Global court upholds Phillips 66 takeover of Sweeny refinery from PdVSA

MOSCOW (MRC) -- Phillips 66 said an international tribunal ruling supports its right to acquire a 50% stake in facilities at its Sweeny refinery in Texas from Petroleos de Venezuela SA, said Hydrocarbonprocessing.

The International Chamber of Commerce’s Court of Arbitration upheld Phillips 66’s right to exercise a call option in 2009 and assume PdVSA’s interest in Merey Sweeny, Rich Johnson, a spokesman for the Houston-based refiner, said in an e-mail. The partnership owns a 70,000-bpd delayed coker and related facilities at the refinery.

"Certain defaults by PdVSA with respect to supply of crude oil to the Sweeny refinery triggered the right to acquire PDVSA’s 50% ownership interest," Johnson wrote.

State-owned PdVSA initiated arbitration with the ICC, claiming the exercise of the call right was invalid. A PdVSA spokesman declined to comment on the ruling.

"Since there is not a lot of crude imported into the US anymore, this decision hurts PdVSA on several fronts. First, the company loses the refinery and production, and secondly it loses the opportunity to bring crude into the refinery," Oil Outlooks and Opinions president Carl Larry said in an interview from Houston.

Caracas-based PdVSA is diversifying its oil and products export markets, company president Rafael Ramirez said this weekend during a conference in St. Petersburg, Russia. The company is now sending more exports to Asia than the US, he said.

"Even though PdVSA has the right to appeal the decision, at this point it is basically a no-win scenario for the company, since they lose the crude and product and obviously they lose the interest in the refinery. So, on all fronts it’s a big loss for PDVSA," Larry said.

The economic crisis in Venezuela, which has the world’s biggest oil reserves, has fueled three months of protests against the government of President Nicolas Maduro that have left at least 42 people dead.

As MRC wrote before, Chevron Phillips Chemical and refiner Phillips 66, has finalized the sale of its Chinese polystyrene business to Grand Astor Ltd.In the deal, Chevron Phillips is selling its affiliate company Chevron Phillips Chemical (China) Co. Ltd., which owns a polystyrene plant located in Zhangjiagang, China.

Phillips 66 is an American holding company headquartered in Westchase, Houston, Texas. It debuted as an independent energy company when ConocoPhillips spun off its downstream assets and midstream assets. The company is engaged in producing natural gas liquids (NGL) and petrochemicals. The company has approximately 13,500 employees worldwide and active in more than 45 countries.Phillips 66 is ranked No. 4 on the Fortune 500 list and No. 16 on the Fortune Global 500 list as of 2013.
MRC

MOSCOW (MRC) -- US styrenics producer Styron, alternately known as Trinseo, has said it plans to close its only North American polycarbonate plant, at Freeport, Texas, by the end of 2014 and exit the market, said Chemanager.

The plant with a capacity of around 100,000 t/y officially belongs to the company's former parent Dow Chemical. The former Dow styrenics unit also produces PC at Stade, Germany, and at Niihama, Japan as part of a joint venture with Sumitomo.

The PC market has been plagued by overcapacity, which has depressed prices and earnings even at leading producers such as Bayer MaterialScience (BMS). Patrick Thomas, CEO of the Bayer offshoot, said earlier this year there were signs that some of the smaller players were planning to quit the market.

Styron said it also will convert a nickel butadiene rubber line at Schkopau, Germany, to produce neodymium butadiene rubber. Conversion of the unit also owned by Dow is expected to begin in the next few months and completed by the end of 2015. Styron said the rubber investment is designed to meet increasing demand for green tires and ultra-high performance tires.

Styron is a leading global materials company and manufacturer of plastics, latex and rubber, dedicated to collaborating with customers to deliver innovative and sustainable solutions. Styron’s technology is used by customers in industries such as home appliances, automotive, building & construction, carpet, consumer electronics, consumer goods, electrical & lighting, medical, packaging, paper & paperboard, rubber goods and tires.
MRC

MOSCOW (MRC) -- Production of polyethylene terephthalate (PET) in Russia dropped from January to April 2014 by 3% year on year, according to MRC ScanPlast.

The output of Russian plants decreased over the said period, despite the overall increased production capacities this year (by 90,000 tonnes at Polief). The overall PET production in Russia totalled 146,600 tonnes over the first four months of 2014.

The situation started to change in April because of a launch of PET chips produciton at Alco-Naphtha. The plant resumed production after a two-month outage and is now operating in a normal mode.

The overall capacity utilisation at Russian plants was 86% in April 2014, whereas this figure was 89% in April 2013.

In its turn, Bashkir Polief reached its full capacity utilisation at two reactors in April. The plant produced over 18,000 tonnes of PET in April, which was the highest figure in the history of the company.

