AMERICAS
Flint Hills Resources to acquire PetroLogistics
Flint Hills Resources will be acquiring propylene producer PetroLogistics for USD 2.1 billion. PetroLogisticsis a major producer of propylene and operates the only propylene dehydrogenation facility currently operating in the United States. The propylene production facility has a capacity of about 725 KTA.
Comments: As a result of the shale gas revolution, steam crackers have reapportioned their cracker feedstock mix to less than 12% naphtha, significantly decreasing propylene production. This trend has increased propylene prices, and in conjunction with cheap propane from shale gas, has made propane dehydrogenation profitable. The plant has contracts with BASF, Dow, Ineos, and Total for the propylene that will last several more years.
Exxon Mobile Baytown expansion project receives EPA approval
ExxonMobil has received the U.S. Environmental Protection Agency Prevention of Significant Deterioration for a greenhouse gas construction permit for the ExxonMobil Olefins plant in Baytown, Texas. ExxonMobil plans to construct a new ethylene production unit with eight ethylene cracking furnaces, and recovery equipment to produce polymer-grade ethylene.
Comments: North American petrochemical companies have announced new ethylene crackers to take advantage of the low-cost feedstock resulting from shale gas abundance in the region. ExxonMobil’s new ethylene plant will have a capacity of 1,500 KTA. ExxonMobil also plans to build two 650KTA polyethylene plants at Mont Belvieu, TX. The new polyethylene plants will use the ethylene feedstock from a new cracker that is expected to become operational in 2016.
OxyChem gets EPA approval for a cracker
The U.S. EPA has issued the final greenhouse gas Prevention of Significant Deterioration (PSD) construction permits to OxyChem for a new ethylene cracker in Ingleside, Texas. The cracker will have the capacity to produce about 540 KTA of ethylene using cracking furnaces equipped with selective catalytic reduction technology. The cracker which will be owned and operated by OxyChem is a 50-50 JV between OxyChem and Mexichem SAB de CV.
Comments: OxyChemis the world’s largest producer of vinyl chloride monomer (VCM). The company plans to use nearly all of the ethylene from the new cracker to manufacture VCM. VCM is the feedstock to produce Polyvinyl Chloride (PVC). PVC is used to produce packaging, pipes, coatings, wire insulation, anti-freeze, and several other domestic and industrial applications.
EUROPE
Westlake Chemical to buy Vinnolit
Westlake Chemical has entered into an agreement to acquire Vinnolit, a leading manufacturer of specialty PVC and its subsidiaries for USD 666.8 million. The transaction, subject to standard closing conditions including regulatory review is expected to close in the third quarter of 2014.
Comments: Westlake currently participates in the PVC business through its operations in the US. The company currently manufactures VCM in Calvert City, Kentucky, and Geismar, Louisiana, and manufactures PVC in Calvert City, Kentucky. The majority of their VCM is consumed for the manufacture of PVC. Vinnolit is a leading PVC manufacturer in Europe that has manufacturing facilities in Germany and UK. The acquisition allows the global expansion of Westlake’s vinyl business.
Rosneft acquires Sanors
Rosneft has acquired Sanors Holding as a part of its petrochemical development strategy. The deal which is subject to antitrust approvals is expected to be closed in the third quarter of 2014. As a part of its petrochemical development project, Rosneft plans to build a new world-class petrochemical complex in the Samara region.
Comments: This acquisition is part of Rosneft’s larger strategy of integration of the company’s upstream resources into the downstream petrochemical sector. The complex, planned to be constructed in Novokuibyshevsk, will be designed to produce 1,200 KTAethylene and 600 KTApropylene. The EPC contractor has not yet been announced, with Linde and Technip competing for the technology award. Additionally, the complex is expected to produce 20 KTA of butadiene, and 150 KTA of toluene.
Sibur, Gazprom Neft, and Titan Group form joint venture in Russia
Gazprom Neft, Sibur, and Titan Group will be establishing a joint venture based on the existing polypropylene plant at Omsk, Russia, owned by Poliom. The PP plant has a capacity of 210 KTA and operates using Spheripol technology. Through this deal, Sibgazpolimer, an equally owned JV between Sibur and Gazprom Neft, has acquired a 50% stake in Poliom from the Titan Group. Gazprom Neft will supply Poliom with propane-propylene feedstock and Sibur will sell Poliom’s products through its distribution network.
Comments: Sibur has recently pursued downstream opportunities in propylene and propylene derivatives with many products likely to be exported to Asia. Participation of Gazprom in the deal ensures a smooth supply source for the plant, whereas Sibur provides both local downstream opportunities (such as ownership of almost all Russian biaxially-oriented polypropylene film capacity) and potential for direct sales through its distribution network.
