Chemical company R&D spending falls on COVID-19, economic slowdown

MOSCOW (MRC) -- Spending by chemical companies on R&D fell year on year (YOY) in the first quarter of 2020 due to the impact of COVID-19 and the worldwide economic slowdown, reported Chemweek with reference to the International Energy Agency (IEA; Paris, France).

Reductions in R&D spending “were seen in all reporting companies in the chemical sector, with some declines of over 10%,” the IEA says. Corporate R&D is “highly likely” to be cut or to grow more slowly in most energy-related sectors as a result of lower revenue this year and beyond, with the impact “already evident in company reports for the first quarter of 2020, with companies representing a large share of global revenue in automotive, aviation, and chemicals spending less on R&D than in previous years,” it adds.

The reduction in R&D matches the perceptions of respondents to a survey carried out in May by the IEA, which showed they anticipated “pressure on corporate R&D budgets for key net-zero emissions technology areas for the rest of 2020 and into 2021,” the agency says. The IEA says it contacted “a number of large companies” active in the development of specific technologies expected to play a significant role in the achievement of net-zero emissions such as hydrogen; direct electrification; carbon capture, utilization, and storage; and digitalization. This included end-user companies outside the energy sector such as the chemicals, iron and steel, and cement sectors, with 28 companies responding representing almost 1.5 million employees worldwide.

First-quarter YOY spending cuts in R&D by DuPont, LG Chem, Dow, BASF, Linde, and Mitsubishi Chemical are highlighted by the IEA, with DuPont shown to have implemented the largest expenditure cut in percentage terms compared with the prior-year quarter of almost 12%, followed by LG Chem with a cut of 8%. Dow is shown to have cut R&D spending YOY by just under 6%, BASF and Linde by more than 4%, and Mitsubishi by almost 3% (chart). The IEA notes that the chart data is from the subset of companies that report quarterly R&D spending.

The responses overall indicate serious disquiet among experts about keeping their innovation pipelines flowing over the next couple of years, the IEA says. “Most respondents think it is at least ‘somewhat likely’ that all elements of their R&D, demonstration, and deployment strategies will be affected. Companies that are prioritizing technologies for the electrification of energy demand, especially those in heavy industry, consider it likely that their R&D budgets will be considerably or significantly reduced,” it says.

The IEA has released a new wide-ranging report that focuses on the need for R&D and other innovation efforts to achieve global net-zero emissions objectives, and says that without a “major acceleration” in clean energy innovation, countries and companies will be unable to fulfil their pledges to bring their carbon emissions down to net zero over the coming decades. “There is a stark disconnect today between the climate goals that governments and companies have set for themselves and the current state of affordable and reliable energy technologies that can realize these goals,” says Fatih Birol, IEA executive director. A significant part of the challenge comes from major sectors where there are “currently few technologies available for reducing emissions to zero” including shipping, trucking, and aviation, and heavy industries such as steel, cement, and chemicals, he says.

In 2019, overall reported corporate energy R&D spending worldwide reached USD90 billion, according to the IEA.

As MRC wrote before, in late May 2020, BASF successfully issued corporate bonds with a total volume of EUR2.0 billion (USD2.28 billion) on the capital market, including its first-ever placement of a green bond that will be used purely to finance sustainable products and projects.

We remind that an unexpected outage occurred at BASF Total Petrochemical’s joint-venture (JV) olefins unit at Port Arthur, Texas, Thursday afternoon, 11 June. The cause of the outage is being investigated, with a compressor shutdown cited as a possible factor, according to a Texas Commission on Environmental Quality filing. Total’s refinery near the olefins plant has also drastically reduced rates. The outage had little effect on Friday’s US spot ethylene market. The JV’s steam cracker at Port Arthur has a production capacity of more than 1 million metric tons/year of ethylene and 544,000 metric tons/year of propylene, according to IHS Markit data.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 595,170 tonnes in the first five month of 2020, up by 10% year on year. Deliveries of all ethylene polymers, except for linear low density polyethylene (LLDPE), rose partially because of an increase in capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market was 457,930 tonnes in January-May 2020 (calculated by the formula production minus export plus import). Deliveris of exclusively PP random copolymer increased.
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McDermott awarded EPFC contract for storage tanks in Canada

MOSCOW (MRC) -- McDermott International Ltd. announced CB&I Storage Solutions has been awarded a large* contract by a major EPC contractor for the engineering, procurement, fabrication and construction (EPFC) of 14 tanks in Burnaby, British Columbia, said Hydrocarbonprocessing.

