Cheap US gas drives Formosa Plastics expansion

MOSCOW (MRC) -- Formosa Plastics is seeking United States permits for a USD2 billion expansion of its Texas operations as cheaper natural gas prices make US production more competitive, said Hydrocarbonprocessing.

The company asked federal and state environmental regulators to approve plans for an ethane cracker unit and downstream derivatives, Formosa Plastics Vice Chairman Susan Wang said in an interview. She is visiting the United States as part of a business delegation led by former Taiwan Vice President Vincent Siew.

The investment is bigger than was previously planned by Formosa Plastics as of February 2012, when it said it would spend USD1.7 billion to build two factories and a polyethylene plastics plant in Texas.

One of the business delegation’s key aims is shoring up United States support for Taiwan’s participation in the proposed Trans-Pacific Partnership, a regional trade deal the will cover the United States and 11 other nations, an area with about USD28 trillion in combined annual economic output. Taiwan is seeking to join the talks, which don’t include China.

Formosa Plastics’s Wang said the Taipei-based company expects to receive the environmental permits for an expansion at its Point Comfort facility, about 200 km southwest of Houston, sometime within the next year. Construction can begin immediately thereafter, she said.

Environmental regulations in the United States are "quite reasonable," Wang said. The hurdles in Texas are a shortage of skilled labor, due to the number of competing facilities that need workers, and the relatively high cost of shipping products by rail in the United States, she said.

In the US, the group owns petrochemical plants, plastic processing facilities and natural gas wells. Last year, it applied to boost capacity in two Texas chemical plants.


Wang said Formosa Plastics is "at a crossroads" in determining whether to build or invest in an ethylene plant in China. Taiwan last month lifted the ban on investing in Chinese ethylene plants, also known as “naphtha crackers” for the use of the petroleum distillate naphtha. China has yet to ease its rules on ethylene investments across the Taiwan Strait.

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. Among the company"s chemical products are paraxylene (PX), phenyl ethylene, acetone and pure terephthalic acid (PTA). The company"s plastic products include acrylonitrile butadiene styrene (ABS) resins, polystyrene (PS), polypropylene (PP) and panlite (PC).
MRC

МОSCOW (MRC) -- Russian lawmakers voted to end state-controlled OAO Gazprom monopoly on exports of liquefied natural gas (LNG) as competitors plan to build plants to produce the chilled fuel, said Hydrocarbonprocessing.

The bill was passed in the last two of three readings by lawmakers in the lower house of parliament on Friday. Once signed into law, it will allow OAO Novatek and OAO Rosneft to ship tankers of the fuel to foreign markets as Russia seeks to double its share of the global LNG market by 2020.

President Vladimir Putin in June called for the gas export laws to be eased to take advantage of a window in the Asia- Pacific market before supplies begin from the US, Australia and Africa. Since Putin granted Gazprom the exclusive legal right to ship gas abroad in 2006 to avoid undermining export prices, the monopoly hasn’t started building any LNG capacity.

"To remain competitive on global gas markets, Russia needs to add an LNG component to its export strategy," Ildar Davletshin, an analyst at Renaissance Capital in Moscow, said today by phone. "If you look at the project pipeline in Australia and East Africa, Russia risks losing out."

The draft law will grant access to LNG exports to those companies developing fields with licenses that stipulate the gas is intended for LNG as well as state companies producing from offshore blocks, and could take effect as soon as Dec. 1, according to a copy on the website of parliament’s lower house, the State Duma.

After the president signs the law, Novatek will have control over exports from the USD20 billion Yamal LNG project that it’s developing with Total SA and China National Petroleum Corp.

The gas producer, controlled by billionaires Gennady Timchenko and Leonid Mikhelson, plans to send its first commercial shipments in the first half of 2017, Yamal LNG Marketing & Shipping Director Gabriel Brecque said in Paris on Nov. 20.

State-controlled Rosneft and ExxonMobil are planning to start an LNG plant with capacity of 5 million metric tons on Sakhalin Island in the Pacific by the end of the decade.

Russia aims to produce at least 40 million tpy, or more than 11% of the world’s LNG, by 2020 -- up from about 5% now, Deputy Energy Minister Kirill Molodtsov said at a September conference on Sakhalin, where Gazprom bought into the country’s only plant for the fuel in 2006. The plant began output in 2009.

