BP shuts down one chemical unit after USD25 million weekend fire

MOSCOW (MRC) -- BP Amoco is operating one of two chemical production units at its Berkeley County plant after a USD25 million fire Saturday, reported The Post and Courier.

The oil and chemical giant on the Cooper River suffered extensive damage to a compressor building in the early-afternoon blaze that was brought under control in about 45 minutes. No one was injured.

BP spokesman Scott Dean said the company shut down one of the two purified terephthalic acid, or TPA, production units as a result of the fire.

"BP is assessing the extent of damage to the compressor building and working to get the unit safely restarted," Dean said. "The rest of the Cooper River plant continues to operate and produce TPA for customers."

TPA is used in polyester fibers, paint, pharmaceuticals and various other applications.

As MRC wrote previously, European oil giant BP Plc.'s profit before taxation for the second quarter of 2014 increased to USD5.15 billion from USD4.12 billion in the year ago quarter. Quarterly profit attributable to shareholders grew to USD3.37 billion from last year's USD2.04 billion, with earnings per ADS improving to USD1.09 from USD0.64 in the previous year.

BP is one of the world's leading international oil and gas companies, providing its customers with fuel for transportation, energy for heat and light, retail services and petrochemicals products for everyday items.
MRC

MOSCOW (MRC) - Russia's imports of expandable polystyrene (EPS) decreased by 9% in January-July 2014 compared to the same time a year earlier, according to MRC ScanPlast.

Total EPS imports in Russia exceeded 37,000 tonnes over the reporting period. The greatest demand in the current year has occurred for the Chinese grades of EPS-F-SA by Loyal production, with 8,000 tonnes imported in January-July 2014. The second position took F-MS grade by Loyal production, with about 7.600 tonnes imported in January-July 2014.
The decline in imports contributed to the increase in demand for Russian EPS, which is traditionally cheaper than imports, leading to a shortage of the material in the country in the spring and early summer.

Imports of EPS increased in July. Russia's EPS imports were 9,300 tonnes in July, up 1,200 tonnes from the June's level.

Russian companies expectedly increased their EPS purchases this summer on the back of the shortage of domestic production. The increase of EPS imports in June and July helped reduce the acute shortage of the material in the Russian market.
MRC

MOSCOW (MRC) -- Werner Breuers, Board Member of Germany's Lanxess, the world's largest maker of synthetic rubber, and up to now responsible for the segments Performance Polymers and Advanced Intermediates, will leave the company at his own request after his contract ends on May 31, 2015, in order to pursue new challenges, reported the company on its site.

Mr. Breuers will leave the Board of Management with immediate effect. He will, however, remain in an advisory role to Lanxess for a transitional period.

The Supervisory Board has with immediate effect handed over the responsibility for the segments Performance Polymers and Advanced Intermediates to Matthias Zachert, Chairman of the Board of Management of Lanxess, on a temporary basis. The company intends to fill the vacated position in the Board of Management in the next twelve months.

As MRC informed earlier, Lanxess's core earnings rose 21% in the second quarter, helped by cost cuts and solid demand for agrochemicals and construction materials. Adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) rose to EUR239 million (USD319 million), a touch above the EUR234 million average estimate in a Reuters poll among analysts.

Lanxess is a leading specialty chemicals company with sales of EUR 8.3 billion in 2013 and roughly 17,300 employees in 31 countries. The company is currently represented at 52 production sites worldwide. The core business of Lanxess is the development, manufacturing and marketing of plastics, rubber, intermediates and specialty chemicals.
MRC

MOSCOW (MRC) -- Saudi Arabia is maintaining its leading position as the region's largest petrochemical producer with an annual 86.4 million tons of capacity a report from the NCB's Economics Department Research Team has confirmed, said Menafn.

But it says the recent discovery of North American shale gas and oil is likely to have an effect on the Saudi petrochemical sector in its trajectory toward remaining upstream or moving downstream. The expansion in ethylene production capacity has resulted in Saudi Arabia being the third largest producer worldwide accounting for 11 percent of global ethylene capacity.

According to the report the Saudi petrochemicals industry is not expected to see a massive rise in overall petrochemicals capacities until 2016 when the Sadara petrochemicals complex is due to come on-stream. Ethylene is a key building block in the petrochemical industry. In recent years the world has witnessed its largest ethylene capacity expansion growing at a compound annual growth rate (CAGR) of 4 percent between 2007 and 2012 to reach 155.9 million tons in 2012. In 2012 worldwide capacity additions were much lower than the record additions registered in 2010 when 11.4 million tons/year of ethylene capacity was added. However GCC capacity addition in 2012 trended downwards by 13 percent.

The majority of capacity additions within the GCC between 2007 and 2012 took place in Saudi Arabia which accounted for 64 percent of the regional capacity additions. With 17.5 million tons/year Saudi Arabia is the largest ethylene producer in the region accounting for 72 percent of the regional ethylene capacity up by 7.7mn tons/year compared to five years ago. This massive expansion in ethylene production capacity has resulted in Saudi Arabia becoming the third largest producer worldwide accounting for 11 percent of global ethylene capacity.

Ethylene's global cost curve reflects that the Middle East overall still has a comparative cost advantage. However according to industry analysts the recent leveling of US gas prices has the potential to render US ethylene more economically cost efficient than Saudi produced ethylene with the transfer price for ethylene in Saudi Arabia and the US amounting to 466 per ton and 323 per ton respectively.

However the recent discovery of North American shale gas and oil especially in the US is likely to have an impact on the Saudi petrochemical sector albeit the technology needed to extract it efficiently and profitably is still in its preliminary stages. Whether Saudi Arabia can retain its global leading position through technology differentiation while leveraging its natural resource abundance remains at the forefront of the sector's concern said the report.

The Saudi petrochemical sector is characterized by three main factors. First the Kingdom has substantial proven feedstock reserves with 264 billion barrels of crude oil 279.7 trillion cubic feet (tcf) of natural gas and an esti-mated 600 tcf of unconventional shale gas. Second low feedstock and energy costs have to-date led to a comparative and in turn a competitive advantage for petro- chemical producers. Third the Kingdom has strong industrial and regulatory infrastructure which have been integrated into specially developed industrial cities.

According to the Gulf Petrochemical and Chemical Association (GPCA) total GCC petrochemicals capacity reached 127.8 million tons in 2012 recording a 5.5 percent growth from the previous year. Saudi Arabia maintained its leading position as the region's largest petrochemical producer with 86.4 million tons of capacity representing 67.6 percent of the total regional capacity. In addition during the same period the Kingdom led production with 6 million tons coming on stream.

The majority of Saudi's nonoil exports consists of petrochemicals which include downstream plastic production and building materials.

MRC

MOSCOW (MRC) -- Yisheng Petrochemical has shut its No 1 purified terephthalic acid (PTA) plant for maintenance turnaround, according to Apic-online.

A Polymerupdate source in China informed that the plant was shut on August 6, 2014. It is likely to remain off-stream for around one month.

Located at Dalian in China, the plant has a production capacity of 2.2 million mt/year.

We remind that, as MRC reported earlier, China’s polyester maker Tongkun is in plans to start a new PTA plant in 2017. To be located at Zhapu in Zhejiang province, China, the plant will have a production capacity of 1.5 million mt/year.

Tongkun Group said its net profit for 2013 slumped by 72.1% year on year to yuan (CNY) 72m (USD11.6m), amid the sluggish domestic chemical fibre market. In 2013, the chemical fibre industry developed weakly, as well as oversupply in some regions which made the industry into the predicament, the company said.
MRC