ExxonMobil & FujianPetrochemical to construct chemical complex
Fujian Petrochemical Company Limited (a company owned 50 percent by China Petroleum & Chemical Corporation (Sinopec) and 50 percent by Fujian Government) (FPCL), ExxonMobil China Petroleum and Petrochemical Company Limited (ExxonMobil), and Aramco Overseas Company B.V. (Saudi Aramco) reached an agreement to jointly fund the front end loading (FEL) design activity for a more than 3.5 billion dollar project involving expansion of the existing refinery in Fujian Province and addition of a chemical complex. The project would result in an integrated refining and chemicals complex located at Quangang, in Fujian Province. ExxonMobil, Sinopec, and Saudi Aramco also agreed to submit a joint feasibility study (JFS) for a fuels marketing joint venture in Fujian Province to the government of the People’s Republic of China.
The Fujian Integrated Project will expand the existing refinery in Fujian Province from 80,000 barrels per day (4 million tons per year) to 240,000 barrels per day (12 million tons per year) with significant product upgrading capability. The upgraded refinery will be designed to refine and process sour Arabian crude. In addition, the project involves the construction of a new 800,000-tons-per-year ethylene steam cracker, polyethylene and polypropylene units, and a new 700,000-ton-per-year paraxylene unit. Currently, completion is estimated for the first half of 2008. The start of FEL is an important step in developing this major integrated complex.
The Fujian Integrated Project Joint Venture, when formed, will be a Sino-foreign venture among FPCL (50 percent), ExxonMobil (25 percent), and Saudi Aramco (25 percent). The submission of the fuels marketing JFS will mark a significant step in the development of the Fujian integrated ventures. The JFS is a document through which the parties, Sinopec (55 percent), ExxonMobil (22.5 percent), and Saudi Aramco (22.5 percent), will jointly agree upon and define future objectives and plans. The joint venture will market petroleum products produced by the Fujian Integrated Project throughout Fujian Province. Together, the Fujian Integrated Project and the Fujian Marketing Joint Venture will be the first fully integrated Sino-foreign project to meet China’s rapidly growing demand for petroleum and petrochemicals.
Comments: Relative to China, this project contains just about everyone who is someone to bring to bear a group that few can rival on a project this size and diversity. It not only is a massive petrochemical stand but also a major fuels marketing program with new service stations numbering more than 600 in Fujian Province. There are two major joint ventures formed, one on the refining/petrochemicals side and the other on the fuels marketing side. Both have about the same ownership in core parties with some small actual differences in share.
From ExxonMobil’s viewpoint, this is a continuation of an apparent strategy to go where there is sustained high demand for the long pull in basic fuels and petrochemicals like ethylene, propylene, and aromatics, and longer-term derivative integration demand opportunities downstream in areas like polyethylene, polypropylene, and paraxylene. A better strategy couldn’t be imagined.
Indian firm Chennai Petroleum to construct 165,000 MT/year PP plant
Indian refining company Chennai Petroleum Corp (CPC) is planning to set up a polypropylene plant at its 950,000 MT/year petroleum refinery complex in the southern Tamil Nadu state city of Chennai. The plant capacity is a planned 165,000 MT/yr.
Indian Oil Corporation owns the majority stake in CPC, whose polypropylene project is in line with IOC’s strategy to foray into petrochemicals. IOC is also building 350,000 MT/year para-xylene and 553,000MT/year purified terephthalic acid production plants at Paniat in northwestern Haryana state. The company has also decided to set up an 800,000MT/year naphtha cracker facility in northwestern Haryana state.
Comments: The total polypropylene capacity in India is 1,585 KT. The major suppliers of polypropylene in India include (1) Haldia, (2) IPCL, and (3) Reliance Industries. Reliance Industries is the largest producer of polypropylene with a total capacity of 1,100 KT. Reliance also has a stake in IPCL which has 140 KT of polypropylene capacity. This new capacity planned by Chennai Petroleum Corporation will increase the domestic capacity by 10%.
Indian Oil Corporation (IOC) owns the majority stake in CPC; one of the largest refining companies in India. Until recent years IOC was participating in upstream markets. However, in recent years IOC has decided to increase its portfolio and participate in downstream markets. This initiative is a part of the company’s strategy to vertically integrate along the value chain.
The total demand for PP in India in 2003 was 1,360 KT. The major markets for PP in India include (1) injection molding, (2) woven sacks, (3) TQ Film, (4) BOPP Film, and others. Injection molding and woven sacks are the two largest end-use markets for PP in India accounting for 31% and 30% of the total PP demand respectively.
