Polief to produce PET partially from recycled feedstock

MOSCOW (MRC) -- SIBUR's Polief site in Blagoveshchensk, Republic of Bashkortostan, launches the production of green polyethylene terephthalate (PET) granules, which, among other materials, will rely on some 34 kt of recycled plastics annually, according to the company's press release.

PET flakes derived from used food packaging will serve as an input for primary polymers. Compliant with the highest standards, Polief green granules will help satisfy growing demand for eco-friendly PET packaging while providing the manufacturer with a comprehensive solution combining primary and secondary PET. On top of that, reusing valuable feedstock to make high-quality products will cut specific electricity consumption and greenhouse gas emissions, as a result.

PET is utilised to manufacture packaging for soft drinks, dairy products, pharmaceuticals, household chemicals, and much more. PET packages are inert to foods, safe for people and the environment, and fully recyclable.

Maxim Remchukov, Head of Sustainable Development at SIBUR said: “Involving recyclables in PET production is a vital part of SIBUR’s 2025 Sustainability Strategy. SIBUR remains focused on boosting process efficiency, improving its grade range, enhancing product properties and developing new solutions. By using recycled feedstock, the Company will help promote the circular economy, while also cutting its greenhouse gas emissions per tonne of end products.”

SIBUR has signed relevant cooperation agreements with the Ministry of Natural Resources and Environment and the Russian Environmental Operator on the sidelines of EEF 2019. The investment project provides for installing the equipment to further treat and sort flakes, which will make it possible to feed the recycled feedstock into the existing production line. The design and engineering documentation will leverage the latest solutions and technologies from global leaders in industrial polymer processing. The project is on the priority list of SIBUR's Blagoveshchensk site for 2020–2022.

Evgeny Semenko, CEO of Polief said: “We expect to start using recycled polyethylene terephthalate packaging at POLIEF by mid-2022. This will enable us to offer both primary and secondary PET and contribute to promoting the circular economy. The processing method allows for the polymer break-down and repeated use of feedstock. The approved technology for using secondary PET (PET flakes) in the primary PET production is an eco-friendly advanced way of industrial PET recycling, unique in Russia.”

PET flakes will come from different parts of Russia, with Bashkortostan and the neighbouring regions having priority. The project will rely on intermediates from processed bottles washed and prepared by suppliers at their own sites. The incoming feedstock will be checked for compliance with quality standards. Bashkortostan currently collects 4 kt of used PET bottles per year, with the figure to potentially reach 20 ktpa if measures are taken to improve collection rates and the sorting quality.

As MRC reported before, in early December 2019, on the margins of the meeting at SIBUR’s PolyLab R&D Centre, SIBUR, the largest petrochemical comples in Russia and Eastern Europe, and BASF, Geman petrochemical major, signed a Memorandum of Understanding (MOU) formalizing their partnership on sustainable development and circular economy agenda further to the companies’ environmental talks held back in June 2019. The memorandum is set to strengthen the partners’ commitment to long-term sustainable development goals. BASF and SIBUR agreed to collaborate more closely on water efficiency, carbon footprint management and chemicals recycling along with joining forces in implementing international environmental initiatives.

According to MRC's ScanPlast report, Russia's estimated PET consumption totalled 367,720 tonnes in the first six months of 2020, up by 19% year on year. Russian companies processed 62,910 tonnes in June. Russian plants reduced their PET output in January-June 2020 by 25% year on year. Overall PET chips production at four Russian plants reached 281,100 tonnes in January-June 2020.

Polief JSC (Blagoveshchensk, Republic of Bashkortostan) is the only producer of terephthalic acid (PTA) and the largest supplier of PET in Russia. SIBUR began the reconstruction of the production of PTA in Blagoveshchensk in December 2017. The capacity for the production of PTA after modernisation is 350,000 tonnes per year, PET - 219,000 tonnes per year.

SIBUR is the largest integrated petrochemicals company in Russia. The Group sells its petrochemical products on the Russian and international markets in two business segments: Olefins & Polyolefins (polypropylene, polyethylene, BOPP films, etc.) Plastics, Elastomers & Intermediates (synthetic rubbers, EPS, PET, etc.). SIBUR’s petrochemicals business utilises mainly own feedstock, which is produced by the Midstream segment using by-products purchased from oil and gas companies. More than 26,000 employees working in SIBUR contribute to the success of customers engaged in the chemical, fast moving consumer goods (FMCG), automotive, construction, energy and other industries in 80 countries worldwide. In 2018, SIBUR reported revenue of USD 9.1 billion and adjusted EBITDA of USD 3.3 billion.

