McDermott to proceed with sale of Lummus Technology

MOSCOW (MRC) -- McDermott International, Inc. has announced that the company intends to move forward with the previously announced share and asset purchase agreement to sell all of the Lummus Technology business to a joint partnership between The Chatterjee Group and Rhone Capital (the "Joint Partnership"), as per Hydrocarbonprocessing.

McDermott did not receive a higher or better bid during the solicitation period, and the auction previously scheduled for Monday, March 9, 2020, will not occur.

As announced on Jan. 21, 2020, subsidiaries of McDermott entered into a share and asset purchase agreement (the "Agreement") to sell Lummus Technology to The Chatterjee Group and Rhone Capital, as the "stalking horse bidder," for a base purchase price of USD2.725 billion, subject to higher or otherwise better bids received through a court-supervised auction process. Under the terms of the Agreement, McDermott will have the option to retain or purchase, as applicable, a 10 percent common equity ownership interest in the entity purchasing Lummus Technology.

The sale hearing to confirm the sale of Lummus Technology to the Joint Partnership will take place on Thursday, March 12, 2020, at 9:00 a.m. CT.

Proceeds from the sale of Lummus Technology are expected to repay McDermott's DIP financing in full, as well as fund emergence costs and provide cash to the balance sheet for long-term liquidity.

As MRC informed before, in late November 2019, McDermott International, Inc. was awarded a sizeable technology contract from Baltic Chemical Company (BCC) and a sizeable Extended Basic Engineering (EBE) contract from China National Chemical Engineering No. 7 Construction Company Limited (CC7). The ethane cracking project is owned by Baltic Chemical Complex LLC, a subsidiary of RusGazDobycha. McDermott's Lummus Technology will provide both the Process Design Package (PDP) Engineering and the license for its olefin production and recovery technology. Lummus Technology's proprietary ethylene steam cracking process is the most widely-applied process for the production of polymer-grade ethylene, representing approximately 40 percent of the world's 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 2,093,260 tonnes in 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments rose from both domestic producers and foreign suppliers. The estimated PP consumption in the Russian market was 1,260,400 tonnes in January-December 2019, up by 4% year on year. Supply of almost all grades of propylene polymers increased, except for statistical copolymers of propylene (PP random copolymers).

McDermott is a premier, fully integrated provider of technology, engineering and construction solutions to the energy industry. For more than a century, customers have trusted McDermott to design and build end-to-end infrastructure and technology solutions to transport and transform oil and gas into the products the world needs today. Our proprietary technologies, integrated expertise and comprehensive solutions deliver certainty, innovation and added value to energy projects around the world. Customers rely on McDermott to deliver certainty to the most complex projects, from concept to commissioning. It is called the "One McDermott Way." Operating in over 54 countries, McDermott's locally focused and globally-integrated resources include approximately 32,000 employees, a diversified fleet of specialty marine construction vessels and fabrication facilities around the world.
MRC

MOSCOW (MRC) -- Sabic has announced that it has purchased additional shares in Clariant, increasing its holding in the company from 24.99% to 31.5%, reported Chemweek.

The move is part of Sabic’s growth strategy to achieve a leadership position among global peers in specialties and increase this segment’s contribution to Sabic. Completion of the transaction is subject to regulatory approvals.

Sabic acquired the original stake in Clariant in 2018 and became its anchor shareholder. At that time, Clariant’s chairman Hariolf Kottmann said that Sabic pledged not to increase its shareholding to the one-third level at which Swiss law would oblige it to make a full offer for the company.

The two companies tried to link in a major, specialties joint venture (JV) by combining Clariant’s additives and high-value masterbatches with parts of Sabic’s specialties business. Clariant was expected to hold a majority stake in the combined company and make a payment to Sabic to equalize the value of their contributions to the JV, but the companies failed to agree on price. Since then, Clariant decided to divest part of the business that was to be included in the JV.

Sabic confirmed late last year that it targets a top-five global position in specialty chemicals, seeking to match its leading position in petrochemicals. Sabic’s specialties business generates annual sales of about $1.8 billion with EBITDA margins of 20%. The goal is to boost overall EBITDA into the “billions” through both organic growth and acquisition, Ernesto Occhiello, executive vice president/specialties, told CW recently.

Sabic is in the process of being acquired by Saudi Aramco. Aramco recently received unconditional approval from the European Union to proceed with the acquisition. This means that Aramco now has all the relevant antitrust approvals and hopes to close the deal in the first half of this year. Aramco is acquiring a 70% stake in Sabic from the Saudi Investment Fund for $69.1 billion. The remaining 30% of Sabic is traded on the Saudi Stock Exchange.

As MRC informed earlier, SABIC Europe, an affiliate of SABIC, conducted a maintenance work at its cracker No.3 at Geleen site in the Netherlands last autumn. The planned maintenance started in September and lasted around 2 months. The company operates two steam crackers in Geleen which are capable of producing 1,250,000 tons/year of ethylene and 675,000 tons/year of propylene in total.

Earlier last year, SABIC took off-stream its SABIC Olefins 4 cracker owing to technical issues on May 10, 2019. Further details on duration of the shutdown could not be ascertained. Located in beek, the Netherlands, the cracker has an ethylene production capacity of 690,000 mt/year and a propylene production capacity of 360,000 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.