The projected growth rate for PP in India is 13.7% annually. Injection molding is the fastest-growing market with a projected growth rate of 17.5% annually. All other markets are also projected to experience robust double-digit growth.
Russian polyolefin producers Nizhnekamskneftekhim & Kazanorgsintez to increase polyethylene capacity by 2008
Russian polyolefin producers Nizhnekamskneftekhim and Kazanorgsintez announced their plans to increase polyethylene capacity in the republic of Tatarstan to 1 million/year by 2008. Currently, seven other companies produce a total of 1.35 million MT/year. The republic’s sales revenue from petrochemicals is expected to rise to Rubles 42.43 billion ($ 1.45 billion) in 2008 from Rubles 24.96-bil in 2003.
Nizhnekamskneftekhim also announced its plans to build a polyethylene & polystyrene plant with LG Chemical at an investment of $ 1.5 billion. The PE plants will have a capacity of 200,000 MT/year PE plant and the PS plant will have a capacity of 40,000 MT/year. The company is expected to boost ethylene output by 150,000 MT/year to 600,000 MT/year while raising benzene output by 53,000 MT to 220,000 MT/year.
Meanwhile, propylene output is expected to rise by 55,000 MT/year to 253,000 MT/year. The existing PS output would be doubled to produce 100,000 MT/year. Other projects include the construction of a new 120,000 MT/year polypropylene plant, which would be later expanded by another 60,000 MT/year.
Comments: With these new plants the polyolefins capacity in Russia will increase. In the past, Russia has not been able to take advantage of cheaper feedstock. Some of these initiatives are aimed to take advantage of Russia being an oil-producing nation.
Russia has a total polyethylene capacity of 1,745 KT per year. The planned addition of 200 KT capacity accounts for 11% of the total PE capacity. The total capacity for HDPE is 790 KT while that for LDPE is 955 KT. The major producers of HDPE include Kazan Orgsintez and Stavropolpolym with HDPE capacity at 250 KT and 300 KT respectively.
The major producers of LDPE in Russia include (1) Angarsk Petchem, (2) Kazan Orgsnintez, (3) Salavatnftgsz, (4) Sevilen, (5) Tomsk Petchem, and (6) Ufaorgsyntez. The capacities of these producers range from 40 KT to 185 KT.
Russia has a total polypropylene capacity of 430 KT. The major producers of polypropylene in Russia include (1) Central Fuel, (2) JSC Polypropylene, (3) Stavropolpolym, (4) Tobulsknefetkhim, and (5) Tomsk Petchem. The addition of 120 KT of polypropylene capacity will increase the total polypropylene capacity by 27%.
Russia has a total polystyrene capacity of 365 KT. The major producers of polystyrene in Russia include (1) Angarsk Petchem, (2) BASF/Nizhnekamsk, (3) Int.-Oxosyntez, (4) Omsk Kauchuk, (5) Omskkhimprom, (6) Plastik, and (7) Salavatnftgsz. The additional 40 KT capacity will increase the total polystyrene capacity by 11%.
Borouge to expand its polyethylene capacity by 100,000 MT/year
Borouge announced its plans to increase its polyethylene capacity by 100,000 MT/year. Borouge has been running its 480,000 MT/year PE plant above its nameplate capacity. Borough’s existing production includes a 600,000 MT/yr ethane-based ethylene line and two HDPE/LLDPE swing lines with a total capacity of 450,000 MT/year. Borougeis a joint venture between Borealis and Abu Dhabi National Oil Co.
Comments: Borouge is planning on investing $40 million to debottleneck the existing PE facility. The project, which includes the expansion of material handling facilities, is expected to be completed by Q2 2005. Borouge is also considering investing in additional crackers and associated polyolefins capacity and has recently commenced a feasibility study. The feasibility study is in response to attractive market dynamics and increased gas production in the region from two ADNOC natural gas developments (OGD-3 and AGD-2) in Abu Dhabi. Significant amounts of ethane equivalent to approximately 1.4 million tons of ethylene will become available for petrochemical use.
DuPont opens $130 million facility to produce nonwoven fabrics
DuPont opened a new $130 million facility to produce nonwoven fabrics from its proprietary Advanced Composite Technology (ACT). The ACT’s initial product is Suprel™, a highly protective and comfortable fabric used for hospital operating gowns and patient drapes. According to DuPont, Suprel™ is the only medical fabric made of polyester – for strength – and polyethylene – for silk-like softness. Traditional single-use medical fabrics can be uncomfortable, especially when they are worn for an extended time, and can lack the necessary fluid barrier for protecting today’s healthcare professionals. Suprel™ has less surface friction than other medical fabric products, allowing for greater comfort and freedom of movement. It also transfers heat away from the body quickly, adding to comfort in the operating environment. Suprel™ is made from continuous filament fibers and is very low linting.
