BASF might invest USD1.4 billion in US shale gas

MOSCOW (MRC) -- BASF SE may undertake its single biggest plant investment to date, spending more than 1 billion euros (USD1.4 billion) to target cheaper US shale gas with a facility to convert methane to propylene used in coatings, said Hydrocarbonprocessing.

Plans for the new facility are being evaluated, the Ludwigshafen, Germany-based company said in a statement. Until now, the largest single-factory investment is BASF’s 1 billion-euro plant in Ludwigshafen for toluene diisocyanate (TDI), a component used in seating cushions and mattresses.

BASF competitors have ramped up US expansion plans on the growth of shale gas. Dow Chemical (DOW) Co. is adding plastics capacity in the US, using the low-cost natural gas. Axiall Corp., North America’s largest producer of vinyl building products, is considering a USD3 billion ethylene plant in Louisiana. The US market produced BASF’s fastest sales growth in euro terms, with revenue rising 5% in the first quarter, it said today.

The chemical maker will reduce the portion of investments allocated to Germany to about a quarter from a third within the next five years because of rising energy costs in its home country, Bock said earlier this year.

First-quarter earnings before interest, tax and one-time items fell 3.3% to 2.14 billion euros, beating a 2.12 billion-euro analyst estimate in a Bloomberg survey. The company saw more demand from the automobile and agricultural industries, it said.

Sales fell 1.1% to 19.5 billion euros in the quarter, compared with a 19.3 billion-euro analyst estimate. Net income gained 2.1% to 1.48 billion euros.

BASF is transferring its gas trading unit to OAO Gazprom (OGZD) in an asset swap and in return will receive stakes in two Siberian oil fields.

BASF is the world’s leading chemical company. Its portfolio ranges from chemicals, plastics, performance products and crop protection products to oil and gas.

MRC

MOSCOW (MRC) - Imports of polypropylene (PP) to Kazakhstan increased by 45% to 3,900 tonnes in the first three months of this year, according to MRC DataScope report.

PP imports to Kazakhstan increased to 1,200 tonnes in March on the back of the seasonal factor, compared with 900 tonnes in February.

Total imports of PP to Kazakhstan were 3,900 tonnes in January - March 2014, compared with 2,700 tonnes in the same period a year earlier.

The main suppliers of PP to the country was Russia, with 70% from the total imports over the reported period. The second largest PP supplier to the local market was South Korea.

Kazakh producer Neftekhim Ltd with 30,000 tonnes/year PP capacity continued to sell material to foreign markets.
PP exports from Kazakhstan were 6,600 tonnes in the first three months of this year, down 2% in the same period a year earlier.
MRC

MOSCOW (MRC) -- Arkema, a France-based chemical manufacturer, has announced a further price increase of EUR100/tonne on its whole Evatane EVA range, high content ethylene vinyl acetate (EVA) copolymer effective from 1 May or as contracts allow, as per the company's press release.

As the world wide shortage on vinyl acetate monomer continues, Arkema is doing its upmost to minimize impact on the Evatane availability.

Marketed under the trademark Evatane, Arkema's EVA functional polyolefins are used in highly diverse industrial applications, including hot-melt, cable, multilayer packaging film, technical polymer modification, solar panel, petroleum additives, bitumen and ink.

As MRC wrote previously, Arkema already increased its April EVA prices by EUR150/tonne prices. That increase was due to rough market conditions, including the world wide unavailability of vinyl acetate monomer.

Arkema with annual revenue of EUR6.4 billion is a leading European supplier of chlorochemicals and PVC. Kynar and Kynar Flex are registered trademarks of Arkema Inc.
MRC

MOSCOW (MRC) -- Sinopec Corp, Asia's largest refiner, posted a 15.3 percent fall in first-quarter profit, meeting forecasts, as a sharp improvement at its refining business was offset by declines at its upstream and chemicals businesses, said the conpany in its press release.

The company posted a net profit of 14.1 billion yuan (USD2.25 billion) versus 16.7 billion yuan a year earlier, under international accounting standards, it said in a filing with the Shanghai bourse. The result compared with an average forecast of 14.6 billion yuan by two analysts polled by Thomson Reuters.

The state-run oil giant, which unveiled a plan earlier this year to sell up to 30 percent of its massive fuel retailing business, has vowed to put more emphasis on investment quality and efficiency instead of expansion this year.

Sinopec said last month it would cut capital expenditure to 162 billion yuan this year from 169 billion yuan in 2013 - which was already seven percent lower than budget.

As MRC informed previously, in late 2012, Sibur, a Russian gas processing and petrochemicals company, and Sinopec International (Hong Kong) Co. Ltd, the wholly owned subsidiary of Sinopec, signed an agreement that will see Sinopec purchase 25% + 1 share of Krasnoyarsk Synthetic Rubbers Plant JSC (KSRP). Sibur and Sinopec are also discussing projects on setting up a joint venture to produce nitrile and polyisoprene rubbers in Shanghai.

Sinopec Corp. is one of the largest scale integrated energy and chemical companies with upstream, midstream and downstream operations. Its refining and ethylene capacity ranks No.2 and No.4 globally. The Company has 30,000 sales and distribution networks of oil products and chemical products, its service stations are now ranked third largest in the world.
MRC

MOSCOW (MRC) -- Ukraine has closed its anti-dumping investigation into imports of suspension PVC (SPVC) from the US without imposing any duties, the interagency commission for international trade said in a report published by the government's official Uriadoviy Kurier newspaper, reported Ukrainian magazine of the Central executive authoritites "Uryadovy Kurier".

The commission, which conducted the investigation covering the imports of SPVC from the third quarter of 2011 through Q3-2012, said the imports from the US amounted to dumping.

The commission also said KarpatNaftoKhim, Ukraine's only producer of SPVC and other petrochemical products and which is owned by Russian oil company Lukoil, suffered losses selling its output domestically in the period.

Karpatneftekhim's annual PVC capacity is estimated at about 300,000 tonne, higher than domestic consumption in the range of 100,000-150,000 tonnes. However, Ukraine has been using cheap imports from the US as well as central and eastern Europe. KarpatNaftoKhim suspended most production in late January, citing weak demand as a key factor. The commission found no sufficient evidence that US imports were responsible for the damage suffered by KarpatNaftoKhim.

As MRC informed before, in late December 2013, Karpatneftekhim (LUKOIL) shut down its PVC production.
The company did not comment officially the reason of the suspension. As reported previously, Karpatneftekhim resumed PVC production on 8 November 2013, following long shutdown from September 2012.

Karpatneftekhim (Kalush, Ivano-Frankovsk region) is a subsidiary of LUKOIL, the largest polymers producer in Ukraine. Its capacities allow to produce 300,000 tonnes of ethylene, 100,000 tonnes of HDPE, 180,000 tonnes of caustic and 300,000 tonnes of PVC annually.
MRC