Huntsman files suit alleging Rockwood color pigments fraud

MOSCOW (MRC) -- Huntsman last week filed a legal complaint in New York State alleging that Rockwood engaged in a "massive fraud" around technology in its color pigments division during discussions leading up to Huntsman’s USD1.1-billion acquisition of Rockwood’s pigments business, reported IHS Chemical Week.

The suit alleges that Rockwood deliberately misled Huntsman about the efficacy of a color pigments technology called "Bluebird," which “would eliminate reliance on Chinese raw materials and allow Huntsman to close numerous inefficient Rockwood pigment plants that Huntsman would receive in the deal," the complaint. The suit names Albemarle - which acquired Rockwood in 2015 - as one of the defendants, along with Seifi Ghasmi, the former Rockwood CEO who now leads Air Products, and several other former Rockwood executives.

"Huntsman has now learned that Rockwood’s representations and data were false and misleading," the court filing says. "Rockwood misrepresented pigments data to Huntsman and lied about the performance of the Bluebird technology, which Rockwood knew did not work." The legal complaint, which requests a jury trial, argues that Rockwood’s mischaracterizations constitute a violation of the companies’ purchase agreement for the pigments business, and it requests "to restore the parties to the status quo ante, or, to the extent that recession is not feasible, rescissory damages in an amount that will proven at trial."

The complaint alleges that Huntsman continued making deceptive statements about Bluebird in part because “Albemarle had told Rockwood in no uncertain terms that if Huntsman walked away from its pigments deal with Rockwood, Albemarle’s purchase would be jeopardized," and that Huntsman would not have made the deal had it known about the problems with the Bluebird technology. It does not allege that Albemarle had knowledge of the problems with Bluebird.

One analyst says that the suit could result in material damages. "In our admittedly non-legal opinion we believe Huntsman did not frivolously bring this lawsuit forward," says Frank Mitch, an analyst with Wells Fargo. "Therefore, we wouldn’t be surprised to see it recoup some sort of financial damages." The complaint notes that Albemarle acknowledged that performance issues with the Bluebird technology at a meeting between Albemarle and Huntsman last year.

As MRC informed before, in October 2014, Huntsman Corporation announced that it had completed the acquisition of the Performance Additives and Titanium Dioxide (TiO2) businesses of Rockwood Holdings, Inc. Huntsman paid approximately USD1 billion in cash and assumed certain unfunded European pension liabilities.

Huntsman Corporation is a publicly traded global manufacturer and marketer of differentiated chemicals. Huntsman is a global manufacturer and marketer of differentiated chemicals. The company's operating companies manufacture products for a variety of global industries, including chemicals, plastics, automotive, aviation, textiles, footwear, paints and coatings, construction, technology, agriculture, health care, detergent, personal care, furniture, appliances and packaging.
MRC

MOSCOW (MRC) -- India's Reliance Industries, owner of the world's biggest refining complex, will halt heavy naphtha exports in 2017/18 after the full-scale start-up of its 2.2 MMtpy paraxylene plant by end-March, four people with knowledge of the matter said, as per Reuters.

The plant, located in western Gujarat state, is currently operating at about 800,000 tpy capacity, and the rest of the project's capacity set to come on stream before the end of this financial year in March, one of the people said. The petrochemical is primarily used in polyester and polyethylene terephthalate (PET).

The main feedstock for paraxylene is heavy naphtha, a crude-based product which can also be converted into reformates, a blending component for high-octane gasoline.

At full capacity, Reliance's paraxylene plant would require 2.7 MMtpy of naphtha -- reducing the firm's ability to export the product and making it likely that the Indian conglomerate will have to resort to imports of heavy naphtha, the trade sources said.

The people declined to be identified because they were not authorized to discuss the matter publicly. Reliance did not immediately respond to Reuters' requests for comments.

Traders said they expect Reliance to import about two medium-range vessel size a month of heavy naphtha if they do resort to buying the product.

"Previously, Asia was not getting much heavy naphtha but these days, Russia is able to supply heavier grades of naphtha," said one Singapore-based trader.

While the short-term supply outlook for naphtha in general is tight in Asia due to India cutting back exports, refinery maintenance, outages and a lack of alternative feedstock to replace naphtha, the long-term view is that the feedstock will be in excess.

"The global market for naphtha will be over-supplied until at least 2020," IHS Markit said in a report, projecting global demand for naphtha (including natural gasoline) to be 1.18 Bt in 2017.

As MRC informed previously, in April 2015, RIL successfully put into operation two plants in Dahej, Gujarat, India. The first is a polyethylene terephthalate (PET) resin plant, which consists of two lines with a combined manufacturing capacity of 650 KTA. This is one of the largest bottle-grade PET resin capacity at a single location globally, and consolidates Reliance’s position as a leading PET resin producer with a global capacity of 1.15 MMTPA, the company said. PET resin from the new capacity would find application in packaging for water, carbonated soft drinks, pharmaceuticals and other food and beverages.

Reliance Industries Limited (RIL) is an Indian conglomerate holding company headquartered in Mumbai, Maharashtra, India, and is one of the world's largest producers of polymers (polypropylene, polyethylene and polyvinyl chloride). Reliance owns businesses across India engaged in energy, petrochemicals, textiles, natural resources, retail and telecommunications. Reliance is the second most profitable company in India, the second-largest publicly traded company in India by market capitalization and the second largest company in India as measured by revenue after the government-controlled Indian Oil Corporation.
MRC

MOSCOW (MRC) -- Repsol is developing a product for manufacturing a new type of polyol, polycarbonate polyol, which will partially replace its raw material, propylene oxide (a limited fossil resource) with the abundant and sustainable alternative, CO2, said Hydrocarbonpcocessing.

