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MOSCOW (MRC) -- LyondellBasell and Sasol (Johannesburg) have closed a previously announced USD2-billion transaction that sees the companies form their Louisiana Integrated Polyethylene joint venture (JV) at Lake Charles, reported Chemweek.
LyondellBasell now owns 50% of Sasol’s new 1.5-million metric tons/year steam cracker, and low-density polyethylene (LDPE) and linear low-density polyethylene (LLDPE) plants - with combined capacity for 900,000 metric tons/year - as well as associated infrastructure at Lake Charles. The deal was closed on 1 December following regulatory and shareholder approvals, with the proceeds to be received within two days of closing, Sasol says.
LyondellBasell will operate the three assets and market the polyethylene (PE) products on behalf of the JV shareholders. Approximately 400 of Sasol’s employees at Lake Charles who directly support the assets have now joined LyondellBasell, the companies say. Sasol achieved beneficial operation of the final plant at the Lake Charles Chemicals Project, the 420,000-metric tons/year LDPE unit, mid-November.
“The formation of this JV is part of our approach to growing our core businesses while positioning the company to benefit from improving economic conditions,” says LyondellBasell CEO Bob Patel. “We believe our ability to operate efficiently and serve growing markets will create exceptional long-term value for our shareholders of both companies.”
“This transaction accelerates the transformation of our chemicals business toward a focus on specialty chemicals,” says Sasol’s president and CEO Fleetwood Grobler. “We’re proud of the world-scale assets we’ve built in southwest Louisiana and look forward to working with LyondellBasell to realize their full potential and create value for all our stakeholders.”
LyondellBasell agreed in October to acquire the 50% stake in Sasol’s base chemicals business at Lake Charles. The agreement included customary rights for each partner regarding the potential future sale of its ownership interest, the companies said at the time.
Sasol has retained full ownership and operational control of its existing 454,000-metric tons/year Lake Charles East Plant ethane cracker, an R&D complex, and its performance chemicals assets at Lake Charles producing Ziegler alcohols and alumina, ethoxylates, Guerbet alcohols, paraffins, comonomers, linear alkylbenzene, ethylene oxide, and ethylene glycol.
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
LyondellBasell, Sasol complete USD2-billion Louisiana JV deal
COVID-19 - News digest as of 02.12.2020
1. ExxonMobil to write off as much as USD20bn in assets; cuts capex
MOSCOW (MRC) -- ExxonMobil plans to write down as much as USD20bn in assets and cut its 2021 capital expenditures (capex) to USD16bn-19bn as it prioritizes investments in chemical performance products in the near term, said Chemweek. Annual capex thereafter until 2025 will be USD20bn-25bn, down from the company’s original budget of USD30bn-35bn. ExxonMobil is also eyeing a 15% cut in its global workforce by the end of next year to cut expenses amid the demand slump caused by the coronavirus pandemic and a low-oil price environment. The asset write-off would include certain dry gas resources in the Appalachian and Rocky Mountains, Oklahoma, Texas, Louisiana and Arkansas in the US, and in western Canada and Argentina.
MRC
PE production in Russia rose by 68% in Jan-Oct 2020
October PE production in Russia was 244,900 tonnes, whereas this figure was 233,200 tonnes a month earlier, in the first month of autumn several producers stopped their capacities for repairs at once. Thus, overall PE output reached 2,449,000 tonnes in January-October 2020, compared to 1,457,000 tonnes a year earlier. Production of all PE grades rose, but LLDPE accounted for the greatest increase, which was provided by ZapSibNeftekhim.
The structure of PE production by grades looked the following way over the stated period.
October production of high density polyethylene (HDPE) in Russia exceeded 140,200 tonnes, compared with 156,200 tonnes in September; Kazanorgsintez shut its capacities for scheduled turnaround in September-October. Russian plants' overall HDPE output reached 1,505,800 tonnes in January-October 2020, up by 104% year on year.
October total low density polyethylene (LDPE) production increased to 50,900 tonnes from 28,300 tonnes in September, as Ufaorgsintez, Tomskneftekhim and Kazanorgsintez shut their facilities for scheduled maintenance works. Thus, overall production of this PE grade totalled 519,100 tonnes over the stated period, down by 2% year on year.
