Formosa to start up its new LDPE plant in Point Comfort in April 2020

MOSCOW (MRC) -- Formosa Plastics USA, part of Formosa Petrochemical, has reportedly delayed the start-up of its new low density polyethylene (LDPE) unit from February to April, 2020, reported NCT with reference to market sources.

Located in Point Comfort, Texas, the unit has a production capacity of 400,000 tons/year.

The company initially planned to begin operations at its new cracker at the same location and LDPE unit by December 2019 before delaying the schedule for undisclosed reasons.

As MRC wrote before, Formosa has recently started up its new 1.5 million tons/year cracker in Point Comfort, Texas. The company has been ramping up the operating rates of the cracker.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,904,410 tonnes in the first eleven months of 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments increased from both domestic producers and foreign suppliers. The PP consumption in the Russian market was 1,161,830 tonnes in January-November 2019, up by 7% year on year. Deliveries of all grades of propylene polymers increased, with the homopolymer PP segment accounting for the largest increase.

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

Sinopec, EIG deliver bid for Petrobras refinery in Minas state

MOSCOW (MRC) -- China’s Sinopec and US-based EIG Global Energy Partners have recently delivered non-binding offers to buy Brazilian refinery REGAP from state-run oil firm Petrobras, reported Reuters with reference to three people with knowledge of the matter.

With a processing capacity of 150,000 barrels per day, REGAP is the fifth-largest refinery of eight up for sale by Petrobras, as part of a plan to raise around USD10 billion to pay debts and sharpen its focus on offshore oil exploration and production.

REGAP in the state of Minas Gerais is the only refinery for sale in southeastern Brazil, the nation’s economic powerhouse and the heart of its oil industry.

The bid marks an entry into the race by Washington-based EIG, as the private equity firm looks to boost its downstream presence in Brazil’s energy industry. Reuters had reported last month that EIG was interested in REGAP.

Sinopec had already delivered a non-binding offer for RLAM, a refinery in the northeastern state of Bahia, which is part of the first block of refineries put up for sale by Petrobras.

Other firms selected for the second round of bidding on that block of refineries are Abu Dhabi’s state investor, plus fuel distributors Ultrapar Participacoes SA and Raizen.

REGAP could offer operational efficiencies for EIG, which owns the Port of Acu in Rio de Janeiro state. Oil received at the port could be transported 500 kms (310 miles) inland to REGAP. EIG also owns a major stake in a Bolivia-Brazil gas pipeline and has bid on other assets divested by Petrobras.

EIG declined to comment. Sinopec did not immediately respond to a Reuters request for comment. Petroleo Brasileiro SA, as Petrobras is formally known, said it would announce any noteworthy developments via public filings.

The buyer of REGAP will also receive pipeline infrastructure connecting it to the region of the REDUC refinery, near Rio de Janeiro city, one of the sources said. Connections from there to nearby seaports, such as Acu, are under study, the source added.

Brazil’s Raizen and Ultrapar Participacoes SA were also eyeing REGAP, but it is not clear if they delivered bids.

As MRC informed before, Sinopec Guangzhou Petrochemical, part of China's petrochemical giant - Sinopec, restarted its cracker in China on December 5, 2019. The cracker was shut for maintenance on October 12, 2019. Located in the Guangzhou province of China, the cracker has an ethylene production capacity of 260,000 mt/year and propylene production capacity of 150,000 mt/year.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,904,410 tonnes in the first eleven months of 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments increased from both domestic producers and foreign suppliers. The PP consumption in the Russian market was 1,161,830 tonnes in January-November 2019, up by 7% year on year. Deliveries of all grades of propylene polymers increased, with the homopolymer PP segment accounting for the largest increase.

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.
MRC

ABS imports to Russia drop by 4% in 2019

MOSCOW (MRC) -- Overall imports of acrylonitrile-butadiene-styrene (ABS) to the Russian market decreased in 2019 by 4% year on year to 33,700 tonnes, according to MRC's DataScope report.