Sasol declares force majeure on LLDPE, HDPE after Hurricane Laura

MOSCOW (MRC) -- Sasol Chemicals North America declared force majeure on all polyethylene (PE) products Aug. 31, including linear low density polyethylene (LLDPE) and high density polyethylene (HDPE) grades at their Texas and Louisiana manufacturers in light of Hurricane Laura's assault on Aug. 27, according to a letter to customers obtained by S&P Global.

Sasol's Lake Charles, Louisiana complex is home to 470,000 mt/year LLDPE plant that started up in February 2019 and a 420,000 mt/year low density polyethylene (LDPE) unit that was damaged by fire during commissioning in January and has remained shut for repairs.

"Sasol's Lake Charles Chemical Complex shut down on Aug. 25 in anticipation of the storm," the letter said.

"Many of the company's employees and contractors followed the mandatory evacuation order and have not been able to return yet, the letter stated.

"At this time, the damage and impact on a restart-schedule is being assessed," and the company is working toward restoring its operations to normal levels, the letter stated.

The company was not available for immediate comment at the time of publication.

Earlier on Aug. 31, the company posted an update on its website that said the storm caused widespread electrical blackouts and other damage, preventing Sasol from operating most utility systems.

"High voltage transmission line corridors into the Lake Charles area are damaged, and the full assessment is still in progress by a local power company," the company's statement said, referring to Entergy.

The company said further that operations recovery crews were assessing damage at the Lake Charles site and early reports indicated no apparent damage to process equipment and no flooding damage was seen as a result of storm surge.

"Start-up of the plants will depend on the availability of electricity, industrial gases, other feedstocks and the restoration process. We are engaging with our customers and suppliers regularly regarding the impacts on production,' the company said.

In general, polyethylene market participants anticipated the declaration as Hurricane Laura directly hit Lake Charles, which caused extreme power outages and damages in some areas and is home to a handful of petrochemical plants.

Producers are still assessing how much production was lost from the hurricane and are uncertain of what to expect in the coming week, one trader source said.

As MRC reported before, Sasol's world-scale US ethane cracker with the capacity of 1.5 mln tonnes per year reached beneficial operation on 27 August 2019. Sasol's new cracker, the heart of Lake Charles Chemicals Project (LCCP), is the third and most significant of the seven LCCP facilities to come online and will provide feedstock to the company's six new derivative units at its Lake Charles multi-asset site.

According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports.

Sasol is an international integrated chemicals and energy company that leverages technologies and the expertise of our 31 270 people working in 32 countries. The company develops and commercialises technologies, and builds and operates world-scale facilities to produce a range of high-value product stream, including liquid fuels, petrochemicals and low-carbon electricity.

Westlake Chemical declares force majeure on VCM, PVC after Hurricane Laura

MOSCOW (MRC) -- Westlake Chemical declared force majeure Aug. 31 on North American polyvinyl chloride (PVC) and upstream vinyl chloride monomer (VCM), with widespread power outages and damage at its Lake Charles, Louisiana, complex leaving production offline for an indefinite amount of time, according to a letter to customers S&P Global obtained.

"At this time, we are not able to predict the duration of this force majeure condition," the Westlake's letter dated Aug. 31 said.

"This force majeure condition will cause supply disruptions and limit our ability to meet anticipated product demand. While this force majeure event declaration is required at this time, Westlake/Axiall is continuing to work on commercial options to lessen the impact on our customers."

Market participants expected the declaration. Westlake's shutdown of its Lake Charles complex has idled 38% of its US VCM production with two VCM plants with a combined capacity of 952,318 mt/year offline.

The complex also has three upstream chlor-alkali plants with a combined capacity of 1.27 million mt/year of chlorine and 1.36 million mt/year of caustic soda - 46% of the company's overall North American chlor-alkali capacity.

The company said on Aug. 27, hours after Hurricane Laura came ashore with 150 mph winds, that it appeared its Lake Charles complex had "incurred limited physical damage."

Spokeswoman Erika Soechting reiterated that assessment in an email Aug. 31, before the FM letter began circulating, that restarts would primarily depend on the availability of electric power, industrial gases, and other feedstocks.

However, a source familiar with company operations said wind damage appeared to be more serious than initially thought upon further assessments. No further detail was available.

