Badlands NGL to build new North Dakota ethane cracker and PE complex

MOSCOW (MRC) -- Badlands NGL has announced the development of a North Dakota manufacturing plant that will convert ethane, a by-product of natural gas processing, into polyethylene (PE), reported Hydrocarbonprocessing with reference to the announcement of the state governor's office.

Badlands NGL, LLC, and its partners expect to invest USD4 billion to build the PE manufacturing facility in North Dakota. The project will be the largest private investment in state history.

The value-added manufacturing plant will tap into North Dakota’s abundant supplies of liquid natural gas to source ethane. The facility will convert ethane gas to low-density and high-density plastics (LDPE and HDPE), which are used to make a wide range of end products for consumers and industry.

The facility will be able to produce 1.5 million tpy of polyethylene, or 3.3 billion lb/year, and will employ 500 highly trained people in manufacturing, marketing, administrative, safety, financial and executive positions.

The project will take at least three years for full development.

Badlands intends to market the majority of the polyethylene products domestically, but product will also find its way to markets in Asia, South America and Europe. Project developers say that the plant’s location in North Dakota will enable them to efficiently ship to world markets from the Pacific Northwest and from Atlantic ports.

"Badlands is proud to bring this manufacturing facility to North Dakota," said William Jeffrey Gilliam, CEO of Badlands NGL. "We are committed to maximizing the value of Bakken ethane for producers, their midstream partners and all gas processors. This facility is the solution needed to add value to North Dakota’s ethane supply and make it a commercially marketable product".

In developing the world-class manufacturing plant, Badlands is working with two strategic partners, Tecnicas Reunidas (TR), which is based in Madrid, Spain, as well as Vinmar Projects of Houston, Texas.

TR, one of the largest petrochemicals and polymers contractors in the world, is completing a preliminary engineering analysis for Badlands. This work is scheduled for completion in 2014 and will include technology evaluations, engineering and planning, and final site selection.

As MRC reported previously, in August 2014, Malaysia's Petronas awarded Tecnicas Reunidas (TR) a contract for the engineering, procurement, construction and commissioning (EPCC) for a refinery package in Petronas’ refinery and petrochemicals integrated development (RAPID) project in Pengerang, Johor. The EPCC scope includes all the hydrotreating units, catalytic reforming unit, hydrogen production units, saturated gas plant, interconnection and flare for the refi
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MOSCOW (MRC) -- Mexican oil company Pemex on Friday announced a third-quarter loss of more than USD4.3 billion, as well as a continued drop in production, said the company in its press release.

The USD4.32-billion loss was 52.5% greater than that registered in the same period a year earlier, according to a Pemex statement.

Pemex has seen huge losses since last year as its oil production has steadily dwindled.

In the third quarter, crude production averaged about 2.4 million barrels a day, which is 4.3% less than in the third quarter of 2013, a company executive, Luis Ramos, said in a phone call with investors.

A decade ago, production was at 3.4 million barrels a day. To boost energy production, the Mexican government has launched a sweeping overhaul of the energy sector, ending the 76-year-old state monopoly on oil drilling and reopening the sector to foreign companies.

Pemex, the world`s seventh-largest oil producer, announced losses of USD4 billion in the second quarter.

In 2013, total losses were USD12.8 billion.

We remind that, as MRC informed earlier, in Semtember 2013, Mexico's state-owned oil Pemex Petroquimica and Mexichem entered into a joint venture, which will enable greater competitiveness of the domestic petrochemical industry in the global market through the integration of a new company, which will create value to the chlorine-vinyl chain. The joint venture includes a cash investment and assets contribution up to the amount of USD518 million, in order to modernize the Pajaritos complex.

Pemex, Mexican Petroleum, is a Mexican state-owned petroleum company. Pemex has a total asset worth of USD415.75 billion, and is the world's second largest non-publicly listed company by total market value, and Latin America's second largest enterprise by annual revenue as of 2009. Company produces such polymers, as polyethylene (PE), polypropylene (PP), polystyrene (PS).
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MOSCOW (MRC) -- Sadara Chemical Company (Sadara), now building the largest chemical complex in the world ever constructed in a single phase, recently headlined the Gulf region’s first forum focused on ethylene: the Ethylene Middle East Technology 2014 (EMET) Forum, as per Saudigazette.

The forum, held in Manama recently under the patronage of Sheikh Ahmed bin Mohammed Al Khalifa, Finance Minister and Minister in Charge of Oil and Gas Affairs in Bahrain, brought together more than 450 ethylene players from around the region and the world, providing an ideal platform for sharing knowledge, best practices and experience in one of the most growth-oriented industries in the region.

Commenting on the event, Ziad said "the Middle East today accounts for almost 20 percent of global ethylene capacity compared to 12 percent a mere five years ago and is the world’s 3rd largest region for ethylene production. And it continues to grow. By capitalizing on the abundance of natural resources, cost effective feedstock pricing, strong regulatory and industrial infrastructure and close proximity to markets with growing demand for our products, we see plenty of opportunity to not only further develop the chemicals industry, but to specifically diversify Saudi Arabia’s role in it."

Ziad engaged four panelists in discussing the future of the industry in topics ranging from specific technical aspects of equipment being used, to operational reliability and future market trends.

He said "the Middle East, and specifically the GCC region, has many unique attributes that combine to make it the perfect hub of the global petrochemical industry. This conference has provided the petrochemical industry players including producers, service providers and customers with the perfect opportunity to meet, learn and collaborate to create future value in the ethylene industry."

