Par Pacific shares jump on acquisition, plans to expand

MOSCOW (MRC) - Par Pacific Holdings Inc shares jumped 17 percent after the refiner said it would acquire assets from its rival in Hawaii and expand its fuels production, as per Hydrcoarcbonprocessing.

The Houston-based company’s shares were at USD21.12 in mid-morning trading, up USD3.18 from the previous day’s close after rival Island Energy Services on Wednesday disclosed it would halt its refining operations on the island.

"This is clearly good news for Hawaii’s only other refinery," analysts at investment firm Tudor, Pickering, Holt said in a note on Thursday.

Par said in a conference call on Thursday it would pay $45 million in cash and stock to buy assets from Island Energy. The acquisition will allow Par to expand processing capacity at its Kapolei, Hawaii, refinery by about 28 percent to 120,000 barrels per day (bpd).

Par will add Island Energy’s atmospheric and vacuum crude distillation units to its Kapolei refinery, which has a current capacity of 93,500 bpd.

The company said it would spend USD30 million from cash on hand and USD15 million in shares to finance the purchase, which is expected to close in the fourth quarter. Par also will spend between USD8 million and USD10 million to integrate pipelines.

"We will be able to run those units the day we close," Par Pacific Holdings Chief Executive William Pate said on Thursday’s conference call.

Par also plans to lease terminals and pipelines from Island Energy, which will shift its focus to storage and logistics. Island owns refined products distribution pipelines around terminals near Hilo, Honolulu, Kahului and Port Allen, Hawaii.

Because Par is not adding gasoline-producing units, its product mix will continue to be 50 percent diesel and will have less need to import motor fuels to Hawaii.

Par will spend USD10 million for an overhaul of the Hawaii refinery in 2019, the company said.

The addition of the Island Energy units will better position Par to take advantage of the switch to lower sulfur marine fuels in 2020 mandated by the International Maritime Organization, a move that is expected to boost margins.

Atmospheric crude distillation units do the primary refining of crude oil and provide feedstock for all other units. They operate at atmospheric pressure.

Vacuum distillation units refine residual crude from atmospheric distillation units and increase the yield of motor fuel feedstock obtained from a barrel of oil.
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MOSCOW (MRC) -- Tronox Limited announced that it has received final approval from the European Commission to close its proposed acquisition of the titanium dioxide ("TiO2") business of The National Titanium Dioxide Company Limited, a privately held global chemical and mining company headquartered in Jeddah, Saudi Arabia, as per the company's press release.

The final approval was issued following the European Commission’s conclusion that Venator Materials PLC is a suitable purchaser of Tronox’s 8120 paper-laminate product grade currently supplied to European customers from Tronox’s Botlek facility in the Netherlands.

Divesture of this product grade was the condition set forth in the conditional approval granted to Tronox by the European Commission on July 4, 2018. Consummation of the divestiture of the 8120 paper-laminate product grade will occur following approval of the overall Cristal acquisition transaction by the U.S. regulatory authorities.

In addition to receiving final approval from the European Commission, Australia, China, New Zealand, Turkey, South Korea, Colombia and Saudi Arabia have also approved the proposed acquisition. The United States Federal Trade Commission remains the final regulatory authority reviewing the transaction.
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MOSCOW (MRC) -- Evonik is taking the next step in systematically focusing on specialty chemicals with the divestment of its US Jayhawk site in Galena, Kansas, as per the company\\s press release.

The site produces precursors for agrochemicals, which are not included in the growth businesses defined by Evonik. "We want to continue growing profitably in the specialty chemicals sector," says Evonik Executive Board Chairman Christian Kullmann. “This also means giving up businesses or sites if a different owner can offer the business better future perspectives. The sale is a further step towards optimizing our portfolio and it opens up new opportunities for us in the targeted development of our growth engines."

Jayhawk’s activities fall under the Agrochemicals & Polymer Additives business line in Evonik’s Performance Materials segment. Under a share deal, funds advised by the international investment firm Permira will acquire the site along with the company and its approximately 120 employees. “We’re looking forward to successfully growing the business in Jayhawk further,” said Sebastian Hoffmann, Principal and member of the Industrials Team at Permira. “We already have a high level of expertise in customer-oriented solutions in fine chemicals, for example through the investment of the Permira funds in CABB. A strategic cooperation between Jayhawk and CABB will create a seamless transatlantic product and service offering from which existing and new customers of both companies will benefit."

