Chandra Asri to invest USD965 mln over next two years in 3 projects to expand facilitites and production

MOSCOW (MRC) -- Indonesia’s largest petrochemicals company Chandra Asri Petrochemical, has allocated USD965 mln over the next two years for three projects to expand facilities and boost production, as per Plastemart.

The Indonesian petrochem major has been granted a tax waiver facility as the government aims to strengthen the structure of the petrochemical industry from upstream to downstream in a bid to reduce the country’s dependence on imports, which reached USD8.5 billion in 2012. Under the government tax holiday facility, which waives corporate income tax for up to 10 years, Chandra Asri can pioneer petrochemical projects with a total value of over Rp 1 trillion (USD82 mln).

Chandra Asri’s investment plan’s first project, which costs USD150 mln, to construct a butadiene plant in Cilegon, Banten, is expected to be completed by the end of this year. The second project, estimated at USD380 mln, will expand its a new naphtha cracker plant’s production capacity by adding furnaces, as well as modifying the main equipment.

The naphtha cracker plant expansion will increase propylene production to 470,000 metric tons in 2015 from 320,000 metric tons currently, and ethylene to 860,000 metric tons from 600,000 metric tons. The construction of the new plant was initiated in Q4-2013 and will be completed in late 2015. The major will spend USD435 mln to build a new synthetic rubber plant, also in Cilegon, through a joint venture with France-based tire maker Michelin, named Synthetic Rubber Indonesia.

As MRC wrote previously, this summer, German petrochemical company Ferrostaal Industrial Projects GmbH and Jakarta-listed PT Chandra Asri Petrochemical agreed to work on studies for the development of a petrochemical plant. Under an agreement, Ferrostaal and Chandra Asri will develop a methanol-based olefin production complex in Teluk Bintuni in West Papua, with a total investment amounting to USD1.89 billion. The complex is expected to produce up to 400,000 tonnes of polypropylene and 175,000 tonnes of ethylene annually.
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MOSCOW (MRC) -- Formosa Plastics Corp (FPC) is likely to shut an acrylonitrile (ACN) plant for maintenance turnaround, said Apic-online.

A source in Taiwan informed that the plant is expected to be taken off-stream in early February 2014. Located in Mailiao, Taiwan, the pant has a production capacity of 280,000 mt/year.

As MRC wrote before, Formosa Plastics Group, will resume its large-scope investment in construction of manufacturing base of ethylene in Ningbo, eastern China following the decision of the Chinese government to ease restrictions on foreign investment in naphtha cracking in the mainland. The company, the group will resume the investment project by spending USD5 billion to set up the petroleum complex encompassing an ethylene plant with annual output of 1.2 million tonnes and factories of plastics in Ningbo.

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).
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MOSCOW (MRC) -- The giant Sakhalin-2 liquefied natural gas project off eastern Russian looks set to go from two to three trains after local gas monopoly Gazprom approved an expansion, according to Upstreamonline.

Gazprom boss Alexei Miller met with Peter Voser, chief executive of the other major partner in the project, Shell, in Moscow and discussed the deal, Reuters reported.

The pair agreed to recommend that the board of Sakhalin Energy discuss the design of the third train, something Shell has been for and Gazprom against for some time.

Japanese pair Mitsui and Mitsubishi are also partners in the project that as things stand is Russia’s only LNG export project.

As MRC wrote before, Gazprom is already building a gas liquefaction plant in Vladivostok, eastern Russia, to supply the Asia-Pacific region. Companies from Japan, a large consumer of LNG, are in talks on purchasing supplies from the facility.

Gazprom Neft, is the fourth largest oil producer in Russia and ranked third according to refining throughput. It is a subsidiary of Gazprom, which owns about 96% of its shares. The company is registered and headquartered in St. Petersburg after central offices were relocated from Moscow in 2011.
MRC

MOSCOW (MRC) -- SIBUR and Gazprom Neft have signed an agreement for construction of a new gas processing plant (GPP) with an annual associated petroleum gas (APG) processing capacity of 900 million cubic metres on the basis of existing Yuzhno-Priobskaya compressor station in the Khanty-Mansi Autonomous Area, said the producer in its press release.

