ADI Chemical Market Resources Newsletter January 30, 2012

EPA Seeks Outside Experts to Review Controversial Fracking Report

EPA is requesting nominations for outside experts to review its controversial report linking water contamination in Wyoming to hydraulic fracturing. EPA’s draft analysis met with resistance from some in the industry, which has called for a rigorous review of EPA’s findings. Nominations will be due by February 17. Candidates should have expertise in one or more fields including petroleum engineering, hydrology, environmental engineering, water quality, hydraulic fracturing, or organic/inorganic chemistry.

The agency’s findings are significant because it is the first time officials have made a direct link between “fracking” and water contamination. EPA last month issued the draft analysis of its three years of sampling near Pavillion, WY, saying the water had been contaminated by chemicals including glycols and alcohols consistent with those used in hydraulic fracturing. Levels were “well above” what federal standards deem safe for drinking water, EPA says. However, EPA says the conditions in Wyoming are unique and not representative of fracking elsewhere in the U.S.

Meanwhile, Encana Oil & Gas (Denver), the main operator in the Pavillion area, has asked EPA to suspend and restart its comment period on the draft report, which is scheduled to close on January 27, saying EPA was not clear on what topics were covered by the notice and comment period. It has also filed Freedom of Information Act requests for all of the data EPA had “in hand” when compiling the report, saying the select data included in the analysis is insufficient. Encana also has asked EPA to “make available to the public the charge it intends to provide to the peer review panel to ensure that public comments relate directly to the questions and evaluations for which peer review is to be sought.”

Total Partners with Kuwait Petroleum, Sinopec in Donghai Island petchems Project

Kuwait has confirmed that it has selected Total as the partner in a previously announced $9-billion refinery and petrochemical complex to be built at Donghai Island near Zhanjiang, China. Kuwait’s Oil Minister Mohammad Al Baseeri said that Kuwait had reached an agreement with Total on the project. A deal is expected to be signed in February based on a memorandum of understanding concluded with Total. Shell withdrew from the project a few years ago to concentrate on other investments in China.
Total chairman Christophe de Margerie said more than a year ago that his company was in discussions on the project. The total would share Kuwait Petroleum’s 50% stake in the venture with Sinopec holding the remaining 50%. The complex is expected to include a 15-million m.t./year refinery as well as a petrochemical complex based on a 1-million m.t./year ethylene plant. Completion is expected in 2015.
Sinopec in November held a groundbreaking ceremony for the project following approvals by the National Development and Reform Commission (Beijing), China’s economic planning agency, in early 2011.

LyondellBasell Licenses Hostalen Technology to Chinese Company

LyondellBasell says it has granted a Hostalen ACP process technology license to Shaanxi Yanchang Petroleum Yanan Energy and Chemical (Yanan, China) for its new high-density polyethylene (HDPE) plant in Shaanxi Province, China. The new HDPE plant is scheduled to start up in 2014.
“This is the largest capacity Hostalen ACP multi-modal process technology that we have ever licensed, further demonstrating the competitive economics for producing leading HDPE resins,” says Bob Patel, senior v.p./Technology at LyondellBasell.
Features of the Hostalen ACP process technology include three reactors in cascade enabling the production of high-performance HDPE resins particularly suitable for film, blow-molding, and pressure pipe application

Albemarle Adds Polyolefin Catalysts at Baton Rouge

Albemarle has installed a production train for finished polyolefin catalysts, which completes the expansion of its Process Development Center at Baton Rouge, LA. “The new train will add to the capacity of our existing facilities at the Process Development Center,” says Amy Motto, v.p./performance catalyst solutions. Albemarle says the expansion is the latest in a series of projects the company is undertaking to meet the growing demand for metallocene/single-site finished catalysts. A separate facility is underway in Yeosu, Korea. The Yeosu site, launched in 2010, is Albemarle’s largest capital investment in the Asia/Pacific and will help meet the regional growth in the metallocene polyolefin market and high-brightness LEDs.