October LLDPE production rose to 53,800 tonnes from 48,700 tonnes a month earlier, ZapSibNeftekhim increased its capacity utilisation.
Overall LLDPE production grew to 424,200 tonnes in the first ten months of 2020 from 186,100 tonnes a year earlier.
MRC
PVC prices rose by Rb8,000/tonne and more in December in Russia
PVC shortages have been reported in many regions of the world since summer, and prices have broken records over the past few years in November. The Russian market also does not stand aside from the global trend. Contrary to the experience of previous years, the price of domestic PVC increased seriously in October - November, and there was a noticeable tight supply in the market.
PVC supply increased for December shipment, and producers announced a more significant increase in PVC prices than in previous months. The demand for SPVC from Russian converters in the autumn months was at a good level, and given the high level of capacity utilisation of domestic PVC producers, it was not enough to fully meet all the needs. This was partly due to, among other things, the almost complete absence of imports.
The situation changed in December, but not dramatically. Converters' demand for PVC continues to decline due to the seasonal factor. Some converters reported that the volume of purchases from them was higher in comparison with the last year.
PVC supply from some Russian producers has increased this month, but there is no need to speak of a surplus.
Even taking into account the new increase in Russian PVC, imports were still significantly more expensive.
And in the next few months, this situation is unlikely to change, especially since in December world prices rose again.
The prices of Russian PVC reached another historical record in December, which is not typical for the market, since in the previous several years in winter the prices reached their lowest values for the year.
At the same time, there is no understanding of what trend will be in prices for January. Negotiations over November shipments of Russian PVC began at the end of last week, with Russian PVC with K64/67 being negotiated in the range of Rb95,000 - 97,000/tonne CPT Moscow, including VAT, for quantities of less than 500 tonnes.
MRC
Neste to permanently close refinery ops in Naantali, Finland by the end of March 2021
MOSCOW (MRC) -- Finnish renewable diesel producer Neste has announced plans to close its refinery operations in Naantali, Finland, as the demand for fossil oil products drops, said the company.
In September, the company revealed plans to restructure its refinery operations in Porvoo and Naantali to enhance the competitiveness of the oil products business. Neste has now has decided to shut down its Naantali operations by the end of March next year. following the finalisation of the co-operation negotiations.
According to the company, the COVID-19 pandemic has accelerated the fall in demand for oil products and is not expected to recover to previous levels. It will now focus on the terminal and harbour operations at the Naantali refinery and will also renew its operating model for its oil products.
As part of the new plans, Neste’s Porvoo refinery will be transformed to co-process renewable and circular raw materials. Neste president and CEO Peter Vanacker said: “We want to improve our competitiveness and maintain refining operations and related strategic capabilities in Finland.
“The changes will support the transformation of the Porvoo refinery into a leading sustainable, safe, and efficient refinery, enabled by our highly innovative and efficient Neste people.” The restructuring process is expected to result in annual fixed cost savings of nearly EUR50m for Neste and the termination of approximately 370 positions.
However, the redundancies are lower that the previous estimate of 470, when the restructuring plans for its refinery operations were announced. Neste procurement, HSSEQ and human resources senior vice president Hannele Jakosuo-Jansson said: “As part of our transformation, we will also renew the Oil Products operating model.
“As a consequence, some of the jobs will cease to exist but completely new jobs will also be created. In the co-operation negotiations, we agreed on comprehensive change support measures which will help our personnel in adapting to the change."
As MRC informed earlier, Royal DSM, a global science-based company in Nutrition, Health and Sustainable Living, has announced that it will start a strategic partnership with Neste, the world’s leading producer of renewable diesel and sustainable aviation fuel and a forerunner as provider of renewable and circular solutions for the chemical industry, to enable the production of high performance polymers.
As MRC informed earlier, in September, 2020, DSM formed a 50/50 joint venture (JV) with VDL Groep (Eindhoven, Netherlands), called Dutch PPE Solutions, to produce medical facemasks and establish the first permanent production of critical facemask components in the Netherlands. The companies are investing several million euros to purchase manufacturing equipment and build manufacturing facilities to produce meltblown polypropylene (PP), the critical material layer in medical facemasks that filters viruses, and make medical masks.
According to MRC's ScanPlast report, 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, excluding producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.
MRC