AMERICAS
Westlake to place ethylene assets in limited partnership
Westlake Chemical plans to place its ethylene assets into a separately traded limited partnership. Westlake Chemical Partners LP, will own two ethylene facilities at Lake Charles, LA, one ethylene unit at Calvert City, KY and an ethylene pipeline that runs from Mont Belvieu, TX to Westlake’s polyethylene plant at Longview, TX. Westlake will enter into a 12-year ethylene sales agreement with the partnership, under which Westlake will purchase 95% of the partnership’s ethylene production on a cost-plus basis at a fixed margin of 10 cts/lb.
Comments: Westlake is taking advantage of a 2012 IRS ruling allowing olefin producers to classify themselves as partnerships, which do not pay income taxes at the corporate level, boosting the already-massive profits from converting low-cost ethane derived from shale gas on the U.S. Gulf Coast to ethylene. The partnership will take over two ethylene plants at Lake Charles, one plant at Calvert City, and a 200 mile ethylene pipeline. The combined ethylene capacity of the crackers is over 1,200 KT. The partnership has also announced plans for a 110 KT capacity expansion at the Lake Charles site scheduled to be completed by 2016.
Lion Copolymer completes EPDM expansion study
Lion Copolymer has completed an engineering study for an additional EPDM manufacturing line, with a capacity of 60-80 KT, at its facility in Geismar, LA. The expansion would increase the total capacity at the site to over 200 KTA. Lion Copolymer is also considering a shared investment in a new ethane cracker.
Comments: After the recent divestiture of SBR business, Lion Copolymer is looking to strengthen its position in the growing EPDM segment. Lion Copolymer acquired the Geismar site in 2007 and undertook a 35 KT expansion in 2011-12. With the cost advantage in the US Gulf Coast, co-investment in a new ethane cracker would strengthen Lion Copolymer’s position in the raw materials.
Idemitsu Kosan and Mitsubishi cancel alpha olefins project in US
Idemitsu Kosan and Mitsui will not be proceeding with the linear alpha olefins joint venture project in the U.S. Idemitsu Kosan and Mitsui were studying a project to build a 330 KTA plant at Dow Chemical’s Freeport site in Texas. Idemitsu Kosan and Mitsubishi proposed the 50:50 joint venture in 2013. Idemitsu and Mitsubishi had also signed an ethylene off-take agreement with Dow Chemical.
Williams considering joint venture ethane cracker
Williams is considering construction of a second ethane cracker at its site in Geismar, LA. Williams is looking at a greenfield project with joint venture partners building derivative capacity.
Comments: Shale gas is expected to play a dominating part in the US energy from 2014. The abundance of shale gas will make the US most cost competitive after Middle East. Companies are looking to take advantage of the cheap feedstocks to bring back the lost momentum of the US petrochemical industry during the last decade. Tulsa-based Williams currently produces olefins – ethylene and propylene, at their Geismar, LA location. The partner in the joint venture will produce downstream petrochemical products.
Kraton introduces new hydrogenated styrene block copolymers
Kraton Polymers has introduced two new hydrogenated styrenic block copolymers. Kraton™ MD6951 and MD1648 offer a balance of high elasticity, tensile strength and lower melt viscosity. The polymers are an extension to the Kraton A and ERS hydrogenated styrene block copolymers.
Comments: Kraton Polymers is one the largest producers of engineered polymers and styrenic block copolymers. Their current SBCs include SIS, SBS, SEBS, and SEPS. The company markets MD 6951 for modification of TPU, PS, and PPE for use in durable goods, grips, etc, while MD 1648 is used for modification of polyolefins targeting household goods, automotive parts, and hot melt adhesives.
EUROPE
Titan Polyom PP plant increases capacity
Titan Polyom PP plant in western Siberia has increased its capacity to 210 KTA from its nameplate capacity of 180 KTA. This plant which has been operational since April 2013 can turn up to 100 different PP grades. It produces general purpose PP for extrusion, compounding and injection molding, polymer for BOPP films and PP for injection and extrusion piping systems.
Comments: Eastern Europe, led by Russia, currently relies on imports of PP to meet its demand. The demand for PP in the region will continue to increase at a healthy rate in the coming years. However, the new capacity from Titan’s Polyom and supply from Russia’s other major petrochemical company, Tobolsk-Polymer, will reduce the dependence on imports. Russia plans to take advantage of the repercussions of US’ shale gas on propylene and PP. The country is investing in alternate technologies for propylene and plans to export PP in the long term.
MIDDLE EAST & AFRICA
Kazakhstan to build petrochemical complex
Kazakhstan plans to build a petrochemical complex by 2016 in the Atyrau region, where Tengiz, a major oil field in Kazakhstan is located. The complex will use associated petroleum gas as feedstock, which is currently flared. The first two stages of the complex which will be built by 2016, will use about 7 billion cubic meters/year of feedstock and will produce propylene and polypropylene with a capacity of 500 KTA and 800 KTA. The third stage will include 250 KTA capacity for butadiene with gas from fields in Karachaganak and Kashagan as feedstock. This stage is most likely to be delayed to at least 2018.
