Advanced Petrochemical lets contract to Fluor for Jubail PDH-PP complex

MOSCOW (MRC) -- Advanced Global Investment Co. (AGIC), a subsidiary of Advanced Petrochemical Co. (APC), has let a contract to Fluor Corp. to provide project management consulting (PMC) for the operator’s proposed propane dehydrogenation (PDH) and polypropylene (PP) complex at APC’s existing operations in Jubail Industrial City, on Saudi Arabia’s eastern coast, according to Oi&Gas Journal.

As part of the contract, Fluor will deliver PMC services for front-end engineering design, detailed engineering, procurement, and construction phases of the project, including associated utilities and off sites, Fluor said on May 14.

Once completed, AGIC’s complex will produce 843,000 tonnes/year of propylene and 800,000 tpy of PP that will be used for production of specialty polymers by manufacturers in the face mask, automotive, pipes, food packaging, and textiles industries, according to the service provider.

Fluor, which booked its portion of the undisclosed contract value in first-quarter 2020, said it will execute the project from its offices in Farnborough, UK, and Al Kobar, Saudi Arabia, with support from the firm’s global network.

Award of the PMC contract follows AGIC’s Mar. 27 signing of a shareholders agreement with SK Gas Co. Ltd. subsidiary SK Gas Petrochemical Pte. Ltd. (SKGP) to establish a joint venture named Advanced Polyolefins Co. (APC JV) for construction and operation of the proposed PDH-PP complex, according to a Mar. 29 release from APC.

At a total estimated cost of about USD1.8 billion, the planned PDH-PP project will be financed 25% by equity of shareholders, while APC JV will finance the remaining 75% via borrowing from lenders, APC said. AGIC will hold 85% interest in APC JV, with SKGP to hold the remaining 15% stake.

APC also confirmed AGIC has already awarded a series of contracts for technology to be implemented at the proposed PDH-PP complex. Lummus Technology LLC will deliver licensing for its proprietary CATOFIN technology for the PDH plant, while LyondellBasell Industries NV subsidiary Basell Poliolefine Italia SRL will license its proprietary Spherizone and Spheripol technologies for the complex’s two PP plants, each of which will have a capacity of 400,000 tpy, APC said.

APC said APC JV expects to begin construction in 2021 on the new PDH-PP complex - which will receive its main feedstock of propane from Saudi Aramco under a long-term contract - for a targeted start-up of operations by second-half 2024.

APC currently produces 455,000 tpy of propylene and 450,000 tpy of PP at its existing Jubail Industrial City plants, according to the company’s website.

As MRC informed before, in September 2019, SK Advanced signed a joint venture agreement with South Korea’s Polymerae Ltd. to establish a polypropylene plant in South Korea with an annual design capacity of 400,000 metric tons. The facility is expected to launch commercial operations in 2021.

Propylene is the main feedstock for the producion of polypropylene (PP).

According to MRC's ScanPlast report, PP shipments to the Russian market was 267,630 tonnes in January-March 2020, down 20% year on year. Homopolymer PP and PP block copolymers accounted for the main decrease in imports.

Dow Chemical faces USD54,000 in OSHA Fines for Louisiana blast

MOSCOW (MRC) -- An explosion at a Dow Chemical Co. plant has led to USD53,976 in proposed fines from federal workplace safety regulators, reported Bloomberg.

The fines covering four alleged serious violations of safety rules for chemical processing were issued by the Occupational Safety and Health Administration after an inspection of the plant in Plaquemine, La.

Dow Chemical spokeswoman Ashley Mendoza on Wednesday said the company “cooperated completely with OSHA during its inspection” and is appealing the citations.

The explosion occurred Nov. 3 when a tank containing water and low levels of ethylene oxide and sulfuric acid burst open, news reports immediately after the accident.

The Plaquemine plant produces glycol ethers. No one was injured, Dow confirmed at the time.

Dow subsequently declared force majeure on its US ethlylene oxide (EO) which was lifted at the end of January. EO is used to make monoethylene glycol (MEG) among other chemicals.

As MRC informed earlier, USA based Dow Chemical is planning to shut three polyethylene (PE) plants in the USA and Argentina to avoid piling inventories amid sluggish global demand conditions due to the COVID-19 related lockdown.

MEG is one of the main feedstocks for the production of polyethylene terephthalate (PET).

As per MRC's ScanPlast report, Russia's estimated PET consumption was 65,3700 tonnes in March 2020, up by 1% year on year. The estimated PET consumption in Russia decreased in January-March 2020 by 3% year on year to 175,170 tonnes.

Gazprom neftekhim Salavat shut DOP production

MOSCOW (MRC) -- Gazprom neftekhim Salavat shut down its dioctyl phthalate (DOP) production for a scheduled maintenance, reported MRC analysts.

Market participants and a plant's representative said Gazprom neftekhim Salavat took off-stream its DOP production for a long scheduled turnaround. The outage began on 12 May and will last for about 30 day.

Gazprom neftekhim Salavat produces more than 100 products, more than 50% of which are large-capacity ones, such as motor gasolines, diesel fuels, heating oils, styrene, polystyrene, low density polyethylene, high density polyethylene, DOP plasticizer, butyl alcohols, sulfur, ammonia, carbamide, acrylic acid, butacrylate and others. Oil refining and petrochemicals are shipped to all federal districts of the country. The export geography covers over 50 countries, including Finland, China, Brazil, Great Britain, countries of Western Europe, the Baltic countries.

COVID-19 - News digest as of 15.05.2020

1. Mitsui Chemicals full-year net profit falls

MOSCOW (MRC) -- Japanese producer Mitsui Chemicals on Thursday reported a 50.1% fall in its full-year net profit as sales dropped following the spread of the coronavirus, said Chemweek. Sales prices fell due to the fall in naphtha and other raw materials as well as fuel prices. Operating income fell due to unfavourable terms of trade in addition to decrease in sales resulting from the spread of the coronavirus and increase in fixed costs.


Mitsubishi Chemical eyes turnaround at Kashima cracker in H1 May

MOSCOW (MRC) -- Mitsubishi Chemical is likely to undertake a planned shutdown at its naphtha cracker, according to Apic-online.

A Polymerupdate source in Japan informed that, the company has scheduled to start turnaround at the cracker by mid-May 2020. The cracker is likely to remain under maintenance till end-June, 2020.

Located at Kashima, Japan, the cracker has an ethylene production capacity of 540,000 mt/year and a propylene capacity of 260,000 mt/year.

As MRC informed earlier, the company last started a two-month maintenance at this cracker in H1 May, 2018.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 557,060 tonnes in the first three month of 2020, up by 7% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments rose because of the increased capacity utilisation at ZapSibNeftekhim. Demand for LDPE subsided. At the same time, PP shipments to the Russian market was 267,630 tonnes in January-March 2020, down 20% year on year. Homopolymer PP and PP block copolymers accounted for the main decrease in imports.

Mitsubishi Chemical with headquarters in Tokyo, Japan, is a diversified chemical company involved in petrochemicals, polymers, agrochemicals, speciality chemicals and pharmaceuticals. The company's main focus is on three business pillars: petrochemicals, performance and functional products, and health care.