Versalis licenses LDPE-EVA technology for MTO project in Uzbekistan

MOSCOW (MRC) -- Versalis S.p.A. (San Donato Milanese), the chemical company of Italian energy major Eni, has licensed to Enter Engineering Pte. Ltd. a Low-Density Polyethylene/Ethyl Vinyl Acetate (LDPE/EVA) swing unit to be built as part of a new Gas-to-Chemical Complex based on MTO-Methanol to Olefins technology to be located in the Karakul area in the Bukhara region of the Republic of Uzbekistan, said Chemweek.

The plant is part of a global complex that will have a major importance in Central Asia due to its size and the technologies involved. Enter Engineering Pte. Ltd., one of the largest construction companies in the region, will act as licensee on behalf of the Uzbek Company Jizzakh Petroleum JV LLC, who will own and operate the LDPE/EVA unit and the entire Gas to Chemical Complex once built and made ready for operation.

The licensed plant will be based on the Versalis proprietary LDPE/EVA Technology. The unit will be designed for a maximum production of EVA equivalent to180,000 metric tons per year (m.t./yr). LDPE and EVA are ethylene polymers and co-polymers possessing a suitable balance between processability and mechanical properties, which are widely used in the industry for the production of materials covering a variety of applications including film, coating, injection moulding, packaging, medical appliances, foams and as a base component for hot melt adhesives.

The LDPE/EVA technology is part of the wider polymers’ technologies portfolio offered by Versalis to produce high-value products. Versalis’ background and expertise as licensor of its proprietary technologies relies on its enduring R&D and lab & pilot plant testing capabilities, and full-scale operational experience at its own production facilities. This knowledge strengthens Versalis’ actions to support and assist its licensees in achieving their specific needs from the project development phase throughout the operational stages.

The contract has been acquired by Versalis in cooperation with ECI Group, a US based plant-lifecycle specialist providing services in design, engineering, procurement, construction, technology and consultancy particularly focused on polyolefins plants. ECI Group comprises Engineers and Constructors International (US), Simon Carves Engineering Ltd. (UK) and International Technical Excellence Center (US).

As per MRC, Versalis, Eni's chemical company and a leader in the production and marketing of elastomers, and AGR, company that owns technology for the devulcanization of post-consumer elastomers, signed an agreement to develop technological innovations and new products and applications with recycled rubber.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,220,640 tonnes in 2020, up by 2% year on year. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, polypropylene (PP) shipments to the Russian market reached 1 240,000 tonnes in 2020 (calculated using the formula: production, minus exports, plus imports, excluding producers' inventories as of 1 January, 2020).

Eni is an Italian multinational oil and gas company headquartered in Rome. It has operations in in 79 countries, and is currently Italy's largest industrial company. The Italian government owns a 30.3% golden share in the company, 3.93% held through the state Treasury and 26.37% held through the Cassa depositi e prestiti. Another 39.40% of the shares are held by BNP Paribas.

Group sells turboexpander business line to Air Liquide

MOSCOW (MRC) -- Nikkiso Cryogenic Industries’ Clean Energy and Industrial Gases Group (Group), a part of Nikkiso Co., Ltd (Japan), has recently announced the sale of its Turboexpander Business Line to Air Liquide, according to Hydrocarbonprocessing.

Located mainly in Santa Ana, California, the Turboexpander Business Line designs, manufactures and sells Turboexpanders within the industrial gas industry as well as the natural gas liquefaction industry.

Air Liquide is a world leader in gases, technologies and services for Industry and Health and has been the largest customer of the Nikkiso Group’s Turboexpander Business Line.

Nikkiso’s Cryogenic Service (NCS) unit will remain an authorized service company and will continue to provide Aftermarket Services, including repair and servicing of ACD designed and built Turboexpander machines while Air Liquide will provide service activities to its plants and its third party plants customers. This arrangement will guarantee all ACD service clients will continue to receive strong support going forward.

“We are confident the Turboexpander Business Line will continue to grow under Air Liquide’s management, and look forward to continuing to provide our services in favor of the entire ACD clientele with Air Liquide for a long time to come,” according to Peter Wagner, CEO of Cryogenic Industries and President of the Group.

