Titan to undergo expansions – adding polypropylene and metathesis unit
Titan Chemicals is investing $158 to expand its petrochemical complex in the southern Malaysia state of Johore, a company. The company plans to build a 100 KT/year butadiene plant, a new metathesis unit to produce at least 115 KT/year of propylene, and a second 130 KT/year polypropylene line. Half of the butadiene capacity will be for the export market.
The expansion is due to be completed by the middle of 2006. The plan is well underway and we are granting procurement control to two Japanese contractors. The plants will add new revenue to the company as well as the country’s gross domestic product.
Comments: Propylene demand has outpaced supply over the past several years and this situation is expected to continue in the short to medium term. Factors contributing to the shortfall include increased demand for propylene-based products (i.e., polypropylene) and lack of crackers under construction that are optimized to produce propylene. Many of the crackers under construction are located in the Middle East and have been optimized to produce more ethylene. If the demand and capacity continue to grow at the current rate, the industry will face a serious shortage of propylene by 2011-2012. Based on the demand and capacity the global operating rate for propylene will average 90% by 2006 and continue to increase till it reaches 100% between 2011 and 2012. This suggests that the industry will have to witness either a decrease in demand growth or an increase in capacity growth to meet the demand requirements for propylene.
Metathesis technology, also known as Olefin Conversion Technology (OCT), is enabling many operators to increase their feedstock flexibility and produce more on-purpose propylene. The majority of the crackers in Asia-Pacific are based on naphtha which provides the appropriate feedstock mix to convert ethylene to propylene via OCT/metathesis. Furthermore, due to the rapid expansion of the C2 chain in the Middle East, many Asian players desire to diversify into the C3 chain to maintain their competitiveness. OCT has made significant inroads into this region with many units put into operation or under construction in Japan, Korea, China, and now Malaysia.
PetroChina selects Innovene process for 550 KT polypropylene complex
Dushanzi Petrochemical Company, part of PetroChina, has selected Innovene gas phase polypropylene technology for its new 550 KT per year polypropylene complex to be located in the Xinjiang province of the People’s Republic of China. The start-up for this facility is planned in 2008. Innovene licenses technologies and catalysts including gas phase polypropylene process technology and catalyst, polyethylene process technology and catalysts for the production of LLDPE and HDPE, polystyrene process technology, and acrylonitrile catalyst and process technology.
Innovene licenses technologies and catalysts including gas phase polypropylene process technology and catalyst, polyethylene process technology and catalysts for the production of LLDPE and HDPE, polystyrene process technology, and acrylonitrile catalyst and process technology.
Innovene was a wholly owned subsidiary of the BP Group, with more than $17bn revenues and $12bn in total assets. In October 2005 Innovene was acquired by INEOS, a UK-based manufacturer of petrochemicals, specialty and intermediate chemicals, and polymers.
Comments: The 550kt/polypropylene is part of the downstream complex for their one million tons ethylene cracker, which is scheduled to start in 2008. The other facilities include 300kt/an HDPE, 600 KT/year LDPE, 320 KT/year styrene monomer, 130 KT/year polystyrene, and 88 KT/year SBS. The complex will also produce 240 KT/year of benzene, 130 KT/year toluene, and 70 KT/year mixed xylene.
Dushanzi is at a strategic location that is very close to the border with Kazakhstan. The cracker could use imported crude oil from Kazakhstan through pipelines, which is expected to be completed at the end of this year.
Basell Spheripol/Mitsui Hypol process is the dominant PP process in China. However, there is a trend that the gas phase process is becoming more popular. Dushanzi will be among the few other players with the Innovene process in China. The other players include Sinopec Yanshan, Sinopec Yangzi, and the recently started SECCO, which is a joint venture of BP and Sinopec. SECCO remains with BP after Innovene is sold to INEOS.
PTT Polyethylene selects UNIPOL for its polyethylene plant
PTT Polyethylene Company Ltd. (PTTPE), a joint venture between Thailand’s PTT Public Company Ltd. (PTT) and National Petrochemical Public Company Ltd. (NPC), has selected the UNIPOL PE Process from Univation Technologies for its polyethylene plant.
