bp accelerates and expands in bioenergy, agreeing to buy Archaea Energy

In a move that will expand and accelerate the growth of its strategic bioenergy business, bp announced that it has agreed to acquire Archaea Energy Inc., a leading producer of renewable natural gas (RNG) in the US, said Hydrocarbonprocessing.

The agreed acquisition, which is subject to regulatory and Archaea shareholder approval, will be for USD3.3 B in cash, as well as around USD800 MM of net debt.

Bioenergy is one of five strategic transition growth engines that bp intends to grow rapidly through this decade. bp expects investment into its transition growth businesses to reach more than 40% of its total annual capital expenditure by 2025, aiming to grow this to around 50% by 2030.

Acquiring Archaea will expand bp’s presence in the US biogas industry, enhancing its ability to support customers’ decarbonization goals and also progressing its aim to reduce the average carbon intensity of the energy products it sells. bp aims to reduce that carbon intensity to net zero by 2050 or sooner.

Bernard Looney, bp chief executive, said: “Archaea is a fantastic fast-growing business, and bp will add distinctive value through our trading business and customer reach. It will accelerate our key bioenergy growth engine, creating a real leader in the biogas sector, and support our net zero ambition. And, importantly, we're doing this while remaining focused on the disciplined execution of our financial frame. Investing with discipline into the energy transition, creating further value through integration – this is exactly what bp’s transformation into an integrated energy company is all about."

Nick Stork, CEO of Archaea Energy, said:“Archaea has become one of the largest and fastest growing RNG platforms in the US and today’s announcement will further enable this business to realize its full potential. bp is a world-class partner with an operational history in the RNG value chain that is fully aligned with ours and our partners’, and I look forward to our hard-working team joining the bp organization to help achieve their bioenergy goals."

Jon Vander Ark, Republic Services president and chief executive officer, said:“The acquisition of Archaea by bp allows us to accelerate decarbonization through our innovative joint venture with Archaea. With our shared focus on sustainability, this joint venture provides additional opportunities to work together on other decarbonization and environmental services initiatives."

The acquisition of Archaea has a strong strategic fit with bp’s existing biogas business, enabling expansion of its position in the US and potentially also in key geographies globally, including the UK and Germany. Alongside growth in bp’s existing portfolio, the addition of Archaea’s production and pipeline has the potential to take bp’s biogas supply volumes to around 70,000 boepd globally by 2030.

We remind, bp laid off most contractors at the approximately 160,000 barrel-per-day Toledo, Ohio, refinery it owns with Cenovus Energy Inc, according to sources familiar with the matter, indicating that the plant will experience a prolonged shutdown following last week's explosion and fire. The explosion killed two United Steelworkers members, identified as brothers Max and Ben Morrissey. The more than 100-year-old refinery has been offline since the middle of last week following the explosion and could be shut for several months.

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Guyana has called for proposals to design, finance and build a 30,000-barrel-per-day (bpd) oil refinery, the first for the South American country as it becomes a force in crude oil production, said Hydrocarbonprocessing.

Construction work on the facility, to be located on public land near the Berbice river, is expected to begin by the first half of 2023 with project completion two years after. Requests are due in mid-December.

An ExxonMobil-led consortium has ramped up oil and gas output to almost 400,000 bpd this year, a rapid increase for a country that only inaugurated crude production in 2019. All output is currently exported.

"In two months' time, we will be receiving the submissions from those who are interested in building this," said President Irfaan Ali in a public event late on Friday.

"The opportunities this will create for transport and logistics, the construction industry, the services industry (and) the rental industry are enormous and will bring tremendous benefit to the people of the region," he added.

The government plans to provide fiscal incentives for the project, including a 10-year tax holiday. It will also secure all the crude supply the refinery will need from Guyana's share of oil production. However, it does not plan to take a stake in the facility.

By 2027, the Exxon-led consortium expects to pump 1.2 MMbpd of oil. Guyana has promised to soon schedule an auction of oil and gas blocks to attract new companies to its remaining offshore areas.

We remind, Guyana could bank about USD1.25 B this year from the sale of oil as its share of offshore production and royalties, up 30% from a prior estimate, the government’s finance ministry said over the weekend. Historically one of South America’s poorest nations, Guyana this year expects proceeds from oil discoveries off its coast to jump on a tripling of output. An ExxonMobil-led consortium opened a second production facility this year, and four more are planned through 2027.
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ExxonMobil Corp said in its reply to a U.S. National Labor Relations Board (NLRB) complaint that the lockout of over 600 workers at its Beaumont, Texas, refinery was lawful, according to a filing with the board, said Hydrocarbonprocessing.

In a Sept. 30 complaint, the NLRB said Exxon acted in violation of federal law in locking the workers out of their jobs for 10 months between May 2021 and March 2022. The board recommended the workers receive their back pay and costs for the time they were locked out of the refinery.

