LG Chem CEO expects stable 2018 petrochemical market

MOSCOW (MRC) -- LG Chem , South Korea’s largest chemical company, sees the global petrochemical market being stable this year, and is diversifying its products to guard against falling plastic usage, reported Reuters with reference to the company’s chief executive.

Asian petrochemical makers typically use crude-oil derived naphtha as a feedstock to produce ethylene and other basic petrochemicals, which are mostly used to make plastics. "The petrochemical business is largely affected by oil prices, but now oil prices are stable in the range of $60 per barrel after rising for a while," Park Jin-soo, LG Chem CEO and vice president, said at a press conference on Friday which was embargoed until Sunday.

"The market may not be as robust as last year but I think it won’t go bad this year."
The chief executive also raised concerns over protectionism after U.S. President Donald Trump proposed tariffs on steel and aluminum, prompting warnings of retaliation from U.S. trading partners.

"We see relatively little impact because our export volume to the U.S. is not that much, however, in the long term we should be prepared for global trade protectionism," Park said.

Asked about the potential impact of plastic usage bans on the petrochemical industry, Park said demand continued to increase steadily.

"However we have been diversifying our businesses to maintain steady demand regardless of supply or demand changes," he said.

LG Chem currently operates two naphtha crackers in the southwestern cities of Yeosu and Daesan with a combined 2.2 million tonnes per year (tpy) of ethylene output. It would increase the Daesan plant’s ethylene output capacity by 230,000 tonnes to 1.27 million tpy by 2019.

The company said in December it would expand its acrylic and superabsorbent polymer production capacity by the first half of 2019 in a bid to focus on more lucrative petrochemical products.

Apart from the petrochemical business, LG Chem is also one of the major South Korean battery makers, along with Samsung SDI and SK Innovation.

As MRC wrote earlier, in January 2016, South Korea's LG Chem said it had decided to drop a plan to jointly build a USD4.2-billion petrochemical complex in Kazakhstan, citing a prolonged slump in oil prices and a sharp increase in facility investments. In 2011, the chemical company said it would construct the complex near the western Kazakh city of Atyrau as part of a 50-50 joint venture with two Kazakh companies. The plan involved building ethylene and polyethylene plants with annual capacities of 840,000 tonnes and 800,000 tonnes, respectively.

LG Chem Ltd., often referred to as LG Chemical, is the largest Korean chemical company and is headquartered in Seoul, South Korea. According to ICIS report, it is 15th biggest chemical company in the world in 2011. It has eight domestic factories and global network of 29 business locations in 15 countries. LG Chem is a manufacturer, supplier, and exporter of petrochemical goods, IT&E Materials and Energy Solutions.
MRC

Toyo awarded large-scale fertilizer complex project in India

MOSCOW (MRC) -- Toyo Engineering Corporation (Toyo-Japan, President and CEO Kiyoshi Nakao) has been awarded a contract for a project to construct a large-scale fertilizer complex in Gorakhpur, Uttar Pradesh state, India, as per Hydrocarbonprocessing.

This complex will be constructed jointly with Toyo Engineering India Private Limited (Toyo-India, Chairman & Managing Director Itsuya Yanagi), TOYO's group company in India, for Hindustan Urvarak & Rasayan Limited (HURL), a fertilizer company jointly established by National Thermal Power Corporation (NTPC), a state power company in India, Coal India Limited (CIL), a state coal mining company, and Indian Oil Corporation Limited (IOCL), a state oil company as the lead promoters.

The objective of this project is to construct a large-scale fertilizer complex composed of an ammonia plant with a capacity of 2,200 tons/day, a urea plant with a capacity of 3,850 tons/day, and a utility supply facility. The ammonia production technology of Kellogg Brown & Root LLC., U.S.A. and TOYO’s urea synthesis technology “ACES 21®” will be employed.

This project is part of a series of national project promoted under the “MAKE IN INDIA” slogan by the Government of India that aims to fully achieve domestic production of chemical fertilizers against the country’s expanding population. TOYO has become the first project contractor.

Since ever TOYO was founded, it will be carrying out fertilizer project again in Gorakhpur 55 years after contract award of its first fertilizer plant in 1963, which was TOYO’s memorial first overseas project.

This is TOYO’s 16th fertilizer project in India including one now under construction in Kota, Rajasthan state. Not only TOYO’s technical capability as urea licensor, but also TOYO’s broad experience in India and international project performance is highly valued, and has been instrumental in the awarding of this contract.

In the Indian market, which has a vast population and huge middle-class population strata that continues to grow, TOYO is committed to contributing to the economic development of the country and its own business expansion based on its achievements in a range of fields including construction of fertilizer plants.
MRC

Iraq oil ministry calls for investors for Anbar refinery

MOSCOW (MRC) -- Iraq's oil ministry on Thursday called on companies to invest in a project to build a 70 Mbpd oil refinery in the western province of Anbar, reported Reuters.

Potential investors have until June 14 to make proposals, the ministry said in a statement, adding that the project is offered on a Build-Own-Operate or Build-Own-Transfer basis.

The Anbar refinery, near the town of Hadditha, is part of a government plan to increase the nation's oil processing capacity and reduce its oil products imports.

