Lotte Chemical to begin construction of its new petrochemical complex in Indonesia in 2022

Lotte Chemical to begin construction of its new petrochemical complex in Indonesia in 2022

MOSCOW (MRC) -- Lotte Chemical has recently informed that that company has decided to proceed with the 5 trillion won (USD4.4 billion) petrochemical project in Cilegon, Indonesia after the previous delay due the pandemic. The project named Lotte Chemical Indonesia New Ethylene (LINE) is to commence construction in 2022, according to CommoPlast with reference to the company's bourse filing.

Lotte Chemical aims to bring the new complex online in 2025.

LINE consists of a mixed feeds cracker that could product 1 million tons/year of ethylene and 520,000 tons/year of propylene, and downstream polyethylene (PE) plants.

“However, the final investment and plant design might be larger than the initial plan,” a Lotte Chemical official said.

On 28 October 2021, Lotte Chemical awarded two contracts worth USD1.64 billion involving engineering and construction work for the new project to Lotte Engineering & Construction Co Ltd (LEC).

Lotte Chemical has already established presence in Indonesia via PT Lotte Chemical which operates a non-integrated 450,000 tons/year PE plant and uses ethylene feed from its sister company in Malaysia.

As MRC informed before, in January, 2019, Lotte Chemical Titan announced plans to add a naphtha-fed steam cracker with an ethylene production capacity of 1 million mt/year to its petrochemical facility in Merak of Banten province, Indonesia, by 2023, making it an integrated petrochemical complex.

Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,265,290 tonnes in the first eleven months of 2021, up by 14% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,363,850 tonnes in January-November, 2021, up by 25% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding PP random copolymers decreased significantly.
MRC

Alpek announced its fourth quarter 2021 results

Alpek announced its fourth quarter 2021 results

MOSCOW (MRC) -- Mexican polyester producer Alpek reported a decline in Q4 consolidated net income because of the shutdowns at two plants and higher taxes, said the company.

The company shut down its caprolactam operations in Salamanca, Mexico and its stable fibres operations in Cooper River in South Carolina state, US. Alpek shut down the plants because of an extended period of low margins that were caused by high raw-material costs. In addition, the outlook for the two industries was unfavourable, Alpek said.

Q4 gross profit rose year on year because sales grew faster than costs. The following table shows the company's Q4 financial performance.

For Polyester, volumes rose quarter on quarter because of the resolution of a drought at Altamira, Tamaulipas state in Mexico. Quarter on quarter, earnings before interest, tax, depreciation and amortisation (EBITDA) benefited from inventory and carry-forward effects. These were partially offset by plant shutdowns.

The Polyester segment produces purified terephthalic acid (PTA), polyethylene terephthalate (PET) and polyester fibres. For Plastics & Chemicals, volumes fell quarter on quarter because of planned maintenance at a plant in the US that make expandable polystyrene (EPS).

Earnings fell quarter on quarter because of plant shutdowns. The segment makes EPS and polypropylene (PP).

As per MRC, Alpek has signed an agreement to acquire Omani polyethylene terephthalate (PET) producer Octal Petrochemical. Alpek to acquire 100% stake in Octal for USD620 million Octal owns a petrochemical complex in Salalah, Oman, with an annual virgin PET capacity of 850,000 tons per year. Alpek said the deal will bring the company's capacity to more than 1 million tonnes.

It was previously reported that Alpek and its joint venture partners may restart construction of their polyethylene terephthalate (PET) project in Texas in 2022. Production could start in two years, which means a launch in early 2024.

Alpek is the largest petrochemical company in Mexico and the second largest in Latin America. Its business is divided into two main segments: "polyesters" (terephthalic acid, polyethylene terephthalate and polyester fibers) and "plastics and chemicals" (polypropylene, expanded polystyrenes, caprolactam, polyurethanes and other specialty and industrial chemicals). Alpek is the world's leading manufacturer of purified terephthalic acid and PET; it owns the largest expanded polystyrene plant on the continent and one of the largest polypropylene plants in North America. Alpek currently has 19 factories in Mexico, USA and Argentina. Alpek is part of the Mexican conglomerate Grupo Alfa. Alpek also owns DAK Americas.
MRC

Demand for residual fuel oil peaks in the USA in late 2021

Demand for residual fuel oil peaks in the USA in late 2021

MOSCOW (MRC) -- In November 2021, more residual fuel oil was consumed in the US, measured as product supplied, than during any month since January 2017, according to Hydrocarbonprocessing with reference to the International Energy Agency (IEA).

