Huntsman reports jump in Q2 earnings despite global challenges

MOSCOW (MRC) -- Huntsman reported a jump in earnings despite challenges it said it faced during the second quarter related to high natural gas prices in Europe, shutdowns in China and a contracting U.S. economy, said the company.

The Woodlands-based chemical and materials company said its profit jumped 41 percent to USD242 million from USD172 million in the same period last year. Revenues increased 17 percent to USD2.4 billion compared to USD2 billion last year.

"We remain well ahead or on track to meet the targets that we presented at our Investor Day in November 2021,” said the company’s CEO Peter Huntsman, "despite an increasingly challenging economic environment due to extremely high European natural gas prices, headwinds in China associated with government-mandated shutdowns and monetary tightening in the United States."

Every dollar of price increase adds around USD10 million in annual costs for the company, Peter Huntsman said. "During these past two weeks, European gas prices moved nearly 20 percent upwards, costing us in excess of USD100 million on an annualized basis of added cost," he said.

The company may decide to reduce production at some of its European facilities in response to the crisis and increase its imports from Asia and North America. "It has become fairly clear to us that Europe's energy problems will not likely be fixed anytime soon," Huntsman said. "We will look at further consolidation and site rationalizations as we calibrate our business around what may be a more permanent reality for Europe."

Also during the quarter, the company began operating its new USD180 million splitter of MDI, or methylene diphenyl diisocyanate, in Louisiana. It expects the splitter to add USD45 million a year to the company's earnings before interest, taxes, depreciation and amortization.

We remind, Huntsman Corporation announced the start of commercial operation of a new methylene diphenyl diisocyanate (MDI) splitter at its Geismar site in Louisiana. The USD180 million splitter gives Huntsman the ability to produce more high value, differentiated grades from the crude MDI manufactured at the plant, thereby enabling growth in key customer applications.
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ORLEN Group completes merger with Grupa Lotos

MOSCOW (MRC) -- Poland’s ORLEN Group has finalised its merger with Grupa LOTOS, strengthening its leading role in the fuel and energy industry in Central and Eastern Europe, said the company.

The final step in the process that has been successfully completed was the registration of the merger by the District Court of Lodz. The merger paves the way for unlocking synergies inherent in leveraging the potential of the two companies. As an immediate effect, the merger of PKN ORLEN and Grupa LOTOS will help increase capital expenditure, step up the execution of the most profitable projects, increase the country’s energy independence and ensure stable fuel supplies for all customers.

"We are making history,” said Daniel Obajtek, President of the Management Board of PKN ORLEN. “We have merged PKN ORLEN and Grupa LOTOS today. This is the culmination of a transaction which many thought and talked about, but failed to initiate and which we have successfully carried through. The strong business of the new group will be built around the most valuable business segments leveraging the combined capabilities and resources of PKN ORLEN, Grupa LOTOS and, soon, PGNiG."

Indeed, the Management Boards of PGNiG and PKN ORLEN have recently agreed on a plan for the merger of the two companies and on the exchange ratio at which PGNiG shares will be swapped for PKN ORLEN shares. "Building a large, strong multi-utility group is a landmark business project that will stimulate further economic growth and help enhance Poland’s energy security,” said Iwona Waksmundzka-Olejniczak, President of the Management Board of PGNiG. “When PKN ORLEN and the LOTOS Group join forces, it will be easier for us to achieve the energy transition that Poland and all the other countries in Europe simply must undergo."

Its merger with Grupa LOTOS, and eventually with PGNiG, will strengthen PKN ORLEN’s position as the leader in energy transition through investments in low- and zero-carbon energy sources. By investing in green energy, including offshore and onshore wind farms and photovoltaics, as well as alternative fuels, small modular reactors and biomaterials, the new ORLEN Group will significantly contribute to reducing the Polish economy’s dependence on fossil fuels.

Following the merger, the scale of capital expenditure to develop individual businesses formed by the multi-utility group will grow. In 2021 alone the ORLEN Group spent on CAPEX a record amount of 9.9 billion zlotys (approximately 2 billion euros), while this year the figure will break another record of 15.2 billion zlotys (approximately 3.2 billion euros).

We remind, PKN ORLEN has confirmed it is discussing with Aramco and SABIC the possibility of collaborating in investments in various petrochemical business segments. An existing triparty MoU will be extended to evaluate a potential joint development of a large-scale mixed feed steam cracker and downstream derivatives integrated with the Gdansk refinery. Moreover, PKN ORLEN and Aramco continue to explore areas of cooperation in the field of research and development.
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Gazprom halts gas supplies to Latvia

Gazprom halts gas supplies to Latvia

MOSCOW (MRC) -- Gazprom stopped supplying Latvia with gas, the Russian gas giant announced on Saturday citing a violation of the conditions for gas withdrawal, said Ceenergynew.

The move comes as a response to the announcement of Latvian energy firm Latvijas Gaze, which said it was buying gas from Russia, but not from Gazprom. During the last month, approximately one terawatt-hour of natural gas was delivered to Latvia from Russia and the payment was made in euros rather than in roubles as required by Gazprom.

"Latvijas Gaze is currently buying gas, but not from Gazprom,” said the company’s head, Aigars Kalvitis, adding that Latvijas Gaze had another supplier in Russia but he did not reveal the supplier’s name.

Latvia’s parliament has passed a ban on natural gas imports from Russia as of January 1, 2023 and amended its energy law to further support the diversification of natural gas supply routes and the provision of strategic reserves.

