Uzbekistan to allocate USD66 M for chemical complex construction

MOSCOW (MRC) -- The Uzbek Fund for Reconstruction and Development (UFRD) will allocate USD65.97 million for the construction of a chemical complex for the production of polyvinyl chloride (PVC), caustic soda and methanol on the basis of Navoiazot JSC worth USD501.1 million, according to the decree of the head of state, said Trend.

The loan of the UFRD will be presented to Navoiazot JSC of the Uzhimprom State Joint-Stock Company (SJC) as a 15% advance payment on a contract with the China CAMC Engineering Co., Ltd., according to the document.

Uzhimprom State Joint-Stock Company (SJC) and China CAMC Engineering Co. Ltd. signed a contract for the construction of a chemical complex for the production of polyvinyl chloride (PVC), caustic soda and methanol on the basis of Navoiazot JSC in Uzbekistan worth USD439.8 million in August 2014.

The contract was signed for the construction of the technological part on a "turnkey". Implementation period of the contract is three years. UFRD credit will be allocated for a period of ten years, with a three-year grace period at an interest rate of 2.25% per annum.

The resolution said that in addition to UFRD credit, work under the contract will be financed by concessional long-term foreign loans in the amount of USD373.83 million. Design capacity of 100,000 metric tons of PVC, 75,000 metric tons of caustic soda and 300,000 metric tons of methanol per year on the basis of Navoiazot.

It was earlier reported that Uzbekistan planned to implement the project since 2006. In March 2006 the Russian Caustic JSC (Volgograd) and Navoiazot created a Navoi-layer joint venture for the implementation of the project of initial cost of USD165.5 million. Subsequently, however, the Russian company refused to participate in the project on the existing technical and financial conditions.

In mid-2009 Navoiazot and Korean ISU Engineering established a joint venture ISU Navoi Chemical for the project of PVC and caustic soda production USD180 million worth, but the project was halted due to revision of previously prepared OTEC project.

In 2014 Uzhimprom could not sign a contract with the China National Chemical Engineering Company (CNCEC) which won the tender for the construction of chemical complex announced in May 2013. The reasons why the contract was not signed are not commented.

Navoiazot JSC (former Navoi chemical plant), the largest chemical company in Uzbekistan, was commissioned in 1964. The factory specializes in the production of nitrogen fertilizers, nitronic fiber as well as in integrated production of organic synthesis.

MRC

MOSCOW (MRC) -- Petrochemical Industries Co. (PIC) aims to implement a number of strategic projects by 2030, foremost among which are Olefins ones, reported Kuwait News Agency with reference to Mijbel Al-Shemmari, head of Olefins Business Development department.

The Olefins Business Development department works on carrying out the third project of Olefins in line with the PIC's strategy that aims at expanding the field of petrochemicals and enhancing integration with the activities of Kuwait Petroleum Corporation, Al-Shemmari told Chemistry Magazine in an interview.

There is now an initial feasibility study on the integration project among the third Olefins factory, the aromatics plant and the Al Zour Refinery, he said, indicating this feasibility study aims at choosing the best alternatives required for the project.

The PIC produces about five million tons of Olefins such as ethylene, polyethylene and glycol as well as other products in cooperation with EQUATE, Kuwait Olefins Company and other companies, he noted.

He said that Kuwait is considered one of the leading countries in the field of petrochemicals as it established the first petrochemical firm in the Gulf region in the early 1960s. The PIC is a leading one in manufacturing and marketing ethylene glycol, he said, noting that Kuwait seeks to expand Olefins through increasing their production.

Olefins are most important as they are used in the manufacture of virtually all consumer products made with chemicals or plastics. The most important of these are ethylene and propylene.

As MRC reported earlier, in 2012, Dow put together a USD17.4 billion joint venture with Petrochemical Industries Co. (PIC), a subsidiary of state-owned Kuwait Petroleum Corp., to produce plastics for consumer products, automotive parts, and drug processing in 2008. But as commodity prices plunged and the global economy went into a recession, the so-called K-Dow Petrochemicals joint venture was scrapped just days before it was set to close. Two months after the deal collapsed, Dow posted losses of USD1.55 billion for the fourth-quarter of 2008 and cut about 11% of its global work force. The International Court of Arbitration in Paris ruled that PIC will pay Dow for backing out of the deal. The court is part of the International Chamber of Commerce.

Thus, in March 2013, The International Court of Arbitration of the International Chamber of Commerce released the final award amount, representing interest and costs, in the arbitration case between Dow Chemical and PIC related to the K-Dow transaction. The final interest and costs awarded to Dow totals USD318 million and is in addition to the partial award of USD2.16 billion announced in May 2012 - resulting in full damages awarded to Dow equal to USD2.48 billion.
MRC

MOSCOW (MRC) -- Brazil's state-run oil company Petrobras could be declared in technical default on some of its foreign debt as early as Tuesday if bondholders pursue efforts to force it to speed up its assessment of losses in a giant corruption scandal, as per Upstreamonline.

The push, led by New York-based Aurelius Capital, applies to USD54 billion of Petrobras bonds governed by US law in New York state. Aurelius, a "distressed debt" fund, is asking investors to put the company into default as "a precautionary step".

