Clariant halts strategic update pending talks with SABIC

MOSCOW (MRC) -- Clariant, a world leader in specialty chemicals, has halted plans to issue an update of its strategy after an activist investor sold its 25 percent stake in the Swiss speciality chemicals maker to Saudi Basic Industries Corp (SABIC) last month, reported Reuters.

Clariant had said in November it would issue the update after U.S.-based investment vehicle White Tale demanded three Clariant board seats and called for an independent review of the Swiss firm by an investment bank.

The update, which Clariant intended to deliver in early 2018, was to cover merger and acquisition (M&A) activities, short-term portfolio management options, returns to shareholders and cost structures. But Chief Executive Hariolf Kottmann's plan is now on hold until he learns more during upcoming meetings with SABIC, now the largest Clariant shareholder.

"We have a completely new situation," a Clariant spokesman said on Friday. "The strategic update started immediately, but now it does not make sense to proceed with something that was started under completely different circumstances." Clariant executives have had informal talks with SABIC managers but have yet to have a formal meeting on strategy.

Last year, White Tale, whose principals included hedge fund Corvex's Keith Meister, succeeded in scuttling Clariant's planned $20 billion merger with U.S.-based Huntsman after amassing a roughly USD2.4 billion stake in the Swiss company. SABIC has not outline its objectives after buying White Tale's stake for an undisclosed sum in late January.

Middle East energy firms have been keen to expand into more advanced chemical operations, such as the catalysts that Clariant produces. SABIC, 70 percent owned by Saudi Arabia’s sovereign wealth fund, has long been a Clariant customer. SABIC and Clariant have a U.S. joint venture, Scientific Design, which in 2016 generated revenue of 79 million Swiss francs (USD84.17 million). Clariant's total 2016 sales were 5.8 billion francs. Clariant releases 2017 results on Wednesday.

As MRC informed before, in March 2017, Clariant announced that it had been awarded a contract by Dongguan Grand Resource Science & Technology Co. Ltd. to develop a new propane dehydrogenation unit in cooperation with CB&I. The project includes the license and engineering design of the unit, which is to be built in Dongguan City, Guangdong Province, China.

Clariant AG is a Swiss chemical company and a world leader in the production of specialty chemicals for the textile, printing, mining and metallurgical industries. It is engaged in processing crude oil products in pigments, plastics and paints. Clariant India has local masterbatch production activities at Rania, Kalol and Nandesari (Gujarat) and Vashere (Maharashtra) sites in India.
MRC

MOSCOW (MRC) — Japanese oil refiners Idemitsu Kosan and Showa Shell Sekiyu have started work to integrate the so-called loading programs through which they purchase crude, Idemitsu's CEO said, said Hydrocarbonprocessing.

The two companies expect to finish this loading integration in the second-half of 2018, Idemitsu CEO Takashi Tsukioka told reporters on the sidelines of an industry event to mark the New Year.

Idemitsu said last month that it and Showa Shell would combine management of their key businesses, pursuing a merger bitterly opposed by a core investor—Idemitsu's founding family.

Japan's second- and fourth-biggest refiners by sales aim to win over Idemitsu's founding family by showing successful examples of "synergies" between the two companies, Tsukioka said.

He added that Idemitsu was "not considering taking forceful measures for integration without gaining the founding family's understanding."
MRC

MOSCOW (MRC) -- The burst of major petrochemical capital projects in the U.S. and around the world in the past few years is potentially entering a second wave, as per Hydrocarbonprocessing.

The main driver is continued access to low cost feedstocks, according to Tom Pickett, Vice-President of Ethylene Technology in TechnipFMC’s Process Technology business, who addressed today’s monthly roundtable luncheon hosted by the Rice Global Engineering & Construction Forum.

"Even though there has been a slight pause in the number of large new petrochemical projects, the same attractive business drivers exist,” Pickett said. “We anticipate that announcements of these large capital projects will continue."

