Formosa Plastics to expand Baton Rouge manufacturing site

MOSCOW (MRC) -- Formosa Plastics Corp. Louisiana, a subsidiary of Formosa Plastics Corp. USA, is investing USD332 million to expand its production of polyvinyl chloride (PVC) resin and add production equipment in two other units at the company’s industrial manufacturing site in Baton Rouge, La., on the east bank of the Mississippi River, reported Oil&Gas Journal.

The project will include installation of new machinery and equipment for the expansion of the PVC resin production unit, expected to result in a 20% increase in production capacity and sales; installation of new machinery and equipment for a halogenated acid production unit for internal use in the production of vinyl chloride monomer; and installation of utilities equipment needed for operations, the Louisiana Economic Development (LED) said.

Launch of the new operations is scheduled for late 2021 or early 2022, LED said.

The expansion of the existing PVC unit will result in an additional 300 million lb/year of resin production, said Paul Heurtevant, plant manager of Formosa’s Baton Rouge site.

LED estimates the project will create 15 direct jobs and 66 indirect jobs. Formosa also will retain 230 existing jobs.

The expansion project is slated to create 500 construction jobs beginning in early 2020, LED said.

LED said it began discussing potential expansion plans with Formosa in March, and the company considered a Texas location before committing to Louisiana.

To secure the project, LED offered Formosa a competitive incentive package that includes a performance-based grant of up to USD500,000. The company also will have access to the Louisiana’s Quality Jobs and Industrial Tax Exemption programs, LED said.

Formosa’s Baton Rouge site currently includes three operating units to produce PVC, a synthetic plastic polymer with a variety of uses in the construction industry, including as insulation on electrical wires, in flooring for buildings needing a sterile environment, and as piping and siding.

As MRC informed before, Formosa Petrochemical Corp reduced its October average run rate at the 540,000-barrel-per-day (bpd) Mailiao refinery in October to about 70% from more than 87% last month due to maintenance. Formosa, Asia’s sixth-largest standalone refinery by capacity, took an 80,000-bpd residue desulphurizer down for a planned maintenance.

According to MRC's ScanPlast report, Russia's overall production of polyvinyl chloride (PVC) reached 809,000 tonnes in the first ten months of 2019, up by 3% year on year. At the same time, not all Russian producers raised their output,

Formosa Petrochemical is involved primarily in the business of refining crude oil, selling refined petroleum products and producing and selling olefins (including ethylene, propylene, butadiene and BTX) from its naphtha cracking operations. Formosa Petrochemical is also the largest olefins producer in Taiwan and its olefins products are mostly sold to companies within the Formosa Group. Among the company's chemical products are paraxylene (PX), phenyl ethylene, acetone and pure terephthalic acid (PTA). The company"s plastic products include acrylonitrile butadiene styrene (ABS) resins, polystyrene (PS), polypropylene (PP) and panlite (PC).
MRC

MOSCOW (MRC) -- US crude oil stockpiles rose last week for the third consecutive week as production hit a record high, while distillate inventories, which include heating oil, fell for the eighth week in a row, reported Reuters with reference to the Energy Information Administration's statement.

Crude inventories rose by 2.2 million barrels in the week to Nov. 8, compared with analysts’ expectations in a Reuters poll for a 1.6 million-barrel rise.

"Further drawdowns in ... distillate fuels were supportive, but the rebound in refining utilization works against those data points," said John Kilduff, a partner at Again Capital LLC in New York.

"Both imports and exports of crude oil were quite low on the week, but the rise in domestic production shows that there is no slowdown in the oil patch, despite the falling rig count."

Crude production rose by 200,000 barrels per day (bpd) to a weekly record of 12.8 million bpd, the data showed.

Commercial crude imports fell 327,000 bpd to about 5.8 million bpd, the lowest level since February 1996. Net US crude imports fell by 589,000 bpd, EIA said.

Oil prices pared gains after the data was released. US crude traded up 14 cents a barrel at USD57.28 by 11:13 a.m. EST (1613 GMT). Brent crude traded up 34 cents a barrel at USD62.72.

Stocks at the Cushing, Oklahoma, delivery hub for US crude futures fell 1.2 million barrels, their first fall after five weeks of builds, the EIA said, after the main artery for Canadian crude imports, the Keystone pipeline, was forced to shut due to an oil spill.

Refinery crude runs rose by 155,000 bpd and utilization rates increased by 1.8 percentage points to 87.8% of total capacity, EIA data showed.

Distillate stockpiles, which include diesel and heating oil, fell by 2.5 million barrels in the week, versus analysts’ expectations in a Reuters poll for a 950,000-barrel drop, the EIA data showed.

US gasoline stocks rose after six weeks of drawdowns, building by 1.9 million barrels, the EIA said, compared with expectations for by 1.2 million-barrel drop.
MRC

MOSCOW (MRC) -- AkzoNobel has repurchased 108,726 of its own ordinary shares in the period from November 4, 2019 up to and including November 8, 2019, at an average price of EUR83.25 per share, said the producer.

The consideration of the repurchase was EUR9.05 million.

This is part of a repurchase program announced on February 13, 2019. The total number of shares repurchased under this program to date is 29,072,111 ordinary shares for a total consideration of EUR2,301.35 million.

