SK Capital completes purchase of 40% Venator stake from Huntsman

MOSCOW (MRC) -- SK Capital Partners has completed the acquisition of a 39.75% stake, roughly 42.4 million shares, in titanium dioxide maker Venator from Huntsman for roughly USD100 million, according to Chemweek.

The deal includes a 30-month option for the purchase of Huntsman’s remaining approximate 9.5 million shares by SK at US2.15/share. Huntsman spun off Venator in a 2017 initial public offering.

"We are excited to engage with (SK founder) Barry Siadat and the SK Capital team, who have a strong reputation within the chemical industry for supporting long term growth and innovation," said Simon Turner, president and CEO of Venator.

"Our business is poised for increased shareholder value creation as demand for our world class functional and specialty products continues to strengthen." Venator said it remains "well positioned to deliver the full USD55 million in EBITDA improvement from our 2020 business improvement program over the next two years. We look forward to implementing additional steps to strengthen our business and further unlock shareholder value.”

SK said in a regulatory filing 23 December that it intends to "engage in discussions with management or the board of directors of (Venator) about its business, operations, strategy, plans, and prospects, from time to time." Discussions may concern "any extraordinary corporate transaction, a sale or transfer of a material amount of assets, a change in the board of directors or management, a material change in the capitalization, other material changes in the company’s business or corporate structure, or similar actions."

Huntsman said that the sale will provide cash tax savings of approximately USD150 million from the offset of a capital loss on the sale of Venator shares against the capital gain realized on the sale of its chemical intermediates and surfactants businesses in early January. The company said the Venator sale will secure a total related benefit of approximately USD250 million in cash this year.

As MRC reported earlier, Nanjing Jinling Huntsman, a joint venture between Huntsman and Sinopec Jinling, planned to shut its propylene oxide plant in Nanjing (Nanjing, Jiangsu Province, China) on November 1 for scheduled maintenance. This plant with a capacity of 240,000 tonnes/year of propylene oxide will be closed until approximately 25 November.

Propylene is the main feedstock for the production of polypropylene (PP).

According to MRC's DataScope report, PP imports into Russia increased by 21% year on year to about 202,000 tonnes in the first eleven months of 2020. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.

Huntsman Corporation is a publicly traded global manufacturer and marketer of differentiated and specialty chemicals with 2019 revenues of approximately USD7 billion. The company's chemical products number in the thousands and are sold worldwide to manufacturers serving a broad and diverse range of consumer and industrial end markets. The company operates more than 70 manufacturing, R&D and operations facilities in approximately 30 countries and employ approximately 9,000 associates within our four distinct business divisions.
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MOSCOW (MRC) -- Gazprom has lost a third of its share of the Finnish gas market after a new pipeline made it possible to import liquefied natural gas (LNG) via the Baltic States, data from Gazprom and Estonian gas grid operator Elering showed, reported Reuters.

The Balticconnector pipeline, which opened early this year, links Finland and Estonia and can also send gas to the Baltics.

In the first nine months of 2020, a total of 5.8 terawatt-hours (TWh) of gas was exported to Finland via the pipeline, data provided by Elering showed.

Meanwhile, direct gas exports from Russia to Finland over same period dropped by 35% to 11.4 TWh, from 17.6 TWh over Jan-Sept in 2019, Gazprom's quarterly data, published on its website, showed.

Natural gas prices between Finland and the Baltic states of Estonia, Latvia and Lithuania vary due to their access to the global LNG market, ability to store gas in Latvia and different Russian gas supply contracts.

Haroldas Nauseda, board member at Lithuanian state-controlled gas trader Ignitis, told Reuters: "In 2019, gas in Finland cost about 7 euros per MWh more than in Lithuania, a difference of 150 million euros for the full year."

"Today, there's little difference left."

Ignitis supplied 2.23 TWh to Finland over Jan-Sept and expects to keep the share in Finland next year, Nauseda said.

Most of the gas came from the only large-scale LNG import terminal in the Baltic states, in Lithuania, with capacity of 39 TWh per year.

Nauseda said that during the cold winter months the Balticconnector pipeline is unable to satisfy demand and prices in Finland go up.

Built to transport about 25 TWh of gas per year, Balticconnector has been limited to about 11 TWh per year due to delays upgrading compressor stations.

Gazprom is also facing competition in other parts of Europe from LNG imports, including from the United States.

The Baltic and Finnish gas markets will be connected to mainland Europe at the end of 2021 by a new pipeline linking Lithuanian and Polish gas grids, potentially bringing in more competition.

"The four countries consume about 60 TWh of gas per year, compared with 200 TWh in Poland, so the region will attract international players," Nauseda said.

As MRC informed before, Gazprom neftekhim Salavat, part of Gazprom, has restarted its low density polyethylene (LDPE) production after a scheduled maintenance. The plant"s customers said Gazprom neftekhim Salavat resumed its LDPE production on 10 August, 2020, after the scheduled turnaround. The outage lasted slightly longer than originally planned. LDPE production capacities were shut for the turnaround on 1 July.

