Carlyle-Vitol venture to buy Bayernoil refinery stake

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.
MRC

Moscow (MRC) -- Stavrolen (LUKOIL) shut production of polypropylene (PP) because of technical problems at the facility on 24 December, according to MRC analysts.

The production of high density polyethylene (HDPE) at the plant functions as normal.

According to unofficial information, the producer's PP facilities will be shut for three days.

This is the second shutdown of PP production at Stavrolen over the last two weeks. The producer shut its PP capacities on 17 December for three days.

Production capacity for polypropylene production at Stavrolen is 120,000 tonnes/year, for high-density polyethylene - 300,000 tonnes/year. Total production of PP and HDPE at Stavrolen was about 116,300 tonnes and 280,700 tonnes respectively.
MRC

MOSCOW (MRC) -- Imports of polyethylene (PE) into Belarus decreased by 4% over the first ten months of 2013. Reduced imports were registered in the low density polyethylene (LDPE) and linear low density polyethylene (LLDPE) markets, according to MRC DataScope.

According to the National Statistical Committee of Belarus, PE imports to Belarus decreased to 90,000 tonnes in January-October 2013 from 94,000 tonnes over the same period a year earlier. Demand for high density polyethylene (HDPE) increased, whereas demand for LDPE and LLDPE fell by almost a quarter.

The structure of PE imports looks the following way.

October HDPE imports to Belarus totalled about 4,700 tonnes, while this figure was 5,500 tonnes in September. HDPE imports into the country rose to 52,400 tonnes over the ten months of the year, up by 18.3% year on year.

The main HDPE suppliers are still Russian producers with the supply volumes of about 27,900 tonnes over the said period. The second and third places occupy PE producers from Saudi Arabia (Sabic) and Hungary (TVK) with supply volumes of 9,500 tonnes and 3,600 tonnes, respectively.

October LDPE and LLDPE imports grew to 4,300 tonnes from 3,900 tonnes in September. Imports of these PE grades fell from January to October of 2013 by 24.2% year on year and totalled 37,600 tonnes. The key suppliers of LDPE and LLDPE to Belarus are producers from Saudi Arabia and Russia with import volumes of 20,500 tonnes and 5,800 tonnes, respectively, over the stated period.
MRC

MOSCOW (MRC) -- Braskem, the largest petrochemical producer in the Americas and the world's leading biopolymer producer, and Genomatica, a US biotechnology company, have signed an agreement for the joint development of a new technology for the production of butadiene from renewable feedstocks, according to Braskem's statement.

Through this partnership, Braskem reaffirms its commitment to invest in the research of producing chemicals from renewable feedstocks, effectively strengthening its leadership role in this segment.

Braskem's objective with green butadiene is to primarily serve the synthetic rubber market, whose demand is currently met by naphtha-based butadiene, of which the company is already the world's third-largest producer. With the expectation of a recovery in global economic growth over the coming years, the company's forecast calls for growing demand for butadiene based elastomers by tire manufacturers, who are the largest consumers of butadiene.

Under the agreement, provided the results are successful, Braskem and Genomatica will build pilot and demonstration plants. The agreement gives Braskem certain exclusivity rights to the technology's use in the Americas.

"Braskem has a clear strategy for investing in the research and development of renewable based chemical technologies as alternatives to complement our current product portfolio based on petrochemicals. In 2010, we became the world leader in Biopolymers when we announced the production of plastic made from sugarcane, and we are now further reinforcing this vision," said Alexandre Elias, director of Renewable Chemicals at Braskem.

In addition to serving as a raw material for the tire industry, butadiene based materials are also used in home appliances, footwear, plastics, asphalt modifiers, oil lubricant additives, tubing, construction components and latex.

Butadiene produced by traditional technological routes has suffered a structural shortage in the Americas due to the growth of shale gas, which, unlike naphtha, generates almost no co-products.

As MRC wrote earlier, since September 2010, Braskem has produced polyethylene resin made from sugarcane ethanol on an industrial scale, which is a 100% renewable material. It invested RD500 million in the construction of a plant located in the Triunfo Petrochemical Complex in the South of Brazil with a capacity to produce 200,000 tonnes of green plastic annually.

Braskem's green plastic is a milestone in global innovation, making Brazil the leading producer of biopolymers in the world. Identified by the "I'm greenTM" seal, the green polyethylene developed in Brazil is used to make a wide range of food packaging and consumer goods.
MRC

MOSCOW (MRC) -- Favorable oil-to-gas price ratios driven by the production of natural gas from shale continue to drive a renewed US competitiveness that is boosting exports and driving greater domestic investment, economic growth and job creation within the business of chemistry, as per Hydrocarbonprocessing with reference to the Year End 2013 Chemical Industry Situation and Outlook, published recently by the American Chemistry Council (ACC) trade group.

Likewise, supported by activity within the domestic chemicals sector, the ACC says the US economy is likely to see continued, though moderated growth in 2014, according to ACC's monthly Chemical Activity Barometer (CAB).

"American chemistry is back in the game," said Dr. Kevin Swift, ACC's chief economist. "After a decade of lost competitiveness, American chemistry is reemerging as a growth industry. We're seeing growing end-use markets; strengthening employment; surging exports; and an influx of tremendous capital investment. Put simply, the US is now the most attractive place in the world to invest in chemical manufacturing."

Over the next five years, US production is expected to grow by almost 25%, pushing industry shipments to USD1 trillion by 2018. Over the next five years we are likely to see more than USD60 billion in domestic investment.

As MRC wrote previously, the ongoing shale revolution will guide the US ethylene industry surge in the near future, growing by more than a third by 2017. The estimated increased investments in the industry will see US ethylene capacity jump to 35.048 million tpy by 2017 - an increase of just under 35% (from 2000).
MRC