Shell оoins Dutch waste-to-chemicals project

MOSCOW (MRC) -- Shell has joined a consortium that comprises Air Liquide, Nouryon (formerly AkzoNobel Specialty Chemicals), Enerkem and the Port of Rotterdam to construct Europe’s first waste-to-chemicals (W2C) plant at Botlek in the Netherlands, said Chemanager-online.

Marco Waas, chairman of the project and director of Research, Development & Innovation at Nouryon, said the project will be further strengthened with the addition of another leading global partner.

The Dutch energy and chemicals company will become an equal equity partner in the W2C project, which will convert up to 360,000 t/y of non-recyclable waste, including plastics, into 220,000 t/y of bio-methanol.

"Advanced biofuels, including those produced using bio-methanol, have the potential to decarbonize the transportation sector, in particular,” said Andrew Murfin, Shell’s general manager, advanced biofuels. “This is an exciting prospect given transportation accounts for one fifth of global energy-related CO2 emissions, and will continue to rely on liquid fuels, especially for long journeys and heavy-duty vehicles, for years to come."

To date, the consortium has set up a dedicated joint venture company and undertaken extensive preparatory work, including detailed engineering and permit applications. It aims to make a final investment decision later in 2019 as it continues with development work and finalizes the selection of an engineering and procurement contractor.

The companies have not yet revealed a start-up date for the plant, which will have two production lines and use Enerkem’s proprietary technology. Air Liquide will supply the necessary oxygen with Nouryon providing hydrogen. Both Nouryon and Shell intend to purchase the bio-methanol output.

The project is expected to help the Netherlands realize its ambition to become virtually carbon neutral by 2050. In separate news, the Dutch Public Prosecution Service has summoned Shell Nederland Chemie to appear in court over an explosion that occurred at its Moerdijk complex in 2014 and a leak of ethylene oxide at the site from November 2015 to January 2016.

Shell said it regretted the incidents and the impact on its neighbors and has since taken measures to avoid a repeat. The case is planned to start in Den Bosch on May 14.
MRC

MOSCOW (MRC) -- Sika AG announced it has agreed to acquire King Packaged Materials Company, an independent Canadian manufacturer of dry shotcrete and mortars for concrete repair, said the company.

Sika said, with the acquisition, it will further expand geographical footprint in Canada and improve growth potential in the home improvement, construction, mining and tunneling markets.

King is a family owned business and a manufacturer of products for the construction and mining industry as well as for the home improvement distribution channel. The portfolio includes shotcrete solutions, grouts, and repair and masonry mortars.

The acquired business generateed annual sales of CHF 61 million. Closing of the transaction is expected to take place in the second quarter 2019.
MRC

MOSCOW (MRC) -- Mitsui Chemicals, Inc. has decided to set up a new production facility for long glass fiber reinforced polypropylene (LGFPP) at Chinese manufacturing subsidiary Mitsui Advanced Composites (Zhongshan) Co, Ltd., as per Hydrocarbonprocessing.

This will become Mitsui Chemicals’ third manufacturing base for LGFPP, joining existing bases in Japan and the US. By establishing this new facility, Mitsui Chemicals’ production capacity for LGFPP will increase to 10,500 tons per year.

Developed by Prime Polymer Co., Ltd., Mitsui Chemicals’ LGFPP is a composite material made by melting and mixing polypropylene (PP) resin with long glass fibers. The lightweight material offers an attractive appearance, with long glass fibers providing a good balance between hardness and impact resistance. The material is already being adopted in areas such as the unpainted insides of rear car doors.

The recent strengthening of environmental regulations and a shift toward electric vehicles have led to increasing needs for automotive lightweighting.

As a result, demand is on the rise for fiber-reinforced resins and is expected to grow further for such materials able to substitute for metal such as car doors and other such parts. (Mitsui Chemicals certifies LGFPP as Blue Value product according to the high environmental contribution value.)

Mitsui Chemicals aims to achieve further business expansion in mobility, a key sector for the company, by continuing to correctly gauge global growth in demand.

As MRC wrote before, in March 2016, Mitsui & Co., Ltd. and Hankuk Carbon Co., a company listed on the Korea Exchange, entered into a strategic alliance agreement to engage in collaborative business activities relating to the processing of composite materials.

Mitsui Chemicals is a leading manufacturer and supplier of value added specialty chemicals, plastics and materials for the automotive, healthcare, packaging, agricultural, building, and semiconductor and electronics markets. Mitsui Chemicals is a Japanese Chemicals company, a part of the Mitsui conglomerate. The company has a turnover of around 15 billion USD and has business interests in Japan, Europe, China, Southeast Asia and the USA. The company mainly deals in performance materials, petro and basic chemicals and functional polymeric materials.
MRC

MOSCOW (MRC) -- German chemicals producer Evonik has agreed to sell its Methacrylates business to private equity investor Advent International for an enterprise value of EUR3 billion, as per Chemanager-online.

The plans announced a year ago reflect its “consistent strategy execution to focus on specialty chemicals,” the Essen-based player said. The announcement was due to be made at the annual results press conference today but was brought forward to yesterday evening after the news was leaked to UK newspaper Financial Times. The paper said chemicals giant Ineos, along with private equity firm SK Capital and a consortium of Triton and Rhone Capital had been interested buyers.

Selling price of the business with 18 production sites and 3,900 employees worldwide is 8.5 times EBITDA, which from 2016 to 2018 totalled about EUR350 million annually on sales of around EUR1.8 billion. Figures for 2019 are forecast to be at a similar level.

