Lummus supplying ethylene cracking furnaces to Baltic Chemical Plant

MOSCOW (MRC) -- Lummus Technology will supply 14 cracking furnaces for a Gas Chemical Complex that is part of the Ethane-rich Gas Processing Complex (GCC EGPC) located near Ust-Luga, Leningrad Oblast, Russia, on the Gulf of Finland, said Hydrocarbonengineering.

The contract is awarded within the framework of an EPC Contract for the GCC EGPC project between China National Chemical Engineering & Construction Corporation Seven, LTD (CC7), and the Baltic Chemical Plant LLC. Lummus' scope includes engineering and supply of the company's proprietary Short Residence Time (SRT®) VI cracking furnaces. The equipment is expected to yield a total ethylene product amount (ethylene crackers 1 and 2) of up to 3 million tpy, will be supplied under the ethylene technology license agreement entered in between Baltic Chemical Plant LLC, a Project Operator (and a subsidiary of RusGazDobycha), and Lummus Technology in 2019.

The cracking furnace is the core process element of an ethylene plant. The process inside a cracking furnace is based upon pyrolysis of hydrocarbons (ethane/propane mixture) in the presence of steam with release of cracked gas. The gas is further fed into the olefins recovery section to produce polymer grade ethylene used as feedstock for polyethylene production as well as other byproducts.

"The Gas Chemical Complex Project relies on the most advanced, highly-efficient and eco-friendly process solutions available in the world. At the current stage of the project, the team is dealing with purchasing long-lead equipment. The benefits offered by Lummus Technology include significant reduction in the output of by-products and specific consumption of utilities. The process also offers feedstock flexibility as it is possible to feed of up to 10% propane in case of ethane shortage," shared Konstantin Makhov, General Director of Baltic Chemical Plant LLC.

"This is the second major award announced recently for our world-class SRT ethylene furnaces, which optimise reliability in capacity, run-length and energy efficiency. It is another step forward in our services for the Baltic Chemical Plant and builds on our experience in Russia, which is among our key markets and where we are recognised as a leading licensor of this technology," said Leon de Bruyn, President and CEO of Lummus Technology.

"This is the first experience of partnering between Lummus Technology and CC7 for ethylene integration project both in Russian and international markets. Following the Process Design Package Contract covering the ethane cracking unit engineering for Baltic Chemical Plant signed in November 2019, a new equipment engineering & supply contract has been now signed. The relationships between the two companies have been evolving, and cooperation experience gained in this project will build a reliable foundation for future strategic partnership in the international market," underlined Long Haiyang, Vice-President at CC7.

As per MRC, Lummus Technology has been awarded a contract by Enter Engineering Pte. Ltd. for the Shurtan Gas Chemical Complex in Uzbekistan. Lummus’ scope includes the design and supply of four proprietary Short Residence Time (SRT) VI and VII type cracking furnaces, which will more than double the production of ethylene at Shurtan’s facility.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,594,510 tonnes in the first nine months of 2020, up by 1% year on year. Only high denstiy polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market reached 880,130 tonnes in the nine months of 2020 (calculated using the formula: production minus exports plus imports, exluding producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.
MRC

Shin-Etsu reports lower income on reduced PVC, silicone earnings

MOSCOW (MRC) -- Shin-Etsu Chemical Co., Ltd. (SHECF.PK,SHECY.PK) reported that its net income attributable to owners of parent for the first half of the fiscal year ending March 31, 2021 decreased to 140.31 billion yen from 165.03 billion yen last year, said Chemweek.

Net sales for the period declined to 710.53 billion yen from 786.54 billion yen in the previous year. The year-end dividend for the fiscal year ending March 31, 2021 is expected to be130 yen per share, an increase of 20 yen per share from the interim dividend of 110 yen per share.

The company projects that the dividend on an annual basis will be 240 yen per share, an increase of 20 yen per share from the dividend for the previous year of 220 yen per share.

Looking ahead for the fiscal year ending March 31, 2021, the company now expects net income attributable to owners of parent to be 283.0 billion yen or 681 yen per share, operating income of 377.0 billion yen, and net sales of 1.43 trillion yen.

