Asian PA, DOP producers prepare for tough fourth quarter

(ICIS) -- Asian phthalic anhydride (PA) and dioctyl phthalate (DOP) producers are preparing for a rough ride as they move into the fourth quarter of this year, industry sources said on Monday.
⌠With such high feedstock orthoxylene (OX) costs, PA producers are losing money with every tonne of material produced, a South Korean producer said.

OX spot prices were assessed at USD 1,575/tonne (EUR1,150/tonne) CFR (cost & freight) northeast (NE) Asia on 16 September, while PA values were at USD 1,460/tonne CFR China Main Port (CMP) on the same day, according to ICIS.

Typically, a tonne of PA is made by using 950kg of OX. A producer then needs to add USD100/tonne to its price to cover conversion costs. Based on the assessed OX and PA prices on 16 September, Asian producers are losing USD 136.25 for each tonne of PA they make.

In India, IG Petrochemicals Limited (IGPL) is keeping the production at its PA plants at 70% of their capacities. IGPL operates two PA lines in Taloja with a combined production capacity of 116,110 tonnes/year.

In China, Shandong Hongxin is operating its three PA lines, with a total production capacity of 120,000 tonnes/year, at 70% of their capacities.

South Korea's Aekyung Petrochemical has lowered the operating rates at its 150,000 tonne/year DOP plant at Ningbo in Zhejiang province to 50% of its capacity as it is unable to obtain sufficient feedstock PA.


MRC

(ICIS) -- Germany-based LANXESS has inaugurated a chemical plant to develop and produce membrane filtration technology for water treatment at its site in Bitterfeld, the specialty chemicals company said on Friday. The company has invested around EUR 30m (USD 42m) in the 4,000sqm project, which will create around 200 new jobs in the long term.

Membrane elements filter out unwanted substances from water such as salts, pesticides, herbicides, viruses and bacteria. The value of the global membrane market alone is estimated at around EUR 1bn/year and is set to rise, according to the company. LANXESS' first reverse osmosis membrane elements will be available on the market from early 2012.

The company added that in 2011 it is planning to invest around EUR 160m in its German sites, ⌠somewhat more than in 2010, LANXESS said without going in detail.

LANXESS announced in January 2010 that it would build the chemical plant at its Bitterfeld site as part of the group's strategy to further expand into the water treatment business.


MRC

(Arabian oil and gas) -- Saipem has today announced it has been awarded new offshore and onshore drilling contracts worth over USD 500 million. In offshore drilling, Saipem signed two contracts in Angola and Saudi Arabia.

In Angola, Saipem has been awarded a contract for the extension of the charter of Saipem 12000 drillship for 2 years by Total E&P Angola, starting from August 2015.

Saipem 12000 is an ultra deepwater drillship, capable of operating in water depths up to 12,000 feet in full dynamic positioning mode.

The second contract has been assigned to Saipem by Saudi Aramco for the charter of the jack-up Perro Negro 7, for drilling activities in the waters of Saudi Arabia. The contract starts in the second half of 2011, extending the existing contract for a period of 3 years.

MRC

(Arabian oil and gas) -- Lukoil is seeking quick approvals of its tender offers as the Russian supermajor looks to get drilling at the West Qurna II bloc before the year is out. "We hope that by October, the Iraqi ministry will approve all our tender offers", the London-listed company's chief executive Vagit Alekperov, Lukoil's CEO, told Dow Jones on Friday that he hopes to see contracts approved "by October," according to a Dow Jones report.

The phase II bloc is estimated to hold almost 13 billion barrels of reserves, which Lukoil - in conjunction with Norway's Statoil - hopes to raise at a rate of 1.8 million barrels per day over the life of their 20-year service contract.

Lukoil owns a 56.25% interest in the field, while Iraqi state-owned North Oil Company owns a 25% stake and Norway's Statoil holds the remaining 18.75%.

MRC

(Arabian oil and gas) -- The news follows Daelim's award of the USD 920 million main hydrocracker package announced in July. South Korea's Daelim Industrial announced to the South Korean stock exchange on Friday that it has signed a USD 707 million deal to build a plant in Saudi Arabia, as part of the mommoth USD 20 billion Sadara joint venture between Saudi Aramco and Dow Chemical. In the regulatory filing, the EPC firm told the exchange that contract is for delivery in 2014, without giving further specifics of the contract. The news follows Daelim's award of the USD 920 million main hydrocracker package announced in July.

MRC