Comments: The high recent difference between propane and propylene prices has spawned significant investment in propane dehydrogenation (PDH) plants worldwide. Kazakhstan is a major oil producer that has yet to develop significant downstream petrochemical capacity. The USD 6.3 billion project will join a long list of PDH projects in the planning and construction stages mainly in China and the United States. Propane will be supplied via a 207 km pipeline that will be built as part of the project. The third stage of the project will aim to take advantage of butadiene supply tightness, which has been exacerbated by a switch to lighter feedstock as a result of shale gas development.
New petrochemical complex in Turkmenistan
Groundbreaking ceremony for a petrochemical complex was held in Turkmenistan. The complex will consist of an ethane cracker with a capacity of 5 billion cubic meters/ year of ethane, 386 KT of HDPE and 81 KT of PP. The construction for the plant is expected to be complete by 2018 and the plant is expected to cost about USD 3.4 billion.
Comments: This project will be Turkmenistan’s first significant petrochemical complex. The state gas company Turkmengaz, has contracted Toyo, LG International and Hyundai Engineering for construction of the facility. The cracker will be able to process 5 billion cubic meters/ year of ethane, which will be supplied from a gas field operated by Petronas. The USD 3.4 billion project is expected to be completed by 2018. This investment by Korean and Japanese companies into Turkmenistan’s large and undeveloped natural resources fits into their strategy of international expansion to low-cost feedstock regions.
Iran to commission four petrochemical plants
Iran plans to bring on-stream four petrochemical plants and will also complete the second phase of the Kavian petrochemical complex in southern Iran this year. Kavian petrochemical complex will have two lines with a capacity of 1,000 KTA. This plant will supply to downstream units located along the line at Lorestan, Kordestan, and Mahabad, which is expected to be operational by the end of the current Iranian calendar year.
Comments: With the constant increase in demand for petrochemical products both domestically and from countries in Asia, Africa, and Eastern Europe, Iran looks to boost its economic growth by investing in petrochemicals. The resumption of exports to Europe and the partial suspension of international sanctions against that country have stimulated the Iran’s petrochemical industry.
Sabic introduces new grades for caps and closures market
SABIC will be introducing two new grades SABIC® HDPE AX7611 and SABIC® PP PHC28 which will meet specific needs of the caps and closures market. SABIC® HDPE AX7611 is a new bimodal HDPE grade which is designed for the caps and closure for sparkling water and carbonated soft drinks. The new polypropylene grade, SABIC® PP PHC28, is developed to meet high safety standards of specialty caps and closures market.
Comments: Comments: SABIC’s new bimodal HDPE grade meets the specific requirements of beverage companies such as high ESCR and downgauging in addition to increasing processability.
ASIA PACIFIC
Sabic to invest in long glass fiber-reinforced PP
Sabic Innovative Plastics plans to invest in a production line for Stamax-brand long glass fiber-reinforced polypropylene resin in Shanghai. The new line is expected to come on-stream in the second half of 2015. Sabic already operates two Stamax plants in Genk, Belgium and Bay St. Louis, Miss.
Comments: Long glass fiber reinforced PP has found several applications in injection molded parts due to its favorable properties such as ease of processing, mechanical strength and dimensional stability. It is finding increased use in automotive applications such as front end carriers, instrument panels, door modules etc. Sabic’s investment in the Stamax product line will help Sabic take advantage of the growing demand for lighter vehicles in Asia.
Sibur and Reliance joint venture to begin operations by 2015
Sibur and Reliance’s butyl rubber joint venture plant is set to begin operations by the end of 2015 and will have a capacity of 100 KTA. The plant will use a solution polymerization technology which is currently used at Sibur’s plant in Samara, Russia.
Comments: India currently imports butyl rubber and this joint venture will play a key role in catering to India’s growing demand for butyl rubber. With the growing production of cars in India, butyl rubber is expected to witness a strong growth in demand. India’s dependence on butyl rubber imports is expected to reduce significantly once this plant comes into operation.
Taiwan’s TSRC expands in Nantong
Taiwan’s TSRC Corp has started a 25 KTA styrene-isoprene-styrene block copolymer production facility in Nantong, China. TSRC also plans to add another 30 KTA SIS plant in Taiwan in 2016. TSRC also plans to add 25 KTA capacity for styrene-ethylene/butylene-styrene block copolymer at its facility in Kaohsiung, Taiwan.
Comments: TSRC produces styrenic block polymers including SBS, SIS, and SEBS. The company currently produces SIS in the US (through JV with Dexco Polymers) and Taiwan, and SEBS in China and Taiwan. The expansion of SIS block copolymer will increase the capacity of TSRC to 87 KTA.
Contact us at ADI Chemical Market Resources to learn how we can help.