Rosneft-led consortium plans to complete Essar acquisition next month

MOSCOW (MRC) -- A consortium led by Russian oil major Rosneft plans to finally complete its USD12.9 billion acquisition of India's Essar Oil next month, two Russian sources close to the deal told Reuters.

Acquiring the refiner will give state-owned oil Rosneft access to India, one of the world's fastest-growing energy markets. The deal was announced to fanfare in October but has still not closed.

The sources said the delay was due to the complexity of Essar's structure and financing, not to any issues relating to the buyers, who will buy 98% of Essar. Rosneft is under Western sanctions due to Moscow's role in the Ukraine crisis.

The deal, announced during a visit to India by Russian President Vladimir Putin, is now set to be completed on March 15, the two sources said. Rosneft will acquire a 49% share in Essar and another 49% will be shared between commodities trader Trafigura and Russian private investment group United Capital Partners (UCP).

The deal was structured to avoid the risk of Western sanctions, the chief executive of Russian bank VTB, which is involved in financing the deal, told Reuters last year.

Essar Oil operates a 400,000-bpd refinery in Vadinar on India's west coast and sells fuels through its 2,470 filling stations across the country.

Trafigura has said that VTB would co-fund Trafigura and UCP's 49% stake. Rosneft has said it may use its own funds, external financing or both to pay for its share.

One of the sources close to the deal said discussions about the management team at Essar were holding up completion of the deal, but did not elaborate.

The second source said that Essar's Indian creditor banks, who include State Bank of India (SBI), must approve a change of control at the company. The deal was also complicated by Essar's ongoing debt restructuring program, the source said.

"The process of receiving lender approvals, including SBI, for the transaction is underway. Sanctions provisions do not apply to the transaction," Essar said in emailed comments to Reuters.

A senior SBI official said the bank was on course to approve the deal, and did not see U.S. sanctions getting in the way, but did not give a timeframe.

VTB earlier agreed to provide Essar with up to USD3.9 billion for debt reconstruction.

In response to Reuters queries, Rosneft said it expected to close the deal in the first quarter of 2017. Trafigura gave the same timeframe, and said it was also replying on behalf of UCP.
MRC

MOSCOW (MRC) -- More than 100 of the coatings industry’s leading scientists are being brought together by AkzoNobel in a new EUR12.6 million research and innovation hub which could revolutionize the company’s portfolio, said the producer on its site.

Located in Felling in the UK, the facility will be home to teams of scientists and technical experts who will work on developing protective coatings for the energy, mining, infrastructure and oil and gas industries. The main focus will be on delivering cutting edge innovations and efficiencies for protecting steel and concrete structures from damage caused by corrosion, abrasion and fire.

The new innovation hub will also offer a world class testing and simulation facility, enabling tests to be carried out in conditions experienced in the world’s most extreme environments.

The facility is expected to be operational at the end of 2018. "Our work at the state-of-the-art lab will have an important impact on our most critical industries,” said Conrad Keijzer, AkzoNobel’s Executive Committee member responsible for Performance Coatings. “More than 100 top scientists and technical experts will be working on future solutions that will offer essential protection to a wide variety of products for our customers."

Added Greg Clark, UK Secretary of State for Business: "Having grown up in the north east of England, I am very aware of the strengths of the chemical sector in the region. AkzoNobel’s significant investment in establishing a new technical innovation hub is further proof that Britain is open for business and underlines the growth we want to see and support in our local economies. As we develop our industrial strategy, we are determined to build on the diverse strengths of all of Britain’s cities and regions."

MRC

MOSCOW (MRC) -- Jet fuel will be the most widely used product from Qatar's Ras Laffan Refinery 2 and a pipeline connecting it to Doha's Hamad International Airport is expected to be completed by next year, said Reuters, citing Qatar Petroleum chief executive Saad al-Kaabi.

Kaabi was speaking to reporters. The condensate refinery, in which Qatar Petroleum, France's Total and Japan's Marubeni Corp, Idemitsu Kosan, Cosmo Energy and Mitsui & Co hold stakes, began production towards the end of last year.

The refinery has a total processing capacity of 146,000 bpd and makes products such as jet-A1, naphtha and ultra low-sulfur diesel, according to Marubeni.

As MRC informed before, Qatargas plnned to start operations at its new Ras Laffan 2 condensate splitter by the end of October 2016, doubling the Gulf state's capacity to process condensate.
MRC

MOSCOW (MRC) -- Lotte Chemical Titan, a local petrochemical unit of South Korean conglomerate Lotte Group, plans to start construction of a USD4 bln naphtha cracker plant in Indonesia next year, as per Plastemart with reference to jakartaglobe.com.

The project, which has been delayed for three years due to land acquisition problems, will help Indonesia reduce expensive chemical imports, Industry Minister Airlangga Hartarto said.

The company plans to complete the front-end engineering design this year and start construction next year. The plant will have a capacity to produce 1 million tons of ethylene and 600,000 tons of propylene annually.

The facility will be located close to another that is owned by Chandra Asri Petrochemical - controlled by Indonesian tycoon Prajogo Pangestu's Barito Pacific and SCG Chemicals - which is currently being expanded to double its annual production capacity to 2 million tons of ethylene.

As MRC wrote previously, sround 40% of the total investment needed for the new plant would be taken from the company’s internal cash, while the rest would be from bank loans.

The Lotte Group currently has a presence in Indonesia via its subsidiary, Honam Petrochemicals, which acquired Malaysia’s polyolefin major Titan Chemicals in July 2010. Included in the acquisition was Titan’s Indonesian subsidiary - PT Titan Petrokimia Nusantara (TPN), which has a polyethylene (PE) production capacity of 450,000 tonnes/year.
MRC

MOSCOW (MRC) -- Indorama Ventures Public Company Limited (IVL) received the Distinction for its excellent sustainability performance and has been recognized as one of the top-scoring companies in the Chemical Industry globally, said the company on its site.

The Company has also been included in the 2017 edition of RobecoSAM’s Sustainability Yearbook, the world’s most comprehensive publication on corporate sustainability. This global recognition reaffirms IVL’s long-term commitment to sustainability and demonstrates excellent performance in the area of economic, environmental, social and corporate governance.

Each year, more than 3,000 of the world’s largest companies are invited to participate in RobecoSAM’s Corporate Sustainability Assessment (CSA). Inclusion in the Yearbook is limited to companies within the top 15% of their industry and must achieve a score which is within 30% of the best-performing companies in its industry.

As MRC informed earlier, Indorama Netherlands B.V., a 100%-owned subsidiary of Indorama Ventures Public Company Limited (IVL), has signed a share purchase agreement to acquire 100% equity stake of Polyplex Turkey from Polyplex Europa Polyester Film San. ve Tic. A.S, Turkey, a 100% owned subsidiary of Polyplex (Thailand) Pcl., and Polyplex (Asia) Pte Limited, Singapore.

Indorama Ventures is a leading producer in the polyester value chain in Thailand with strong global network and manufacturing across Asia, Europe and North America. Its products serve major players in diversified end use markets, including food, beverages, personal and home care, health care, automotives, textile, and industrial. The company’s main products are PTA, PET and polyester fibre, which are distributed across the world.
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