BASF to cut up to 2,000 jobs by 2022 from business services unit

MOSCOW (MRC) -- BASF says it will reduce the number of employees in its global business services unit, which it established at the start of this year, by up to 2,000, almost 24% of the unit's total, by the end of 2022, said Chemweek.

The decision follows the bundling of services and resources and the implementation of a wide-ranging digitalization strategy, BASF says.

From 2023, the unit expects to achieve annualized cost savings of more than EUR200 million (USD235 million) from the move, the company says. Details of the planned worldwide workforce reduction will be worked out in the coming months with employee representatives involved, according to local rules and regulations, it says.

"Overall, with these planned measures, we will make a considerable contribution to BASF group’s efficiency," says Marc Ehrhardt, head/global business services at BASF. As part of the restructuring, more services than before will be bundled in hubs, which will offer as many services as possible for the units in the BASF group, the company says.

As MRC wrote before, 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. 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.

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’s global business services unit was established on 1 January 2020 as part of the implementation of BASF’s corporate strategy. As of that date, about 8,400 employees worldwide transferred to the new unit and since then have been providing services for BASF’s other business units, ranging from financial and logistical processes to services in the areas of communication, human resources, environment, health and safety, the company says.

MRC

Total to convert Grandpuits in France into bio plant

MOSCOW (MRC) -- Total's Grandpuits refinery in north-central France will be converted into a plant for the production of bio plastics due to potentially costly repairs on the Ile-de-France pipeline (PLIF) bringing crude to the plant, reported S&P Global with reference to a CGT union source.

"A meeting of the CSEC [Comite Social et Economique Central or Social and Economics Central Committee] -- was called for Sept. 24 and we were told by Total management this morning that two points were added to the order of the day, which confirmed the conversion of Grandpuits refinery into an agro-plastics producing plant," a CGT union source told S&P Global Platts Sept. 22.

The refinery is expected to close in March 2021, the union source said.

According to the union source, the so-called "Projet Galaxie" will lead to the end of refining activity at Grandpuits and the likely loss of jobs. "In Seine-et-Marne there is a lot of beetroot production and thus the converted Grandpuits plant could get feedstocks from agricultural products and recycled plastics," the source said. "Biofuel production is a cash machine... a ton of biofuel produced at La Mede refinery has much more value than one ton of traditional oil product from the Antwerp refinery," the source added.

Total said July 6 that the company was carrying out an audit of the pipeline and the "longer term future of Grandpuits" depends upon "the viability of the pipeline," adding that it is "not prepared to work with units which have deficiencies."

The company said Sept. 22 that the Grandpuits project will not lead to job losses. "No one loses their job at Total when there are industrial changes. At Carling or at La Mede, there were no layoffs but retirements and internal moves to other sites," Total said.

La Mede stopped processing crude at the end of 2016 and started up as a biodiesel plant in 2019.

Grandpuits was offline between March and June this year, partly due to low demand during the coronavirus pandemic, but last year remained offline between late February and July after the pipeline which brings crude from Le Havre port leaked.

The pipeline currently was operating at 70% capacity in July, Total said at the time, adding that it was "looking at how much it would cost to replace the PLIF."

The reduced capacity means the refinery processes less crude, according to a report in Le Figaro newspaper. Meanwhile, the report also noted that the cost of replacing the pipeline would be further raised by a large-scale maintenance at the plant planned for March 2021.

As MRC wrote before, French energy major Total said in April that its joint USD5 billion petrochemical project with Saudi Aramco in the Saudi city of Jubail would not be hit by planned cuts in investment, although the partners were focused on controlling costs.

We remind that in November 2019, Total disclosed that itis evaluating construction of a new gas cracker at its Deasan, South Korea, joint venture (JV) with Hanwha Chemical.

Ethylene and propylene are feedstocks for producing polyethylene (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.

Total S.A. is a French multinational oil and gas company and one of the six "Supermajor" oil companies in the world with business in Europe, the United States, the Middle East and Asia. The company's petrochemical products cover two main groups: base chemicals and the consumer polymers (polyethylene, polypropylene and polystyrene) that are derived from them.
MRC

Air Products hikes industrial gas product prices in North America

MOSCOW (MRC) -- Air Products says it will increase liquid and bulk industrial gas product prices, monthly service charges, and surcharges for merchant customers in North America, effective 1 October or as contracts permit, said Chemweek.

The price hike is in response to increases in sourcing, production and delivery costs, and will support continued investments in reliability, security, and safety, it says. The prices of liquid nitrogen, liquid oxygen, and liquid carbon dioxide (CO2) will rise by up to 15%, with services charges to be increased by up to 20%. "Some adjustments may be outside of these ranges based on specific situations," it says.

The prices for helium, hydrogen, and argon "will also be increased based on supply/demand and cost situations, and may be customer specific," it adds.

As MRC reported earlier, in December 2014, SIBUR-Khimprom (a subsidiary of SIBUR Holding) and Air Products entered into an agreement to build a new air separation unit in Perm and to supply the facility with locally produced gases. The unit came on-stream in 2016. After the commissioning Air Products will supply industrial gases for SIBUR-Khimprom over the next 20 years.

Besides, we remind that in September 2019, SIBUR, the largest petrochemical comples in Russia and Eastern Europe, and BASF, Geman petrochemical major, agreed to closely cooperate on sustainable development to share their best practices.

