MOSCOW (MRC) -- Neste Corporation has signed an agreement to sell its existing base oils business to Chevron Corporation, one of the world's leading integrated energy companies, said the company.
The agreement covers a combination of share and asset deals forming Neste's entire global base oils business. As part of the divestment, the parties have also agreed on a long-term offtake for Neste’s base oils supply from Porvoo, Finland. With the same date, Neste has signed an agreement to exit its base oils joint venture with Bahrain Petroleum Company and Nogaholding.
"I want to thank our people in the base oils business who have been known for their pioneering spirit throughout the years. They have built the foundation for Neste to become one of the world’s leading producers of Group III base oils, and we can be extremely proud of that. Chevron being a leading manufacturer of base oil products is therefore an excellent company to nurture and develop the NEXBASE base oils business further,” says Neste’s President and CEO Peter Vanacker.
Neste’s base oils have been produced in Porvoo, Finland and by a base oils joint venture with Bapco and Nogaholding in Bahrain. The agreement with Chevron will cover Neste’s Porvoo base oils production volumes, its premium brand NEXBASE™, all formulation coverage associated with the brand, as well as a global marketing and distribution platform. In connection with the divestment, Neste is exiting the joint venture with Bapco and Nogaholding, and will no longer have presence in Bahrain.
The parties are committed to ensuring a seamless transition to NEXBASE customers and all other stakeholders including employees. The parties have agreed that the transaction price shall remain confidential. The transaction will not have a material effect on Neste’s financial position. The completion of the divestment is subject to the approval of the competition authorities and customary closing conditions, with estimated completion date by the end of Q1/2022.
As MRC reported earlier, in August 2021, Chevron and other partners said they are investing in a startup to build modular waste-to-green hydrogen and renewable synthetic fuel facilities in northern California with tentative plans to eventually grow worldwide. The USD20 million investment in Wyoming-based Raven SR is focused on technology to develop combustion-free, green hydrogen for transportation that is cleaner than so-called blue hydrogen derived from natural gas.
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 1,176,860 tonnes in the first half of 2021, up by 5% year on year. Shipments of exclusively low density polyethylene (LDPE) decreased. At the same time, PP shipments to the Russian market were 727,160 tonnes in the first six months of 2021, up by 31% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased. Supply of statistical copolymers of propylene (PP random copolymers) subsided.
Headquartered in San Ramon, California, Chevron Corporation is the the second-largest integrated energy company in the United States and among the largest corporations in the world. Chevron is involved in upstream activities including exploration and production, downstream activities including refining, marketing and transportation, and advanced energy technology. Chevron is also invested in power generation and gasification processes.