Elliott revives call to split Marathon Petroleum into three

MOSCOW (MRC) -- Elliott Management Corp urged Marathon Petroleum Corp to split into three companies, saying it would boost shareholder value by as much as USD40 billion, three years after it asked the refiner to consider spinning off businesses, as per Hydrocarbonprocessing.

Shares of Marathon, which has a market capitalization of about USD36 billion, were up 7.7% at USD59.76.

Elliott said its call to separate Marathon’s retail, refining and midstream assets was prompted by the company’s failure to deliver on past promises and “chronic underperformance".

The company’s shares have fallen 6% this year, compared with a 7.4% gain in the S&P oil and gas refining and marketing index. At the year’s low of USD43.96 in August, its shares touched 2016 levels.

Under Elliott’s latest plan, Marathon’s transportation and storage business will become MPLX, a company with an enterprise value of more than USD50 billion. Its refining business will be the “New Marathon” with an enterprise value of USD29 billion, while its retail business will become Speedway worth about USD18 billion.

Marathon said it was focused on increasing shareholder value and would “thoroughly evaluate” Elliott’s proposal.

The hedge fund, founded by billionaire Paul Singer, said it had accepted a “compromise” last time around after “extensive” talks in which Marathon agreed to simplify its midstream business and undertake a strategic review of its Speedway assets.

After the review, the refiner chose to keep its Speedway retail arm, a decision then backed by Elliott.

Marathon later bought rival Andeavor to become the top U.S. refiner and earlier this year completed the merger of midstream units MPLX (MPLX.N) and Andeavor Logistics LP in a USD9 billion deal.

Elliott said it estimated a USD22 billion boost to shareholder value from the split and another USD17 billion if refining, retailing and marketing operations were to be improved after the separation.

As MRC informed earlier, on April 29, 2018, Andeavor, Marathon, Mahi Inc. and Andeavor LLC entered into an Agreement and Plan of Merger (the "Merger Agreement") providing for the acquisition of Andeavor by Marathon through a merger of Mahi Inc. with and into Andeavor, with Andeavor surviving the merger as a wholly owned subsidiary of Marathon and the subsequent merger of Andeavor with and into Andeavor LLC, with Andeavor LLC surviving the merger as a wholly owned subsidiary of Marathon.
MRC

MOSCOW (MRC) -- Michelin, IFPEN, and Axens have announced the construction of the first industrial-scale prototype of a plant producing butadiene from bioethanol in France, said Hydrocarbonengineering.

Launched in late 2012, the BioButterfly project aims to produce butadiene from ethanol from biomass (plants) in order to produce innovative synthetic rubbers that are more environmentally friendly.

Currently produced from oil, butadiene is a compound used, among other things, for the manufacture of synthetic rubber. Worldwide, manufacturers consume over 12 million tpy of butadiene of which about 40% is used to make tyres.

Construction of this industrial prototype will start in late 2019 and is expected to be completed in late 2020 on Michelin’s site in Bassens, near Bordeaux, where Michelin is already using butadiene from petroleum to manufacture its synthetic rubbers intended, in particular, for the European market. The BioButterfly project represents a total investment of EUR70 million and will create around 20 jobs on the site.

After several years of laboratory tests (manufacturing a few grams) followed by the development of pilots at IFPEN-Lyon (manufacturing hundreds of grams), the industrial prototype must now validate the complete chain of steps in the manufacturing process to prove its technological and economic viability for mass production (between 20 and 30 tpy). This is the last phase before industrial implementation of the process (100 000 tpy) to be marketed by Axens.

The plant will test the use of ethanol from all kinds of biomass, including 2G ethanol (2nd generation, non-competing with food) made from forest or agricultural residues (straw, woodchips, etc.) It will validate the process developed by IFPEN which will eventually be included in the portfolio of green technologies marketed by Axens. This production pathway will also enable Michelin to better secure its access to butadiene while supporting its goal of sustainable mobility.

This decision gives a new dimension to the BioButterfly project supported by ADEME (French Agency for Environment and Energy Management) under the Investments for the Future Programme. It illustrates the willingness of partners to reduce the industry’s environmental footprint by fostering the development of a bio-sourced synthetic rubber industrial sector and reaffirms their commitment to a new research and innovation sector serving a more sustainable industry.

Florent Menegaux, CEO of Michelin, said: “Taking the environmental impact of its activities into consideration is part of the Michelin Group’s identity as a forerunner and leader of sustainable mobility. By 2050, 80% of raw material used in our tyres will be sustainable. We expect bio-butadiene to represent approximately 20% of this objective."

Butadiene is one of the main raw materials for the production of acrylonitrile butadiene styrene (ABS).

