LyondellBasell and Odebrecht end discussions regarding Braskem acquisition

MOSCOW (MRC) -- LyondellBasell, one of the largest plastics, chemicals and refining companies in the world, has announced it has ended discussions with Odebrecht S.A. concerning the potential acquisition of Braskem, as per the company's press release.

Odebrecht S.A. is the controlling shareholder of Sao Paulo-based Braskem.

"The combination of LyondellBasell and Braskem is compelling because of the companies' complementary strengths, product portfolios and operational footprints. However, after careful consideration, we jointly decided not to pursue the transaction. We want to thank the teams at Odebrecht and Braskem for their cooperation during the entire process," said LyondellBasell CEO Bob Patel.

"We remain focused on advancing our disciplined, value-driven growth strategy. In addition, we intend to expedite our share repurchase program, which currently allows for the repurchase of up to 37 million of our outstanding shares. Our strong cash flows, ample liquidity, and healthy balance sheet allow us to deliver a growing, top-quartile dividend, advance organic growth, and maintain optionality for M&A opportunities while executing these significant opportunistic share repurchases," said Patel.

As MRC wrote previously, in August 2016, LyondellBasell made the final investment decision to build a high density polyethylene (HDPE) plant on the US Gulf Coast. The plant will have an annual capacity of 1.1 billion pounds (500,000 metric tons) and will be the first commercial plant to employ LyondellBasell's new proprietary Hyperzone PE technology. The start-up of the new plant is scheduled for 2019.

LyondellBasell is one of the largest plastics, chemicals and refining companies in the world. Driven by its 13,000 employees around the globe, LyondellBasell produces materials and products that are key to advancing solutions to modern challenges like enhancing food safety through lightweight and flexible packaging, protecting the purity of water supplies through stronger and more versatile pipes, and improving the safety, comfort and fuel efficiency of many of the cars and trucks on the road. LyondellBasell sells products into approximately 100 countries and is the world's largest licensor of polyolefin technologies.

Braskem S.A. produces petrochemicals and generates electricity. The Company produces ethylene, propylene, benzene, toluene, xylenes, butadiene, butene, isoprene, dicyclopentediene, MTBE, caprolactam, ammonium sulfate, cyclohexene, polyethylene theraphtalat, polyethylene, and polyvinyl chloride (PVC).
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Aveva announces new global agreement with Covestro to transform process engineering and simulation

MOSCOW (MRC) -- AVEVA, a global leader in engineering and industrial software, announced that Covestro, one of the world’s largest high-tech polymer companies, has signed a multi-million Euro agreement to help digitally transform Covestro’s entire process engineering workflow, as per Hydrocarbonprocessing.

Covestro chose AVEVA’s SimCentral Simulation Platform as a single solution to replace legacy systems across the plant lifecycle to increase efficiency and allow its engineers to focus on innovation and develop new solutions to complex problems.

Process simulation is the virtual modeling of production processes designed to help engineers understand their operations better and enable them to predict performance and optimize processes with a high degree of accuracy.

With AVEVA SimCentral Simulation Platform, Covestro employees will be able to collaborate seamlessly across projects, engineering disciplines and locations with the potential to drive further productivity and efficiency gains. It is the first process simulation platform developed from the ground up to support steady-state, fluid-flow and dynamic modeling. It also integrates with engineering design tools in a single easy-to-use environment that spans the entire plant lifecycle.

"AVEVA’s SimCentral Simulation Platform will help us to fundamentally change the way we use process simulation software from conceptual design to the engineering and operation of our plants. It’s a key part of our journey to digitally transform our production," said Dr. Frank Dobert, Head of Production and Technology, Coatings, Adhesives and Specialties at Covestro. "AVEVA has the right technology, the right people, the right understanding of our industry and business and the right business mindset to be a valuable global strategic partner." Learn how Covestro uses next-generation process simulation to push the boundaries of digital transformation.

Covestro provides its high-quality polymer materials for a wide range of applications ranging from insulation for refrigerators and entire buildings, laptop and cell phone cases to scratch-resistant and fast-drying vehicle coatings and soft foams for furniture and car interiors. By replacing traditional materials with durable, light, environmentally-compatible and cost-effective equivalents, Covestro’s materials and application solutions are being used in nearly every area of modern life.

Amish Sabharwal, Global Head of Engineering Business at AVEVA, added: "A global leader in its field with a commitment to innovation and pushing the boundaries of what’s possible, Covestro’s approach to doing business is closely aligned with our own. Covestro is one of the most dynamic, forward thinking businesses in the industry and recognizes the growing importance of digital solutions in a changing world. Covestro’s engineers realized the potential of SimCentral Simulation Platform early on and after extensive testing we are delighted that Covestro has chosen to partner with us to meet a crucial objective in their digital transformation strategy."

As MRC reported earlier, in May 2018, Bayer Group sold 28.81 million shares representing a 14.2 percent interest in Covestro at a price of 75.50 euros per share. The proceeds of this sale totaled 2.2 billion euros. Bayer AG now holds just 6.8 percent of Covestro shares to repay the exchangeable bond that matures in 2020. Bayer AG acquired these shares from Bayer Pension Trust, which now no longer holds any Covestro shares.

We also remind that on 1 September, 2015, Bayer MaterialScience became known as Covestro. The plans for the carve-out of Bayer MaterialScience were announced in September 2014.

