LyondellBasell JV starts up USD2.6-billion petchem complex in China

MOSCOW (MRC) -- LyondellBasell and Liaoning Bora Enterprise Group have commenced operations at their 1.1-million metric tons/year ethylene plant and associated polyolefins complex at Panjin in Liaoning Province, northeastern China, reported Chemweek.

The cost of the project is approximately USD2.6 billion.

The two companies in September 2019 established a 50/50 joint venture (JV), Bora LyondellBasell Petrochemical Co., for the project.

The ethylene plant has the flexibility to consume naphtha and liquefied petroleum gas. The downstream complex includes units producing 800,000 metric tons/year of polyethylene (PE) and 600,000 metric tons/year of polypropylene (PP) using LyondellBasell’s Hostalen ACP PE technology and the company’s Spheripol and Spherizone PP processes.

The complex will supply the packaging, transportation, building and construction, and healthcare and hygiene industries. The materials produced at the facility will be sold for use within China.

The two companies are planning medium-to-long-term collaboration on additional petchem projects that could be deployed in multiple phases over the next 10 years.

"The northeast is on the forefront of China's next round of regional revitalization. It is an attractive destination for investment, with abundant natural resources, upgraded infrastructure, and improving business environment, supported by the government's long-term development vision," says Qu Baoxue, the controlling shareholder of Bora.

Demand for polyolefins "has returned in China after the pandemic-related economic slowdown earlier in the year, and the long-term growth trends are very favorable for this project," says Bob Patel, CEO of LyondellBasell. "We look forward to potential future opportunities that would allow us to expand our local manufacturing footprint."

The Bora LyondellBasell Petrochemical ethylene plant is one of four steam crackers scheduled to start up in China by the end of this year.

According to IHS Markit, Asia is the largest and fastest-growing polyolefins market in the world. China accounts for more than 60% of the Asian polyolefins market and represents 40% of worldwide polyolefins growth.

As MRC informed earlier, LyondellBasell has already invests in several chemical plants in China, including a joint venture with a unit of state refiner Sinopec Corp.

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

According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.

Bora is one of more than 40 independent Chinese refiners that have grown rapidly since late 2015 to account for a fifth of China’s total crude oil imports.

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

COVID-19 - News digest as of 04.09.2020

1. ExxonMobil weighs global job cuts after unveiling Australian lay-off plan

MOSCOW (MRC) -- ExxonMobil Corp is assessing possible worldwide job cuts, a spokesman said, after the company announced a voluntary lay-off program in Australia, according to Hydrocarbonprocessing. Exxon is the latest oil major to embark on axing jobs spurred by a historic collapse in fuel demand because of the coronavirus pandemic. The company has slashed capital spending this year by 30% to around USD23 billion and said in August it planned both capital and operating expense cuts to defend its dividend after reporting losses in the first and second quarters.

MRC

Chevron Phillips Chemical declares force majeure for PE in USA

MOSCOW (MRC) -- Chevron Phillips Chemical declared force majeure Sept. 1 on its polyethylene (PE) products after assessing the impact of Hurricane Laura to its Gulf Coast PE operations, the company said in a letter seen by S&P Global.

"Unfortunately, it has become apparent that issues arising in connection with the hurricane and the associated outages have impacted our planned production and delivery of polyethylene products," CP Chem stated.

CP Chem operates a 420,000 mt/year high-density polyethylene (HDPE) plant in Orange, Texas, and an 855,000 mt/year cracker in Port Arthur.

The company plans to minimize the impact of the event and return to full PE deliveries as soon as possible, the letter said.

Although there was no exact recovery timeline, the letter stated that it's working to evaluate the duration of the interruption.

The letter follows a group of force majeure declarations by other petrochemical producers this week, including Westlake Polymers, Ineos Olefins & Polymers and Sasol, which are all recovering from widespread power outages and damage from Laura, which made landfall on Aug. 27.

As MRC informed earlier, on 18 August, 2020, Chevron Corp reported a fire at its 112,229-barrel-per-day (bpd) Pasadena, Texas facility. "At this time, flames, smoke may be noticeable to the community. We are coordinating with local officials, and working to resolve the issue as soon as possible," the company reported on August, 19.

We remind that US-based Phillips 66 remains open to developing another ethane cracker for its Chevron Phillips Chemical (CP Chem) joint venture, the refiner's CEO said in March 2018.

According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports.

