Court orders recalculation of USD1.4 billion in damages in lawsuit between Dow and Nova Chemicals

MOSCOW (MRC) -- The Alberta Court of Appeal has ordered a recalculation of a decision that awarded USD1.4 billion in damages to Dow Chemical Canada in a dispute with Nova Chemicals Corp, said Canplastics.

As is being reported by The Canadian Press, the appeal court agreed with the original judge who ruled that Dow was correct in its interpretation of an operating agreement for a jointly owned ethane cracker at the Joffre petrochemical complex in central Alberta.

The cracker, one of three at the complex and dubbed E3, was built by Nova and Union Carbide through a 1997 joint venture agreement and designed to supply ethylene feedstock for a new polyethylene plant being built by Union Carbide. In 2001, Dow merged with Union Carbide in 2001 and took over its half ownership of the ethane cracker.

Dow argued that the Joffre petrochemical complex had been operated by Nova at less-than-agreed-upon volumes for a 10-year period until 2012.

"The Court of Appeal of Alberta affirmed the trial court’s ruling that E3 must be run to its full productive capability, and that Nova committed gross negligence and wilful misconduct in failing to do so,” Dow spokeswoman Ashley Mendoza said in an email to The Canadian Press. "The trial court’s finding in Dow’s favour on Nova’s liability has been affirmed, as has its ruling on the great majority of Dow’s damages through 2012."

The appeal court found that the trial judge’s inclusion of lost polyethylene profits from the lack of ethylene production was improper and Dow should only be compensated for direct damages, to be calculated by the trial court.

"We are pleased with the appellate court’s decision on our appeal, and we look forward to continuing to improve the ongoing operations and relationships at our world-class Joffre facility," Nova spokeswoman Jennifer Nanz said in an emailed statement to The Canadian Press.

According to MRC's ScanPlast report, Russia's overall PE production totalled 1,712,400 tonnes in the first seven months of 2020, up by 58% year on year. Linear low density polyethylene (LLDPE) accounted for the greatest increase in the output. At the same time, overall PP production in Russia increased in January-July 2020 by 24% year on year to 1,063,700 tonne. ZapSibNeftekhim accounted for the main increase in the output.

MRC

Thyssenkrupp opens new engineering office in Pune

MOSCOW (MRC) -- Thyssenkrupp group inaugurated its newest engineering office in Pune, India, in a bid to keep pace with its steady growth and accommodate its workforce in a more advanced state-of-the-art facility, said Themachinemaker.

Dr. Sami Pelkonen, CEO thyssenkrupp Business Unit Chemical & Process Technologies Germany (tkIS- CPT) and P D Samudra, CEO & MD and Member of Board, thyssenkrupp Industrial Solutions India attended the inauguration ceremony. thyssenkrupp Industrial Solutions (India) Pvt Ltd, is one of the leading engineering companies in India for chemical plants and projects.

According to Dr. Pelkonen, thyssenkrupp’s operations have been a unique success story over the last four decades in the chemical process sectors. thyssenkrupp is playing a significant role for Indian and international projects covering fertilisers, polymers, petrochemicals, refinery units, electrolysis, cryogenic storages etc. in the chemical sectors and plants for metallurgical sectors among others.

Thyssenkrupp Industrial Solutions India is the largest subsidiary of thyssenkrupp Industrial Solutions – Chemical Process & Technologies globally. It has a track record of over 750 large, medium, and small size projects in India and abroad. The company has implemented EPCM services as well as EPC projects in the past 20 years.

“In addition to our initiatives at our Head Office in Mumbai, we had made a small beginning with our Pune operations in 1997 at Bibwewadi on the outskirts of Pune City with less than 50 engineers. This means we are relocating our Pune office after growing steadily over two decades”, Mr Samudra said. He added that Pune Operations have been independently executing projects with minimum support from the Head Office in Mumbai and have several successfully-implemented projects to their credit.

The new ultra-modern engineering office will accommodate approximately 350 engineers out of the total strength of 1,400 employees of thyssenkrupp Industrial Solutions India.

As MRC informed earlier, Thyssenkrupp Industrial Solutions said it has won an order from Turkish packaging producer Koksan Pet Packaging Ind Co to build a polyethylene terephthalate (PET) plant in Gaziantep, in the southeast of the country. Thyssenkrupp will supervise the construction and commissioning of the plant and provide the main equipment, engineering works, licence and staff training, the German company said in a statement.