Westlake's FM will sharply tighten already tight PVC availability.

Formosa Plastics Aug. 14 declared FM on PVC at both its Texas and Louisiana complexes because a turnaround at its 736,000 mt/year chlor-alkali plant in Point Comfort, Texas, lasted longer than expected. Even though the chlor-alkali plant had restarted the week of Aug. 10, the company's downstream ethylene dichloride reserves were depleted, reducing its ability to produce adequate PVC further downstream.

Formosa's FM remained in place Aug. 31 as the company worked to replenish those EDC reserves and restore normal PVC output.

Export PVC availability already had been tight with Formosa's chlor-alkali turnaround that started in mid-June and a turnaround at its 513,000 mt/year PVC plant in Baton Rouge, Louisiana, in July.

In addition, domestic PVC demand has strengthened significantly since catering in April amid widespread coronavirus pandemic-related shutdowns.

Formosa and Westlake already had not expected to offer export volumes for September - Formosa because of its FM, and Westlake because of domestic demand. US PVC producers also had not resumed fully normal rates since reducing output in April, with chlor-alkali rates at 75% in July.

As MRC reported earlier, in February 2018, as MRC informed before, Westlake Chemical announced plans to expand its capacities for the production of PVC and VCM at three of its chemical facilities. Two of the plants are located in Germany (Burghausen, Gendorf) and one is located in Geismar, Louisiana. The expansions in Burghausen and Geismar are expected to be completed in 2019. The Gendorf expansions are expected to be completed in 2020 and 2021.

According to MRC's DataScope report, imports of suspension polyvinyl chloride (SPVC) into Russia totalled 13,800 tonnes in the first half of 2020, up by 5% year on year, whereas exports grew by 7% year on year.

Westlake Chemical Corporation is an international manufacturer and supplier of petrochemicals, polymers and building products with headquarters in Houston, Texas. The company's range of products includes: ethylene, polyethylene, styrene, propylene, chlor-alkali and derivative products, PVC suspension and specialty resins, PVC Compounds, and PVC building products including siding, pipe, fittings and specialty components, windows, fence, deck and film.

US emergency oil reserve site suffers "considerable" damage from Hurricane Laura

MOSCOW (MRC) -- The US Energy Department said that the West Hackberry site of the Strategic Petroleum Reserve “sustained considerable damage” from Hurricane Laura and that detailed estimates of the harm done should be out later this week, reported Reuters.

The department shut two of the four SPR sites ahead of Laura and the other site, in Big Hill, Texas is back up and fully operational, it said. The West Hackberry is without access to commercial power. “There is no threat to the integrity of the geologically sealed underground caverns, and no danger of contamination or concern for spills,” a department official said.

As MRC wrote previously, most chemical production facilities in the region between Beaumont-Port Arthur, Texas, and Lake Charles, Louisiana, have shut down in preparation for Hurricane Laura, which was forecast to make landfall near the Texas-Louisiana border last Wednesday night or early Thursday. Several olefin crackers and associated derivative polymer units have been shut down, as has about 2.5 million b/d of refining capacity.

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

According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.

Restoring power to Phillips 66 Lake Charles refinery may take three weeks

MOSCOW (MRC) -- Restoring electricity to the Phillips 66’s 260,000 barrel-per-day (bpd) Lake Charles, Louisiana, refinery could take up to three weeks, reported Reuters with reference to sources familiar with plant operations.

The refinery was shut on Aug. 25 as Hurricane Laura was forecast to make landfall southwest of Lake Charles. Laura, packing winds of 150 miles per hour (241 kmh) passed over the Lake Charles area on Thursday.

“Phillips 66 does not comment on rumors or speculation,” the company said in an emailed statement.

Local power provider Entergy said on Monday that the seven power-line corridors to Lake Charles received catastrophic damage from Laura.

Phillips 66 is performing assessments of the Lake Charles refinery and chemical plant complex, which is located in Westlake, Louisiana. The assessments were hampered for at least two days by a chemical fire at a nearby plant, the sources said.

As MRC informed before, last month, US refiner Phillips 66 said it plans to reconfigure its refinery in Rodeo, California to produce renewable fuels from used cooking oil, fats, greases and soybean oils.

We remind that US-based Phillips 66 remains open to developing another ethane cracker for its Chevron Phillips Chemical (CP Chem) joint venture, the refiner's CEO said in March 2018.

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

According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.