Using a market-focused approach as part of its research and development, DuPont researchers developed Suprel™ by working closely with operating room nurses who participated in comfort studies conducted at North Carolina State University. The ACT facility is located at DuPont’s Old Hickory manufacturing complex, near Nashville.
Comments: The North American demand for nonwoven Fabrics in 2003 is estimated at 2,800 MM Lbs. The base polymer used for the fiber determines most of the fabric properties like processability, softness, strength, aesthetics, and applicability. The materials used for fabric production include (1) polypropylene, (2) polyester, (3) polyethylenes, (4) nylons (5) rayons, and others. Polypropylene and polyester account for almost 90% of the materials consumed for nonwoven fabrics with polypropylene accounting for 60% of the overall material consumption in North America. Polypropylene is the most preferred material because of its superior performance characteristics, aesthetics, and favorable economics.
Polypropylene is easy to thermal bond thereby eliminating the need/cost for chemical binders. Polyester has excellent tensile strength, tear resistance, and UV resistance. Rayon was the dominant fiber consumed in nonwovens during the early to mid-1970s and showed excellent absorbency characteristics. Polyethylene spun bonds was developed by DuPont under the tradename Tyvek® for durable paper-like applications. Polyethylene fabrics provide excellent strength and tear resistance and are extensively used in applications like courier envelopes, labels, banners, protective apparel, and various medical applications. Nylon fabrics provide excellent strength and its higher cost limits its usage to more durable applications rather than for disposable applications. Certain specialty applications could use a combination of polymers (i.e., bicomponent fibers) to enhance certain desired properties. The bicomponent variety may be a side-by-side, sheath/core, and sea-island type depending upon the structure of the fiber.
DuPont Nonwovens is the second-largest Global fabric supplier to the nonwovens industry. DuPont currently supplies nonwoven fabrics under the tradenames which include: (1) Sontara®, (2) Tyvek®, (3) Typar®, and (4) Xavan®.
DuPont’s Suprel™ is a bi-component nonwoven fabric based on DuPont Nonwovens Advanced Composite Technology. The fabrics are based on a fiber structure that has a central core made of polyester material to take advantage of its superior strength and an outer sheath made of polyethylene to take advantage of its softness. The application for Suprel includes medical fabrics where barrier properties and comfort are the key technical requirements. Suprel is likely to make an impact in hygiene applications where softness is a critical criterion for baby diapers and feminine care products.
BASF plans to construct a TPU plant in China
BASF announced its plans to expand its polyurethanes activities in Asia with a planned investment in a new specialties site in Pudong, Shanghai. Polyurethanes specialties tailored to the requirements of Chinese customers are to be produced in Pudong from early 2007 onward. Construction is planned to start next year.
The project will comprise a polyurethane system house, a Technical Research & Development Center, and a production plant for thermoplastic polyurethanes (TPU). These activities will be integrated into one company, BASF Polyurethanes Specialties (China) Co. Ltd. The new site will use the cost advantages provided by the regional Production Verbund for polyurethane: MDI (diphenylmethane diisocyanate) and TDI (toluene diisocyanate) – basic materials needed to produce specialties in Pudong –will be supplied from Caojing, Shanghai. Here, BASF and its partners are planning to start up a world-scale production plant for these isocyanates in 2006.
Comments: Thermoplastic polyurethane elastomers (TPU) are from a family of materials that combine the high performance of thermosetting polyurethane elastomers and the efficiency of thermoplastic processing. TPUs are noted for their excellent abrasion resistance, and tear propagation resistance, exhibit flexibility over a wide range of temperatures and are resistant to oils and grease. The major markets for TPU include (1) automotive parts, (2) film and sheet applications (3) hoses & tubes, (4) mechanical goods, (5) wire & cable, (6) adhesives (7) coatings, and medical applications.
Globally BASF is one of the largest producers of TPU with capacities in North America, Europe, and Japan. The opening of the new plant will give BASF access to the ever-increasing Chinese demand for TPU. The other major producer Noveon is scheduled to start their production of TPU in the fall of 2004. China relies heavily on imported TPU for various applications such as adhesives for footwear applications.
Kuraray to increase production capacity at Eval Company by 24,000 Mt/year
Kuraray announced its plans to increase capacity for ethylene vinyl alcohol polymer resin at its subsidiary Eval Company of America. Kuraray has decided to expand production capacity by 24,000 tons per year. Production capacity following the expansion, which is scheduled for completion in March 2006 for US$150 million, will be 47,000 tons per year.
