Sabic seeks investments in shale-gas technology

(bloomberg) -- Saudi Basic Industries Corp. (SABIC), the world’s largest petrochemical maker, plans to invest in companies in the U.S and elsewhere that have technology to turn shale gas into chemical products.

The amount of natural gas produced from shale is a "game- changer" that will have a large impact on worldwide supplies, Mohamed Al-Mady, chief executive officer of the company known as Sabic, said today in an interview in Jubail, Saudi Arabia.

"It will require Sabic to become more competitive and to participate in the shale-gas boom itself," he said. "Our strategic focus is to examine shale gas very closely and find very competitive areas where we can invest."

Growth in U.S. shale-gas exploration and production has lowered domestic gas prices and enables producers there to use gas as feedstock. That has put pressure on petrochemical producers in Saudi Arabia who get gas for a government- subsidized price of USD0.75 per million British thermal units.

Saudi Arabian Oil Co., or Saudi Aramco, is exploring for shale gas in northern parts of the country, and has started a venture capital company this year to buy stakes in companies with technology to develop the resource.

With many plants in the U.S. under construction, "it will take three years or less to see the impact of the shale-gas boom on the petrochemicals industry," al-Mady said. "The world economy is expanding and hopefully, the expansion and future growth in world’s economy will absorb new supply of petrochemicals from shale gas."

Sabic’s venture capital arm is looking for opportunities in the U.S., Europe and China to buy stakes in start-up companies that can turn shale gas into petrochemicals, according to Ernesto Occhiello, Sabic Ventures’ executive vice president for technology and innovation.

Formed last November, the Netherlands-based business is negotiating 30 to 40 deals and is looking especially at technologies that use different feedstocks, Occhiello said today in Jubail.
MRC

Another Chinese producer choses UNIPOL PP technology from Dow

(eon) -- Qinghai Damei Coal Industry has signed a license agreement for UNIPOLPolypropylene Process Technology with Union Carbide Chemicals & Plastics Technology LLC, a wholly owned Subsidiary of The Dow Chemical Company.

The coal based polyolefin complex, located in the Xining Economic and Technological Development Zone of Xining City, Qinghai Province in China, is expected to start up in 2015. The 400 KTA polypropylene plant will produce homopolymers, random copolymers and impact copolymers. This is the 12th UNIPOL Polypropylene Technology license signed in China since 2006. The 11th license was signed by Jiutai Energy in September, as MRC informed earlier. With the least complex PP process technologies available and low investment costs, Dow’s UNIPOL PP Process Technology positions polypropylene manufacturers to meet and exceed increasing demand for high quality polypropylene.

The UNIPOL PP process for polypropylene is a comprehensive technology and services package with established worldwide success. It combines product and catalyst know-how with leading gas-phase process technology and technology transfer expertise. Licensed by Union Carbide since 1985, UNIPOL PP technology is now available through Dow. Resins produced by UNIPOL polypropylene technology from Dow account for 17 percent of global polypropylene output. Polypropylene is a versatile plastic used in packaging, durable goods, automotive parts, non-wovens, fibers and consumer applications.
MRC

The process of shale gas exploration in Europe has just begun

MOSCOW (MRC) -- The latest technology of hydraulic fracturing, which provides access to recently inaccessible layers of natural gas, is widely used in the U.S. but not in Europe, according to "Neft Rossii".

Due to fracturing, the United States has almost fully met the country's needs with shale gas. Thus, such petrochemical giants, as Dow Chemical, Formosa Plastics and Chevron Phillips Chemical, earlier this year announced their plans to increase production capacities in North America on the development of new shale gas resources in Ohio, Pennsylvania and New York and attractive price of shale gas, as MRC reported earlier. ExxonMobil is also considering the construction of two new lines for the production of polyethylene in Mont Bellevue, Texas, and a new ethane cracker at Baytown, Texas.

In the U.S., an intensive research and exploration of shale gas has been carried out over the past few decades. In Europe, this process has just begun. Poland has the most favorable geological conditions in Europe for the new technology, and the country could become a major producer of shale gas in about 10 years. If this is the case, shale gas will help Poland not only economically, but also politically, reducing the country's dependence on Russian gas.

Some of the European countries are conducting research, but have not started to blow up coalbeds yet. However, it is worth keeping in mind a few important points. Firstly, the geological conditions in Europe are different from those in the USA. Secondly, there are huge differences between the two continents in the size of potential gas deposits, which makes the new technology for the European countries economically disadvantageous. According to the International Energy Agency, it is the U.S., Canada and China that have the largest deposits of shale gas but Europe.
MRC

European makers to increase PS prices in November

MOSCOW (MRC) -- European PS producers are going to increase their price offers for November shipments on rising quotations of styrene monomer and a high level of demand for polystyrene in October, report MRC analysts.

Last week, two major European producers voiced their intentions to raise their PS price offers by EUR15-25/tonne. The producers base their intentions on the market balance and are going to get an increase in profit margins in November. At the same time, buyers oppose any price increase referring to the fact that the current cost of PS in Europe is crucial for most converters.

Styrolution has posted on its website an announcement about a price increase for GPPS and HIPS by EUR15/tonne. Styron has issued a press release where it is also reported an increase in the cost of the material by EUR25/tonne. Producers believe that the current level of demand for PS on a significant price hike of spot quotations of styrene monomer will allow them to increase prices.

Customers’s reaction to these statements was negative. Converters report that such a high level of PS cost has a negative impact on the competitiveness of the final production comparing to that produced from alternative polymers. More detailed information can be found in MRC Price report.
MRC

Import of titanium dioxide to Russia dropped by 24% in January-September

MOSCOW (MRC) -- In January-September, imports of titanium dioxide to the Russian domestic market fell by 24% year-on-year and made 50,500 tonnes, report MRC analysts.

Over the three quarters of 2011, the total import of titanium dioxide made 66,120 tonnes. This year, supply volumes have been dropping monthly with the exception of February when the total import of TiO2 to Russia rose by 12% year-on-year and made 5,860 tonnes.

At present, the major suppliers of titanium dioxide to Russia are still Ukrainian makers - Crimean Titan and Sumykhimprom. In January-September 2012, Ukraine exported to Russia about 19,250 tonnes of titanium dioxide pigment. Note that during the same time period in 2011, Russian companies purchased 25,500 tonnes of dioxide in Ukraine.


Chinese plants are the second-largest suppliers. During three quarters of the year, Chinese makers supplied 6,226 tonnes of the material. Meantime, in 2011, China ranked only fourth among all the suppliers of titanium dioxide to Russia after the USA and Germany.

American producers are losing their positions in the Russian market yielding their ground to Chinese suppliers. The total volume of American ТiO2 to be sold to Russia amounts to 5,000 tonnes. In 2011, this index made about 7,900 tonnes.

MRC