As MRC wrote earlier, in September 2020, Air Liquide finalised an agreement with Sasol to acquire the biggest oxygen production site in the world with a plan to reduce its carbon dioxide (CO2) emissions by 30%. After the announcement on July 29, the international major industry gas company has now entered into a business purchase agreement with Sasol to acquire the oxygen production site in Secunda, South Africa.

We remind that 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 LCCP, is the third and most significant of the seven LCCP facilities that came online and will provide feedstock to the company's six new derivative units at Sasol's Lake Charles multi-asset site.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,220,640 tonnes in 2020, up by 2% year on year. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, polypropylene (PP) shipments to the Russian market reached 1 240,000 tonnes in 2020 (calculated using the formula: production, minus exports, plus imports, excluding producers' inventories as of 1 January, 2020).

Trinseo earnings surge YOY on higher volume, margins

MOSCOW (MRC) -- Trinseo (Berwyn, Pennsylvania) reports net income for the fourth quarter of USD67 million, up tenfold from USD6 million in the year-ago period, on sales of USD860 million, down 3.3% year-over-year (YOY) from USD889 million, according to Chemweek.

Adjusted earnings per share came to USD1.84, up from $0.35 in the year-ago period and ahead of the consensus estimate of USD1.78 as compiled by Zacks Investment Research.

Lower prices, mainly on the pass through of lower raw material costs, resulted in a 10% decline in sales, partially offset by higher volume across all segments except feedstocks, says Trinseo. Higher net income reflected higher volume and margin, particularly within the polystyrene and base plastics segments, and a favorable pre-tax net timing variance of USD37 million.

“Demand recovery in end markets like appliances and automotive in the second half of the year, as well as commercial excellence initiatives, resulted in robust earnings in the third and fourth quarters,” says Frank Bozich, president and CEO. “In fact, the fourth-quarter adjusted EBITDA was our highest result in over two years, and we ended the year in a very strong liquidity position.”

Trinseo expects positive trends in volume and margins to continue in the first quarter. The company forecasts full-year 2021 net income of US167-200 million versus USD8 million for 2020.

The latex binders segment reported sales of $200 million, down 9% YOY on the pass through of lower raw material costs. Volumes increased slightly gains in CASE, textile, board and specialty paper applications were mostly offset by declines in graphical paper applications. Adjusted EBITDA was flat YOY at USD22 million as higher sales volume was offset by net timing.

The synthetic rubber segment reported sales of USD102 million, up 2% YOY. Higher solution and emulsion styrene-butadiene rubber (sSBR and eSBR) volume and favorable currency effects increased sales by 16% and 7%, respectively, but were mostly offset by lower pricing on raw material pass-through. Demand in the tire market was consistent with the third quarter. Adjusted EBITDA increased 33% YOY to USD16 million, with a favorable net timing variance of USD4 million and higher sales volume partially offset by lower fixed-cost absorption. Trinseo says it is still considering whether to divest the segment.

Sales in engineered materials totaled USD60 million, up 5% YOY on higher sales volume to consumer electronics applications in Asia and thermoplastic elastomer applications in Europe. Adjusted EBITDA increased 20% YOY to USD12 million, mainly on a 7% YOY increase in sales volume.

The Base Plastics segment reported sales of USD269 million, flat YOY as higher sales volume to automotive applications and favorable currency impacts were offset by lower pricing on raw material pass-through. Adjusted EBITDA increased 174%% YOY to USD52 million on higher acrylonitrile-butadiene-styrene (ABS), polycarbonate (PC) and compounding margins as well as higher sales volume.

Polystyrene (PS) sales totaled USD193 million, up 10% YOY on higher sales volume driven by continued strong demand into applications such as appliances, construction, and packaging. Adjusted EBITDA increased X% YOY to USD34 million on higher margins, particularly in Asia, higher sales volume, and a favorable net timing variance of USD9 million.

Feedstocks sales totaled USD36 million, down 47% YOY on lower styrene pricing and styrene-related sales volume. Adjusted EBITDA was USD15 million, up from a USD10 million loss in the year-ago quarter owing to higher styrene margins in Europe as well as a USD19 million favorable net timing variance.