AkzoNobel intends to repurchase common shares up to a value of €2.5 billion as part of a total EUR6.5 billion being distributed to shareholders following the sale of the Specialty Chemicals business. The share buyback is due to be completed by the end of 2019.

In accordance with regulations, AkzoNobel will inform the market about the progress made in the execution of this program through weekly updates on the share buyback overview page.

As it was written before, AkzoNobel finalized the acquisition of BASF’s global Industrial Coatings business, which supplies a range of products for industries including construction, domestic appliances, wind energy and commercial transport, strengthening its position as the global number one supplier in coil coatings.

As MRC informed earlier, BASF would expand the capacity of ethylene oxide and ethylene oxide derivatives at its Verbund site in Antwerp, Belgium. The total investment adds about 400 000 tpy to BASF’s production capacity for the corresponding products with an expected investment amount exceeding EUR500 million.

Ethylene is a feedstock for producing polyethylene (PE).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,255,800 tonnes in the first seven months of 2019, up by 9% year on year. Shipments of all PE grades increased.

Akzo Nobel N.V., trading as AkzoNobel, is a Dutch multinational, active in the fields of decorative paints, performance coatings and specialty chemicals. Headquartered in Amsterdam, the company has activities in more than 80 countries, and employs approximately 55,000 people.
MRC

MOSCOW (MRC) -- Israel’s Oil Refineries (ORL) reported a 56% drop in quarterly net profit on weakness in its polymers business and as refining margins fell, said Hydrocarbonprocessing.

ORL, Israel’s largest refining and petrochemicals group, earned USD7 million in the third quarter, down from USD16 million a year earlier.

Its adjusted refining margin was USD6.3 a barrel in the quarter, compared with Reuters’ quoted Mediterranean Ural Cracking Margin of USD3.3 a barrel and USD8.1 a year earlier.

Revenue rose 5% to USD1.62 billion.

The company said it will pay a USD50 million dividend, the same as the second quarter. ORL is controlled by Israel Corp, which holds a 33.1 percent stake.

As MRC informed earlier, Israel’s Oil Refineries (ORL) reported lower quarterly net profit, saying timing differences on the value of its inventory offset higher refining margins. ORL, Israel’s largest refining and petrochemicals group, earned USD63 million in the third quarter, down from USD74 million a year earlier.

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

ORL, Israel’s largest refining and petrochemicals group, said at this stage it was unable to predict the results of the investigation and its implications for ORL and Gadiv.
MRC

MOSCOW (MRC) -- China’s crude oil throughput in October rose 9.2% from a year earlier to the second-highest on record, as refineries in the world’s second-biggest oil consumer and top importer ramped up output after returning from plant maintenance, said Hydrocarbonprocessing.

Last month, crude processing volumes were 57.84 million tonnes, or about 13.62 million barrels per day (bpd), below the record of 13.75 million bpd reached in September, data from the National Bureau of Statistics showed.

"Most of the refineries have resumed operations from maintenance and have kept a relatively high processing rate in order to meet their annual production targets," said Wang Zhao, an analyst with China-based Sublime Information Co. The launch of two large-scale refineries by privately owned Hengli Petrochemical and Zhejiang Petrochemical along with the start up of an expansion at a PetroChina refinery also pushed crude runs higher last month.

Faced with a slowing economy and tepid demand for refined oil products, however, the hefty crude throughput may increase a fuel surplus in China and encourage refiners to boost product exports in coming months. China’s crude oil imports in October rose to a record high of 10.72 million bpd, which is expected to be processed at refineries over November and December.

Average refining margins in China fell to around 200 yuan (USD28.60) a tonne in October from nearly 300 yuan a tonne in August, Wang said, adding that he expected processing profits to shrink further in November. Asia’s top refiner Sinopec posted a 35% fall in third-quarter net profit versus a year earlier due to China’s narrowing refining margins.

For the first 10 months of the year, crude throughput rose 6.4% from a year earlier to 537.1 million tonnes, or about 12.9 million bpd, the data showed. The statistics bureau data also showed that China’s crude oil output in October held flat from a year earlier at 16.11 million tonnes, or about 3.79 million bpd, the lowest daily output so far this year.

Natural gas production jumped 8.2% from a year ago to 14.6 billion cubic meters (bcm) amid Beijing’s push to boost domestic supply. In the first 10 months of 2019, crude output climbed 1.1% from a year ago to 159.25 million tonnes, and gas output rose 9.3% to 142.3 bcm.

China’s state planner expects natural gas output to top 170 bcm in 2019, up 11 bcm from last year.

As MRC informed earlier, Russia's output of chemical products dropped in September 2019 by 2.4% month on month. However, production of basic chemicals increased by 3.6% in the first nine months of 2019, according to Rosstat"s data. According to the Federal State Statistics Service of the Russian Federation, the largest increase in production volumes on an annualized basis accounted for mineral fertilizers and polymers in primary form. Thus, 200 ,000 tonnes of ethylene were produced in September, compared to 255,000 tonnes a month earlier. Kazanorgsintez and Stavrolen capacities were shut for maintenances in September. Thus, 2,256,000 tonnes of this olefin were produced in January-September 2019, up by 0.7% year on year.
MRC