Borealis commissions new naphtha cavern in Porvoo, Finland

MOSCOW (MRC) -- Borealis announces that its new naphtha cavern in Porvoo, Finland has now been safely commissioned as of October 2020, as per the company's press release.

Having invested around EUR25 million in the construction of this 80,000 m3 facility, Borealis can now source and store naphtha for its Porvoo operations from the global market in a more flexible, cost-efficient, and secure way. The cavern can also accommodate renewable naphtha, making it possible for Borealis customers in future to draw on certified renewable polypropylene (PP) and polyethylene (PE), as well as renewable base chemicals, ethylene, propylene and phenol.

Construction of the new cavern began in 2019 and was completed safely, sooner than projected, and significantly under budget. Located 90 meters below ground, the storage volume of the new cavern enables Borealis to source feedstock from various sources and markets. Naphtha can now be delivered by large marine vessels (up to 35 kilotons) in addition to rail. The new Porvoo cavern has also been built to accommodate the storage of renewable naphtha, thus enabling Borealis to produce renewable base chemicals.

“A core component of our sustainability strategy is to contribute to societal progress and to enable more sustainable living while at the same time delivering robust financial results for Borealis and our stakeholders,” says Martijn van Koten, Borealis Executive Vice President Base Chemicals and Operations. “The innovative cavern in Porvoo improves our commercial flexibility and will make a valuable contribution to the achievement of our sustainability goals and the circularity of our products.”

“Borealis sees investment in our European assets such as Porvoo as a clear sign of our commitment to enhancing the safety, profitability, and sustainability of our operations,” says Thomas Van De Velde, Borealis Senior Vice President Hydrocarbons & Energy. “Our new cavern makes Borealis more independent and flexible in our sourcing of naphtha while enabling the production of renewable feedstock.”

Naphtha is used in the petrochemical industry to produce olefins in steam crackers. Borealis sources feedstock such as naphtha, butane, propane and ethane from the oil and gas industry, as well as renewable feedstock from the market, and converts these into ethylene and propylene through its olefin units. Its flexible steam cracker in Porvoo produces both ethylene and propylene.

As MRC wrote previously, the light-feed 625,000-metric tons/year Borealis steam cracker at Stenungsund, Sweden, is expected to restart operations in the fourth quarter this year after a fire broke out at the plant in May, 2020. The cracker has been under force majeure for almost four months after the blaze at the plant on 10 May, which was subsequently brought under control the following day.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,496,500 tonnes in the first eight months of 2020, up by 5% year on year. Shipments of all ethylene polymers increased, except for linear low desnity polyethylene (LLDPE). At the same time, PP shipments to the Russian market reached 767,2900 tonnes in the eight months of 2020 (calculated using the formula - production minus exports plus imports - and not counting producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.

Borealis is a leading provider of innovative solutions in the fields of polyolefins, base chemicals and fertilizers. With headquarters in Vienna, Austria, Borealis currently employs around 6,500 and operates in over 120 countries.
MRC

MOSCOW (MRC) -- Top executives of companies like Westlake Chemical and LyondellBasell are paying increasing attention to hydrogen, including the potential for turning ‘gray’ hydrogen into increasingly demanded environmentally friendly versions, according to Hydrocarbonprocessing.

Hydrogen does not emit carbon when used as fuel. It can store energy, or provide power to vehicles and homes. It can be transported as gas or liquid.

When hydrogen releases energy it only leaves behind water vapor. But hydrogen production does release carbon dioxide. Gray hydrogen comes from hydrocarbons while green comes from renewables. Blue hydrogen comes from processes that include carbon re-capture.

Petrochemical companies mostly produce gray hydrogen, as it is based on fossil energy like ethane or propane. Production comes as a by-product.

There is increasing interest in hydrogen across the US, including "places like the Gulf Coast, where they already have a lot of hydrogen in the infrastructure and are wondering what is their future in the energy and how will they transition by taking advantage of infrastructure they already have,” Dave Edwards, Air Liquide's hydrogen director, said.

Westlake produces a fair amount of gray hydrogen during the cracking process, as a by-product of ethylene and currently uses it as fuel.

Ethylene is the target molecule during ethane cracking, but the process also yields a fair amount of gray hydrogen. Westlake also produces smaller volumes of hydrogen when making chlorine.

Albert Chao, CEO of Westlake Chemical Corp, said during the second quarter earnings discussion on Aug. 7 that the company wants to “enter” the hydrogen economy, according to a call transcript by ThomsonReuters Street Events.

“We produce hydrogen from our colocalize cells. So we produce not a whole lot of amount because when you do electrolysis on salt brine to make chlorine caustic, there's water in the salt brine, and they turn into hydrogen as well,” Chao said.

“We do produce hydrogen from a chlor-alkali plant as well as ethylene plants. So we are all ears, and we want to enter into the hydrogen economy, and we have a way to supply with today's production without adding any more capacities,” he added.

