AMERICAS
Mexichem acquires HDPE pipe and conduit producer
Mexichem will be acquiring Dura-Line for about USD 630 million. Dura-Line manufactures HDPE conduit, duct, and pressure-pipe products for telecom and data communications, energy, and infrastructure industries.
Comments: Dura-Line is one of the largest plastic pipe manufacturers in the US. The company has a wide regional presence with manufacturing locations in the USA, Mexico, South Africa, India, Oman, Dubai, and the Czech Republic. The acquisition will allow Mexichem will increase the company’s presence on a global scale.
Lanxess expands plastics production in North Carolina
Lanxess is expanding its plastics compounding facility in Gastonia, North Carolina, by adding a second production line. Lanxess will be investing about USD 15 million to increase the production capacity from 20 KT to 40 KT. The expansion is expected to be complete in early 2016.
Comments:: Lanxess produces thermoplastic resins – Durethane Polyamide and Pocan PBT for several interior and exterior automotive applications. These resins are mainly consumed as blends with glass fiber. Strong growth in the U.S. automotive manufacturing industry is driving companies to increase their capacities to meet the rising demand.
Nova’s new LLDPE unit’s start-up delayed
The start-up of Nova Chemicals’ expanded LLDPE plant in Joffre, Alberta is delayed until the end of the summer of 2016. Earlier, the expanded plant was expected to be on-stream by late 2015. After the expansion, the plant will have a capacity of 454 KTA.
Arkema secures propylene supply contract
Arkema has secured a contract for propylene supply with Enterprise Products. Enterprise Products is currently constructing a PDH plant in Mont Belvieu, Texas, which is expected to be completed in the first half of 2016.
Comments: Following the lead of several East and Southeast Asian companies, Arkema has secured a long-term relatively inexpensive supply of shale gas-derived propylene from the United States. Arkema has significant acrylic production in the U.S., and the agreement allows the company to lock down the majority of its feedstock for the region and avoid market volatility. Enterprise has been one of the first players in the propane dehydrogenation game in North America and should enjoy an advantage in profitability compared to some of its rivals that have not yet started construction.
EUROPE
PKN Orlen builds on-purpose propylene plant
PKN Orlen plans to build an on-purpose propylene production facility at its Plock manufacturing complex in Poland. The new plant will use CB&I’s olefin conversion technology and will have a propylene production capacity of 100 KTA.
Comments: Partly due to crackers in the U.S. shifting to light feedstock as a result of the shale gas revolution, propylene has traded at a premium to ethylene in the past few years. Relative propylene scarcity has prompted many companies predominantly in North America and China to invest in on-purpose propylene production. Instead of going with the more popular propane dehydrogenation or coal-to-olefins, PKN chose Lummus’ Olefins Conversion Technology (OCT), which combines n-butenes with ethylene to produce polymer-grade propylene. The unit will be integrated into the company’s existing fluid catalytic cracker, which makes the investment able to withstand varying prices of ethylene/propylene/C4s due to the large flexibility in the propylene-to-ethylene output of the plant.
Sabic to convert UK cracker to use US ethane
Sabic plans to proceed with the conversion of its Olefins plant at Wilton, UK to use ethane feedstock from the US. Sabic’s naphtha cracker at Wilton can produce 865 KTA of ethylene, 400 KTA of propylene, and 100 KTA of butadiene. The conversion is expected to be completed in 2016.
Comments: SABIC is following the lead of Ineos in modifying its cracker to use relatively inexpensive ethane from U.S. shale gas instead of naphtha. Since North American ethane is expected to remain surplus to domestic requirements for the next several years, ethane import is an attractive economic proposition even when the massive trans-Atlantic transportation costs are taken into account. The UK government is helping SABIC shoulder the cost of the cracker modification and construction of new infrastructure to store and transport the ethane.
Sibur may build a polymer plant in the Tyumen region
Sibur is considering the construction of a plant to produce basic polymers at the ZapSibNeftekhim facility in the Tyumen Region. The new facility would produce 1,500 KTA polyethylene and 500 KTA polypropylene.
