Dresser Natural Gas Solutions acquires Flow Safe

MOSCOW (MRC) -- Dresser Natural Gas Solutions (Dresser NGS), a leading provider of measurement, instrumentation and piping solutions to the natural gas distribution and transmissions markets, has acquired Flow Safe, a manufacturer of spring-operated and pilot-operated high performance pressure relief devices, said Hydrocarbonprocessing.

Dresser NGS has acquired the entire Flow Safe business, including 38 employees and two locations: Orchard Park, New York, and Houston. The acquisition will enable Dresser NGS to provide over-pressure protection for its natural gas customers.

The Flow Safe product line, which includes spring-operated and pilot-operated high performance over pressure protection devices, will focus on applications in Natural Gas Distribution, Pipeline, Aerospace, Marine, Industrial Gases and other liquid and gas process applications.

David Evans, president and CEO, Dresser NGS, said, “Dresser is excited about Flow Safe joining the family. We will help Flow Safe reach new customers, and Flow Safe will help us strengthen our working relationships with gas company risk managers, systems engineers, over-pressure protection specialists, measurement managers and technicians, all of whom realize value from Flow Safe’s industry-leading over pressure protection solutions."

Ryan Gannon, president, Flow Safe, said, “Flow Safe is excited to be a part of the Dresser NGS team and looks forward to expanding their reach into many different markets that Dresser NGS currently does not operate, including aerospace, marine, and industrial/specialty gas to name a few, helping to diversify the Dresser NGS portfolio."

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,496,500 tonnes in the first eight months of 2020, up by 5% year on year. Shipments of all ethylene polymers increased, except for linear low desnity polyethylene (LLDPE). At the same time, PP shipments to the Russian market reached 767,2900 tonnes in the eight months of 2020 (calculated using the formula - production minus exports plus imports - and not counting producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.
MRC

Freeport LNG loads 100th LNG cargo

MOSCOW (MRC) -- Freeport LNG has announced that it has loaded its 100th LNG cargo, which departed from Freeport LNG’s terminal on October 30, according to Hydrocarbonprocessing.

“This is a tremendous achievement for Freeport LNG and our customers,” said Michael Smith, founder, chairman and CEO, Freeport LNG. “Achieving this milestone safely and efficiently is a true testament to the dedication, discipline and drive of our workforce who play an integral role in Freeport LNG’s continued success.”

Freeport LNG loaded its first cargo in September 2019. The company began full commercial operations of its USD13.5 billion, three train facility in May. In addition to achieving this 100th cargo, carried by BP’s British Contributor, Freeport LNG recently marked another significant milestone, its first nighttime transit. The vessel departed Freeport LNG’s terminal on the evening of October 6. The company anticipates having more routine nighttime transits by early next year.

As MRC reported earlier, BP Australia plans to shut its 146,000 b/d Kwinana refinery in Western Australia and convert it into a fuel import terminal, according to the company's statment Oct. 30. The continued growth of large scale, export-oriented refineries throughout Asia and the Middle East has structurally changed the Australian market, BP said, adding that regional oversupply and sustained low refining margins mean the Kwinana refinery is no longer economically viable.

We remind that a “technical defect” disrupted production at part of the Gelsenkirchen integrated refinery and petrochemicals complex in Germany, early last week. The company operates plants in the Horst and Scholven districts at Gelsenkirchen, with the defect occurring at Horst. BP sais it was working to resume normal operations as soon as possible. It did not specify which unit has been affected, with sources suggesting it was the fluid catalytic cracker, but this was not confirmed by the company.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,594,510 tonnes in the first nine months of 2020, up by 1% year on year. Only high denstiy polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market reached 880,130 tonnes in the nine months of 2020 (calculated using the formula: production minus exports plus imports, exluding producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.
MRC

Supply from Total Grandpuits oil refinery disrupted by strike

MOSCOW (MRC) -- Deliveries of refined oil products from Total’s Grandpuits plant in France were disrupted on Thursday after the CGT union said employees had begun a 48 hour strike to protest against planned job cuts at the site, said Hydrocarbonprocessing.

