Sonatrach-Total JV to begin construction of of PP plant in Algeria in July

MOSCOW (MRC) -- A joint-venture (JV) between Total and Sonatrach is expected to begin construction of its Algerian polypropylene (PP) plant in July 2023, said the company.

There is very little domestic PP production in North Africa compared to demand, and the region mostly relies on exports from Europe and the Middle East. The STEP PP plant will have a nameplate capacity of 550,000 tonnes/year of homopolymer.

Well-documented and commonplace shipping problems connected with Algeria are not expected to impact the plant as upstream material will be provided by the Erg Issouane gas field.

The JV will initially concentrate on Algeria and its neighbouring countries, such as Morocco and Tunisia. A 50% share will also be reserved for export, with Europe the main focus.

We remind, Eni CEO, Claudio Descalzi, and the CEO of Sonatrach, Toufik Hakkar, signed in Algiers two agreements which outline future joint projects on energy supply, energy transition and decarbonisation. The agreements were signed in the presence of the Prime Minister of Italy, Giorgia Meloni, and the President of the People's Democratic Republic of Algeria, Abdelmadjid Tebboune.

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MOSCOW (MRC) -- Shell Petroleum has completed the acquisition of renewable natural gas (RNG) producer Nature Energy Biogas (Nature Energy), said the company.

By purchasing all shares in Nature Energy, Shell says it has bought the largest producer of renewable natural gas (RNG) in Europe, its portfolio of operating plants, associated feedstock supply and infrastructure, pipeline of growth projects and in-house expertise in the design, construction, and operation of innovative and differentiated RNG plant technology. Shell announced the deal on November 28 last year.

This acquisition supports Shell’s ambitions to build an integrated RNG value chain at global scale and profitably grow its low-carbon offerings to customers across multiple sectors. Nature Energy will operate as a wholly owned subsidiary of Shell, initially under its existing brand.

Founded in 1979 as a natural gas distributor, the company established its first biogas plant in Denmark in 2015 and now has 14 operating plants with associated infrastructure, feedstock arrangements, and 2022 production of around 6.5MMBtu/yr (3,000 boe/d).

Last month Nature Energy’s 13th biogas plant in Denmark was inaugurated by Lars Aagaard, Minister for Climate, Energy and Utilities. The company also has a pipeline of around 30 new plant projects in Europe and North America. More than a third of these projects are in medium to late development stage in Denmark, the Netherlands and France and could deliver up to 9.2 mln MMBtu/yr (4,400 boe/d) by 2030, subject to future final investment decisions and relevant regulatory approvals.

In the coming years, around DKK 7bn will be invested in building up to 10 biomethane plants in Quebec together with Energir, Quebec’s leading gas supply company, marking Nature Energy’s largest international investment to date. Nature Energy and Energir will jointly develop, build, and operate biomethane plants that together can supply 200m m3 of biogas per year, corresponding to one third of Quebec’s target for CO2 reduction by 2030.

RNG, also known as biomethane, is chemically identical to conventional natural gas and can be used in existing transmission and distribution infrastructure.

This makes it a competitive option to help decarbonise multiple hard to abate sectors including commercial road transport, marine, heating and heavy industry. The sustainability benefits are amplified by the processing and use of methane that could otherwise be released to the atmosphere from the decomposition of organic by?products and waste.

Shell has an existing RNG production business in North America, with one operational site and three under construction. Shell also has an existing RNG trading portfolio in Europe, to which this acquisition will add new volumes and support Shell’s efforts to transition its growing European LNG customer base to BioLNG, with supply intended to span road, marine and other customers.

Shell has a target to be a Net Zero emissions energy business by 2050. It aims to reduce the carbon intensity of its products by 6-8% this year, 9-12% in 2024, 20% by 2030, 45% by 2035, and 100% by 2050.

We remind, Shell Chemical Appalachia LLC announced it has commenced operations of its Pennsylvania Chemical project, Shell Polymers Monaca (SPM). The Pennsylvania facility is the first major polyethylene manufacturing complex in the Northeastern United States and has a designed output of 1.6 MMt annually.

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MOSCOW (MRC) -- Cepsa and ACE Terminal have signed a Memorandum of Understanding (MoU) by which the Spanish energy company will supply green ammonia to the planned import terminal in the port of Rotterdam, for end use applications in the industry after conversion of the ammonia back into hydrogen, or for direct end use in the shipping and other industries in Northwest Europe, said the company.

Cepsa is developing 2GW of green hydrogen at its two Energy Parks in Andalusia, southern Spain, as part of its 2030 Positive Motion strategy to become a leader in sustainable mobility and the production of renewable hydrogen and advanced biofuels and a benchmark in the energy transition. The two hydrogen plants, with a 3 billion euro investment, will form part of the Andalusian Green Hydrogen Valley, the largest green hydrogen hub in Europe, for which Cepsa has recently signed a number of partnership agreements across the hydrogen value chain.