Indorama to Invest $700 Million in PTA, PET, PSF Project in India

Indorama Ventures (Bangkok) says it will construct an integrated facility in India, which will consist of purified terephthalic acid (PTA), polyethylene terephthalate (PET), and polyester staple fiber (PSF) production plants fully integrated with a para-xylene facility of a third party. Indorama has signed a memorandum of understanding with Indorama Synthetics India (Gurgaon, India), an Indorama group company, to enter into a joint venture that will construct the plants and utilize the offtake of the plants. The project will involve a total investment of about $700 million, Indorama says. Details of the location of the facility and the production capacity of the plants will be disclosed after negotiations are completed, Indorama says.
Plans for the project were announced during an official visit of Yingluck Shinawatra, prime minister of Thailand, to India this week.
“India is today a fast-growing market that is demanding attention from the world’s fast-moving consumer goods companies, who are our customers. We must be there to serve these customers and the emerging local producers who will be consuming more and more PET and PSF over the next decade,” says Aloke Lohia, CEO of Indorama. “We are looking at the long-term double-digit growth in demand for such products and feel this is the right time to move into the market.”
Indorama also plans to build a PTA and PET bottle-resin manufacturing complex in the Mideast with an investment of $600 million. The company had first said in 2010 that it would invest in PTA and PET manufacturing complexes in the Mideast and India.

DuPont Collaborates with Yingli Green Energy on Solar Technology

DuPont Photovoltaic Solutions says it is collaborating with Yingli Green Energy (Baoding, China), to advance technology for higher efficiency solar cells, new module manufacturing processes, and innovative component designs. Through technical collaboration, the two companies plan to speed the development and adoption of solar energy to address one of the world’s biggest challenges – sustainable energy generation.
Yingli, a leading solar energy company and one of the world’s largest vertically integrated photovoltaic manufacturers, is collaborating with DuPont Photovoltaic Solutions to develop advanced technologies to make modules such as Yingli’s Panda more efficient and longer lasting. Working together, they have made significant advancements in raising solar cell efficiency, extending module lifetime, and targeting lower overall photovoltaic system costs, DuPont says.
“Achieving the best possible performance and lowest total cost from photovoltaic technology is more critical than ever as solar energy is gaining competitive advantage vs. non-renewable energy sources,” says Bill Feehery, global business director, of DuPont Photovoltaic Solutions. “Global collaboration helps to accelerate innovation, and most importantly, encourage faster and broader adoption of solar power, which is good for consumers and the environment.”
“Technology innovation, especially through collaboration with leading materials suppliers such as DuPont, enables us to deliver high-quality, cost-competitive products,” says Liansheng Miao, chairman, and CEO of Yingli.

PetroChina, Qatar Petroleum, and Shell Ink Agreement for World-Scale Project in China

China National Petroleum Corp. (CNPC), parent of PetroChina; Qatar Petroleum International (QPI); and Shell signed an agreement this week to proceed with a previously announced $12.6-billion refinery and petrochemical complex at Taizhou, Zhejiang Province, China. The partners signed a framework agreement with the Taizhou municipal government last October.

Shell Chemicals confirms to CW that “PetroChina, Shell, and QPI have signed a joint venture heads of agreement in Doha to progress the proposed integrated refinery, petrochemical, and marketing project in China.” Peter Voser, CEO of Shell signed on behalf of the company. The signing took place at the end of a six-day trip by China’s premier Wen Jiabao to the Mideast.

PetroChina will own a 51% stake in the JV, and Shell China and QPI will share equally the remaining 49%. The project will use imported condensate as feedstock. The refinery will have a throughput of 400,000 bbl/day and the petchems complex will be based on a 1.2-million m.t./year ethylene plant.

CNPC is also planning to build a refinery and petrochemicals complex in Guangdong Province in partnership with PDVSA (Caracas), reports say. PDVSA is expected to supply crude oil to the complex and provide oilfield concessions to CNPC in Venezuela, in return for a share of the Chinese fuels market.

