Ineos joins search for shale gas in Scotland

MOSCOW (MRC) -- Ineos has bought rights to explore for shale gas in the area surrounding its Grangemouth refinery complex in Scotland, in the petrochemicals giant's debut move into the fracking industry, said Telegraph.

The company, which requires gas and gas by-products to run the plant, said on Monday that it had bought a 51pc stake in the shale section of the PEDL 133 licence area from BG Group for an undisclosed sum.

The licence covers 127 square miles in the Midland Valley, spanning the Firth of Forth and including Grangemouth, Falkirk and much of Stirling.

The remaining 49pc of the shale section is owned by Dart Energy, which is in the process of being taken over by fracking firm IGas Energy.

No shale gas exploration has so far taken place in the area, but Dart estimates it could contain 4.4 trillion cubic feet (tcf) of gas. If 10pc were recoverable, estimates suggest it could provide enough gas to meet Scotland's needs for more than a year.

As MRC wrote before, Ineos Compounds and Doeflex Compounding received the green light for the merger of their polyvinyl chloride (PVC) compounding businesses from the European Commission. The combined business, once completed, will create a leading PVC compound manufacturer, with a turnover in excess of EUR200m and production sites in the UK, Sweden and Switzerland.

Ineos Group Limited is a privately owned multinational chemicals company consisting of 15 standalone business units, headquartered in Rolle, Switzerland and with its registered office in Lyndhurst, United Kingdom. It is the fourth largest chemicals company in the world measured by revenues (after BASF, Dow Chemical and LyondellBasell) and the largest privately owned company in the United Kingdom.
MRC

MOSCOW (MRC) -- US propylene supplies are expected to return to levels not seen since 2006, but the increase in the feedstock supply won’t come close to meeting the global demand for polypropylene during the next decade, according to Hydrocarbonprocessing.

Shale gas exploration has given the US an opportunity to enter the on-purpose propylene market in a big way.

While much of the propane dehydrogenation (PDH) announcements were designed to offset the lost propylene production from refineries and crackers that have switched to the lighter ethane feedstock, we will face a potential oversupply of propylene in the near future.

However, the oversupply will eventually be absorbed by increasing global demand for PP. Globally, it’s estimated there is a need for nearly 18 million tons of new PP capacity by 2024. Most of the demand will be created in China, and much of the new PP production capacity is expected to be built in Asia. Producers in China have announced plans to add more than 3 million tpy of PP capacity on-stream.

At the same time, there are 16 PDH plants being planned in China, which would produce more than eight million mt of the feedstock propylene annually. Of these, eight have already announced they will be using propane sourced from the US. The US is positioned to capitalize on the PP shortages in two ways. US-produced plastic, made from inexpensive shale-based propane, can be exported globally. Or, if other regions – particularly Asia – prefer to produce domestically, US-produced natural gas liquids (NGLs) will be exported to feed those units.


MRC

MOSCOW (MRC) -- Russia's output of finished goods from polymers increased by 9.6% over the first seven months of 2014. The construction sector still demonstrated negative figures, reported MRC analysts.

Production of main products from polymers in Russia increased significantly in July under the pressure of seasonal factors, which affected the final figures. Thus, the output of key products from polymers rose by 8.6% from January to June 2014, while this figure grew by 9.6% from January to July 2014. Nevertheless, the construction sector showed the negative result.

According to the Federal State Statistics Service of the Russian Federation, July production of unreinforced and non-combined films rose to 112,000 tonne (99,600 tonnes in June). Thus, Russia's ouput of these products totalled about 611,700 tonnes from January to July 2014, up by 26.2% year on year.

Last month's output of plates and sheets reached 19,300 tonnes (19,000 tonnes in June). Production of these products by Russian companies reached 125,500 tonnes over the stated period, up by 3.6% year on year.

July production of plastic pipes, hoses and fittings rose to 56,000 tonnes on the back of seasonal factors (48,700 tonnes in June). The overall output of these products reached 302,600 tonnes over the first seven months of 2014, down by 10.3% year on year.