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.

Air Products is a world-leading industrial gases company in operation for nearly 80 years. Focused on serving energy, environment and emerging markets, the Company provides essential industrial gases, related equipment and applications expertise to customers in dozens of industries, including refining, chemical, metals, electronics, manufacturing, and food and beverage. Air Products is also the global leader in the supply of liquefied natural gas process technology and equipment. The Company develops, engineers, builds, owns and operates some of the world's largest industrial gas projects, including gasification projects that sustainably convert abundant natural resources into syngas for the production of high-value power, fuels and chemicals.
MRC

INEOS signs 10-year deal with Engie for Belgium sites

MOSCOW (MRC) -- INEOS has concluded the largest ever purchase contract of wind energy for heavy industry in Belgium, said the company.

The 10-year agreement with energy producer ENGIE, for the purchase of renewable electricity will avoid 1,150,000 tonnes of CO2 emissions and give a significant boost to the further development of capital-intensive offshore wind market.

Renewable energy will be supplied to INEOS from the Norther offshore windfarm in the North Sea from 1st January 2021. The long-term 84 MW commitment will initially be used by existing INEOS production sites and later by Project ONE, the INEOS investment in two state of the art chemical plants for the production of ethylene and propylene in Antwerp, announced last year.

John McNally, CEO INEOS Project ONE said: "This agreement is an important step for INEOS in reducing emissions from energy consumption in Belgium. Project ONE will be the most energy efficient chemical complex of its kind in Europe, using the newest technologies. Our propane dehydrogenation unit has been designed with a maximum level of electrification, which makes it possible to virtually eliminate indirect emissions by using only green electricity. In the coming months, we will continue to look at the options for further expanding the use of renewable energy."

Gerd Franken Chairman INEOS Olefins & Polymers Europe said: “This significant deal will reduce our carbon footprint in Belgium by more than one million tonnes of CO2 , the equivalent of taking 100,000 cars off the road each year, from the beginning of next year for ten years. It is the first of many environmental investments from our business as we continue to supply the products that people increasingly need across medical, food, transport and construction.

Philippe van Troeye, CEO ENGIE Benelux said: "Being the largest green energy producer in Belgium, ENGIE acts to accelerate the transition towards a carbon-neutral world, supporting its clients in reaching their sustainability goals. In order to reach this ambition, ENGIE develops integrated, custom solutions to support its customers in making their own energy transition. We are proud to help INEOS meet their environmental goals, by facilitating their consumption of renewable energy in Belgium. This contract also illustrates ENGIE’s strong ambition to increase renewables’ development in Belgium, as several PPAs have been signed with major companies during the last months."

As MRC informed before, in January 2019, INEOS announced Antwerp as the location for its new petrochemical investment. The EUR3 billion investment will be the biggest ever made by INEOS and is first cracker to be built in Europe in 20 years. The investment is a game changer for the chemical sectors and will bring huge benefits to the Belgium and wider European economies.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 215,390 tonnes in the first month of 2020, up by 23% year on year. Shipments of all grades of high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) increased due to higher capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market were 127,240 tonnes in January 2020, up by 33% year on year. ZapSibNeftekhim's homopolymer PP accounted for the main increase in shipments.
MRC

OMV lowers oil price assumptions to reflect increased pace of energy transition

MOSCOW (MRC) -- OMV (Vienna, Austria) says it has cut its forecast price for Brent crude oil to USD60 per barrel (bbl) to reflect the increasing pace of the worldwide energy transition towards lower-carbon energy sources, said Chemweek.

"The revised oil price planning assumptions reflect our believe that the pace of transition to a lower carbon world will accelerate," it says. OMV will "reposition our portfolio towards products which are also essential in a widely decarbonized world” and make itself “less vulnerable to the long-term oil price development."

The recent acquisition of a controlling 75% ownership interest in Borealis "extends OMV’s value chain towards high-value chemical products” and is “an important milestone for this ambition," says Reinhard Florey, OMV’s CFO.

The updated price forecast is expected to result in non-cash net impairments of tangible and intangible assets of around EUR600 million (USD704 million) post-tax in the company’s upcoming financial results for the third quarter, it says.

The company has reduced its long-term Brent oil price assumption to USD60/bbl from USD75/bbl. For 2021, it expects COVID-19 to continue to have a macroeconomic impact and has confirmed its oil price forecast for next year of USD50/bbl. For 2022 and 2023 it has lowered its oil price expectations to USD60/bbl from USD70/bbl and USD75/bbl, respectively.

For the period 2024-2029, OMV says it will assume a Brent price of USD65/bbl, down from USD75/bbl previously, with the newly assumed price then expected to "gradually decline" to USD60/bbl until 2035. From 2035 onwards it will use an oil price forecast of USD60/bbl, it says. All assumptions for the years 2025 onwards are based on 2025 real terms, it adds.

The company has also reiterated its commitment to the Paris climate agreement, as part of which it recently set itself the ambition of achieving net-zero operations by 2050 or before.

As MRC informed earlier, in March 2020, OMV signed agreement to increase its shareholding in Borealis to 75%, repositioning in a low-carbon world.

Ethylene and propylene are feedstocks for producing polyethylene (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.

OMV (Osterreichische Mineralolverwaltung AG) is an Austrian oil company, the largest in Central Europe. Headquarters - in Vienna.
MRC