Evonik said the net purchase price following deductions consisting primarily of pension obligations will be about EUR500 million lower. Over the past two decades, Advent has been one of the leading buyers and sellers in the chemicals and plastics sectors.

Following regulatory approvals, the sale is planned to be wrapped up in this year’s third quarter. It will comprise the Methacrylates, Acrylic Products and the CyPlus business lines, in the main MMA and PMMA. The German company is ranked number two globally for both for the monomer and polymer. Without being specific, Evonik said it plans to retain some of its methacrylate resins activities.

While part of the proceeds will be used to strengthen the balance sheet, a sizeable share has been earmarked for “targeted growth projects” such as the acquisition of US hydrogen peroxide and peracetic acid producer PeroxyChem from One Equity Partners for USD625 million.

Additionally, some of the intake will be used to fortify the existing specialty chemicals portfolio, for example the new polyamide 12 plant to be built in Marl, Germany. Evonik said these businesses “generate an attractive margin and an above-average cash flow."

Expected to cost around €400 million, the PA 12 plant, the company’s largest investment in Germany so far, is expected to be operational in the first six months of 2021. The new production facility will increase overall capacity by more than 50%. Evonik currently produces around 40,000 t/y of the specialty polymer.
MRC

MOSCOW (MRC) -- Asia’s biggest oil consumers are flooding the region with fuel as refining output is exceeding consumption amid a slowdown in demand growth, pressuring industry profits, accoridng to Hydrocarbonprocessing.

Since 2006, the Asia-Pacific has been the world’s biggest oil consuming region, led by traditional industrial users South Korea and Japan along with rising economic powerhouses China and India.

Yet overbuilding of refineries and currently sluggish demand growth have caused a jump in fuel exports from these demand hubs.

Car sales in China, the world’s second-biggest oil user, fell for the first time on record last year, and early 2019 sales also remain weak, implying a slowdown in gasoline demand.

For diesel, China National Petroleum Corp in January said it expected demand to fall by 1.1 percent in 2019. That would be China’s first annual demand decline for a major fuel since its industrial ascent started in 1990.

The surge in fuel exports combined with a 25 percent jump in crude oil prices so far this year has collapsed Singapore refinery margins, the Asian benchmark, from more than $11 per barrel in mid-2017 to just over USD2.

Combine the slumping margins with labor costs and taxes and many Asian refineries now struggle to make money.

The squeezed margins have pummeled the stocks of most major Asian petroleum companies, such as Japan’s refiners JXTG Holdings Inc or Idemitsu Kosan, South Korea’s top oil processor SK Innovation, Asia’s top oil refiner China Petroleum & Chemical Corp and Indian Oil Corp., with some companies dropping by about 40 percent over the past year.

Jeff Brown, the president of energy consultancy FGE, said the surge in exports and resulting oversupply were a “big problem” for the industry.

"The pressure on refinery margins is a case of death by a thousand cuts... Refinery upgrades throughout the region are bumping up against softening demand growth," he said.

The profit slump follows a surge in fuel exports from China, India, Japan, South Korea and Taiwan. Refinitiv shipping data shows fuel exports from those countries have risen three-fold since 2014, to a record of around 15 million tonnes in January.

The biggest jump in exports has come from China, where refiners are selling off record amounts of excess fuel into Asia.

"There is a risk for Asian market turmoil if (China’s fuel) export capacity remains at the current level or grows further," said Noriaki Sakai, chief executive officer at Idemitsu Kosan during a news conference last week.

But Japan’s and South Korea’s fuel exports have also risen as demand at home falls amid mature industry and a shrinking population. Japan’s 2019 oil demand will drop by 0.1 percent from 2018 while South Korea’s will remain flat, according to forecasts from Energy Aspects.

In Japan, oil imports have been falling steadily for years, yet its refiners produce more fuel than its industry can absorb.

The situation is similar in South Korea, the world’s fifth-biggest refiner by capacity, according to data from BP Plc.
Cho Sang-bum, an official at the Korea Petroleum Association, which represents South Korean refiners, said the surging exports had "triggered a gasoline glut".

That glut caused negative gasoline margins in January.

Compounding the supply overhang in Asia, fuel exports from the Middle East, which the BP data shows added more than 1 million barrels per day (bpd) of refining capacity from 2013 to 2017, have doubled since 2014 to around 55 million tonnes, according to Refinitiv estimates.

Even more fuel is set to come. Malaysia’s state-owned Petroliam Nasional Bhd is starting up its RAPID refinery, capable of processing 300,000 bpd of crude, while China and India also have several projects coming online this year and next.

"Asia is expected to lead the global refining industry, both in terms of capacity as well as capital expenditure, between 2019 and 2023," data analytics firm GlobalData said in a report published this week.

“Between 2019 and 2023, 45 new refineries are expected to become operational in Asia,” said the report, adding that this would “increase petroleum products exports” from Asia.

Despite so many refineries coming to the market, the outlook is not entirely bleak.

FGE’s Brown said new regulations by the International Maritime Organization (IMO) that will require shippers to reduce the sulfur content in their fuel from next year meant demand for products like diesel and low-sulfur fuel oil (LSFO) would rise and improve refinery profits.

The main relief will come as the market shifts into IMO2020 mode in the fourth quarter," said Brown. "Margins will recover, restoring order to the market."
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