INEOS to construct a new ethane tank at its Rafnes site in Norway

MOSCOW (MRC) - Swiss group INEOS along with German company TGE Gas Engineering plans to build a new ethane tank at its Rafnes site in Norway, according to Ineos.

The construction is scheduled to begin in February-March, 2013, and the start-up of the production is to take place in 2015. The new facility will complement the existing storage at Rafnes.

As MRC reported previously, INEOS had already signed a long-term agreement on imports of ethane to Europe since 2015 for its cracker in Norway. The feedstock will be supplied by the U.S. company Range Resources Appalachia from the industrial complex located at Marcus Hook (Philadelphia, USA). In addition, Ineos signed a 15-year contract with Sunoco's subsidiaries for the feedstock transportation through the pipeline from Houston to the Marcus Hook's facility, from where it will be delivered to Ineos' cracker in Rafnes.

Ineos said that the construction project will allow the company to get access to the global ethane markets and ensure long-term competitiveness of the company.

David Thompson, Procurement & Supply Chain Director at INEOS Olefins & Polymers Europe says: "The construction of the tank will give Rafnes and our business in Norway additional capacity and enormous flexibility to benefit from globally available ethane. Combined with the recent supply agreements, I believe that we significantly strengthen the competitive position at Rafnes for the foreseeable future."
MRC

Formosa plans expansion at its Mailiao naphtha cracker after winning appeal

(Taipei Times) -- Formosa Petrochemical Corp plans to start an expansion project of its naphtha cracker in Yunlin County’s Mailiao Township after winning an administrative appeal against the Environmental Protection Administration (EPA), as per Taipei times.com.

The Executive Yuan overruled the strict environmental conditions the EPA had set on the project, a joint venture with the US-based Kraton Performance Polymers to produce hydrogenated styrenic block copolymer (HSBC), a high value-added rubber product.

"Once we receive the official document on the ruling, we will contact Kraton to continue the project in Yunlin," Formosa Petrochemical chairman Chen Bao-lang said, without elaborating on when the company would begin the project.

Formosa Petrochemical and Kraton would share the cost equally, with each holding 50% in the venture, which was previously set to become operational by H2-2013. The project is expected to cost more than USD200 million.

We remind that earlier this year Kraton Performance Polymers Inc. exited its joint venture deal with Taipei, Taiwan-based Formosa Petrochemical Corp. (FPCC), seeking instead to expand hydrogenated styrenic block copolymer (HSBC) manufacturing capability in Asia on a stand-alone basis due to the project delay, as MRC informed earlier.

Formosa Petrochemical is involved primarily in the business of refining crude oil, selling refined petroleum products and producing and selling olefins (including ethylene, propylene, butadiene and BTX) from its naphtha cracking operations. Formosa Petrochemical is also the largest olefins producer in Taiwan and its olefins products are mostly sold to companies within the Formosa Group.

Kraton Performance Polymers, Inc. is a leading global producer of engineered polymers, including styrenic block copolymers (SBC).
MRC

Russian prices of DOP still go down

MOSCOW (MRC) -- Prices of plasticizer DOP continue to fall in the Russian market on weak demand and seasonal changes in the market, according to MRC analysts.

Prices of plasticizer of dioctylphthalate (DOP) in the Russian market continue to decline under the pressure of seasonal factors and changes in the structure of suppliers. By mid-December the Russian DOP prices fell to Rb68,000-70,000/tonne, CPT Moscow, including VAT, after the October peak of Rb82,000-84,000/tonne, CPT Moscow, including VAT.

The appearance of the "old new producer" led to a dramatic price cuts of DOP in the Russian market. In late October Rosplast took Permian capacities under the control. The company previously gave in rent the production capacities of Uralplastic to a group of companies.

The second factor resulted into weakening of demand for DOP in the key sector of consumption - production of soft compounds of PVC. Traditionally, the production of non-rigid PVC in Russia is reduced in the end of the year and reach its minimum in January and February. Many makers of non-rigid PVC in the first half of January stop their capacities on the scheduled turnaround, as a result, the demand for DOP reduced significantly.