Kuwait Details Olefins III; Mohammad Hussain to Succeed Al Terkait at Equate

Kuwait’s previously announced Olefins III project is expected to be completed by the end of 2016, Maha Mulla Hussain, chairperson of Petrochemical Industries Co. (PIC) told CW recently. It will be designed to produce 1.4 million m.t./year of ethylene and less than half that amount of propylene, Hussain says. Downstream facilities will include polyethylene and ethylene glycol.
The project will be located at Al Zour, downstream from a new refinery being built by Kuwait National Petroleum Corp. (KNPC). Olefins III will be a flexi-cracker based on liquid and gas feedstocks.
It has not yet been decided which companies will be the investors in Olefins III, Hussain says. The country’s existing two ethane crackers are based at Shuaiba and are each designed to produce 850,000 m.t./year of ethylene. They are operated by Equate, a joint venture in which PIC and Dow Chemical each hold 42.5%, Boubyan Petrochemical Co. has 9%, and Qurain Petrochemical Industries 6%. Sources say that Equate is unlikely to be the investor in Olefins III as Dow and PIC remain in arbitration over PIC’s decision to cancel a planned 50-50 petrochemicals joint venture with Dow. PIC was to acquire a 50% stake in K-Dow for $7.5 billion as part of the agreement. Dow is seeking damages over $2.5 billion in the arbitration.
Separately, Mohammad Hussain, vice chairman and deputy managing director of KNPC, is expected to succeed Hamad Al Terkait as president and CEO of Equate this April. Al Terkait, president and CEO of Equate since 2001, decided not to renew his contract. Hussain was previously the deputy chairman at Kuwait Oil Co. Equate has not yet announced the top appointment.

Georgia Gulf Rejects Westlake Takeover Bid

Georgia Gulf’s board has rejected Westlake’s $1.1 billion, $30/share takeover offer, calling the offer “inadequate and highly opportunistic.” Westlake announced an unsolicited bid for Georgia Gulf on Friday and said that it had first presented an offer to Georgia Gulf on September 20, 2011.
In a letter to Westlake CEO Albert Chao, Georgia Gulf’s board said that the offer “takes advantage of a dislocation in public market valuations to deprive Georgia Gulf shareholders of the intrinsic value of their investment.” The company also believes that the Westlake offer does not take into account Georgia Gulf’s growth potential, due largely to improving polyvinyl chloride (PVC) demand and the U.S. shale gas cost advantage.
Georgia Gulf has also adopted a shareholder rights plan, or “poison pill,” that is set to expire at the end of this year. The plan allows shareholders to acquire the company’s common stock at a discounted price if a group acquires ownership of over 10% of Georgia Gulf’s stock.
Westlake Chemical said today that the rejection is not in the best interest of Georgia Gulf shareholders. “Georgia Gulf’s board is once again standing in the way of its shareholders receiving immediate value and a substantial premium,” Westlake says. “Georgia Gulf’s rejection of our proposal and their adoption of a ‘poison pill’ is entirely consistent with its board’s entrenched approach and refusal to come to the table to negotiate in good faith.”
Georgia Gulf criticized Westlake’s refusal to enter into a confidentiality agreement. “We now believe that Westlake’s plan all along was simply to take advantage of Georgia Gulf’s temporarily depressed share price, as demonstrated by Westlake’s accumulation of a large position in Georgia Gulf’s common stock,” the board said in its letter to Chao.

BASF Invests €1 Billion to Build Integrated TDI Complex at Ludwigshafen

BASF announced today that it will build a single-train 300,000-m.t./year plant to produce toluene diisocyanate (TDI) and expand additional plants for its precursors at its Ludwigshafen site. The company first announced the plans last year and said that it is considering either the Antwerp or the Ludwigshafen sites for the investment. The plan includes the construction of a new hydrogen chloride recycling plant as well as the expansion of plants for nitric acid, chlorine, and synthesis gas. The company also plans to expand the aromatics complex at the site to supply toluene feedstock. Total investment including the required infrastructure at the Ludwigshafen site will be about €1 billion and create around 200 additional jobs. Production will start at the end of 2014. BASF, at the same time, plans to close down its 80,000 m.t./year TDI plant at Schwarzheide, Germany, when the new plant begins production. TDI is a key component in flexible polyurethane foams.

“This project will position us as the low-cost TDI producer in Europe due to economies of scale and the highly efficient integration into our Verbund,” said Wayne T. Smith, President of BASF’s polyurethanes division. Together with our existing TDI sites in Asia and North America, we will be able to optimally serve customers in all major markets.” “We are constantly developing the Ludwigshafen site further to remain competitive internationally. In addition to such important investments in production, this involves modernization and targeted development of the whole infrastructure,” says Bernhard Nick, site manager of Ludwigshafen. “The new TDI plant and the related facilities strengthen the competitiveness of BASF’s largest Verbund site.” Associated investments in precursors and infrastructure will support additional growth in other BASF value chains.