This figure was 35,200 tonnes in January-December 2018.


South Korean companies LG Chem and Lotte Advanced accounted for more than half of the country's ABS imports.

Styrolution and Trinseo shipped the bulk of European ABS. The share of their supplies is 23% of the total imports.

ABS imports to Russia continued to decline for the third month in a row. December ABS imports to Russia fell by 26% month on month to 2,400 tonnes from 3,300 tonnes, imports of material into the country were 2,500 tonnes in December 2018.

MRC

EPS imports to Russia up by 29% in 2019

MOSCOW (MRC) -- Overall imports of expandable polystyrene (EPS) to the Russian market rose in 2019 by 29% year on year to 21,300 tonnes, according to MRC's DataScope report.

This figure was 16,600 tonnes in January-December 2018.


The Finnish producer Styrochem's material accounted for 36% of the total EPS imports, the Chinese company Loyal with the share of 20% occupied the second position.

Styrochem's imports grew over the stated period by 31% year on year: from 5,900 tonnes to 7,700 tonnes. Shipments of Chinese Loyal increased by 45% year on year: from 2,900 tonnes to 4,300 tonnes.

December EPS imports to Russia rose by 10% year on year to 1,500 tonnes from 1,300 tonnes a year earlier, imports of material into the country were 2,100 tonnes in November 2019.

MRC

Sasol says fire damage at Lake Charles LDPE unit is limited, investigation ongoing

MOSCOW (MRC) -- Sasol says the low-density polyethylene (LDPE) unit at the company's Lake Charles Chemicals Project (LCCP) at Westlake, Louisiana, suffered limited damage from an explosion and fire in a high-pressure section of the unit earlier this month but that nearby major equipment and other units have not been affected, reported Chemweek.

Parallel commissioning activities on the rest of the 420,000-metric tons/year LDPE unit will continue while an investigation continues to determine the cause, extent of the damage, and scope and timeline of any repairs. "Initial findings indicate the damage is limited to a small portion of the LDPE unit and, importantly, major equipment such as the compressors were unaffected," says Sasol. "The technology providers, licensors, and other external experts are fully engaged and in addition, we have mobilized and dispatched a team of Sasol technical and operations experts to support the investigation team."

Ethylene currently being produced by the LCCP’s steam cracker that was originally destined for the LDPE unit will be sold externally until the LDPE unit can be started up, according to Sasol. The ethane cracker has been operating at nameplate capacity following the replacement of the acetylene reactor catalyst in December.

Projected earnings for the troubled LCCP complex in the current financial year "will only be impacted by the loss in the margin of ethylene to low-density polyethylene," Sasol notes. The insurance process has also been initiated and cover includes construction and commissioning activities, says Sasol. The scope of repair and outage duration is expected to be determined by the second half of February, it adds.

All the other previously commissioned units at LCCP were unaffected and are operating to plan. The ethoxylates, Ziegler, and Guerbet downstream units are also unaffected and remain within cost and schedule as per previous guidance, according to the company.

Sasol says that at the end of December engineering and procurement activities at LCCP were "substantially complete and construction progress was at 98%." Overall project completion was at 99%, with capital expenditure so far amounting to USD12.5 billion. The LCCP has been plagued by cost escalation and delays, resulting in Sasol’s joint CEOs, Bongani Nqwababa and Stephen Cornell, stepping down in November following a review of the project.

All employees and contractors were safe and accounted for following the explosion during the final stages of the LDPE unit’s commissioning on 13 January and, in line with standard safety protocols, the unit had to be made safe before re-entry of personnel into the affected area could be allowed, the company says.

In Sasol’s latest production and sales metrics for the financial half-year ended 31 December 2019, also released today, it says the ethane cracker is planned to operate close to its nameplate capacity for the rest of this year.