Previously, the company expected net income attributable to owners of parent to be 314.0 billion yen or 755 yen per share, operating income of 406.0 billion yen, and net sales of 1.54 trillion yen.

According to MRC"s ScanPlast report, September total production of unmixed PVC grew to 86,000 tonnes from 75,500 tonnes a month earlier, SayanskKhimPlast and RusVinyl increased their capacity utilisation. Overall output of polymer were 718,500 tonnes in the first nine months of 2020 versus 720,500 tonnes a year earlier, only two producers raised their production volumes, and RusVinyl cut its output.
MRC

Oil and gas EPC majors shift to cleaner energy

MOSCOW (MRC) -- Major oil and gas engineering, procurement, and construction (EPC) companies are increasingly shifting their strategies toward cleaner energy segments, according to Hydrocarbonprocessing.

With a bleak investment outlook for the sector in the wake of COVID-19, now is seen as good a time as any for major oil and gas companies to make strategic shifts in energy transition, according to analysis by GlobalData.

Major oil and gas EPCs, which have traditionally relied on projects within the oil and gas value chain and have had relatively little exposure to renewables, are now looking to renewables and other clean energy sectors for future growth.

EPC companies are adopting diverse strategies to position themselves for the energy transition. Aker and TechnipFMC, for example, have restructured their businesses to create dedicated units for low-carbon projects. Petrofac aims to achieve net zero in Scope 1 and Scope 2 emissions by 2030. Despite these varying approaches, the most common target segments among major oil and gas EPC companies are offshore wind and carbon capture and storage (CCS).

“COVID-19 brought a major oil and gas demand shock, delayed projects and raised additional questions about the potential for future oil demand growth. Oil and gas investment is likely to flatline at best over the coming years, and companies will need to look to the growth markets of new energy sectors to support their businesses,” said Will Scargill, GlobalData managing oil and gas analyst.

“The targeting of offshore wind and carbon capture is a common theme among companies from the oil and gas sector looking to adapt for the energy transition due to the potential for knowledge synergies. Oil and gas EPCs looking to target new segments will also hope to benefit from existing partnerships with clients making a similar transition. However, their growth plans will face a challenge from incumbent players in the renewables space,” Scargill added.

As MRC informed earlier, the coronavirus pandemic underscored BP's efforts to "reimagine energy" by taking a leading role in the push to cleaner, low-carbon fuels, said CEO Bernard Looney in July, 2020. Rising levels uncertainty over the future demand for oil, oil price volatility, a growing attractiveness of stable returns from some renewables, and an increased awareness of "the fragility of the world we live in" mean BP is taking the right path to pursue lower-carbon fuels, Looney said.

We remind that in July, 2020, the Turkish Competition Council gave permission to SOCAR and BP to establish a joint venture that will operate in the petrochemical sector. Earlier it was reported that SOCAR and BP applied to the relevant institutions in Turkey to establish a joint petrochemical company, which will be called Mercury complex, in April 2020. Recall that on December 20, 2018 SOCAR and BP signed contractual principles for evaluation of plans for creation a world-class petrochemical complex in Turkey and establishment of a joint venture to manage it.

Construction of the complex was planned to begin during the current year in order to put the enterprise into operation in 2023-2025. However, due to low oil prices and to the COVID-19 pandemic, the project implementation has been postponed until 2021. The Mercury complex will be built near the Petkim petrochemical complex and the STAR refinery in Aliaga region. The enterprise will produce 1.25 million tons of purified terephthalic acid (PTA), 840 thousand tons of paraxylene (PX), 340 thousand tons of benzene.

PTA is the main raw material in the production of polyester from which beverage and food containers, packaging materials, photo and film and other consumer and industrial goods are derived.

According to ICIS-MRC Price report, consumption of PET chips by Russian converters decreased in October, which is generally in line with the current season. Market participants reported weak demand in the Russian PET chips market at the end of last month and expect its further decline in early November. The revival of the domestic PET market is expected in the second half of November, before the New Year holidays.
MRC

Celanese completes sale of stake in Polyplastics

MOSCOW (MRC) -- Celanese has completed the sale of its 45% equity investment in Japanese engineering plastics company Polyplastics to Daicel Corp for USD1.575bn in cash, the US chemicals company said.

