Uzbekistan in talks with partners on USD10 bln gas chemical project

Uzbekistan plans to build a gas chemical complex at a cost of more than USD10 billion in the Khorezm region in the northwest of the country, said Interfax.

"In conclusion to the first day of a visit to Khorezm region, President Shavkat Mirziyoyev held a working meeting with the leadership of the Energy Ministry, Uzkhimprom JSC and a major foreign investment company. They discussed issues concerning the joint implementation of a major gas chemical project with total investment of more than $10 billion," the press release said.

Construction is scheduled for 2024-2028 and the project is expected to create 3,000 jobs. The complex will have capacity to produce 2.5 million tonnes of polymer products per year.

"The implementation of the project will give new momentum to the development of the gas chemical industry and become one of the industrial flagships of the new Uzbekistan," Mirziyoyev said at a meeting with regional officials on Friday.

It was reported earlier that Uzbekistan intends to launch a gas chemical complex to process 5 billion cubic meters of gas annually in the Surkhandarya region by the summer of 2024. The cost of the project, which is being carried out by foreign company Surhan Gas Chemical Operating Company using technology licensed from Shell (SPB: RDS.A), is $2.9 billion. The complex is being built based on the 25 Years of Independence field.

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Japan’s Mitsubishi Gas Chemical (MGC) will suspend its production of orthoxylene (OX) and phthalic anhydride (PA) at its Mizushima site from mid-January 2025, and is selling off its 50% stake in CG Ester Corp, effectively exiting the plasticizers business, said the company.

Continued unprofitability, aging equipment, and forecasts of shrinking demand prompted MGC’s decision to halt OX and PA production next year, the company said in a statement on 26 February. MGC produces 30,000 tonnes/year of OX and 40,000 tonnes/year of PA at its Mizushima site.

OX is mainly used as a raw material for PA, as well as for solvents and pharmaceutical and agrochemical intermediates. PA is used as a raw material for plasticizers. In a separate statement, MGC said that it has sold off its 50% stake in plasticizers maker CG Ester Corp to its partner JNC Corp in a deal worth yen (Y) 734m ($4.9m).

The share transfer was scheduled for 29 March this year, after which, CG Ester will be fully owned by JNC. CG Ester can produce 70,000 tonnes/year of plasticizers via two production sites in Mizushima and Ichihara, according to its website.

CGE will cease manufacturing at its Mizushima plant by March 2025 and will take over operations of JNC Petrochemical Corp’s manufacturing facility in Ichihara and will also continue to operate its own facility at the site, JNC Corp said in a statement.

We remind, Mitsubishi Heavy Industries Compressor International Corporation will supply critical turbomachinery packages to Dow for their Fort Saskatchewan Path2Zero Project – the world’s first net-zero scope 1 and 2 CO2 emissions ethylene cracker.

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Africa's richest man Aliko Dangote is planning to set up an oil trading arm, likely based in London, to help run crude and products supply for his new refinery in Nigeria, six sources familiar with the matter said, as per Hydrocarbonprocessing.

The move would reduce the role of the world's biggest trading firms, which have been negotiating for months to provide the refinery with financing and crude oil in exchange for products exports. The giant 650,000 barrel-per-day refinery is set to redraw global oil and fuel flows and the trading community is closely watching the way it will operate.

Dangote, whose wealth is estimated by Forbes at $12.7 billion, did not reply to several comment requests. BP, Trafigura and Vitol among others have met Dangote in Lagos and London in recent weeks to offer loans for the some $3 billion in working capital the refinery needs to buy large amounts of crude, trading sources told Reuters.

The traders asked the refinery to repay loans with fuel exports but so far they have signed no deals as Dangote worries they would reduce his control of the project – and potentially his profit, the sources said. Dangote has also met state-backed firms in his search for cash and crude.

"He is going to try and do it himself," an industry source told Reuters. Sources told Reuters the new trading team will be led by ex-Essar trader Radha Mohan. He joined Dangote in 2021 as director of international supply and trading, according to his Linkedin profile. Two sources said the team was in the process of hiring two new traders.

The refinery took nearly a decade to complete -- and came in at a cost of $20 billion, some $6 billion over budget.

The plant has refined around 8 million barrels of oil between January and February and will take months to get to full capacity. So far, Vitol has prepaid for some product cargoes to help the refinery buy crude, while Trafigura has swapped some crude oil in exchange for future fuel cargoes, sources with knowledge said. Geneva-based Vitol and Trafigura declined to comment.

We remind, Trading house Vitol has bought the first naphtha cargo produced for export by Nigeria's new 650,000-bpd Dangote oil refinery. Dangote issued a tender to sell the 60,000 metric ton cargo earlier this month for Feb. 23-29 loading. Vitol declined to comment.

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In March, Ineos Styrolution, a subsidiary of the prominent European petrochemical producer Ineos, has made a notable decision to increase the prices of its Acrylonitrile Butadiene Styrene (ABS) products in the United States, said Chemanalyst.