Kuraray was the first company to develop and commercialize the high-performance resin EVAL in 1972, which has the highest gas impermeability of any plastic (approximately 10,000 times that of ordinary polyethylene). This superior gas barrier property makes EVAL highly trusted as a preservative food-packaging material, and the expansion of this business has been centered in the food-packaging field. In recent years it has been increasingly used to manufacture plastic fuel tanks for automobiles, as it is lightweight, easy to work with, and prevents the leakage of volatilized fuels. EVAL is also used to make pipes for floor heating systems and in other residential and appliance-related applications.
Comments: EVOH is currently the best available barrier material. The development of EVOH as a barrier material essentially opened up several innovative markets including plastic gas tanks, plastic beer bottles, shelf-stable meals, MREs, etc. On a performance basis, EVOH has better barrier properties than PVDC. Since EVOH is highly hygroscopic, it has to be protected in multiple-layer structures with tie-layer resins. For a while, most of the growth in tie-layers was associated closely with the growth in the EVOH markets. The major disadvantage of EVOH-based composite structures is their lack of recyclability.
At present, Kuraray’s tripolar manufacturing organization is composed of the Okayama Plant, Eval Company of America, and Eval Europe N. V. (Belgium), has a combined capacity of 45,000 tons per year, but the expansion of facilities at Eval Europe N. V. that is now in progress, combined with the planned expansion at Eval Company of America, will bring combined capacity to 81,000 tons per year in fiscal 2006.
Octel Corporation acquires Leuna Polymer, a producer of EVA & PE waxes
Octel announced that it has acquired Leuna Polymer (Leuna, Germany), a producer of ethylene-vinyl acetate (EVA) copolymers, polyethylene waxes, and additives for middle distillates. Luena Polymer generated sales of 23 million/year ($28 million) in 2003. The company has been under private ownership since it was privatized in 1997 under the German government’s program to sell state-owned assets in former East Germany.
Comments: Octel is a global chemical company specializing in high-performance fuel additives and special chemicals. The company has been expanding its product portfolio via acquisitions. On August 26th Octel announced their acquisition of Aroma and Fine Chemical Limited in Cheshire, UK.
LEUNA Polymer GmbH operates a revamped high-pressure polymerization plant for the manufacture of special products based on ethylene and vinyl acetate namely EVA, PE-waxes, and additives for middle distillates. Leuna Polymers EVA copolymer products cater to various applications including (1) injection molding, (2) film & sheet, (3) foams, and (4) polymer blends.
The largest application for PE waxes includes hot melt adhesives, textiles, and printing inks. Textiles, printing inks, pigment dispersion aids, and polishes market are considered to be the high-end premium-priced market for polyethylene waxes. Hot melt adhesives and paper coating are considered to be on the lower end. Other applications for PE waxes include paraffin compounds and candles.
JSR to focus less on elastomers–looking for alliances
Japanese synthetic rubber producer JSR Corp. announced its plans to reduce the company’s focus on its elastomers business. The company is seeking alliances for its elastomers business under a new midterm business plan.
The plan, titled JSRevolution II, will continue a trend that has seen elastomer sales fall to 30 percent of JSR’s revenue last year from 41 percent just four years ago. Profits from the elastomers and other petrochemicals units now will fund higher-growth electronics and optical display materials businesses, the group said in its annual report for the year ended March 31. To this end, JSR plans to raise the productivity of its elastomers operations through cost-cutting and other measures, while also remaining open to new partnerships with other producers.
JSR already has an outsourcing deal with Dow Europe GmbH for solution styrene-butadiene rubber and a toll manufacturing agreement to supply emulsion SBR to Sumitomo Chemical Co. Ltd. JSR is a partner in Kraton JSR elastomers K.K.-a joint venture with Kraton Polymers for the production of styrenic thermoplastic elastomers and polyisoprene. The company also has a 14-percent stake in BST elastomers Co. Ltd., a joint venture with Zeon Corp. based in the Maptaphut district of Thailand. This venture started operations in 1998 with annual capacities of 60,000 metric tons SBR and 40,000 tons polybutadiene.
Comments: JSR is a major elastomer company based in Japan. With the new global trends and Japan’s position as the specialty technology product participant, it is reasonable to expect JSR to take this action.
Sasol to double octene-1 production
Sasol announced its plans to construct a new octane-1 production plant at Secunda in South Africa.
The new octane-1 plant, the third located at Secunda, will produce 100 000 tons of 1-octene a year and will double Sasol’s 1-octene capacity to 196,000 tons per year when it comes on stream by the end of 2006.
