Petronas: taxes may stall Canada LNG until 2030

MOSCOW (MRC) -- Petroliam Nasional Bhd., Malaysia’s state-owned energy company, said it may delay construction of its USD8.9 billion Canadian liquefied natural gas project past 2030 unless proposed taxes are lowered this month, said Hydrocarbonprocessing.

The company, known as Petronas, needs the Canadian government and province of British Columbia to commit to lower taxes by the end of October to meet its mid-December target for a decision on the shipping terminal, CEO Shamsul Azhar Abbas said Monday in an e-mailed statement.

The project is scheduled to start operating in 2018. "In our last portfolio review exercise, the current project economics appeared marginal,” Shamsul said. “Missing this date will have the impact of having to defer our investments until the next LNG marketing window, anticipated in 10-15 years."

Petronas and global rivals including Royal Dutch Shell and Chevron are considering exporting gas from Canada’s Pacific Coast in liquid form to meet rising demand in Asia. They are pressing Canada’s westernmost province of British Columbia and the federal government for financial terms that would justify making multibillion-dollar investments.

Costs to develop liquefied natural gas, or LNG, are higher in Canada than elsewhere because of the tax proposals, pace of regulatory reviews and as local contractors charge more than in other countries, Shamsul said.

Shamsul’s statement comes as British Columbia’s legislature prepares to start a new session today, during which the government has committed to finalizing an LNG-specific tax regime and also plans to introduce a policy on emissions from the shipping terminals.

British Columbia Premier Christy Clark is confident Petronas will decide to proceed with the project, known as Pacific NorthWest LNG, she said last week after meeting with Shamsul in Vancouver.

The meeting followed similar warnings about the viability of the Canadian LNG project by Shamsul in an interview with the Financial Times of London.

As MRC wrote before, Petronas, Grupa Azoty Zaklady Azotowe "Pulawy" SA (Pulawy) and Sipitang Oil & Gas Development Corp. (SOGDC) has inked a memorandum of understanding (MoU) to conduct a joint feasibility study for producing urea and ammonia derivatives in Sipitang Oil & Gas Industrial Park (SOGIP) in Sabah, Malaysia.

Petronas, short for Petroliam Nasional Berhad, is a Malaysian oil and gas company wholly owned by the Government of Malaysia. The Group is engaged in a wide spectrum of petroleum activities, including upstream exploration and production of oil and gas to downstream oil refining; marketing and distribution of petroleum products; trading; gas processing and liquefaction; gas transmission pipeline network operations; marketing of liquefied natural gas; petrochemical manufacturing and marketing; shipping; automotive engineering; and property investment.
MRC

MOSCOW (MRC) - Russia's imports of polypropylene (PP) decreased by 16% in the first nine months of this year, with the largest drop in imports occurred for homopolymer PP. Russia became a net exporter, according to MRC DataScope report.

September PP imports in Russia rose to 16,700 tonnes, compared with 15,000 tonnes in August because of the increased supply of propylene copolymers. Total PP imports in Russia decreased to 134,100 tonnes in January - September 2014, compared with 159,600 tonnes year on year. A significant increase in domestic production (over 20%) has reduced the imports of homopolymer PP, making Russia a net exporter of homopolymer PP (exports exceed imports).

In general, PP imports over the reported period looked as follows. September imports of homopolymer PP decreased to 5,200 tonnes, compared with 6,600 tonnes in August because of the reduced supplies of Turkmenistan raffia. Total imports of homopolymer PP in the country decreased to 44,700 tonnes, down 30% year on year; Russia' exports of homopolymer PP over the reported period exceeded 120,000 tonnes.

September of PP block copolymer grew to 4,200 tonnes in September, compared with 2,900 tonnes in August on the back of stronger demand in injection moulding extrusion sectors. Total imports of PP block copolymers decreased to 35,300 tonnes in the first eight months of the year, compared with 42,000 tonnes, with the biggest drop in demand occurred for injection moulding products production.

Imports of PP random copolymers were 4,200 tonnes in September, compared with 2,600 tonnes in August on the back of the increased supply of pipe copolymers grades. Total imports of PP random copolymers in Russia decreased to 25,800 tonnes in January - September, compared with 28,800 tonnes year on year.

The main drop in demand occurred for injection moulding (about 26%) and extrusion grades (about 28%), while demand for the copolymer from the producers of BOPP films increased by 10%.

Imports of other PP grades grew to 28,200 tonnes in the first eight months of the year, compared with 25,100 tonnes.

