Saudi Aramco, Total to double investment at Jubail site

(Reuters) - Saudi Aramco SDABO.UL said its oil refinery joint venture with France's Total (TOTF.PA) will double capital investment to 7.12 billion riyals (USD1.90 billion) at Jubail, the largest industrial city in the region.

Saudi Aramco Total Refinery and Petrochemicals Company (SATORP) will increase spend at the site from 3.56 billion riyals in the first-quarter of 2013, according to a statement on the Saudi bourse website.

State-owned Aramco holds a 62.5 percent stake in the project, with Total holding the remaining 37.5 percent stake. The capital increase will be on a pro-rata basis, the statement said.

In 2010, the joint-venture firm said it had raised USD8.5 billion towards the USD12.8 billion project and issued in 2011 3.75 billion riyals Islamic bonds to help pay for it.

The refinery, whose construction is close to completion is part of Saudi Arabia's drive to boost crude refining capacity and would process heavy crude from Aramco's giant 900,000 barrels per day Manifa oilfield.

As MRC wrote earlier, Aramco and Total have already started testing their new refinery at Jubail, raising the prospect of full operation of the USD14 bln facility ahead of a scheduled start-up in Q3-2013.

Saudi Aramco Total Refinery and Petrochemicals Company (SATORP) has fired up the boilers at the plant, and hopes to bring the first of two crude distillation units (CDU) online before year-end.

The refinery would produce around 190,000 bpd of diesel, around 90,000 bpd of gasoline and 50,000 bpd of kerosene as well as petrochemicals.

MRC

(reinforcedplastics) -- Aircraft maker Boeing and automotive company BMW have signed a collaboration agreement to participate in joint research on carbon fibre recycling. The companies will also share knowledge about carbon fibre materials and manufacturing.

Boeing and BMW are both using of carbon fibre composite in their products. Boeing's 787 Dreamliner is made up of 50% carbon composite material and BMW will introduce two vehicles with passenger compartments made of carbon composite in 2013 (the BMW i3 and i8).

Recycling composite material at point of use and the end of product life is critical to both companies.

"This collaboration agreement is a very important step forward in developing the use and end use of carbon fiber materials," says Larry Schneider, Commercial Airplanes vice president of Product Development, who represented Boeing at the signing of the agreement in Seattle, Washington.

BMW opened a plant in Moses Lake, Washington, in 2011 that will provide carbon fibre for the 2013 i3 and i8 models. Both new models will be assembled in Leipzig, Germany.

As part of the collaboration agreement, Boeing and the BMW Group will also share carbon fibre manufacturing process simulations and ideas for manufacturing automation.

Carbon fiber, alternatively graphite fiber, carbon graphite or CF, is a material consisting of fibers about 5–10 mm in diameter and composed mostly of carbon atoms.

The properties of carbon fibers, such as high stiffness, high tensile strength, low weight, high chemical resistance, high temperature tolerance and low thermal expansion, make them very popular in aerospace, civil engineering, military, and motorsports, along with other competition sports. However, they are relatively expensive when compared to similar fibers, such as glass fibers or plastic fibers.

MRC

(Wall Street Journal) -- U.S. Deco, as the Akzo Nobel unit is known, was hit hard by the slump in the US construction and housing market, struggling to compete with bigger US rivals, such as PPG and Cleveland-based Sherwin-Williams. Akzo Nobel originally acquired the business as part of its 2008 acquisition of UK chemicals group ICI.

Akzo Nobel, the Dutch paints and coatings supplier struggling with tough trading conditions in Europe, on Friday said it would sell its North American paints business to US rival PPG Industries for USD1.05 billion.

Akzo Nobel, which is shedding the paints unit after four years of losses and restructuring, said it would use the USD875 million disposal proceeds to reduce debt and invest in higher-growth markets.

The company wrote down the value of its paints assets by EUR2.48 billion euros (USD3.25 billion) in October.

U.S. Deco, as the Akzo Nobel unit is known, has been hit hard by the slump in the US construction and housing market, struggling to compete with bigger US rivals, such as PPG and Cleveland, Oh.-based Sherwin-Williams Co.

