Chart Industries acquires L.A. Turbine

Chart Industries acquires L.A. Turbine

MOSCOW (MRC) -- Chart Industries, Inc. has acquired L.A. Turbine for USD80 million. L.A. Turbine is a global leader in turboexpander design, engineering, manufacturing, assembly and testing process for new and aftermarket equipment, with significant in-house engineering expertise, said Hydrocarbonprocessing.

This acquisition aligns with our inorganic investment principles and contributes to our financial growth and strength through expanded revenue and profit. LAT’s capabilities are a natural fit and deliver a competitive point of differentiation for Chart. There is a very unique expander required for hydrogen and helium liquefaction which is difficult to obtain in the market due to a limited number of companies like LAT that are capable of designing and producing it. Further, within the last three years, the other qualified suppliers have been acquired by companies that only use their hydrogen and helium turboexpanders for in-house dedicated purposes (i.e. discontinuing sales to third parties). These very specialized expanders are difficult to design and produce as they require very high efficiency, in some cases oil free machines, foil bearings for plants producing 10 tons per day and smaller, and magnetic bearings for larger helium and hydrogen liquefaction plants. Plus, this part of the liquefier is one of the longest lead-time items at one to two years depending on the configuration. L.A. Turbine has these capabilities in-house and our ownership of these capabilities will further position us to win liquefaction projects and deliver them in significantly shorter timeframes, a further differentiator in the expanding liquefaction market.

"It is an exciting time for Chart and L.A. Turbine as we now work together to bring our customers expanded solutions across multiple molecules, including nearly all types of energy sources and multiple industrial gas applications,” stated Jill Evanko, Chart’s CEO and President. “L.A. Turbine is one of the only turboexpander engineering and manufacturing companies that can design and produce very specialized expanders; one of the longest lead time items in the hydrogen and helium liquefaction supply chain. With this capability in house, we are further differentiated in liquefaction – not just from decades of experience but also from world class efficiency and now, significantly shorter and guaranteed delivery times."

Couple the above complementary nature of the business with the fact that our companies have worked together for numerous years and we expect to have immediate and significant synergies including expanded field service and repair capabilities (LAT is the global leader in servicing all brands of turboexpanders).

"Since our company’s inception, L.A. Turbine’s focus is to be the go-to turboexpander solution provider, as an OEM of highly-engineered rotating equipment designs and process solutions for engineering, procurement and construction clients and end-user operators as well as aftermarket, service and repair. With Chart we can both capitalize on emerging market opportunities while also enhancing and extending the reach of the value chain to our collective customers through our people, technology, infrastructure and financial assets,” stated Danny Mascari, President, L.A. Turbine. “In addition, we remain committed to providing the top-of-the-line FX-TURBO aftermarket service our turboexpander customers have come to know and expect."

Additionally, this acquisition builds on other recent additions to our portfolio, including Cryo Technologies’ helium and hydrogen liquefaction capabilities which will also utilize L.A. Turbine’s equipment. Both of our businesses have very active commercial order pipelines and there are multiple requests for hydrogen liquefaction and processing as well as a variety of energy projects.

LAT is expected to be immediately accretive to Chart, with 2021 positive impact to full year guidance to be shared on Chart’s second quarter 2021 earnings call which is scheduled for July 22, 2021. Looking ahead to 2022, when we will have ramped up our combined benefits, L.A. Turbine is expected to contribute between USD40 and USD50 million of revenue and USD0.20 to USD0.30 of non-diluted earnings per share on approximately 35.5 million weighted shares outstanding (assuming tax rate of 18%). Additionally, our total addressable market (“TAM”) for our specialty products is expanded by USD350 million resulting from this acquisition – the result of the expanded TAM for hydrogen liquefaction, helium liquefaction and carbon capture with energy storage. This addition brings our total near-term specialty products addressable market size to USD6.6 billion. Winston & Strawn LLP served as legal advisor to Chart on the transaction. No investment bankers were engaged in this transaction.

As per MRC, Reliance Industries (RIL) and US-based Chart Industries are leading a new coalition focussed on commercialising hydrogen technologies and systems to build net-zero carbon pathways in India. The alliance will work together to build the hydrogen economy and supply-chain here and also help develop blue and green hydrogen production and storage apart from building hydrogen-use industrial clusters and transport use-cases with hydrogen-powered fuel cells.

Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 744,130 tonnes in the first four month of 2021, up by 4% year on year. Shipments of all PE grades increased. At the same time, PP deliveries to the Russian market were 523,900 tonnes in January-April 2021, up by 55% year on year. Supply of homopolymer PP and PP block copolymers increased, whereas shipments of PP random copolymers decreased.
MRC

Union, company meet over Exxon Mobil refinery lockout in Beaumont

Union, company meet over  Exxon Mobil refinery lockout in Beaumont

MOSCOW (MRC) -- Union and company negotiators met to discuss the lockout of workers at Exxon Mobil Corp’s (XOM.N) Beaumont, Texas refinery, spokespeople for both sides said, as per Reuters.