Borealis introducing PP grades with post-consumer content
Borealis has developed three Daplen PP grades, containing post-consumer recycled content intended for use in interior exterior and under-the-hood automotive applications. The Daplen grades are developed for the automotive industry’s need for materials with enhanced sustainability while ensuring performance.
Comments: OEM and other primary suppliers in the automotive industry globally are pushing toward the increasing use of recycled materials. The new PP Daplen grades offer similar properties as virgin PP grades and will offer increased competitiveness in this emerging area.
Rosneft and Pirelli enter talks about expansion in Russia
Rosneft and Pirelli will enter into talks for the expansion of cooperation for synthetic rubber production in the Nakhoda region. Rosneft and Pirelli will also discuss the development of sales and marketing in Russia.
Comments: Pirelli is partnering with Rosneft to generate a steady supply of high-quality styrene butadiene rubber for tires to take advantage of the growing Russian market. Rosneft and Pirelli already have a joint R&D deal signed in 2013 covering synthetic rubber, reinforcing materials, and fillers such as carbon black. Rosneft and Pirelli have previously discussed building a synthetic rubber production plant in Armenia.
Sibur increases BOPP film capacity
Sibur’s Biaxplen has started up a new 30.5 KTA BOPP film production line in the Samara region. Biaxplen invested about USD 55.06 million for the new unit. With this investment, the total plant capacity has increased to 55.5 KTA.
Comments: Biaxplen, the largest Russian producer of polypropylene films, was completely acquired by Sibur in April 2012. Since then, Biaxplen has undertaken expansion projects to cater to the rapidly growing market for packaging materials. In November 2013, Biaxplen added a new line at its Tomsk site. The new line will allow Biaxplen to increase its supply of 5-layer films to the Russian and European markets.
ASIA
Sabic forms PE joint venture with SK Chemical
Sabic and SK Global Chemical have signed a 50-50 joint venture agreement to invest USD 595 million in projects. The joint venture will acquire SK Global Chemical’s cutting-edge Nexlene solution polyethylene technology and a 230 KTA polyethylene plant at Ulsan, South Korea. With the agreement, which is subject to regulatory approvals, SK Global Chemical and Sabic also plan to establish production facilities for Nexlene PE in Saudi Arabia and other regions.
Comments: This agreement is the second JV that SABIC has entered into in the Asian region and follows its JV with Sinopec in China in the manufacture of polyolefins. SABIC and SK are both interested in competing in the higher end of the polyethylene market and the new metallocene production JV will enable them to compete in value-added markets starting with Singapore as a base and subsequently expanding to other regions.
UOP to provide technology for propylene plant in China
Guangdong Peng Zun Energy Development Cohas selected UOP’s C3 Oleflex process technology to convert propane to propylene for its new 450 KTA propylene plant. The plant is expected to start operations in 2016. UOP will also be providing the catalysts for the plant.
Sinopec and sibur to form a Synthetic rubber joint venture
Sinopec and Sibur have signed a deal to set up a joint venture for synthetic rubber production in Shanghai. Sinopec and SIbur will also be cooperating to look into the potential expansion of trading operations and collaboration opportunities in gas processing and petrochemical projects. Sinopec and Sibur will build a new NBR plant with a capacity of 50 KTA in Caojing, China.
Comments: The joint venture brings together two large petrochemical companies that have a strong presence in their respective regions. China is the world’s largest and fastest-growing NBR market, with demand being driven by the automotive and construction industries. The new venture will strengthen China’s supply of NBR to meet domestic demand while expanding Sinopec’s presence outside China.
PetroChina Sichuan LLDPE plant begins commercial operations
PetroChina has begun commercial operations at the 300 KTA LLDPE plant in Sichuan Province, China. The LLDPE plant is a part of PetroChina’s integrated petrochemical and refinery complex in Sichuan Province which includes a 10,000 KTA refinery and 800 KTA ethylene unit.
Indian Oil PP project approved
Indian Oil’s polypropylene project at Paradip has been approved by the board. The PP project at Paradip will involve an investment of approximately USD 530 million. The new plant will have the capacity to produce 350 KTA of PP and is expected to become operational at the end of 2016.
Comments: The new PP plant is one of the several new PP plants expected to come on stream in India in the next couple of years. Indian Oil over the past few years has been actively developing new PP grades catering to the domestic and Asian markets, especially in the injection molding segment. Indian Oil supplies to surrounding Asian countries as well as several African countries.