Ineos, CP Chem, LyondellBasell bid to acquire stake in Sasol Lake Charles assets

MOSCOW (MRC) -- Cash-strapped Sasol (Johannesburg) has received offers from companies including CP Chem, LyondellBasell, and Ineos for a large stake in Sasol’s Lake Charles, Louisiana, petrochemical complex, reported Chemweek with reference to Bloomberg citing people familiar with the matter.

The companies are among those moving into a second round of bidding for a stake in the nearly completed complex, which could raise more than 29 billion South African rand (USD1.68 billion) for Sasol, according to Bloomberg.

In response to CW’s enquiry, Sasol says that the company does “not comment on ongoing commercially sensitive and/or M&A processes and we do not react to market speculation.” Sasol adds, however, that its expanded asset-disposal process has yielded good interest by strong contenders.

On 12 March 2020, Sasol announced that it was reviewing a variety of actions to address the challenges created by the impact of COVID-19 and the recent decline in the oil and chemical prices. “A package of measures have been developed that are intended to reposition the company over the following 24 months. One of these measures will be our existing asset disposal program… This includes the potential for exploring partnering options at Sasol’s…US-based chemicals business.”

The cost of the Lake Charles complex has sharply risen from early estimates to R192 billion and this, together with falling oil prices, has hurt Sasol’s finances. The Lake Charles complex is based on a 1.54-million metric tons/year ethane cracker, which started production last year. The ethylene will be used in six downstream plants on site to produce ethylene oxide, ethylene glycol, ethoxylates, and low-density and linear low-density polyethylene (PE), as well as Ziegler and Guerbet alcohols. About 10% of the ethylene will be surplus to requirement and sold on the merchant market as well as supply Sasol’s share of its high-density PE joint venture (JV) with Ineos in Texas. The 50/50 JV is designed to produce 470,000 metric tons/year.

Sasol recently warned of a loss on the Lake Charles project in 2020. Despite the continuing ramp-up of the project, further price weakness means that the EBITDA contribution from Lake Charles for financial year 2020 has been revised to a loss of USD50–100 million, the company said.

As MRC wrote previously, in mid December 2019, Sasol announced that the LCCP Ethane Cracker was increasing production rates following the successful replacement of the acetylene reactor catalyst. Sasol’s Ethane Cracker with a nameplate capacity of 1.54 million tons per year achieved beneficial operation in August 2019 but has run approximately 50-60% of nameplate capacity due to under performance of the plant’s acetylene removal system. The company stated that the issue had been resolved then.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 721,290 tonnes in the first four month of 2020, up by 4% year on year. Low density polyethylene (LDPE) and linear low density polyethylene (LLDPE) shipments grew partially because of the increased capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market totalled 347,440 tonnes in January-April 2020 (calculated by the formula production minus export plus import). Supply exclusively of PP random copolymer increased.

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

PP imports to Russia up by 15% in Jan-May 2020

MOSCOW (MRC) -- Polypropylene (PP) imports to Russia rose in the first five months of 2020 by 15% year on year, totalling 85,300 tonnes. Propylene homopolymers (homopolymer PP) accounted for the main increase in imports, according to MRC's DataScope report.


In May, Russian companies further reduced their purchasing of PP in foreign markets partially because of the quarantine restrictions and weaker demand, imports were 14,200 tonnes versus 17,500 tonnes a month earlier. Thus, overall PP imports into Russia reached 85,300 tonnes in January-May 2020, compared to 74,200 tonnes a year earlier. The volume of purchasing of all grades of propylene polymers in foreign markets increased, with imports of homopolymer PP accounting for the most noticeable increase.

The overall structure of PP imports by grades looked the following way over the stated period.


May imports of homopolymer PP were 4,900 tonnes versus 6,700 tonnes a month earlier, shipments of injection moulding homopolymer PP from Azerbaijan slumped. Thus, overall imports of homopolymer PP totalled 34,000 tonnes in the first five months of 2020, compared to 25,300 tonnes a year earlier.