At Schwarzheide, BASF will develop its site structures according to future needs over the next years to focus more on specialties. With this investment BASF will have two strong sites in Europe for polyurethane basic products: Ludwigshafen for the production of TDI and Antwerp for the production of methylene di-para-phenylene isocyanate and propylene oxide.

The TDI plant is one of two world-scale such units due to come online in Germany in 2014. Bayer is building a 300,000-m.t./year TDI facility at Dormagen, also as part of a scrap and build plan.

TDI is used in the automotive industry as well as in the furniture. BASF says it is a leading supplier of basic products for polyurethanes. It currently operates TDI plants at Geismar, LA, Yeosu, Korea; Caojing, China and Schwarzheide, Germany.

BASF Invests €1 Billion to Build Integrated TDI Complex at Ludwigshafen

BASF announced today that it will build a single-train 300,000-m.t./year plant to produce toluene diisocyanate (TDI) and expand additional plants for its precursors at its Ludwigshafen site. The company first announced the plans last year and said that it is considering either the Antwerp or the Ludwigshafen sites for the investment. The plan includes the construction of a new hydrogen chloride recycling plant as well as the expansion of plants for nitric acid, chlorine, and synthesis gas. The company also plans to expand an aromatics complex at the site to supply toluene feedstock. Total investment including the required infrastructure at the Ludwigshafen site will be about €1 billion and create around 200 additional jobs. Production will start at the end of 2014. BASF, at the same time, plans to close down its 80,000 m.t./year TDI plant at Schwarzheide, Germany, when the new plant begins production. TDI is a key component in flexible polyurethane foams.

The TDI plant is one of two world-scale such units due to come online in Germany in 2014. Bayer is building a 300,000-m.t./year TDI facility at Dormagen, also as part of a scrap and build plan.

W. Virginia considers bag tax, bottle bill

Lawmakers in West Virginia have proposed a statewide 5-cent plastic bag tax along with a 5-cent bottle deposit bill.
The plastic bag tax, HB 2136, would charge grocery stores, drug stores, and convenience stores 5 cents for every plastic shopping bag given to customers. The bill says the tax may not be passed onto the customer.
The bottle bill, HB 2814, extends to all beverages sold in plastic and aluminum containers, excluding dairy products and other drinks with nutritional value. The bill is aimed at getting the state’s recycling rate to 50 percent, according to the proposal.

Dow and Teknor Apex to Develop Market for Flexible Vinyl Containing Dow’s Bio-Based Plasticizers

Dow Electrical & Telecommunications (Dow E&T), a business unit of Dow Chemical, and Teknor Apex Company (Pawtucket, RI) said on Monday that they have entered into a joint market development agreement for flexible vinyl in several application areas. Under the agreement, Teknor Apex was granted exclusive marketing rights in North America for flexible vinyl compounds containing Dow’s Ecolibrium bio-based plasticizers in applications such as consumer and industrial products, certain medical devices, automotive components, and select wire&cable products. Teknor Apex plans to commercialize compounds made with Dow Ecolibrium this year and will introduce the new compounds at NPE 2012 in April.

“Our relationship with Teknor Apex has provided Dow E&T with a unique opportunity to market beyond the power industry,” says Thorne Bartlett, new business development director at Dow E&T. “Working with a company like Teknor Apex will allow us to bring this sustainable technology to a host of consumer and industrial end products that utilize flexible vinyl compounds, including certain wire and cable construction applications.”

The use of Dow Ecolibrium plasticizers, made from virtually 100% renewable feedstocks, in flexible vinyl compounds may help cable-makers and durable goods OEMs reduce their greenhouse gas emissions by up to 40% if used instead of traditional di-isononyl phthalate polyvinyl chloride plasticizers, the companies say.

“Using Dow Ecolibrium bio-based plasticizers in our world-class compounds will allow both Dow and us to help open doors for those OEMs looking for sustainable solutions in their end products,” says Louis R. Cappucci, v.p./vinyl at Teknor Apex. Footwear, flooring, and profiles are among the first targeted areas for the new compounds.