Akzo Nobel originally acquired the business as part of its 2008 acquisition of UK chemicals company ICI. U.S. Deco had revenue of USD1.5 billion in 2011, about 7% of Akzo Nobel's total.

The transaction with PPG is expected to close in the first quarter of 2013.

As MRC wrote earlier, in early December AkzoNobel signed an expanded joint venture agreement with the Yusuf Bin Ahmed Kanoo group of companies as a part of its growth ambitions for the Middle East.

Akzo Nobel N.V., trading as AkzoNobel, is a Dutch multinational, active in the fields of decorative paints, performance coatings and specialty chemicals. Headquartered in Amsterdam, the company has activities in more than 80 countries, and employs approximately 55,000 people.
MRC

(chemicalexplorer) -- The global economic uncertainty continues to put pressure on the Kingdom's petrochemical sector. Weak demand and increasing supply is restricting price growth. Operational inefficiencies at the new startups are also contributing to the weak performance.

Petrochemical demand in China is expected to remain weak in the near term due to lower industrial activities and slowing domestic demand. China's GDP is expected to grow by 7.8 % in 2012 and 8.2 % in 2013 lower than the 9.2 % in 2011. Slow recovery in the US economy and the ongoing credit crisis in Europe are expected to result in a weak demand for petrochemical products. Excess supply from low-cost producers will pressure prices.

Three petrochemical projects - Petrochem's Saudi Polymers Company, Industries Qatar's LDPE facility, and Saudi Kayan's LDPE plant - started the commercial/trial operations in H2, 2012. This coupled with other projects such as Borouge 3 expansion, Sadara Chemical Co., PetroRabigh II expansion, and Sipchem Phase III expansion will increase the GCC's petrochemical capacity by 19.4 percent to 145-146 million tons per annum by 2016 from 121 million tons per annum in 2011.

The increasing supply from low-cost producers will result in excess supply and will pressure prices in the long term. Petrochemical and fertilizer prices are expected to decline in 2013. Continuing weakness in demand in key markets and increasing supply from low-cost producers are expected to exert downward pressure on petrochemical prices in 2013.

However, polyethylene, ethylene glycol and polypropylene prices are expected to remain flat as demand for these products remain strong.

Currently, Saudi petrochemical firms have one of the lowest production costs globally. Although increasing feedstock prices will decrease their cost advantage, the cost structure of Saudi petrochemical producers will remain lower than their global peers. Net income is to grow in 2013 on higher earnings from startups.

This will offset the negative effect of weak demand and prices. In 2013, earnings will increase as a result of the contribution from petrochem's facilities and Saudi Kayan's LDPE plant, which started the operations in Q4, 2012. Higher productivity at Saudi Kayan's petrochemical complex and the contribution from Sahara's three projects (SAMC, SAP and ACVC), which are expected to start operations during 2013, will further support earnings growth during the year.
MRC

MOSCOW (MRC) - After October record high the imports of polyethylene (PE) to the Ukrainian market expectedly declined. In November, the total volume of imports decreased to 28,800 tonnes. The eleven months’ external supplies of PE made 297,400 tonnes, according to MRC DataScope.

In November the imports of polyethylene to the Ukrainian market after the October record went down again. External supplies decreased by 12%, from October and made 28,800 tonnes. The decline in imports was seen in all grades of polyethylene, with the only exception of LDPE.
In November, imports of high-density polyethylene (HDPE) decreased to 14,300 tonnes, while in October it reached a record 17,300 tonnes. The greatest decrease was seen in importsof pipe polyethylene.

Despite the seasonal factor the import of LDPE last month, on the contrary, increased by 14% compared with October and amounted to 9,000 tonnes. Supply of polyethylene from Belarus increased significantly. The deliveries of LDPE from Ethylene-Polyethylene (Sumgait, Azerbaijan) were resumed.

External supplies of linear polyethylene in the Ukrainian market in November fell by 25% compared with October - up to 4,700 tonnes. Decline in imports resulted from the limited supply of polyethylene in November from a number of European makers.

In the whole, the eleven months’ imports of polyethylene to Ukraine amounted to 297,400 tonnes, up by 8% year on year. The most significant increase in imports was seen indeliveries of linear polyethylene , with the market growth by 38%.

MRC