LyondellBasell and Sinopec announce joint venture to manufacture propylene oxide and styrene monomer in China

MOSCOW (MRC) -- LyondellBasell (LBI), one of the largest plastics, chemicals and refining companies in the world, has announced it has signed a Memorandum of Understanding (MoU) to form a 50:50 joint venture (JV) with China Petroleum & Chemical Corporation (Sinopec), one of the largest integrated energy and chemical companies in China, as per LBI's press release.

Under the non-binding MoU, the JV will construct a new propylene oxide (PO) and styrene monomer (SM) unit in Zhenhai, Ningbo, China to serve that country's domestic market. Once finalized, this JV will build upon the existing LyondellBasell / Sinopec PO/SM joint venture in the same location, which operates under the name Ningbo ZRCC Lyondell Chemical Company Limited.

"Joint ventures in strategic regions are an important part of our growth strategy," said Bob Patel, CEO of LyondellBasell. "As demand for construction materials, packaging and furnishings continues to grow, we see an opportunity to bring together our leading technology with Sinopec's operational capabilities to further serve the Chinese market."

"This cooperation on the second PO / SM unit between Sinopec and LyondellBasell is based on the successful partnership of the first unit," said Dai Houliang, Chairman of Sinopec. "It is in line with China's further opening-up policy, and is another achievement of international cooperation of Sinopec. The products will help meet the increasing demands from the domestic market."

"The formation of this JV with Sinopec, a highly respected Chinese company and an existing PO / SM partner, allows us to take advantage of the fastest growing market in the world for these products," said Torkel Rhenman, Executive Vice President of LyondellBasell. "We see tremendous opportunity to create additional value and grow the presence of LyondellBasell in this very important market."

The new facility is expected to produce 300 kilo tons per annum (KTA) of PO and 600 KTA of SM. Construction of the facility will begin in early 2020 with start-up expected in 2022. The facility will use LyondellBasell's leading PO / SM technology. Products produced will be marketed equally by both companies which will significantly expand their respective participation in the Chinese market for both PO and SM.

According to IHS Markit, China makes up more than 60 percent of the Asian chemicals market demand and represents 40 percent of global chemicals growth over the next decade. PO and SM are core products for LyondellBasell.

LyondellBasell operates five wholly-owned facilities in China which are located in Guangzhou, Suzhou, Dalian, Dongguan and Changshu. In addition, LyondellBasell is currently building the largest next generation PO / tertiary butyl alcohol (TBA) plant in the world near Houston, Texas.

As MRC reported earlier, Sinopec has just completed the central unit of the Al-Zour refinery project in Kuwait. As the largest refinery in the Middle East, it will make Kuwait the biggest clean oil-producing country in the region with an annual processing capacity of 3,150 tons.

Styrene monomer (SM) is the main feedstock for the production of polystyrene (PS).

According to MRC's ScanPlast report, Russia's estimated consumption of PS and styrene plastics totalled 411,080 tonnes in the first ten months of 2019, which corresponds to the last year's level. October estimated consumption of PS and styrene plastics rose by 2% year on year, totalling 46,740 tonnes.

China Petroleum & Chemical Corporation or Sinopec Limited is a Chinese oil and gas company based in Beijing, China. Sinopec"s business includes oil and gas exploration, refining, and marketing; production and sales of petrochemicals, chemical fibers, chemical fertilizers, and other chemical products; storage and pipeline transportation of crude oil and natural gas; import, export and import/export agency business of crude oil, natural gas, refined oil products, petrochemicals, and other chemicals.

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.
MRC

MOSCOW (MRC) -- Imports of polycarbonate (PC) granules into Ukraine grew in the first eleven months of 2019 by 8% year on year, totalling 3,600 tonnes, according to MRC's DataScope report.

This figure was at 3,300 tonnes in January-November 2018.

Last month's imports of material to the Ukrainian market fell by 25% to 255 tonnes from 341 tonnes in October.

In terms of technology, the share of injection moulding PC grades decreased to 54% (1,900 tonnes) in the first eleven months of 2019 from 64% (2,100 tonnes) a year earlier. The share of extrusion grade PC grew significantly: from 15% (424 tonnes) of the total imports to 28% (981 tonnes), with the share of blow moulding grades decreasing by 3% to 19% and totalling 661 tonnes.

Covestro and Sabic with the share of about 83% of the total imports in January-November 2019 were the key suppliers of resin to the Ukrainian market.

Thus, imports of Covestro's PC to the Ukrainian market increased over the first eleven months of 2019 by 35% year on year: from 1,800 tonnes in January-October 2018 to 2,500 tonnes. Covestro's material accounted for 69% of the total PC imports to the country in the first eleven months of 2019 versus 55% a year earlier. The company's shipments of material to Ukraine were 135 tonnes last month, compared to 250 tonnes in November 2018.

At the same time, Sabic's deliveries of material fell in January-November 2019 by 34% year on year: from 754 tonnes to 496 tonnes. This producer's PC granules accounted for 14% of the total imports to the country in the first eleven months of 2019 versus 23% a year earlier.

MRC

MOSCOW (MRC) -- Formosa Plastics reported flaring at its Point Comfort, Texas, steam cracker to the Texas Commission on Environmental Quality, according to S&P Global.

The company said in a late Friday filing with the regulatory agency that "as part of initial commissioning, this is OL3 Plant's first startup and thus will require a stabilization period necessary to ensure removal of non-condensables and inerts from the process through intermittent venting to the flare."

The flaring is expected to last 504 hours through January 11.

The company was not immediately available for comment on operations Monday.

