AMERICAS
Formosa Plastics obtains EPA permits for new plants
Formosa Plastics Corp. has obtained greenhouse gas prevention of significant deterioration (GHG-PSD) permits from EPA for the construction of 1,600 KTA ethane cracker, 660 KTA PDH unit and a 570 KTA LDPE plant at its site in Point Comfort, Texas. Formosa Plastics expects to bring the new plants on-stream in 2017.
Comments: The development of shale gas has had a dramatic impact on the North American petrochemical industry. The resultant low-cost ethane has spawned a massive wave of new ethylene expansions by essentially every olefins and derivatives producer in North America as well as several foreign players. Formosa is one of the first five companies to get EPA approval, which will likely be a significant roadblock for some of the later players due to the sheer number of plants coming up in a relatively small region. The approval significantly increases the likelihood that the cracker and downstream units will be actually built on time.
TPC Group, UOP to collaborate on butadiene technology
TPC and UOP have begun working together to license TPC Group’s proprietary OXO-D technology for the production of on-purpose butadiene. TPC Group and UOP will jointly develop further enhancements to OXO-D technology for the efficient and low cost conversion of butene to butadiene.
Comments:: TPC has had its Oxo-D on purpose butadiene technology for over 25 years. The shale gas boom in North America has led to speculation that traditional C4 stream would be impacted as a result of the focus on shale gas and ethylene leading to shortages in the C4 stream. UOP has had a lot of success in licensing technologies to China over the past few years, and the Chinese market will represent a good opportunity for UOP to license its on-purpose butadiene technology.
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 acrylics 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 to 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
Borealis to buy DuPont’s share in Specialty Polymers Antwerp
Borealis will acquire DuPont’s 67% shareholding in Specialty Polymers Antwerp, a joint venture between DuPont Holding Netherlands B.V. (67%), Borealis Polymers N.V. and Borealis Kallo N.V. (together 33%). Upon completion of the proposed acquisition, DuPont will continue to serve the market with EVA and acrylate copolymers produced at the Specialty Polymers Antwerp facility.
Comments: Specialty Polymers Antwerp was formed as a joint venture with DuPont Holding Netherlands owning 67% and Borealis Polymers and Borealis Kallo together owning 33%. The acquisition makes Borealis the full owner of Specialty Polymers Antwerp. Specialty Polymers Antwerp manufactures EVA and acrylate copolymers. Acrylate copolymers find applications in extrusion coating, polymer modification, cast and blown films, etc.
Lanxess consolidates business units
Lanxess is consolidating its business units as a part of its realignment process. Lanxess will merge certain business units, reducing the number of business units to 10 from 14. Lanxess will combine the butyl rubber (BTR) and performance butadiene rubbers (PBR) business units to form the Tire & Specialty Rubbers (TSR) business unit. Lanxess will recombine the high performance elastomers (HPE) and Keltan elastomers (KEL) business units under the name high performance elastomers (HPE). Also, the rubber chemicals (RUC) business unit’s specialty chemicals product line, the functional chemicals (FCC) business unit and the Rhein Chemie (RCH) business unit will be combined to form the new Rhein Chemie Additives (ADD) business unit.
MIDDLE EAST & AFRICA
Trial runs begin at EVA-LDPE plant at Al-Jubail
International Polymers Co. (IPC) has begun trial runs of EVA and LDPE plants at Al-Jubail. IPC is owned by Sipchem (75%) and Hanwha (25%). The plant has a production capacity of 200 KTA and has been built at an investment of USD 800 million. The plant is expected to begin commercial operations in 2015.
Comments: The rapidly growing demand in Asia is driving Middle East to add large capacities for polyethylene in the region. Moreover, Middle East has the advantage through enormous availability of economic feedstocks. Since production of polyethylenes in Middle East will surpass the regional demand, companies will look to sell their polyethylenes mainly in Asia, followed by Europe.
Rabigh II project to merge with Petro Rabigh
Rabigh Refining and Petrochemical Co. has approved the merger of Rabigh II with Petro Rabigh. Petro Rabigh is a joint venture between Saudi Aramco and Sumitomo Chemicals. Rabigh II, presently owned by the founding partners, will double the capacity of Petro Rabigh and widen the product portfolio. Rabigh II includes expansion of an ethane cracker and the construction of an aromatics complex. The project is scheduled for completion in 2016.
Comments: Rabigh Refining and Petrochemical Company (Petro Rabigh or Rabigh I) is an equally owned joint venture between Saudi Aramco and Sumitomo Chemical in Saudi Arabia. Its polymer products include LLDPE, HDPE, and PP. The merger will double Petro Rabigh’s capacity and add LDPE/EVA, PET, MMA, PMMA, caroplactam, Nylon-6 and various other petrochemicals to the company’s product portfolio.
