Süd-Chemie Launches Improved PDH Catalyst for Catofin Technology
Süd-Chemie, a Clariant subsidiary, says that its “breakthrough” catalyst used in the Lummus Catofin propane dehydrogenation (PDH) technology has been successful in delivering a significant increase in propylene selectivity, while simultaneously reducing energy consumption. The new catalyst, introduced just more than a year ago, has delivered a 2%-3% selectivity boost as well as energy savings of between 5%-10%, both of which have a significant and very positive impact on plant economics, enabling an increase in production without additional operating costs, the company says. For a new grassroots facility, this performance improvement can translate into a profit improvement of up to $30 million, when compared with using conventional catalysts.
The Catofin process in addition to producing propylene from propane can also be used to produce isobutylenes from isobutane. It operates at an optimum reactor pressure and temperature to maximize the conversion of propane, or isobutene, with low investment and operating costs.
Catofin technology has been selected by 20 licensees worldwide and is in operation in 14 units, including the largest PDH unit currently in operation, owned by Petrologistics with a capacity of 500,000 m.t./year. A 600,000-m.t./year Catofin PDH unit will start operation in 2013 in Tianjin, China. It is owned by the Tianjin Bohua Petrochemical Co.
Süd-Chemie says the new catalysts can be used in existing plants or new facilities.
Formosa Plastics Corp. mulls investment of US$2 bln in Texas plant
Formosa Plastics Corp. plans to inject NT$60 billion (US$2 billion) into its Texas plant in the U.S. to boost production capacity and output, according to an interview with the company’s chairman, Lee Chih-Tsuen, published by the Commercial Times. The expanded capacity of the plant in Point Comfort is expected to increase the plant’s annual production of propylene and ethylene to 2.46 mln and 1.34 mln metric tons respectively. The company has not revealed a timeline for the investment. Formosa Plastics also has operations in Delaware City and Baton Rouge, Louisiana, in the U.S.
Five banks offer a loan of US$1 bln to Egypt’s Ethylco
Five Egyptian banks have agreed to a US$ 1 bln loan to the Egyptian Company for Ethylene and Derivatives (Ethylco), to build an ethylene and polyethylene complex in Alexandria with a project value of US$$ 1.427 bln, as reported in Zawya. The new plant will produce 400,000 tpa of ethylene and its derivatives. It will provide the ethylene feedstock for the second phase projects of the project, which includes the production of styrene and polystyrene in addition to polyethylene. The twin-currency loan will come to the company as US$630 mln and EGP 370 mln.
The National Bank of Egypt (NBE) is expected to contribute US$450 mln, of which US$270 mln is in foreign currency. Banque Misr will contribute US$225 mln, including US$ 135 mln in foreign currency; the International Commercial Bank (ICB) will chip in with about US$175 mln, including US$105 mln in foreign currency; Banque du Caire will provide US$75 mln, of which US$54 mln is in foreign currency; and the Arab International Bank (AIB) will contribute US$75 mln in foreign currency. National Societe Generale Bank (NSGB) is considering participating in the facility
Chemical Units at Oil Majors Post Lower Profits
Chemical business units of oil majors posted mostly lower results, on weak volumes and margins. ExxonMobil Chemical reported a first-quarter net income of $701 million, down 54% from the year-ago quarter. Sales volumes were flat, at 6.3 million m.t. OxyChem, the chemical business of Occidental Petroleum, reported first-quarter net income of $184 million, down 16%, primarily a result of lower export volumes and higher raw material costs. Sales were down 1.5%, to $1.1 billion.
Shell’s downstream business unit, which includes its chemical business, posted earnings on a current costs of supplies basis down 32% from the year-ago quarter, to $1.1 billion. Revenues were not disclosed. Chemicals sales volumes decreased 7% compared with the same quarter last year, to 4.6 million m.t., mainly due to reductions in European capacity and rationalization of the contract portfolio.
ConocoPhillips was the outlier, posting chemicals net income up 13% from the year-ago period, to $218 million. ConocoPhillips, whose chemical earnings are from its 50% stake in Chevron Phillips Chemical, says industry margins for ethylene during the quarter were among the highest recorded in 20 years.