Residual fuel oil has several uses, but it is primarily consumed as bunker fuel in the maritime shipping sector. Consumption in December 2021 was at its highest end-of-year level since 2012, according to the EIA's weekly petroleum status report.

On January 1, 2020, tighter regulations from the International Maritime Organization (IMO) on maritime fuel sulfur specifications became effective. Before 2020, marine fuel could have a sulfur content as high as 3.5%, which is considered high-sulfur fuel oil. The IMO now requires ships to switch to fuels with a 0.5% sulfur content or less, forcing ships to use a more processed, and more expensive, variety of residual fuel oil called very-low-sulfur fuel oil.

Ships comply with the IMO specification as long as their actual emissions meet the target sulfur emissions level, regardless of the specification of the fuel they use. Ship owners can install sulfur scrubbers on board to reduce sulfur emissions while still consuming high-sulfur fuel oil and remain compliant. Ship scrubbers are expensive and require ongoing maintenance, but vessels can lower operating costs by purchasing high-sulfur fuel oil instead of higher-priced very-low-sulfur fuel oil or low-sulfur marine gas oil.

The IMO regulation applies to global shipping. Marine vessels operating within the North American or US Caribbean Sea Emission Control Areas were already required to meet 0.1% sulfur content while operating within those waters.

Since spring 2020, overall production of residual fuel oil has decreased because of substantially less refinery production resulting from the effects of the COVID-19 pandemic.

As MRC reported earlier, EIA forecasts that crude oil prices will fall in 2022 and 2023 from 2021 levels, according to its January 2022 Short-Term Energy Outlook (STEO). In the fourth quarter of 2021, the price of Brent crude oil, the international pricing benchmark, averaged USD79 per barrel (b). EIA forecasts that the price of Brent will average USD75/b in 2022 and USD68/b in 2023. The declining prices are driven by a shift from global petroleum inventory declines during 2021 to inventory increases in 2022 and 2023. Global petroleum inventories decline when consumption is greater than production and increase when production is greater than consumption.

We remind that oil supply will soon overtake demand as some producers are set to pump at or above all-time highs, said EIA, while demand holds up despite the spread of the Omicron coronavirus variant.
MRC

Neste to introduces its first dedicated charging service for logistics companies

Neste to introduces its first dedicated charging service for logistics companies

MOSCOW (MRC) -- Neste will introduce its first dedicated charging service for logistics companies in the Finnish market in February 2022, according to Hydrocarbonprocessing.

Neste ran a service pilot in 2021 together with Finland's leading moving and logistics company Niemi Services Ltd. The pilot was a success, and the Neste charging service will be widely available for the transport industry to support companies in achieving their climate goals. By using the Neste charging service to charge their electric vehicles, logistics companies can reduce their GHG emissions by 85% on average. This figure is based on a five-year average of the electricity used in Finland’s national grid as well as European regulations.

Neste has been at the forefront in reducing transport-related emissions with its Neste MY Renewable Diesel. This fuel allows drivers and companies to reduce their GHG emissions by up to 90% compared to fossil diesel use. The fuel is globally available in Finland, Estonia, Latvia, Lithuania, Sweden, Belgium, the Netherlands and the US in California and Oregon. In Finland, more than 150 stations provide Neste MY Renewable Diesel for both business and private motorists. With the new charging service, Neste wishes to offer its customers an expanded product range for the transition to low-emission transport.

