Japanese oil refiners Idemitsu, Showa Shell sign alliance deal

MOSCOW (MRC) -- Japanese oil refiners Idemitsu Kosan Co Ltd and Showa Shell Sekiyu KK said on Tuesday that they have signed a deal to form a business alliance ahead of Idemitsu's stalled merger with Showa Shell, said Japantimes.

Under the deal, the companies will cooperate more closely on crude purchases and transportation as well as production plans, they said in a statement.

Idemitsu Kosan completed the purchase of just under a third of Showa Shell last December, but the goal of a full merger of the two companies has been delayed due to opposition from Idemitsu's founding family.

The founding family and related parties, which together hold a stake of a little over one-third of Idemitsu shares, are opposed to the merger and have pledged to block the deal if a vote is held.

Idemitsu Kosan Director Susumu Nibuya said the company would continue to talk to Idemitsu's founding family but added the company still had no timetable for winning approval from them. In the statement on the deal, the two companies said that the closer cooperation will result in annual cost savings of at least $220 MM within three years from April 2017.

Nibuya said the fight to win cost reductions is to compete effectively against other refiners such as JXTG Holdings, which was formed in April from the merger of JX Holdings and TonenGeneral Sekiyu and has a domestic gasoline market share of more than 50 percent.

"Over the past 10 yr, the amount that domestic oil product demand has fallen is equivalent to what we and Idemitsu Kosan sell domestically, and demand is expected to fall by another 20% to 30% by 2030," Showa Shell Corporate Executive Officer Hiroshi Watanabe told reporters.

The oil refining industry has high fixed costs, so it is difficult to respond to such a challenge on an individual company basis, Watanabe said.

"Japan's oil companies have only about half the profit margins of those in South Korea, and it's crucial to strengthen profitability quickly," he said.
MRC

MOSCOW (MRC) -- Qatar Petroleum (QP) has announced agreements to supply additional quantities of ethane to a number of subsidiaries of Industries Qatar (IQ) and Mesaieed Petrochemical Holding Company (MPHC), reported Plastemart.

This move is aimed at supporting Qatar’s petrochemical industry. The agreements for additional ethane volumes were signed with each of QAPCO, Q-Chem 1, Q-Chem 2, and Qatofin.

The total additional ethane volumes that will be supplied to the four companies will be approximately one thousand metric tons per day which equates to an increase of approximately 10% compared to the base quantities. The new agreements are designed to enable these companies to reach the maximum capacity of their respective facilities, thus raising their efficiency and improving profitability.

Saad Sherida Al Kaabi (pictured), President and CEO of QP, said "This important step was driven by Qatar Petroleum’s keenness to maximize benefit from our natural resources, especially in the vital petrochemical sector". "It also comes in support of Qatar’s national industry and the important role it plays in boosting the growth and development of our national economy," he said.

As MRC wrote before, in 2015 QP, as part of a restructuring program, announced plans to withdraw from the joint venture Long Son petrochemical complex in Vietnam. Located in Ba Ria-Vung Tau province, the complex, with an estimated cost of USD4.5-billion, involves a 1.4-million-t/y olefins cracker to feed downstream production of 2.7-million t/y of polyethylene and polypropylene. Operations are expected to begin in 2018.

Qatar Petroleum is an integrated national oil corporation responsible for the sustainable development of the oil and gas industry in the State of Qatar. Its activities encompass the entire spectrum of the oil and gas value chain locally, regionally, and internationally, and include the exploration, production, processing, marketing and sales of oil and gas, liquefied natural gas (LNG), natural gas liquids (NGL), gas to liquids (GTL) products, refined products, petrochemicals, fertilisers, steel and aluminium.

MOSCOW (MRC) -- Japan’s Itochu Corporation signed a deal to purchase 11,000 tons of polyethylene (PE) per month from the Persian Gulf Petrochemical Industries Company (PGPIC), as per Plastemart.

