AMERICAS
Shell selects site near Monaca, Pittsburgh for petrochemical refinery
Shell Oil Co. has chosen a site near Pittsburgh for a major, multi-billion-dollar petrochemical refinery that could create thousands of construction jobs and provide a huge economic boost to the region. Shell has signed a land option agreement with Horsehead Corp. to evaluate a site near Monaca, about 35 miles northwest of Pittsburgh. The cracker would convert ethane from bountiful Marcellus Shale natural gas liquids into more profitable chemicals such as ethylene. The next steps are environmental and design studies and further economic analysis, followed by requisite permits. Ohio, West Virginia, and Pennsylvania had all sought the plant and offered Shell major tax incentives. Monaca is about 15 miles from both the Ohio and West Virginia borders, so workers in all three states are likely to benefit. The Marcellus covers large parts of Pennsylvania, New York, Ohio, and West Virginia, and drillers have also started to tap the adjacent, deeper Utica Shale formation.
Comments: This appears to be an integrated petrochemical refinery to crack ethane and light hydrocarbons (such as light naphtha to produce petrochemicals. The refinery could include aromatics complex to extract benzene, toluene, and xylenes to further enhance the availability of petrochemical feedstock materials. Other schemes are possible to increase the production of propylene. With thousands of shale gas drillings across those shale gas regions, this will significantly change the North American supply/demand prospect of ethylene-based chemicals and polyethylene in the next five years.
NOVA to invest USD 750-900 million for a 40% capacity increase at Joffre
Nova Chemicals is planning to invest USD 750-900 million to increase its polyethylene production by 40% at its Joffre plant in Lacombe County. A feasibility study is underway to present to the Board. The project, if approved by its board of directors, will add a third reactor to the polyethylene facility on site. Nova’s Joffre plant, which has five manufacturing facilities, is one of the largest ethylene and polyethylene production sites in the world. If approved, construction is estimated to start in 2013 and be completed in 2015.
Comments: The successful development and the abundant shale gas reserve in North America undoubtedly played a role in this plan of expanding its crackers and polyethylene facilities.
DuPont has a record-breaking year for patents
DuPont had a record-breaking year with 910 new U.S. patents granted in 2011, an increase of 32 percent over last year, and breaks the previous record set in 1966 when the company was awarded 780 U.S. patents. For the second year in a row, the combination of U.S. patent grants and applications was the highest in DuPont’s history. DuPont’s U.S. grants are up 125 percent over the past 10 years.
Last month, the Patent Board ranked DuPont as the No. 1 innovator in the chemical industry for the fifth consecutive year in its Patent Scorecard. The Patent Board ranks corporate innovation using a series of measures to determine patent quality, technological strength, and breadth of impact. DuPont leads all ranked companies in three categories, and surpasses the competition 10 times over in “Science Strength,” a measure of how much a company uses science in building its patent portfolio.
Comments: Founded in 1802 primarily as a gunpowder manufacturer in the first 100 years after its inception, DuPont diverged into chemicals and polymers after the turn of the 20th century and has established itself as the most innovative chemical company in the world — both in research and commercial products. Innovations like nylon, neoprene, Teflon, Mylar, Kevlar, Nomex, Sorona, Lycra, Freon, etc. have become household names and are synonymous with DuPont’s success. Now with the renewed focus on science and novelty, this recognition does not come as a surprise.
Dow authorizes capital for Texas propylene
Dow Chemical’s board of directors has authorized capital to finalize detailed engineering and to purchase equipment for the company’s planned world-scale propylene facility in Texas. Dow said basic engineering work for the on-purpose propylene production facility has begun. The project is on track for production start-up in 2015. The project will run on Honeywell UOP process technology to produce propylene from propane.
Comments: With the increasing shortage of propylene projected a few years ago, propane dehydrogenation has become a popular way to make on-purpose propylene. Dow’s propane dehydrogenation plan was announced a couple of years ago. They finally decided on the UOP’s Oleflex technology as opposed to the Catofin technology from Lummus CBI and the technology from Ube. Dow’s propylene will not only be the precursor for acrylic acid but also will supply Braskem’s North American PP plants purchased from Dow.