Bayer MaterialScience Invests in PU Coating Raw Materials Plant in Germany

Bayer MaterialScience said today that it started construction of a multipurpose facility to produce polyurethane coating raw materials at Leverkusen. The facility will produce hexamethylene diisocyanate (HDI) and isophorone diisocyanate (IPDI), which are used primarily in automotive and industrial coatings. The company is investing about €35 million in the project, due onstream in the fall of 2013. The new multipurpose plant will be integrated into existing HDI and IPDI facilities at the Leverkusen site.

Marijn Dekkers, Bayer CEO said in Leverkusen today that Bayer MaterialScience intends to invest at least €700 million in capital projects in Germany over the next three years and the facilities announced today form part of the investment plan. “In keeping with our mission statement, Science For a Better Life, our company develops innovative and sustainable solutions as answers to global megatrends,” he says. One example is increasing mobility around the world, resulting in rising demand for high-performance automotive coatings.

The company needs to adjust its capacities if it is “to meet the rising demand for coating and adhesive raw materials,” said Daniel Meyer, head of coatings and adhesives and member of the board of Bayer MaterialScience

Keyuan Petrochemicals to Build ABS Plant in China

Keyuan Petrochemicals (Ningbo, China) says it will build an acrylonitrile butadiene styrene (ABS) plant at Fangchenggang, Guangxi Province, China. Construction will begin next month. The company signed a cooperation agreement with the local government in Guangxi on January 19. The facility, called Guangxi Keyuan New Materials Industrial Park, when fully operational, is expected to have a production capacity of 400,000 m.t./year of ABS. Construction of the plant will be done in two phases, Keyuan tells CW. Construction of the first phase, which will begin next month, “will be completed and begin operation by the end of 2013. Construction of the second phase will begin in 2014 and will be completed by the end of 2015,” Keyuan says. The company did not disclose the total investment in the project.

The location of the facility was chosen after an extensive preliminary study during the last 12 months. Keyuan chose the location due to various factors, including proximity to raw materials supplies, access to stable sources of power and skilled labor, and vast market potential, Keyuan says.

“This new project is an important component of our long-term growth strategy,” says Chunfeng Tao, chairman, and CEO of Keyuan. “It will further diversify our product and customer base, as well as expand our access to southern and western China and the ASEAN markets. We expect to fund this project with bank financing and internal cash flows.”

Keyuan completed the construction of a 70,000-m.t./year styrene butadiene styrene (SBS) production facility at Ningbo in October 2011.

Lanxess to Build Rubber Chemicals Plant in Russia

Lanxess says that its Rhein Chemie subsidiary will build a rubber chemicals plant in Russia. The plant will be built at a new site at Lipezk and it will initially produce up to 1,500 m.t./year of rubber additives and about 500 m.t./year of release agents, supplying the automotive and tire industries in Russia and the Commonwealth of Independent States. Construction is due to start in early 2012 and start-up is scheduled for the first half of 2013. Rhein Chemie will add a production facility in 2016 for bladders used in tire production. The total planned investment is about €5 million.

According to studies, Russia will be the biggest market for passenger cars in Europe by 2016 with more than 3 million vehicles produced every year, Lanxess says. The company generated sales of almost €50 million in Russia during the first nine months of 2011, more than twice its sales there in the whole of 2009.

Arkema restructures its Functional Polyolefin range

As part of a drive to optimize its functional polyolefin range, Arkema announces that it is to discontinue its Evatane® 33-15 (High Content Ethylene – Vinyl Acetate Copolymers) and Lotryl® 14MG02 (Ethylene – Acrylate Copolymers) grades.
This withdrawal is part of a rationalization program to be completed in 2012 designed to shorten the production wheel and reduce inventories of finished products while delivering even better customer service. In the past three years Arkema has sought to methodically optimize its Evatane®, Lotryl® andOrevac® T (Ethylene – Vinyl Acetate and Maleic Anhydride Terpolymers) ranges, and to channel its sales towards higher added value grades. Marketed under the tradenames Evatane®, Lotryl®, Lotader®, and Orevac®, Arkema’s Functional Polyolefins are used in wide-ranging industrial applications, including hotmelt adhesives, cables, multilayer packaging films, technical polymer modification, solar panels, petroleum additives, bitumens, and inks.