Dow Sees U.S. Ethylene Advantage Widening
Dow Chemical CEO Andrew Liveris told investors last week that conditions will grow more favorable for U.S. ethylene makers, adding an estimated $2 billion/year in Ebitda to Dow’s results by 2017. Dow’s 2011 Ebitda was $7.8 billion.
U.S. producers will benefit from sustained favorable oil-to-gas ratios, which generate a strong cost advantage for U.S. producers able to use natural gas liquids (NGLs) feedstock. Dow expects markets for ethane feedstock to “go structurally long in the second half of 2012 and beyond, as more than $6 billion of fractionation and pipeline investments come online,” Liveris says. Cheaper ethane relative to other petrochemical feedstocks and strong operating rates should generate strong margin improvement over the next few years, he adds.
Dow announced the decision to site the planned 1.5-billion lb/year ethylene plant at its Freeport, TX site earlier this month. Dow expects to award the technology package for the cracker by midyear, says Dow executive v.p. Jim Fitterling. Derivatives under consideration include polyethylene (PE), elastomers, ethylene oxide derivatives, and color vinyl, Fitterling says.
“We have a hierarchy of products ranked by value-add, and we will fill out derivatives with the higher-value products,” Fitterling says. The investment is likely to include PE. “When you look at the industry today. You generally don’t build a cracker without having some PE,” Fitterling says. “In our case, you will see a broad range of higher-value performance plastics.”
The company is evaluating which ethylene oxide derivatives to add to support its higher growth performance and advanced materials business. The company is also considering chlorovinyls-related investments, likely as part of joint investments with partners. “Strategically, polyvinyl chloride is not one of [Dow’s core] products… but our partners are keenly interested, and we would entertain discussions,” Fitterling says.
Dow is coordinating with fractionators, pipeline operators, and upstream companies to bring NGL feedstocks to the market. “It is difficult to predict what supply will look like in 2017 with 100% certainty, but we’re working on an overall game plan to make sure that investments are well timed [across] the whole integrated chain from shale through petrochemicals,” he says. Dow will also have the ability to shift feedstock at the new cracker between ethane and propane. “For ethane, everyone is conscious that there is not going to be an unlimited amount available,” Fitterling says. Propane is expected to be more widely available and will support Dow’s planned on-purpose propylene unit at Freeport, scheduled for start-up in 2015, and cracker feedstock.
Chevron Phillips Chemical, Sasol, Shell Chemical, and Formosa have also announced plans for world-scale crackers in the 2017-2018 timeframe. “It is possible that all we built according to current timelines, but not probable,” Fitterling says. “We think there will be some early movement, and some projects may stretch out a bit longer than what has been announced.”
Mitsui Plant Fire Kills One, Injures 21; Production Halted
Mitsui Chemicals says that a fire broke out following an explosion on April 22 at a resorcinol plant at the company’s Iwakuni-Ohtake production complex in Waki, Japan. The blast killed one Mitsui employee and injured 21 people, including 10 residents, the company says. The fire spread to a cymene plant and utility piping rack at the complex and caused a second explosion in a storage tank at the resorcinol plant. The fire was extinguished by April 23.
Operations at all plants within Mitsui’s Iwakuni-Ohtake production complex were suspended on April 23. Authorities are investigating the causes of the accident, which are not yet clear. The 21 injured include seven Mitsui employees, two of whom suffered serious injuries; the 10 residents; two employees of an adjacent refinery operated by JX Nippon Oil & Energy (Tokyo); and two employees of partner companies, Mitsui says. About 18 plants at the site have been damaged by the explosion and there is extensive damage to windows and slate roofing, and railroad sidings, Mitsui says. The incident also caused damage to about 473 buildings and homes outside the plant site, mainly to windows, Mitsui says.
There had been no report of leakage of hazardous substances or materials by CWpress time, Mitsui says. Mitsui says it will cooperate with authorities in the investigation. The company has also formed task forces to respond to concerns among residents and to implement appropriate safety measures.
The main products produced at the complex besides resorcinol include purified terephthalic acid; polyethylene terephthalate resin; hydroquinone; TPX, a 4-methyl pentene-1 based polyolefin; and APEL cyclo olefin copolymer.
Mitsui tells CW that the company is not certain when operations at the Iwakuni-Ohtake complex can be restarted. The company also declined to comment on the potential financial impact of the incident or the impact of the suspension of production on supplies.