In the reply, Exxon said it "acted in good faith and has not violated any provision of the National Labor Relations Act." The NLRB in the September complaint alleged Exxon undertook the lockout to remove United Steelworkers union (USW) local 13-243 from representing the workers at the 369,024 barrel-per-day (bpd) refinery.

The lockout began as the union and Exxon were deadlocked in talks over a new six-year contract. Exxon said the lockout would assure operations continued uninterrupted if the union began a strike, as it had notified the company it might do. The lockout ended after union members accepted Exxon's contract proposal.

In the September complaint, the NLRB alleged Exxon unilaterally changed the terms of the contract and working conditions for refinery employees. The company "did not make any material changes to bargaining unit employees’ terms and conditions of employment," Exxon said on Friday.

The NLRB alleged Exxon provided more than the "ministerial aid" to union members who led a decertification campaign to remove USW local 13-243 from representing the workers. The board also alleged the lockout became unlawful when Exxon said in messages to the refinery workers that they would be allowed to return to work if they removed the union.

Exxon's "alleged conduct with respect to its employee communications, even if true, is lawful under extant board law," the company said. An administrative law judge will hear the complaint and Exxon's defense in 2023.

ExxonMobil asked the U.S. National Labor Relations Board (NLRB) to move back by a month a hearing on a complaint the company unlawfully locked out more than 600 workers from its Beaumont, Texas, refinery.

We remind, ExxonMobil is gradually shutting down its 235,000 barrel per day (bpd) Fos-Sur-Mer refinery in France as a result of ongoing strike action. Walkouts caused the gradual shut down of Exxon's 240,000 bpd Port Jerome-Gravenchon oil refinery and Notre Dame de Gravenchon (NDG) petrochemical site in France on Sept. 20 before spreading to Fos-Sur-Mer 24 hours later.

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Indorama Ventures Public Company Limited (IVL), a global sustainable chemical company, celebrated the completion of a plant to manufacture high-performance nylon yarn for automobile airbags, said the company.

The new plant in Rayong, Thailand, was constructed by Toyobo Indorama Advanced Fibers Co., Ltd. (TIAF), a joint venture that Indorama Ventures established with Toyobo Co., Ltd in November 2020.

The plant, which has been built on the site of Indorama Polyester Industries PCL (IPI) in Rayong Province, will deliver 11,000 tons of high-performance yarn per year to meet global demand for airbags that is expected to grow by 3 percent to 4 percent annually as automakers equip vehicles with more airbags and emerging economies require cars to adopt more safety features. Test production is scheduled to start in October 2022 with the goal of starting commercial production in the middle of 2023.

In 2014, Indorama Ventures and Toyobo jointly acquired Germany’s PHP Fibers GmbH, a leading airbag yarn maker. Since then, both companies have strengthened their relationship with a focus to expand in the automotive safety sector. Mr Christopher Kenneally, based in Bangkok, leads IVL’s Fibers segment, which produces fibers and yarns across its Hygiene, Mobility and Lifestyle verticals. Mr Ashok Arora, with over 30 years of experience in fibers and polymer operations, will helm TIAF as CEO while maintaining his role as CTO with IVL Fibers.

Indorama Ventures Public Company Limited, listed in Thailand (Bloomberg ticker IVL.TB), is one of the world’s leading petrochemicals producers, with a global manufacturing footprint across Europe, Africa, Americas, and Asia Pacific. The company’s portfolio comprises Combined PET, Integrated Oxides and Derivatives, and Fibers. Indorama Ventures products serve major FMCG and automotive sectors, i.e., beverages, hygiene, personal care, tire, and safety segments. Indorama Ventures has more than 26,000 employees worldwide and consolidated revenue of USD14.6 billion in 2021. The Company is listed in the Dow Jones Emerging Markets and World Sustainability Indices (DJSI).

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Stepan Co has completed the previously announced purchase of the surfactant business and associated assets of PerformanX Specialty Chemicals (PerformanX Specialty Chem), said the company.

The acquisition includes intellectual property, commercial relationships and inventory. Financial terms of the transaction were not disclosed.

As per MRC, Stepan plans to invest USD220m to build a new alkoxylation plant at its site in Pasadena, Texas. The new plant will provide “a flexible capacity” of 75,000 tonnes/year, capable of both ethoxylation and propoxylation, and better position the company to serve growing global demand in its surfactant and polymer businesses, it said.

As MRC informed before, Stepan conducted planned maintenance at its 90,000 tonnes/year phthalic anhydride (PA) plant Millsdale, Illinois, US, from early October to end-October, 2020.

Stepan is a manufacturer of specialty and intermediate chemicals used in a wide range of industries. The company is based in Northfield, Illinois, USA. The company is also a manufacturer of surfactants, which are key ingredients in consumer and industrial cleaning formulations. In addition, the company is a supplier of polyurethane polyols used in the growing market for thermal insulation and the CASE industry (coatings, adhesives, sealants and elastomers).

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