Delta Air Lines seeks buyers for a stake in its refining subsidiary

MOSCOW (MRC) - Delta Air Lines has hired two investment banks to offer a stake in its Monroe Energy refining subsidiary, signaling it wants a partner to shoulder the risk of running an energy business, as per Reuters.

The Atlanta-based airline acquired the 185,000-barrels-per-day refinery in 2012 for USD150 million in a bet that it could lower its cost of jet fuel, among the highest expenses for any airline. The refinery also makes gasoline and diesel for profit.

The U.S refining industry has been consolidating into larger players that can use scale to lower their cost of buying raw materials and paying for regular overhauls. In the U.S. East Coast, four refineries closed in the past decade due to the rising costs of acquiring crude.

Ed Hirs, a professor of energy economics at the University of Houston, said the attempt to recruit a joint venture partner is no sure thing.

Delta defended its effort to bring in a partner.

It is planning to invest USD120 million in Monroe Energy’s Trainer, Pennsylvania, plant next quarter on maintenance and improvements. That overhaul will curb production for two months.

Delta has said the refinery’s purchase was more than a way to make a profit from the subsidiary, arguing that if the facility had closed it would have sent jet fuel prices higher across the Northeast, hurting the airline’s results.

But more recently Delta has run the plant like a traditional refinery, choosing to make more of whatever refined product offered the highest margin.

The company has hired investment banks Barclays and Jefferies to manage the sale process. The banks have already begun talking with potential suitors, according to sources familiar with the matter. It was not immediately clear what valuation the company has put on the stake offered.

Delta has grappled with the best way to manage Monroe.

Last year, it hired a consultant to evaluate the impact on jet fuel prices of any sale or closure of the refinery. The company downplayed the evaluation’s significance at the time, calling it routine.

East Coast refiners got a lifeline from the Bakken shale boom in North Dakota earlier this decade. Production there outpaced pipeline capacity, forcing producers to offer steep discounts to East Coast refiners like Monroe.

However, the discounts have vanished in recent years as more pipeline capacity came online in the upper U.S. Midwest. That forced Monroe and other U.S. East Coast refineries once again to buy higher priced crudes for their plants, reverting back to the poor economics that hurt them a few years earlier.
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Lotte Chemical Titan starts commercial operations at new PP plant in Pasir Gudang

MOSCOW (MRC) -- Lotte Chemical Titan said it has successfully begun commercial operations at its new polypropylene (PP) plant in Pasir Gudang, Johor, Malaysia, as per Apic-online.

The 200,000-t/y facility, known as PP3, will supply PP to the domestic market and for export.

Cost of the project was not given.

As MRC reported earlier, un January 2018, the company announced its catalytic cracking reactor within its TE3 expansion project in Pasir Gudang had begun commercial operations. The catalytic cracking reactor, based on KBR's cata-lytic olefins technology, is connected to an existing naphtha cracker plant.

The USD276-million project increased ethylene production capacity by 92,000 t/y, propylene capacity by 170,000 t/y and BTX (benzene, toluene and xylene) capacity by 134,000 t/y.

Lotte Chemical Titan produces Malaysia's most comprehensive portfolio of olefins and polyolefins which contribute to the enhancement of everyday life. Lotte Chemical Titan's production site in Malaysia consists of eleven process facilities, two co-generation plants and three tank farms. They are located on 2 sites in Pasir Gudang and Tanjung Langsat in the state of Johor. In 2006, Lotte Chemical Titan acquired PT Lotte Chemical Titan Nusantara, Indonesia’s first and largest polyethylene plant in the country. This acquisition boosted the polyolefins capacity by approximately 50%, thus making the company one of the largest producers in South East Asia. Lotte Chemical Titan was acquired by Lotte Chemical Corp., forming part of the Lotte conglomerate of Korea, in 2010. The company thus became one of Lotte Chemical Corp.’s largest overseas subsidiaries.
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Johnson Matthey awarded 1.8 million mtpa methanol technology contract

MOSCOW (MRC) -- Johnson Matthey (JM) announced it has been awarded a contract by Methanex to supply a license for a 5,000 mtpd ATR methanol technology flowsheet, including associated engineering, proprietary equipment and catalyst supply, as per Hydrocarbonprocessing.

This is for the proposed third Methanex US methanol plant, a new build unit with a capacity of 1.8 million tonnes per annum. The facility will be located next to Methanex’s existing facilities in Geismar, Louisiana. Pending a final investment decision (FID), expected in mid-2019, this would be the eighth Methanex plant in operation today to use JM licensed methanol technology. Johnson Matthey has the leading methanol technology which has been licensed for more than 45 years with over 90 plant licenses granted in that time.