Sasol Seeks Exit From Petrochemicals JV in Iran
Sasol has entered into preliminary talks to divest its stake in Arya Sasol Polymers (Assaluyeh, Iran), an equally owned petrochemicals joint venture with Pars Petrochemical Co., a subsidiary of National Petrochemical Co. (NPC; Tehran). Sasol says it is in discussions with interested buyers as well as representatives of the Iranian and South African governments to ensure consistency of approach. The company is reluctant to divulge further details but says that “as the plant is based in Iran, we engage authorities there, along with South African authorities, with which Sasol engages on an ongoing basis.”
The planned move is a response to tightening U.S. and European Union (EU) sanctions against Iran, and direct pressure from the U.S. on Sasol to break commercial ties with Iran completely. Sasol said last month that it had stopped buying crude oil, which it used in its Natref refinery at Sasolburg, South Africa, from Iran. Sasol also said in an October 7, 2011 filing to the U.S. SEC that it had initiated a review of its activities in and with Iran and that it did not intend to expand its activities there.
Sasol’s complete pull-out will be a major blow to Iran. Sasol is the largest overseas investor in petrochemicals in Iran. Arya Sasol, established in 2003, operates plants designed to produce 1 million m.t./year of ethylene using ethane as feedstock and 90,000 m.t./year of other olefins, including propylene. The JV’s two downstream polyethylene plants have a combined capacity of 600,000 m.t./year. They are a 300,000-m.t./year low-density polyethylene plant based on Sabtec technology and a 300,000-m.t./year high-density polyethylene unit that uses the LyondellBasell process. The ethylene plant started production in November 2007 and uses the Technip process. The polymer plants began operating in 2009.
Possible buyers for Sasol’s stake in Arya Sasol are difficult to identify. Other overseas companies present in Iran including Turkish, Swedish, Saudi, and Indonesian firms are unlikely to be interested. Venezuela, with close ties to Iran, could replace Sasol. Pars Petrochemical, alternatively, could absorb the stake it does not hold in Arya Sasol. NPC and Pequiven (Caracas) signed agreements earlier to jointly build methanol plants in Iran and Venezuela. Construction of the 1,650-m.t./day VenIran methanol unit has started at Assaluyeh and is due online in 2015.
Separately, Iran’s vice president Mohammad Reza Rahimi said last week that Iran would barter petrochemicals for food products because of the sanctions imposed by the U.S. and EU on Iran’s banking system and resulting in difficulties with payments in U.S. dollars.
A recent report by Société Générale says that negotiations to stop Iran’s nuclear-enrichment program are unlikely to succeed, which will set the stage for full implementation of U.S. and EU sanctions. “There will not be a quick resolution to the nuclear standoff,” says Michel Wittner, global head of oil market research at Société Générale. He expects U.S. and EU sanctions, which take effect July 1, to be fully implemented.
Ineos looks to divest French and Italian HDPE sites
Ineos Olefins & Polymers Europe is considering the future of its HDPE businesses at Rosignano and Sarralbe, including a divestment to interested third parties. The decision follows a strategic review of operations.
Rosignano (Italy) and Sarralbe (France) have been a part of Ineos since the company acquired the Innovene business from BP. However, the materials giant plans to focus on assets that are highly integrated, both upstream and downstream and the two plants do not fit with this policy.
According to the company, this announcement has been made at a very early stage in the evaluation process to enable discussions to take place with employees, works councils, and interested third parties.
The outcome of these discussions is not considered to be a foregone conclusion as Ineos will only divest these sites if it is in the interest of its business and the long-term future of the sites.
Mitsui to Increase PP Compounds Production in China, Mexico, U.S.; to Establish a New Company in Brazil
Mitsui Chemicals and its Prime Polymer Co. (Tokyo) affiliate say they plan to increase production at their three sites for automotive use of polypropylene (PP) compounds in China, Mexico, and the U.S., to meet growing global demand. Mitsui holds a 65% stake in Prime Polymer and Idemitsu Kosan holds the remaining 35%. Prime Polymer will also establish a new company in Brazil for the PP compound business to strengthen its operations in the South American market.