Pickett attributed the increase in supplies of petrochemical feedstocks to advances in upstream drilling and production technologies, namely horizontal drilling and hydraulic fracturing. Just as technology led the way upstream, he said that technological advancements would be crucial as licensors and engineering and construction (E&C) companies seek ways to reduce capital costs and streamline project execution schedules for petrochemical megaprojects.

Tom Pickett, Vice-President of Ethylene Technology in TechnipFMC’s Process Technology business
“During this slower period, E&C companies need to examine methods and approaches to capital projects, looking for ways to improve schedules, lower costs, and improve project economics for customers,” Pickett said. “Companies willing to invest in technology, whether design or project execution techniques, will reap the rewards."

About Tom Pickett: For more than 35 years, Tom has worked in the olefins related petrochemicals industry, gaining extensive domestic and international experience. Currently he is part of TechnipFMC’s Process Technology business unit in Houston, with responsibility for licensing, technology development and strategic planning. He is active in AIChE’s Ethylene Producers’ Committee and is a registered professional engineer in the state of Texas. Tom holds a bachelor’s degree in chemical engineering from Texas A&M University.
MRC

MOSCOW (MRC) - Refiners in India, the world’s third-biggest oil consumer and importer, have drawn up plans to raise their capacity by 77 percent to about 8.8 MMbpd by 2030 to meet the country’s rising fuel demand, as per Hydrocarbonprocessing.

India’s refining expansion plan will ensure the nation’s surplus production of diesel and gasoline will last till 2035, according to a report prepared and released by the Ministry of Petroleum and Natural Gas.

India is emerging as one of the key global drivers for refined fuels consumption as its economic expansion and rising industrial activity yields infrastructure improvements and increased energy access for commercial and retail consumers.

If current patterns of use continue, India’s fuel demand could rise to as much as 335 million tonnes by 2030, and 472 million tonnes by 2040, from about 194 million tonnes last year, the oil ministry’s report says.

On the basis of expansion plans submitted by refiners to the government, gasoline production will remain in surplus up to 2035, turning into a deficit in 2040, according to the report. A spokesman for the oil ministry declined to discuss the report further when contacted by phone.

Diesel will remain in surplus until about 2035, beyond which domestic demand will overtake supply, the report said. The report also forecast a growth of 5 percent or more each year in India’s gasoline, diesel and jet fuel demand to 2030.

The report recommended the refiners set up petrochemical projects and cut production of petcoke and fuel oil.
MRC

MOSCOW (MRC) -- Poland's PKN Orlen is building a clean fuels upgrading unit at its 330,000 barrel bpd Plock refinery this year, as oil companies across Europe prepare for stricter environmental rules on shipping from 2020, reported Reuters.

The unit, a visbreaker, helps cut output of sulfur-rich fuel oil in favour of more valuable cleaner products such as distillates.

A spokesman said the company is investing USD176 million with completion expected by the end of 2020.

PKN Orlen has said the visbreaker will enable an additional product yield of 1,200 tonnes per day
From 2020, the International Maritime Organization (IMO) will slash the amount of sulfur that can be emitted from ships, which is expected to cut demand for fuel oil and has created a serious challenge for refiners.

Companies including ExxonMobil and Total have invested in refinery upgrades to produce lower sulfur fuels in advance of the new shipping rules, and also tighter limits worldwide on sulfur in automotive fuels.

As MRC informed before, in early May 2016, PKN ORLEN signed a contract with Saudi Aramco for the supply of ca. 200 thousand tonnes of crude oil monthly to its refineries. The contract was effective from May 1st to December 31st 2016, with an option of automatic renewal for successive years. The oil will be processed by all PKN ORLEN's refineries in Poland, the Czech Republic and Lithuania.

PKN Orlen is a major Polish oil refiner and petrol retailer. The company is a significant European publicly traded firm with major operations in Poland, Czech Republic, Germany, and the Baltic States.
MRC