US engineer McDermott completes restructuring

MOSCOW (MRC) -- Haldia Petrochemicals Ltd, majority owned by The Chatterjee Group (TCG), together with global private equity firm Rhone Capital, has acquired Texas-based Lummus Technology for an enterprise value of USD2.725 billion (Rs 20,592 crore at current exchange rate), said Vccircle.

Haldia and Rhone have jointly acquired the petrochemicals licensing company through a sale conducted by its parent McDermott International Ltd, which provides engineering and construction for the energy industry, in a bid to exit bankruptcy.

Houston-based McDermott will use the proceeds to repay debtor-in-possession financing as well as fund emergence costs besides providing cash to its balance sheet.

McDermott had entered into an agreement with TCG and Rhone – the stalking horse bidders – in January this year for a base price of USD2.725 billion subject to higher or otherwise better bids received through a court-supervised auction process.

On March 3, McDermott said: “(It) did not receive a higher or better bid during the solicitation period”. It also cancelled its next auction the same month.

Under the terms of the agreement with TCG and Rhone, McDermott had the option to retain or purchase 10% common equity ownership interest in the entity purchasing Lummus Technology.

Lummus is a master licensor of proprietary gas processing, refining, petrochemical, and gasification technologies as well as a supplier of catalysts, equipment and related services.

These technologies are critical in the refining of crude oil into petrol, diesel, jet fuel and lubes besides the manufacturing of petrochemicals and polymers as well as gasification of coal into syngas.

The company has more than 125 licensed technologies and 3,400 patents and trademarks. The acquisition will help TCG with technological improvements. McDermott provides engineering and construction services for the energy industry.

"Our investments are both strategic and long-term, where most span across 25-30 years. We have primarily focused on knowledge-based companies, and Lummus is a great addition to our portfolio. Lummus delivers sustainable value to clients in the area of materials technology," said TCG’s founder and chairman Dr Purnendu Chatterjee.

Besides the sale of Lummus, McDermott also sold The Shaw Group, which was acquired by Chicago Bridge & Iron (CB&I) in 2013. McDermott had acquired CB&I in 2018. In early 2019, TCG had also emerged a winner in acquiring the securities business of IDFC Ltd, outbidding a number of other suitors.

TCG had agreed to pay a total of Rs 161.7 crore. However, IDFC called off the deal with TCG in July 2019. The following month, it struck a deal with Dharmesh Mehta, who resigned as the chief executive of investment banking firm Axis Capital.

As MRC informed before, Haldia Petrochemicals’ plant and Indian Oil’s refinery in East Midnapore district have been put on high alert in the wake of cyclone Amphan.

Several measures have been taken by the Haldia Petrochemicals Ltd (HPL) management in view of the cyclone, said its plant head Ashok Ghosh.

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.
MRC

MOSCOW (MRC) -- SIBUR Holding, Russia’s largest integrated petrochemicals company, announced today that it has raised USD500 million following the offering of 5-year Eurobonds on the Irish Stock Exchange, said Chemweek.

The coupon rate is 2.95%, which is a record low for Russian corporate issuers. The coupon will be paid twice a year. The Eurobond proceeds will be used to optimize the company’s loan portfolio and for general corporate purposes.

Bank GPB International, Citigroup Global Markets, Goldman Sachs International, J.P. Morgan Securities and VTB Capital acted as the leading coordinators and bookrunners. The order book topped USD1 billion. The Eurobonds were sold to 94 investors and the issue was rated Baa3 by Moody’s and BBB- by Fitch.

“The resilience of Sibur’s business and its growth potential are highly valued by investors, which is confirmed by the reaffirmation of the company’s investment-grade credit ratings from the three leading agencies. The record low coupon rate at which the Eurobonds were offered testifies to investors’ confidence in Sibur as a high-quality borrower," said Alexander Petrov, CFO.

As MRC informed earlier, in February 2020, Linde PLC recieved a contract to provide technology for PJSC SIBUR Holding’s cracker at Amur gas chemical complex (GCC). GCC is an integrated 1.5 million tons per year polyethylene and polypropylene production complex to be built near Svobodny in Russia’s far-east Amur region. The contract was awarded to Linde under a consortium with SIBUR subsidiary and project contractor NIPIgazpererabota (Nipigaz).

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.

