Kazakhstan picks Petrofac engineering consortium to expand petrochemicals

MOSCOW (MRC) -- Petrofac, an international service provider to the oil and gas industry, Linde and GS Engineering & Construction Corporation have been engaged by KLPE to provide services to the development of its Integrated Petrochemicals Complex and Infrastructure project, in the Tengiz and Karabatan regions of Kazakhstan worth up to USD3.58 billion in total, according to Hydrocarbonprocessing.

The first part of the contract is worth USD77 million, of which USD21 million is Petrofac's share, and will involve the consortium undertaking engineering work on an open book estimate.

Petrofac will lead the consortium for the execution of the Integrated Petrochemicals Complex and Infrastructure, or IPCI, project.

Subject to satisfactory conclusion of the open book estimate, and successful contract conversion, it is contemplated that the IPCI project will move into a second phase, in excess of USD3.5 billion, for a polyethylene plant comprising two streams each producing 400,000 tpa of product.

Eventual scope for the IPCI petrochemical project will include the engineering, procurement, construction and commissioning of a gas plant, ethane cracker, gas pipelines, polyethylene plants and associated utilities and offsites in the Tengiz and Karabatan areas.

We remind that, as MRC informed previously, South Korean petrochemical company LG Chem is planning to build an ethylene production plant in Atyrau, Kazakhstan. The project is going to be constacted in collaboration with two other Kazakh firms. The production is expected to begin in late 2016. LG projects that the plant will manufacture up to 800,000 tonnes of ethylene a year by injecting a USD4.2 billion investment into the complex.
MRC

MOSCOW (MRC) -- India's cabinet has approved state-run Hindustan Petroleum Corp.'s (HPCL) 372 billion rupee (USD6 billion) refinery and petrochemicals complex in the northwestern state of Rajasthan, reported Hydrocarbonprocessing with reference to Information and Broadcasting Minister Manish Tewari.

The 9 million tpy refinery will mostly draw upon crude supplies from Cairn India Ltd.'s oilfields in the state.

Hindustan Petroleum will own 74% of the project, while the Rajasthan state government will own the rest. The refinery, located in Rajasthan's Bamer town, is expected to go on stream in four years.

The project's clearance comes ahead of state elections in Rajasthan, due to take place toward the end of this year.

Besides, as MRC wrote previously, another major Indian petrochemical (polypropylene, polyethylene and polyvinyl chloride) producer Reliance Industries plans to expand capacity at its refineries in the western state of Gujarat. Last year, the company unveiled an USD18 billion investment plan for India over the next five years.

India imports three-fourths of its energy requirement but has one of the world's largest refining capacities. The country has also emerged as one the largest exporters of refined products in the world.
MRC

MOSCOW (MRC) -- Sistema JSFC, the largest publicly-traded diversified holding company in Russia and the CIS, has acquired a 98% stake (resulting in effective ownership of 100%) in OJSC United Petrochemical Company (UPC) from the Group's subsidiary JSOC Bashneft for RUB 6.2 billion, according the the company's press release.

The value of the stake is based upon an independent appraisal carried out by an international consultant.

UPC's development plans will be financed partly by its own cashflow, as well as debt financing and joint venture initiatives with leading international petrochemical companies.

Mikhail Shamolin, President and Chief Executive Officer of Sistema, commented: "This acquisition is a natural expansion of our energy investments. UPC is already one of the leading petrochemical producers in Russia with a reliable supply of raw materials from Bashneft's downstream operations and competitive production costs. Combined with Russia's increasing consumption per capita of petrochemical products, UPC provides Sistema with a solid entry into an attractive and growing sector.

UPC's development plans currently envisage organic growth focused on existing and new production lines, as well as commenced discussions with leading international petrochemical groups on possible joint venture opportunities".

UPC is a vertically integrated petrochemical group which owns four enterprises located in the Bashkortostan region: Ufaorgsintez, Tuimazinkoye and Shkapovskoye Gas Processing Plants and Bisphenol-A plant. In 2012, UPC generated a combined revenue of RUB 17.9 billion.