Americas Styrenics adjusted EBITDA came to USD25 million, up 18% YOY on higher styrene volume and margin in North America, which reflected industry outages in the region.

As MRC reported earlier, Trinseo, a global materials company and manufacturer of plastics, latex binders, and synthetic rubber, and its affiliate companies in Europe, have announced a price increase for all PS and ABS in Europe. Effective February 1, 2021, or as existing contract terms allow, the contract and spot prices for the products listed below rose as follows:

- STYRON general purpose polystyrene grades (GPPS) -- by EUR40 per metric ton;
- STYRON and STYRON A-Tech and STYRON X- Tech and STYRON C- Tech high impact polystyrene grades (HIPS) - by EUR40 per metric ton;
- MAGNUM ABS resins - by EUR200 per metric ton.

Trinseo is a global materials company and manufacturer of plastics, latex and rubber. Trinseo's technology is used by customers in industries such as home appliances, automotive, building & construction, carpet, consumer electronics, consumer goods, electrical & lighting, medical, packaging, paper & paperboard, rubber goods and tires. Formerly known as Styron, Trinseo completed its renaming process in 1Q 2015. Trinseo had approximately USD3.8 billion in net sales in 2019, with 17 manufacturing sites around the world, and approximately 2,700 employees.

Enterprise Products Partners Q4 2020 profits hit by slow energy demand recovery

MOSCOW (MRC) -- Enterprise Products Partners reported Feb. 3 a 69% decline in profit for the final three months of 2020 amid a slow demand recovery from the worst shocks of the coronavirus pandemic, reported S&P Global.

The operator of pipelines, processing plants and export and storage facilities recorded a year-on-year decline in natural gas and NGL, crude oil, refined products and petrochemical transportation volumes for the October-December quarter. NGL fractionation and propylene plant production volumes rose.

The company reiterated its plan to cut spending over the next two years, though it will bring online several additions during that timeframe. They include the expansion of an ethane pipeline serving the petrochemical industry on the Gulf Coast, a gas pipeline that will deliver Haynesville production to LNG markets in Louisiana and a hydrotreater in Texas that will remove sulfur in natural gasoline.

Perhaps the greatest uncertainty going forward comes from potential policy changes from the Biden administration that could affect fossil fuel interests. During an investor conference call, Enterprise executives acknowledged the impact that limits on shale drilling volumes would have on pipeline, processing and export volumes.

"Reading the news, some may think the sun is setting on oil and gas," co-CEO James Teague said on the call. "Obviously, policy proposals from this new administration have been supportive of renewables. The cleaner energy future does not mean a world without fossil fuels. The reality is nothing could be further from the truth."

Teague said that while discussion of the global energy transition often implies shifting away from traditional hydrocarbons, Enterprise still believes an "all-of-the-above approach" will be required to meet the world's growing energy needs.

"Limiting supply only makes Russia, OPEC and Iran richer and more powerful," Teague said. "And it says to the 3 billion people on this planet that live in energy poverty that US politicians don't care about their quality of life."

Enterprise sees potential production limits as bullish for prices and Biden's revocation of a key permit for TC Energy's Keystone XL heavy crude pipeline - effectively suspending work on the $8 billion project - as potentially having a positive effect on throughput on Enterprise's Seaway pipeline system. Also, Enterprise is working with Magellan Midstream Partners to make Houston the most desirable destination to ship crude oil. They are teaming to develop a new crude oil futures contract.

"It works for producers, it should work for refiners, it should work for consumers, and the fact there's transparency for people to go out and conduct their business long-term," Brent Secrest, Enterprise's chief commercial officer, said on the investor call.

For the three months ended Dec. 31, Enterprise reported net income attributable to common unit holders of USD337 million, or 15 cents a share, compared with a profit of USD1.1 billion, or 50 cents a share, in the same period of 2019. Fourth-quarter 2020 revenue fell 12% to USD7.04 billion from USD8.01 billion in the October-December quarter of 2019.

