Fuels storage operator faces added costs for March fire and chemical spill

MOSCOW (MRC) -- The costs of a massive fire and chemical spill at a Houston petrochemical facility have begun trickling out, with a local official on Monday estimating emergency response costs at USD800,000 for the first two weeks of the disaster alone, reported Reuters.

A blaze at Mitsui & Co Ltd's Intercontinental Terminals Co (ITC) petrochemical facility in Deer Park, Texas, last month released cancer-causing chemicals into the air and waterway that connects Houston to the Gulf of Mexico, disrupting shipping along the nation's busiest oil port.

County employees devoted 16,800 hours to firefighting, pollution control, public health and law enforcement departments, Shain Carrizal, a Harris County director of finance, said of the USD800,000 estimate. The county plans to submit the bill to ITC after final calculations are made, as well as additional bills for labor and equipment costs in the future, he said.

Costs are likely to soar, with clean up operations continuing and local businesses affected by orders for area residents to stay indoors and refinery output reduced by shipping disruptions. In addition to fire and pollution control, the county provided medical care to more than 1,400 residents who live near the site following the blaze, officials said.

ITC faces lawsuits by state and county government over air and water pollution releases. Federal and state investigations into ITC's response also are continuing.

The company did not immediately respond to a request for comment. In the past, an ITC executive has said the company would apply insurance and available financial resources to pay for the local government costs.

As MRC informed before, in late March 2019, state and local investigators have begun investigating a petrochemical storage company outside Houston, TX where a massive fire fed by giant tanks of fuel burned for days, darkening the skies with soot for dozens of miles. The blaze at Mitsui unit Intercontinental Terminals Co (ITC) in Deer Park, Texas, began on Sunday, 17 March, and was not extinguished until early Wednesday, 20 March. It destroyed 11 tanks that can hold up to 80,000 barrels of gasoline and other fuels.
MRC

MOSCOW (MRC) -- Wood plc (Aberdeen, Scotland) has been awarded a new contract by Evonik Industries AG (Essen, Germany) to deliver engineering, procurement and construction management (EPCM) services for the group’s new polyamide 12 (PA12) production complex, to be built at the Marl Chemical Park, Marl, Germany, as per Chemengonline.

PA12 is a high-performance polymer for special applications employed across various end markets including the automotive industry, oil & gas pipelines and 3D printing. The new facility will supplement the existing PA12 production plant, without disrupting existing production.

The contract grows Wood’s relationship with Evonik following efficient delivery of basic engineering, EPCM and commissioning support services to the specialty chemical company’s new world-scale methionine plant on Singapore’s Jurong Island. Successful mechanical completion for the project was achieved safely in December 2018 meeting all milestones of the EPC contract.

Dave Stewart, CEO of Wood’s Asset Solutions business in Europe, Africa, Asia and Australia, said: “This award marks significant progress in our strategy to develop our chemicals business and expertise across Europe. “Wood is committed to the safe, reliable and successful delivery of this major project supporting Evonik to achieve future PA12 production targets.

“We look forward to building our partnership with this key customer in the downstream sector, leveraging our knowledge and understanding of Evonik’s operations to work in close collaboration."

Dr Ralf Dussel, head of the high-performance polymers business at Evonik, comments: “This is Evonik’s largest investment in Germany so far, valued at approximately EUR400 million, and it is expected to increase the Group’s overall capacity for PA12 by more than 50 percent. In Wood, we have contracted a well-known, globally active technical services provider, for the successful implementation of such a challenging project."

The project will be executed by Wood’s capital projects team based in Milan, Italy and is expected to be completed in the first quarter of 2021.
MRC

MOSCOW (MRC) -- Chinese independent refiner Shandong Haiyou Petrochemical Group aims to restart its key crude oil unit in June, a year after it was idled following a bankruptcy filing, reported Reuters with reference to sources.

The refinery in Juxian county in the eastern province of Shandong is preparing to restart a 70,000 barrels per day crude unit shut since last May after local government-led investment helped the firm clear most of its debts.

"The dead is returning... after the local government injected funds and became its new shareholder," said a trading executive active in the Shandong crude oil market who was briefed on the matter.

Two local government-backed companies in June 2017 injected a total 300 million yuan (USD44.7 million) into Haiyou Petrochemical for a combined 60 percent stake, according to official business credit information portal, the National Enterprise Credit Information System.

The local government also helped Haiyou raise about 2.8 billion yuan using its assets such as raw materials and inventories as collateral, said a statement posted on the local government’s website last December.

"The restructuring is still underway, but things are looking up," said a Haiyou Petrochemical manager based in Shandong, who declined to be named as he’s not authorized to speak to press.

The plant aims to restart the crude facility in June, but the final decision hinges upon when Haiyou receives further funding for operational matters, the manager added.

Multiple calls to Haiyou Petrochemical’s phone number listed on its website went unanswered.

