Output of products from polymers in Russia decreased by 12% in January

MOSCOW (MRC) -- The seasonal factor has led to cutbacks in the production of finished products made of polymers in January 2013, particularly in the construction sector, according to MRC analysts.

Lengthy New Year holidays and weak demand from end users in January led to a serious decline in the output of finished products from polymers in Russia. The total volume of production of plastic products decreased by 12% compared to December, 2012. However, when compared to January, 2012, the output turned out to be much higher.

As it was expected, the most significant decline in the output was recorded in the construction sector, namely, in the production of plastic windows and window sills. According to Rosstat, in January 2013 the total production volume of these products amounted to 993,000 square meters, down 39% from December 2012. In January 2012, this index made 810,000 square meters.

The output of plates, polymer nonporous (NP) and unreinforced films last month made about 47,000 tonnes, down 21% from December last year. In January 2012, this index made 46,300 thousand tonnes.

The production of plastic pipes and fittings in January fell to 37,700 tonnes, down 12% less from December. In January 2012, Russian companies produced about 40,000 tonnes of plastic pipes and fittings.

The output of bottles, flasks and similar articles from polymers amounted to 902 million units over the stated period, in December 2012, this index made 960 million units. 887 million bottles, flasks and similar articles made of polymers were produced in January 2012.
MRC

MOSCOW (MRC) -- Oman-based Saltic LLC FZE has formally launched work on its world-scale caustic soda and ethylene dichloride plant at Salalah Free Zone, reported Plastemart.

Site preparation works kicked off recently on a 35-hectare plot within the massive special economic zone adjoining the Port of Salalah, as per Oman Daily Observer.

South Korea's Hanwha Engineering & Construction Corporation is executing the project under an engineering, procurement & construction (EPC) contract awarded by the promoters last November. Salalah-based contractor, Al Ez Trading, Transport Cont Co, is undertaking the site works as part of the promoters' strategy to engage local firms in the implementation of the venture.

Saltic is investing an estimated USD500-600 mln in the development of a state-of-the-art petrochemical complex designed to produce 1,000 tonnes per day of caustic soda and 1,231 tonnes per day of ethylene dichloride (EDC). Both commodities are high-value intermediate products with extensive application in a variety of industrial processes.
All other statutory approvals, including the all-important environmental permit from the Ministry of Environment and Climate Affairs, have been obtained, say officials. Project completion is targeted during Q4-2014, with commissioning slated for Q1-2015.

When operational in 2015, the project will add to a growing cluster of large-scale petrochemical schemes at the free zone, currently comprising a methanol plant run by Salalah Methanol Company, and a giant PET complex owned by OCTAL Petrochemicals.

Caustic soda, one of two principal products of the Saltic plant, has extensive application in a number of industrial processes involving the manufacture of textiles, detergents, pulp and paper, and drain cleaner products, besides potable water production.

Ethylene dichloride (EDC), on the other hand, is used for manufacturing vinyl chloride monomer (VCM), which is the key raw material for producing polyvinyl chloride (PVC).
MRC

MOSCOW (MRC) -- UK-listed oil and gas giant BP Plc won approval of an agreement for the U.S. government to not count 810,000 barrels of oil captured before they became part of the 2010 Gulf of Mexico spill, reducing the potential maximum fine under the Clean Water Act by USD3.4 billion, according to Bloomberg.

The company said it believes the US government's estimate that 4.9 million bbl of oil were spilled in the Gulf of Mexico during the incident is overstated by at least 20% and includes another 810,000 bbl of oil that BP captured from the leaking well, thus never making contact with the environment.

The collected oil "never came into contact with any ambient seawater and was not released into the environment," U.S. District Judge Carl Barbier in New Orleans said in an order yesterday, less than a week before trial over the spill begins.

