Mexichem/OxyChem US cracker commercial ops on schedule for Q1 ‘17

MOSCOW (MRC) -- Ingleside Ethylene Llc, the 50:50 joint venture between Occidental Chemical Corporation (OxyChem) and Mexichem, have announced that construction of its ethylene cracker at OxyChem’s Ingleside, Texas, complex is underway and the project remains on schedule to become commercially operational in the first quarter of 2017, said Business-standard.

Total investment in the project will be approximately USD1.5 billion. Senior management from both companies and Texas Land Commissioner-elect George P Bush, participated in a ceremony to celebrate the symbolic groundbreaking of the new ethylene cracker.

Construction of the cracker began in the second quarter of 2014. When completed it will have the capacity to produce 1.2 billion pounds (550,000 cubic meters) of ethylene per year and provide OxyChem with an ongoing source of ethylene for manufacturing vinyl chloride monomer (VCM), which Mexichem will use to produce polyvinyl chloride (PVC resin) and PVC piping systems. The project will create approximately 1,700 jobs at peak construction and generate more than 150 permanent jobs. OxyChem will operate the cracker upon completion.

"The ethylene cracker is a significant project for both OxyChem and Mexichem, enabling us to capitalise on the advantages that shale gas development presents for the chemical industry. It also helps our companies better compete globally in our respective markets," said Robert Peterson, president of OxyChem.

"The Oxy-Mexichem joint venture is a vital part of our strategy to become a global vertically integrated specialty chemicals company with a focus on high-end products. Once operational, this cracker will provide a steady supply of ethylene, a key raw material for many of our most important products. We look forward to working with OxyChem in the coming years to complete the project," said Antonio Carrillo, chief executive officer of Mexichem.

In December 2013, Ingleside Ethylene, LLC awarded CB&I the engineering and construction contract to build the cracker. In May 2014, the plant received necessary permits for construction to begin from the U.S. Environmental Protection Agency (EPA) and Texas Commission on Environmental Quality (TCEQ).

MRC

MOSCOW (MRC) -- Arkema has successfully completed a bond issue with a 10-year maturity and a 1.50% coupon, reported the company in its press release.

Taking advantage of favourable market conditions and supported by a strong oversubscription level the amount of the issue has been fixed at EUR700 million.

This operation represents the last phase in the financing of the project to acquire Bostik, following the EUR700 million hybrid bond issue completed in October 2014 and the EUR350 million share capital increase conducted in December.

As MRC wrote before, in late September 2014, Arkema offered to buy oil major Total's adhesives business Bostik, which makes Blu-Tack, for EUR1.74 billion (USD2.24 billion).

Total, under pressure from shareholders to improve its cash flow and raise dividends, has embarked on a major divestment program. A sale of Bostik at that price would increase its announced disposals this year to near USD20 billion - at the top of its target range of USD15-USD20 billion.

Bostik is the third-largest adhesives company and generated sales of EUR1.53 billion in 2013. Total has granted Arkema an exclusivity period to pursue the offer. The proposed transaction is subject to approval by the relevant antitrust authorities.

The acquisition would strengthen Arkema’s position in specialty chemicals and continue the development of its high-performance materials segment, which would account for 42% of total sales following the Bostik deal, Arkema says.

Bostik develops high-performance and high-value-added bonding and sealing products for the nonwoven, industrial, construction, and consumer markets. Bostik employs about 4,900 people across 48 production facilities - 18 in Europe, 10 - in North America, 8 - in Asia, 6 - in Australia and New Zealand, 2 - in Africa, and 4 - in South America.

Arkema is a leading European supplier of chlorochemicals and PVC. Kynar and Kynar Flex are registered trademarks of Arkema Inc.
MRC

MOSCOW (MRC) -- Negotiations over prices of European polyvinyl chloride (PVC) for January shipments to the CIS markets continued this week. European producers were forced to reduce their PVC prices proportionally to the fall in ethylene prices on the back of weak demand, according to ICIS-MRC Price report.

The contract price of ethylene in Europe for January shipments was agreed by EUR130/tonne lower from December. The price cut of one of feedstocks results in a EUR65/tonne reduction in PVC production costs. Some market participants said they had managed to achieve a EUR70/tonne reduction in export prices of European producers.

Negotiations over January shipments of suspension PVC (SPVC) to the CIS markets continued this week. Deals have been negotiated in the range EUR620-660/tonne FCA.

The record weakening of the euro against the dollar over the last nine years only enhances the effect of the January fall in European producers' export prices.
MRC

MOSCOW (MRC) -- The January contract price for propylene in Europe was agreed by EUR120/tonne below the level of December. However, European producers did not reduce proportionally their export polypropylene (PP) prices for the CIS markets, according to ICIS-MRC Price report.

Negotiations over January prices of European PP began last week and continued this week. Many market participants said they had managed to achieve a EUR90-100/tonne reduction from December in January prices. However, PP producers did not reduce propylene prices proportionally.

Deals for January shipments of propylene homopolymers (homopolymer PP) to the CIS markets have been negotiated in the range of EUR1,010-1,070/tonne FCA this week, down by an average of EUR90-100/tonne from December. Some market participants said they had received offer prices below EUR1,000/tonne, but this fact has not been confirmed so far.

Negotiations over shipments of propylene copolymers started from EUR1,080/tonne FCA.

The record weakening of the euro against the dollar over the last nine years only enhances the effect of the January fall in European producers' export prices.
MRC