KBR to provide Petro Rabigh with predictive maintenance services for Saudi petchems site

KBR to provide Petro Rabigh with predictive maintenance services for Saudi petchems site

KBR has secured a five-year asset condition monitoring program contract from Rabigh Refining & Petrochemical Company (Petro Rabigh) to deploy predictive maintenance services at its plant in Rabigh, Saudi Arabia, said the company.

The program will optimize asset lifecycle, enhance machinery performance and improve overall reliability. This collaboration aims to boost energy and equipment efficiency while mitigating operational risks, aligning with Petro Rabigh's commitment to safety and sustainability.

"We are pleased to build a longstanding partnership with Petro Rabigh and offer our innovative technology-led industrial solutions," said Jay Ibrahim, President, KBR Sustainable Technology Solutions. "KBR's predictive maintenance services improve operational efficiency and align with the clients' ESG objectives by promoting sustainability and responsible resource management."

We remind, KBR announced it has been awarded a project management contract by Sonangol for the design and construction of a new 200,000bpd refinery in Lobito, Angola. Under the terms of the contract, KBR will provide services encompassing the project management of engineering, procurement and construction phase execution.

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Polynt Group enters discussions to acquire Polyprocess

Polynt Group enters discussions to acquire Polyprocess

On March 5, Polynt SpA (Scanzorosciate, Italy), Groupe MV, Polyprocess (St. Jean D’illac, France) and other minority shareholders of Polyprocess entered into a non-binding memorandum of understanding (MOU) for the sale of Polyprocess to Polynt, said the company.

Polyprocess is a supplier of specialty gelcoats, color pastes and derivatives for the composites industry, with a long-standing history of excellence among customers and an outstanding quality record recognized in the composites industry.

The parties have agreed to customary exclusivity undertakings while discussions are finalized and Polyprocess consults with its employee representatives on the proposed transaction. The contemplated transaction, should it go through, is expected to be signed and completed by the end of April 2024, in addition to the transfer of Polyprocess’ production plant located in Saint-Jean-d’Illac, France, to Polynt Group.

“Polyprocess will complement the offering product portfolio of the Polynt Group,” Rosario Valido, CEO of the Polynt Group, says. “The synergy of Polyprocess’ technology and experience, combined with the innovation leadership of Polynt Group, will contribute to further growth in industry.”

According to Matthieu Castet, manager GMV and GMV CEO of Polyprocess, “This project will give a new dimension to Polyprocess, particularly worldwide. It allows us to secure supplies but also to continue to develop new ranges of products, combined with our recognized know-how and that of the Polynt Group, to maintain our high standards of quality and innovation for the coming years.”

We remind, Polynt Group started the process for the installation of a new esterification plant to produce special plasticizers, in particular trimellitates, at its site in Atlacomulco, Mexico. Special high-performance plasticizers, with their superior technical performances in electrical and high temperature applications, are a main component for the electrification of cars and transportation, a general trend so important for improving environmental sustainability. Trimellitates represents the most effective family of products that can satisfy those outstanding performance characteristics.

Polynt Group has more than 3,100 employees in 35 manufacturing operations throughout North and South America, Europe and Asia.

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Dangote oil refinery could accelerate European sector's decline

Dangote oil refinery could accelerate European sector's decline

Nigeria's giant Dangote oil refinery could bring to an end a decades-long gasoline trade from Europe to Africa worth USD17 B a year, heaping pressure on European refineries already at risk of closure from heightened competition, as per Hydrocarbonprocessing.

The refinery started production in January and cost $20 billion to build. It can refine up to 650,000 barrels per day (bpd) and will be the largest in Africa and Europe when it reaches full capacity this or next year.

It has long been touted as the turning point for Nigeria's quest for energy independence. Nigeria is Africa's most populous nation and its top oil producer, yet it imports almost all its fuel due to lack of refining capacity.

About a third of Europe's 1.33 million bpd average gasoline exports in 2023 went to West Africa, a bigger chunk than any other region, with the majority of those exports ending up in Nigeria, Kpler data shows.

"The loss of the West African market will be problematic for a small set of refineries that do not have the kit to upgrade their gasoline to European and U.S. specification," consultancy FGE's head of refined products Eugene Lindell said, referring to more stringent environmental standards for other markets.