Ufaorgsintez is one of the leading petrochemical producers in Russia. Polypropylene and ethylene account for over 50% of its production line, while 90% of total sales are made to the domestic market. The company benefits from an established production chain with feedstock sourced from Bashneft's Ufa refineries, the Tuimazinskoye and Shkapovskoye Gas Processing Plants, which produce liquid petroleum gas and nafta from stable natural gasoline (SNG). As MRC informed previously, Ufaorgsintez has just announced an increase in contract polypropylene (PP) prices by Rb550-2,000/tonne amid strong demand and tight supply and an increase in contract low density polyethylene (LDPE) prices for the domestic market from 16 September by Rb1,000-1,550/tonne.
MRC

MOSCOW (MRC) -- Following a EUR50/tonne price increase on August 1st 2013, Arkema, a France-based chemical manufacturer, has announced a further EUR50/tonne price increase effective early September for its entire Evatane range - high content Ethylene Vinyl Acetate (EVA) copolymers, according to the company's press release.

Both price increases, amounting to EUR100/tonne over the August and September period, have become necessary following two consecutive months of raw material cost increases, while EVA market prices have significantly eroded since the beginning of 2013.

Marketed under the trademark Evatane, Arkema's EVA products are functional polyolefins used in highly diverse industrial applications, including hotmelt, cable, multilayer packaging film, technical polymer modification, solar panel, petroleum additives, bitumen and inks.

As MRC wrote previously, Arkema has recently declared a project to divest its tin stabilizer business to PMC Group, a New Jersey-based performance plastics and chemicals manufacturer. This planned divestment of organometallic products includes Fascat catalysts, Thermolite tin stabilizers and fine chemicals. Therefore, Arkema strives to refocus its activities on expanding core specialty businesses.

Arkema is a leading European supplier of chlorochemicals and PVC. Kynar and Kynar Flex are registered trademarks of Arkema Inc. Moody's Investors Service has upgraded Arkema S.A.'s senior unsecured rating to Baa2 from Baa3. The outlook on the rating was changed to stable from positive.
MRC

MOSCOW (MRC) -- Technology from Honeywell's UOP has been selected to produce key ingredients for fuels and synthetic rubber in China, reported Hydrocarbonprocessing with reference to officials' announcement.

China's Panjin Heyun New Material Co. will use UOP's C4 Oleflex process to produce isobutylene, a key ingredient for fuels and synthetic rubber. This is UOP's third C4 Oleflex license in China this year.

Panjin Heyun New Material Co. will also use UOP's Butamer process, which converts normal butane to isobutane, thereby maximizing the feedstock utilization to the Oleflex process.

Southeast Asia is the world's largest producer of rubber, and China is the largest consumer, accounting for 33% of the world's rubber consumption, according to a 2012 report. China's economy is expected to grow about 8% this year, further increasing the country's need for key materials.

"UOP technology is currently being used in China to produce about 5 million metric tons annually of key petrochemicals, and we look forward to working with Panjin to continue supporting the country's efforts," said Pete Piotrowski, senior vice president and general manager of Honeywell's UOP process technology and equipment business.

The new unit, which is expected to start up in 2014, will process approximately 400,000 tpy of isobutane feedstock at its facility in Liaoning Province, China. UOP will provide the engineering design, technology licensing, catalysts, adsorbents, equipment, staff training and technical service for the project.

As MRC informed previously, UOP LLC, a Honeywell company, has been recently selected to provide technology for the world's largest on-purpose propylene production facility, located on the U.S. Gulf Coast. Ascend Performance Materials Operations LLC will use Honeywell's UOP C(3) Oleflex process technology to convert propane to propylene, a key ingredient in the production of materials such as nylon, films and packaging. Petrochemical makers are installing additional propylene capacity to meet growing demand and to make up for the shortage of propylene production from traditional refining and petrochemical sources.

Besides, OOO Kirishinefteorgsintez selected Honeywell to supply its experion process knowledge system (PKS) and advanced alarm manager system at the company"s refinery in Kirishi, in the Leningrad region of Russia.
MRC