The deal comes after the two sides signed a preliminary deal in December 2016, based on which Itochu agreed to lend EUR320 mln (USD341 mln) to PGPIC for infrastructure development, IRNA reported. An official added that PE shipments will begin "within the next few months."

As MRC informed previously, in early 2016, Italy-based Maire Tecnimont, a leading engineering company, signed an agreement worth EUR1 billion (USD1.11 billion) with PGPIC to construct refineries and petrochemical plants in Iran. Maire Tecnimont will help Iran build an acrylonitrile butadiene styrene (ABS) and rubber plant in the industrial city of Asaluyeh. The ABS product has a variety of applications including in the automotive industry.
MRC

MOSCOW (MRC) -- Japanese chemical maker Tosoh Corp said on Thursday it will invest about USD88 MM to upgrade its 527,000-tpy naphtha cracker in Yokkaichi, central Japan, by 2020, said Reuters.

The move, which will include the installation of a new large-scale furnace to boost efficiency and cut costs, will allow the facility to make the same amount of ethylene from smaller volumes of feedstock naphtha, a company spokesman said.

It marks the first large-scale investment on the cracker since 1998. Japanese naphtha cracker operators have been trying to adjust to shrinking domestic demand market by closing some crackers and cutting costs.

Idemitsu Kosan said in November it would expand the processing of propane at its naphtha cracker to take advantage of cheap liquefied petroleum gas (LPG) prices.

Tosoh plans to keep its naphtha import volumes at current levels. It will generate savings by expanding its gas turbine facilities and using the cracker's excess naphtha feedstock for in-house power generation, the spokesman said.

Tosoh has 14 existing furnaces that process naphtha.

The new large-scale furnace will replace two ageing small furnaces that will be held in reserve, while the remaining furnaces will be renovated to improve efficiency, he said.

Some of the work will likely be carried out during the cracker's large scale maintenance shutdowns in spring 2018 and spring 2020, he said.
MRC

MOSCOW (MRC) -- Clariant, a world leader in specialty chemicals announced that its Healthcare Packaging manufacturing facility in Dongguan, Guangdong Province, China, recently obtained ISO 15378:2011 certification for production of desiccant packets for healthcare applications, said the company on its web-site.

"Expanding our ISO 15378 certification to our global sites is of paramount importance, as it demonstrates our focus on patient safety and current Good Manufacturing Practices." said Frederic Gaire, Head of Quality, Clariant Healthcare Packaging. "Given the high level of respect this ISO certification has in the pharmaceutical and nutraceutical industries, customers can be confident of Clariant’s commitment to quality on a global basis."

ISO 15378:2011 specifies requirements for current Good Manufacturing Practices (cGMP) and a quality management system (QMS) for manufacturers of primary packaging materials for pharmaceuticals. Organizations certified under the standard must demonstrate their ability to consistently meet customer requirements, including compliance with the specific regulations and standards that apply to packaging materials used in pharmaceutical applications. The ISO documents state: "the realization of GMP principles in production and control of primary packaging materials within organizations is of great importance for the safety of a patient using the medicinal product because of their direct product contact."

Clariant produces its desiccant packet brands Sorb-it (silica gel) and Tri-Sorb® (molecular sieve) at numerous facilities globally, including in Dongguan, providing customers a wide array of options and Business Continuity Planning (BCP). The Dongguan site produces a full portfolio of desiccant packets both for regional Asia-Pacific healthcare markets and for export to the Americas and Europe. Packets are available in DuPont Tyvek® and as Continu-Strip that feature a hole in every seal to optimize the desiccant insertion process. Sizes available range from 0.25g to 10g.

Dongguan follows Clariant’s other sites that already maintain ISO 15378:2011 certification: Romorantin, France; Belen, NM, USA; and Changshu, China. The network of production sites will soon include a fifth facility in Cuddalore, India, where Clariant is constructing a new plant. Also integral for BCP, the new plant in Cuddalore will supply the large and growing Indian market and once online will quickly begin the process of ISO 15378 certification.
MRC