MRC

MOSCOW (MRC) -- M&G Chemicals, a leading producer of PET for packaging applications in the Americas and the market's technological leader, plans to invest in a biorefinery in China that will make PET building block ethylene glycol from straw, as per Plastemart.

M&G of Tortona, Italy, part of the Mossi Ghisolfi Group, will build the biorefinery in Fuyang, in Anhui province with Chinese company Guozhen as partner. The biorefinery will process 2.2 bln lbs of straw annually.

In addition to ethylene glycol it will make ethanol and byproduct lignin will fuel an electric cogeneration plant. The plant will use enzyme technology supplied by Beta Renewables a company partly owned by Mossi Ghisolfi Group.

M&G estimates the biorefinery will cost about USD500 mln and be on stream in mid-2015. Beta Renewables recently started up a biorefinery in Crescentino, Italy.

"This is the first act of a green revolution that M&G Chemicals is bringing to the polyester chain to provide environmental sustainability," noted M&G Chemicals CEO Marco Ghisolfi in a news release. He cited growing demand for sustainable materials as evidenced by Coca-Cola Co.’s aim to use partially plant-based PET in all its bottles by 2020.

M&G plans to raise about USD500 mln in an initial public offering on the Hong Kong exchange by the end of the year.

We remind that, as MRC reported earlier, last September, M&G Group, announced that it had purchased the land in Corpus Christi, Texas where it will build its one million tonnes per year PET plant (2.2 billion pounds) and accompanying 1.2 million tonnes per year (2.6 billion pounds) PTA plant.

M&G Group is a family owned chemical engineering and manufacturing group headquartered in Tortona, Italy. M&G Group operates in the PET resin industry through its wholly-owned holding company Mossi & Ghisolfi International S.A. (M&G International). M&G International is one of the largest producer of PET resin for packaging applications in the Americas, with a production capacity in 2012 of approximately 1.6 million tons per annum.
MRC

MOSCOW (MRC) -- Showa Denko is in plans to shut a steam cracker for maintenance turnaround, said Apic-online.

A source in Japan informed that the cracker is likely to be shut in mid-March 2014. It is planned to remain off-stream for around one month.

Located in Oita, Japan, it has an ethylene capacity of 695,000 mt/year and propylene capacity of 425,000 mt/year.

As MRC wrote before, Showa Denko and KH Neochem Co., Ltd. have agreed to dissolve their joint venture, Japan Ethyl Acetate Co., Ltd. (JEA). JEA was established in August 2003 for the purpose of strengthening the foundations of the two parent companies' ethyl acetate businesses. JEA began commercial production in April 2004.

Showa Denko K.K. is mainly engaged in the petrochemical business. The Petrochemical segment manufactures and sells olefin, organic chemicals and others. The Chemical Product segment supplies chemicals, industrial gases, special gas and functional drug for semiconductors, functional high molecular materials, among others.
MRC

MOSCOW (MRC) -- Sinopec Maoming Co. has selected Honeywell to rejuvenate and improve the operational performance of aging petrochemical plants in China’s Guangdong Province, reported GV.

Honeywell said its Profit Suite R400 process optimization software will be deployed at two of Maoming’s ethylene crackers, "helping to improve plant performance by increasing energy efficiency, improving flexibility of its operations, and maximizing the plants’ yield of high-value products."

The two plants have been operating for more than 50 years and currently produce 1-million t/y of petrochemicals, Honeywell noted.

Maoming Co. Deputy Chief Engineer He Lijian added: "We want to establish this project as a benchmark for other similar facilities within the Sinopec Group. Using this Honeywell solution, Maoming Co. is expecting an increase in production that would improve our profitability by more than USD 6-million per year."

As MRC wrote previously, this summer, Sinopec officially commenced operations at its new lubricant facility in Singapore. The lubricant plant, with an initial production capacity of 100,000 tpy, is the company's first direct overseas investment.

Sinopec Maoming Petrochemical Company (Maoming Company) - a subsidiary of Sinopec- is located in Maoming, Guangdong and was founded in May 1955. The company now has a crude oil processing capacity of 13.5 million t/a and an ethylene production capacity of 1 million t/a. Maoming Company has turned out to be a large-scale integrated refining and chemical enterprise with refining as the leading business and petrochemical sector as the mainstay.

China Petroleum & Chemical Corporation, or Sinopec Limited is a Chinese oil and gas company based in Beijing, China. It is listed in Hong Kong and also trades in Shanghai and New York . Sinopec is the worlds fifth biggest company by revenue.
MRC