The three plants are operated by Sasol Olefins and Surfactants, which forms part of Sasol’s chemical businesses, and the first delivery from the new plant is expected to reach global customers by January 2007. Sasol Olefins and Surfactants is a leading producer of hydrocarbons such as 1-octene, 1-pentene, and 1-hexene for use as chemical intermediates in the production of plasticizer alcohols, polymers, polyethylene, fatty acids, detergent alcohol, and lubrication oil additives.
Comments: The largest end-use for octane-1 is the comonomer for polyolefins. Butene, hexene, and octene comonomers are used to improve strength, elasticity, and puncture resistance. The major global suppliers include (1) Shell, (2) BP, (3) Chevron Phillips, (4) Idemitsu Petrochemical Company, (5) Mitsubishi Chemical Corporation, (6) Sasol, and (7) Nizhnekamskneftekhim. The global demand for 1-octene is about 1.2 billion pounds and the demand is expected to increase between 6-8.0% per annum for the next five years. The demand is increasing faster in other regions of the world at about 8%. This is primarily due to the increasing demand for LLDPE.
The major applications for octane-1 co-monomer include (1) polyethylene (LLDPE & HDPE), (2) plastomers, and (3) elastomers. Comonomer imparts multiple benefits such as (1) increased puncture resistance, (2) improved strength, (3) enhanced processability, and (4) tear resistance. The common trade names of LLDPE products include: (1) Dowlex, (2) Elite (metallocene LLDPE), (3) Astute, and (4) Surpass. The common ethylene elastomers/plastomers include: (1) Engage elastomers, (2) Exact and (3) TAFMER using metallocene catalyst and Flexomer using Ziegler-Natta catalyst, and (4) Affinity.
LLDPE is mainly used in film applications, elastomers in polymer modification applications, and plastomer are mainly used in food applications.
Thai firm PTT conducts feasibility study for a petrochemical complex in Thailand
PTT Ltd., formerly the Petroleum Authority of Thailand, is conducting a feasibility study to build a gas-based petrochemical complex with an investment of over $1 billion in Thailand. PTT has selected Foster Wheeler (FW) as a consultant to carry out a feasibility study, which will be completed by the end of 2004. PTT plans to bring the planned complex onstream before 2010 to feed the fast-growing Asian market.
The complex will use gas piped from offshore reserves in the Gulf of Thailand to the province of Rayong, where it will be separated and fed to an ethane cracker and downstream plants. The exact location of the complex has not been decided, but it is likely to be close to chemical plants operated by PTT affiliates at Map Ta Phut, Thailand, sources say.
The cracker’s capacity will be determined by the availability of gas, but it is likely to have a capacity of 800,000-1000,000MT/year of ethylene. The complex will also include a propane dehydrogenation unit, which will supply propylene to polypropylene (PP) and acrylonitrile units. PTT also wants to include high- and low-density polyethylene plants, sources say. PTT says the complex is separate from a plan it announced last year to build a propane dehydro unit, and a 300,000 MT/year PP plant.
PTT will invite some of its affiliates to participate in the complex, sources say. PTT has five chemical affiliates: Aromatics (Thailand) Co. (ATC); National Petrochemical Co. (NPC), a producer of olefins and derivatives; National Fertilizer Co. (NFC); Thai Olefins Co. (TOC); and Thai Paraxylene Co. (TPX), a producer of para-xylene and other aromatics.
Comments: Just like the recent announcements in Venezuela, China, and the Middle East, this complex is another example of supply going where long-term cost-effective feedstocks are available. The natural gas and condensates must be very attractive if the project can afford a propane dehydro unit. These units are usually not well situated unless there is a dedicated source of very low-cost propane. The issue for Foster Wheeler will be to determine the best integration around the core ethylene cracker. If condensates are to be run into the cracker, the yielded pyrolysis gas will provide a good economic base for aromatics and leads to opportunities in markets in benzene and paraxylene both regionally and globally.
Given the alternate value of the natural gas from the offshore fields, this should be a very profitable project with a long operating standing in major global complexes. Is the 2010 project start date (or before) just right to make the next capacity cycle? Only time will tell if this capacity hits it right.
Ex-executive of Dow Chemical in Taiwan stole company data
The Taiwan arm of Dow Chemical has sued a former executive for allegedly stealing confidential company data in what could become the island’s biggest industrial espionage case.
Tu Chung-Hsien, a former Dow Chemicals general manager who resigned in late June, was suspected of downloading more than 280,000 entries of hi-tech information from the company’s central database, the China Times reported. The database was estimated to be worth more than 20 billion Taiwan dollars.
