Preparing for the Disruptions that Lie Ahead - Shell Global Solutions

MOSCOW (MRC) -- Over the last four decades, refiners have had to adjust to a relentless stream of changes in product demand patterns and ever-more-stringent environmental regulations, as per Hydrocarbonprocessing.

Making the adjustment takes time and requires a good assessment of the potential future scenarios. We had the unleaded gasoline mandate, followed by the introduction of oxygenates to gasoline. Next, came the trend for ultra-low levels of sulphur in diesel. Then, over the last 10 years or so, the momentum in dieselisation, changing crude slate and the need for tighter integration with petrochemicals have given refiners even more new things to think about.

Each time, refiners have displayed remarkable flexibility in reconfiguring their facilities and operating strategies. And now, further challenges lie ahead. Two in particular will have a profound impact on refiners.

First, we have the International Maritime Organization’s (IMO) MARPOL 73/78 Annex VI (IMO 2020) on the horizon, which will cut the allowable sulphur content of marine bunker fuel from 3.5 to 0.5%. Achieving full residue conversion is likely to be extraordinarily capital intensive and might not be necessary anyway, but cost-effectively reducing fuel oil exposure is almost certainly a good idea, as it has a clear link with competitiveness.

Secondly, a global energy transition is under way. One element of this is that we are starting to see battery electric vehicles gaining consumer acceptance. Worldwide, about 50% of refinery output is directed towards road transportation fuels, so any substantial moves towards electrification have significant potential to reduce demand for diesel and gasoline.

Disruption N1 - IMO 2020: Although clean air concerns have driven the IMO 2020 legislation, it is not necessarily a compliance issue for refiners.

After 2020, ships that are not fitted with scrubbers will not be able to use high-sulfur fuel oil. However, that does not mean that refiners will not be able find outlets for it, especially as about 50% of the current high-sulfur fuel oil market is not marine fuel so will not be affected by the IMO regulations. In addition, there will be a limited number of ships fitted with scrubbers that can process it. Alternatively, other refiners that have spare residue conversion capacity may take it – but at a price.
MRC

Taiyo Vinyl to shut PVC plant for maintenance

MOSCOW (MRC) -- Taiyo Vinyl is likely to take its polyvinyl chloride (PVC) plant off-stream for a maintenance turnaround in Q1 2018, as per Apic-online.

A Polymerupdate source in Japan informed that the plant is planned to be shut in early-March 2018. The planned maintenance is expected to be remain in force for around 8 weeks.

Located in Yokkaichi in Japan, the PVC plant has a production capacity of 310,000 mt/year.

As MRC reported earlier, Taiyo Vinyl is likely to take off-stream its another PVC plant in Japan for a maintenance turnaround in 2018. Located in Osaka in Japan, the PVC plant has a production capacity of 160,000 mt/year. The plant is planned to be shut in end-June 2018 for a period of about one month. The last shutdown was undertaken by the company in end-June 2017 for about 30 days.

Taiyo Vinyl Corporation, a subsidiary of Tosoh Group, is one of Japan's largest manufacturers of polyvinyl chloride (PVC). The plant in Chiba is one of the company's key assests, which supplies 50% of its products to the domestic market. The company also produces PVC at the plants in Yokkaichi and Osaka with the annual capacity of 310,000 and 150,000 tonnes, respectively.
MRC

BASF to take over PA business of Solvay

MOSCOW (MRC) -- BASF and Solvay have signed an agreement for the sale of Solvay’s integrated poly­amide (PA) business to BASF, as per GV.

The business has approximately 2,400 employees globally, thereof approximately 1,300 in France, and achieved net sales of more than EUR 1,3 billion in 2016. Worldwide, it operates twelve production sites, four R+D locations and ten technical support centres. The purchase price would be EUR 1.6 billion.

The companies aim to close the transaction in the third quarter of 2018, after customary regulatory approvals have been obtained. The acquisition would complement BASF’s engineering plastics portfolio and expand the company’s access to markets in Asia and South America. In addition, the purchase would strengthen BASF’s PA 6.6 value chain through increased polymerisation capacities and the backward integration into the raw material ­adipodinitrile.

As MRC informed previously, in December 2016, AkzoNobel finalized the acquisition of BASF’s global Industrial Coatings business, which supplies a range of products for industries including construction, domestic appliances, wind energy and commercial transport, strengthening its position as the global number one supplier in coil coatings.

BASF is the leading chemical company. It 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 generated sales of about EUR58 billion in 2016.
MRC

Wanhua begins operations in Yantai at first phase PC plant

MOSCOW (MRC) -- Wanhua Chemical has successfully launched a first phase polycarbonate facility at the Yantai Industrial Park in Yantai, China, according to GV.

The 70,000 t/y polycarbonate plant, which utilizes the company's own phosgenation interfacial polycondensation technology, is part of a project that includes a second phase. No other details were given.

Last July, Linde Group signed an agreement with Wanhua to build two additional air separation units (ASUs) to expand gas supply to the second phase.

The ASUs are scheduled to come on stream in 2019.

We remind that, as MRC informed previously, in March 2017, the Chinese Wanhua Chemical Group announced the formation of the new business division "Performance Chemicals Business Unit". The newly formed division consolidates the previous ADI and Specialty Amines business units to further strengthen its core competencies in the production and marketing of aliphatic isocyanates, speciality amines and other chemicals.
MRC

Univar and Chemours Reach Exclusive Distribution Agreement in USA for Hydrochloric Acid

MOSCOW (MRC) -- Univar Inc., a global chemical and ingredient distributor and provider of value-added services, announces an exclusive distribution agreement with The Chemours Company for Hydrochloric Acid produced at Chemours' Parkersburg, West Virginia, plant, said Reuters.

Hydrochloric Acid, with a total market of over five million tons, is widely used in a number of industrial applications, including pH control for water treatment processes, steel manufacturing, and oil and gas drilling. With this agreement, Univar brings this important product closer to its customers in these markets, shortening the supply chain and improving service response times.

Jerry Panock, Univar's vice president of growth in the basic chemicals segment, said, "Customers will benefit from Chemours and Univar's shared safety culture and focus on productivity and efficiency to help manage their cost to serve. Additionally, it will help provide customers with a competitive and long term supply of Hydrochloric Acid, critical to their operations."

Founded in 1924, Univar (NYSE: UNVR) is a global chemical and ingredients distributor and provider of value-added services, working with leading suppliers worldwide. Supported by a comprehensive team of sales and technical professionals with deep specialty and market expertise, Univar operates hundreds of distribution facilities throughout North America, Western Europe, Asia-Pacific and Latin America. Univar delivers tailored customer solutions through a broad product and services portfolio sustained by one of the most extensive industry distribution networks in the world.
MRC