Total confirmed in a statement that output had been affected, but added that it would continue “to ensure supplies for its network of petrol stations and clients”.

The CGT said production had been reduced to minimal levels and that deliveries of finished products by pipeline, truck or train from Grandpuits had been halted.

As MRC reported earlier, within the framework of its net zero strategy, Total will convert its Grandpuits refinery (Seine-et-Marne) into a zero-crude platform and will invest more then EUR500 mln into this project. By 2024 the platform will focus on four new industrial activities: production of renewable diesel primarily intended for the aviation industry, production of bioplastics, plastics recycling and operation of two photovoltaic solar power plants.

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 estimated PE consumption totalled 1,594,510 tonnes in the first nine months of 2020, up by 1% year on year. Only high denstiy polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market reached 880,130 tonnes in the nine months of 2020 (calculated using the formula: production minus exports plus imports, exluding producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.

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

COVID-19 - News digest as of 02.11.2020

1. Reliance reports YOY fall in petchem profit, revenue; sequential improvement

MOSCOW (MRC) -- Reliance Industries says that EBDITA dropped 33% year on year (YOY) at its petrochemicals business to 59.64 billion Indian rupees (USD802.79 million) in the fiscal second quarter ended 30 September. Quarterly sales for this sector were Rs296.6 billion, down 23% YOY, said Chemweek. The company says, however, that compared with the preceding quarter, prices of polypropylene (PP), polyethylene (PE), and polyvinyl chloride (PVC) strengthened by 13%, 17%, and 25%, respectively, due to tight supply with regional turnarounds and an improvement in demand. With increased feedstock prices, para-xylene (p-xylene) prices firmed 10% quarter on quarter (QOQ) and purified terephthalic acid (PTA) and ethylene glycol prices increased by 4% and 10%, respectively. Naphtha prices increased by 56% QOQ because of healthy demand. Reliance says that its steam-cracker margins improved QOQ due to the feedstock mix and “favorable economics for ethane cracking.” Its crackers operated at near 100% utilization during the quarter. The company recorded higher QOQ production volume and higher volume placement in the domestic market. "Domestic demand has sharply recovered across our oil-to-chemicals business and is now near pre-COVID levels for most products,” says Mukesh Ambani, chairman and managing director at Reliance.



MRC

LyondellBasell gets to buy from Sasol 50% of cracker, two PE plants at two-thirds of value

MOSCOW (MRC) -- LyondellBasell left aside the financial caution it adhered to since the start of the pandemic to seize an opportunity provided by deteriorated market conditions to buy for two-thirds of the estimated real value a 50% stake in an ethane cracker and two polyethylene (PE) plants in Louisiana from Sasol, according to Hydrocarbonprocessing.

The purchase includes half of Sasol’s 1.5 MM ton/year ethane cracker and 0.9 MM ton/year low density (LDPE) and linear-low density (LLDPE) polyethylene (PE) plants.

The assets were part of a Sasol expansion at Lake Charles marked by delays and cost overruns. LyondellBassel will now run the assets and market all products on behalf of both partners.

LyondellBasell got “full capacity and immediate financial benefits of a new, operational, world-scale integrated cracker complex with minimal exposure to risk of project execution, timing uncertainty and opportunity cost typically incurred during the multi-year construction,” LyondellBasell’s CEO Bhavesh Patel said.

The assets also represented for LyondellBasell “a very attractive valuation” as the transaction timing occurred as the market reached a bottom, Patel added in comments during an Oct. 2 call conference with analysts.

The announcement came six months into the Covid pandemic, which has clouded the demand outlook and impacted the US feedstock cost advantage.

The entire Lake Charles expansion, which included other production assets, suffered cost overruns and ended up having a cost of nearly USD13 billion. Back in 2014 Sasol had estimated construction would take about four years and cost under USD9 billion.