CP Chem still evaluating the US site for new PE plants
Chevron Phillips Chemical (CP Chem) is still evaluating sites for its new polyethylene plants. CP Chem plans to build a 1,500 KTA ethane cracker and two PE plants, each with a capacity of 500 KTA. The company has already chosen its Cedar Bayou site in Baytown, Texas, for its cracker.
Comments: Both the cracker size and PE reactor size are large enough to minimize the production cost. For Phillips loop slurry HDPE technology, the Capex is now only about 25% of that of 1990 technology, and the Opex is about 50% of that of 1990 technology. Phillips slurry loop is still a favored process technology for HDPE production and the blow molding resins produced by it are among the most popular.
McDonald’s studies replacement for PS cups
About 2,000 of the company’s restaurants, mostly West Coast operations, will be testing a double-walled fiber hot cup in an attempt to phase out polystyrene (PS) foam cups. McDonald’s objective is to assess customer acceptance, operational impact, and overall performance.
The switch is in response to a shareholder resolution filed in 2011 by As You Sow, a nonprofit organization that promotes environmental and social corporate responsibility through shareholder advocacy, coalition building, and legal strategies. As You Sow’s shareholder proposal asked McDonald’s to assess the environmental impact of different kinds of beverage containers and to develop package recycling goals. Nearly 30 percent of McDonald’s shareholders who voted supported the resolution.
Comments: McDonald’s decision to use a more environmentally friendly material for disposable cups will be a major impact as the company is the largest fast food chain in the world, leading to the highest waste products. McDonald’s has actively been looking at environmentally safe products for their packaging needs — which resulted in the Company phasing out their clamshell burger box made out of PS foam in 1990. McDonald’s decision will also influence other fast food chains to take notice and switch and help in looking at alternative materials in the future. Polystyrene does not decompose and can remain in landfills for hundreds of years. The material is light and is often found as litter in gutters and marine debris becoming harmful to birds and marine mammals.
EUROPE
Russia’s Lukoil close to reviving PP production
Russian oil and petrochemicals group Lukoil is close to reviving polypropylene production at its Stavrolen chemicals site in Budyennovsk, Russia following a major fire at the end of last year. The mid-December blaze in the ethylene plant at what is one of Russia’s largest petrochemicals complexes caused more than €20 million (USD 26.5 million) worth of damage. It halted all production of polyethylene and PP at the site. Lukoil announced that it has managed to secure a supply of propylene to the site from its Karpatneftekhim petrochemicals plant in Ukraine and from other Russian producers.
The plant has been undergoing extensive repair and renewal work. This has included the repair of damaged pipe racks, dismantling internal columns, renewal of damaged heat insulation, and pressure vessel testing. The new pipe is due for delivery shortly and contractors will then weld and assemble the pipelines on the renewed racks. The company explained ethylene production should restart by the beginning of April, but that timeframe may still have to be extended because of delays.
Comments: Russia continues to import polypropylene from neighboring countries mainly due to higher demand locally and for exports. The domestic demand for polypropylene has been increasing and currently, three-quarters of the production is consumed to meet this demand. Russia’s polypropylene products for exports are mainly targeted toward the Chinese. The main growing markets for polypropylene in Russia include PP raffia, BOPP film, and pipe used in construction. The demand for polypropylene in Russia is 800 KT and is expected to grow at 4.2% for the next 5 years. The resumption of the PP plant will reduce imports and meet local demand.
Sumitomo to start Russian petrochemical projects
Sumitomo Corporation is considering building a gas processing plant to produce propylene from natural gas in the Khabarovsk region of Russia. The company is currently negotiating with the authorities of the Khabarovsk region and has already started developing a feasibility study for the project. The financial and technical details of the project remain to be disclosed. There is a possibility that the new plant could be built in the Komsomolsk, or Ulchi areas of the Khabarovsk region. Sumitomo could become the second Japanese investor to express its interest in petrochemical projects in the Russian Far East in recent months. Last year, Marubeni announced plans to build a petrochemical complex in the Russian city of Nakhodka, in cooperation with the Russian oil producer Rosneft.
