Shell to buy Cove Energy

(forbes) -- Royal Dutch Shell is making a bet on liquefied natural gas (LNG) in East Africa, bidding to buy Cove Energy for about USD1.56 billion in cash. The bid, expected to be approved by Cove's board, would grant Shell access to the Rovuma Offshore field off Mozambique's coast, which could hold more than 30 trillion cubic feet of LNG.

Headquartered in the Netherlands, Shell is looking to strengthen its position as one of the world's largest LNG producers, and thus offered 195 pence per share, a 73.3% premium over Cove's closing price on January 4, the last day before the bid was announced, to buy the totality of shares outstanding.

Shell is looking to tap Cove's 8.5% participating interest in Mozambique's Rovuma Offshore field. While Cove's board has preliminarily said it would recommend the offer to its shareholders, Shell noted it requires written consent by Mozambique's Ministry of Mineral Resources.

MRC

(hydrocarbonprocessing) -- Shell has signed a contract to hire the French refinery owned by insolvent Swiss-based refiner Petroplus to process crude oil for six months.

Royal Dutch Shell has signed a contract to hire the French refinery owned by insolvent Swiss-based refiner Petroplus to process crude oil for six months. Industrial machinery like the refinery cannot stay idle for too long, he said during a trip to the facility, which is located in Petit-Couronne, a town on the French northern coast.

Resuming operations at the refinery, which was gradually shut down in January, requires EUR50 million investment. Shell will transfer EUR20 million to the refinery in advance of future payments to the refinery. The government will finance the remaining EUR30 million.

Petroplus, one of the largest independent European refiners, was forced to file for insolvency in late January after struggling for months with weak demand due to the economic slowdown in Europe and overcapacity amid tighter credit conditions, high crude prices and competition from Asia and the Middle East.

French and German courts have appointed administrators to handle their units of Petroplus after the Swiss-based refiner filed for protection from creditors after running out of cash. French prosecutor is investigating whether there was wrongdoing in the insolvency process.

MRC

(news.szenergy) -- Daqing Petrochemical Company (China) took its 330,000 ton/year cracker offline, together with its derivative polyethylene facilities at Heilongjiang province for scheduled maintenance.

15-day closure involved Daqing's 65,000 ton/year low density polyethylene line, 80,000 ton/year high density polyethylene three lines, as well as 85,000 ton/year linear low density polyethylene line at the plant.

Daqing Petrochemical Company is a regional branch company of Petro-China Company Limited. It is a giant-scale petrochemical complex producing oil products, chemicals, fertilizers and chemical fiber with the major raw materials of crude oil, light hydrocarbon and natural gas from Daqing oilfield.

MRC

(news.szenergy) -- Jinling Petrochemical Corporation (China), a Sinopec's subsidiary, took offline its 100,000 ton/year dioctyl phthalate facility due to tight feedstock 2-ethylhexanol supply. Dioctyl phthalate plant is located in east China.

The facility being shut in February 19, is scheduled to be restarted in March 5. Jinling Petrochemical s dioctyl phthalate (DOP) inventory may continue till late February.

Due to its suitable properties and the low cost, dioctyl phthalate is widely used as a plasticizer in manufacturing of articles made of PVC. Plastics may contain 1% to 40% of dioctyl phthalate . It is also used as a hydraulic fluid and as a dielectric fluid in capacitors. Dioctyl phthalate also finds use as a solvent in glowsticks.

MRC

(fibre2fashion) -- The rise in prices of crude oil in the past few days, especially after the Iran crisis, has made yarn and fabric producers in India's biggest man-made fibre (MMF) hub a worried lot.

The MMF industry in Surat heavily depends on crude oil products for manufacturing various yarns like polyester filament yarns, spun yarns and blended yarns, which are used to weave fabrics.

Mr. Arun Jariwala, Chairman, Federation of Indian Art Silk Weaving Industry (FIASWI), said, "The increase in crude oil prices will affect Surat Textile industry in a manner that will increase the prices of yarn."

"Last time, when the crude oil prices went up to USD 150 per barrel, yarn prices increased by 20-25 percent. This time, while there will be no affect on cotton yarn price, the price of synthetic yarn is likely to go up by 10 percent. Hence, the costs will rise very high," he adds.

However, the impact will be relatively less on yarn manufacturers. He opines, "The yarn manufacturers will still be able to bear the increase in price of raw materials as there are few such units and they are also in a position to export."

Comparing how yarn and fabric manufacturers have fared, he says, "In the last two years, yarn exports have increased and the sector has a positive growth. But, the fabric segment has a negative growth. This means, they have exported yarn in greater quantities and at a lesser price, and thus sustaining high fabric prices in India. So, it will be difficult for the weavers and processors, and the consumers will prefer wearing cotton fabrics, rather than synthetic fabrics."

To ease the situation, Mr. Jariwala recommends, "The Government will have to decrease the excise duty not only on yarn, but also on purified terephthalic acid (PTA) and Monoethylene glycol (MEG), so that cost of production is reduced and yarn is available at a reasonable price to weavers."

MRC