“We want to help our customers reduce their GHG emissions, and we are continuously investigating possibilities to support companies in achieving carbon neutrality. Although heavy transport vehicles will be powered by diesel for a long time to come and renewable diesel provides opportunities for significant reductions of emissions, other solutions are additionally needed to reduce the emissions from transport. An increasing number of transport and logistics companies will operate fleets comprising diesel, electric and gas-powered vehicles in the future, and that is why we wish to expand our services to include electric charging solutions. We are pleased to quickly and widely introduce the charging service for companies operating in Finland. We are investigating the possibility of later expanding the service to the Baltic market,” says Tuomas Kulola, Head of Sales in Marketing & Services at Neste.

Neste is currently planning its own dedicated electric charging solution for workplaces. The aim is to begin pilots at Neste’s Porvoo refinery and the company’s head office in Espoo, Finland during 2022.

As MRC wrote before, Neste has successfully concluded its first series of trial runs processing liquefied waste plastic at its Porvoo refinery in Finland. After kicking the series off with its first-ever industrial scale trial run with liquefied waste plastic in 2020, Neste has conducted additional runs in 2021. In the course of the trial runs, Neste has been able to upgrade liquefied waste plastic to drop-in solutions for plastic production and develop industrial scale capabilities to upgrade recycled feedstocks. Trials pave the way for continuous and commercial activities. Neste has set itself the goal of processing more than 1 MM tons of plastic waste per year from 2030 onwards.

Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,265,290 tonnes in the first eleven months of 2021, up by 14% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,363,850 tonnes in January-November, 2021, up by 25% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding PP random copolymers decreased significantly.

Neste (Helsinki) creates solutions for combating climate change and accelerating a shift to a circular economy. The company refines waste, residues and innovative raw materials into renewable fuels and sustainable feedstock for plastics and other materials. The company is the world’s leading producer of renewable diesel and sustainable aviation fuel, developing chemical recycling to combat the plastic waste challenge. In 2020, Neste's revenue stood at EUR11.8 billion, with 94% of the company’s comparable operating profit coming from renewable products.
MRC

AkzoNobel plans to expand production of its resins

AkzoNobel plans to expand production of its resins

MOSCOW (MRC) -- AkzoNobel plans to expand production of its resins, said the Dutch-headquartered coatings producer.

Capacity expansions will take place at 23 productions sites worldwide over the next three years, with investment plans accounting for the sites, equipment and people needed to run them. This will enable AkzoNobel to become more self-sufficient and is expected to add between EUR15-20m in earnings before interest, tax, depreciation and amortisation (EBITDA) by 2023.

The added capacity will allow the company to build resilience against supply disruptions and reduce Scope 3 carbon emissions, in line with the firm’s target to reduce carbon emissions across the value chain by 50% by 2030. Resins are used as a binder to hold pigment particles together in the coating production process and provide adhesion to the coated surface.

Resins are a key ingredient for making coatings. They’re used as a binder to hold the pigment particles together and provide adhesion to the coated surface.

"All of our businesses use resins, and while we produce a good proportion of what we need ourselves, commodity and other specialty resins need to be sourced from third parties,” explains Michael Friede, AkzoNobel’s Chief Commercial Officer for Performance Coatings. “Further investing in our own resin capabilities will help us to secure sustainable business growth, as well as supporting our innovation pipeline and sustainability targets."

As per MRC, AkzoNobel has strengthened its paints business and footprint in Spain by completing the acquisition of 100% of the shares of Spanish decorative paints maker Titan Paints for an undisclosed fee. The transaction includes Titan Paints' three production plants in El Prat (Barcelona), Las Palmas (Canary Islands), and Maia in Portugal, seven logistics and service centers for decorative paints, the company said in a statement. Titan Paints generated sales of about EUR80m in 2019 and has 425 employees. The deal was first announced in October 2020.

AkzoNobel has started building a new powder coatings facility. The plant will appear in the city of Chungli (Taiwan). The enterprise will be a fully automated and environmentally friendly site. The assortment of the future plant includes materials to meet the needs of the growing market for furniture, household appliances, sports equipment, machine tools, automotive accessories, electronic components, telecommunications and architecture. The capacity of the object is not specified.

Akzo Nobel is the largest European manufacturer of paints and coatings. The company provides a wide range of products for both industrial, professional and home use, including building coatings, automotive paints, marine protective coatings, wood surface coatings, and space technology coatings.
MRC