The Advanced Composites (Sidney, OH) subsidiary will increase PP compounds capacity by 28,000 m.t./year to 254,000 m.t./year; Advanced Composites Mexicana (Aguascalientes, Mexico) subsidiary will increase capacity by 25,000 m.t./year to 70,000 m.t./year; and the Mitsui Advanced Composites (Zhongshan, China) subsidiary will increase capacity by 10,000 m.t./year, to 70,000 m.t./year. The expansion at the three sites will be completed in 2013.
Separately, Prime Polymer announced that it has acquired a 70% stake in compound company Produmaster Indústria e Comércio (Produmaster; Mauá, Brazil), and established a new company called Produmaster Advanced Composites Indústria e Comércio de Compostos Plásticos as the parent organization to Produmaster. Vicente Eudes de Freitas holds the remaining 30% stake in the newly established company.
Produmaster is Brazil’s third-largest PP compound manufacturing and sales company, and it supplies products to major automakers through its production facilities, which have a total capacity of 55,000 m.t./year, Mitsui says. This includes a 38,000-m.t./year capacity at a facility at Mauá; and a 17,000-m.t./year capacity at a facility at Camaçari, Brazil operated by its Produmaster do Nordeste subsidiary.
Earlier this year, the Mitsui-Siam Cement Group (SCG; Bangkok) joint venture announced plans to increase PP compound capacity in Thailand. Grand Siam Composites (Bangkok) jv is increasing production capacity for PP compounds by 18,000 m.t./year at Map Ta Phut, Thailand. SCG Chemicals, the chemicals subsidiary of SCG holds a 46.2% stake in Grand Siam Composites; Mitsui holds 45.2%; Prime Polymer holds 3%; and others own 5.6%.
Reliance inks a US$2 bln equivalent loan with 9 banks covered by Euler Hermes SA
Reliance Industries has moved forward with its plans for petrochemical expansion by raising a US$2 bln loan from German banks. The facility has a door-to-door (tenure) maturity of 13 years and is backed by leading German credit insurance provider Euler Hermes SA, inked with nine banks. The loan will be utilized to finance goods and services procured from German suppliers as part of RIL’s petrochemical expansion projects at Jamnagar, Hazira, Silvassa, and Dahej. This deal helps diversify RIL’s funding sources and extends the maturity profile of its long-term debt cost-effectively. Over the next 4-5 years, RIL is investing over US$12 bln in the refining and petrochemical industries. This includes an investment of US$4 bln in a petroleum coke gasification project to produce synthetic natural gas that will replace expensive LNG as fuel, and US$8 bln in adding capacities of PFY, PET, polyester, and intermediate chemicals such as PTA and paraxylene, besides adding new products such as carbon black and rubber.
The nine banks include KfW IPEX-Bank GmbH, Citibank, Commerzbank AG, Nord LB, Banco Santander, Landesbank, Baden-Wurttemberg, DZ BANK AG, BHF-BANK AG, and ING Bank (a Branch of ING-DiBa AG).
Braskem mulls switch at its US polypropylene plants to feedstock from shale gas
As the cost of crude oil and its derivatives hurts profits, Braskem is looking to switch feedstock at its U.S. polypropylene plants from shale gas, as per Reuters. Chief Executive Carlos Fadigas said that the Brazilian petrochemicals company is currently weighing a decision on whether to build its plant processing propane from natural gas or form a joint venture with a guarantee to buy the project’s output. The decision should be made this year.
ENI to Invest €1.6 Billion in Revamped Chemical Operations, Could Launch IPO After 2015
Energy group ENI (Rome) presented its newly configured chemical operations to the public for the first time this week at the Plast 2012 plastics and rubber exhibition, being held near Milan. At a press conference yesterday, the CEO of the newly named Versalis, previously Polimeri Europa, Daniele Ferrari, admitted that the company is about 10 years behind its rivals with regard to investment and international expansion, but that it is intent on expanding and differentiating its product portfolio, creating more integrated production sites, and maximizing the benefits of its intellectual and physical assets.
The current four-year business plan, running until 2015, calls for a total investment, mostly in Italy, of about €1.6 billion, Ferrari says. Much of this, about €500 million, will be absorbed by the conversion of operations in Sardinia into the Matrìca “green” chemicals operation at Porto Torres, in partnership with Novamont. The construction of seven production plants that will use renewable feedstocks is planned in three phases over the next five years, together with a research center that was opened in February. A new biomass power station nearby will be operated by ENI Power, and another ENI subsidiary, Syndial, will carry out land reclamation. The total investment is put at €1.2 billion.
