Eni targets Versalis in revamp to boost energy transition momentum, recapture margins

Eni SpA (Rome) has unveiled plans for a strategic restructure of its downstream operations, including a heightened focus on the performance of its chemical subsidiary, Versalis SpA, as per Chemweek.

A newly formed Industrial Transformation division, headed by COO Giuseppe Ricci, will “primarily focus on driving the restructuring and industrial transformation of the chemical sector, Versalis, through a focus on innovation, specialization and circularity,” the company said in an announcement Sept. 12.

The internal revamp is aimed at accelerating the transformation of the chemicals business “into new specialized, circular and bio-based platforms and environmental remediation business into new markets activities,” it said. This will allow Eni to “increase the potential of the energy transition businesses and to recover financial margins,” it noted.

The new division will also continue the transformation of Eni’s traditional refining activities into biorefining, it said.

Eni will reorganize its business activities into three main structures, one of which is Industrial Transformation, to maximize their operational effectiveness, it said.

The other two structures are Global Natural Resources, formerly Natural Resources, and Chief Transition & Financial Officer, it said. The Global Natural Resources structure will oversee the technical, operational and engineering capabilities required to execute Eni’s projects and will be integrated with the company’s Power Generation & Marketing business and oil trading activities to develop a more competitive offering, enhance synergies and capture margins more effectively, it said. It will also continue to manage the operational development of the new carbon capture and storage and agri-hub businesses. The Chief Transition & Financial Officer structure will be responsible for developing and implementing Eni's economic and financial strategy. Plenitude and Enilive, two of Eni’s subsidiaries linked to the energy transition, will report to this structure, it said.

The new organizational structure will “highlight the value of Eni’s satellite companies, further strengthen the operational excellence of new and traditional businesses [and] accelerate and complete the industrial transformation of the Chemicals and Downstream businesses,” it said.

Earlier this week, Eni said it planned to begin construction imminently on its biorefining project at Livorno, Italy after getting the green light from regulators, with completion anticipated in 2026.

Eni has previously laid out plans to increase its biorefining capacity from current levels of 1.65 million metric tons per year (MMt/y) to over 5 MMt/y by 2030, with the expanded biofuel footprint a cornerstone of its decarbonization strategy.

In July, Versalis posted steepening losses for the second quarter of 2024 both sequentially and year over year, due primarily to continued weak chemical margins, an oversupplied market and increasingly competitive imports from the US and Asia. The company reported a quarterly adjusted operating loss of €222 million, widening from adjusted losses of €168 million in the first quarter of this year and €70 million in the prior-year period.

Versalis’ steam cracker margin in the quarter decreased year over year, as did the company’s margins on polyethylene and styrenics, due to “weak commodity prices and competitive dynamics,” it said.

In April, Versalis permanently shut down synthetic rubber production at its site in Grangemouth, UK, according to sources on May 3, reported Platts, a division of S&P Global Commodity Insights. Versalis said earlier that it wanted to close the plants in 2024 “due to worsening conditions of the elastomers market, declining sales, increasing costs and negative outlook.”

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Toyo Engineering Corp. said Nippon Shokubai Co. Ltd. (Osaka, Japan) has awarded its affiliate PT Inti Karya Persada Tehnik an engineering, procurement and construction (EPC) contract for a superabsorbent polymer (SAP) plant at Cilegon, Indonesia, said Chemweek.

The production capacity of the plant will be 50,000 metric tons per year. The plant is slated to commence operations in July 2027.

Nippon Shokubai in August this year announced the USD110-million SAP project. After the completion of the project, PT. Nippon Shokubai Indonesia’s (NSI) total production capacity for SAPs will be 140,000 metric tons per year.

Toyo Engineering Corporation (Toyo) announced that it has entered into a Joint Development Agreement (JDA) with Pupuk Indonesia Holding Company (PIHC) and Itochu Corporation. The strategic partnership aims to install a water electrolyzer at the Pupuk Iskandar Muda (PIM) ammonia plant operated by PIHC. The project aims to produce green ammonia using green hydrogen produced from renewable energy.

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Envision (Shanghai) will build an electrolyzer manufacturing plant to produce 5 gigawatt (GW) per year of hydrogen-producing technology in Spain, following an agreement with the country's government, said Chemweek.

The facility will produce high-capacity proton exchange membrane electrolyzers, and low-pressure alkaline and high-pressure alkaline electrolyzers, Envision said.

The plant, which will receive an initial investment of USD1 billion, will “play a pivotal role” in helping Spain reach a national target of 11 GW of electrolysis capacity by 2030, it said.

Construction of the facility is scheduled to commence in the first half of 2026, with Envision working closely with the Spanish government to identify an optimal site for the greenfield development, it said.

The site, whose exact location has not been chosen, aims to be the “first integrated green hydrogen net-zero industrial park in Europe” and will “serve as the design, research, manufacture and service function for green hydrogen including electrolysis, air separation unit (ASU), ammonia synthesis and the completed module facility for scalable green ammonia production,” Envision said.

The facility will be powered by locally generated clean energy, including biomass, solar and wind energy.

The deal with Envision follows a previous agreement with Spain regarding a lithium-based battery plant that started construction in July after receiving Spanish recovery funding in February.

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Kazakhstan has started construction of state-owned Silleno’s polyethylene (PE) plant at the National Industrial Petrochemical Technopark in the Atyrau Region, according to local media reports, said Chemweek.

The PE plant, Kazakhstan’s first and due to be completed in 2029, will enable the country to replace imports with its own production. It will use ethane from the Tengiz oil field and have a capacity of 1.25 million metric tons per year, the reports said.

According to the results of the first half of the year, Russia became the largest exporter to the Republic of Kazakhstan. 28.6% of goods delivered to the country were of Russian production. At the same time, the Russian Federation overtook China (share in total deliveries is 24.5%). The shares of other suppliers were significantly lower: Germany - 5.1%, the USA - 4.1%, South Korea - 3.3%.

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Linde PLC’s (Woking, UK) affiliate, Linde India Ltd. (Kolkata), has invested 349 million Indian rupees (USD4.1 million) to acquire 27% stake in Zenataris Renewable Energy Pvt. Ltd, a special purpose vehicle (SPV) of Fourth Partner Energy Pvt. Ltd. (Secunderabad, India), said Chemweek.

Linde said this investment is the first tranche in the overall planned investment of 1.4 billion rupees in Zenataris Renewable Energy and the deal is expected to be completed by March 2025.

Zenataris Renewable Energy engaged in the business of commissioning and generation of electricity through renewable energy including transmission and distribution. It supplies power either directly or through transmission lines of governments or private companies or electricity boards.

Linde said it can purchase renewable power under captive mechanism, which will result in a lower tariff and consequent cost savings.

We remind, Linde PLC is investing $2 billion to build a clean hydrogen and atmospheric gas plant in Alberta, Canada. Under the long-term agreement, the hydrogen will be supplied to Dow as part of its Path2Zero ethylene project.

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