Lotte Chemical to merge its affiliate Lotte Advanced Materials by January 2020

MOSCOW (MRC) -- The board of directors of Lotte Chemical, based in Seoul, agreed on a scheduled merger between two Korean-Japanese Lotte subsidiaries. Lotte Advanced Materials will merge into Lotte Chemical once the merger takes place, as per Kemicalinfo.

Following a shareholder meeting in November, the merger is anticipated to be complete by January 2020.

Lotte Chemical’s dissenting shareholders may submit veto privileges in September. The merger will be scrapped if a combined stake of more than 20 percent is represented by opposing stakeholders. The majority shareholders of Lotte Chemical include 23.24 percent of Lotte Corp., 20 percent of Lotte Property & Development and 9.3 percent of Lotte Holdings. The rest of Lotte Chemicals’ 42.59 percent is owned by minority shareholders.

The disclosure came weeks after Samsung SDI bought the remaining 10 percent stake for 279.5 billion won (USD231 million) from Lotte Chemical, which already held a 90 percent stake in Lotte Ad-vanced Materials.

Formerly a chemical material making operation of Samsung SDI, Lotte Advanced Materials got its new name after a Samsung SDI split-off and Lotte’s acquisition for 2.3 trillion in 2016. Lotte Advanced Chemicals is based in the coastal city of Yeosu, South Jeolla Province. Both Lotte Chemical and Lotte Advanced Materials have presence in plastic polymer market. Lotte Chemical produces polyethylene and polypropylene, while Lotte Advanced Materials makes acrylonitrile butadiene styrene and polycarbonate.

As MRC wrote previously, Lotte Chemical Corp commenced commerical operations at its US ethane cracker in Louisiana in May, 2019. With the commencement of the plant, the South Korean company hopes to boost its cost competitiveness by diversifying away from mainly naphtha as a feedstock to make ethylene, a key ingredient for petrochemical products. Lotte Chemical’s US ethane cracker is a joint venture with Axiall Corp, which is now merged with Westlake Corp. Lotte owns an 88 percent in the plant, while Westlake Corp holds the remainder.

South Korean Lotte Chemical is a global petrochemical company, established in 1976. It produces low density polyethylene (LDPE), high density polyethylene (HDPE), linear low density polyethylene (LLDPE), polypropylene (PP), functional resins, styrene monomer (SM), polyethylene terephthalate (PET), etc.
MRC

MOSCOW (MRC) -- US refiner HollyFrontier Corp said it would build a biodiesel plant in New Mexico to lower costs related to blending renewable fuels and announced a USD1 billion share buyback program, as per Hydrocarbonprocessing.

Oil companies, including refiners, have to blend increasing amounts of renewable fuels with their petroleum products or purchase credits, known as Renewable Identification Numbers (RINs), to meet US biofuel requirements.

The company’s RIN costs totaled USD184 million in 2018.

HollyFrontier plans to build the plant at its Artesia refinery to process soybean oil and other feedstocks into biodiesel, with production capacity of about 125 million gallons a year.

The plant, along with rail infrastructure and storage tanks, is expected to cost USD350 million and will be funded with cash on hand.

The project, which is expected to be completed in the first quarter of 2022, will generate an internal rate of return of between 20% and 30%, the company said.

The buyback replaces all existing share repurchase authorizations, of which there was about USD281 million remaining, the company said.

HollyFrontier had on Friday said it would bring in its former Chief Executive Officer Michael Jennings to replace George Damiris, who will retire at the end of the year.

As MRC informed before, a fire at HollyFrontier Corp’s 39,330 barrel-per-day (bpd) Woods Cross, Utah, refinery was extinguished by noon MST(1900 GMT), on 13 January 2019. HollyFrontier spokesman Craig Biery said then all employees and contractors were accounted for and safe at the refinery 10 miles (16 km) north of Salt Lake City.
MRC

MOSCOW (MRC) -- Gazpromneft Bitumen Materials, operator of the Gazprom Neft bitumens business, has signed a Cooperation Agreement with the Transport and Construction Complex Research Institute on developing effective formulations for high-tech bitumen binders, and using these in roadbuilding, under an agreement signed by Dmitry Orlov, General Director, Gazpromneft Bitumen Materials, and Evgeny Simchuk, General Director of the Transport and Construction Complex Research Institute, said the company.

The parties have agreed to develop a roadmap directed at improving efficiency in using bitumen materials in building and operating transport infrastructure facilities. This partnership is expected to involve a series of R&D and pilot operations at the Gazprom Neft Science and Technology Centre in Ryazan, as well as at the Institute’s own research centre. Based on this work, current technical standards and methodologies for testing bitumen materials will be updated, in line with the needs of Russia’s roadbuilding industry.

The agreement also envisages the parties collaborating in developing new innovative formulations for bitumens and asphalt mixes, using cutting-edge technological solutions in line with current regulatory, environmental and safety standards. In order to monitor effectiveness in using bitumen materials a progressive oversight system will be put forward for monitoring the operating conditions and status of highways and motorway test-sections.

