Construction approved for second Vietnam refinery

MOSCOW (MRC) -- Japanese refiner Idemitsu Kosan Co. and its partners have made a final investment decision on Vietnam's second oil refinery and secured USD5 billion in project finance, reported Hydrocarbonprocessing with reference to Idemitsu's statement.

The USD9 billion Nghi Son complex 180 kilometers south of Hanoi will have a refining capacity of 200,000 bpd. It is slated to process Kuwaiti crude supplied exclusively by Kuwait Petroleum International.

Construction will begin in July and commercial operations are expected to start in the second quarter of 2017.

Idemitsu and Kuwait Petroleum each owns a 35.1% stake in the project. State-owned Vietnam Oil & Gas Group, known as Petrovietnam, and Mitsui Chemicals own 25.1% and 4.7%, respectively.

Petrovietnam will buy all oil products from Nghi Son at Asian market prices, as its output is primarily intended to meet the needs of Vietnam's domestic market. The joint-venture contract also allows it to export any excess production to avoid reducing the refinery's operating rate.

Nghi Son will produce 700,000 tpy of paraxylene, all of which Idemitsu and Mitsui Chemicals will take. Besides, it will produce polypropylene (PP) and aromatics.

The project has been delayed several times -- the final investment decision was originally scheduled for the summer of 2010 -- as the partners struggled to obtain bank financing without underwriting by the Vietnamese government. Talks progressed rapidly, however, after the government agreed in August to take official and unofficial measures to minimize financial risks.

As MRC wrote earlier, in May, 2013, the Vietnamese government approved to a 660,000 barrel oil refinery and petrochemical complex for an estimated USD27 billion by the energy giant PTT Plc, paving the way for a detailed feasibility study within a year.
MRC

MOSCOW (MRC) -- Nova Chemicals has begun construction on the expanded polyethylene facilities at the Joffre Site which will include a world-scale polyethylene reactor (R3), said the company in its site.

While R3 and associated infrastructure require a significant USD900-million capital investment, the project is categorized as modest derivative expansion, largely integrated within the site’s existing "footprint."

R3, once it is commissioned in the Fall of 2015, will be the third reactor in our existing PE1 facility. Currently, PE1 has two identical production "trains" referred to as polyethylene reactors. R3 has been designed to produce between 950 to 1,100 million pounds of linear low density polyethylene (LLDPE). This will be an approximate 40% increase in our overall site polyethylene capacity and will use existing Joffre Site ethylene capacity.

As MRC wrote earlier, growth in the LDPE market is part of NOVA 2020, the company's long-term asset strategy to capitalize on emerging feedstock opportunities and growing North American demand. Restoring the Moore facility is the first step in NOVA Chemicals’ plan to strengthen its commitment to the LDPE market to better meet the needs of customers.

NOVA Chemicals Corporation is a plastics and chemical company headquartered in Calgary, Alberta, Canada, and is a wholly owned subsidiary of the International Petroleum Investment Company (IPIC) of the Emirate of Abu Dhabi, United Arab Emirates.
MRC

MOSCOW (MRC) -- Fitch Ratings has upgraded NOVA Chemicals Corporation's (NOVA) Issuer Default Rating (IDR), unsecured bank credit facilities, and senior unsecured notes to 'BB+' from 'BB' and its secured credit facility to 'BBB-' from 'BB+', said Finance.

The rating outlook is stable. Approximately USD715 million of debt is affected by this rating action. A complete list of ratings is included at the end of this release.

The upgrade is based on NOVA's continued strong operating performance and its substantial debt paydown. NOVA benefits from robust demand and tight supply in its core Olefins/Polyolefins segment, which mainly produces ethylene and polyethylene. The resulting favorable supply environment coupled with low costs for light feedstock has resulted in high operating profits and margins. In the latest 12 months (LTM) period ended March 31, 2013, NOVA had operating EBITDA of approximately USD1.2 billion, corresponding to a margin of 23.5%, based on USD5 billion of revenues.

The company's performance resulted in significant LTM free cash flow (FCF) of USD525 million, based on USD966 million of cash flow from operations, USD360 million of capital expenditures and USD75 million of capital distributions. However, Fitch does not anticipate NOVA will continue generating FCF. In April, NOVA increased its distribution to USD150 million. The company also is ramping its cap ex spend to accomplish its NOVA 2020 strategy. Fitch expects NOVA to produce negative FCF in 2013, 2014 and 2015 as the company's spend for planned projects and cash distributions outpace cash from operations.

The strengthening of the company's credit profile partially mitigates the key ratings constraints, the price volatilities and the demand and supply cyclicality of commodity chemicals. Prices for the company's commodity products sold to third party customers (ethylene, polyethylene, polystyrene and by-products) are volatile as they follow the cyclicality of the industry, which is not only influenced by the economic demand cycle but also by the industry's supply dynamics.