The GPP is designed to have liquids recovery ratio at least of 95%, in line with global practices. The project will be implemented by OOO Yuzhno-Priobskiy GPP, a joint venture of Gazprom Neft and SIBUR (each having a 50% stake) and the owner of the Yuzhno-Priobskaya compressor station. Under the memorandum, Gazprom Neft will supply APG to Yuzhno-Priobskiy GPP on a long-term basis while SIBUR will pay for half of the volume. The partners plan to process APG and produce refined products pro rata their stakes in the JV. SIBUR will then sell its share of dry gas to Gazprom Neft and purchase Gazprom Neft’s share of NGLs. All the contracts, with price formula agreed, will be long-term.

Dry gas will be transported to the "Khanty-Mansiysk Gas Supply" gas transmission pipeline, while NGLs will be supplied to the pipeline connected to SIBUR’s Tobolsk production site. The GPP construction project will include setting up infrastructure to handle and store NGLs, and modernisation of the pipeline to deliver dry gas to the gas transmission pipeline.

As MRC wrote before, Gazprom Neft, a subsiduary of Gazprom, SIBUR will collaborate in the polymer road materials production and marketing. SIBUR will deliver styrene-butadiene-styrene (SBS) polymers to the facilities of Gazprom Neft. The materials are applied in the polymer-bitumen binders (PBB) manufacturing to improve the quality characteristics of the road surface and extend its service life. Moreover, the parties are ready to carry out a joint research to develop the utilization of road materials based on polymers, in particular, to work up SBS polymers brands.

SIBUR is a vertically integrated gas processing and petrochemicals company, which operate Russia’s largest gas processing business in terms of associated petroleum gas processing volumes and are the leader in the Russian petrochemicals industry.

Gazprom Neft is a vertically integrated oil company primarily engaged in oil & gas exploration and production (E&P), the sale and distribution of crude oil, and the production and sale of petroleum products.

MRC

MOSCOW (MRC) -- Carlyle Group and Vitol Group agreed to buy a 45 % stake in Germany’s Bayernoil refinery from OMV as they expand oil-processing, distribution and storage operations in northwestern Europe, said Hydrocarbonprocessing.

Carlyle and Vitol will acquire the plant as part of an investment in Varo Energy BV, OMV said in a statement on its website, without disclosing terms. The purchase, confirmed by the buyers, also includes a bitumen plant in Grossmehring.

OMV has looked to sell its Bayernoil stake since hiring Deutsche Bank AG to handle a divestment program in January 2012. The Austrian company is focusing on exploration and production as Europe’s refining industry struggles to maintain profits amid stagnant demand. For Carlyle and Vitol, they gain access to a 207,000 bpd plant as well as pipe and storage assets.

"The sale decreases OMV’s exposure to the downstream segment where there is higher volatility," Oleg Galbur, an analyst at Raiffeisenbank Centrobank, said by phone. The sale puts OMV’s restructuring program “ahead of schedule,” according to Galbur, who advises holding the stock.

"They’re betting on a sector that is currently under pressure, that has prices which are low," Galbur said. He estimated the probable transaction value at 400 million euros to 600 million euros, including inventory. The companies expect the deal to close next year.

As MRC wrote before, Clariant, a world leader in specialty chemicals, has announced that it has signed a long-term supply contract with OMV. From 2015, the Austrian oil and gas company will supply Clariant’s site in Gendorf (Germany) with ethylene. This agreement will enable Clariant to source most of its requirements for this important basic chemical in southern Bavaria.

OMV is an integrated international oil and gas company, headquartered in Vienna. OMV's main business is in Exploration & Production (E&P), Gas & Power (G&P) and Refining & Marketing (R&M). With group sales of more than EUR34 billion (2011) and a global workforce of around 30,000 (2011), OMV is the largest listed manufacturing company in Austria.
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