According to MRC's ScanPlast report, October estimated LDPE consumption in Russia grew to 50,030 tonnes from 23,930 tonnes a month earlier. Russian producers increased domestic LDPE shipments after the September shutdowns for maintenance. Russia's estimated LDPE consumption was about 456,490 tonnes in January-October 2020, down by 1% year on year. Lower production was offset by higher imports.
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1. Asia distillates-Jet fuel cracks hover near multi-month peak as aviation demand ticks up

MOSCOW (MRC) - Asia's refining margins for jet fuel dipped on Tuesday but remained within close sight of multi-month highs touched last week, supported by seasonal heating demand for kerosene and a slow but gradual recovery in regional aviation demand, Reuters. However, a fast-spreading new coronavirus strain that has shut down much of Britain has prompted several countries to reimpose travel curbs on UK routes, triggering worries about fuel demand recovery and near-term air travel outlook. Refining margins, or cracks, for jet fuel slipped 24 cents to $4.36 per barrel over Dubai crude during Asian trade on Tuesday. The jet cracks, which also determine the profitability of closely-related kerosene, have gained 37% in the last month, Refinitiv Eikon data showed. Cold season in the northern hemisphere typically brings peak demand for kerosene in Japan and Korea, where the fuel is used as a heating oil to fend off winter chill.


MRC

MOSCOW (MRC) -- The US Environmental Protection Agency is now aiming for Dec. 31 as the point by which it will propose rules on the amount of biofuels refiners must blend into their fuel mix next year, after missing a deadline last month to release the proposal, reported Reuters.

Under the adjusted timeline, the agency will aim to finalize the rule on the so-called Renewable Volume Obligations in June 2021, according to the agency's agenda on the Office of Information and Regulatory Affairs' website.

EPA is in charge of administering the US Renewable Fuel Standard, which requires refiners to blend billions of gallons of biofuels into their fuel mix each year, or buy tradable credits from those that do.

The regulation is a lightning rod of contention between the corn industry, which supports it because it creates demand for ethanol, and the refining industry, which opposes it because it is costly and competes with traditional petroleum fuels.

The EPA missed a Nov. 30 deadline for issuing the obligations this year, after the process was complicated by the coronavirus pandemic and its economic fallout for the fuel industry.

EPA did not immediately respond to a request for comment.

As MRC wrote before, in October, the US Environmental Protection Agency (EPA) released a federal strategy for addressing marine litter that includes broad efforts to incentivize recycling and build infrastructure both domestically and overseas. “Internationally, up to 28 billion pounds of waste makes it into our oceans every year, harming marine life and coastal economies,” says EPA administrator Andrew Wheeler. “Marine litter is a top priority for this Administration, and working together with our global partners, we aim to solve the current growing marine litter problem in our shared oceans.” According to EPA, five countries in Asia - China, Indonesia, the Philippines, Thailand, and Vietnam - account for over half of the plastic waste input into the ocean. The majority of marine litter comes from land-based sources, such as littering and the mismanagement of waste, and the most effective way to combat marine litter is to prevent and reduce land-based sources of waste from entering the oceans in the first place.

We remind that Braskem has formed first partnership for removing household plastic waste from landfill in Greater Sao Paulo. The partnership forged between Braskem and Tecipar, the Brazilian company specializing in environmental engineering, will avoid some 2,000 tons of plastic waste annually from being discarded in the landfill of Santana do Parnaiba, a city in the metropolitan area of Sao Paulo. This volume is equivalent to 36 million units of plastic packaging made from polyethylene (PE) and polypropylene (PP). The partnership reinforces Braskem's commitment to the Circular Economy and is aligned with the business strategy of the company, which is engaged in supporting the development of the recycling chain and its market.

According to MRC's DataScope report, PE imports to Russia decreased in January-November 2020 by 17% year on year and reached 569,900 tonnes. High density polyethylene (HDPE) accounted for the greatest reduction in imports. At the same time, PP imports into Russia increased by 21% year on year to about 202,000 tonnes in the first eleven months of 2020. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.
MRC

MOSCOW (MRC) -- Seqens (Ecully, France) has confirmed details of its previously announced isopropyl alcohol (IPA) expansion at Roussillon, France, according to Chemweek.

The company says it will build an additional unit with capacity for 45,000 metric tons/year of IPA that is scheduled to be onstream early in 2022.

Demand for IPA has spiked this year because of the product's use as an ingredient in hand sanitizers. The capacity expansion “will guarantee domestic production, even in times of health crises, of one of the main solvents used in the production of intermediates and pharmaceutical active ingredients, as well as in hygiene, disinfection, and sanitizing products such as hydro-alcoholic solutions and gels,” Seqens says. “Thanks to this investment, Seqens will continue its downstream integration by offering a large range of IPA grades, from pharmaceutical, cosmetic, technical, and very recently, electronic and biocide grades, to support our end-markets, as well our specialty solvents such as isopropyl acetate and diisopropyl ether.”

Seqens is France's only dedicated producer of IPA with 60,000 metric tons/year of capacity at Roussillon, according to IHS Markit data. It operates a phenol/acetone unit at Roussillon that supplies acetone to the IPA plant.

Investment firm Eurazeo is the majority shareholder in Seqens.

As MRC informed previously, the French company Segens has lifted the force majeure on shipments of acetone from its plant in Peage, France. Seqens removed the force majeure circumstances at this plant with a capacity of 108,000 mt of acetone per year on July 16, 2020. The company announced force majeure in late March due to the coronavirus pandemic.

Acetone, along with phenol, is the main feedstock for the production of bisphenol A (BPA), which, in its turn, is used for the production of polycarbonate (PC).

According to MRC's ScanPlast report, Russia's estimated consumption of PC granules (excluding imports and exports to\\from Belarus) rose in January-November 2020 by 18% year on year to 83,600 tonnes (70,600 tonnes a year earlier).
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