Headquartered in San Ramon, California, Chevron Corporation is the the second-largest integrated energy company in the United States and among the largest corporations in the world. Chevron is involved in upstream activities including exploration and production, downstream activities including refining, marketing and transportation, and advanced energy technology. Chevron is also invested in power generation and gasification processes.
MRC

Westlake Polymers declares force majeure on Lake Charles polymer units

MOSCOW (MRC) -- Westlake Polymers declared force majeure on its North American polymer facilities Aug. 31 after Hurricane Laura adversely impacted its unit sites, the company said in a letter seen by S&P Global.

Additionally, Westlake's Lake Charles, Louisiana, complex had "incurred limited physical damage" and restarts would primarily depend on the availability of electric power, industrial gases, and other feedstocks, according to an official statement Aug. 27 that spokeswoman Erika Soechting shared with Platts on Sept. 1.

The company also declared the force majeure as a result of the hurricane and associated uncertainty, the letter stated.

"Westlake has begun assessing its facility conditions and associated supply and distribution issues," the letter said.

There will be a better assessment of the damage and potential restart timing in the forthcoming days and any potential impacts on their sales, the letter added.

Westlake's facility at Lake Charles, Louisiana, has a 200,000 mt/year linear low density polyethylene (LLDPE) unit; a 60,000 mt/year high density polyethylene (HDPE)/LLDPE unit; a 386,000 mt/year low density polyethylene (LDPE) plant.

The letter joins a list of force majeures declared in the week of Aug. 30 by petrochemical producers, including Ineos Olefins & Polymers and Sasol, recovering from widespread power outages and damage from Hurricane Laura, which made landfall Aug. 27.

In turn, market participants expect September to be very challenging as offers grow tight due to limited availability from producers facing shutdowns.

"I won't be surprised if export offers are significantly less. Ineos and Sasol have already declared force majeure and several others are facing production issues," one trader source said.

As MRC wrote before, Westlake Chemical also declared a force majeure on Aug. 31 for all its North American PVC and VCM. Westlake's shutdown of its Lake Charles complex has idled 38% of its US VCM production, resulting in two VCM plants with a combined capacity of 952,318 mt/year going offline.

The complex also has three upstream chlor-alkali plants with a combined capacity of 1.27 million mt/year of chlorine and 1.36 million mt/year of caustic soda - 46% of the company's overall North American chlor-alkali capacity.

According to MRC's DataScope report, imports of suspension polyvinyl chloride (SPVC) into Russia totalled 13,800 tonnes in the first half of 2020, up by 5% year on year, whereas exports grew by 7% year on year.

As per MRC's ScanPlast report, Russia's overall production of polyethylene (PE) totalled 1,712,400 tonnes in the first seven months of 2020, up by 58% year on year. LLDPE accounted for the greatest increase in the output.

Westlake Chemical Corporation is an international manufacturer and supplier of petrochemicals, polymers and building products with headquarters in Houston, Texas. The company's range of products includes: ethylene, polyethylene, styrene, propylene, chlor-alkali and derivative products, PVC suspension and specialty resins, PVC Compounds, and PVC building products including siding, pipe, fittings and specialty components, windows, fence, deck and film.
MRC

September prices of European PVC rise significantly for CIS markets

MOSOCW (MRC) -- Negotiations over prices of European polyvinyl chloride (PVC) for September shipments to the CIS markets started at the beginning of this week. European producers announced an increase of EUR30/tonne or higher in their export PVC prices, despite a roll-over of the ethylene price, according to ICIS-MRC Price report.

September contract price of ethylene was agreed at the previous month's level, which theoretically allowed to talk about the steadiness of the net cost of PVC production, if compared to August. However, scheduled and unscheduled plants' shutdowns in Europe and globally strong demand for PVC allowed European producers to talk about an increase in export prices for the CIS countries in September. An increase of EUR30-40/tonne in export PVC prices has been under discussion.

Demand for PVC from consumers in the CIS countries remained good due to the seasonal factors, and converters were forced to purchase some of their quantities in Europe, whereas European producers have limited their export sales to a number of regions, including the CIS markets, for the past three months. Restrictions were caused by plants' scheduled shutdowns for maintenance and unscheduled shutdowns for repairs and strong demand from both the domestic market and export markets.

Overall, deals for September shipments of suspension polyvinyl chloride (SPVC) to the CIS markets were negotiated in the range of EUR705-750/tonne FCA, whereas the previous month's deals were discussed in the range of EUR665-720/tonne FCA.
MRC