Petkim opens plastic packaging plant in Turkey
Petkim has opened a plastic packaging plant in Aliaga in Turkey’s Izmir province. Petkim’s product portfolio includes polyamide, polypropylene, low density polyethylene, high density polyethylene and PVC and the output is supplied to construction, electricity, electronic, packaging, textile also medical, dying, detergent and cosmetic industry.
Comments: Petkim has recently decided to pursue an aggressive strategy of expansion, investing USD 100 million every year until 2018 in an effort to match the growing demand for plastics in the region. Plastic packaging is expected to experience double digit growth in some of Turkey’s neighboring countries, and Petkim is taking a calculated risk relying on rapid growth of developing economies. Petkim currently produces PA, PP, LDPE, HDPE, and PVC.
Orpic licenses Spheripol PP technology
Orpic has licensed LyondellBasell’s Spheripol polypropylene technology for a new 300 KTA PP plant to be built in Sohar, Oman. The project is expected to start –up in January 2018.
Comments: LBI’s Spheripol is the most licensed PP technology globally and accounts for the largest share of installed PP capacity worldwide compared. In the last decade, several new PP projects have been completed in the Middle-East including large capacity projects such as Borouge in Abu Dhabi. Most of the PP produced in the Middle-East is being exported to Asian countries particularly China, where the demand for PP exceeds the country’s capacity currently.
ASIA PACIFIC
PTTGC to delay conclusion of talks on Indonesian joint venture
PTTGC and Pertamina are delaying the conclusion of talks on the joint venture project in Indonesia by six months. The conclusion of talks on the USD 4-5 billion project has been postponed to early next year.
Comments: PTTGC has been looking to expand its market presence in the ASEAN region and in China. PTTGC’s PE grades are well received in the ASEAN countries, and with the free trade agreement in place amongst member nations, PTTGC’s manufacturing presence outside of Thailand would represent a good strategic move. Indonesia currently has only two PE producers: Chandra Asri and Lotte Titan, and the country has been a net importer of PE for some time now. PTTGC can cater to the needs of the domestic Indonesian market as well as use Indonesia as a second export hub.
Kraton not to move forward with planned merger
Kraton Performance Polymers has decided not to move ahead with the proposed merger with LCY Chemical as the companies could not agree upon a mutually acceptable revised terms of the agreement.
Comments: Kraton has had a lot of success with sales of its SBC products in Asia, so the merger with LCY Chemical made sense in order to make the company the runaway leader in SBC in the region as well as worldwide. Both companies, but especially LCY, have struggled in 2014, and the board may have withdrawn its recommendation in the face of stockholders’ backlash. The catastrophic explosion of LCY’s propylene pipeline in Taiwan may give Kraton an easy exit from the agreement and allow the company to avoid paying a penalty for terminating the agreement.
Mesnac buys synthetic rubber producer
Mesnac has acquired Fushun Yikesi New Material Co. Ltd., a synthetic rubber and resin producer in Fushun City in China. Fushun Yiksei’s product portfolio includes refined petroleum C5 resin, piperylene, dicyclopentadiene and isoprene derivatives, including synthetic rubber.
Comments: Mesnac Co.’s acquisition highlights the company’s strategy to shift into the production of high performance rubber and material technology. Prior to the acquisition, Mesnac was one of the world’s largest suppliers of tire manufacturing equipment. Fushun’s products include C5 resin, piperylene, dicyclopentadiene and isoprene derivatives, and will allow Mesnac to offer a more comprehensive portfolio to its customers.
Nippon Shokubai cancels China SAP expansion
Nippon Shokubai has cancelled its plans to double super absorbent polymers capacity at its Nisshoku Chemical Industry subsidiary in China. The project planned to increase the SAP production capacity at the site to 60 KTA, with an investment of USD 56 million.
Comment: Acrylic acid technology is held closely by a handful of licensors globally. Nippon Shokubai is one of the leading producers and licensors of acrylic acid technology. Acrylic acid licensors typically tend to form a JV or subsidiary with the potential licensee, rather than licensing the technology outright. In this case, Nippon Shokubai planned a SAP subsidiary in China but has decided to not go ahead with the project due to the volatile SAP industry in China.
New nylon-6 manufacturing plant commissioned in China
Hangzhou Hangding Nylon Tech has commissioned a nylon-6 plant at the Economic Technical Development Area of Hangzhou City, Zhejiang Province, China. The facility produces nylon-6 additives to produce 47 KTA of nylon chips for textile grade applications.
Comments: China is the largest supplier of nylon-6 in the world. The country is also the fastest growing region in terms of nylon capacity additions. China’s increasing demand for nylon is driving the supply additions of nylon, subsequently easing the dependence on imports to meet the demand requirement.