Borouge boosts pre-compounded PE capacity for Asian pipe markets

MOSCOW (MRC) -- Singapore-based polyolefin supplier Borouge Pte. Ltd. is making investments in specialized grades of polyethylene to meet demand for higher-quality pipe in Asia, including in response to China upgrading its water pipe standards, said Plasticsnews.

CEO Wim Roels declined to release details of the investment, but a company news release said it was a "significant" increase in capacity for specialized precompounded black PE resin for pressure pipe applications for Asian markets and would be completed next year.

In an interview at Chinaplas, held May 21-24 in Guangzhou, Roels said the investment will come at the company's facility in Ruwais, United Arab Emirates.

He said China's Water Standards Committee last year adopted new rules for PE pipe that will promote the use of precompounded materials. The new capacity is also targeting Africa, the Middle East and other parts of Asia-Pacific, including the Indian subcontinent, Southeast Asia and Australia, he said.

"Countries are moving," he said. "China has now decided to use precompounded black material for water pipe.

"This will improve the quality of pipe," Roels said. "At the end, we believe it's crucial to secure quality standards for pipe. If you put pipe in the ground, it's supposed to be there for 50 years plus, up to 100 years."

He said the adoption of higher standards as China has done is important for the company's market development because without more stringent rules, "there are always cheaper solutions" for pipe infrastructure. But he said lower-quality pipe can leak water or, in the case of gas, cause explosions.

"This is a raising of the standard, a raising of the quality requirements, which I believe long term is the right thing to do," Roels said. "We are leading support to this development of new standards like China did. Substandard pipe is very dangerous for society and for the industry.

"We have been pioneering in these countries black pipe, precompounded pipe as a solution," he said. "That's a position we want to maintain and we want to further develop."

Roels said most of Borouge's business in China that targets the domestic market, like pipe, is doing well.

The automotive sector is struggling and some of Borouge's export-oriented customers are pinched because of the trade conflict with the United States, but in general the market in China is in good shape for Borouge, he said.

"Overall, we still see the business is quite good," he said. "So far we see that most of the businesses we are serving are actually doing quite OK. They're more domestic, and domestic demand fundamentally has not changed very much."

Even with China's economic growth slowing to 5 or 6 percent, as the world's second-largest economy, that's still "massive" growth, he said.

The announcement of added capacity for pipe materials comes shortly after Borouge announced an expansion of its petrochemical complex in Ruwais, including what would be the world's largest mixed-feed cracker with an ethylene output of 1.8 million metric tons.

Borouge is a joint venture of Vienna, Austria-based Borealis AG and the Abu Dhabi National Oil Co.
MRC

MOSCOW (MRC) -- Chevron Phillips Chemical Company, a joint venture between Chevron Corp and Phillips 66, has offered to acquire Nova Chemicals Corp for more than USD15 billion including debt, said Reuters.

Chevron Phillips Chemical, one of the world’s top petrochemical producers, would gain scale and expand its footprint through the acquisition of Nova Chemicals, whose expandable polystyrene and resins are used in a range of industries, from construction to packaging.

Abu Dhabi’s sovereign wealth fund Mubadala Investment Co, the owner of Nova Chemicals, has been exploring a sale of the Canadian plastics maker since the start of the year, and there is no certainty that it will accept the offer from ?Chevron Phillips Chemical, the sources said.

Another bidder for Nova Chemicals may yet emerge, some of the sources added. Mubadala could also decide to keep a stake in Nova Chemicals in a deal, one of the sources added.

The sources asked not to be identified because the negotiations are confidential. Nova Chemicals, Mubadala, Chevron and Phillips 66 did not immediately respond to requests for comment.

Headquartered in Calgary, Nova Chemicals was founded in 1954. Over the years, it has diversified its business beyond foam packaging and insulation to foam beverage cups and containers.

Nova Chemicals reported earnings before interest, taxes, depreciation and amortization of USD271 million in the first three months of 2019, down from USD418 million a year earlier, according to its website.

Abu Dhabi acquired Nova Chemicals for USD500 million in 2009 using its stated-owned International Petroleum Investment Co (IPIC), saving it from a financing restructuring due to its large debt. Since then, the company’s business has grown rapidly, taking advantage of the shale-driven natural resources boom in North America.
MRC

MOSCOW (MRC) -- Indonesian state energy company PT Pertamina said it was extending negotiations with Saudi Aramco on the potential joint development of an oil refinery in the country by another three months, reported Reuters.