The new facility is planned as part of a major petrochemical expansion at its Mab Ta Phut site in Rayong, Thailand. The plant will include a UNIPOL PE line capable of producing 400,000 tons of linear low-density polyethylene per year. The facility will also be the first new-build plant in Southeast Asia to include Univation’s metallocene catalyst technology.
According to PTTPE proven reliability, world scale capacity, and advantages in investment & operating costs, were the primary reasons for the selection of Univation’s PE technology.
Additionally, the company believes that the technology will enable the company to accommodate Thailand’s growing polyethylene demand with proven LLDPE products and provide the ability to produce PE products with metallocene technology.
“We are extremely pleased to be selected by PTTPE to meet their need for LLDPE capacity in Thailand with a world-class UNIPOL PE facility. The proven reliability and efficiency of the UNIPOL PE process coupled with advanced metallocene technology will offer PTTPE the scale and flexibility to meet their near-term and future market demands,” said Ken Glover, Univation’s president.
Comments: Unipol process provides three major advantages: (1) a large-scale low-maintenance process for narrow-grade slate, (2) excellent experience in licensing and technology servicing Globally, and (3) metallocene technology option – if and when needed.
These three factors make the Unipol process more attractive for participants in developing countries such as Thailand.
Polyethylene producers in developing regions have increased their efforts to produce more sophisticated/differentiated products. Over the past 12 months, Univation has publicly announced several licensing agreements with the rights to use metallocene technology, including Equistar, PetroChina, Qenos, and now PTTPE. Prior to 2000, metallocene technology was primarily practiced by companies positioned in North America, Western Europe, and Japan. Even then, the usage was limited to companies seeking to produce specialty-type products by leveraging metallocene technology. Many commodity-type players did not feel they needed to use metallocene technology. Since then, metallocene technology has become more mainstream and has started to make significant inroads into developing markets.
The total demand for metallocene-based polyethylenes globally in 2005 is estimated to be close to 2 million tons. Metallocene-based LLDPE dominated demand, accounting for 80-85% of the total demand. A lot of the new growth is coming from Asia-Pacific where the major applications of m-LLDPE in Asia-Pacific include (1) general-purpose film, (2) agricultural film, (3) blending resin, (4) foams, and (5) other applications. Films are the largest end-use application for m-LLDPE in the Asia Pacific. Major end-use applications are in (1) food packaging, (2) non-food packaging, (3) stretch and shrink films, and (4) non-packaging applications.
Asahi Kasei Fibers Corp. to acquire Lanxess’ spandex (Dorlatan®) business
Asahi Kasei Fibers Corp. (AKF) and Lanxess Deutschland GmbH (Lanxess) have reached a basic agreement for the purchase by AKF of the Dorlastan®spandex business of Lanxess and the companies today concluded a memorandum of understanding to this effect. A final agreement will be executed shortly, with the transaction to proceed pending approval of the relevant antitrust authorities.
All Dorlastan® operations and assets, including production facilities in Dormagen, Germany, and Bushy Park, South Carolina, USA, are subject to transfer.
Asahi Kasei Fibers is a wholly owned subsidiary of Asahi Kasei Corporation and the core operating company for the fiber operations of the Asahi Kasei Group. Its three core businesses are spandex, cuprammonium rayon, and nonwovens.
One of Europe’s leading chemical companies, Lanxess was spun off from Bayer AG, succeeding most of its chemical business and part of its polymer business. Lanxess has an extensive product portfolio ranging from solid rubbers and plastics to high-quality basic and fine chemicals.
Comments: Spandex under the Roica™ brand is a core business of AKF with competitiveness secured through integrated production from raw material to finished yarn, and technological advances to enable a wide range of performance features such as chlorine resistance and moisture transpiration.
The Roica™ supply infrastructure, based on geographic market developments, comprises four production sites in Asia. In order to enhance the global presence of Roica™, AKF studied a number of prospects for the establishment of production bases in Europe and North America. The acquisition of the Dorlastan® production facilities in Europe and the US will complement the Asian production sites to effect a complete globalization of Roica™ operations.