As MRC wrote before, Sadara is building a world-scale, fully integrated chemicals complex in Jubail Industrial City 2, Kingdom of Saudi Arabia. The complex will be comprised of 26 manufacturing units, will possess flexible cracking capabilities and is expected to produce more than 3 million metric tons of high-value performance plastics and specialty chemical products. The first production units are expected to come on-line in the second half of 2015, with full production starting in mid-2016.

Sadara is a joint venture between the Saudi Arabian Oil Company (Saudi Aramco) and The Dow Chemical Company with a total investment of about USD20 billion.
MRC

MOSCOW (MRC) -- AkzoNobel has announced the EUR5 million divestment of its 50% share in non-consolidated joint venture Eka Synthomer Oy, to Synthomer, reported the company on its site.

The divestment of these shares follows a strategic review of the businesses within AkzoNobel's portfolio.

Commenting on the transaction, Niek Stapel, Managing Director of AkzoNobel's Pulp and Performance Chemicals business, said: "Following an earlier announcement about the intended divestment of our Paper Chemicals activities to Kemira, this deal completes our exit from the paper chemicals market.

"Divesting our holding in Eka Synthomer Oy will now allow us to focus on our strong chemical platforms, as well as our global leadership positions in bleaching chemicals, colloidal silica, Kromasil and expandable microspheres."

The Eka name will remain a core part of AkzoNobel's Specialty Chemicals business.

As MRC informed previously, in early July 2014, Finnish chemicals company Kemira announced it would buy rival Akzo Nobel's paper chemical business for EUR153 million (USD209 million).

Eka Synthomer Oy is a non-consolidated joint venture between AkzoNobel Pulp and Performance Chemicals and Synthomer from Germany. Based in Finland, it produces and sells styrene-butadiene latex products for the paper and board industry, mainly in Nordic countries.

Akzo Nobel N.V., trading as AkzoNobel, is a Dutch multinational, active in the fields of decorative paints, performance coatings and specialty chemicals. Headquartered in Amsterdam, the company has activities in more than 80 countries, and employs approximately 55,000 people.
MRC

MOSCOW (MRC) -- Sales of BASF Group grew by 3% compared with the previous third quarter, reaching EUR18.3 billion, as per the company's statement.

A sharp rise in volumes in the Natural Gas Trading business sector was mainly responsible for this growth. Income from operations (EBIT) before special items increased by EUR150 million to around EUR1.8 billion. The primary contributors to this development were the Chemicals and Oil & Gas segments, together with Other. The increase was dampened by a considerable earnings decline in the Agricultural Solutions segment.

"The economic environment remained challenging in the third quarter of 2014. Geopolitical tensions and increasing uncertainty about the global economic development significantly dampened demand for chemical products. Nevertheless, sales and earnings of BASF Group increased in the third quarter of 2014," said Dr. Kurt Bock, Chairman of the Board of Executive Directors of BASF.

EBIT grew by EUR128 million to EUR1.8 billion compared with the third quarter of the previous year. EBITDA rose by EUR30 million to EUR2.5 billion. Income before taxes and minority interests increased by EUR126 million quarter-on-quarter to EUR1.6 billion. Because of the higher tax rate and increased minority interests, net income declined by EUR53 million to EUR1.0 billion.

For the fourth quarter of 2014, BASF does not anticipate an upturn in demand. The company has adjusted its expectations for the global economy in 2014 as follows (previous forecast in parentheses): growth of gross domestic product: 2.3% (2.5%); growth in chemical production: 4.0% (4.4%).

Bock: "We assume that the environment will remain volatile and challenging. We nevertheless still aim to slightly raise our EBIT before special items for the year 2014." Sales are likely to decrease slightly as a result of the divestiture of the gas trading and storage business planned for this year in addition to negative currency effects.

At the telephone conference, the company gave an update on the "We create chemistry" strategy and the related financial targets for 2015, which were originally published in 2011.

From today’s point of view, BASF will not achieve its ambitious financial targets for 2015 (sales: EUR80 billion; EBITDA: EUR14 billion). The growth rates for gross domestic product, industry and chemical production for 2010 to 2015 are lower than originally expected:

BASF now expects the average annual growth of global gross domestic product to be about 0.8% points lower (prior assumption: 3.4% p.a., current assumption: 2.6% p.a.). Growth of industrial production is now assumed to be 3.4% p.a., versus a previous assumption of 4.6% p.a. The company now assumes the growth of chemical production to be 4.0% p.a. instead of 4.9% p.a. - still growing well above GDP and industrial production.

Bock: "The reasons for this weak global economic development are obvious: reduced growth dynamics of emerging markets and a delayed recovery in the European economy."

For 2015, BASF now expects sales and EBITDA to be in line with market expectations. For EBITDA, they are between EUR10 billion and EUR12 billion. As usual, the company will provide an outlook for 2015 at its Annual Press Conference on February 27, 2015, and give an update on its long-term targets.

As MRC reported earlier, in a bid to revive its diversification plan, India’s Essar Industries is in talks with Germany's BASF for a petrochemicals joint venture. The diversification plan had been put on hold for long, because of global factors and the company's high debt burden.

BASF is the largest diversified chemical company in the world and is headquartered in Ludwigshafen, Germany. BASF produces a wide range of chemicals, for example solvents, amines, resins, glues, electronic-grade chemicals, industrial gases, basic petrochemicals and inorganic chemicals. The most important customers for this segment are the pharmaceutical, construction, textile and automotive industries. BASF had sales of about EUR74 billion in 2013 and over 112,000 employees as of the end of the year.
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