That comes after talks were previously extended by six months from last December, with Pertamina on Tuesday reiterating that the two sides had been unable to agree a "valuation" for the refinery, without giving further details.

Pertamina and Aramco in 2016 agreed to negotiate to form a joint venture to build and operate the Cilacap refinery in the province of Central Java.

Pertamina spokeswoman Fajriyah Usman said in a statement on Tuesday that the two companies would extend talks by three months and that they had agreed to hire a financial adviser to help finalise a deal.

The Cilacap refinery is one of six major projects that are part of a push to double Pertamina’s refining capacity to 2 million barrels per day (bpd).

Pertamina officials said in April that if talk with Aramco failed, the Indonesian company would launch the project without a partner to meet an operational target of 2025.

Pertamina is an Indonesian state-owned oil and natural gas corporation based in Jakarta. It was created in August 1968 by the merger of Pertamin (established 1961) and Permina (established 1957). Pertamina is the world's largest producer and exporter of liquefied natural gas (LNG).

Saudi Aramco, officially the Saudi Arabian Oil Company, is a Saudi Arabian national oil and natural gas company based in Dhahran, Saudi Arabia. Saudi Aramco's value has been estimated at up to USD10 trillion in the Financial Times, making it the world's most valuable company. Saudi Aramco has both the largest proven crude oil reserves, at more than 260 billion barrels, and largest daily oil production.
MRC

MOSCOW (MRC) -- Overall imports of polyethylene (PE) to the Ukrainian market grew in the first five months of 2019 by 11% year on year to 111,300 tonnes. The high density polyethylene (HDPE) accounted for the main increase in imports, according to MRC's DataScope report.

Last month's PE imports to Ukraine dropped to 21,100 tonnes from 25,100 tonnes in April, shipments of all ethylene polymers decreased. Overall PE imports reached 111,300 tonnes in January-May 2019, compared to 100,300 tonnes a year earlier. HDPE imports increased, whereas imports of other grades of ethylene polymers virtually remained at the 2018 level.

The structure of PE imports by grades looked the following way over the stated period.

Last month's HDPE imports fell to 8,700 tonnes from 9,600 tonnes in April, with pipe grade PE accounting for the reduction in shipments. Overall HDPE imports reached 42,000 tonnes in the first five months of 2019, compared to 31,100 tonnes a year earlier.

May imports of low density polyethylene (LDPE) were 5,100 tonnes versus 6,900 tonnes a month earlier. Overall LDPE imports reached 31,600 tonnes over the stated period, which virtually corresponded to the 2018 figure.

Last month's imports of linear low density polyethylene (LLDPE) were 6,500 tonnes, compared to 7,500 tonnes in April. Overall LLDPE imports rose to 32,000 tonnes in January-May 2019 from 32,000 tonnes a year earlier.

Imports of other PE grades, including ethylene-vinyl-acetate (EVA), totalled 5,200 tonnes over the stated period, compared to 5,700 tonnes a year earlier.

MRC

MOSCOW (MRC) -- Russia's output of chemical products rose in April 2019 only by 1% year on year. However, production of basic chemicals increased by 2.8% in the first five months of 2019, according to Rosstat's data.

According to the Federal State Statistics Service of the Russian Federation, ethylene accounted for the largest increase in production year on year.

262,000 tonnes of ethylene were produced last month, compared to 263,000 tonnes in April. Thus, 1,318,000 tonnes of this olefin were produced in January-May 2019, up by 4.1% year on year.

May production of benzene was 128,000 tonnes, compared to 121,000 tonnes a month earlier. Overall output of this product reached 618,000 tonnes in the first five months of 2019, up by 0.9% year on year.

May production of sodium hydroxide (caustic soda) was 107,000 tonnes (100% of the basic substance) versus 103,000 tonnes a month earlier. Overall output of caustic soda totalled 535,000 tonnes over the stated period, compared to 514,800 tonnes a year earlier.

2,098,000 tonnes of mineral fertilizers (in terms of 100% nutrients) were produced in May versus 2,249,000 tonnes a month earlier. Overall, Russian plants produced 10,404,000 tonnes of fertilizers in January-May 2019, up by 1.6% year on year.

Last month's production of polymers in primary form decreased to 713,000 tonnes, up 1.1% from April. Overall output of polymers in primary form totalled 3,497,000,000 tonnes over the stated period, up by only 0.8% year on year.
MRC