The sale price is in the high double-digit million dollar range. The transaction is subject to approval by antitrust authorities in several countries.

Caspar Gammelin, Head of Evonik’s Performance Materials segment, sees good prospects for the site under its new owner: "Jayhawk has highly skilled employees, well-developed facilities, and longstanding customer relationships. Under the new owner these strengths can be leveraged even more effectively. With this sale, we’re paving the way for the intelligent further development of our businesses."

Permira is a global investment firm. Founded in 1985, the firm advises funds with a total committed capital of approximately EUR32 billion. The Permira funds have a long track record of successfully investing in industrial companies around the world and have invested over EUR4.6 billion in more than 20 companies.

The CABB Group, headquartered in Sulzbach am Taunus, Germany, is a globally active producer of precursors, intermediates, and active substances for fine chemicals. With about 1,000 employees, the Group generates annual sales in the region of EUR450 million.
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MOSCOW (MRC) -- South African petrochemicals group Sasol said full-year profit dropped 6 percent, pulled down by interruptions to production, a stronger rand and employee share-based payment expenses, reported Reuters.

Core headline earnings per share (HEPS) for the year ended June 30 fell to 36.03 rand (USD2.46) compared with 38.47 rand a year earlier. HEPS is the main profit gauge in South Africa, which strips out certain one-off items.

The firm said its financials were affected by unplanned electricity supply interruptions from state-owned power utility Eskom and two internal outages at its Secunda Synfuels and Natref operations that resulted in lower production.

A stronger average rand-to-dollar exchange rate compared with a year earlier also hurt results, Sasol said, while expressing optimism about operations in the coming year.

"2019 will be a defining year for Sasol with the start-up of the LCCP in the US, a catalyst for transforming our earnings profile," Chief Executive Officer Stephen Cornell said in a statement.

The Lake Charles Chemicals project (LCCP) ethane cracker in North America, which has been hit by delays and rising costs, is about 88 percent complete and is expected to cost USD11.13 billion, the firm said.

Sasol, the world’s top manufacturer of motor fuel from coal, said earnings before interest, tax, depreciation and amortisation (EBITDA) rose 10 percent to 52 billion rand (USD3.55 billion).

The difference between core headline earnings and EBITDA was due to depreciation costs of 16 billion rand and employee share-based payment expenses of 1.5 billion rand, Sasol said.

The company declared a final dividend of 7.90 rand per share, up 1.3 percent year-over-year. That brings its total dividend declared for the period to 12.90 rand per share, compared with 12.60 rand per share a year earlier.

As MRC informed before, in July 2018, Honeywell announced that Secunda Synfuels Operations, an operating division of Sasol South Africa Ltd., will use a Honeywell Connected Plant service to monitor the operating reliability of its two Honeywell UOP CCR Platforming units at its refinery in Secunda, South Africa.
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MOSCOW (MRC) -- Brazilian state-owned oil company Petroleo Brasileiro SA said it would resume operations at its Paulinia Refinery (Replan), the country’s largest, after oil industry regulator ANP gave it the green light, as prer Reuters.

ANP said it cleared areas of the facility not affected by a fire that broke out last week to restart. Petrobras said that will happen on Wednesday, with the 415,000-barrel-a-day refinery reaching 50 percent of its capacity within a week.

As MRC wrote previously, in late October 2017, Petrobras’s minority stakes in Braskem and Deten Quimica was excluded from Petrobras’s divestment program, according to a government decree published in Brazil’s Official Gazette last week. The decree prevents Petrobras from immediately selling its minority stake in Braskem, which had been announced this year. A new decree will be required to release the stock sale.

Headquartered in Rio de Janeiro, Petrobras is an integrated energy firm. Petrobras' activities include exploration, exploitation and production of oil from reservoir wells, shale and other rocks as well as refining, processing, trade and transport of oil and oil products, natural gas and other fluid hydrocarbons, in addition to other energy-related activities.
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