Saudi Basic Industries Corporation (Sabic) ranks among the world's top petrochemical companies. The company is among the world's market leaders in the production of polyethylene, polypropylene and other advanced thermoplastics, glycols, methanol and fertilizers.

Clariant AG is a Swiss chemical company and a world leader in the production of specialty chemicals for the textile, printing, mining and metallurgical industries. It is engaged in processing crude oil products in pigments, plastics and paints.
MRC

MOSCOW (MRC) -- Asia Polymer Corp (APC), part of USI Corporation, has planned to shut its ethylene-vinyl-acetate (EVA) plant owing to feedstock availability issues, according to Apic-online.

A Polymerupdate source in Taiwan informed that, the company is likely to halt operations at the plant in March 2020 for a period of around 8-10 days. The exact of date of the shutdown could not be ascertained.

Located at Kaohshiung, Taiwan the EVA plant has a production capacity of 150,000 mt/year.

According to MRC's DataScope report, December 2019 EVA imports to Russia dropped by 4,1% year on year to 3,600 tonnes from 3,760 tonnes a year earlier, and overall imports of this grade of ethylene copolymer into the Russian Federation decreased in January-December 2019 by 17,8% year on year to 39,55 tonnes (48,09 tonnes in 2018).

Asia Polymers Corporation is a Taiwan-based company principally engaged in the manufacture, processing and sales of polyethylene and related products. Its products include low-density polyethylene (LDPE) resins and ethylene-vinyl acetate (EVA) resins. Its LDPE products are applied in the processing of packaging films, the manufacture of plastic products and accessories and the manufacture of plastic films. Its EVA products are applied in the production of foam materials, sports equipment, solar cell films, laminating films and insulation materials for wire and cable. The company operates businesses in China, Southeast Asia, South Asia, Middle East, South Africa, Europe and Northeast Asia, among others. The company is also engaged in investment businesses through its subsidiaries.
MRC

MOSCOW (MRC) -- PT Chandra Asri Petrochemical Tbk (CAP) is planning to conduct a trial production at its newly expanded polyethylene (PE) plant in Cilegon in March 2020 to produce metallocene PE grade (MLLDPE), according to CommoPlast.

The company expanded PE capacity in 2019 by adding one more production line that pushed the total output to 736,000 tons/year. CommoPlast was informed that the newest 400,000 tons/year high density polyethylene (HDPE)/ linear low density polyethylene (LLDPE) swing line would be utilized for the MLLDPE trial production purpose.

At the moment, it is unclear on how long the MLDPE trial run would take, however, a source close to the producer expected the line to return to produce normal grade within a month.

In the same complex, Chandra Asri owns a 560,000 tons/year polypropylene (PP) plant and a steam cracker that produces 900,000 tons/year of ethylene and 490,000 tons/year of propylene.

As MRC reported earlier, PT Chandra Asri Petrochemical shut its naphtha cracker in Cilegon for maintenance in early-August 2019. The plant remained off-stream for a period of around 6-7 weeks.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,093,260 tonnes in 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments rose from both domestic producers and foreign suppliers. The estimated PP consumption in the Russian market was 1,260,400 tonnes in January-December 2019, up by 4% year on year. Supply of almost all grades of propylene polymers increased, except for statistical copolymers of propylene (PP random copolymers).

CAP is the largest integrated petrochemical company in Indonesia and operates the country’s only world-scale size Naphtha Cracker. The CAP plant is strategically located in Banten province, providing convenient access to key customers.
MRC

MOSCOW (MRC) -- Trinseo, a global materials company and manufacturer of plastics, latex binders and synthetic rubber, and its affiliate companies in Europe have announced a price reduction for all polystyrene (PS) grades in Europe, according to the company's press release.

Effective March 1, 2020, or as existing contract terms allow, the contract and spot prices for the products listed below went down as follows:

-- STYRON general purpose polystyrene grades (GPPS) -- by EUR65 per metric ton;
-- STYRON and STYRON A-Tech and STYRON X- Tech high impact polystyrene grades (HIPS) - by EUR65 per metric ton.

As MRC informed before, Trinseo increased its prices for all PS grades, acrylonitrile-butadiene-styrene (ABS) and acrylonitrile styrene copolymer (SAN) grades on 1 February 2020, as stated below:

- STYRON GPPS grades - by EUR100 per metric ton;
- STYRON and STYRON A-Tech HIPS grades - by EUR100 per metric ton;
- MAGNUM ABS resins - by EUR55 per metric ton;
- TYRIL SAN resins - by EUR55 per metric ton.

According to ICIS-MRC Price report, prices of Russian PS will remain unchanged until the end of the first quarter. Nizhnekamskneftekhim rolled over February prices of its material for shipments in March. Penoplex and Gazprom neftekhim Salavat also maintained their GPPS prices the same.

Trinseo is a global materials company and manufacturer of plastics, latex and rubber. Trinseo's technology is used by customers in industries such as home appliances, automotive, building & construction, carpet, consumer electronics, consumer goods, electrical & lighting, medical, packaging, paper & paperboard, rubber goods and tires. Formerly known as Styron, Trinseo completed its renaming process in 1Q 2015. Trinseo had approximately USD4.6 billion in net sales in 2018, with 16 manufacturing sites around the world, and approximately 2,500 employees.
MRC