As per ICIS-MRC Price Report, demand continued to subside in the Russian polyethylene terephthalate (PET) market. Some sellers reported a decrease in spot market activity compared to the beginning of the month. Some Russian factories have free volumes of PET chips. On the other hand, a large PET preform producer reported that he had met its target sales of finished products in the current month and that consumption of finished products was quite high.
MRC

BASF to invest in German pyrolysis-technology firm

MOSCOW (MRC) -- BASF says it is investing EUR16.0 million (USD18.9 million) into Pyrum Innovations (Dillingen, Germany), a technology company specialized in the pyrolysis of waste tires, said Chemweek.

The investment will support the expansion of Pyrum’s pyrolysis plant at Dillingen and the further rollout of the technology, the company says. BASF and Pyrum anticipate that production capacities of up to 100,000 metric tons of pyrolysis oil derived from waste tires could be built up within the coming years together with additional partners. BASF will use the pyrolysis oil from end-of-life tires as an additional raw material source next to oil from mixed plastic waste, the use of which is the long-term focus of the company’s ChemCycling project, it says.

Pyrum is currently running a pyrolysis plant for end-of-life tires that can process up to 10,000 metric tons/year of tires and it will add two more production lines by the end of 2022, BASF says. Most of the pyrolysis oil produced by Pyrum’s plant will be used by BASF to make chemical products for mainly the plastics industry, it says. Pyrum intends to build additional tire pyrolysis plants together with interested partners, to accelerate the path toward the use of Pyrum’s technology in serial production.

"With the investment, we have taken another significant step towards establishing a broad supply base for pyrolysis oil and towards offering our customers products based on chemically recycled plastic waste on a commercial scale,” says Hartwig Michels, president/petrochemicals at BASF.

The company says that according to a life-cycle assessment carried out by the consulting company Sphera (Chicago, Illinois) on behalf of BASF, products made from pyrolysis oil by using a mass balance approach have the exact same properties as products manufactured with primary fossil resources. In addition, they have a lower carbon footprint than conventional products.

As MRC reported earlier, BASF has restarted its No. 1 steam cracker in Germany following a maintenance turnaorund. Thus, the company resumed operations at the plant on September 30, 2019. The plant was shut for maintenance in mid-August, 2019. Located at Ludwigshafen in Germany, the No. 1 cracker has an ethylene production capacity of 235,000 mt/year and a propylene production capacity of 125,000 mt/year.

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

According to MRC's ScanPlast report, Russia's overall PE production totalled 1,712,400 tonnes in the first seven months of 2020, up by 58% year on year. Linear low density polyethylene (LLDPE) accounted for the greatest increase in the output. At the same time, overall PP production in Russia increased in January-July 2020 by 24% year on year to 1,063,700 tonne. ZapSibNeftekhim accounted for the main increase in the output.

BASF is the leading chemical company. It produces a wide range of chemicals, for example solvents, amines, resins, glues, electronic-grade chemicals, industrial gases, basic petrochemicals and inorganic chemicals. The most important customers for this segment are the pharmaceutical, construction, textile and automotive industries. BASF generated sales of EUR59 billion in 2019.
MRC

Reliance details assets to be included in spun-off refining, petchems business

MOSCOW (MRC) -- Reliance Industries Ltd (RIL) released a detailed plan to carve out its oil-to-chemicals business into a separate entity for a potential stake sale, said Chemweek.

As per the scheme, RIL’s oil-to-chemicals (O2C) assets, including its refining, petrochemicals, fuel retail (majority interest only) and bulk wholesale marketing businesses, along with its assets and liabilities, will be transferred to a new unit. The new unit will include the refining and petrochemical plants and manufacturing assets at RIL’s Jamnagar, Dahej, Hazira, Nagothane, Vadodara, Patalganga, Silvassa, Barabanki and Hosiarpur locations.

It will also include all assets relating to RIL’s ongoing refinery and petrochemical projects that are being commissioned or near completion, the company said. RIL had officially announced its proposal to transfer its oil-to-chemicals (O2C) business to a separate entity in April.

“The nature of risk and returns involved in the O2C business are distinct from those of the other businesses of RIL and the O2C business attracts a distinct set of investors and strategic partners,” it said in the statement detailing its plan to create the new subsidiary. "RIL being a listed company cannot issue shares with differential rights (i.e. equity shares with interest linked only to O2C business) therefore, the O2C undertaking has to be transferred into a wholly-owned subsidiary of RIL in which the investors will invest,” it added.