Emma Li, an analyst with Refinitiv, which tracks oil tanker movements into China, said Haiyou received 730,000 barrels of Russian crude ESPO blend in late February.

A group of more than 40 independent Chinese refiners, sometimes known as "teapots", enjoyed bumper growth after Beijing allowed them to import crude oil. However, they have recently faced greater regulatory scrutiny and fierce competition in an increasingly over-supplied fuel market.

It was not clear what exactly led to the bankruptcy of Haiyou. Some small refiners are heavily leveraged and entangled in cross debt guarantees to secure financing, making them vulnerable to collective defaults if one part of the web of guarantees collapses.

Haiyou Petrochemical, established in 2006, filed for bankruptcy last July, the first teapot refiner to file for bankruptcy in recent years.

A Juxian county official told Reuters the local government has set up a special panel to restructure debts held by Haiyou and its previous parent Shandong Sunrise Group.
MRC

MOSCOW (MRC) -- Bayer AG’s earnings report gave Chief Executive Officer Werner Baumann a welcome boost as he prepares for a key meeting Friday where some investors will vent concerns about the troubled Monsanto acquisition, said the company.

The agriculture unit posted a 5.5% jump in first-quarter sales after adjusting for currency and portfolio changes, the company said as it reported earnings for the group that beat analysts’ estimates. Bayer rose as much as 4.5% in Frankfurt, its biggest gain since early January.

Monsanto’s growth rate is welcome news for Baumann, coming despite flooding in the U.S. Midwest that hurt rivals including DowDuPont Inc. and the impact of China trade tensions on the U.S. soybean sector. He’s heading into Bayer’s annual general meeting as the German company faces a broad set of challenges, led by the mounting number of lawsuits alleging that its Roundup weedkiller is linked to cancer.

The earnings beat is a temporary distraction from the Roundup woes, according to Michael Shah, an analyst at Bloomberg Intelligence. It’s a “much-needed boon to sentiment, yet it’s likely to be short-lived,” he said in a note.

The surprise sales jump at Monsanto came from, among other things, a strong performance in cotton seeds, according to Dennis Berzhanin, an analyst at Pareto Securities. On the pharma side, top-selling treatments Xarelto and Eylea — which face loss of patent protection next decade — both achieved sales growth of more than 15%. Quarterly profit was 2.55 euros a share, while analysts had estimated 2.48 euros a share. Even so, Bayer held to its group earnings target and 4% sales growth forecast for 2019.

Buying Monsanto was supposed to secure Bayer’s position in the rapidly consolidating agrochemicals market and deter outside forces from trying to split up the company, which sells everything from aspirin and cancer medicines to shoe inserts and soybean seeds. Now, investors are hoping to find out if and when the company will set aside money to settle the mountain of U.S. lawsuits surrounding Roundup, also known by its chemical name, glyphosate.

The company was facing suits from 13,400 U.S. plaintiffs as of April 11, about 20% more than in late January. That figure suggests that settlement terms could exceed $6 billion, which will continue to scare potential shareholders and as well as credit investors who want to see Bayer reduce its debt, according to Bloomberg’s Shah.
MRC

MOSCOW (MRC) -- Ube Industries, Ltd. announced that its consolidated subsidiary, UBE Corporation Europe S.A.U. (UCE), has acquired Spanish compound manufacturer Repol S.L. and has entered into an agreement for the transfer of shares, as per Hydrocarbonprocessing.

Repol operates a compound business in Europe using nylon 6, nylon 66, polypropylene, polyacetal, and other resin raw materials. These products are mainly used for automobiles but are also broadly used in industrial materials and for the electrical and electronics industries.

Under the agreement for the transfer of shares, UCE acquired a majority of the shares of Repol at the end of March 2019.

Ube Industries has positioned the nylon 6 business as an active growth business and is currently strengthening the nylon 6 business in the market for extrusion applications, where the company has a competitive edge. At the same time, Ube Industries is expanding the scope of the nylon 6 business in the market for injection applications.

The acquisition establishes a complementary relationship in the nylon 6 business while also giving Ube Industries access to Repol’s compound technologies and product development capabilities for non-nylon resins. Additionally, Repol’s recycling technologies are anticipated to be an asset to future business development amid tightening environmental regulation of plastic packaging materials.

UCE operates an existing compound plant and through the acquisition, Ube Industries gains an additional base of operations in Europe, which is leading the world in the use of plastics for vehicle weight reduction. Ube Industries will also seek to realize synergies with its existing manufacturing operations in Japan and Thailand. This will further accelerate the development of the company’s compound business for injection applications in the automotive sector and other industries, not only in Europe but extending to the Transatlantic region and Asia.

As MRC reported earlier, in December 2017, Ube Industries, JSR Corp. and Mitsubishi Chemical Corp. (MCC) received European Commission (EC) approval for the planned integration of their acrylonitrile butadiene styrene (ABS) subsidiaries.
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