Sasol to delay decision on gas-to-liquids plant in Louisiana

MOSCOW (MRC) -- South African petrochemicals group Sasol on Wednesday said it would delay its USD8.1 billion investment in an ethane cracker in Louisiana, in response to low global oil prices, said Reuters.

In a statement, the company also said it would identify other opportunities to cut costs over the next 30 months.

A cracker converts ethane taken from natural gas into ethylene, the basic building block in the manufacture of plastics and chemicals. In October 2014, Sasol announced its final investment decision relating to the USD8.9 billion petrochemical complex, which consists of an ethane cracker that will produce 1.5 million tpy of ethylene. The complex will also comprise six chemical manufacturing plants, enabling infrastructure and utility improvements.

Sasol said it would still proceed with the construction of a smaller planned ethane cracker and plant, also slated for Westlake, that would produce ethane-based products, like plastics and chemicals. Sasol said that by moving forward on that smaller project it could reassess whether to go ahead with the bigger GTL investment. The ethane cracker and plant was estimated to cost between USD5 billion and USD7 billion.

The project’s size and scale had become a symbol of what many observers saw as a renaissance of American manufacturing. Many foreign firms, including European industrial giants, have been drawn to the U.S. in recent years by low energy prices, thanks in large part to an explosion in shale gas drilling.

The company said it expects to focus on saving additional cash by undertaking project phasing and reductions, capital restructuring, working capital improvements, margin enhancement and further fixed cost reductions. It didn’t disclose details and said cost savings would be laid out in March at the company’s first-half results.

Sasol Limited is an integrated energy and chemical company based in Johannesburg, South Africa. It develops and commercialises technologies, including synthetic fuels technologies, and produces different liquid fuels, chemicals and electricity.

MRC

MOSCOW (MRC) -- BP, Europe’s third-largest oil company by market value, will freeze employee pay in the latest example of cost cuts as the world’s top oil companies respond to plunging crude, as per Hydrocarbonprocessing.

The company "needs to take a number of measures in response to the harsh trading environment," CEO Bob Dudley said in a memo to staff Monday. "One of the measures we are taking is a general freeze to base pay for 2015, with only a few exceptions."

BP, which employs more than 80,000 people around the world, is the first global oil company to announce a pay freeze for staff.

Oil has slumped to under USD50/bbl, less than half the price six months ago, forcing producers to review spending on new projects, reduce staff and cut costs.

BP, which announces full-year earnings for 2014 next week, will review salaries as normal in 2016, Dudley said in the memo, the contents of which were confirmed by the London-based company’s press office.

As MRC reported earlier, in August 2014, BP, with a 20% stake in OAO Rosneft, the UK oil company with the single-biggest foreign investment in Russia, warned that more sanctions against the country could hurt its business.

BP is one of the world's leading international oil and gas companies, providing its customers with fuel for transportation, energy for heat and light, retail services and petrochemicals products for everyday items.
MRC

MOSCOW (MRC) -- PolyOne Corp. (POL) reported a fourth-quarter loss of USD14.6 million, after reporting a profit in the same period a year earlier, said the company in its press release.

The Avon Lake, Ohio-based company said it had a loss of 16 cents per share. Losses, adjusted for one-time gains and costs, were 52 cents per share.

The results missed Wall Street expectations. The average estimate of analysts surveyed by Zacks Investment Research was for earnings of 34 cents per share.

The maker of resins used in plastic pipe and other products posted revenue of USD869.3 million in the period, which also fell short of Street forecasts. Analysts expected USD903.2 million, according to Zacks.

For the year, the company reported profit of USD79.2 million, or 85 cents per share. Revenue was reported as USD3.84 billion.

PolyOne shares have dropped roughly 5 percent since the beginning of the year.

As MRC informed earlier, in February 2014, PolyOne Corporation announced the addition of new capabilities to its OnColor HC Plus portfolio. These expanded offerings add medical-grade LDPE, nylon, PEBA, PS and PVC to the globally available palette of specialty healthcare colorants, and are pre-certified to meet or exceed biocompatibility requirements for ISO 10993 and/or USP Class VI protocols.

PolyOne Corporation, with 2013 revenues of USD3.8 billion, is a global provider of specialized polymer materials, services, and solutions. PolyOne is a provider of specialized polymer materials, services and solutions with operations in specialty polymer formulations, color and additive systems, polymer distribution and specialty vinyl resins.
MRC

MOSCOW (MRC) -- Russian plants raised their spot prices for bottle grade PET chips by Rb2,000-3,000/tonne, including VAT, this week on the back of higher prices of imported material, according to ICIS-MRC Price report.

The spread of spot prices of Russian polyethylene terephthalate (PET) were announced to customers at Rb77,000-80,700/tonne CPT the central region. PET offer prices from plants' warehouses were at Rb77,000-78,500/tonne EXW, including VAT.

Despite the fact that PET prices in foreign currencies (US dollar and euro) have been falling in foreign markets, prices of imported European and Asian PET chips, including delivery to Russia, were much higher than the same grades of domestic material. The depreciation of the national currency was the reason for higher purchase prices of material.

According to MRC data, January PET quantities have been entering the market at USD1,080-1,180/tonne CIF Novorossiysk, excluding VAT. After the payment to the supplier at the current market exchange rate of the rouble as of 01/27/2015 (about Rb68 per USD1), payment of VAT and customs duty, prices will be at Rb90,100-98,500/tonne, excluding delivery to a converter's warehouse. At the same time, such quantities of material were scarce. Russian consumers significantly reduced their purchasing of material for January shipments on the back of the rouble devaluation and high inventories of finished goods in late 2014.

According to ICIS-MRC Price report, import prices of Chinese PET grades, including delivery to Novorossiysk, were at USD935-1,000/tonne CIF, excluding VAT. Import prices of Asian material were at USD890-930/tonne CIF port Vostochny.

MRC

MOSCOW (MRC) -- Last year's overall ethylene production in Russia decreased by 10.6% to 2.4 million tonnes. The reduced production was caused by a prolonged outage at Stavrolen, reported MRC analysts.

According to the Federal State Statistics Service of the Russian Federation, Russian plants produced 229,000 tonnes of ethylene in December, whereas this figure totalled about 221,000 tonnes in November. Thus, the total ethylene production fell to 2.4 million tonnes in 2014 versus 2.67 million tonnes a year earlier.

The main reason for lower ethylene production of Russian plants was the forced long shutdown at Stavrolen. We remind that the Budenovsk plant was forced to shut down its ethylene production with the annual capacity of 300,000 tonnes on on 26 February 2014 because of an accident.

Other Russian producers, on the contrary, increased their output of ethylene. Angarsk Polymer Plant accounted for the greatest increase in production. Nevertheless, the growth of capacity utilisation at other plants did not allowe to fully offset the outage at Stavrolen.
MRC