As MRC wrote earlier, growth in the LDPE market is part of NOVA 2020, the company's long-term asset strategy to capitalize on emerging feedstock opportunities and growing North American demand. Restoring the Moore facility is the first step in NOVA Chemicals’ plan to strengthen its commitment to the LDPE market to better meet the needs of customers.

NOVA Chemicals Corporation is a plastics and chemical company headquartered in Calgary, Alberta, Canada, and is a wholly owned subsidiary of the International Petroleum Investment Company (IPIC) of the Emirate of Abu Dhabi, United Arab Emirates.

MRC

MOSCOW (MRC) -- Asahi Kasei Chemicals and DuPont China Holdings Co., Ltd. (DuPont) have agreed to a share transfer under which the Asahi Kasei Group will obtain full ownership in Asahi-DuPont POM (Zhangjiagang) Co., Ltd. (ADZ), a joint venture between Asahi Kasei Chemicals and DuPont for the production and sale of polyacetal copolymer in China, said Asahi-kasei.

Asahi Kasei Chemicals and DuPont will now advance procedures to receive the necessary approvals from the Chinese government, and begin deliberations with clients regarding the transition. Timing of the share transfer and a new name for the company will be determined upon receipt of such approvals.

ADZ has been producing and selling polyacetal copolymer in China since 2004, meeting growing demand for polyacetal in the Chinese market. When the transfer of ownership is complete, the operation of ADZ will be fully integrated with the performance plastics business of Asahi Kasei Chemicals, with a strategic focus on superior applications development through differentiated products.

Polyacetal has a distinctive market because it cannot be easily replaced by other materials. In China and other regions of Asia, demand growth for polyacetal is forecasted in automotive applications. The share transfer announced today will reinforce the position of Asahi Kasei Chemicals as the world’s only producer of both homopolymer and copolymer polyacetal, enhancing its production and marketing capabilities for differentiated grades to further expand business in China and other Asian countries.

Polyacetal (POM) is a crystalline engineering resin featuring wear resistance, toughness, and chemical resistance. It is used for parts and components in automotive, electronic, electrical, and industrial applications. There are two types of polyacetal: homopolymer, with high rigidity, strength, and fatigue resistance, and copolymer, with high tensile modulus and thermal stability.

As MRC wrote earlier, Asahi Kasei Chemicals will build a new acetonitrile plant at the site of Tong Suh Petrochemical's Ulsan plant grounds in South Korea. The new plant, with a production capacity of 11,000 tons per year, is expected to come onstream in January 2014. The proposed acetonitrile plant will use crude acetonitrile byproduct from other acrylonitrile plants in Korea. The facility, along with the company's Japanese acetonitrile plant, will help Asahi Kasei Chemicals to meet the growing demand for acetonitrile.
MRC

MOSCOW (MRC) -- Keyuan Petrochemicals Inc., an independent manufacturer and supplier of various petrochemical products in China, announced its financial results for the twelve months ended December 31, 2012, said Marketwatch.

"Our 2012 revenues benefitted from solid customer demand and expanded production capacity," declared Mr. Chunfeng Tao, Chairman and Chief Executive Officer of Keyuan Petrochemicals Inc. "Although our margins were negatively impacted by higher raw materials costs and labor cost, I believe Keyuan's core earnings potential continues to improve as a result of the operation of the SBS facility and a series of initiatives on major projects."

Chinese petrochemical company Keyuan has announced its expansion plans, which include a transformer oil facility.

On the back of the declaration of a strong 2012 financial year, with revenues up almost 20% year-on-year, the company made clear its intention to produce and refine transformer oil using hydrogen from its forthcoming ethylene-styrene facility. The company hopes to produce 100,000 metric tons annually, according to a press release.

Both the ethylene-styrene and the transformer oil facilities are expected to be complete by the end of Q4 of 2014.

As MRC wrote earlier, Keyuan Petrochemicals Inc received three patent notices from the Patent Office of China regarding inventions related to the production process of acrylonitrile.

Keyuan Petrochemicals, Inc., established in 2007 and operating through its wholly-owned subsidiary, Keyuan Plastics, Co. Ltd., is located in Ningbo, China and is a leading independent manufacturer and supplier of various petrochemical products. Having commenced production in October 2010, Keyuan's operations include an annual petrochemical manufacturing design capacity of 720,000 MT for a variety of petrochemical products, with facilities for the storage and loading of raw materials and finished goods, and a technology that supports the manufacturing process with low raw material costs and high utilization and yields. In order to meet increasing market demand, Keyuan plans to expand its manufacturing capacity to include a SBS production facility which was completed in September 2011 and one production line has entered into commercial production, additional storage capacity, a raw material pre-treatment facility, an asphalt production facility, and an ABS production facility.
MRC