Leak causes fire at Lanzhou refinery of Petrochina

MOSCOW (MRC) -- Firemen are fighting a blaze at PetroChina’s subsidiary refinery and petrochemical plant in northwest China, reported MD with reference to company officials' statement.

The fire that broke out at 8.39am local time (0039 GMT) was triggered by a leak at an 300,000 tonne-per-year air separation unit, official Xinhua News Agency reported.

A Beijing-based PetroChina media official said so far no casualties have been reported.

It was not immediately clear if other main production facilities were affected by the fire.

The Lanzhou plant, in northwestern Gansu province, is one of the country’s oil refining hubs. It operates crude refining capacity of just over 200,000 barrels per day and also an affiliated petrochemical complex.

On Saturday, China suffered its worst industrial accident in a year when an explosion killed at least 69 people and injured more than 120 at a factory that makes wheels for US carmakers, including General Motors.

As MRC reported earlier, Chinese state oil and gas giant PetroChina plans to spend more than 10 billion yuan (USD1.6 billion) on shale gas this year. PetroChina's decision to triple its shale gas spending from expenditures on the unconventional fuel over the past few years comes just months after Sinopec lifted hopes that China is near a breakthrough by announcing a commercial find.

PetroChina Company Limited, is a Chinese oil and gas company and is the listed arm of state-owned China National Petroleum Corporation, headquartered in Dongcheng District, Beijing. It is China's biggest oil producer.
MRC

MOSCOW (MRC) -- Russian producers have raised contract polypropylene (PP) prices for August shipments on the back of stronger demand and a succession of scheduled outages for maintenance, according to ICIS-MRC Price report.

Ufaorgsintez announced an increase in its contract PP prices from 1 August this week. SIBUR (the company manages assets of Tobolsk-Polymer, Neftekhimia, Tomskneftekhim and Poliom) and Nizhnekamskneftekhim have been discussing an issue of increases in their contract prices. Stronger demand for PP because of seasonal factors and scheduled shutdowns for maintenance are the main cause of higher prices.

Most converters began negotiations over August PP shipments this week. Many companies have significantly increased their enquiries for PP this month, anticipating a further deterioration in the availability of material in the market and further price rises. Producers, in their turn, said they were in no positon to fully meet all the current orders.

Supply of PP was virtually completely absent in the spot market. And some market participants said PP supply to the spot market by somel producers will be minimized because of the scheduled outages for maintenance. Because of higher prices in foreign markets, imports are unlikely to grow significantly, raffia from Turkmenistan being the only exception (according to preliminary estimates, over 3,000 tonnes of PP will be delivered in August).

Most market participants said the situation with PP availability in the market will be difficult until September. Tobolsk-Polymer resumed its production last week after after a scheduled turnaround. But it is worth noting that Tomskneftekhim is still idle (the start-up is to take place in mid-August), and Ufaorgsintez and Poliom will shut down their production in the midddle of the month.
MRC

MOSCOW (MRC) -- South Korean petrochemical company LG Chem is likely to shut its butadiene (BD) plant for maintenance turnaround, repoted Apic-online.

A Polymerupdate source in South Korea informed that the plant is planned to be shut in October 2014. It is likely to remain off-stream for around one month.

Located in Yeosu, South Korea, the plant has a production capacity of 145,000 mt/year.

As MRC informed previously, LG Chem is planning to build an ethylene production plant in Atyrau, Kazakhstan. The project is going to be constructed in collaboration with two other Kazakh firms. The production is expected to begin in late 2016.

LG Chem also plans to start operations at a new 150,000 mt/year ABS plant in Huizhou, southern China's Guangdong province, in Q1 2014. The plant will be a joint venture with state-owned China National Offshore Oil Corp.