Comments: Sibur built Russia’s largest PP in Tobolsk in 2013 with a capacity of over 500KTA. This plant has changed Russia from a net importer of PP to a net exporter. Russia has added sizable PP capacity in the last few years and will continue to do so in the short term.
BASF’s new butadiene unit reaches mechanical completion
BASF has achieved the mechanical completion of its new butadiene extraction unit in Antwerp in Belgium. The new plant has a production capacity of 155 KTA and is expected to start up by the third quarter.
Comments: Western Europe is one of the largest butadiene-producing regions in the world. Companies like LyondellBasell, BASF, and Versalis are increasing their butadiene production capacity to capitalize on the decrease in North America’s butadiene production. The US cracker’s shift from heavy feeds, such as naphtha, to ethane, has led to increased reliance on imports from Western Europe and South America to meet the demand.
MIDDLE EAST & AFRICA
Kazakhstan starts construction on new petrochemical technology park
Construction for Kazakhstan’s first petrochemical technology park has begun in a special economic zone in Atyrau. The plant will use gas from the Kashagan field to manufacture polyolefins including polypropylene, polyethylene, and butadiene.
Comments: Kazakhstan has huge oil and gas reserves and has been looking to increase downstream petrochemical production. United Chemical Company will provide the gas from the Kashagan field to companies that win land plots in the country’s first petrochemical technology park. There are also refineries nearby to process oil from the country’s deposits for potential feedstock for the new plants.
ASIA PACIFIC
Reliance Industries to import US ethane
Reliance Industries plans to import 1,500 KTA of ethane from the US for its crackers in India. Reliance has also executed storage and capacity agreements for the transportation of ethane which is expected to begin in the fourth quarter of 2016.
Comments: Reliance is the fourth company to announce plans to import ethane derived from US shale gas and the first outside of Europe. The amount of ethane transported per year is also the largest to date, with Samsung Heavy Industries providing six carriers by 2016. The massive investment to upgrade Reliance’s cracker which was originally designed to use refinery off-gas and is not currently suited to such light feedstock along with transportation and storage costs will require U.S. ethane to remain cheap for a long time for the project to retain profitability.
Indian Oil’s PP project to be completed in 2017
Indian Oil’s polypropylene project at Paradip is expected to be completed in September 2017. The PP plant, which is being constructed with an investment of USD 526 million, was initially expected to come on-stream by 2016. The plant will include two lines, each with a production capacity of 350 KTA of PP.
Comments: Indian Oil has invested heavily in its new petrochemical complex in Paradip. A handful of PP projects are expected to add capacity in India by 2018. Indian Oil has also been active in researching PP catalyst development and has focused on developing a phthalate-free PP catalyst which may be commercialized in the next few years.
Shanghai Secco launches butadiene plant
Shanghai Secco Petrochemical has started up its new butadiene plant in Shanghai. With the new plant, Shanghai Secco’s butadiene production capacity has increased to 180 KTA.
Comments: Shanghai SECCO, one of China’s largest petrochemical companies, is a joint venture between China Petroleum & Chemical Corporation, Sinopec Shanghai Petrochemical Company Limited, and BP Chemicals East China Investments Limited. Butadiene is used to produce synthetic rubbers and polymer resins. The largest end uses are synthetic butadiene rubber (SBR) and polybutadiene rubber (PBR) which are used in tires. The use of SBR and PBR mainly in tire manufacture and the growth of the automotive market in Asia are driving the demand for butadiene in China.
Sinopec Maoming to start up PP facility
Sinopec Maoming Petrochemical plans to start up a new polypropylene facility with a production capacity of 200 KTA. With the new PP facility, Sinopec Maoming will have three PP units with a total production capacity of 670 KTA.
Comment: The majority of the PP plants in China are operated either by Sinopec or PetroChina with a few independently operated facilities. Most of the upcoming PP capacity is expected to be in China, which also has the largest current installed PP capacity driven by the country’s increasing domestic demand for PP resins. Sinopec is also a leading third-party catalyst supplier to the PP plants in China.