Indonesia’s first Butadiene plant was inaugurated (on 19-1-2012)

Indonesia’s first-ever Butadiene plant was inaugurated in Cilegon, Banten, as per The Jakarta Post. “The plant’s production capacity is 100,000 tons a year,” the ministry’s press release stated as quoted bykompas.com. The plant is part of publicly listed petrochemicals producer PT Chandra Asri Petrochemical (CAP) and will be managed by the company’s subsidiary PT Petrokimia Butadiene Indonesia

Kaiser Permanente switching to non-PVC IV bags

Without specifying what alternative material or materials it will use, managed healthcare provider Kaiser Permanente said it will no longer purchase intravenous solution bags made from PVC or that contain the plasticizer DEHP or IV tubings that contain DEHP.
The company said the switch was part of its continuing effort to better protect “the health and safety” of the 8.9 million people — 73 percent who live in California — who get care at its hospitals, doctors’ offices, and healthcare facilities.
The transition will take place over the next six months and save Kaiser, which buys 4.9 million IV tubing sets and 9.2 million solution bags annually, almost $5 million a year, the company said.
The switch, announced on Jan. 19, is expected to be a boon for material suppliers and medical-device companies that have developed non-PVC and phthalate-free IV bags and tubing over the last several years.
Six years ago, the two companies that control 90 percent of the IV bag market in the U.S. — were Hospira Inc. of Lake Forest, Ill., and Baxter International Inc. of Deer Park, Ill. — began selling non-PVC IV bags. It’s estimated that more than 300 million IV bags are used annually in the U.S.
“Kaiser is not doing its diligence on material switching,” said Allen Blakey, vice president of industry and government affairs for the Vinyl Institute, which represents four of the five largest vinyl resin and PVC producers in the United States.
Alexandria, Va.-based VI argued that PVC and DEHP, or di(2-ethylhexyl) phthalate, “have some 50 years of safe use in myriad products such as blood bags [and] IV tubing” and that the Food and Drug Administration “found no instances of harm from decades of use” in a 2002 study of medical products made flexible with DEHP.
“Kaiser … announced that it would switch … to an unnamed alternative, without offering either evidence of harm from PVC/DEHP or comparative information about the health and environmental impacts of the alternative,” said VI.
Kaiser only said that PVC and DEHP “have been shown to harm humans and [do] environmental harm,” without citing any specific data or studies, and added that research suggests “long-term exposure to DEHP … can [result] in a variety of hormonal abnormalities, particularly in infants.”
That’s the same approach Kaiser took in 2010 when it switched from PVC to nitrile rubber for the more than 40 million hospital gloves it buys annually. When pressed by VI back then to provide life-cycle data to support that switch, Kaiser’s vice president of workplace safety and environmental stewardship officer, Kathy Gerwig, told VI — in a letter dated April 12, 2010 — “we don’t have unlimited resources to undertake the research ourselves on all the products we purchase.”
“[But] where there is credible evidence that a material we’re using may result in environmental or public health harm, we strive to replace it with safer commercially available alternatives,” she wrote.
That, too, is similar to what Kaiser said in announcing that it would no longer use PVC tubing and IV bags.
“We at Kaiser Permanente recognize that the products we buy can have a direct effect on human health and the health of our environment,” said Raymond Baxter, senior vice president for community benefit, research, and health policy in a news release announcing the change. “Our efforts to remove harmful chemicals from hospitals and clinics reflect our commitment to the total health of our members and our communities.”
Oakland-based Kaiser has stated that it wants to “move the industry to create greener products” through its size and influence. Since May 2010, for example, companies that supply products and medical equipment to Kaiser have been required to provide environmental data for those items.
In addition, Kaiser is one of five companies — which combined buy $130 billion worth of medical products for hospitals and healthcare facilities — that adopted a standard set of questions last fall for suppliers to answer about a variety of chemicals contained in products.
“Kaiser Permanente recognizes we can improve health today and for the future by taking a close look at the products we purchase,” said Barry Brenner, vice president for medical sourcing.

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