AMERICAS
Dow Chemical moving ahead with polyethylene projects
Dow Chemical is moving ahead with plans to add capacity for polyethylene and related feedstock in the U.S. Gulf Coast and Saudi Arabia. The first units of Sadara, Dow’s joint venture with Saudi Aramco in Jubail, are expected to be on-stream in 2015. Sadara will have a total capacity of about 3,175 KTA for PE, polyurethanes, elastomers, and other products. Overall, the Sadara project is 45% complete, with 65% completion of its olefin units. Ethylene and polyethylene expansion in Freeport, Texas is expected to come on stream by 2017. Dow has also completed 20% construction of a PDH-based propylene unit.
Comments: North America and the Middle East are currently the most cost-competitive regions for producing petrochemicals due to the abundance of low-cost feedstock. The shale gas revolution has led North American polyethylene manufacturers to announce capacity additions. Dow plans to sell the products from its Freeport, TX plant in the US and South America, while the products from the Sadara plant will be sold in the Asia-Pacific region.
Brazil’s anti-trust authority approves Braskem-Styrolution ABS venture
Brazil’s antitrust authority has approved the joint venture between Braskem and Styrolution to build an acrylonitrile butadiene styrene plant in Brazil. Styrolution will have a 70% stake and the remaining will be held by Braskem. This plant will have a capacity of 100 KTA and would manufacture ABS, and styrene-acrylonitrile copolymers.
Comments: ABS, a copolymer of acrylonitrile, butadiene, and styrene, is one of the most widely used thermoplastics. The mechanical properties of ABS, such as impact resistance and toughness allow its use in applications including electronic appliances, domestic appliances, automotive interior, and exterior trims, etc.
Hanwha Chemical eyeing Dow’s chloralkali assets
Hanwha Chemical is in the initial study phase of assessing the possibility of acquiring Dow Chemical’s major chlor-alkali assets. Dow Chemical plans to carve out a significant portion of its chlorine value chain assets including chloralkali, vinyls, and ethylene dichloride assets.
Comments: Dow has been divesting its assets in what it considers commodity markets and moving into more profitable product segments. Over the past three years, Dow has divested its polypropylene assets to Braskem and its polypropylene licensing business to WR Grace. Hanwha has also been looking to expand its presence outside of Asian markets keeping in mind lower feedstock costs and has begun JVs in the Middle East and will look to take advantage of the shale gas boom in North America.
Ethylene XXI project is 62% complete
The engineering, Procurement, and Construction of the Ethylene XXI project in Mexico are 62% complete. The project is a joint venture between Braskem and Mexico’s Groupo Idesa. The project will produce 1,050 KTA of polyethylene from ethane and is expected to commence operations in the third quarter of 2015.
Comments: The project construction began in 2010 and is on track for completion by its target date of mid-2015. The project consists of an ethane cracker with and capacity for 750 KTA of HDPE and 300 KTA of LDPE. Mexico is currently an importer of polyethylene and this project once completed will reverse the current situation.
EUROPE
Rosneft to acquire an indirect stake in Pirelli
Rosneft has reached an agreement to take a 50% stake in a consortium that will control 26.19% of Pirelli. This agreement would tighten business relationships between Rosneft and Pirelli. Rosneft and Pirelli recently signed two co-operation pacts, one for joint R&D in synthetic rubber, reinforcing materials, and fillers and another pact for joint research and development into synthetic rubber in Armenia.
Comments: This deal will increase Pirelli’s presence in Eastern European markets. Pirelli would have the financial backing of Russia’s largest oil producer. Pirelli and Rosneft already have an existing arrangement where Rosneft sells Pirelli’s products at their gas stations. The only risk that Pirelli faces is if there are any potential sanctions imposed by the EU on Russian companies.
Lanxess, and Hankook to jointly develop synthetic rubber for tires
Lanxess and Hankook have signed an MoU to develop synthetic rubber technologies for high-performance tires. Lanxess and Hankook will also be jointly studying the development of high-performance synthetic rubber grades to increase tire performance.
Comments: Lanxess produces polybutadiene, high-performance solution styrene-butadiene (S-SBR), and neodymium polybutadiene rubbers (Nd-PBR) for the manufacture of tires under their Performance Butadiene Rubber business. Lanxess invested in various rubber plants (Nd-PBR, EPDM, NBR) in Asia, and the new agreement will bolster the sales of its products in the region.
