YNCC plans investment in South Korea to boost ethylene, butadiene Capacity

MOSCOW (MRC) -- Yeochun NCC Co., a joint venture between Daelim Industrial and Hanwha Chemical, said it plans to spend 740-billion won to increase ethylene and butadiene capacity in South Korea, according to Apic-online.

The project involves construction of a second naphtha cracking plant, which will increase ethylene capacity to 915,000 t/y from 580,000 t/y, and setting up a new butadiene plant to expand capacity to 370,000 t/y from 240,000 t/y. Commercial operations are scheduled to begin in the fall of 2020.

Yeochun NCC said the new capacity will allow it to provide stable raw materials to its affiliates, and increase its competitiveness. In addition, the project is expected to create 1,000 new jobs a year over the next three years.

As MRC wrote before, YNCC plans to undertake planned maintenance at its No.3 naphtha cracker at Yeosu in October-November 2018 for a period of one month. Located in Yeosu, South Korea, the No.3 cracker has an ethylene production capacity of 470,000 mt/year and propylene production capacity of 230,000 mt/year.

South Korea’s Yeochun NCC (YNCC) pyrolyzes naphtha to produce basic feedstock materials for the petrochemical industry. YNCC, a joint venture between South Korean firms Hanwha and Daelim, is a key exporter of ethylene and propylene in the country.
MRC

MOSCOW (MRC) -- Saudi Aramco Upstream Technology Company, a Saudi Aramco company, has recently signed a memorandum of understanding (MOU) with Russia’s Lomonosov Moscow State University (MSU) to promote cooperation in the area of joint research, primarily to explore oil and gas industry innovation with specific focus on upstream technology, as per Process-worldwide.

Under the MOU, Saudi Aramco and MSU will conduct programmes and projects to include developing new advanced materials applied in the oil and gas industry as well as methods and techniques for reservoir and oilfield data acquisition, analysis and computational modeling.

The collaboration will also entail both parties organising bilateral joint laboratories, symposia, workshops and conferences. A new Saudi Aramco Research Center will also be established at the MSU Science Park in Moscow. The University has a vast experience of fundamental research in the areas of geophysics and geochemistry, digital modelling and big data analytics, and collaboration.

As MRC earlier said, Saudi Arabia has called off both the domestic and international stock listing of state oil giant Aramco, billed as the biggest such deal in history. The financial advisors working on the proposed listing have been disbanded, as Saudi Arabia shifts its attention to a proposed acquisition of a “strategic stake” in local petrochemicals maker Saudi Basic Industries Corp 2010.SE.

Saudi Aramco is an integrated oil and chemicals company, a global leader in hydrocarbon production, refining processes and distribution, as well as one of the largest global oil exporters. It manages proven reserves of crude oil and condensate estimated at 261.1bn barrels, and produces 9.54 million bbl daily. Headquartered in Dhahran, Saudi Arabia, the company employs over 61,000 staff in 77 countries.
MRC

MOSCOW (MRC) -- Higher base chemicals demand and feedstock security for heavy naphtha are driving the development of a new wave of mega-integrated refinery and chemical sites in China. Private Chinese chemical producers, including Hengli and Rong Sheng, are back-integrating their chemical plants with refineries by building mega-integrated facilities, as per Hydrocarbonprocessing.

Wood Mackenzie expects these projects to come on stream in the next 12 to 24 months.

Both the Hengli and Rong Sheng projects are expected to add over 9 million tonnes (Mt) of paraxylene (PX) capacity by 2021. This wave of Chinese investment outpaces robust demand growth for the polyester chain and, as a result, we expect China to reduce its PX imports by more than 4 Mt by 2021.

"The question is what happens to Japan and South Korea which are major PX exporters to the world's largest PX importer? They will have limited alternative export outlets and will almost certainly need to curtail their PX operating rates," said Steve Jenkins, vice president, Wood Mackenzie.

These new mega-integrated sites could yield up to 45 wt (weight) % of chemicals (the majority of which is PX, the primary feedstock for China's massive polyester industry), two to three times more than a traditional integrated site, whilst processing heavy crudes.

However, the high capital expenditure required for such sites has an impact on return on investment and development timelines. But once built, the integrated sites are the first quartile in terms of competitive position against their refining and chemical peers. The margin uplift over refining for these mega-integrated sites could be significant, between USD8/bbl and USD14/bbl.

Sushant Gupta, research director, Wood Mackenzie said: "The Hengli and Rong Sheng projects could add up to 500,000 barrels per day (b/d) of medium- to heavy-crude demand in the market when they start operation. This additional demand would further tighten the heavy crude market as we expect a shortage of heavy crude at a global level in the medium term.