Daicel now owns all of Polyplastics, which makes liquid crystal polymers, polyphenylene sulphide (PPS), as well as polyoxymethylene (POM) copolymer, known as polyacetal. With the sale, announced in July, Celanese has monetised a “historically passive investment” and expects to deploy the proceeds into higher value-generating opportunities, it said.

As noted in the July 20, 2020, announcement, Celanese has been investing in and rapidly growing its own Engineered Materials base business globally over the last 10 years, independent of Polyplastics, with a footprint in Asia significantly greater now than when the Company entered the region more than 50 years ago through Polyplastics. The sale of Polyplastics is an intentional departure from a legacy relationship to a more contemporary approach to independently drive future growth, advance application development with customers, and pursue high-return expansion opportunities for the benefit of Celanese and its customers.

"Celanese is well-positioned to continue its growth trajectory as we increase investment in new product development to serve customer demand in growth segments and key geographies,” said Tom Kelly, Senior Vice President, Engineered Materials, Celanese. “We will continue to invest in product expansion to serve the growing demand in applications such as 5G, advanced mobility, medical/pharma, and sustainable materials. Celanese also plans to expand its manufacturing capacity and advance its T&I capabilities in Asia to meet rapidly growing demand in the region."

As MRC informed earlier, Clariant, Celanese, and Orbia have been fined a total of EUR260 million (USD296 million) by the European Commission for breaching EU competition rules by participating in a cartel related to ethylene purchases in Europe. Westlake, which also participated in the cartel, received full immunity by revealing the breach, avoiding an aggregate fine of about EUR190 million, the Commission says.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,594,510 tonnes in the first nine months of 2020, up by 1% year on year. Only high denstiy polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market reached 880,130 tonnes in the nine months of 2020 (calculated using the formula: production minus exports plus imports, exluding producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.

Celanese Corporation is a global technology leader in the production of differentiated chemistry solutions and specialty materials used in most major industries and consumer applications. Based in Dallas, Celanese employs approximately 7,700 employees worldwide and had 2019 net sales of USD6.3 billion.
MRC

Huntsman announces sale of its India-based DIY consumer adhesives business

MOSCOW (MRC) -- Huntsman Corporation announced that it has entered into a definitive agreement to sell its India based Do-It-Yourself (DIY) consumer adhesives business, part of the Advanced Materials division, to Pidilite Industries Ltd. in an all-cash transaction valued at up to USD285 million, excluding customary working capital and other adjustments, as per the company's press release.

The transaction value represents a 2019 adjusted EBITDA multiple of approximately 15 times. Under the terms of the agreement Huntsman will receive approximately USD257 million in cash at closing and up to approximately USD28 million of additional cash under an earn out within 18 months if the business achieves sales revenue in-line with 2019. The transaction is expected to close within the coming week.

Peter Huntsman, Chairman, President and CEO commented: "We have taken this business and built it from almost nothing to be a market leader in India. To take it to the next level of size and value, we simply do not have the footprint in India to do so. Pidilite is a respected leader in consumer adhesives within India and is in a better position to invest in and more aggressively grow this consumer DIY business over the coming years. We anticipate within the coming months that we will be able to deploy the proceeds from this asset and replace the lost EBITDA with other growth assets that fit even better within our core Advanced Materials specialty business."

As MRC reported earlier, Nanjing Jinling Huntsman, a joint venture between Huntsman and Sinopec Jinling, planned to shut its propylene oxide plant in Nanjing (Nanjing, Jiangsu Province, China) on November 1 for scheduled maintenance. This plant with a capacity of 240,000 tonnes/year of propylene oxide will be closed until approximately 25 November.

According to MRC's ScanPlast report, PP shipments to the Russian market reached 880,130 tonnes in the nine months of 2020 (calculated using the formula: production minus exports plus imports, exluding producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.

Huntsman Corporation is a publicly traded global manufacturer and marketer of differentiated and specialty chemicals with 2019 revenues of approximately USD7 billion. The company's chemical products number in the thousands and are sold worldwide to manufacturers serving a broad and diverse range of consumer and industrial end markets. The company operates more than 70 manufacturing, R&D and operations facilities in approximately 30 countries and employ approximately 9,000 associates within our four distinct business divisions.
MRC