MRC

Dow opens a representative office in Sochi

MOSCOW (MRC) - As a part of the agreement on its sponsorship of XXX Olympic Games signed in 2010, Dow Chemical will also support the Winter Olympics in Sochi in 2014, in connection with which the company has recently opened a representative office in Sochi, according to the company's press release.

According to Arthur Eritspohova, Head of Dow's Olympic department in Russia, a new company's office in Sochi will strengthen Dow's position in the Russian market, contribute to the further introduction of innovative technologies into various industries, such as construction, transport, electricity and telecommunications, wich are necessary for the development of infrastructure of the city and successful Olympic Games in Sochi.

We remind that Dow has developed a variety of solutions for the Krasnodar region even a few years before the first Winter Olympic Games in Sochi in 2014, as MRC reported previously. Thus, during the Olympic Games in London in mid-summer, an artificial ice rink, the creation of which was possible due to refrigerant DOWCAL and Dow's insulation (extruded polystyrene) STYROFOAM, was open in Sochi.Park. Besides, floor coverings in Sochi.Park - the entrance of Sochi.Park and Dow's exhibition area - were made of 400 square meters of modern recyclable carpet tiles. Dow's elastomers, used to make carpet backing, refrigerant DOWCAL and the company's insulation will all be re-used in the future to produce the same floor covering.

The company has also successfully developed projects for the construction of Russia's first bobsleigh track, providing cables for power supply in the region, polyethylene (PE) pipes for water supply facilities, thermal insulation for pipelines, the creation of infrastructure of the coastal and mountain clusters.
MRC

Council of the Eurasian Economic Commission to simplify life for importers of linear polyethylene

MOSCOW (MRC) -- The Council of the Eurasian Economic Commission is going to clear in the near future the duty on imports of copolymers of ethylene (code FEACN 3901 90 900 0), under which there were declared sufficiently large volumes of imports of linear polyethylene to Russia, according to MRC analysts.

The decision of the Council of the Eurasian Economic Commission from 12 October, 2012 N 89 "On amendments to the common nomenclature of foreign economic activity of the Customs Union and the Common Customs Tariff of the Customs Union on the silicone resins, polymers of ethylene, some grades of organic chemicals, fish," provides the rates of import duties on other polymers of ethylene by FEACN code 3901 90 900 0. Former import duty of 10% under this decision to be cut to 0%. The decision comes into effect after 30 days from the date of its official publication.

According to the rules of the Common Customs Union all polymers of ethylene, etc, containing the total mass of copolymer chains of more than 5% refers to FEACN code 3901 90 900 0. Thus, copolymers of ethylene often include linear polyethylene containing a total mass of more than 5% of the copolymer chains of butene, hexene or octene. While linear polyethylene, FEACN code 3901 10 100 0, was not the subject to import duty.

This confusion in the legislation significantly complicates the activity of importers of linear polyethylene in Russia and led to additional costs for customs clearance. In particular, all imported goods under FEACN code 3901 10 100 0, had to be tested to confirm the content of the copolymer chains in the total mass of no more than 5%. And this in turn entailed additional expenses of importers (cash cover, down time, laboratory test services, etc.). The same imported product could be classified under different codes (any PE can have acceptable variation in key indicators).

Since 2011 the amount of linear polyethylene, which are classified as other polymers of ethylene (FEACN code 3901 90 900 0), grew steadily. Last year the imports of linear polyethylene under this code made about 11,100 tonnes, over 11 months of this year this figure rose to 24.300 tonnes.

After coming into effect of the decision of the Council of the Eurasian Economic Commission on 12October, 2012 N89 procedure of clearance of linear polyethylene should be simplified, first of all financially. The absence of import duties (FEACN code 3901 90 900 0 made 10%) should affect the cost of linear polyethylene in Russia. The decision was not published officially yet.

MRC