Lanxess, based in Germany, is one of the leading chemical companies with operations in basic and fine chemicals. Dorlastan®, marketed since 1964, is one of the world’s leading spandex brands. This announcement is in accordance with an ongoing portfolio realignment whereby Lanxess is focusing on core operations while seeking to transfer non-core businesses to parties that would be better placed to sustain their development and growth.
In recognition of their complementary interests in this regard, the two parties began discussing the potential for such a transaction late last year.
AKF will draw on the solid established customer relationships, marketing, and distribution networks, world-class production facilities, and highly skilled workforce of the Dorlastan® business to swiftly and smoothly augment Roica™ operations in Europe and the US while enhancing the Dormagen and Bushy Park facilities with advanced AKF technology and strategic capital investments. AKF is targeting sales of ¥40 billion by 2008 for the combined spandex operations.
Trans Polymers to build polyethylene plants in Pakistan
UK-based Trans Polymers Ltd has revealed plans to build a polyethylene plant in Karachi, Pakistan with an initial investment of US$480m.
A delegation from the company, led by chairman Peter Lloyd-Cooper, discussed the proposal with the Pakistani minister for privatization and investment on 15 October.
The plant aims to meet Pakistan’s entire demand for PE with a capacity of 310 KT/year. The plant is expected to go into commercial production by the end of 2008.
Comments: Pakistan currently does not have any capacity for polyethylene or ethylene. The country is dependent on exports for all its polyethylene needs. This will be the first polyethylene plant in Pakistan.
The plant is projected to have a production capacity of 310 KT per year and would produce 80 per cent (248 KT) in the first year. It would increase production to 115 per cent (360 KT) in the third year, which could meet the entire demand in Pakistan. The construction, commissioning, and warranty test of the plant is estimated to take 34 months while the project is expected to go into commercial production by the fourth quarter of 2008. Pakistan is hoping that the establishment of a polyethylene plant in Pakistan would help save foreign exchange while meeting local polyethylene requirements.
ExxonMobil to double brominated elastomers capacity
ExxonMobil Chemical will double capacity for Exxpro specialty brominated elastomers at Baytown, TX. Capacity specifics are not disclosed. The project is due for completion in the fourth quarter of 2006 and will support the development of higher air-barrier inner liner technologies in passenger and commercial vehicle tires.
Exxpro is a brominated copolymer of isobutylene and para-methyl styrene. The company says that prototype Exxpro polymer liners made with nanocomposites have been successfully processed into lighter-weight commercial truck tires in a commercial tire facility, the company says. Benefits include reductions in tire cure time, liner gauge thickness, inflation pressure retention, and intra-carcass pressure, as well as more than a 20% improvement in tire durability expressed by “mileage-to-failure” ratings.
Comments: Exxpro Specialty Elastomers have a saturated backbone that is vulcanized. The cross-linking is resistant to breakdown giving the polymer high heat resistance. This property has allowed the polymer to be used in high heat conditions such as engine mount.
Other applications where brominated elastomers are used include automotive, pharmaceutical, construction, and adhesives.
New polyolefins project planned in Chile
A Chile-based polyolefins project dubbed PDP (Petroquimica del Pacifico) is in the works. The project includes a 400 KT LL/HDPE swing plant, an increase in polypropylene capacity, and a 400 KT ethylene capacity. The groundbreaking for this project will be in 2007. Petroquim, the Chilean polypropylene producer, is one of the major companies leading the project. The project plans to tap the growing plastic demand in Ecuador, Peru, and possibly Bolivia and Argentina.
The company is looking for potential investors (both Latin and overseas), technology, and evaluating the feedstock costs. A final decision will likely be made early next year. Petroquim and ENAP have already signed an agreement to finance a feasibility study.
Comments: Dow and Petrokim are the only major producers of polyolefins in Chile. Dow has a 45 KT LDPE plant and Petrokim has a 140 KT PP plant. Chile currently does not have any capacity for LLDPE or HDPE. Chile imports substantial amounts of polyolefins from Argentina, Brazil, and the United States. If this plan comes through then Chile will have a domestic source for LLDPE and HDPE and its reliance on imports will decrease.