Exxon and United Steelworkers union (USW) representatives agreed to meet again next week, said Hoot Landry, international staff representative for the union, as the lockout of 650 workers reached nine weeks. "We continue to meet and bargain in good faith,” said Exxon spokeswoman Julie King. “Our current offer remains available for a vote by the membership."

Exxon locked out the workers represented by USW 12-243 on May 1, citing the risk of a strike. Exxon has said the proposal would give it flexibility to be profitable in even low-margin environments.

As MRC informed previously, Gov. John Bel Edwards and ExxonMobil Baton Rouge Refinery Manager David Oldreive have announced the company’s final investment decision for more than USD240 million in capital improvements at the ExxonMobil Baton Rouge Refinery.

Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 744,130 tonnes in the first four month of 2021, up by 4% year on year. Shipments of all PE grades increased. At the same time, PP deliveries to the Russian market were 523,900 tonnes in January-April 2021, up by 55% year on year. Supply of homopolymer PP and PP block copolymers increased, whereas shipments of PP random copolymers decreased.

ExxonMobil is the largest non-government owned company in the energy industry and produces about 3% of the world's oil and about 2% of the world's energy.
MRC

Haldor Topsoe to build catalyst plant

Haldor Topsoe to build catalyst plant

MOSCOW (MRC) -- Haldor Topsoe will build a 15,000-tpy hydroprocessing catalyst plant at the company’s existing Bayport production site in Pasadena, Harris County, Texas, said the company.

The plant will increase production capacity of Topsoe’s TK catalyst family to meet increasing demand, both in traditional refining and for use with Topsoe’s HydroFlex technology for production of renewable diesel and jet fuel. The plant is expected to be fully operational in the first half of 2023.

"We are happy to announce this significant investment which will reduce lead time and secure stable deliveries of Topsoe’s top-tier hydroprocessing catalysts to our customers in the U.S. and globally. We see increasing demand for our refining catalysts driven by an increasing global demand for clean fuels as well as the surge in renewable diesel production using our world-leading HydroFlex technology and our proprietary renewable fuel catalysts," says Amy Hebert, Chief Commercial Officer, Topsoe.

The increased production capacity will also help meet growing demand for Topsoe’s hydroprocessing catalysts in the Middle East and South-East Asia. "We are proud to be a member of the innovative and expanding business community in Harris County. Topsoe has a long-standing presence in Bayport where our plant has been in operation for more than 50 years. With this expansion, our operations here are secured for years to come, and the area will benefit from new jobs directly at the facility, as well as more business for our local service providers,” says Amy Hebert.

The new refining catalyst plant is an important step forward in the work to achieve Topsoe’s vision – to be recognized as the global leader in carbon emission reduction technologies by 2024. “I am always looking for opportunities that strengthen our local economy and that also get people working in good-paying jobs. I am proud of this partnership between Harris County and Haldor Topsoe to build a new facility in the Pasadena-area of Precinct 2” says Adrian Garcia, Harris County Precinct 2 Commissioner. “This project is the first under our newly adopted Economic Development Guidelines. We are also always supportive of new innovative methods of cleaner energy production, so this project satisfies a number of my goals for industry that decides to make its home in Precinct 2,” says Adrian Garcia.

“This is a huge win for the region and the new TK hydroprocessing catalyst manufacturing plant should be viewed as critical infrastructure to support the world's largest petrochemical complex. Its production will meet a growing global market demand coinciding with decades of unprecedented capital investment that has taken advantage of North America’s abundant low-cost and clean burning natural gas. With a 7-to-1 indirect job creation of high-paying careers, it is the type of project that further strengthens our economy in the Houston Port Region,” says Chad Burke, President & CEO, Economic Alliance Houston Port Region.

"Today’s exciting announcement from Haldor Topsoe to expand operations in Bayport with a new TK hydroprocessing catalyst plant serves as another prime example of the region’s leadership in the global energy transition to a low-carbon world. Houston has the expertise and built infrastructure necessary to produce and transport Haldor Topsoe’s hydroprocessing catalyst to customers in the U.S. and globally. We thank Haldor Topsoe for their continued investment in the Houston region," Says Susan Davenport, Chief Economic Development Officer, Greater Houston Partnership.

As MRC reported earlier, in May, 2020, Honeywell announced that Enterprise Products Partners L.P. will use Honeywell UOP’s C3 Oleflex technology in its second propane dehydrogenation plant, called "PDH 2". Located near Mont Belvieu, Texas, PDH 2 will produce 750,000 metric tons per year of polymer-grade propylene as part of Enterprise’s expansion of propylene manufacturing capacity.

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

According to MRC's ScanPlast report, PP deliveries to the Russian market were 523,900 tonnes in January-April 2021, up by 55% year on year. Supply of homopolymer PP and PP block copolymers increased, whereas shipments of PP random copolymers decreased.
MRC

Honeywell UOP technology will allow state government to meet regional emission standards

Honeywell UOP technology will allow state government to meet regional emission standards

MOSCOW (MRC) -- Honeywell announced that the Societe Ivoirienne de Raffinage (SIR), the state-owned refining company of Cote d’Ivoire, will use Honeywell UOP Distillate Unionfining technology to produce diesel that complies with both AFRI 6 and Euro-V emission standards, said Hydrocarbonprocessing.