In addition to the Far East project, in January this year, Marubeni announced its intention to build a plant to produce aromatic hydrocarbons, PET, and terephthalic acid in Tatarstan, one of the most economically developed regions of Russia.
Comments: Russia has been constructing new production facilities for polypropylene as a result of growing demand from consumers due to improved economic growth. The demand is still lower than in other regional countries indicating long-term future growth for this market. The raw material needed for these plants will put pressure on the current supply and new capacities will be needed to meet this demand. Russia proven natural gas reserves are close to 48 trillion m3 which amounts to 26% of the global reserves and is currently the largest producer and exporter of the material. Sumitomo’s decision to start a petrochemical complex will allow it to take advantage of the growing demand for polypropylene and the vast raw material supply the country offers.
Chemtura expands polyurethanes capacity in Italy
Chemtura has expanded the capacity for its line of polyurethane prepolymers at the company’s manufacturing plant in Latina Scalo, Italy. The new production capacity, the exact figures of which have not been disclosed, has already started up. Increased demand has necessitated the latest expansion. The new production will be used to serve local demand. The company will also enhance its technical development capabilities at Latina Scalo.
Comments: Chemtura has recently commercialized its mercury-free MDI product line, and the growing demand for it has led to its expanding its production capacity for polyurethane prepolymers. Chemtura’s polyurethane prepolymers are used in a wide variety of applications but end use in binders, elastomers, and adhesives applications are among the fastest growing segments. There is an increasing need to use formaldehyde and mercury-free MDI/TDI in binders and adhesives in furniture applications, and the mercury-free prepolymers would comply with the new regulations.
Gazprom Neft announces Sibur deal
Gazprom Neft, the oil arm of the Russia-based Gazprom, is planning to invest up to RUB 3 billion rubles (€70 million, USD 93 million) in developing its petrochemical business this year in cooperation with Sibur. The two companies have already launched a joint project for polypropylene production at a Moscow refinery. Gazprom Neft and Sibur are currently working on the next project, which will involve the production of polypropylene at a plant in Omsk which the Titan Group owns. The companies are considering buying a stake in the plant and, according to several sources close to the project and are looking for a controlling interest in the plant. The deal will allow Sibur and Gazprom Neft to expand their business in the profitable segment of the market. Gazprom Neft and Sibur also have plans to jointly produce terephthalic acid and polyethylene terephthalate — which is expected to be their largest joint project.
Comments: The deal is in line with Sibur’s strategy of expanding the polypropylene capacity. The company currently has a total capacity of 240 KT and is planning to expand to 850 KT by 2015. Gazprom Neft is the oil-producing arm of Russian energy giant Gazprom and has in the past formed an alliance with Sibur in other projects such as the production of terephthalic acid and polyethylene terephthalate. Russia currently imports close to 92 KT of Polypropylene mainly from Turkmenistan and Ukraine.
MIDDLE EAST/ AFRICA
Dorama’s PET plant slated for inauguration in Nigeria
A new 86 KTA Polyethylene Terephthalate (PET) plant built by Indorama Group, the core investor in the Eleme Petrochemicals plant, is slated for inauguration in H2-2012. The plant is being built for USD 300 million.
The Polyethylene Terephthalate plant will come onstream between April and May 2012 when all regulatory procedures have been completed. Production will serve all local demands first before any exports. The Eleme plant currently produces 240 KTA of polyethylene and 95 KTA of polypropylene.
Comments: Indorama, the Bangkok-based PET and polyester giant, has already invested USD 575 million in Eleme Petrochemicals which is a subsidiary of Nigerian National Petroleum Corporation and is a major African producer of ethylene, polyethylene, propylene, and polypropylene. Indorama will invest another USD 2.1 billion in Eleme and this PET plant will be part of the new investment. This is part of Indorama’s globalization scheme as the integrated leading producer of PET, polyester, PTA, and worsted wool fiber. The projected revenue for 2012 will be USD 8 billion which is 26% higher than that of 2011 (USD 6.3 billion).