Dow Chemical, the world’s fifth largest chemicals company, confirmed it was investigating an alleged breach of intellectual property rights (IPR) but denied media reports that the theft was worth about 20 billion Taiwan dollars.
Tu is believed to have fled to China in early July and Down Chemical had asked mainland police authorities to search for him, the report said. The company had also asked China and Taiwan authorities to bar Tu from traveling abroad, and freeze his assets pending the investigation, it added. Dow Chemical also has branch offices in major Chinese cities. Dow Chemical reportedly invested about one billion US dollars to develop the database, which covers the company’s research and development plans and the latest information in the areas of chemistry, chemical engineering, petrochemical, medical and environmental sciences.
Comments: IP Protection is a major issue in the current information era. The organizations are fully justified in taking the toughest stance they can.
High natural gas prices threaten chemical industry jobs
According to American Chemistry Council, about 35,000 jobs might be in jeopardy due to high natural gas prices. Wholesale prices for natural gas, a key raw material in the industry, have nearly doubled over the past five years from an average of $3.12 per million BTU in 1999 to $5.78 so far this year. The American Chemistry Council estimates that each $1 increase in gas prices drives up the industry’s costs of doing business by $4.2 billion.
In July the U.S. Bureau of Labor Statistics listed 893,000 chemical industry jobs, not including some managerial and professional posts. Over the past 12 years, the chemicals industry has lost 178,000 U.S. jobs, including 70,000 positions eliminated since mid-2002.
The high cost of natural gas for a number of years has choked off U.S. chemical jobs growth, by prompting companies to relocate manufacturing to countries like Trinidad and Tobago, and Saudi Arabia, where natural gas sells well below U.S. levels. The industry’s job losses are but one aspect of the overall decline in U.S. manufacturing jobs. But these jobs –at both the managerial and production level — are among the highest paying in the manufacturing sector.
According to American Council of Chemistry statistics, the average annual wage for chemical industry workers in 2003 was $67,900 in both Louisiana and Texas. According to some economists, about 4,000 jobs have been shed at chemical plants in Louisiana in the last four years and another 1,800 positions are likely to go in 2004 and 2005.
Comments: This recent report by the American Chemistry Council and the U.S. Bureau of Labor Statistics reveals only the tip of the iceberg. Collectively, their numbers talk about the loss of several hundred thousand jobs in the Chemical Industry over the past decade or so. This doesn’t include the trickle-down effect either which generally says the loss of a prime manufacturing job impacts the community several fold in terms of loss of local spending on services, goods, lost taxes, and the whole range of other economics that a family impacts on the local economy.
The competition driving this dislocation and dilution of primary local economics is unmistakable as the ACC and BLS statistics show. In Trinidad and Tobago for instance, projects have been based on long-term natural gas contract prices by a hi-low range. The base cost of the natural gas is reported to be in the range of $.85/mm BTU and this increases as the margin made by the product based on the natural gas (methanol, ammonia, aluminum for example) increases to a ceiling of about $2.00/mm BTUs. Even with freight of the final products to the US markets (somewhat less than 5-10% of market value) this natural gas cost component is a huge advantage. In the case of ammonia, for example, the natural gas component of the final product is 80-90% of the product value! No wonder in these products, none in the US can out-compete Trinidad and Tobago. More products like these are slated to come from other countries in the region; the ACC is broadcasting a reasonable beacon of warning.
Dow and BASF to commercialize innovative HPPO technology & constructal propylene oxide plant
The Dow Chemical Company and BASF Aktiengesellschaft announced their plans to commercialize the new Hydrogen Peroxide to Propylene Oxide (HPPO) technology. BASF and Dow are proceeding with plans to construct a world-scale HPPO plant at BASF’s Verbund site in Antwerp, Belgium. Construction is scheduled to start in 2006, and the plant is expected to come on stream in 2008. The plant will serve the growing demand for PO derivatives, in particular in the polyurethane industry. In July 2003, BASF and Dow combined their research efforts in the field of propylene oxide (PO) manufacturing based on propylene and hydrogen peroxide (HP). The results of this joint HPPO process development, which have exceeded high expectations, are available for commercial use to both parties.
Initially, the new production facility will have an annual capacity of 300,000 metric tons. An advantage of the new technology is that co-products are avoided and nothing but the end product, PO, and water is generated. Furthermore, production plants using this process have a smaller footprint, need less infrastructure, and require a significantly lower investment compared with conventional PO production processes.