Accordingly this scheme is being proposed for transfer of the O2C business to the subsidiary on a slump sale basis. In a slump sale, assets are transferred or sold without considering the values of the individual assets or liabilities contained within the undertaking.

"The scheme will become effective from the appointed date…means opening business hours of 1 January 2021 or such other dates as may be approved by board of the parties,” the company said on its website. The separation of the assets was planned as part of RIL’s target to sell 20% in its refining and chemicals business to Saudi Aramco.

The USD15bn deal with Aramco was initially scheduled to be completed by March 2020, but has been delayed/ At the company’s Annual General Meeting in July, RIL chairman Mukesh Ambani had said that the company expected to complete the deal with Aramco by early 2021.

As MRC informed earlier, in August last year, RIL announced initial agreements to sell a 20% stake in the oil-to-chemical business to Saudi Aramco for an asking of USD15 billion. The deal covers all of Reliance’s refining and petrochemicals assets as well as the remainder of stake the firm has in fuel retailing business after selling 49% to BP Plc of UK for Rs 7,000 crore (USD924.2 million).

And in late April 2020, it became known that Saudi Aramco’s plan to buy USD15-billion stake in Reliance Industries hydrocarbon business may not go through due to the rising risk of collapsing oil prices, US-based brokerage Bernstein has warned. The unique combination of excess crude oil global supply, 30% drop in demand due to coronavirus crisis and continuous price fall weighed heavily on Aramco’s investment plans.

According to MRC's ScanPlast report, Russia's overall PE production totalled 1,712,400 tonnes in the first seven months of 2020, up by 58% year on year. Linear low density polyethylene (LLDPE) accounted for the greatest increase in the output. At the same time, overall PP production in Russia increased in January-July 2020 by 24% year on year to 1,063,700 tonne. ZapSibNeftekhim accounted for the main increase in the output.

Reliance Industries is one of the world's largest producers of polymers. Thus, the company produces among others polypropylene, polyethylene and polyvinyl chloride.
MRC

Refiners, offshore producers shut ahead of Hurricane Sally landfall

MOSCOW (MRC) -- More than a fifth of U.S. offshore oil production was shut and key exporting ports were closed on Tuesday ahead of Hurricane Sally’s landfall on the U.S. Gulf Coast, the second significant hurricane to shutter oil and gas activity over the last month, said Hydrocarbonprocessing.

Slow-moving Sally weakened to a Category 1 hurricane on Tuesday and is expected to maintain that strength with sustained winds of 85 mph (140 km/h)d until making landfall late on Tuesday, the U.S. National Hurricane Center said. The storm’s trajectory has shifted east toward western Alabama, sparing some Gulf Coast refineries from high winds.

The U.S. government said 21%, or nearly 396,000 barrels per day (bpd), of offshore crude oil production and 25%, or 685 MM cubic feet per day (mmcfd), of natural gas output were shut in the U.S. Gulf of Mexico.

The nation’s sole offshore terminal, the Louisiana Offshore Oil Port (LOOP), stopped loading tanker ships on Sunday, while the port of New Orleans closed on Monday. That will cut off roughly 307,000 bpd of crude and 411,000 bpd of refined products, according to Kpler data.

As of 7 a.m. CDT on Tuesday, Sally was about 65 miles (110 km) east of the mouth of the Mississippi River, and moving to the northwest at 2 mph (3 km/h). Offshore facilities operated by Chevron Corp and BP Plc have been shut, less than one month after Hurricane Laura forced roughly 1.5 MM barrels per day of output to close temporarily.

Refiners in the region have wound down operations. The Phillips 66 Alliance oil refinery, which processes 255,600 bpd at a site along the Mississippi River on the coast of Louisiana, shut on Monday, said operator Phillips 66. Shell cut production to minimum rates on Monday at its 227,400-bpd Norco, Louisiana, refinery.

According to MRC's ScanPlast report, Russia's overall PE production totalled 1,712,400 tonnes in the first seven months of 2020, up by 58% year on year. Linear low density polyethylene (LLDPE) accounted for the greatest increase in the output. At the same time, overall PP production in Russia increased in January-July 2020 by 24% year on year to 1,063,700 tonne. ZapSibNeftekhim accounted for the main increase in the output.
MRC