The LDPE startup was delayed by an explosion in January and then by Hurricane Laura after late August.

Sasol will continue to own at Lake Charles 100% of its research and development unit, the East Plant ethane cracker and performance chemicals assets that produce Ziegler alcohols and alumina, ethoxylates, Guerbet alcohols, paraffins, co-monomers, linear alkyl benzene, ethylene oxide and ethylene glycol.

Based not on what Sasol shelled out in a construction plagued with significant cost overruns, but on what the cost would be to build similar assets today in a well-managed construction, Patel estimated LyondellBasell is getting the assets for two-thirds of their value.

“My sense is that a really well executed project that is low cost relatively speaking, including the utility and the infrastructure, would likely be close to USD6 billion for a well-executed project, 100% basis, so half of it would be about USD3 billion,” Patel said.

“I do think that we’re kind of at the bottom of the polyethylene cycle and there have been many public announcements about the delay or cancelation of projects on the supply side and on the demand side,” Patel said.

Looking ahead, Patel believes the PE market will recover and allow LyondellBasell to see cash flow reflected in earnings per share by next year. The companies will complete the transaction by year’s end.

“We think the cycle should turn up here,” Patel said.

“I’m not implying here that we get back to 2014 kind of margins, but I think getting to the past three years 17, 18, 19 over the next three to five years is doable,” he added.

“If you look at how PE demand has developed here during the pandemic, we actually see year-over-year demand growth globally, we see year-over-year demand growth in the US,” he added.

Patel said he recognized the purchase “may come as a surprise after a strategy of limiting financial exposure in the first six months of the pandemic.”

“The key here is that you pay or have valuations at the bottom of the cycle,” he added.

“I’ve been through a lot of cycles over the 30 plus years that I’ve been in the business and this is kind of how cycles work,” Patel said.

Patel said he expects the purchase will result in an “unlevered internal rate of return in the mid-teens.” The company will pay for the assets with debt and cash. It does not have plans engage in asset construction or additional new purchases.

“We don’t see any other assets that are like this, that have the strategic rationale that I laid out, so our focus now is going to be to get to closing as quickly as possible, get the rates to where we want, get a solid marketing plan in place,” he said

The joint venture’s LDPE and LLDPE capacity will complement LyondellBassell existing North American capacity, which is predominantly high density (HDPE), he said.

LyondellBassel production will reach over 17 MM tons of annual olefin capacity and 16 MM tons of polyolefin capacity after the transaction, he said. Assets include 13 ethylene plants and dozens of PE production lines.

“After the start of our hyperzone plant we’re about 500,000 tons long before this deal so if you add another 300,000 we end up in the 800,000 which gets us to under 2 billion” pounds of ethylene in the US, he said.

“We’ve been kind of in the 1 to 2 (billion pounds long) range for a few years now and I don’t think that’s too long,” he said.

“We have a very extensive pipeline network, many longstanding relationships. Sasol is selling some of that ethylene today so I think it’s still modest,” he added.

As for whether LyondellBasell could acquire or build ethylene derivative units to balance ethylene output and requirements, Patel left the possibility open only for the longer term.

“That would be a middle of the decade or second half of the decade sort of decision,” he said.

As for Sasol, “what I hope our partners saw was the value that we brought from an operating standpoint, the ability to plug in to a global network on marketing immediately from day one, and the possibility for them to retain 50% and ride some of the market upside before they make a decision on the second 50%,” Patel said.

As MRC wrote before, the last remaining unit of Sasol to come online at the LCCP complex is the 420,000-metric tons/year LDPE facility, damaged in a fire earlier this year. It was expected to achieve beneficial operations by the end of last month.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,594,510 tonnes in the first nine months of 2020, up by 1% year on year. Only high denstiy polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market reached 880,130 tonnes in the nine months of 2020 (calculated using the formula: production minus exports plus imports, exluding producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.

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.

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