Pequiven to sign a $300 million PP development agreement with Braskem
Venezuela’s state petrochemicals firm Pequiven plans to sign a project development agreement (PDA) with Brazilian petrochemicals company Braskem in December to build a US$300 million polypropylene plant at Pequiven’s El Tablazo industrial complex.
The plant at the El Tablazo complex in oil and gas-rich Zulia state will have the capacity to produce 400 KT a year of polypropylene. The partners will cover about 40%, or US$120mn, of the project’s total price tag 50:50. The partners will seek other sources of financing for the remaining 60%. The companies have not announced if they would acquire debt, sell bonds or seek loans from multilateral lending agencies for the financing. The two companies are still working on the financial structure of the project.
Pequiven signed two memorandums of understanding (MOUs) in February 2005 during an official visit by Brazil’s President Luiz Inacio Lula da Silva to Caracas. In the first MOU Pequiven agreed to undertake feasibility studies with Brazil’s federal energy company Petrobras for the construction of a fertilizer plant in Brazil or Venezuela. Pequiven signed the second MOU with Braskem to seek business opportunities that could lead to the construction of petrochemical facilities in Venezuela. The MOU with Braskem set a time frame of six months to conclude initial studies.
Comments: Braskem sees a partnership with Pequiven as part of company plans to strengthen its position as a leading petrochemicals company in Latin America and expand to other markets. The plant would use natural gas supplied by PDVSA, which would lower the cost of raw materials compared with plants in Brazil, which mostly rely on naphtha.
Venezuela is following its policy of pursuing projects that make use of Venezuela’s large natural gas reserves. The petrochemicals produced will be exported to other countries.
The plant Pequiven’s El Tablazo industrial complex will be the biggest in South America. The El Tablazo complex currently has an 85 KT polypropylene plant based on the Mitsui process. This project will increase the total Venezuelan polypropylene capacity by many folds and the total South American polypropylene capacity by 20%.
The plastic bag industry gains a temporary victory in the United States and Europe
The plastic bag industry has gained temporary victory in three instances; San Francisco, France, and Scotland.
San Francisco had been threatening a 17-cent-per-bag tax to reduce consumption and the environmental impact of the bags. Instead, the city formed a deal that requires grocers and the bag industry to cut bag use in the city’s food marts by about 20 percent by the end of 2006. The plastic bag industry and grocers have signed an ambitious recycling pact with the city of San Francisco, averting what could have been the first tax on retail shopping bags in the United States.
Specifically, the deal calls for grocers to cut bag use by 10 million sacks and institute broader recycling programs in stores, and requires the bag industry to spend $100,000 on a public education campaign. The city, for its part, agrees not to pursue a bag tax through 2006, while the industry program gets underway. The city also said it will try to introduce curbside bag recycling.
France was planning to introduce a bill that would ban the use of non-biodegradable plastic packaging in France beginning in 2010. The lower house of France’s Parliament, its National Assembly, had passed the ban on Oct. 11, as part of an agricultural reform bill. However, the plan faced opposition in France’s Senate. French senators seemed likely to water down rather than throw out a proposal to ban non-biodegradable plastic packaging in France beginning in 2010.
On November 14, 2005, Europe’s plastics industry won a qualified victory in its battle to block a proposed ban on all non-biodegradable plastic bags in France. French senators, debating the controversial amendment demanding the bag ban, voted for a compromise outlawing only the non-biodegradable, single-use, light carrier bags distributed at supermarket checkouts.
The compromise measure only covers a small portion of the bag business. There seems to be agreement that thin bags for fruit, vegetables, and fish – bags used in small neighborhood shops and markets – would not fall under this Senate amendment.