Last month's imports of propylene block-copolymers (PP block copolymers) were 3,500 tonnes versus 5,400 tonnes in April, demand for pipe grade PP decreased from Russian companies. Imports of PP block copolymers into Russia reached 23,600 tonnes in January-May 2020, compared to 21,300 tonnes a year earlier.

May imports of statistical copolymers of propylene (PP random copolymer) grew to 3,800 tonnes from 2,700 tonnes a month earlier, with pipes producers accounting for the main increase in shipments due to very low prices in Europe. Overall imports of this grade of propylene copolymers were 14,600 tonnes in January-May 2020, compared to 13,100 tonnes a year earlier.

Imports of other propylene polymers totalled 13,100 tonnes over the stated period versus 14,400 tonnes a year earlier.

MRC

COVID-19 - News digest as of 16.06.2020

1. Thai energy group PTT cuts 2020 investment

MOSCOW (MRC) -- State-owned Thai oil and gas company PTT Pcl said it would cut its investment budget across the group by 10-15% this year and some projects will be delayed as partners face challenges from the coronavirus, according to Hydrocarbonprocessing. Chief Executive Auttapol Rerkpiboon, who took up the post last month, said the PTT group faced "double effects" from the oil price slump and the coronavirus outbreak.




MRC

KPIC operates Onsan cracker at full rates in June

MOSCOW (MRC) -- Korea Petrochemical Industry Co (KPIC) is presently running its steam cracker at maximum capacity levels, according to Apic-online.

A Polymerupdate source in South Korea informed that the company is currently operating at the plant at 100% production capacity rates. Earlier, the plant was operating near 90% of production capacity rate in May 2020.

Located at Onsan city in South Korea, the cracker has an ethylene production capacity of 800,000 mt/year and propylene capacity of 410,000 mt/year.

As MRC informed previously, in June 2017, KPIC finilized the expansion of its ethylene production capacity. Thus, KPIC started commercial operation at its Ulsan-based Naphtha Cracking Center (NCC) from Jun 23, 2017. Earlier, KPIC produced about 470,000 mt/year of ethylene from its Ulsan-based NCC. With the expansion, the company added 330,000 mt/year of ethylene, and its combined ethylene capacity reached 800,000 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 721,290 tonnes in the first four month of 2020, up by 4% year on year. Low density polyethylene (LDPE) and linear low density polyethylene (LLDPE) shipments grew partially because of the increased capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market totalled 347,440 tonnes in January-April 2020 (calculated by the formula production minus export plus import). Supply exclusively of PP random copolymer increased.

KPIC is one of the key producers of ethylene in South Korea. The companyпїЅs ethylene capacity accounted for about 6% of total ethylene production in South Korea before the expansion was completed, and now the companyпїЅs market share will be increased to nearly 10%.
MRC

PVC imports into Ukraine fell by 3% in Jan-May, exports up by 35%

MOSCOW (MRC) - Imports of suspension polyvinyl chloride (SPVC) into Ukraine decreased by 3% in the first five months of this year, compared to the same period in 2019 and reached about 17,800 tonnes. At the same time, sales of Ukrainian PVC to foreign markets grew by 35% year on year, according to a MRC's DataScope report.

Last month SPVC import deliveries to the Ukrainian market grew to 3,500 tonnes against 2,800 tonnes in April, the increase in foreign purchases was largely due to the desire of some companies to build up additional stocks of PVC before introducing an import duty in the amount of 18%. Overall SPVC imports reached 17,800 tonnes in January-May 2020, compared to 18,400 tonnes a year earlier.

The increase in capacity utilisation allowed Karpatneftekhim to increase export volumes.The key suppliers of PVC to the Ukrainian market were producers from Europe, their share in total imports for the period under review amounted to about 80%. Producers from the USA with the share of about 17% were the second largest suppliers.

Last month, Karpatneftekhim had to increase export sales due to falling demand from the domestic market, the export sales of Ukrainian PVC amounted to 17,400 tonnes, which was almost the same as in April. Overall, about 89,600 tonnes were shipped for export in the first five months of 2020, compared to 66,600 tonnes a year earlier.
MRC