Baghdad in recent months has announced plans to build four refineries and to refurbish oil and gas processing plants destroyed during fighting with Islamic State insurgents.
MRC

ADNOC announces strategic move downstream

MOSCOW (MRC) -- The Abu Dhabi National Oil Company (ADNOC) announced its intention to move further downstream, as the company pivots to take full advantage of the rising demand for higher value refined and petrochemical products, particularly in the growth economies of China and Asia, according to Hydrocarbonprocessing.

Speaking at CERAWeek by IHS Markit, a leading gathering of the energy industry, H.E. Dr Sultan Ahmed Al Jaber, UAE Minister of State and ADNOC Group CEO, set out ADNOC’s strategic ambitions to become a major global downstream player, with the operational flexibility to respond quickly to shifting and emerging market needs. At the center of its new downstream strategy, ADNOC intends to create the world’s largest integrated refining and chemical site in the world, in Ruwais, UAE, where it will triple petrochemicals’ production to 14.4 million tonnes, annually, by 2025.

H.E. Dr. Al Jaber announced plans to host a Downstream Investment Forum, in Abu Dhabi, on May 13 and 14, where ADNOC will unveil significant co-investment opportunities to strengthen and grow its downstream portfolio.

"We will unveil significant co-investment opportunities for all partners, ready to work alongside us at a special event this coming May, as we transform our Downstream portfolio domestically and internationally." H.E. Dr. Al Jaber said.

"I would like to extend an invitation, to those who are keen to join us on this journey, to attend the ADNOC Downstream Investment Forum, where we will unveil our roadmap, signature projects and detailed investment plans. As we begin this next phase of our development, we welcome existing and prospective partners to join us in creating smarter growth for our long-term mutual benefit."

H.E. Dr. Al Jaber explained ADNOC’s downstream strategy will build on the progress ADNOC had made in 2017, as it accelerated its transformation and sharpened its focus on its strategic pillars of people, performance, profitability and efficiency to both unlock and create maximum value from its resources and assets.

In addition to aligning its group of companies under a single, unifying brand, he said ADNOC opened up opportunities across its upstream and downstream businesses to new categories of partners and investors, including public and private financial institutions. ADNOC also took steps to enhance and optimize its capital structure by leveraging, for the first time, the global capital markets, including issuing a US $3 billion bond against one of its large crude oil pipelines - the biggest non-sovereign bond sale in the Middle East - and successfully listing ADNOC Distribution on the Abu Dhabi Stock Exchange (ADX), in what was the largest IPO in Abu Dhabi in a decade.

"The steps we have taken so far have laid a solid foundation for powering the next phase of our growth," said H.E. Dr. Al Jaber. "And the biggest opportunity for that growth is downstream, particularly in petrochemicals, where demand is expected to climb 150 percent by 2040, driven by the growth economies of Asia."

While developing downstream has become a key strategic priority for delivering on the goals of ADNOC’s 2030 smart growth strategy, H.E. Dr Al Jaber said the company is also building on its strong legacy as a leading, global upstream player.

He cited the reconfiguration of the former ADMA offshore concession into multiple concession areas as an example of how an expanded approach to partnerships has allowed ADNOC to attract additional upstream partners who bring strategic value add to the table - in terms of market access, capital, technology and expertise.

In support of ADNOC’s upstream expansion strategy, H.E. Dr. Al Jaber noted that a series of new blocks are to be made available for commercially competitive bidding, in an unprecedented opportunity, for both existing and new partners with best-in-class exploration technology, to unlock untapped resources in one of the world’s largest hydrocarbon super-basins.

Organized by IHS Markit, CERAWeek takes place annually in Houston, Texas. It brings together 3,000 global industry leaders and policymakers, from more than 60 countries, across the entire energy value chain, to exchange knowledge and insights on energy markets, industry trends, technology and strategy.

As MRC reported earlier, in July 2017, ADNOC and Borealis signed a framework agreement, under which the companies will advance two key projects that will expand both ADNOC and Borealis downstream petrochemicals business and support the delivery of ADNOC’s integrated smart growth and partnership strategy.
MRC

Iraq to increase Kirkuk oilfields output to supply refineries

MOSCOW (MRC) -- Iraq's state-run North Oil Company (NOC) has begun testing operations at its Avana and Bai Hassan oilfields in Kirkuk to increase crude supply for domestic refineries, Iraqi officials said on Wednesday, as per Reuters.

"We have started testing operations at Avana and Bai Hassan oilfields to prepare initial pumping of more than 50 Mbpd," one NOC official said.

Operations at the Avana and Bai Hassan fields have been halted since October when Iraqi forces took them back after they had been under Kurdish control since 2014.

Oil exports from Kirkuk fields have been suspended amid an ongoing dispute between Baghdad and the Kurdish Regional Government (KRG) over the use of the Ceyhan export pipeline to Turkey.

Iraqi oil officials said there were no plans to resume crude flow through the Kurdish-owned pipeline, as no agreement had been reached yet.

"Until this moment we didn't reach any kind of agreement, even an initial, with Kurdish authorities to resume Kirkuk oil exports to Ceyhan," said an oil ministry official.

The Kurdish region operates a pipeline that connects to the twin Kirkuk-Ceyhan pipeline at Khabur on the border with Turkey.

Iraq started late last year to divert output from Kirkuk oilfields to local refineries to boost fuel production and help free up more oil for exports from the southern oilfields.
MRC