“We are certain that Versalis will become a leader on a global level at the end of this plan,” Ferrari says. His objective is to double the company’s revenues, increasing the current 15% margin to 30% in the next five years.
What happens to Versalis at the end of the four-year plan remains to be seen. “At the end of the 2012-15 plan we have several options: an initial public offering [IPO], an alliance, or acquisitions,” Ferrari says. But, when asked if ENI could sell the business, he said: “I don’t see a sale.”
The new company name is needed to remove the impression that its activities are restricted to polymers in Europe, Ferrari says. He points out that Versalis has licensees for its technologies in various polymers, chemicals, and catalysts around the world, but that not enough had been done in the past to extract value from these deals. He says he wants to build more joint ventures, especially in India and Asia, and also South America. Versalis is already in advanced discussions with potential partners in several countries.
Versalis re-entered China last February with Eni Chemicals Shanghai, directly distributing products in the Chinese market, and with Versalis Pacific, which also has offices in Shanghai and operates in all Asian markets. ENI had not had a chemical present in China since 2001, Ferrari says.
The group’s chemicals operations have, since the beginning of this year, been divided into four market-focused business units, covering chemical intermediates, polyethylenes, styrenics, and elastomers. Within polyethylenes, Versalis will concentrate more on specialty products, Ferrari says. The company is Europe’s second-largest producer of ethylene vinyl acetate (EVA), ranks second in Europe in styrenics, and is first in elastomers, but only seventh in the world.
There will also be some downsizing. There have been losses of “hundreds of millions of euros per year” at operations at Porto Torres and Priolo, Sicily, and there is a need to “transform” both sites, Ferrari says. Versalis is closing a 150,000-m.t./year linear low-density polyethylene line at Priolo, and renovating and reconfiguring its 760,000-m.t./year ethylene plant there. Capacity is being halved, and output will be diverted more toward C5 and C9 fractions, targeted at elastomers. More than €350 million will be invested at Priolo to build capacity for producing tackifying resins and isoprene.
Versalis is considering redimensioning a newer steam cracker at Brindisi in southeastern Italy, “but we are not sure if it is necessary to increase capacity there,” Ferrari says.
Other future investments include €350 million on elastomers–solution styrene butadiene rubber (SSBR), thermoplastic elastomers, and polyisoprene–at Ravenna; €135 million in ethylene propylene diene monomer rubber production at Ferrara; €80 million in butadiene production at Dunkirk, France; and €50 million in SSBR at Grangemouth, U.K. The new butadiene line at Dunkirk is said to be “fundamental” to the supply of raw materials to Versalis’s elastomer production sites, particularly in the U.K.
Cytec to Sell Pressure Sensitive Adhesives to Henkel
Cytec has reached an agreement to sell its pressure-sensitive adhesives (PSA) product line to Henkel for $105 million, the company says. The deal is expected to close in the third quarter of this year. Cytec’s PSA product line recorded $94 million in sales in 2011. It has 80 employees.
The product line includes emulsion-based and polymer-based PSAs for use in several industrial and consumer applications. These include tapes, labels, graphics, and transdermal medical applications.
Cytec is “seeking to drive a greater amount of organic and inorganic growth from our specialty growth platforms. We continue to make meaningful progress with our ongoing evaluation of the remaining Coating Resins business and are on track to announce our decision this quarter,” says CEO Shane Fleming. The deal is expected to be neutral to Cytec’s 2012 earnings per share (EPS).
“The product range to be acquired is complementary to Henkel’s well-established high-performance PSA business and is expected to strengthen our position in this field,” says Jean Fayolle, corporate senior v.p./packaging adhesives at Henkel.
Last month, Cytec agreed to acquire composites maker Umeco (Leamington Spa, U.K.) for $439 million. The deal enhanced Cytec’s presence in engineered industrial materials, analysts say. It is expected to close in the third quarter.
Auto industry avoids shutdowns from nylon 12 shortage
LEXINGTON, MASS. (May 10, 1:10 p.m. ET) — The global auto industry appears ready to avoid any shutdowns due to the shortage of nylon 12, with procedures in place to replace the resin when needed, says an industry watcher.