As much as 300-400,000 bpd of refining capacity in Europe is at risk of closure because of rising global gasoline production, according to Kpler's analyst Andon Pavlov.

A European refinery executive who declined to be identified said coastal refineries that are geared for exports will be more exposed while inland refineries are less vulnerable because they rely on local demand.

"The changes won't happen overnight, but they could ultimately lead to closures of refineries and their conversion to storage terminals," he added, referring to the challenging market environment.

Pavlov said the UK's Grangemouth and Germany's Wesseling refineries could close ahead of schedule as a result of looming gasoline oversupply later this year and consequent pressure on refining margins.

Petroineos CEO Franck Dema flagged the energy transition which is causing demand for fossil fuels to dwindle as one of the reasons behind his company's decision to shut down Grangemouth next year. Shell SHEL.L said its decision to shut down Wesseling next year was part of its drive to reduce carbon emissions.

Petroineos did not respond to a request for comment and Shell declined to comment about whether its plant could close ahead of schedule.

We remind, 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. 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.

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Borouge shareholders approve USD1.3 bn dividend for 2023

Borouge shareholders approve USD1.3 bn dividend for 2023

Borouge Plc, a leading petrochemicals company that provides innovative and differentiated polyolefins solutions, confirmed shareholder approval of a USD650 mln (7.94 fils/share) final 2023 cash dividend at its Annual General Meeting (AGM), said the company.

The company also confirmed its intention to pay a total dividend of USD1.3 billion for 2024, reinforcing its commitment to shareholder value.

Dr. Sultan bin Ahmed Al Jaber, Minister of Industry and Advanced Technology and Chairman of Borouge, said, "In 2023, Borouge significantly outperformed its industry peers, demonstrating remarkable operational and financial resilience and reinforcing its position as one of the world's most profitable and innovative polyolefin producers. Borouge is pursuing accelerated growth domestically and internationally.

"Locally, Borouge 4, a major strategic growth project, is expected to add approximately USD1.5 - USD1.9 billion to revenue annually after recontribution and full production ramp-up of the plant. Borouge 4 will boost the company's production capacity by 28%, making Borouge's Al Ruwais production site the world's largest integrated single-site polyolefin complex.

"I am also pleased to announce a new expansion project. Our second ethylene unit (EU2) is advancing plans to increase our total production of olefins and polyolefins by 230,000 tonne after project completion in 2028 and is expected to contribute approximately $220 to 250 million to Borouge's revenue per year.

"Internationally, the company is pursuing accelerated global growth opportunities, including an opportunity in the Asia Pacific region that has reached feasibility stage. I am confident that Borouge will continue to deliver unparalleled performance and growth in 2024 and beyond, supported by its robust business model and focus on innovation and AI technology."

Hazeem Sultan Al Suwaidi, CEO of Borouge, commented, "The significant USD1.3 billion dividend from our 2023 earnings reflects the success of our business strategy and our operational resilience in a challenging market environment. Our outstanding operational and commercial excellence yielded exceptional performance compared with our global peers.

"This was supported by a highly effective Value Enhancement Programme, which enabled us to successfully optimise revenues and streamline costs amid softening prices globally. We will explore in parallel further levers to enhance our competitive cost position. Once operational, Borouge 4 will significantly increase our capacity by 28% while enhancing our product portfolio and margin. Our focus remains on sustainable growth and delivering value, with our shareholders set to profit from exceptional recurring dividends in the years to come."

Borouge successfully navigated the bottom of the cycle and delivered a significant USD1.0 billion in net profit in 2023. Borouge's $607 million Value Enhance Programme contributed a significant 28% to 2023 EBITDA, the highest total impact in any single year of any announced programmes by peers.

The company achieved record sales volumes of 5.1 million tonnes, driven by exceptional production and industry-leading asset utilisation rates, adding approximately 200,000 tonnes in polyolefins sales, which contributed to $106 million EBITDA in 2023.

As a result of these initiatives, Borouge outperformed its regional and international peers with one of the highest EBITDA margins in the industry at 38%. By continuing to actively manage costs and adapt to evolving market dynamics, Borouge expects to sustain these substantial efficiencies and value.

Borouge will distribute a total of $1.3 billion in dividends for 2023, following AGM approval of a final dividend of $650 million, equivalent to 7.94 fils (AED0.0794) per share, representing a 6.4% dividend yield based on the latest share price.