MRC

MOSCOW (MRC) -- Inner Mongolia Yili has shut a polyvinyl chloride (PVC) plant for maintenance turnaround, reported Apic-online.

A Polymerupdate source in China informed that the plant was shut on October 9, 2014. It is likely to remain off-stream for around one month.

Located at Erdos in Inner Mongolia, the plant has a production capacity of 500,000 mt/year.

As MRC wrote previously, Formosa Plastics Corp (FPC) shut down its PVC plant in China for maintenance turnaround on September 9, 2014. It was planned to remain shut for around one month. Located at Ningbo in Zhejiang province of China, the plant has a production capacity of 400,000 mt/year.

We remind that Xinjiang Zhongtai Chemical shut down two PVC plants for maintenance turnaround in July 2014. The duration of the shutdown could not be ascertained. Located in Xinjiang, China, the plants have a combined production capacity of 800,000 mt/year.
MRC

MOSCOW (MRC) -- CB&I has been awarded a contract by Shenhua Ningxia Coal Industry Group Co. for the license and engineering design of a polypropylene (PP) unit to be built in Lingwu, China, project officials announced on Thursday, reported Hydrocarbonprocessing.

The unit will use CB&I's Novolen technology to produce 600,000 tpy of PP. There are already two units utilizing Novolen technology on site - each with cascade and parallel production lines.

At the completion of this third unit, the capacity on site will be increased to 1.6 million tpy and the plant will be able to produce the full range of polypropylene grades.

"Once the third polypropylene unit at Shenhua Ningxia's site is running, it will be the largest polypropylene site in China," said Daniel McCarthy, president of CB&I's technology operating group. "This site will also have the largest capacity of any of the Novolen technology licensees."

As MRC said previously, Shenhua Ningxia also awarded CB&I contracts for the license and engineering design of the olefins conversion technology, comonomer production technology, CDHydro selective hydrogenation technology and CDIsis technology for this same complex.
MRC

MOSCOW (MRC) -- Clariant, a world leader in specialty chemicals, confirms that in its draft Alternatives Assessment report on flame retardants in flexible foam released in June, the US Environmental Protection Agency (EPA) identified Clariant’s oligomeric phosphonate polyol (OPP) flame retardant - marketed under the trade name Exolit OP 560 - as a safer alternative to pentabromo diphenylether (pentaBDE), traditionally used for giving fire protection to foam, reported the company on its site.

This is good news for the upholstery industry and other sectors looking for safer, environmentally more compatible flame retardants that meet internationally accepted flammability standards for flexible polyurethane foam.

The report is part of the EPA’s Design for the Environment program, which helps industries choose safer chemicals, and offers a basis for future decision-making by providing a detailed comparison of the potential public health and environmental impacts of chemical alternatives.

Exolit OP 560 is a reactive flame retardant that eliminates unwanted emissions since it becomes chemically bonded within the polymeric polyurethane foam structure. As a result, the Exolit OP 560 cannot leave the foam during use. Exolit OP is also halogen-free, and has a more favorable toxicological and environmental profile. In particular, it cannot bioaccumulate in humans and other organisms since it is "locked" into the foam. Further benefits for PU applications include excellent ageing stability, as well as low smoke density and smoke gas corrosivity in case of a fire. The phosphonate’s high effectiveness and good compatibility with natural polymers allow it to be used at low dosages in the foam matrix, which also adds to the foam’s excellent sustainability profile.

"Exolit OP 560 is not only halogen-free but becomes an integral part of the PU foam, creating possibilities to produce flexible foams with locked-in fire protection without the environmental and health concerns of traditional flame retardants," comments Adrian Beard, Head of Marketing Flame Retardants, Clariant. "The US-EPA report is a step forward in easing the identification of safer alternatives by PU foam producers and end-users."

Clariant is looking to expand capacity to meet increasing demand in the move toward more environmentally friendly and sustainable PU foams.

As MRC informed before, in June 2014, CB&I and Clariant announced that their new Ziegler-Natta (ZN) polypropylene catalyst plant in Louisville, Kentucky, is on schedule to begin production in 2015. The plant is part of a long-term strategic partnership between Clariant’s catalysts business and CB&I’s Lummus Novolen Technology business. Based at Clariant’s largest US production hub, the new facility will combine innovative catalysts jointly developed by both companies with high-capacity output.

Clariant AG is a Swiss chemical company and a world leader in the production of specialty chemicals for the textile, printing, mining and metallurgical industries. It is engaged in processing crude oil products in pigments, plastics and paints.
MRC