Comments: Propylene oxide producers have been researching on developing new routes to producing propylene oxide over the last few years. The most common route to PO produces styrene monomer as a by-product. BASF & Dow had formed an alliance in 2003 and now based on their research; they are in a position to commercialize the new technology for the production of propylene oxide without any by-products.
DuPont and Sipchem sign agreements for vinyl acetate monomer technology
DuPont signed definitive agreements with the Saudi International Petrochemical Company (Sipchem) to license DuPont technology for a new vinyl acetate monomer (VAM) manufacturing plant to be located in the Jubail Industrial City, Kingdom of Saudi Arabia. DuPont will provide its VAM technology under license and provide technical assistance for the Sipchem VAM facility.
The planned VAM facility will be integrated into other petrochemical facilities currently planned for the site. Sipchem, a Saudi joint stock company, plans to produce and market VAM, maleic anhydride, butanediol, methanol, and acetic acid from the new world-class manufacturing site facilities.
Comments: Sipchem is a Saudi joint stock Company, established in late 1999. The company was formed to invest in petrochemical, chemical, and hydrocarbon industries, both basic and intermediary, to produce chemicals. Sipchem develops strategic alliances with carefully selected international partners to optimize its technology and marketing positions. As part of its Phase I plan, Sipchem is currently progressing in the establishment of the following two projects: A Methanol plant with an output of nearly 1 million metric tons per year and a 1,4 Butanediol (BDO) manufacturing facility with an output of 75,000 metric tons per year (MTPA). The construction of an acetic acid and vinyl acetate monomer plant is part of its Phase II plans. Once the company has the basic chemicals available, it will invest in the manufacture of other derivatives such as ethyl acetate, EVA, and others.
Sipchem recently also licensed the acetyls technology from Eastman. For more information on this, please refer to “Global Polyolefins & Elastomers – Strategic News Analysis – Volume 2, Issue 16.
Symyx Technologies and UOP sign intellectual property licensing agreement
Symyx Technologies, Inc. and UOP LLC entered into a multi-year intellectual property cross-licensing agreement relating to their respective patents for high-throughput research methodologies and equipment. Symyx will receive annual license fees from UOP and UOP will receive payments from Symyx in the event of the sale of instruments by Symyx within the scope of certain UOP patents.
Traditional materials discovery relies on an expensive and time-consuming process of trial and error, making and testing one material at a time. A typical project may take years to complete, often with a low probability of success. High-throughput technologies enable researchers to generate hundreds to thousands of unique materials at a time, and rapidly screen those materials for desired properties, increasing the probability of success of research programs with reduced costs in timelines.
Comments: High throughput experimentation(HTE) combines advanced computational and experimental techniques thereby offering a faster and more effective route to better products and processes.HTE can also be defined as the accelerated completion of two or more experimental stages in a concerted and integrated fashion incorporating various technologies. HTE is applied to different applications including (1) oil and gas conversion, (2)basic and intermediate chemicals, (3) environmental,(4) polymerization, (5) specialty and fine chemicals, and others.
New combinatorial and high-throughput methods are being developed which promise to substantially shorten the development time for discoveries in polyolefin catalysts. Symyx’s agreement with UOP signifies the use of high-throughput experimentation in applications other than polyolefins.
BP is going to present a paper at the conferenceFlexPO 2004 organized by Chemical MarketResources, Inc regarding its “Experiences in High Throughput Experimentation”. FlexPO 2004 will be held on Sept. 15-17, 2004 at San Louis Resort, Galveston, TX.
Daicel employee charged in a price-fixing case
Hitoshi Hayashi, a salesperson in Daicel’s organic chemicals division at the time of the conspiracy, will pay a $20,000 fine and serve three months in jail, subject to court approval, according to DOJ. The conspiracy affected nearly $1 billion in U.S. commerce.
Hayashi was originally indicted in January 2001 along with three other Japanese defendants for participating in the sorbates cartel. “Until now he has remained a fugitive beyond the reach of U.S. jurisdiction,” DOJ says.
In the indictment, filed in U.S. District Court in San Francisco, the grand jury had charged Yuji Komatsu, a member of Ueno’s Board of Directors; Yoshihiko Katsuyama, general manager of the Sales Department in Ueno’s Chemical Division; Wakao Shinoda, a sales manager in Ueno’s Chemical Division; and Hitoshi Hayashi, with conspiring with other corporate and individual co-conspirators to suppress competition by fixing the prices and allocating the volumes of sorbates to be sold in the United States and elsewhere from 1979 to 1996.
Comments: In 2000, three executives of Daicel Chemical Industries Ltd. were indicted for participating in an international price-fixing conspiracy in the food preservatives industry. Daicel had agreed to pay a $53 million criminal fine for its role in the same conspiracy.