Looking ahead, Borouge intends to pay a USD1.3 billion cash dividend for the full year 2024, equivalent to 15.88 fils (AED0.1588) per share. Driving operational excellence and innovation with digitalisation and AI

Digitalisation and artificial intelligence (AI) are integral drivers of innovation, efficiency, and value creation across Borouge's operations, facilitating operational excellence and catalysing the development of cutting-edge solutions.

Borouge has embarked on several AI and advanced technology initiatives, which delivered USD58 million in value to date in 2023. The company targets several significant milestones that would enable the realisation of around USD280 million in value generation in the coming years.

Its Innovation Centre facilitated the introduction of eight groundbreaking products in 2023, including a pioneering solution for gas pipes that is now globally recognised for its unrivalled safety and reliability standards.

We remind, Borouge announced that it has established offices in Kenya and South Korea as part of its strategic initiative to expand its market share in high-growth geographies. With a sales and marketing office in Singapore, Borouge’s expanded, on-the-ground presence in Kenya and South Korea enhances its extensive international sales and supply chain infrastructure. Its global footprint now includes 14 international offices across key markets in the UAE, China, Egypt, India, Japan, and Southeast Asia.

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Petrochemical industry invests record amount in R&D despite downturns

Petrochemical industry invests record amount in R&D despite downturns

Despite a downturn in the industry, petrochemical companies in South Korea have reportedly invested a record amount in research and development (R&D), said Businesskorea.

This move is interpreted as part of a differentiation strategy to enhance competitiveness in new business areas such as high-value added (specialty) materials, in response to aggressive expansion by China.

According to industry sources on March 31, four domestic petrochemical companies -- Lotte Chemical, Kumho Petrochemical, Hanwha Solutions, and LG Chem (excluding LG Energy Solution) -- all spent record amounts on R&D last year. LG Chem’s R&D expenditure amounted to 1.04 trillion won. This marks the first time its R&D expenditure has exceeded 1 trillion won. Hanwha Solutions, Lotte Chemical, and Kumho Petrochemical spent 215 billion won, 120 billion won, and 63 billion won on R&D, respectively.

The proportion of R&D expenses in revenue is also increasing. Last year, LG Chem’s R&D expenses accounted for around 4 percent of its revenue, showing a 1 percentage point increase compared to the previous year. Hanwha Solutions, which remained in the early 2 percent range in 2022, also rose to 2.94 percent last year. During the same period, Kumho Petrochemical saw a slight increase in the proportion of R&D expenses from 0.74 percent to 1 percent and Lotte Chemical from 0.47 percent to 0.6 percent.

Domestic petrochemical companies are being hit hard by oversupply resulting from China’s expansion. With deteriorating market conditions and poor performance, they are resorting to selling off their major subsidiaries and assets. LG Chem sold its polarizing film business, including polarizing plates and polarizing plate materials, to a Chinese company last year. Lotte Chemical is considering selling its petrochemical production base in Malaysia, Lotte Chemical Titan (LC Titan). The sale of the Pakistan subsidiary, which fell through this year, is planned to be reinitiated by the end of the year. Kumho Petrochemical sold its entire stake in a latex joint venture factory in China, which it has operated since 2009.

In addition, the petrochemical industry is strengthening new business areas such as materials. LG Chem, for instance, is notably expanding its production capacity of carbon nanotubes, a battery material, to over 6,100 tons, more than double its current capacity. CNT boasts strength 100 times that of steel, making it a next-generation material.

Lotte Chemical has set a goal to expand the proportion of specialty material sales to 60 percent by 2030. At the shareholders’ meeting held on March 26, the company added the clean hydrogen business to its business objectives.

Kumho Petrochemical has identified three major growth businesses, which are electric vehicle solutions, eco-friendly bio, and specialty materials.

Hanwha Solutions is focusing on caustic soda. Caustic soda is used in the production process of cathode materials, a secondary battery material, to remove impurities. The company is currently working on increasing its production capacity of caustic soda from 842,000 tons to 1.11 million tons.

We remind, INEOS said that it has completed acquisition of TotalEnergies’ 50% share in their three joint ventures, as well as some other infrastructure assets in France, said the companies. The targets are Naphtachimie, Appryl and Gexaro, which were 50:50 joint ventures between INEOS and the French energy major at Lavera in southern France. Financial details of the acquisition were not disclosed.

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