Grace signs MOU for FCC catalyst joint venture
W.R. Grace has signed a memorandum of understanding with Al Dahra Agriculture (Abu Dhabi) to jointly build and operate a fluid catalytic cracking (FCC) catalysts and additives plant in Abu Dhabi, United Arab Emirates. Grace, the world’s largest manufacturer of FCC catalysts and additives, expects the unit would be it’s first in the region. Capacity terms were not disclosed, but Grace considers growth in the region will be more than adequate for the new plant by the time it is anticipated to come on stream in late 2015. Sixteen FCC units are expected to be built in the Mideast and South Asian markets in the next five years, increasing the catalyst opportunity in the region by about USD 150 million. Al Dahra, an agriculture and animal production firm, expects the deal to represent another milestone in the company’s strategy to diversify its service offering. The joint venture is subject to the execution of definitive agreements and receipt of regulatory approvals.
Comments: This is a strategic move for Grace to set up the first JV plant to produce FCC catalysts in the Gulf Cooperation Council (GCC) region. This is in line with the fact new refinery demands will be highest in South Asia and the GCC region in the next five years.
ASIA PACIFIC
Ineos licenses polypropylene technology to a Chinese firm
neos Technologies has licensed its Innovene polypropylene (PP) process to China Shenhua Coal to Liquid and Chemical Co. (Beijing), a wholly owned subsidiary of Shenhua Group (Beijing), for the manufacture of PP resins including homopolymers, random copolymers, and impact copolymers, at Yulin, China. The new 300 KTA plant at Yulin will serve the rapidly growing Chinese PP market and will be part of China Shenhua Coal to Liquid and Chemical’s second methanol-to-olefins (MTO) complex.
Comments: Ineos Technologies has had a license signing record in both polyethylene (Innovene S dual loop slurry process and Innovene G gas phase fluidized bed process) and polypropylene (Innovene PP gas phase fluidized bed process) in the past seven years. LyondellBasell, the largest licensor in polyolefins and well-established in China, continues its success in China.
Wacker expands polymer site in China
Wacker Chemie AG is expanding its Chinese polymer activities by investing around €40 million (USD 53.1 million) in building two new production facilities at its Nanjing site. The Company is expanding the site’s existing facilities for vinyl acetate-ethylene copolymer (VAE) dispersions by adding a new reactor with an annual capacity of 60 KTA. This measure will double Nanjing’s VAE dispersion capacity by approx. 120 KTA, making the complex one of the biggest of its kind in China. The new reactor is scheduled to come on stream in mid-2013. At Nanjing, Wacker is also building a new plant to produce polyvinyl acetate (PVAc) solid resins with an annual capacity of 20 KTA. This plant is due for completion in early 2013.
Comments: The vinyl acetate-ethylene copolymer typically contains vinyl acetate 60-90% of. It is a water-based emulsion and is sometimes sold in powder form. The vinyl acetate-ethylene copolymer has the advantage over poly(vinyl acetate) or PVA in that the Tg can be changed by the composition and thus altering the properties and applications. Both PVA and vinyl acetate-ethylene copolymer are useful as adhesives under low temperatures and wet conditions. They have strong adhesion to non-porous materials.
Lanxess’ Singapore Nd-PBR plant will break ground in September
Lanxess will break ground for its new neodymium polybutadiene rubber (Nd-PBR) plant in Singapore on September 11 this year. Lanxess plans to invest roughly EUR 200 million (about SGD 340 million) in a 140 KTA facility in Jurong Island Chemical Park. The facility will be the largest of its kind in the world and serve the growing market for “green tires,” especially in Asia. About 100 jobs will be created. The plant is expected to start up in the first half of 2015. Engineering work has advanced considerably since June 2011, when the company announced it had selected Singapore as the site for the new plant.
Lanxess has signed contracts with key suppliers to its Nd-PBR plant. Petrochemical Corporation of Singapore (Private) Limited (PCS) has agreed on a long-term supply of butadiene to Lanxess. PCS is building a new butadiene extraction unit and associated infrastructure necessary to supply the raw material. In addition, Singapore’s TP Utilities Pte. Ltd. (a wholly-owned unit of Tuas Power Ltd.) will provide steam to the Nd-PBR plant.