The tanks are part of the Trans Mountain Expansion Project, which will increase the nominal capacity of the Trans Mountain Pipeline System from 300,000 to 890,000 barrels of oil per day. The scope of the contract includes 14 flat-bottom atmospheric storage tanks of various sizes up to 185 feet (56.4 meters) in diameter. The engineering and installation of the tanks will be performed by Canadian workers.

"This award demonstrates the confidence major international contractors place in our world-class storage and EPFC solutions," said Cesar Canals, Senior Vice President of CB&I Storage Solutions. "For more than a century, CB&I Storage Solutions has maintained a strong track record of execution excellence in Canada."

The award will be reflected in McDermott's second quarter 2020 backlog. *McDermott defines a sizeable contract as between USD50 million and USD250 million.

As MRC informed earlier, Haldia Petrochemicals (HPL), a flagship company of The Chatt­erjee Group (TCG), alo­ng with its international partner Rhone Capital has acquired US-based Lummus Technology at an enterprise value (EV) of USD2.725 billion (around Rs 20,590 crore) from McDermott International. In the joint acquisition, HPL’s share is at 57 per cent, the balance would be held by Rhone Capital. Under the new dispensation, Lummus Technology wou­ld function as a ‘standalone’ autonomous entity.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 595,170 tonnes in the first five month of 2020, up by 10% year on year. Deliveries of all ethylene polymers, except for linear low density polyethylene (LLDPE), rose partially because of an increase in capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market was 457,930 tonnes in January-May 2020 (calculated by the formula production minus export plus import). Deliveris of exclusively PP random copolymer increased.

CB&I Storage Solutions is the world's leading designer and builder of storage facilities, tanks and terminals. With more than 59,000 structures completed throughout its 130-year history, CB&I Storage Solutions has the global expertise and strategically-located operations to provide its customers world-class storage solutions for even the most complex energy infrastructure projects.
MRC

Krauss Maffei opens new plant in Jiaxing

MOSCOW (MRC) -- Krauss Maffei has opened its new plant in Jiaxing, with which the company plans to double its production capacity in China, said the company.

More than 600 customers and partners came to the opening ceremony of the new Chinese plant. In an exhibition, they saw ten different machine types and 16 different applications. These included machines that are developed and manufactured in China for the Chinese market, such as the PX Agile series of electrical injection molding machines, the ZE GP-Agile twin-screw extruders and a mixing and dosing machine. Among the processes presented were LSR processing, colorform and metal injection molding as well as special applications such as precision injection molding, optical lenses and freely sprayed high-gloss surfaces. The “Pioneering Plastics” innovation and development forum took place parallel to the exhibition, presenting new technologies and trends in the industry.

The new location in Jiaxing currently has more than 58,000 m? of floor space; another 37,000 m? property is reserved for future use. It offers space for research and development, technical design, manufacturing and logistics - and this for extrusion, injection molding and reaction technology. This means that Jiaxing within the Krauss Maffei Group will become another comprehensive functional headquarters outside of Germany.

"China and the rest of the world face the challenges that the corona pandemic poses for the manufacturing industry and the related industrial chains. In the meantime, the emerging new technologies and megatrends - intelligent manufacturing, digital services and solutions - bring new opportunities for our industry, ”said CUI Xiaojun, CEO of Krauss Maffei China. "The new plant in Jiaxing is another important milestone in Krauss Maffei's more than 180-year history, with which we want to further expand the Chinese market, improve our local capacities and create value for customers in China and worldwide."

The new plant is located in the Jiaxing Economic and Technological Development Zone in the Greater Bay Area, a regional economic cluster that China is currently expanding into a metropolitan region with great ambitions. The opening was actually scheduled for early February, but had to be postponed due to the coronavirus pandemic.

It was previously reported that NPP Polyplastic, the largest Russian manufacturer of thermoplastic composite materials, signed an agreement with KraussMaffei Berstorff GmbH in 2016 to modernize the production facilities of the Russian company.

As MRC informed earlier, Russia's output of chemical products rose by 4.4% year on year in May 2020 . Thus, production of basic chemicals increased year on year by 5.4% in the first five months of 2020. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the output in January-May. Production of benzene was 110,000 tonnes in May 2020, which equalled the figure a month earlier. Overall output of this product reached 615,000 tonnes over the stated period, up by 1.7% year on year.

Krauss Maffei, the world's only provider of turnkey equipment for injection molding, extrusion and reaction technology, has merged its business divisions as well as the former brands KraussMaffei, KraussMaffei Berstorff and Netstal, under the auspices of the single brand KraussMaffei.
MRC

Citgo Corpus Christi, Texas, refinery restarts large FCC

MOSCOW (MRC) -- Citgo Petroleum Corp restarted the large gasoline-producing fluid catalytic cracker at its 167,500-barrel-per-day (bpd) Corpus Christi, Texas, refinery, reported Reuters with reference to sources familiar with plant operations.