On the import side, Gasunie, HES International and Vopak have partnered to develop ACE Terminal as an entry point to the Netherlands for ammonia as a carrier for green hydrogen as well as a sustainable feedstock. The open access terminal will be located in the port of Rotterdam, a very important port for Northwest Europe from an energy point of view. With the planned reuse of assets and infrastructure, ACE Terminal is a project with a short time to market. The MoU with Cepsa is the first of agreements aimed between additional clients and the ACE open access hub terminal for green hydrogen and ammonia imports.

The MoU between Cepsa and ACE Terminal entails a cooperation intended to lead to a binding commercial agreement to facilitate the oversea transport of green ammonia, to redistribute the green ammonia to end markets in the hinterland, and to process the green ammonia into green hydrogen ready for use by end customers in Northwest Europe. The location of ACE Terminal in the port of Rotterdam offers direct connection to Rotterdam's industry and the planned national hydrogen network, and has an excellent connection to the infrastructure into Northwest Europe.

We remind, Cepsa has signed a deal with the Dutch port of Rotterdam to ship green hydrogen from southern Spain to northern Europe. The hydrogen will be produced at Cepsa’s San Roque Energy Park near the Bay of Algeciras, and will be exported through hydrogen carriers such as ammonia or methanol to the Port of Rotterdam.

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MOSCOW (MRC) -- Moody’s has downgraded its credit rating for AkzoNobel as a result of high leverage and the amount of time expected for debt to substantially fall, the agency said.

The firm downgraded its rating for AkzoNobel’s debt from Baa1 to Baa2, citing the levels of debt to earnings the company reached last year as a result of acquisition costs and “generous” share buy-back programmes amid lower volumes and higher costs.

Moody’s is the latest agency to downgrade Akzo’s debt rating, following Fitch cutting its rating for the company to BBB from BBB+ on the back of higher debt to earnings levels.

AkzoNobel estimated that its leverage rose to 3.8 times earnings before interest, taxes, depreciation and amortisation (EBITDA) in 2022, following the buy-backs and its acquisition of Latin America-focused coatings player Grupa Orbis.

The company is still working to complete its purchase of Kansai Paints Africa, expected to be a significant factor behind an anticipated EUR500m of cash-outs in the second half of 2023.

We remind, AkzoNobel has completed the acquisition of the wheel liquid coatings business of Lankwitzer Lackfabrik GmbH, a deal which strengthens the company’s performance coatings portfolio. The acquired business will complement AkzoNobel’s existing powder coatings offering and expand the range of innovative products the company supplies.

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MOSCOW (MRC) -- Fluor has been awarded a reimbursable contract by Dow to provide front-end engineering and design (FEED) and engineering, procurement and construction management (EPCM) services for the world’s first net-zero carbon emissions (scope 1 and 2 carbon dioxide emissions) ethylene cracker and derivatives complex in Fort Saskatchewan, Alberta, Canada, said the company.

Fluor will book the initial FEED award in the first quarter and anticipates the additional EPCM scope will be awarded throughout 2023 pending a final investment decision by Dow’s Board of Directors.

“We commend Dow for its leadership and commitment to decarbonize its global footprint, and we are pleased to work together with the company on this important project,” said Jim Breuer, group president, Fluor’s Energy Solutions business. “Fluor’s expertise in energy transition is helping clients across industries reduce greenhouse gas emissions and improve energy efficiency.”

Dow’s net-zero emissions ethylene cracker and derivatives complex, which is subject to approval by Dow’s Board of Directors and various regulatory agencies, would decarbonize approximately 20 percent of its global ethylene capacity while growing its polyethylene supply by about 15 percent and supporting approximately USD1 B of EBITDA (earnings before interest, taxes, depreciation and amortization) growth across the value chain by 2030.

The additional project scope to be awarded in 2023 includes integrated project management team services for the entire Fort Saskatchewan Path2Zero program and EPCM services for the ethane cracker and associated utilities, power and infrastructure.

We remind, Dow intends to construct the sector's first net-zero carbon emissions ethylene and derivatives complex with respect to scope 1 and 2 carbon dioxide (CO2) emissions, at its Fort Saskatchewan (Alberta, Canada) site. The project involves a new 'net-zero carbon emissions' ethylene cracker at the site, set for launching by 2027. It would expand Dow's ethylene and polyethylene capacity by over 200% from its Fort Saskatchewan site, while retrofitting the site's existing assets to net-zero carbon emissions.

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