Under the terms of those bonds, Petrobras is required to provide third-quarter financial statements within 90 days of the end of a quarter, in this case by Monday, 29 December. Petrobras has not published those accounts because allegations of contract-fixing and bribery at the company have raised doubts about the true value of its assets.

For the default declaration to take effect on any of the more than 20 US law bonds outstanding, investors holding at least 25% of any one series must request the action, Aurelius said in the letter to fellow bondholders. Aurelius was a leading member of a group of investors that refused to accept a debt restructuring with Argentina, taking the country to court.

Petrobras, which first planned to release results in early November, has extended the deadline to 31 January as new corruption allegations came to light, saying it had a waiver from investors but not giving any details. A January release of unaudited results will meet obligations to creditors and prevent a forced early repayment of debt, Petrobras said in a statement Monday.

"We believe bondholders should immediately take the prudent precaution of giving formal notice of default," Aurelius managing director Eleanor Chan wrote. "While mere notice of default should not itself cause a crisis, bondholders cannot avoid a crisis merely by sticking their heads in the sand and accepting Petrobras’ assurances as a certainty."

Distressed debt funds specialise in buying the debt of companies or countries at risk of default. Such hedge funds, also known as "vulture" funds, often use top flight lawyers to gain favourable terms in any bankruptcy. Few have suggested Petrobras will be unable to pay its debts in the short or medium term. It has huge oil resources and the backing of the Brazilian government, whose officials have said they will backstop the company.

Petrobras, though, is already frozen out of capital markets because of the scandal and is in danger of losing its investment-grade debt rating, a situation that would reduce the pool of potential investors and raise its borrowing costs.

A notice of default will require Petrobras to provide financial statements by early March or face calls for early repayment of debt. Even if matters do not reach that stage, the declaration will increase pressure on Petrobras executives to negotiate with bondholders and provide a credible accounting of the costs of the corruption scandal, a reckoning that Petrobras' chief executive said could take months.

"If Petrobras releases its third-quarter financial statements by the beginning of March, the default will be cured," Aurelius said. "If Petrobras still has not released its third-quarter financials by early March, the underlying causes of the delay may be considerably worse than is understood today."

Petrobras also said Monday it was revising planned investments of more than USD40 billion for 2015 based on a average exchange rate of 2.60 Brazilian reais to the dollar and an average price of benchmark Brent crude oil of USD70 a barrel.

As MRC wrote before, Petroleo Brasileiro SA is delaying its exit from Argentina’s petrochemical business as it focuses on a graft case in Brazil, two people familiar with the process said. Petrobras, as the Rio de Janeiro-based producer is known, received a joint offer for its 34% stake in Cia. Mega SA from partners YPF and Dow Chemical, said the people, who asked not to be named because the talks are private. Buenos Aires-based YPF owns 38% of Mega and Dow has 28%.

Headquartered in Rio de Janeiro, Petrobras is an integrated energy firm. Petrobras' activities include exploration, exploitation and production of oil from reservoir wells, shale and other rocks as well as refining, processing, trade and transport of oil and oil products, natural gas and other fluid hydrocarbons, in addition to other energy-related activities.
MRC

MOSCOW (MRC) -- Solvay, a privately owned multinational chemicals company, has completed the acquisition of the Ryton PPS (polyphenylene sulphide) business from US-based Chevron Phillips Chemical Company for USD220 million, enlarging its high-performance polymers offering and entering a solid growth market, as per the company's press release.

Solvay’s Global Business Unit (GBU) Specialty Polymers has bought two Ryton PPS resin manufacturing units in Borger, Texas, a pilot plant and R&D laboratories in Bartlesville, Oklahoma, as well as a compounding plant in Kallo-Beveren, Belgium with a total of about 200 employees joining the Group.

Chevron Philips Chemical’s compounding unit in La Porte, Texas, will provide temporary tolling services to Solvay, allowing for an orderly transition with the Ryton customer base.

Solvay Specialty Polymers, which has the industry’s broadest product portfolio, will access new business segments with innovative and demanding applications in transportation, automotive in particular, in electronics and in filter bags.

The acquisition is part of Solvay's strategic development to enhance its specialized solutions, deliver higher growth and greater returns while reducing cyclicality. The Ryton PPS businesses consolidated into Solvay's accounts as of January 1, 2015.

As MRC wrote before, in early December 2014, Solvay acquired Dhaymers, a Brazilian manufacturer of specialty esters, entering the skin care market and expanding its presence in industrial lubricants and mining industries in Latin America.

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. The group employs about 29,400 people in 56 countries and generated EUR9.9 billion in net sales in 2013.
MRC

MOSCOW (MRC) -- Dear readers of MRC!

On this Christmas, the team of MRC wishes everyone happiness and prosperity on the personal and professional life.

Thank you for staying with us in 2014. It has been a pleasure helping you reach your goals, and we look forward to serving you again in the new year.

During this year, we provided reliable analytics on any changes of the polymers market in the CIS countries. We want to take a chance on this so special time to give all our readers and clients the respective thanks for your preference and trust.

We wish you a wonderful new year filled with abundance, joy, and treasured moments. We hope 2015 is a year of great happiness and success for you.

Best wishes,
MRC staff.

We will be back from holidays on 12, January, 2015.

MRC