The impetus behind this price adjustment stems from the escalating costs associated with the production and delivery of materials, a circumstance communicated to customers through an official letter from the manufacturer.

Specifically, Ineos Styrolution has outlined plans to implement an 8-cent per pound price hike for its Terluran ABS, Lustran Standard ABS, and Novodur ABS brand products in the U.S. market. This strategic move reflects the company's response to the dynamic economic landscape and the challenges posed by the fluctuating costs associated with the manufacturing and transportation of materials essential to ABS production.

A noteworthy development in Ineos Styrolution's global operations was previously reported, highlighting the initiation of acrylonitrile butadiene styrene (ABS) production in Ningbo, China. This significant venture represents a collaborative effort between Ineos Styrolution and the esteemed Chinese company Sinopec. The newly established plant in Ningbo boasts a nominal capacity of 600 thousand tons per year, underscoring the strategic importance of the Chinese market in the global petrochemical landscape.

The inception of Ineos Styrolution itself can be traced back to October 2011 when it was founded as Styrolution by two major players in the industry, BASF and Ineos. At its establishment, both companies held equal shares in this joint venture, leveraging their collective expertise in the production of styrene monomer, polystyrene, and various styrene-based products. However, in June 2014, Ineos executed a pivotal move by acquiring BASF's 50% stake in Styrolution, marking a significant shift in ownership dynamics. The transaction, valued at EUR 1.1 billion, culminated in Ineos becoming the sole proprietor of Styrolution. This strategic acquisition aligned with the terms of a shareholders' agreement forged in 2011, delineating the trajectory of ownership evolution.

In the global landscape, the initiation of ABS production in Ningbo, China, stands as a testament to Ineos Styrolution's strategic expansion into key markets. The joint project with Sinopec signifies collaborative efforts to meet the growing demand for ABS products in China, leveraging the strengths and resources of both entities. The substantial nominal capacity of the Ningbo plant positions it as a crucial asset in Ineos Styrolution's global production network.

As Ineos Styrolution navigates the complexities of the petrochemical industry, from strategic acquisitions to global expansions and price adjustments, its resilience and adaptability remain at the forefront. The ABS price increase in the U.S. underscores the company's commitment to maintaining a sustainable and competitive presence in the market. The ongoing evolution of Ineos Styrolution's operations will undoubtedly continue to shape its trajectory within the petrochemical landscape.

We remind, Ineos Inovyn, the chlorvinyls arm of UK-based chemical company Ineos, has announced that its PVC production operations in Jemeppe, Belgium, will be partly powered by solar energy starting this summer, said the company. The Jemeppe site is one of the largest PVC production facilities in Europe, with 420,000 tonnes supplied to sectors such as building, automotive, and piping every year.

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Geneva-based trading house Montfort Group is in discussion to sell part or all of its refining facility in the United Arab Emirates to the fuel oil arm of Chinese state giant Sinopec Corp, at least five industry sources told Reuters.

If reached, a deal would give Sinopec, the world's biggest refiner by capacity, a stronger foothold in the UAE's Fujairah market, which it entered last year amid plans to expand its global presence in the marine fuel market.

Sinopec is considering investment in the refining facility as it seeks to expand its sales at the world's third-largest bunker fuel hub, the sources added. Sinopec did not respond to a request for comment.

A Montfort spokesperson said the company and its partner in the refinery, Sheikh Ahmed Dalmook Al Maktoum, "remain fully committed" to the business.

"Of course, if we are approached by parties who wish to be involved in our refinery business, we are always willing to discuss such opportunities if we believe that it would enhance and grow our business," the spokesperson said.

Located in the port of Fujairah, the facility can process 65,000 barrels per day of crude, with capacity to sell over 30 million barrels of low-sulfur fuel oil to the shipping industry annually, according to Montfort.

Montfort acquired the crude oil processing and marine fuel trading business last year from Germany's Uniper Energy in a deal valued around $80 million. Montfort holds a Fujairah bunker supplier license under Montfort Trading FZE.

Sinopec opened an office in Dubai last year for marine fuel trading in Fujairah, though it does not have a bunker license there.

Sinopec Fuel Oil, the biggest marine bunker supplier at Chinese bunker hub Zhoushan, became the third-largest marine fuel supplier at the world's top bunker hub Singapore in 2023, while expanding its storage capacity in Asia.

The Chinese company has been looking to expand globally as slowing economic growth and rapid adoption of electric vehicles in the world's top auto market dents domestic demand.

We remind, Sinopec Corp announced on Tuesday that it has encountered substantial oil and gas flows in a pivotal exploration shale well located in southwest China. The Xingye-9 well, situated in the Liangping area of Chongqing municipality, is positioned within the gas-rich Sichuan basin. Sinopec has revealed that the well exhibited a daily production of 108.15 cubic meters of oil and 15,800 cubic meters of gas during its testing phase.

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