An outage at the Kaliningrad plant in February and March led to increased sales of Russian PET in the domestic market in April. However, buying activity fell again in May on the back of the arrival of significant quantities of imported PET in the market.

As reported earlier, April PET imports reached 30,000 tonnes, which was the top level since June 2011.

MRC

MOSCOW (MRC) -- Petroleos Mexicanos, the state-owned oil producer, is negotiating with Chinese companies to create a fund valued at as much as USD4 billion to invest and finance projects, said Bloomberg.

The proposed arrangement is in a "final stage of negotiations," Pemex, as the Mexico City-based oil producer is known, said in an e-mailed statement yesterday, correcting an earlier filing that said a deal had already been signed.

The Sino-Mex Energy Fund would be the largest Chinese investment fund in Latin America, according to the earlier statement sent to the Mexican Stock Exchange. The prospective agreement between Pemex’s international unit PMI Comercio Internacional and Xinxing Ductile Iron Pipes, SPF Capital Hong Kong Ltd. and other Chinese companies would be used to finance large-scale projects and create jobs.

Pemex is seeking to increase sales to Asia and Europe to offset falling oil exports to the U.S., Mexico’s largest crude buyer. U.S. oil imports from Mexico have fallen 47% in the past decade, dropping to a 20-year low, according to the U.S. Energy Information Administration.

Pemex has announced plans this year to export light crude to Japan, Hawaii, India and Switzerland, and will continue to pursue new partners in Asia and the Pacific region, Gustavo Hernandez, Pemex’s director of exploration and production, said last week.

As MRC wrote before, Pemex on May 6 2014 said it plans to quadruple petrochemical investment to 50.4 billion pesos (USD3.89 billion) over the next four years to boost output. The company with Mexichem formed an alliance to revamp the Pajaritos petrochemical plant last year.

Pemex, Mexican Petroleum, is a Mexican state-owned petroleum company. Pemex has a total asset worth of USD415.75 billion, and is the world's second largest non-publicly listed company by total market value, and Latin America's second largest enterprise by annual revenue as of 2009. Company produces such polymers, as polyethylene (PE), polypropylene (PP), polystyrene (PS).
MRC

MOSCOW (MRC) -- Westlake Chemical Corporation has announced that it has signed a definitive agreement to acquire German-based Vinnolit Holdings GmbH and its subsidiary companies from Advent International, a private equity firm, reported the company on its site.

Vinnolit is an integrated global leader in specialty polyvinyl chloride (PVC) resins. The acquisition price of EUR490 million will be financed using existing Westlake cash and credit facilities. The transaction is expected to close in the third quarter of 2014, subject to standard closing conditions, including regulatory review.

Vinnolit has six production facilities located in Gendorf, Burghausen, Cologne, Knapsack and Schkopau in Germany and Hillhouse in the United Kingdom. These operations have a combined annual capacity of 780,000 metric tons of PVC, including specialty paste and suspension grades, 665,000 metric tons of vinyl chloride monomer (VCM) and 475,000 metric tons of membrane grade caustic soda. Vinnolit has a world class research and development facility in Gendorf and applications laboratory in Burghausen.

Vinnolit's products are suitable for a wide range of industrial and building product applications including automotive sealants, cable sheathing, flooring, medical applications, pipes, rigid film, technical coatings, wall covering and window profiles. Vinnolit's headquarters are located in Ismaning, Germany, outside of Munich. The company generated EUR917 million of revenue in 2013 and employs approximately 1,400 employees.

"The acquisition of Vinnolit is an excellent strategic fit for Westlake. It will allow us to expand our chlorvinyl business globally and adds important specialty PVC products and technology to our existing portfolio," says Albert Chao, Westlake's President and CEO. "Vinnolit is an impressive company with an outstanding reputation for meeting customer needs with superior technology, product quality, and operating excellence. We look forward to working with their talented team as they join the Westlake family of companies."

"We have transformed Vinnolit into the leading specialty PVC manufacturer and remain dedicated to further growing the company's business," commented Dr Josef Ertl, Managing Director of Vinnolit, on behalf of the management board. "We thank Advent for their support and strategic advice in developing Vinnolit and facilitating its successful transformation. We, as a management team, look forward to beginning a new chapter in our company's history and continuing our successful growth path together with Westlake."

As MRC informed earlier, last March, Westlake Chemical agreed to acquire the PVC pipe and fittings unit of Compagnie de Saint-Gobain SA's CertainTeed Corp. for USD175 million. CertainTeed's pipe and foundation group produces PVC pipe and fittings for municipalities, water wells, mining, agriculture and irrigation. The transaction was closed in the second quarter of 2013.

Westlake Chemical Corporation is an international manufacturer and supplier of petrochemicals, polymers and building products with headquarters in Houston, Texas. The company's range of products includes: ethylene, polyethylene, styrene, propylene, caustic, VCM, PVC resin and PVC building products including pipe and specialty components, windows and fence.
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