“We could buy renewable power, then we become green from the chlor-alkali plants,” Chao added.

“We certainly do look at times of using hydrogen at a higher value and not just as fuel, but selling that back into the merchant market,” Westlake Chemical Corp.’s CFO Steve Bender said.

Regarding plans to produce hydrogen other than gray, that “is something that we're looking at and paying attention to, but it's something we'll just have to see if there's an underlying value stream long term if we want to look at doing anything on that front more broadly,” Bender added.

An analyst posing a question during an earnings discussion on July 31 estimated that based on LyondellBasell’s ethylene capacity, the company likely produced “hundreds of thousands of tons of hydrogen a year.”

“Indeed, we do produce a lot of hydrogen off of our crackers, especially the ethane crackers,” LyondellBasell CEO Bhavesh Patel said, according to a call transcript by Motley Fool.

“We have some integration with the refinery, as you noted. We also sell some crude hydrogen to industrial gas companies who then refine the hydrogen,” Patel said.

“So there's a mix. Some of it is fuel, some of it is sold to industrial gas companies, and then and the balance goes back to our refinery,” he added.

“And we'll look at that over time as we see industrial gas companies finding new uses for hydrogen to see if we can sell more to them and recover,” Patel said.

Another petrochemical process that produces hydrogen as a by-product is propane de-hydrogenation (PDH). PDH plants produces polymer grade propylene (PGP).

In 2018 Enterprise Products PDH produced hydrogen at Mont Belvieu, Texas helped Air Products add 40 million standard cubic feet per day to its Gulf Coast system.

Air Products’ Gulf Coast system, stretching from Houston to New Orleans, provides over 1.4 billion standard cubic feet of hydrogen per day to refinery and petrochemicals customers with 22 Air Products’ hydrogen facilities feeding a 600-mile pipeline.

Hydrogen is used in petroleum refining processes to remove sulfur, olefins and aromatics to meet specifications.

As MRC reported earlier, in September, 2020, LyondellBasell, one of the largest plastics, chemicals and refining companies in the world, released its annual Sustainability Report with the aim of affecting positive change and is focused on three transformational areas including plastic waste, climate change, and thriving societies. LyondellBasell announced one of the most ambitious goals of the industry to produce and market two million metric tons of recycled and renewable-based polymers annually by 2030. The report showcases LyondellBasell's strategy and ambitions for the next decade.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,496,500 tonnes in the first eight months of 2020, up by 5% year on year. Shipments of all ethylene polymers increased, except for linear low desnity polyethylene (LLDPE). At the same time, PP shipments to the Russian market reached 767,2900 tonnes in the eight months of 2020 (calculated using the formula - production minus exports plus imports - and not counting producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.

LyondellBasell is one of the largest plastics, chemicals and refining companies in the world. Driven by its 13,000 employees around the globe, LyondellBasell produces materials and products that are key to advancing solutions to modern challenges like enhancing food safety through lightweight and flexible packaging, protecting the purity of water supplies through stronger and more versatile pipes, and improving the safety, comfort and fuel efficiency of many of the cars and trucks on the road. LyondellBasell sells products into approximately 100 countries and is the world's largest licensor of polyolefin technologies.

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.
MRC

MOSCOW (MRC) -- Stepan reports net income of USD33.2 million, 28.2% higher year-on-year (YOY), as demand for surfactants amid the COVID-19 pandemic more than offset the crisis’s impact on construction markets, said Chemweek.

Adjusted net income of USD1.56/share was up 30% YOY and beat the analysts’ consensus estimate of USD1.40/share, as reported by Refinitiv (New York). Net sales increased 2.8% YOY, to USD464.5 million, on a 5% increase in volumes.

"Surfactant third quarter operating income was up significantly on volume growth, which was mostly attributable to strong demand in the consumer product end markets driven by the fight against the COVID-19 virus,” says F. Quinn Stepan, Jr., Chairman, President and Chief Executive Officer. "Operations in Mexico delivered strong earnings growth versus the prior year quarter. Our Polymer business was down slightly versus the prior year quarter as North America continues to experience construction project delays and cancellations as a result of COVID-19. On a global basis, the demand for rigid polyols is gradually improving. Our Specialty Product business results were down due to reduced margins and customer order patterns."

Surfactant operating income doubled YOY, to USD41.2 million due to higher demand for cleaning, disinfection, and personal wash products due to COVID-19. Segment sales increased 11%, to USD333.8 million. Polymer operating income declined 3.9% YOY, to USD22.4 million, due to construction delays and cancellations. Segment sales fell 14%, to USD116.7 million. Specialty Product operating income fell 30.4% YOY, to USD1.6 million, on lower medium change triglycerides margins. Segment sales were down 17% YOY, to USD13.9 million.