Scotland was debating on a bill that was inspired by a plastic bag law, the so-called PlasTax, introduced in Ireland in 2002. That measure, designed to reduce litter, imposed on consumers a levy equivalent to 13 U.S. cents per retail plastic bag. According to the Irish government, this has slashed the consumption of thin plastic carrier bags by about 95 percent. When it started a year ago, this proposal looked like a free ride. It was an emotional situation, and it was thought that it would get support from many directions.
Britain’s plastic film manufacturers believe they have put up an effective case in their battle to block a retail plastic carrier-bag tax in Scotland. Armed with what they see as an arsenal of facts, industry leaders have presented evidence to the Scottish Parliament, which is considering a private member’s bill to introduce the environmental levy.
The report was described as “devastating for those environmentalists who attack plastics bags”. The report proved that if a plastic bag tax is introduced the environmental impact will be greater than before across all environmental indicators, with the single exception of litter, where paper is slightly less obtrusive than plastic when waste blows into hedgerows.
Comments: Chemical Market Resources, Inc. will publish a detailed report presenting an analysis of the recycling of plastic bags and its impact on different regions across the globe.
NOVA Chemicals Corporation declares force majeure
NOVA Chemicals Corporation has declared force majeure on ethylene, propylene, crude C4s, and other co-products from its Corunna, Ontario, manufacturing facility and on polyethylene from its Sarnia, Ontario, area manufacturing sites. NOVA Chemicals expects fourth quarter 2005 results will be negatively impacted by U.S. $10 – $15 million as a result, which is in addition to the $15 – $25 million projected for the turnarounds in the Company’s third-quarter earnings release.
The force majeure declarations are due to an extension in the planned shutdown for NOVA Chemicals’ Corunna, Ontario, ethylene flexi-cracker. The duration of the shutdown was extended due to a variety of factors, principally lower-than-expected labor productivity.
NOVA Chemicals is working with all impacted customers and expects to resume production at Corunna in the second half of November 2005, contingent upon the completion of all remaining shutdown activities.
Comments: NOVA makes more than 1.2 billion pounds of polyethylene at two plants in Sarnia, with most of that production in high-density polyethylene. The event marks the second time that Nova has declared force majeure on those products in 2005.
The firm originally declared force majeure at the site in April after a power outage in the area. The shutdown lasted less than 10 minutes, but ongoing production problems lowered Nova’s second-quarter earnings by $20 million to $25 million. Production resumed in mid-May, but force majeure market conditions lasted several weeks after that.
The turnaround was expected to hurt NOVA’s earnings by $15 million to $25 million, but the extended period will lift that figure to $25 million to $40 million.
Reliance Industries Ltd setting up $6.5 billion investment plans
Reliance Industries Ltd is setting up petrochemicals downstream projects with an expected investment of Rs 30,000 crore ($6.5 billion) at its Special Economic Zone (SEZ) in Jamnagar.
Reliance has sent invitations to Dow Chemicals, Royal Dutch/Shell, Mitsubishi Chemicals, Nippon, ExxonMobil, Huntsman, and Borealis for the project. Reliance had made meticulous presentations before the companies during the last few days.
The Gujarat government has sanctioned the project, paving the way for approvals from the central government.
The petrochemical giant intends to plan a 30 million-ton capacity refinery in the SEZ near Jamnagar. Reliance has invited the world leaders in petrochemical to concentrate on five major polymer products – polypropylene, PVC, PTA, LDPE, and isopropyl alcohol.
Comments: Reliance is one of India’s largest petrochemical companies. The company is the largest producer of PP, PVC, PTA, and LDPE in India. With this project, Reliance hopes to provide other global giants to participate in the growing Indian polymer market.
Reliance had been undergoing internal problems related to ownership. After the settlement of ownership issues between the two brothers, Reliance has announced ambitious growth plans. After settling the disputes the company seems to be focused and is well on its path to compete in the global markets.
The Reliance Group was founded by Dhirubhai H. Ambani and is India’s largest business house with total revenues of over Rs. 99,000 crore (US$ 22.6 billion), cash profit of Rs. 12,500 crores (US$ 2.8 billion), net profit of Rs. 6,200 crores (US$ 1.4 billion) and exports of Rs. 15,900 crores (US$ 3.6 billion).
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