National Science Foundation to fund research regarding the environmental fate of nanoparticles
The National Science Foundation and EPA announced they will give a total of $2 million to Purdue University (West Lafayette, IN) to research the effect of nanoparticles on the environment. The NSF will give $1.6 million over four years, and EPA will give $365,000 over three years.
According to the researchers, the use of nanoparticles to increase dramatically over the next 10 years, but there is little known about any potential health or environmental problems.
The study will examine nanomaterials’ effect on the environment, including any toxicity toward bacteria and fungi that are key indicators of damage to the ecosystem. The project will also evaluate the effect of the environment on manufactured nanomaterials. The researchers will use techniques already developed to assess the environmental impact of other substances, such as pesticides, to examine how bacteria and fungi in soil and water contribute to the degradation of manufactured nanomaterials.
Comments: The nanoparticles are the newest area of excitement. The nanoparticle sizes are so small that no one understands their full impact on human health.
This is the right time to take a careful look at the health impacts – remember the “Black Lung Disease”.
Clemson University spin-off, Tetramer Technologies received an NSF grant for the manufacture of plastics from renewable resources
Clemson University spin-off company Tetramer Technologies, LLC received a $100,000 Phase I Small Business Innovative Research award (SBIR) from the National Science Foundation to demonstrate the commercial feasibility of plastics partially derived from renewable sources like corn. This award builds on a previously earned Phase II $500,000 and two SBIR $100,000 grants received from the NSF small business program. This NSF grant allowed Tetramer to hire three more employees, bringing total employment to eight. The company plans to staff 20 full-time employees over the next five years.
Tetramer was formed in February 2001 by professors in Clemson’s Center for Optical Materials Science and Engineering Technologies. Wagener, a 1967 Clemson graduate in physical organic chemistry, returned to South Carolina to head the company. Wagener has 36 years of new product commercialization and venture capital experience at Dow Chemical, Stepan Co., and The ChemQuest Group Inc.
Clemson University professor Dennis Smith and his research group have found a new way to replace up to 50 percent of the chemicals that make regular plastics with polylactic acid. The end product is a plastic that has both the environmental friendliness of the corn-based product and the durability of regular plastics.
Stiffer environmental regulations and consumer conscience are driving the search for materials that are recyclable, renewable, and less polluting. Polylactic acid is a byproduct of corn. It currently is used in some pill coatings and sutures because it easily dissolves – a property not desirable in drink containers, boat coatings, and packaging.
Continental Carbon to pay $20.7 million in property damages
Continental Carbon, a subsidiary of China Synthetic Rubber has been ordered to pay $20.7 million for property damage caused by its Phenix City, AL facility. In the adjacent city of Columbus, GA, a local merchant, and a resident sued the company, saying the emissions of carbon black stained the city and residential property and disrupted business.
The jury awarded $1.9 million in compensatory damages, $1.3 million in attorney fees, and $17.5 million in punitive damages. The owner of a boat dealership received the bulk of the compensatory damages, $1.3 million. The jury upheld his claim that carbon black ruined his property and forced him to stop selling boats.
Plaintiffs’ attorneys say the Phenix City plant’s excess emissions originate in part from a 40-year-old unit with severe operating problems that caused the unit to release much more carbon black than the permit allows. The plaintiffs’ case relied on emissions modeling experts and sampling that proved carbon black was responsible for the alleged property damage. A former plant manager also testified that he had requested funds for installing emissions controls, but that company headquarters would not authorize the expense.
Jewel beetle senses forest fires
The researchers at the University of Bonn in Germany found that Jewel beetles can detect forest fires. They are a kind of heat-seeking missile when they detect a forest fire; they flock to the scene because the females of the species like to lay their eggs in burned tree bark. The beetles find their targets, by using two tricks: sensing the smoke forest fires create, and sensing the heat they generate. Jewel beetles, which can detect chemicals found in smoke rising 50 miles away, have infrared sensors finely tuned to detect the heat given off by forest fires.
The researchers figured out that 3-μm infrared radiation was the clue. The radiation is produced in large amounts from forest fires, escapes most natural atmospheric absorption processes, and can travel long distances. The researchers have devised a sensor that mimics the beetle’s behavior. The sensor is made of polyethylene whose bonds also react to 3-μm IR radiation. The polyethylene expands and presses against a piezoelectric crystal, including a current in wires attached to the crystal.
Comments: Who says there is no innovation left in polyethylenes?
Contact us at ADI Chemical Market Resources to learn how we can help.