In recent months, Latvia and the other Baltic countries have been working to secure alternative gas supplies to phase out their dependence on Russian gas. Natural gas consumption of all Baltic states combined was approximately 4 billion cubic metres (bcm) in 2021 (Lithuania – 2.3 bcm, Latvia – 1.2 bcm, Estonia – 0.5 bcm).

Gazprom has already halted or reduced deliveries to 12 EU countries. Poland, Bulgaria, the Netherlands, Finland and Denmark were cut off from Russian gas supplies as they refused to comply with Gazprom’s demands to pay for deliveries in rubles. As a response, EU energy ministers reached an agreement on mandatory, bloc-wide gas rationing in case of winter supply shortages.

We remind, Gazprom has told customers in Europe it cannot guarantee gas supplies because of 'extraordinary' circumstances. The July 14 letter from the Russian state gas monopoly said it was retroactively declaring force majeure on supplies dating from June 14. The news comes as Nord Stream 1, the key pipeline delivering Russian gas to Germany and beyond, is undergoing annual maintenance meant to conclude on Thursday. The letter added to Europe's fears that Moscow could keep the pipeline mothballed in retaliation for sanctions imposed on Russia over the war in Ukraine, heightening an energy crisis that risks tipping the region into recession.
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PKN Orlen will soon start a feasibility study for a petrochemical complex in Gdansk

MOSCOW (MRC) -- PKN Orlen together with its partners - Saudi Aramco and its subsidiary SABIC - will soon start a feasibility study for the construction of a petrochemical complex in Gdansk based on a steam cracker, announced President Daniel Obajtek, as per Stooq.

"We will soon start a feasibility study and I expect that concrete decisions will be taken soon regarding the construction of the petrochemical complex in Gdansk," Obajtek told journalists. As he emphasized, this type of complex implemented in other parts of the world is an investment of several billion dollars.

"Even after the merger with PGNiG, we will still be far from some of our competitors, so it is normal that we will be interested in further acquisitions," added the president. He made a reservation that the takeover of Energa, Grupa Lotos and PGNiG on the Polish market completes the plan related to the creation of a multi-energy concern.

"We are becoming much more attractive from the perspective of global players, we can already see today that they offer a change in the perspective of cooperation towards joint projects" - added Robert Sleszynski, PKN Orlen's Executive Director for Equity Investments.

We remind, PKN ORLEN has confirmed it is discussing with Aramco and SABIC the possibility of collaborating in investments in various petrochemical business segments. An existing triparty MoU will be extended to evaluate a potential joint development of a large-scale mixed feed steam cracker and downstream derivatives integrated with the Gdansk refinery. Moreover, PKN ORLEN and Aramco continue to explore areas of cooperation in the field of research and development.

The PKN Orlen Group manages six refineries in Poland, the Czech Republic and Lithuania, and is also active in Poland and Canada. Its consolidated sales revenues reached PLN 131.5 billion in 2021. The company has been listed on the WSE since 1999.
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Indorama Ventures and Capchem evaluate proposed carbonate solvents plant

Indorama Ventures and Capchem evaluate proposed carbonate solvents plant

MOSCOW (MRC) -- Indorama Ventures, a global sustainable chemical company, has entered into a non-binding agreement with Capchem Technology USA to study the opportunity to build and operate a world-class lithium-ion battery solvents plant at one of IVL’s petrochemical facilities in the U.S. Gulf Coast, said Hydrocarbonprocessing.

The proposed plant will supply the lithium-ion batteries industry in North America, which is boosted by significant growth in the development of electric vehicles (EV). The proposed facility will produce ethylene carbonate and its chemical derivatives, which are essential components of the electrolytes solutions used in lithium-ion batteries. IVL’s Integrated Oxides and Derivatives (IOD) segment and Capchem USA, a subsidiary of Shenzhen Capchem Technology Co., Ltd., will study the proposal to develop and operate the plant. Capchem is a global leading company in lithium-ion battery chemicals. A new plant would significantly benefit the North American lithium-ion battery market, which currently depends on imports from Asia amid potential for accelerated growth in the EV industry.

Entering the lithium-ion battery market as a competitive new player reinforces IOD’s transition towards downstream specialty products, increasing IVL’s opportunities in attractive end-market applications. Under its Vision 2030 ambition, IVL is building on its global integrated petrochemicals model through investing in adjacent businesses that offer High Value Add (HVA) products which contribute to a more sustainable world.

The study will assess the opportunity to build a plant using Capchem’s established technology to produce ultra-pure ethylene carbonate, di-methyl carbonate, ethyl methyl carbonate, di-ethyl carbonate and derivatized electrolyte solutions. The study also includes an option to build a second module to meet expected growing market demand. The key raw materials for the proposed new plant, namely purified ethylene oxide and carbon dioxide, will be supplied from IVL’s integrated supply network as part the company’s strategy to enhance end-market exposure, technologies, and downstream portfolio breadth. The sequestered carbon dioxide used in the process has a positive sustainability impact.

Alastair Port, Executive President, Integrated Oxides and Derivatives (IOD), IVL, said, “IVL is constantly looking for ways to enhance our sustainability programs towards our vision of creating a more sustainable world. This mutual study with Capchem USA not only helps us to achieve that, but also supports the adoption of zero-emission electric mobility. Given our proven operational excellence, highly skilled workforce, world-class infrastructure, and access to captive raw materials, we believe we are well-placed to successfully implement the technology, which will help to reduce North American EV manufacturers’ reliance on imports."

As per MRC, Indorama Ventures Public Company Limited (IVL), a global sustainable chemical company, today completed the acquisition of the wool spinning businesses in Italy and Poland of Tollegno 1900 S.p.A. (Tollegno 1900), a leading Italian manufacturer of fabrics and yarns.
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