The investment is part of Cote d’Ivoire clean air program and SIR’s refinery modernization. UOP, a leading technology provider for the oil and gas industry, will provide services, equipment, catalysts and adsorbents. The UOP Unionfining process removes impurities to improve the quality of middle distillate feedstocks such as kerosene, jet fuel, and diesel oils that meet increasingly stringent regulations for fuels such as diesel.

"The addition of the UOP Distillate Unionfining process will allow SIR to meet changing diesel specifications in Africa, with a cost-effective solution that reduces the sulfur content while maximizing distillate yields,” said Laura Leonard, vice president and general manager, Honeywell UOP Process Technologies. “Our design for this unit and track record of success with this technology enables SIR to raise its crude processing capacity, as part of the modernization one of the West Africa’s largest oil refineries."

UOP Unionfining technology provides flexible solutions to gas oil conversion for ultra-low-sulfur diesel fuel and kerosene production. UOP is the world’s leading provider of distillate hydrotreating technology and has licensed more than 370 Unionfining units globally.

The Societe Ivoirienne de Raffinage (SIR) was created in 1962 by the Ivorian government with the support of international oil groups. It refines crude oil and distributes petroleum products in Cote d’Ivoire and the rest of the world. SIR refines 3.8 million tons of crude oil on an annual basis.

As MRC reported earlier, in May, 2020, Honeywell announced that Enterprise Products Partners L.P. will use Honeywell UOP’s C3 Oleflex technology in its second propane dehydrogenation plant, called "PDH 2". Located near Mont Belvieu, Texas, PDH 2 will produce 750,000 metric tons per year of polymer-grade propylene as part of Enterprise’s expansion of propylene manufacturing capacity.

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

According to MRC's ScanPlast report, Russia's supply of homopolymer PP and PP block copolymers increased, whereas shipments of PP random copolymers decreased. PP deliveries to the Russian market were 523,900 tonnes in January-April 2021, up by 55% year on year.
MRC

Processing volumes in the world will continue to grow due to the increase in the number of vaccinations in July, August

Processing volumes in the world will continue to grow due to the increase in the number of vaccinations in July, August

MOSCOW (MRC) -- Global refining runs are expected to continue rising in July and August due to increasing vaccination rates and easing social distancing measures around the world, the International Energy Agency (IEA) said, said Hydrocarbonprocessing.

The Paris-based agency, however, expected the trend will lose momentum in winter due to seasonal maintenance of refineries. Refiners around the world significantly reduced their operations in 2020 as they faced an unprecedented fall in fuel demand brought about by the coronavirus pandemic and mobility restrictions. The lockdowns at their peak destroyed over 20% of global oil demand.

The refining runs have been rising since February as widespread vaccination programmes started in several countries and restrictions were eased. After stagnating in May, global refining throughput increased by 1.6 million barrels per day (bpd) in June, IEA said in its monthly report.

That was the largest monthly increase since July 2020, which supported crude oil prices. Increased product supply and higher crude oil prices negatively affected product cracks and refinery margins in June. Runs are expected to increase by another 2.7 million bpd over July and August from June levels but will start declining in September and October as refinery maintenance season begins.

The gap between the global refineries throughput in the fourth quarter of the year and its peak in 2018 will be around 2.6 million bpd. The global throughput is not expected to reach 2018 levels by the end of next year, according to IEA. "The main deficit will be on account of Europe and North America, while the Middle East, some parts of Asia, and Latin America are on track to surpass 2018 levels in 2022," IEA said.

The activity of European refiners is not expected to recover to pre-pandemic levels any time soon, IEA said. As a result, annual average throughput rates of Chinese refiners are expected to exceed the European rivals by 3 million bpd in 2022. Chinese refiners reached parity with European refineries in 2019 in terms of throughput.

IEA said stalled talks by top oil producers over releasing more supply could deteriorate into a price war just as COVID-19 vaccines are sending demand for oil surging.

As MRC wrote before, in early July, US crude stocks fell for the sixth straight week as refiners ramped up output in response to rising demand, according to the Energy Information Administration. Crude inventories fell by 6.7 million barrels in the week to June 25 to 452.3 million barrels, a steeper drop than the 4.7 million barrels expected by analysts in a Reuters poll.

We remind that Indian refiners, anticipating a lifting of US sanctions, plan to make space for the resumption of Iranian imports by reducing spot crude oil purchases in the second half of the year. The world's third-largest oil consumer and importer halted imports from Tehran in 2019 after former US President Donald Trump withdrew from a 2015 accord and re-imposed sanctions on the OPEC producer over its disputed nuclear programme.

Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 744,130 tonnes in the first four month of 2021, up by 4% year on year. Shipments of all PE grades increased. At the same time, PP deliveries to the Russian market were 523,900 tonnes in January-April 2021, up by 55% year on year. Supply of homopolymer PP and PP block copolymers increased, whereas shipments of PP random copolymers decreased.
MRC