On Friday, a company spokesman told S&P Global it will not start up its new 1.5 million mt/year cracker and 400,000 mt/year low density polyethylene plant at the Texas location by year-end as planned earlier.

"We encountered some unexpected delays," spokesman Fred Neske said in an email. "Neither the LDPE (unit) nor the cracker plant will be running by the end of the year."

He said the company did not have an estimate of when the plants at the Point Comfort complex would come online.

As MRC informed before, 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. 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.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,724,670 tonnes in the first ten months of 2019, up by 7% year on year. Shipments of all PE grades increased. The estimated PP consumption in the Russian market in January-October 2019 totalled 1,066,520 tonnes, up by 7% year on year. Supply of block copolymers of propylene (PP block copolymer) and homopolymer of propylene (homopolymer PP) increased, demand for statistical copolymers (PP random copolymer) decreased.

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) -- Staff at Petroineos' Lavera refinery in France started halting units this weekend due to a strike, according to S&P Global with reference to CGT sources and local media reports.

The company declined to comment.

There have also been meetings at the Grandpuits and Feyzin refineries and La Mede biofuels plant where the staff will decide later Monday whether to halt units, the CGT said.

French labor unions, including the CGT, FO and FSU, have called on employees in all sectors to take part in industrial action against the government's pension reforms. The industrial action, which started December 5, has beenextended several times.

Several unions have called for a large-scale strike and demonstrations on January 9, as well as demonstrations on December 28. In addition, the CGT union has submitted a strike notice from January 6 until February 6.

Supply has been intermittent from Total's Donges, Grandpuits, and La Mede plants and Petroineos' Lavera since the start of the industrial action. Operations and deliveries have returned to normal at Total's Feyzin, and the strike has been suspended at Total's Gonfreville refinery after a fire led to the shutdown of the crude distillation unit mid-December. The refinery is operating partially, using its own stock.

Operations and deliveries are back to normal at ExxonMobil's Fos sur Mer, where staff have been joining the strike on and off. There has been no strike action at ExxonMobil's Gravenchon refinery in Normandy, the company said.

Francis Duseux, the president of industry body UFIP, said in an interview broadcast on France Info radio that due to problems at some terminals, strategic stocks have been used for the past week, but only to a small degree.

However, according to union sources, strategic stocks have been used extensively to avoid motor fuel shortages.

Meanwhile, shipping sources said towage companies at the country's ports remain on strike for the moment until December 26, with no tug assistance available.

Port and dock workers have also been asked to stop work for a few hours on December 30, organize protests on January 6 and 7 at the ports of Dunkirk, Le Havre, Rouen, St Nazaire, La Rochelle, Bordeaux and Marseille, and to halt operations for 24 hours on January 9.

French ports have been working intermittently since the start of the industrial actions, with loadings disrupted on several occasions. As a result, tankers have faced delays at the Fluxel-operated Fos and Lavera oil terminals in the Mediterranean and Le Havre in the north.

As MRC informed before, ExxonMobil's cracker at Notre Dame de Gravenchon, France, had an "unexpected stoppage" on Friday, 6 December, following a technical failure this October. Thus, an electric fire Saturday morning, 19 October, 2019, on the ExxonMobil facilities in Notre-Dame-de-Gravenchon (Seine Maritime) resulted in a plume of smoke, below the regulatory thresholds, which could remain visible for several days.

Besides, ExxonMobil halted polyethylene (PE) production at its site in Notre Dame de Gravenchon, France, last week due to commercial reasons, without providing further details. The site houses 500,000 tons/year of linear low density polyethylene (LLDPE) plant, including metallocene linear low density polyethylene (MLLDPE). This plant resumed operations on 19 December 2019.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,724,670 tonnes in the first ten months of 2019, up by 7% year on year. Shipments of all PE grades increased. The estimated PP consumption in the Russian market in January-October 2019 totalled 1,066,520 tonnes, up by 7% year on year. Supply of block copolymers of propylene (PP block copolymer) and homopolymer of propylene (homopolymer PP) increased, demand for statistical copolymers (PP random copolymer) decreased.
MRC

MOSCOW (MRC) -- Sasol is still commissioning its new low density polyethylene (LDPE) new plant with its start-up expected by end-December 2019, reported S&P Global on Friday with reference to the company's statment.

Thus, Sasol said earlier last week that commissioning continued at its new LDPE plant and was expected to reach beneficial operation - defined by the company as 72 hours of continuous on-spec production - this month.

Overall, the first wave of new polyethylene (PE) production is bringing 6.4 million mt/year of capacity online. About 7.27 million mt/year of new capacity is under construction or planned through the 2020s in the second and third waves, as per company announcements.

As MRC wrote earlier, Sasol's world-scale US ethane cracker reached beneficial operation on 27 August 2019. Its new cracker, the heart of our Lake Charles Chemicals Project (LCCP), is the third and most significant of the seven LCCP facilities to come online and will provide feedstock to our six new derivative units at our Lake Charles multi-asset site.

According to MRC's ScanPlast report, Russia's October estimated LDPE consumption grew to 54,650 tonnes from 47,980 tonnes a month earlier. Local producers increased significantly their polyethylene (PE) shipments partially due to the reduction in exports. The estimated LDPE consumption in Russia totalled 484,360 tonnes in the first ten months of 2019, up by 9% year on year. Some producers' LDPE exports decreased, whereas imports rose by 19%.

Sasol is an international integrated chemicals and energy company that leverages technologies and the expertise of our 31 270 people working in 32 countries. The company develops and commercialises technologies, and builds and operates world-scale facilities to produce a range of high-value product stream, including liquid fuels, petrochemicals and low-carbon electricity.
MRC