Last month's output of plastic windows and their frames and sills increased to 2.9 million square meters (in June - 2.1 million square meters). Production of plastic windows and window sills totalled 13.5 million square meters from January to July 2014, down by 6.8% year on year.
MRC

MOSCOW (MRC) -- Russia increased its production of polyimide 6 (PA 6) from January to July 2014 by 9.4% year on year to 85,200 tonnes, according to MRC ScanPlast report.

Russia produces PA 6 for processing yarns and fibers, as well as, for compounding. The produced products are mainly supplied to foreign markets, as Russia does not require such quantities. The main consumers are the countries with well-developed light industry: India, China, Turkey.

Russia produces monthly 12,000 tonnes of PA 6, of which about 70% are exported. The needs of the Russian market in PA 6 for the textile industry are 2,000-3,000 tonnes per month.

According to Rosstat, production of Russia's textile and clothing industries rose by 98.7% in July 2014 year on year and by 106.0% from January to July 2014.

KuibyshevAzot is Russia's major producer and exporter of PA 6. The plant's annual production capacity of original PA was 135,000 tonnes in 2013. To date, it reached 150,000 tonnes. One of the plant's strategic objectives is providing domestic converters with affordable material of high quality.

MRC

MOSCOW (MRC) -- Shares of LyondellBasell Industries clocked a new 52-week high of USD110.67 on Aug 15, exceeding its previous high of USD110.49, said Zacks.

The stock pulled back a bit to end the trading session at USD110.60 on that day. The chemical giant, which has a market cap of around USD57 billion, has seen its shares rise roughly 40% so far this year, outperforming a roughly 7% rise in the S&P 500 for the period. Average volume of shares traded over the last three months is around 2,795.7K. The company’s long-term projected EPS growth is around 10.7%.

LyondellBasell’s profit for second-quarter 2014, reported on Jul 25, jumped around 27% year over year as it saw gains across all segments, especially the Olefins & Polyolefins – Americas division. Both revenues and earnings for the quarter comfortably beat Zacks Consensus Estimates. The company expects strong production of oil, natural gas and natural gas liquids (NGLs) in the U.S. to support margins going forward.

LyondellBasell, which emerged from Chapter 11 bankruptcy in 2010, continues to benefit from favorable North American natural gas environment and is executing its expansion projects to leverage the U.S. NGLs advantage.

LyondellBasell remains on track with its ethylene expansion projects. The company’s multi-plant ethylene expansion program, which started last year, represents a total investment of roughly USD1.3 billion across its Channelview, La Porte and Corpus Christi facilities which benefit from shale gas production. The expansion program, when in full swing, is expected to expand annual ethylene capacity by an estimated 1.85 billion pounds for an aggregate projected capacity of 11.8 billion pounds in North America.

LyondellBasell’s methanol plant at Channelview, TX (restarted in fourth-quarter 2013) along with its other major debottleneck projects (including expansion at La Porte) are expected to bring in new capacity at considerably lower cost than building new facilities. LyondellBasell expects to start production from the La Porte ethylene expansion project in the third quarter.

That said, LyondellBasell is exposed to volatility in raw material and energy costs and a still challenging European market.

As MRC wrote before, LyondellBasell Industries posted second-quarter earnings that topped analysts’ estimates as margins widened on higher prices. Net income was USD2.23/share, compared with USD1.61 a year earlier, London-based LyondellBasell said in a statement Friday. Income from continuing operations was USD2.22, which exceeded the USD1.92 average estimate of 18 analysts compiled by Bloomberg. Sales were USD12.1 billion, compared with USD11.1 billion a year earlier, beating the USD11.5 billion average estimate.

LyondellBasell Industries NV is a manufacturing company. The Company produces chemicals, fuels, and polymers used for packaging, clean fuels, durable textiles, medical applications, construction materials, and automotive parts. LyondellBasell Industries operates globally and is headquartered in the Netherlands. LyondellBasell is also a leading licensor of polypropylene and polyethylene technologies. The more than 250 polyolefin process licenses granted by LyondellBasell are twice that of any other polyolefin technology licensor.
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