SIBUR is the largest integrated petrochemicals company in Russia. The Group sells its petrochemical products on the Russian and international markets in two business segments: Olefins & Polyolefins (polypropylene, polyethylene, BOPP films, etc.) Plastics, Elastomers & Intermediates (synthetic rubbers, EPS, PET, etc.). SIBUR’s petrochemicals business utilises mainly own feedstock, which is produced by the Midstream segment using by-products purchased from oil and gas companies. More than 26,000 employees working in SIBUR contribute to the success of customers engaged in the chemical, fast moving consumer goods (FMCG), automotive, construction, energy and other industries in 80 countries worldwide. In 2018, SIBUR reported revenue of USD 9.1 billion and adjusted EBITDA of USD 3.3 billion.
MRC

MOSCOW (MRC) -- Nouryon completed the acquisition of US-based JM Huber’s carboxymethyl cellulose (CMC) business, said Chemweek.

The acquisition price was not disclosed, but at the time of the initial announcement in January, Nouryon said the business generated sales of around EUR135m per year. The deal includes a production plant and research and development facility in in Aanekoski, Finland, with 248 employees.

CMCs are bio-based water-soluble polymers that are used as thickeners, binders, stabilisers and film formers. The purchase of JM Huber’s assets significantly deepening Nouryon’s portfolio in the space, the company said.

Nouryon, which was spun off from AkzoNobel, has also pursued a series of acquisitions in the triethyl aluminium (TEAL) space during the last year, including Sasol’s merchant business for the polymer catalyst, and China-based firm Zhejiang Friend Chemical.

As MRC wrote previously, in February 2019, Nouryon (formerly AkzoNobel Specialty Chemicals) announced that it would license its innovative continuous initiator dosing (CiD) technology to Karpatnaftochim, Ukraine’s largest polyvinyl chloride (PVC) producer. Nouryon’s patented CiD technology allows PVC producers to increase reactor output by up to 40 percent, improve product quality, and make the production process intrinsically safer - all with minimum capital expenditure.

We remind that Russia's output of chemical products rose in May 2020 by 4.4% year on year. Thus, production of basic chemicals increased year on year by 5.4% in the first five months of 2020, according to Rosstat's data. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the output in January-May.
MRC

MOSCOW (MRC) -- Royal Dutch Shell Plc plans to restart the 40,000 barrel-per-day (bpd) reformer over the weekend at its 227,400 bpd Norco, Louisiana, refinery, sources familiar with plant operations said Reuters.

Shell spokesman Curtis Smith declined comment.

Shell restarted the refinery’s 40,000 bpd naphtha hydrotreater on Monday at the refinery, the sources said. The units were shut in early June for planned overhauls.

As MRC wrote before, in May 2020, CNOOC Oil & Petrochemicals Co. Ltd (CNOOC), Shell Nanhai B.V (Shell) and the Huizhou Government have announced a strategic cooperation agreement to further expand the CNOOC and Shell Petrochemical Company (CSPC) 50:50 joint venture in Huizhou, Guangdong Province, China.

The expansion is planned to serve the growing number of intermediate and performance chemicals customers in the key market of China, supplying products including SMPO, polyols, ethylene glycol, polyethylene (PE) and polypropylene (PP). These chemicals are used in a wide range of end products, in healthcare, construction, fabrics, packaging, transport and electronics. For the first time in Asia, Shell would apply its advanced technology for linear alpha olefins. The project is intended to include construction of a new 1.5 million-tonnes-per-year ethylene cracker, with the mega-site bringing economies of scale and enhanced competitiveness.

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.

Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.
MRC

MOSCOW (MRC) -- Australia’s Ampol Ltd will consider reopening its Lytton refinery at the end of August, when it expects to complete four months of maintenance work, reported Reuters with reference to its new boss.

Ampol brought forward the refinery turnaround to May as refining margins crashed and extended the outage from two months to four months to the end of August to allow for social distancing of workers at the site.

“We’ll consider at that time what the overall economics equation looks like for the refinery and we’ll make a decision on that basis,” Chief Executive Matt Halliday, who was appointed on Monday after taking the role on an interim basis in March, told Reuters.

As MRC wrote before, Takeover target Caltex Australia Ltd said in early April that it would bring forward and extend the planned shutdown of its sole oil refinery Lytton refinery to ward off the expected hit to refining amid the pressures on demand from the coronavirus pandemic. The company said that operations at the refinery will restart once margin conditions recover.

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.
MRC