Automotive forecasting group IHS is unaware of any scheduled closures due to a disruption in nylon 12 supplies, said Jim Dorsey, spokesman for the Lexington, Mass.-based group.
Global supplies of nylon 12 were running short following a fatal fire on March 31 at Evonik Industries AG’s plant in Marl, Germany, which destroyed the plant making the feedstock cyclododecatriene.
In North America, the Automotive Industry Action Group worked with automakers and suppliers to streamline the approval process for alternative resins, which should speed up the development of new parts in the product pipeline.
The response in other regions has not been as visible, IHS noted, but daily calls between carmakers and major suppliers are providing needed management of resources.
The industry still has a lot of ground to cover before it can put the shortage behind it, Dorsey noted, adding that the group will continue to monitor the situation.
PFB buys Nova Chemicals’ performance styrenics business
CALGARY, ALBERTA (May 9, 5:05 p.m. ET) — A plastics materials deal has taken shape on the streets of Calgary, with resin maker Nova Chemicals Corp. selling its performance styrenics business to building products maker PFB Corp. for an undisclosed price.
Both firms are based in Calgary. The deal includes Nova’s expandable polystyrene resins and Arcel-brand styrene copolymers.
As part of the deal, Nova will acquire an equity stake in PFB and will hold two seats on the firm’s board of directors. Robert Snyder, Nova performance styrenes vice president, will become PFB’s chief operating officer.
The deal represents an upstream integration move for PFB, which operates in Canada as Plasti-Fab Ltd. Its primary products are insulating building products made of materials ranging from EPS to concrete to wood.
Nova “has long been a leading North American producer of moldable foam resins with a diverse product portfolio serving the construction, packaging, and global cup and container markets, “ PFB chief operating officer C. Alan Smith said in a May 9 news release. “Together we have the opportunity to better serve customers – providing outstanding products to the market.”
PFB posted sales of $89.2 million in 2011 — an increase of more than 25 percent vs. 2010. Nova — one of North America’s largest polyethylene makers – rang up sales of $5.2 billion last year, up 13 percent from 2010. Nova is wholly owned by International Petroleum Investment Co., a state-owned firm based in Abu Dhabi, United Arab Emirates.
Sabic upgrading Dutch olefins cracker
RIYADH, SAUDI ARABIA (May 9, 10:15 a.m. ET) — Saudi Basic Industries Corp. (Sabic) will spend about $175 million to make improvements to its olefins cracker in Geleen, the Netherlands.
In a May 9 news release, officials with Sabic in Riyadh, Saudi Arabia, said that the goal of the investment “is to ensure a safer, more competitive and more energy efficient cracker that is better for the environment.”
The improvements will be made over the next 18 months at the cracker, which makes plastics feedstocks ethylene and propylene. A “substantial maintenance turnaround” also is scheduled for the site beginning in September 2013.
Officials added that customers will not be affected by the improvement project, which aims to reduce the cracker’s energy consumption by eight percent. Improvements are intended to modernize the plant, which was built in the 1970s so that it can compete with the firm’s younger plants.
The project was launched on April 11 and is expected to “transform the [cracker] into one of the best crackers in Europe, in terms of safety, durability and cost efficiency,” officials said.
“We believe in the future of Sabic in Geleen,” manufacturing vice president Henny Egberink added in the release.
Sabic is majority owned by the Saudi government and ranks as one of the world’s largest producers of polyethylene, polypropylene, and several specialty plastics.
Braskem plans investment of US$100 mln in green PP plant
Braskem has confirmed plans for a US$100 mln expansion in Brazil in a move that will ramp up the company’s efforts to curb its environmental footprint. Braskem, the world’s first producer of green plastic produced from 100% sugar cane derivatives, plans to fund a new plant to produce 30,000 tpa of polypropylene, dubbed Green PP, from ethanol. The new plant will be built adjacent to Braskem’s existing 200 tpa green PE facility, at its 60 km sq site in Rio Grande do Sul, and is expected to be completed in 2013.
Currently, green PE is available at a premium of about 20% compared to conventional PE, but reduces the carbon impact by 2.3-kilo tons of CO2 per ton, vs gas or naphtha-based PE.
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