Lotte Chemical Titan shuts down operations temporarily in Pasir Gudang to cut losses

Lotte Chemical Titan has announced the temporary shutdown of one of its plants at the Pasir Gudang Complex in Johor, effective Dec 15, to mitigate losses stemming from a prolonged downturn in the petrochemical industry, said Theedgemalaysia.

LC Titan will consider resuming the operation of the plant, named Naphtha Cracker Number 1 plant, when market conditions become more favourable, according to its bourse filing on Friday. The plant has a nameplate capacity of 430,000 tonnes per annum, LC Titan noted.

LC Titan noted that the petrochemical industry experienced a prolonged downturn over the past two years as a result of a supply glut, resulting in negative margins for the company.

The shutdown comes slightly over a month after Reuters reported in early November that Thailand's industrial conglomerate Siam Cement Group halted commercial operations at its US$5.4 billion (RM24.2 billion) Long Son Petrochemicals complex in the southern province of Ba Ria-Vung Tau in Vietnam.

LC Titan's profitability relies on the polymer-naphtha spread, while naphtha feedstock prices are highly correlated to crude oil prices. The high-density polyethylene (HDPE)-naphtha spread, an indication of margin level, has been between US$200 and US$300 a tonne since mid-2023.

Having recorded losses for 10 consecutive quarters, LC Titan’s net loss widened to RM246.42 million for the July-September 2024 quarter, compared to RM55.58 million in the corresponding quarter last year.

The larger loss was attributed to inventory writedowns, higher losses from its 40%-owned associate Lotte Chemical USA Corp due to a maintenance shutdown, and increased foreign exchange losses.

Quarter-on-quarter, the net loss slightly narrowed from RM248.89 million in the April-June 2024 quarter. For the first nine months of the year, LC Titan’s net loss expanded to RM673.33 million from RM593.81 million in the same period last year.

Back then, in its financial statement accompanying the latest results, LC Titan said its management is closely monitoring operations and carefully managing financial liquidity to enhance efficiency and maintain product quality.

As of end-September 2024, LC Titan reported RM7.84 billion in loans and borrowings and RM461.09 million in cash, placing it in a net debt position of RM7.37 billion.

Shares of LC Titan fell to an all-time low of 3 sen on Friday, the lowest since its relisting on the stock exchange in July 2017. The stock closed 1.5 sen or 2.33% lower at 63 sen, giving the company a market capitalisation of RM1.45 billion.

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Nigeria's Dangote Refinery said it has made its first export of petrol to Cameroon, a milestone that could pave way for regional energy integration and help stabilize fuel prices across the region, as per Hydrocarbonprocessing.

The 650,000-bpd refinery built by Nigerian billionaire Aliko Dangote in Lagos aims to compete with European refiners when operating at full capacity and is expected to change trading of refined products in the Atlantic basin.

The company did not provide details of how much was exported.

Cameroon's energy firm Neptune Oil said in the statement that both companies were exploring new initiatives to establish a reliable supply chain that will help stabilize fuel prices and opportunities across the region.

Neptune Oil said the petrol supply transaction was executed without intermediaries.

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Neste and BMW announced a collaboration for the supply of renewable diesel, as per Hydrocarbonprocessing.

BMW will purchase Neste MY Renewable Diesel and use the fuel for the initial fill of diesel vehicles leaving their manufacturing plants in Germany. This will see Neste's renewable diesel being used in the BMW plants in Munich, Dingolfing, Leipzig, and Regensburg. The transition of the initial filling to HVO100 will thereby affect more than half of the global production volume of BMW’s diesel vehicles. First deliveries of the fuel to individual plants have already commenced.

BMW recently expanded its approval of the use of renewable diesel (also known as “HVO100” or Hydrotreated Vegetable Oil) to cover an even larger portion of BMW models. While renewable diesel is in general compatible with all diesel engines, the official approval from BMW provides further assurance for drivers, for example when it comes to liability questions.

“We are grateful for BMW’s trust in us, and we are looking forward to this cooperation,” says Joerg Huebeler, Head of Market Development EU & APAC, Transport & Industry at Neste. “Renewable diesel plays an important role in the transformation towards sustainable mobility globally. The first filling of BMW cars in Germany with Neste’s renewable diesel allows customers to experience firsthand that significant GHG emission reductions with renewable diesel are possible without any impact on the vehicle performance. We also wish to express our gratitude to our partner Biofuel Express, who supports us in delivering the fuel to BMW.”

This is not the first time BMW and Neste cooperate on renewable diesel: In 2023, in addition to the use of electric trucks, a one-year test of renewable diesel took place in logistics operations around the BMW plant in Munich – with Neste being the supplier of the fuel. With the steps now being taken, BMW is taking advantage of the change in the German law in spring 2024, which permits the free sale of renewable diesel in Germany.

Neste's renewable diesel is made from 100% renewable raw materials, primarily waste and residue oils and fats. Leveraging these raw materials, the use of the fuel can reduce greenhouse gas emissions by up to 90%* over the life cycle of the fuel compared to fossil diesel.