Total natural gas transportation volumes slid to 13.7 TBtus/d in the final quarter of 2020 from 13.8 TBtus/d for the same quarter of 2019. Total crude oil pipeline transportation volumes in the latest quarter fell year-on-year to 2 million b/d from 2.3 million b/d. NGL fractionation volumes jumped 20% to 1.3 million b/d in the fourth quarter of 2020 from 1.1 million b/d in the same period of 2019, Enterprise said.

The prolific Permian Basin in West Texas and southeastern New Mexico remains a key market for Enterprise, supplying significant volumes of oil and gas to its pipeline system.

With the Biden administration talking about limiting drilling on federal lands, Enterprise is mindful of how that could impact future production.

"It's hard for me to say that we're going to have a bunch of discretionary barrels until the Permian Basin recovers, and that's going to take years, but I feel when it comes to weathering the storm, we'll be okay," Secrest said.

As MRC informed previously, Enterprise Product Partners' propane dehydrogenation (PDH) unit in Mont Belvieu, Texas, was taken off-line for a turnaround in early February. Thus, the PDH unit was shut for scheduled maintenance on Feb. 1 for approximately six weeks. This PDH unit has the capacity of 750,000 mt/y of propylene.

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

According to MRC's ScanPlast report, PP shipments to the Russian market reached 1 240,000 tonnes in 2020 (calculated using the formula: production, minus exports, plus imports, excluding producers' inventories as of 1 January, 2020).

Enterprise Products Partners L.P. is an American midstream natural gas and crude oil pipeline company with headquarters in Houston, Texas. It acquired GulfTerra in September 2004. The company ranked No. 105 in the 2018 Fortune 500 list of the largest United States corporations by total revenue

PPG raises offer for Finland's Tikkurila, tops Akzo bid

MOSCOW (MRC) -- Finnish paints maker Tikkurila said on Thursday Pittsburgh-based PPG has raised its all-shares offer for the company to 34.00 euros per share, topping a rival bid from Akzo Nobel, reported Reuters.

The two industry heavyweights are seeking to tap into Tikkurila’s strong position in Finland, Sweden, the Baltics, Russia and Poland.

“Today’s bid values Tikkurila ...well above both Akzo Nobel’s and PPG’s own multiples, highlighting the quality and importance of acquiring the asset,” Citi analysts said in a note.

Tikkurila’s board has unanimously decided to recommend that the shareholders accept the PPG’s raised offer, which values the firm at 1.5 billion euros (US1.8 billion).

Shares in Tikkurila were up 3.6% at 34.2 euros at 1031 GMT.

Tikkurila said some major shareholders, holding 29.3% of its shares, have agreed to accept the offer if PPG gets regulatory approvals for the acquisition.

PPG has lowered its acceptance rate for the offer to 66.7% of shares from its original 90% target.

The battle for Tikkurila started in December with PPG’s 25 euros per share offer, which it raised to 27.75 euros after rival Hempel approached Tikkurila.

Akzo Nobel last week made a binding offer of 31.25 euros per share, valuing Tikkurila at 1.4 billion euros.

As MRC informed previously, in February 2020, PPG said it had completed its acquisition of Industria Chimica Reggiana (ICR, Reggio Emilia, Italy), a maker of automotive refinish products. Financial terms of the deal, including purchase price, were not disclosed. The deal was announced on 8 January. ICR was founded in 1961 and employs about 180 people. ICR manufactures automotive refinish products, including putties, primers, basecoats and clear coats. It also makes a range of coatings, enamels and primers for light commercial vehicles and other light industrial coatings applications. ICR employs about 180 people and sells its products in more than 70 countries in Europe, Africa, the Middle East, the US and Latin America.

We remind that Russia's output of chemical products rose in November 2020 by 9.5% year on year. At the same time, production of basic chemicals increased in the first eleven months of 2020 by 6.6% year on year, according to Rosstat's data. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the January-November 2020 output. November production of polymers in primary form rose to 896,000 tonnes from 852,000 tonnes in October. Overall output of polymers in primary form totalled 9,240,000 tonnes over the stated period, up by 17.1% year on year.