Covestro (formerly Bayer MaterialScience) is an independent subgroup within Bayer. It was created as part of the restructuring of Bayer AG from the former business group Bayer Polymers, with certain of its activities being spun off to Lanxess AG. Covestro manufactures and develops materials such as coatings, adhesives and sealants, polycarbonates (CDs, DVDs), polyurethanes (automotive seating, insulation for refrigerating appliances) etc.
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Henan Shuncheng and CRI sign agreement for CO2-to-Methanol plant in China

MOSCOW (MRC) -- Henan Shuncheng Group has entered into an agreement with Carbon Recycling International (CRI) for a carbon dioxide (CO2)-to-methanol facility in Anyang City, Henan Province, China, as per Apic-online.

The plant, which will be based on CRI's Emissions-to-Liquids process, will recycle about 150,000 t/y of CO2, with other waste gases, to produce 180,000 t/y of low-intensity methanol and liquefied natural gas. The project, estimated to cost around $90-million, is expected to be commissioned by the end of 2021.

CRI's majority owned joint venture with local partners in China established the project with Shuncheng; however, CRI is responsible for the design of the process, engineering and project execution.

"An agreement with a large Chinese chemical manufacturer such as Shuncheng Group shows CRI's global technology leadership in the CO2 capture and utilization (CCU) industry and how we enable energy companies and chemical producers to recycle waste into products, reducing pollution while supporting a circular economy," said CRI Chief Executive Sindri Sindrason.

We remind that, as MRC wrote before, Sinopec Zhongyuan Petrochemical restarted its methanol-to-olefins (MTO) plant following an unplanned outage in mid-February 2019. The plant was shut on November 5, 2018 owing to bearish market conditions. Located at Henan in China, the MTO plant has an ethylene and propylene capacity of 100,000 mt/year each.
MRC

LG Chem resumes production at Daesan naphtha cracker

MOSCOW (MRC) -- LG Chem Ltd has restarted its Deasan cracker following an unplanned outage, according to Apic-online.

A Polymerupdate source in South Korea informed that the company was likely to resume operations at the cracker on June 4, 2019. The cracker was shut on June 2, 2019 owing to technical glitch.

Located at Daesan in South Korea, currently the cracker has an ethylene capacity of 1.27 million mt/year and propylene capacity of 650,000 mt/year.

As MRC informed before, LG Chem is planning to spend USD2.4-billion to expand its naphtha cracking center (NCC) and polyolefin (PO) plant in Yeosu, South Korea. The project, which will expand the NCC and PO facility by 800,000 t/y each, is expected to be completed in the second half of 2021.

LG Chem Ltd., often referred to as LG Chemical, is the largest Korean chemical company and is headquartered in Seoul, South Korea. According to ICIS report, it is 15th biggest chemical company in the world in 2011. It has eight domestic factories and global network of 29 business locations in 15 countries. LG Chem is a manufacturer, supplier, and exporter of petrochemical goods, IT&E Materials and Energy Solutions.
MRC

SOCAR plans IPO of Turkish subsidiary in 2021

MOSCOW (MRC) -- Azerbaijan’s state energy company SOCAR plans to list its Turkish subsidiary on the London, Hong Kong and Istanbul stock exchanges in 2021, reported Reuters with reference to a SOCAR official.

"We believe that we have a good asset that we can monetize and IPO is a profit for shareholders," Zaur Gakhramanov, head of SOCAR Turkey Enerji, told Reuters at the annual Caspian Oil and Gas conference in Azerbaijan’s capital Baku.

He did not specify the volume of shares in SOCAR Turkey Enerji that SOCAR planned to offer to investors, but said that shareholders and SOCAR’s management would decide how to use proceeds from the initial public offering (IPO).

Citigroup and JP Morgan will be listing consultants, while McKinsey will help with "technical and financial optimization".

Gakhramanov said that SOCAR’s STAR oil refinery in Turkey had reached its full processing capacity of 10 million tonnes of oil per year in May and was expected to process 7 million tonnes of crude by the end of 2019.

"The plant is currently processing 28,500–29,000 tonnes of crude oil daily," he said, adding that the same volumes would be processed in June and July.

Oil products from the refinery are sent to the Turkish domestic market as well as for export.

Gakhramanov said that STAR would export 300,000 tonnes of reformate and 50,000 tonnes of jet fuel this year, while exports next year were expected to rise to 600,000 tonnes of reformate and 200,000-250,000 tonnes of jet fuel.

Gakhramanov said that reaching its full capacity enabled STAR to add other grades of crude oil to Urals, the only grade that it had been refining so far.

ЭWe plan to purchase 600,000 barrels of Siberian light crude and oil from Iraq Basra in June for processing purposes as it is possible to refine all crude oil grades at our plant,Э he said, adding that Saudi oil was not commercially profitable for the company at the moment.

Gakhramanov said that SOCAR had been given final permissions for the acquisition of natural gas distributing networks in the Turkish industrial cities of Kayseri and Bursa from Germany’s EWE Turkey Holding on May 27 and would finalize the deal by mid-June.

The company expects to be distributing 4 billion cubic meters (bcm) of gas to consumers in Turkey from 2020.

Gakhramanov said that gas supplies from Azerbaijan’s giant Shah Deniz field to Turkey through the Trans-Anatolian Pipeline (TANAP) would reach 3 bcm in 2019 and would double from 2020.

As MRC informed previously, in October 2018, Azeri state energy company SOCAR started up its new oil refinery in Turkey. The USD6.3 billion Star refinery, the first in Turkey built in 30 years, will supply feedstock to Turkish petrochemicals firm Petkim to help to cut Turkey’s dependence on imported refined oil products. It will boost Turkish refining capacity by 30 percent.

SOCAR, which is keen on expanding operations in the retail oil products market abroad, is involved in exploring oil and gas fields, producing, processing, and transporting oil, gas, and gas condensate, marketing petroleum and petrochemical products in the domestic and international markets, and supplying natural gas to industry and the public in Azerbaijan.
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