This means a considerable reduction in the emission of pollutants into the atmosphere and, consequently, lessening environmental footprint impact.

Repsol has worked together with selected customers who have manufactured products with this polyol. Additional advantages of this new polycarbonate polyol are that, it enhances certain properties of different CASE applications. For adhesives and elastomers, the improved features can be added adherence and elasticity compared with conventional polyols.

Repsol has already started production of its polycarbonate polyol in the pilot plant located in Puertollano, Spain. With this plant Repsol aims to produce polyol with a 20% of CO2.

"This is a step forward for a more ambitious project at industrial scale," the company said in a press release. "With this product, Repsol reinforces its commitment to innovation, sustainability and contributing to a better environment."

Repsol offers a portfolio of polyols with a wide range of alternatives to meet the specific needs of its customers.

As MRC informed earlier, Repsol had reached a deal to buy Talisman Energy, Canada"s fifth-largest independent oil producer, for USD13 billion.

Repsol S.A is an integrated Spanish oil and gas company with operations in 28 countries. The bulk of its assets are located in Spain.
MRC

MOSCOW (MRC) -- PetroRabigh has commenced the restart process at its polypropylene (PP) plant, as per Apic-online.

A Polymerupdate source in Saudi Arabia informed that the company has recently resumed operations at its plant and is expected to be fully operational by next week. The plant was shut on January 19, 2017.

Located in Rabigh, Saudi Arabia, the plant has a production capacity of 700,000 mt/year.

We remind that, as MRC wrote previously, in April 2015, Rabigh Refining & Petrochemical Co. (Petro Rabigh) received ownership of the Rabigh Phase II project from Saudi Aramco and Sumitomo Chemical, major shareholders in Petro Rabigh, and will now integrate the project into Petro Rabigh's existing refining and petrochemical complex in Rabigh, Saudi Arabia.

The Rabigh II project, expected to cost about USD 8.1-billion, involves expanding an existing ethane cracker and adding production of ethylene propylene rubber, thermoplastic polyolefins, methyl methacrylate monomer, polymethyl methacrylate, low-density polyethylene/ethylene vinyl acetate, paraxylene/benzene, cumene and phenol/acetone. Production facilities are expected to begin operations "one after another, beginning in the first half of 2016," Sumitomo said.

PetroRabigh, a joint venture between Saudi Aramco and Japan's Sumitomo Chemical, has an annual output capacity of 18 million tonnes of refined products and 2.4 million tonnes of petrochemicals. Thus, the complex currently has a cracker to produce 1.3-million t/y of ethylene and 900,000 t/y of propylene, as well as downstream production of polyethylene, polypropylene, propylene oxide, ethylene glycol and butene-1.
MRC

MOSCOW (MRC) -- A shift in the use of liquefied petroleum gas (LPG) to petrochemicals and away from transport has pushed demand for the fuel to new records in South Korea, after years of slumping consumption, a change which mostly benefits US suppliers, said Reuters.

South Korea mainly used LPG to power cars up to 2010, but sales started to spiral down as drivers of commercial vehicles, mostly taxis, began switching to other fuels such as diesel or gasoline. That forced South Korea's major LPG distributors, SK Gas and E1 Corp, to look to other sectors to offset revenue loss.

Last year strong demand for consumer plastics began to strengthen Asian petrochemical margins, and at the same time SK Gas started up a plant using LPG as a feedstock.

As petrochemical consumption in South Korea began jumping, and with LPG prices dropping to around 30% less than naphtha, demand recovered, shooting to its highest ever.

Analysts are expecting to see much the same this year. "We expect petrochemical consumption to support this year's LPG demand to stay similar to that of last year," said Ong Han Wee of energy consultancy FGE.

In 2016, LPG imports rose by almost a third compared to the previous year, to a record 7 MMt, according to data from the Korea National Oil Corp (KNOC), while total consumption rose to a record 9.4 MMt.

That came as prices for LPG, a mixture of propane and butane produced as a by-product of US shale gas, undercut naphtha. Both products can be broken down into the building blocks for the plastics used in packaging, toys, cars and clothing.

The average import price of naphtha in 2016 was $44.09 a barrel, whereas LPG cost $30.85 a barrel, KNOC data showed.

"As the largest single (LPG) exporting nation in the world, the US should get its proportionate share of the growth," said Ted Young, chief financial officer at US company Dorian LPG , which is the world's second-biggest LPG shipper.

Between 2015 and 2016, South Korea's US LPG imports more than doubled to about 3.4 MMt, according to KNOC, making up almost half its total LPG imports.

Last year around 4.3 MMt of South Korea's total LPG consumption was used in the petrochemical and industrial sectors, a jump of more than 70% from the previous year, according to KNOC data.

South Korea's record LPG use accompanied a near doubling of its petrochemical production to 3.3 MMt last year, up 87.8% from 2015.

Analysts expect South Korea's petrochemical production to hold near that level this decade, although JBC Energy's David Wech warned that use of LPG in the system likely "maxed last year."
MRC