Bob Dudley, chief executive officer of BP Plc, discusses the outlook for its civil trial related to the 2010 Gulf of Mexico oil spill scheduled to start Feb. 25 in New Orleans, the hostage attack at its natural-gas facility in Algeria, dividend policy and acquisition strategy. He speaks in London with Bloomberg Television's Ryan Chilcote.

Under the U.S. Clean Water Act, polluters face a penalty ranging from USD1,100 to USD4,300 for each barrel spilled, depending on a variety of factors, including whether the polluter acted in a grossly negligent or reckless manner in causing the spill.

Yesterday’s agreement reduces BP’s potential maximum civil pollution fine from about USD21 billion to about USD17.6 billion, depending on whether the company is found at the trial beginning next week to have been grossly negligent.

"We firmly believe we were not grossly negligent," BP said.

We remind that, as MRC wrote previously, in late 2013 the US government temporarily blocked BP from obtaining new contracts on a "lack of business integrity" that resulted in the Deepwater Horizon oil spill. The suspension will prevent the company from buying new oil-drilling leases or other government contracts until the company can provide sufficient evidence that it meets federal business standards. The move has an immediate impact on BP.

BP is one of the world's leading international oil and gas companies, providing its customers with fuel for transportation, energy for heat and light, retail services and petrochemicals products for everyday items.
MRC

MOSCOW (MRC) -- Saudi International Petrochemical Company (Sipchem) is expected to launch production at its upcoming ethyl acetate (etac) facility in Jubail on 15 April, reported Saudi Gazette.

The etac /butyl acetate (butac) swing plant with a nameplate capacity of 100,000 tpa is located in Jubail Industrial City.

The etac and butac produced from the plant will be used as solvents in manufacture of inks, industrial solvents and as granules in surface coatings, market sources said.

The acetic acid feedstock for the plant will be obtained from Sipchem’s affiliate, the International Acetyl Company, while ethanol will be imported from international markets, according to a press release on the company’s website.

The ethyl acetate (etac) market in the Middle East is expected to see a dynamic shift with the start-up of Sipchem’s facility.

We remind that, as MRC informed previously, in December, 2012, Sipchem launched the construction of its ethylene vinyl acetate (EVA) films project in Hail Industrial City. The SR 120 million project will manufacture 4,000 tpa of EVA films. The project will be financed by the company and other local backers and is expected to be operational by Q3-2013.
MRC

MOSCOW (MRC) -- SIBUR and Tosol-Sintez have signed an agreement on the sale of coolants and brake fluids facilities located on the former Kaprolaktam plant site in Dzerzhinsk, according to SIBUR's press release.

The projected annual capacity of the facilities is 46,000 tonnes of coolants and 22,800 tonnes of brake fluids.

SIBUR has worked with Tosol-Sintez in the technical fluids segment since 2001, in particular, by selling it monoethylene glycol, which is used in the production of coolants and brake fluids. System fluids are the core products marketed by Tosol-Sintez.

As agreed between SIBUR and the new owner of the former Kaprolaktam facilities, after their shutdown the staff will be transferred to Tosol-Sintez, the latter becoming a resident of the Oka-Polymer industrial park as a system fluid production facility.

Previously, Kaprolaktam's ethylene chlorohydrin units were sold to another strategic investor – Kazan Synthetic Rubber Plant. SIBUR is transferring the assets to their new owners as part of the phased process of the Kaprolaktam chlorine production shutdown and conversion of the site into an industrial park.

The Oka-Polymer industrial park is a subsidiary of SIBUR established to facilitate the transformation of the former Kaprolaktam site into a technology park.

Tosol-Sintez is a leader in the domestic market of internal combustion engine coolants (antifreezes) and other system fluids. The company's dealer chain covers several regions of Russia and foreign countries.

SIBUR is a vertically integrated gas processing and petrochemical company with a business model focused on two key segments. The company holds and manages Russia's largest associated petroleum gas (APG) assets (according to IHS CERA), dominating the Russian petrochemical market.
MRC