Looking ahead, Stepan expects surfactant volumes for consumer end markets to remain strong, although demand for agriculture and oilfield are expected to be flat and down, respectively, in 2020. Although rigid polyols sales have slightly recovered, the company expects it will remained “challenged” in the short-term as as re-roofing and new construction projects are deferred or canceled. Longer-term, rigid polyols “remain attractive as energy conservation efforts and more stringent building codes should increase demand,” it adds. Specialty Product results are forecast to be flat compared to 2019.

As it was written earlier, Stepan will conduct planned maintenance on its 90,000 tonnes/year PA plant through end-October.

According to MRC's ScanPlast report, Russia's overall PVC production totalled 718,500 tonnes in January-September 2020, down by 0.3% year on year. At the same time, only two producers managed to increase their PVC output.
MRC

MOSCOW (MRC) -- LG Chem reports that its third-quarter operating profit more than doubled to 902.0 billion South Korean won (USD7.9 million) versus W348.0 billion in the year-ago period, said Chemweek.

Sales were W7.5 trillion, a rise of 8.8% year on year (YOY). The company has not provided a net profit figure.
Profit at LG Chem's petrochemicals division also more than doubled to W721 billion, compared with W321 billion a year earlier. Sales declined by 9.6% YOY to W3.5 trillion. Earnings grew due to improved spreads resulting from increased prices for major products such as acrylonitrile-butadiene-styrene, polyvinyl chloride, and nitrile-butadiene rubber and continued low costs of raw materials. However, the company projects that the petchems unit will be hurt in the fourth quarter due to the traditionally slow demand season. It expects to “achieve sound performance due to continued increase in demand for major products."

Sales at LG Chem's new battery business jumped 42% YOY to W3.1 trillion and it achieved a huge increase in operating profit to W168 billion from W700 million in the same period last year. The launch of new electric car models by major European clients, an increase in sales of cylindrical batteries, and an expanded supply of IT products led to higher profit, it says. LG Chem expects fourth-quarter sales to grow and profit to improve through an expanded supply of car batteries and cylindrical batteries for electric vehicles.

Operating profit grew sharply at the advanced materials business to W59 billion, from W510 million in the corresponding period of the previous year. Sales increased 18% YOY to W9.6 trillion.

LG Chem’s other businesses are life sciences and farm hannong.

As MRC informed earlier, LG Chem will close its plasticizer plant in Naju for about three weeks from the beginning of November due to planned renovations. According to the source, the current production capacity of the enterprise is about 110,000 tonnes of plasticizers per year, and in mid-2021 it will be increased to about 160,000 tonnes per year.

According to MRC's ScanPlast report, Russia's overall PVC production totalled 718,500 tonnes in January-September 2020, down by 0.3% year on year. At the same time, only two producers managed to increase their PVC output.

South Korean LG Chem is one of the largest chemical companies in the world. The company manufactures a wide range of products, from petrochemicals to high-tech plastics.
MRC

MOSCOW (MRC) -- Saudi Kayan Petrochemical Company, a Sabic affiliate, turned to a net loss of SAR 28.16 million in the third quarter (Q3) of 2020, against net profits of SAR 1.26 million in the corresponding period a year earlier, according to Chemweek.

The move to losses was driven by a slump in the average selling prices of the company's products, according to a bourse disclosure on Tuesday.

This came despite an increase in the quantities sold, a drop in the average feedstock cost, and lower financing costs and general and administrative expenses.

Revenues slipped by 8.6% yearly, standing at SAR 2.1 billion in the July-September period.

In the first nine months of 2020, the company’s losses deepened by 100.9% to SAR 943.14 million from SAR 469.36 million in the prior-year period.

As MRC wrote earlier, Saudi Kayan conducted a 21-day scheduled maintenance at its ethylene glycol (EG) and ethylene oxide (EO) facilities at Jubail, Saudi Arabia, starting on 1 February, 2020. The company said that some of its other facilities that rely on EG and EO feedstocks would also undergo periodic maintenance and improvements.

Ethylene oxide is one of the most important raw materials used in large-scale chemical production. Most ethylene oxide is used for synthesis of ethylene glycols, including diethylene glycol and triethylene glycol, that accounts for up to 75% of global consumption. Other important products include ethylene glycol ethers, ethanolamines and ethoxylates. Among glycols, ethylene glycol is used as antifreeze, in the production of polyester and polyethylene terephthalate (PET - raw material for plastic bottles), liquid coolants and solvents.

According to ICIS-MRC Price report, contract prices of Russian PET plants increased by Rb1,000-1,500/tonne this month under the pressure from the growth of the dollar exchange rate against the rouble.

Saudi Kayan Petrochemical Company is a manufacturing affiliate of the Saudi Basic Industries Corporation (Sabic, 35%). Saudi Kayan is the fifth-largest petrochemical manufacturer by market value in Saudi Arabia.
MRC