MIDDLE EAST & AFRICA
Advanced Petrochemical to join SK Gas in the PDH project
Advanced Petrochemical Co has signed an MoU with SK Gas to enter into a joint venture in SK Gas’ propane dehydrogenation project in South Korea. The investment for the project is expected to be about USD 900 million and will produce 600 KTA of propylene. This project which is expected to be complete in 2016 will employ Catofin PDH technology using Lummus’ process and Clariant’s catalysts.
Comments: Growing demand for propylene and the influx of propane from gas-rich regions has sparked massive investments in PDH plants in several regions as the spread between propane and propylene prices is projected to remain large enough to make the technology profitable. In North America, seven PDH plants are currently in planning or construction stages driven by decreased propylene production due to cracker feedstock changes and by the surge in propane production from shale gas. In China, eleven plants are in the planning or construction stages, as the country pushes to catch up to domestic demand and rely less on imports. U.S. propane exports have increased drastically in the past year, with several Asian companies signing long-term contracts with U.S. midstream producers. SK Gas will likely import propane from the U.S. to run its plant, which will use Catofin PDH technology. The venture will also help Advanced Petrochemical Co. establish a more global presence.
SRF inaugurates BOPP film manufacturing plant in South Africa
SRF Ltd has inaugurated its new BOPP plant in Cato Ridge, South Africa. This is SRF’s first BOPP film manufacturing plant. The plant has a capacity of 25.5 KTA.
Comments: SRF’s new plant is in line with the recent trend of Indian film companies ramping up capacity and targeting export markets. The plant is SRF’s first venture into the Biaxially Oriented Polypropylene (BOPP) space and is the company’s second plant outside of India. The plant has a capacity of 25 KT on a Bruckner line. South Africa was chosen as the location for the plant due to the country’s robust demand growth for BOPP film and as a convenient entry point to nearby African markets.
ASIA PACIFIC
Sumitomo Chemical opens SSBR plant in Singapore
Sumitomo Chemical has inaugurated its solution-styrene butadiene rubber plant at Jurong Island, Singapore. The plant can produce 40 KTA SSBR.
Comments: Solution-polymerized SBRs are being increasingly used in a variety of tire and industrial applications. SSBRs are gaining importance, particularly in the manufacture of fuel-efficient tires due to their low rolling resistance.
Sichuan Petrochemical to produce on-spec PE, PP
Sichuan Petrochemical plans to produce on-spec PE and PP at its new plants this month. The plants are located in Sichuan, China, has a capacity of 300 KTA LLDPE, 300 KTA HDPE, and 450 KTA polypropylene
Comments: This plant is one among several new polypropylene plants that are expected to come onstream in China between 2014 and 2016. China is adding the largest amount of new PP capacity globally, due to the increasing demand for PP resin in the Chinese domestic market.
IOC to invest in PP unit at Paradip
Indian Oil Corporation is planning to invest about USD 517 million in setting up a new polypropylene unit. The unit will have a capacity of 700 KTA and will be built in the Petroleum, Chemicals, and Petrochemical Investment Region proposed at Paradip in Odisha. The approval for the project is expected by the next month.
Comments: This plant is part of the Petroleum, Chemicals, and Petrochemical Investment Region project which has been experiencing delays from the time it was planned. IOC is one of the anchor tenants in the PCPIR zone and has already begun the construction of a refinery there. The planned PP plant is in keeping with the increasing demand and fast growth for polypropylene driven by the automotive industry in India.
Sinopec signs propane export deal with Phillips 66
China International United Petroleum & Chemicals (Unipec), a wholly owned subsidiary of Sinopec has signed a long-term contract to purchase propane from Phillips 66 for use as a chemical feedstock.
Comments: Sinopec is aiming to build a massive gas-based petrochemical complex in Quingdao, China but does not have sufficient feedstock supply from current sources and will need to import some liquefied petroleum gas (LPG). Phillips 66 has positioned itself well as a player in the cost-advantaged NGL export market. The company has recently decided to move forward with two major NGL projects, 100,000 bbl/day NGL fractionators on the Gulf Coast and a 4.4 million barrel/year LPG export terminal to leverage the purified NGLs on the global market.
ExxonMobil to build the world’s largest hydrogenated hydrocarbon resin plant
ExxonMobil Chemical Company will build a 90 KTA plant to manufacture hydrogenated tackifiers at its petrochemical complex in Singapore. This plant will almost double ExxonMobil’s capacity for Escorez 5000 resin. Escorez 5000 hydrogenated resins are the tackifier of choice for applications where low odor and color, thermal stability, and polymer compatibility are required. Construction for this project is expected to begin in 2014 with completion anticipated in 2017.
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