Comments: Lanxess is the largest producer of polybutadiene rubber (PBR) in the world with over 15% of global capacity. Lanxess’s decision to establish a plant in Singapore will allow them to take advantage of the growing automotive demand in the region. Asia currently consumes over 60% of the total PBR demand and growing at over 4% for the next 5 years. The Neodymium catalyst will give the additional advantage of producing very high cis-PBR which translates to lower rolling resistance and fuel efficiency as the rubber is used in treads and side walls of tires. Nd-PBR has recently received a boost from a number of legislation from various countries that requires tire manufacturers to label fuel efficiency in their products. Japan and South Korea have mandated the labeling system and the European Union has recently approved a similar move.
Sinopec plans to produce at least 2 billion cubic meters pa of shale gas by 2015
China Petrochemical Corp. (Sinopec Group) plans to produce at least 2 billion cubic meters of shale gas annually by the end of 2015–around one-third of the country’s targeted production of 6.5 billion cubic meters for that date. China has shale-gas resources of 134 trillion cubic meters, of which 25 trillion cubic meters are recoverable. Sinopec owns three shale-gas blocks covering 17,000 square kilometers. So far, about 50 shale gas wells have been drilled in China, but no commercial production has been announced. Shale gas development in China faces hurdles of a lack of domestic drilling expertise and tough geology. In 2012, the company will invest over CNY1 billion (USD 159 million) in the shale-gas and oil sectors, up from about CNY600 million (USD 95 million) in 2011.
Sinopec has finished drilling three shale-gas wells and is drilling another seven, including some in the Nanchuan block for which it won exploration rights in China’s first shale-gas auction last July.
Sinopec completed joint environmental research on shale gas exploration with Exxon Mobil Corp. (XOM) in the Meigu block in Sichuan province last year. The company is also conducting a risk assessment with BP PLC at Guizhou’s Kaili deposit and with Chevron Corp. at Guizhou’s Longli field.
Comments: To minimize dependence on imported oil, in the past decade China has developed and significantly advanced coal-based technologies for chemicals and polyolefins in addition to supplementing China’s huge demand for energy. However, in pursuit of a “clean” energy source in the past couple of years, China is actively pursuing its shale gas development. In addition to developing drilling expertise in high-pressure fracturing and horizontal drilling required for shale gas, China is also studying and addressing the environmental issues (water contaminations, minor scale earthquakes, etc) associated with shale gas development. In the United States, thousands of wells have been drilled in the past few years for shale gas and over 25% of natural gas is now from shale gas.
SK Global Chemical to build EPDM plant in China
SK Global Chemical, the petrochemical business of SK Innovation, formerly SK Energy, will build an ethylene propylene diene monomer (EPDM) plant in Ningbo, China. The plant will have a production capacity of 50 KTA of EPDM and it is expected to start production in 2014. SK Global is planning to work with a state-owned Chinese firm on this project. Once the plant is fully operational, SK Global’s total EPDM capacity will rise to 90 KTA and will make the company one of the largest EPDM manufacturers in Asia. The company has already acquired a factory site and located feedstock suppliers and other necessary resources for the project.
Comments: The global supply for EPDM is tight and getting worse due to the growing automotive industry. In addition, the global economy is influencing the construction industry putting pressure on the EPDM demand. The current global utilization is close to 90% with the current demand at 1300 KT. EPDM is commonly consumed in the automotive market such as hoses, seals, and air ducts, or as compounded (TPO) used in automotive bumpers or softer compounds for grips for interior applications. SK Global chemical’s plan to put up a plant in China will bring some relief Another Unique Service From Chemical Market Resources, Inc. 560 Blossom Street, Ste C, Houston, TX 77598 USA; Tel: 281-557-3320 Email: POE-SNA@CMRHouTex.Com Copyright © 2011 Page 19/22of Issue 06– Volume 10 to the supply but further EPDM capacities are expected shortly to sustain this growth.
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