As MRC informed earlier, Gazprom Neft and the Abu Dhabi National Oil Company (ADNOC) have entered into a Framework Agreement on Strategic Cooperation. The companies will explore opportunities for implementing joint projects in the upstream and downstream sectors, as well as in information technologies, artificial intelligence, and other areas.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,589,580 tonnes in the first nine months of 2019, up by 7% year on year. Shipments of all PE grades increased. The estimated PP consumption in the Russian market was 976,790 tonnes in January-September 2019, up by 4% year on year. Shipments of PP block copolymer and homopolymer PP increased.

Gazpromneft Bitumen Materials is a subsidiary of Gazprom Neft, specialising in the production and sale of bitumen products. The company currently holds a leading position on the Russian bitumens market.

The company’s key production facilities are based in the Moscow, Omsk, Yaroslavl, Smolensk, Rostov and Ryazan Oblasts, as well as in Serbia and Kazakhstan. The company produces road, construction and roofing bitumens, as well as polymer-modified bitumens (PMBs) and binders (specifically G-Way Styrelf), and a range of bitumen derivatives (mastic compounds, sealants, bridging tapes and more). The company established a dedicated bitumens Science and Technology Centre in 2016, which has since become the first such organisation among Russia’s vertically integrated oil companies offering technological support to the bitumens business. The company is constantly developing new formulations, and further improving technology in the production of innovative binders.
MRC

MOSCOW (MRC) -- Peruvian state-owned oil firm Petroperu is seeking as much as USD1.5 billion of government funding to complete expansion of its Talara refinery, the company’s president Carlos Paredes said at a press conference, as per Hydrocarbonprocessing.

Paredes said the funds - USD1 billion rolling over previously issued bonds and $500 million in “fresh” financing - would help the facility start operation in the first quarter of 2021.

As MRC informed earlier, Peru’s state-owned energy company will halt operations at its flagship oil refinery Talara for about a year starting in November. Talara will halt operations to complete a USD5 billion expansion project, the company said. Petroperu said it plans to import fuel in that period to ensure demand is met in the Andean country of about 30 million people. It did not specify what kind of fuel it would import.

Peru is a net oil importer. Petroperu said Peru’s fuel imports will fall significantly once the expansion is complete, which it estimated would happen at the end of 2020.
MRC

MOSCOW (MRC) -- ExxonMobil Corp. has let a contract to Fluor Corp. for a series of services related to the operator’s previously announced expansion project to increase production of ultralow-sulfur diesel by nearly 45% at affiliate Esso Petroleum Co. Ltd.’s (EPCL) 270,000-b/d Fawley refinery near Southampton, UK, reported Oil&Gas Journal.

Following its completion of front-end engineering design for the expansion - now known as the Fawley Strategy (FAST) project - Fluor will provide engineering, procurement, fabrication, and construction on a reimbursable basis for the project, the service provider said.

Specifically, Fluor’s scope of work on the project includes design and construction of a new diesel hydrotreater and steam methane-reforming hydrogen plant as well as modifications to unidentified existing installations at the Fawley site.

With EPCL now granted planning permission from local regulatory authority the New Forest District Council Engineering, Fluor said it is currently leading engineering and procurement for the FAST project out of its Farnborough office in the UK.

Construction activities on the FAST expansion are scheduled to start by yearend.

Fluor disclosed neither a value nor duration of the contract.

The contract award follows ExxonMobil’s April final investment decision to proceed with the more than USD1-billion expansion project, which intends to help reduce the need to import diesel into the UK by adding a hydrotreating unit to remove sulfur from fuel, supported by a hydrogen plant that, combined, will also help improve the refinery’s overall energy efficiency.

In addition to logistics improvements, the project will increase ultralow-sulfur diesel production at the site by 38,000 b/d.

Pending regulatory approval, the FAST project is targeted for start-up in 2021.

Situated on the western side of Southampton Water, the Fawley refinery - the UK’s largest - features a mile-long marine terminal that annually handles about 2,000 ship movements and 22 million tonnes of crude and other products.

ExxonMobil previously said the Fawley expansion project comes as part of the company’s broader plans to increase earnings potential of its global downstream business by 2025.

As MRC wrote previously, on 24 September 2019, ExxonMobil Corp shut its 369,024 barrel-per-day (bpd) crude oil refinery in Beaumont, Texas, because of flooding from Tropical Storm Imelda. Exxon earlier that day shut the Beaumont chemical plant, which adjoins the refinery. The company operates a cracker with a capacity of 830,000 mt of ethylene and 195,000 mt of proplyelen per year, low density polyethylene (LDPE) plant with a capacity of 236,000 mt per year and linear low density polyethylene plant with a capacity of 727,000 tonnes per year.

We also remind that in September 2019, ExxonMobil announced plans to spend GBP140 million over the next two years in an additional investment program at its Fife ethylene plant (UK), which has a capacity of more than 800,000 t/y.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and PP.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,589,580 tonnes in the first nine months of 2019, up by 7% year on year. Shipments of all PE grades increased. The estimated PP consumption in the Russian market was 976,790 tonnes in January-September 2019, up by 4% year on year. Shipments of PP block copolymer and homopolymer PP increased.

ExxonMobil is the largest non-government owned company in the energy industry and produces about 3% of the world's oil and about 2% of the world's energy.
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