"As these integrated sites are mostly configured to process Middle Eastern crude, the ongoing trade tension between China and the US is unlikely to affect the projects. US sanctions on Iran crude exports, on the other hand, could limit their crude choices.

"We expect knock-on implications on the refining and fuels markets in Asia and beyond as these projects also produce large amounts of co-products such as gasoline and middle-distillates (jet fuel and diesel/ gasoil)."

China is expected to have a large surplus of about 780,000 b/d in middle distillates and about 500,000 b/d in gasoline by 2020. About 20% and 40% of the surplus in middle distillates and gasoline, respectively, comes from the Hengli and Rong Sheng projects alone. There is another consequence for the gasoline market. Exporters of PX to China, mainly South Korea and Japan, will need to curtail their PX production which could see more gasoline supply of about 150,000 b/d to 200,000 b/d from these two countries.

Higher diesel/ gasoil exports from China is welcome as it helps meet the higher demand for marine gasoil in the shipping sector resulting from the IMO regulation starting in 2020. However, additional supply of gasoline from China, South Korea, and Japan would add to the global surplus of gasoline post-2020.

Furthermore, the development of such large and competitive projects, driven by chemicals, could increase the threat of closures for less competitive standalone refinery sites in China and Europe.

Mr. Gupta said: "Private refiners’ margins are already challenged by various factors, including tougher government policies, and now these bigger integrated sites will no doubt turn up the pressure."

As MRC reported previously, in May 2018, INVISTA’s technology and licensing group, INVISTA Performance Technologies (IPT), and Hengli Petrochemical (Dalian) Co.,Ltd. (Hengli) reached an agreement to license INVISTA’s latest purified terephthalic acid (PTA) process technology for Hengli’s fourth PTA line. Hengli’s first three PTA lines, the first of which began operation in 2012, also utilize INVISTA’s technology and have a combined capacity of 6.6 million metric tonnes per year. The fourth line will have a design capacity of 2.5 million metric tonnes per year and will be installed at Changxing Island, Liaoning Province of China.
MRC

MOSCOW (MRC) -- Fried-Walter Munstermann (54), President, Procurement, BASF SE, Ludwigshafen, Germany, will assume responsibility for the "Task Force Process Simplification" effective January 1, 2019, as per the company's press release.

He will be succeeded by Stefano Pigozzi (54), President, Monomers, BASF SE, Ludwigshafen.

At the same time Kenneth T. Lane (50), President, Catalysts, BASF Corporation, Iselin, New Jersey, will assume responsibility for the Monomers division. The Monomers division’s headquarter will be transferred from Ludwigshafen to Waterloo, Belgium, in the course of 2019.

Dr. Peter Schuhmacher (53), President, Process Research & Chemical Engineering, BASF SE, Ludwigshafen, Germany, will assume responsibility for the Catalyst Division on December 1, 2019. He will be succeeded by Dr. Detlef Kratz (56), currently Senior Vice President, Corporate Technology & Operational Excellence, BASF SE, Ludwigshafen, Germany.
MRC

MOSCOW (MRC) -- Negotiations over September shipments of suspension polyvinyl chloride (SPVC) began in the Russian market last week. Producers insisted on a further price increase, according to ICIS-MRC Price report.

PVC prices have been going up in the Russian market since the beginning of the year, and September will be no exception. Producers intend to achieve the increase of not less than Rb3,000/tonne, compared to the level as of early August. The weakening of the rouble against the dollar is one of the reasons of the price rise.

An import alternative has been already unavailable for Russian consumers for several months due to high export prices of the key suppliers to the market in the previous years. The August devaluation of the rouble against the dollar has completely terminated any purchases of PVC in foreign markets, at least, until October.

Moreover, due to the rouble devaluation, the targeted by Russian producers level of PVC prices for September deliveries to the domestic market is comparable to prices of export parity in certain regions. And some producers do not hide the fact that in case of lower sales in September, they will increase export sales.

Some converters said they intend to reduce their PVC purchases in September partially because they anticipated the September price increase and built up additional inventories in August and partially because they do not want to enter October, the month of weaker demand for finished products, with expensive finished products.

As well as a month earlier, negotiations will be quite long, converters will try to limit the increase in prices of material for themselves as much as possible.

Overall, deals for September shipments of resin with K = 64/67 were discussed in the range of Rb77,000-79,000/tonne CPT Moscow, including VAT, whereas in early August, deals were done in the range of Rb73,500-76,000/tonne CPT Moscow, including VAT.
MRC