According to the ICIS-MRC Price Report, because of low prices in Asia in August, ABS imports to Russia amounted to 3.600 tonnes compared to 2,800 tonnes a month earlier and 2,700 tonnes in August last year. According to the results of January - August, the import of ABS in the Russian Federation did not change relative to the same period last year and amounted to 21,900 tonnes.
MRC

MOSCOW (MRC) -- Commodity trader BB Energy has expanded into renewables and petrochemicals as it seeks to diversify away from the more crowded conventional oil markets, it said, as per Hydrocarbonprocessing.

The company has hired two traders in Singapore to venture into biofuel and petrochemical trading in the Asia Pacific region, where it sees promising growth.

“We have to diversify from conventional fuel, we have to go with the flow” Frederic Lassau, global head of middle distillates, told Reuters.

Lassau said conventional markets like crude, jet fuel and diesel were becoming increasingly harder to trade amid shrinking profits and fierce competition.

Oil traders must now compete with new players like Saudi Arabia’s Aramco and the UAE’s Adnoc, which in recent years have beefed up their own trading operations, seeking to maximize profits on their own oil from the well to the consumer.

BB Energy has hired Shane Hong to set up the petrochemicals desk, focusing on aromatics and other petrochemical products, Lassau said. Hong previously worked as trading manager for AOT Energy in Singapore, according to his LinkedIn entry.

Eng Hian Ong joined on biofuels, having previously traded a variety of petroleum products from fuel oil to LPG with Trafigura and others.

On the petrochemical side, BB Energy wants to capitalize on new petrochemical refining capacity coming online in the region, for example in China and Korea.

Traders like BB Energy, Lassau noted, can offer expertise in marketing products, providing financial instruments and hedging options.

BB also continues to expand in conventional markets and has recently expanded its gasoline and distillates teams in London and Houston.
MRC

MOSCOW (MRC) -- The Supervisory Board of Brenntag AG appointed Christian Kohlpaintner as the company's next CEO and Member of the Management Board effective January 1st, 2020, said the company.

Over the last two decades, Christian Kohlpaintner has held various management positions in leading international companies. He joins from Clariant International Ltd. where he was Member of the Executive Committee. Christian Kohlpaintner will succeed the current CEO, Steven Holland, who will leave the company at the same time.

Stefan Zuschke, Chairman of the Supervisory Board of Brenntag AG, commented on the appointment: 'With Christian Kohlpaintner we have been able to place as our new CEO an internationally experienced business leader with a proven track record. He has demonstrated impressively that he can lead and develop major business divisions and companies successfully. It will be his mission to lead Brenntag to sustainable growth and expand the market leadership further. It will also be about breaking new ground while at the same time preserving the core of the successful business model."

The future CEO, Christian Kohlpaintner, commented on his appointment: 'I am looking forward to my new role at Brenntag and the opportunity of working with my colleagues on the Management Board and the whole Brenntag team. Brenntag is a very healthy company which is ideally positioned in the chemical value chain."

The appointment of Christian Kohlpaintner also marks the end of Steven Holland's almost 14 years tenure with Brenntag, more than 8 years as its CEO. Stefan Zuschke: 'The Supervisory Board would like to thank Steven Holland. Steven's vision and leadership have driven the company's growth and success in a dynamic and challenging environment. We sincerely thank Steven for his contributions and for developing the company into the leading position that Brenntag holds in the market today. The Supervisory Board wishes him all the best for the future."

Christian Kohlpaintner (55) has more than 20 years of management experience in an international environment. The Ph.D. chemist began his professional career at Hoechst, where he held various positions in Germany and the USA. Afterwards he moved to Celanese, where he worked amongst others as Marketing Director and as Vice President for Innovations. Between 2003 and 2009, Christian Kohlpaintner worked for Chemische Fabrik Budenheim, where his last position was CEO. In 2009, Christian Kohlpaintner joined Clariant in Switzerland, where he had been a member of the Executive Committee since then. Most recently he was based in China and amongst others responsible for the growth-oriented business areas of Clariant and the whole region Asia.

As MRC informed earlier, Brenntag, the global market leader in chemical distribution, has signed an agreement to acquire TAT Group, a Singapore based distributor for industrial chemicals.
MRC

MOSCOW (MRC) -- LyondellBasell has declared a force majeure on polypropylene (PP) supplies from its Carrington, UK facility, according to NCT with reference to market sources.

The news could not be confirmed directly by the company while the reason for the force majeure was not disclosed at the time of press.

LyondellBasell’s Carrington plant is able to produce 210,000 tons/year of PP.

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.

According to MRC's ScanPlast report, the estimated PP consumption in the Russian market was 796,120 tonnes in January-July 2019, up by 11% year on year. Shipments of PP block copolymer and homopolymer PP increased.

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.
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