LG Chem Ltd., often referred to as LG Chemical, is the largest Korean chemical company and is headquartered in Seoul, South Korea. According to ICIS report, it is 15th biggest chemical company in the world in 2011. It has eight domestic factories and global network of 29 business locations in 15 countries. LG Chem is a manufacturer, supplier, and exporter of petrochemical goods, IT&E Materials and Energy Solutions.
MRC

MOSCOW (MRC) -- Solvay has signed a binding agreement to sell its sulfuric acid virgin production and regeneration business Eco Services to affiliates of CCMP Capital Advisors, LLC, as per the company's press release.

"The divestment of Eco Services is another step in Solvay’s transformation aimed at achieving higher growth and greater returns. Eco Services has a market leading position and generates stable cash flows, but its business profile differs from Solvay’s strategic ambitions," said Jean-Pierre Clamadieu, CEO of Solvay. "CCMP Capital is committed to working with the management team to make the investments necessary to support the long term growth of the business".

The transaction terms correspond to an enterprise value of USD 890 million (EUR 660 million), which represents just over 8,0x adjusted EBITDA for the last twelve months ending June 30th, 2014.

CCMP specializes in middle market buyouts and growth equity investments of USD100 million to USD500 million in North America and Europe. CCMP’s core strategy is to enhance the value of its portfolio companies through an active approach to operational transformation. With offices in New York, Houston and London, CCMP invests in four primary industries: Consumer/Retail, Industrial, Energy and Healthcare.

Solvay announced in February that it was exploring strategic options for Eco Services. Completion of the transaction, expected in the fourth quarter, is subject to customary closing conditions.

As MRC reported earlier, in June, Solvay SA and Ineos Group AG have given a name to their chlorovinyls joint venture, Inovyn, as the two firms prepare the launch the company by the end of 2014. The new company will officially open following divestments by both companies required by the European Commission. Until completion, Solvay and Ineos will continue to run their businesses separately.

Solvay S.A. is a Belgian chemical company founded in 1863, with its head office in Neder-Over-Heembeek, Brussels, Belgium. The company has diversified into two major sectors of activity: chemicals and plastics. Solvay supplies over 1500 products across 35 brands of high-performance polymers – fluoropolymers, fluoroelastomers, fluorinated fluids, semi-aromatic polyamides, sulfone polymers, aromatic ultra polymers, high-barrier polymers and cross-linked high-performance compounds.
MRC

MOSCOW (MRC) - Ufaorgsintez owned by "United Petrochemical Company" (UPC), announced an increase in contract prices of low density polyethylene (LDPE) and polypropylene (PP), effective from 1, August, according to ICIS-MRC Price Report.

The company raised its contract LDPE prices by roubles (Rb) 2,000-2,500/tonne, compared with the price level on 15, July. PP prices increased by Rb2,000-2,500/tonne, depending on grade. PE and PP prices were risen because of the strong demand and upcoming shutdown for the long scheduled maintenance works.

We remind that the turnaround will be done in two steps. First stage includes the shutdown of the part capacities for 158, 153 LDPE and the whole PP production capacities for 30 days from 15, August. The second stage includes the shutdown of the second LDPE line (108 PE) for 30 days from 1, September.

Tomskneftekhim announced an increase in LDPE contract prices of Rb1,000/tonne on 28, July.

OAO Ufaorgsintez manufactures organic synthesis products in Russia and Europe. Its products include ethylene, propylene, ethanol, cumol, ethyl benzol, phenol, acetone, copolymer rubber, polyolefines, poly vinyl chloride and polyethylene items, thinners, and dilutants. The company exports its products to Byelorussia, Kazakhstan, Finland, Germany, France, and Brazil. Ufaorgsintez was founded in 1956 and is based in Ufa, Russia. Total PE and PP production at Ufaorgsintez was 44,100 tonnes and 64,100 tonnes in the first six months of 2014, respectively.
UPC owns 87.76% of the share capital Ufaorgsintez. Bashneft sold stake Ufaorgsintez to UPC in May 2013.
MRC