Sasol’s gross ethylene production in North America, including from its existing cracker, totaled 454,000 metric tons, it says. For the six months ended 31 December 2019, gross ethylene production from the LCCP cracker alone was 220,000 metric tons. Total PE production at LCCP over the same period was 184,000 metric tons, and the ethylene oxide (EO) value chain’s production at LCCP was 162,000 metric tons.

The LCCP’s linear low-density PE plant achieved beneficial operation in February 2019 and the EO/ethylene glycol (EG) unit and ethane cracker followed in May and August, respectively. The high-density PE plant continues to produce at planned rates, the company says.

Despite the LCCP cost overruns, Sasol says it expects a "largely strong operational performance" for the full financial year ending 30 June 2020.

In line with previous market guidance, Sasol’s group base chemical sale volume excluding US polymer products is expected to be 1–2% higher than in the prior year, with total sales volume expected to be 15-0% higher.

For the fiscal first six months ended 31 December, higher sales volume was offset by a further softening of chemical prices. Base chemical sales volume, excluding US polymer products, was 1% higher than in the prior-year period. This was despite an 18% decrease year on year (YOY) in fertilizer volume to 165,000 metric tons due to an extended shutdown, Sasol notes. The US polymers business achieved PE sales volume of 320,000 metric tons and ethylene and coproduct sales volume of 149,000 metric tons.

The base chemical segment's average sales basket price for the half-year fell 15% YOY but only 1% in the second quarter compared with the first quarter. "Softer commodity chemical prices are being experienced across most of our sales regions and products, largely attributable to weaker global demand and increased global capacity, particularly for polymers," says Sasol. Heightened geopolitical risks for the rest of the financial year "especially in the Middle East and the ongoing trade discussions between China and the US are likely to impact prices," it adds.

Sasol's US polymer basket prices were impacted by changes in the company’s product mix during the first six months, including its re-entry into the merchant ethylene market following the start-up of the new cracker as well as lower worldwide polymer prices.

In its performance chemicals segment, Sasol expects full-year sales volume to remain flat to slightly below the prior year’s level, excluding LCCP. Total sales volume for the business is expected to be 7-9% higher than in the prior year, despite continuing macroeconomic headwinds and a softer outlook on worldwide GDP growth, says Sasol.

The six months ended 31 December are described by the company as "challenging" because of a generally softer macroeconomic environment in Europe and Asia on the back of the US-China trade dispute, especially in the automotive market. Total sales volume nevertheless rose 6% compared with the prior-year period because of the LCCP’s EO/EG plant contining to produce as planned, it says. The unit produced 74,000 metric tons in the second quarter of the fiscal year, up from 70,000 metric tons in the first quarter, and 37,000 metric tons in the fourth quarter of Sasol's 2019 fiscal year.

Excluding LCCP volumes, Sasol says its organics business sales declined 3% YOY mainly because of the soft macro environment affecting demand. The company's organics-portfolio sales prices were "negatively impacted by the higher share of monoethylene glycol and lower oleochemicals pricing," it says.

Sasol has also highlighted a 2% YOY rise in volumes from its Eurasian-based assets in the first six months of the financial year, mainly supported by production ramp-up at the company's new ethoxylation unit in China, which achieved beneficial operation in April 2019, as well as increased alkylate volumes from Italy.

As MRC informed before, an explosion and fire damaged Sasol's new low density polyethylene (LDPE) plant at its Louisiana complex on 13 January, 2020, as the unit was coming online while wrapping up commissioning. The company's new 1.5 million mt/year cracker was not affected by the incident and was operating at its nameplate capacity.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,904,410 tonnes in the first eleven months of 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments increased from both domestic producers and foreign suppliers. The PP consumption in the Russian market was 1,161,830 tonnes in January-November 2019, up by 7% year on year. Deliveries of all grades of propylene polymers increased, with the homopolymer PP segment accounting for the largest increase.

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