Johnson Matthey’s world-scale syngas generation technology options include steam methane reforming, combined reforming, ATR and gas heated reforming that allows bespoke designs unique to each customer’s project requirements “I’m delighted that Methanex has chosen Johnson Matthey’s technology for this potential third project in Louisiana. Having completed the initial engineering work, we will continue to support the project as it works towards FID. This is the continuation of a long-standing relationship over two decades between Methanex and JM relating to our catalysts and technology" said John Gordon, Managing Director at JM.

As MRC informed earlier, Johnson Matthey PLC (JMAT.LN) said Monday that Patrick Thomas will succeed Tim Stevenson as chairman effective July 26, when the latter will retire following a seven-year tenure. Mr. Thomas has been the chief executive and chairman of polymers company Covestro AG (1COV.XE) since 2015, Johnson Matthey said.
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Clariant confirms SABIC to complete purchase of 24.99% stake in Clariant after receiving all regulatory approvals

MOSCOW (MRC) -- Clariant, a world leader in specialty chemicals, has announced that SABIC has received the final outstanding regulatory approvals from the competition authorities for the purchase of a 24.99% stake in Clariant, according to Hydrocarbonprocessing.

Therefore, an unconditional closing of the purchase will take place in the next days which makes SABIC Clariant’s largest strategic anchor shareholder, and second anchor shareholder beside the group of former shareholders of Sud-Chemie.

SABIC, the world’s third-largest diversified chemical company and a long-standing partner of Clariant in the Catalyst joint venture Scientific Design, entered into a purchase agreement regarding the acquisition of the stake in Clariant in January 2018.

"With SABIC receiving all the regulatory approvals and the transaction set to be completed, we look forward to further developing the strategic relationship between both companies in order to generate value for all stakeholders", said Hariolf Kottmann, CEO of Clariant.

Clariant and SABIC are discussing possible future collaborations that will generate value for the stakeholders of both companies. Any outcome of these discussions will be presented in due course.

As MRC wrote before, in January 2018, SABIC, a world leader in chemicals, agreed to acquire approximately 83 million shares in Clariant from 40 North and Corvex Management.

Saudi Basic Industries Corporation (Sabic) ranks among the world's top petrochemical companies. The company is among the worldпїЅs market leaders in the production of polyethylene, polypropylene and other advanced thermoplastics, glycols, methanol and fertilizers.

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.
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Sempra Energy receives FERC notice of schedule for Port Arthur, Texas, LNG export project

MOSCOW (MRC) -- Sempra Energy received a Notice of Schedule from the Federal Energy Regulatory Commission (FERC) that sets Jan. 31, 2019, as the planned completion date of the final environmental impact statement for siting, construction and operation of the proposed Port Arthur LNG natural gas liquefaction-export project in Jefferson County, Texas, as per Hydrocarbonprocessing.

"This is an important step forward in the federal regulatory review to construct our Port Arthur liquefaction-export project on Texas' Gulf Coast," said Joseph A. Householder, president and chief operating officer of Sempra Energy. "Federal and Texas state policymakers have been instrumental in supporting U.S. liquefied natural gas (LNG) exports to bolster the U.S. economy."

"Sempra Energy's new liquefaction facility will be a boon to the Port Arthur community and to the entire state of Texas," said Texas Gov. Greg Abbott. "This project will not only create thousands of jobs and benefit the local economies, but it will also be a boost to our nation's economy. I thank Sempra Energy for their investment in Texas and Port Arthur, and I look forward to the completion of this project."

"I am honored to have worked to make the Port Arthur LNG export project a reality, which will bring thousands of jobs to Texas and renewed prosperity to communities like Port Arthur, where families are still rebuilding one year after the devastation of Hurricane Harvey," U.S. Sen. Ted Cruz said. "Our Gulf communities remain strong, and Texas continues to forge ahead as an energy leader for America and the entire world."

"Southeast Texas is America's energy gateway," said U.S. Rep. Randy Weber. "As more LNG facilities come online, the contributions our region makes to America's energy dominance further increase. I am grateful to FERC for finalizing the notice of schedule, allowing Sempra Energy to complete this project years in the making."

The FERC issued its Notice of Schedule for the proposed Port Arthur liquefaction-export project Aug. 31. The project is expected to include two natural gas liquefaction trains to enable the long-term sale of approximately 11 million tonnes per annum (Mtpa) of LNG; feed gas pre-treatment facilities; natural gas liquids and refrigerant storage; up to three LNG storage tanks; two marine berths and associated facilities.

The ultimate decision to construct the Port Arthur liquefaction project is contingent upon obtaining binding customer commitments and financing arrangements; reaching a definitive engineering, procurement and construction contract; securing all necessary permits and approvals including a FERC order approving the siting, construction and operation of the project and reaching a final investment decision.
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