Citgo did not reply to a request for comment.

The 69,000-bpd FCC was knocked out of production early on Wednesday, the sources said, by a pump outage. The pump was repaired and the unit restarted.

As informed before, in May 2019, Citgo restarted larger reformer at its US Corpus Christi 52,000 bbl/day refinery with capacity 225,000 benzene; 180,000 toluene tonnes/year.

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

According to MRC's ScanPlast report, PP shipments to the Russian market was 457,930 tonnes in January-May 2020 (calculated by the formula production minus export plus import). Deliveris of exclusively PP random copolymer increased.
MRC

Clariant catalyst helps Duslo turn plastic waste into high-quality winter diesel

MOSCOW (MRC) -- Clariant and Duslo’s research institute VUCHT are transforming waste into wealth. Using a proprietary technique and Clariant’s HYDEX E next-generation hydro-dewaxing catalyst, VUCHT has successfully converted plastic waste into premium winter fuel distillate, according to Hydrocarbonprocessing.

The efficacy of this groundbreaking process has now been proven in a pilot plant in Slovakia. As plastics and fuels are both mainly composed of natural gas or crude oil, turning one into the other has major implications for sustainable and lucrative fuel production.

Stefan Heuser, Senior Vice President & General Manager at Clariant Catalysts: “Upgrading gas oil fractions to more valuable products has become essential for improving refinery economics. Clariant is committed to supporting this customer need through innovations such as HYDEX E. We are honored to partner with VUCHT in their pioneering plastic waste-to-winter diesel technology, and very pleased about the outstanding performance of our next-generation catalyst in the process.”

VUCHT is part of Duslo, a major Slovak producer of fertilizers, specialty nitrogen compounds, and rubber chemicals. The institute uses a pyrolysis process to convert a variety of plastic waste collected in the country (such as polyethylene, polystyrene, polypropylene and PET) into diesel fuel. The process thermally degrades the plastic at temperatures above 300°C (530°F), converting it into liquid oil comprised of various hydrocarbon compounds. Recently, the institute developed a proprietary technique to further convert the liquid oil into a high-quality fuel distillate known as winter diesel.

The winter diesel produced is compliant with Euro 6 fuel emission standards, including cold flow properties specified for temperatures as low as -30°F (-34°C), typically required in arctic areas. To achieve this extreme improvement in cold flow, Clariant’s HYDEX E hydro-dewaxing catalyst was applied. After intensive pilot testing proved the technical viability and economic appeal of the process, VUCHT is planning to expand the method’s success in a custom-built demonstration plant with a fuel distillate capacity of 40 metric tons per annum (MTA).

HYDEX E is an economical selective isomerization hydro-dewaxing catalyst specially developed for highly paraffinic feedstocks. The key advantages of this zeolite-based catalyst are that it has the ability to significantly raise fuel quality and yield, while minimizing costs and by-product formation. HYDEX catalysts have been successfully used for catalytic dewaxing at numerous refineries around the world for over 25 years, and are recognized to be highly favorable for middle distillate feedstocks, such as diesel.

Duslo’s VUCHT institute is a research and engineering organization with more than 100 years of experience in the active development of organic and inorganic chemistry processes and products. Branislav Brezny, the institute’s Managing Director, explained the significance of the results, stating, “Scaling up to near-plant capacity was the ultimate test of the practicality and profitability of our proprietary diesel production process, and we are extremely satisfied with the results of our team’s innovations. This could not have been achieved without a partner such as Clariant, whose new dewaxing catalyst has delivered beyond expectations.”

As MRC reported earlier, in June 2020, TechnipFMC and Clariant Catalysts entered into a joint development agreement for the demonstration and commercialisation of Clariant’s new state-of-the-art AcryloMax propylene ammoxidation catalyst for the production of acrylonitrile (ACN).

Besides, in May 2020, Clariant’s CATOFIN catalysts was selected by Advanced Global Investment Co. (AGIC), a joint venture between Advanced Petrochemical Company (APC) and SK Group, to build a PDH facility in the Middle East.

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

According to MRC's ScanPlast report, PP shipments to the Russian market was 457,930 tonnes in January-May 2020 (calculated by the formula production minus export plus import). Deliveris of exclusively PP random copolymer increased.

Clariant AG is a Swiss chemical company and a world leader in the production of specialty chemicals for the textile, printing, mining and metallurgical industries. It is engaged in processing crude oil products in pigments, plastics and paints.
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