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Kazakhstan's mineral resource base includes nearly 10,000 deposits of minerals, hydrocarbons and groundwater, and new reserves of natural gas registered with the government over the past two years total 113 billion cubic meters, Yerlan Akbarov, Chairman of the Geology Committee of the Industry and Construction Ministry, said, as per Interfax.

"The government balance overall accounts for over 987 deposits of solid minerals, 355 hydrocarbons, 3,666 common minerals, and 4,540 groundwater deposits," Akbarov said at a briefing on Thursday.

Akbarov also said that 27 deposits of solid minerals, 10 hydrocarbon deposits, and 23 groundwater deposits were registered with the government for the first time in 2023-2024.

"There was an increase in resources and reserves for the following types of minerals: gold at 522 tonnes, silver at 281,000 tonnes, chrome ores at 2.383 million tonnes, uranium at 44,000 tonnes, copper at 800,000 tonnes, phosphorite ores at 82 million tonnes, oil at 277 million tonnes, gas at 113 bcm, condensate at 1.9 million tonnes, and groundwater at 155,800 cubic meters per day," he said.

Akbarov said that gold has the highest reserve replenishment at a coefficient of 1.2.

"For example, we mine one tonne of gold and replenish approximately 1.2 tonnes. The replenishment coefficient is from 0.4 to 1 for lead, zinc, copper, and gold," he noted.

Gold reserves in Kazakhstan are generally calculated for 20 years of extraction, and copper for 40 years. "The reserve supply is 40 years for many minerals. One should take into account that there are certain geological and technical difficulties. There are individual deposits, where the supply is 10 and even five years. The supply is generally on average 20 years in the republic," Akbarov said.

We remind, Transneft is substantially hiking tariffs for long-term storage of petroleum products as of January 1, 2025. Transneft said that the tariff for storing one tonne of petroleum products from the 31st to the 40th day would be set at five times the tariff in effect during the first 30 days, and the tariff from the 41st day would be set at ten times the tariff in effect during the first 30 days.

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SAMSUNG E&A announced that it secured the contract for a biorefinery that will have the capability to produce sustainable aviation fuel (SAF) and other biofuels such as renewable diesel/hydrogenated vegetable oil (HVO) to cater to the growing demands of the global aviation and transportation industries by tapping each partner’s expertise, as per Hydrocarbonprocessing.

It is SAMSUNG E&A’s first entry into the SAF market, a new business initiative in the era of energy transition.

SAMSUNG E&A announced that it had received a Letter of Award (LoA) for the EPCC (Engineering, Procurement, Construction and Commissioning) work of Bio-Refinery Project in Malaysia from Enilive S.p.A (Enilive), on behalf of a joint venture consisting of PETRONAS Mobility Lestari Sdn. Bhd. ("PMLSB"), a subsidiary of PETRONAS; Enilive, and Euglena Co., Ltd. ("Euglena"). The EPCC contract, valued at USD 955 million, is targeted to be officially signed by the end of January 2025.

This biorefinery will be located within PETRONAS’ Pengerang Integrated Complex (PIC), Johor, Malaysia, and upon completion, will have the capability to process about 650,000 tonnes per year of raw materials to produce SAF, HVO, and bio-naphtha.

The wastes and residue feedstocks for the biorefinery will comprise used vegetable oils, animal fats, waste from the processing of vegetable oils, and other biomass, including microalgae oils are expected to be explored in the mid-term.

SAMSUNG E&A has entered the new SAF market for the first time, with this contract attracting attention as a next-generation eco-friendly energy source as it can significantly reduce carbon emissions.

As part of the global effort to reduce carbon emissions, major countries are implementing regulations to increase the adoption of SAF. This trend is expected to drive steady growth in the SAF market. For instance, the European Union will mandate the placing on the market of at least 2% SAF blends in aviation fuel from next year onwards. Similarly, Singapore will introduce a 1% or higher SAF blending requirement by 2026. Following suit, South Korea plans to introduce mandatory SAF blending from 2027, with gradual expansion slated for subsequent years.

SAMSUNG E&A plans to leverage the profound experience gained from executing more than ten projects in Malaysia, with its differentiated technologies such as modularization and automation. Additionally, SAMSUNG E&A intends to collaborate closely with the client and technology partners to deliver an excellent project.

Hong Namkoong, President and CEO of SAMSUNG E&A stated, “Since we are carrying out the project in Malaysia, a major Asian market for us, we expect stable performance with our accumulated experience and technology. By successfully carrying out the company’s first SAF project, we will expand our position in the carbon-neutral, eco-friendly field in the future.”

Meanwhile, earlier this year, SAMSUNG E&A changed its name from SAMSUNG Engineering to reflect the evolving business environment of the energy transition era and its future scalability. Further, it established a mid-to-long-term core strategy of “addressing societal challenges through technology” and is shifting its entire organizational capacity to advancing new energy transition businesses such as hydrogen, carbon neutrality, and SAF.

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