Dow signs coatings, silicones investment agreements in Saudi Arabia

MOSCOW (MRC) -- The Dow Chemical Company signed an agreement to construct a state-of-the-art manufacturing facility to produce a range of polymers for coatings and water-treatment applications in the Kingdom of Saudi Arabia (KSA), and a memorandum of understanding for a feasibility study related to a proposed investment in the company’s Performance Silicones franchise, according to Hydrocarbonprocessing.

Andrew Liveris, Dow’s chairman and chief executive officer, signed the agreements at an event in Riyadh, Saudi Arabia, attended by US President Donald J. Trump, His Majesty, King Salman Bin Abdulaziz Al-Saud, Custodian of the Two Holy Mosques, His Royal Highness, the Deputy Crown Prince of Saudi Arabia, Mohammad bin Salman bin Abdulaziz Al-Saud, and other distinguished guests.

"Dow has been a long-term strategic partner in Saudi Arabia for nearly four decades and is the largest foreign investor in the country," said Liveris. "Through our global and regional experience and expertise, we have unmatched capabilities to deliver high value, innovative solutions that support the Kingdom in key growth areas that help advance the Saudi’s Vision 2030 plan designed to create a vibrant society and a thriving diversified economy."

Located in the PlasChem Park in Jubail, the coatings facility will service the needs of the Saudi Arabian market with a range of acrylic-based polymers for industrial and architectural coatings and water-treatment and detergent applications.

The investment will create approximately 1,000 jobs during peak construction and approximately 100 high-skilled, full-time operations jobs in the Kingdom, ultimately growing local manufacturing and sustainable economic growth.

The new coatings facility will complement Dow’s existing coatings capabilities in the Middle East, which include an existing facility at Jebel Ali, in Dubai, United Arab Emirates.

The proposed silicones investment will include constructing a fully integrated, world-scale siloxanes and high performance silicones complex geared towards markets and industries such as home and personal care, automotive, high performance building and construction, solar energy, medical devices and oil and gas. When complete the complex will support the economic impact of KSA through the creation of approximately 350 full-time, technology-skilled jobs.

This move will serve to further integrate the former Dow Corning silicones business into Dow, and will accelerate the development of new hybrid materials which will be unique, technology rich solutions for regional-specific needs. For example, the Middle East is home to many of the world’s largest and tallest buildings, which utilize high performance glass bonding technologies from Dow Silicones. Dow was recently awarded the contract for supply of silicones sealants for the structural glazing facade of the Jeddah Tower in KSA. Construction of the facade will start later this year. Upon completion, the Jeddah Tower will be the tallest building in the world and will utilize state-of-the-art silicones technology from Dow to realize its futuristic architectural design.

Dow maintains several joint ventures in the region including Sadara Chemical Company, a joint venture with Saudi Arabian Oil Company (Saudi Aramco).

As MRC said before, National oil firm Saudi Aramco plans to cut its stake in Sadara Chemical Co, a joint venture with US company Dow Chemical, via an initial public offer of shares, Sadara chief executive Ziad al-Labban said in early May 2017. He did not give a timeline or other details. Executives first raised the possibility of an IPO for Sadara years ago; a source familiar with the matter told Reuters this year that it would occur after the planned IPO of Aramco itself, which is due to take place in 2018.

Saudi Aramco is an integrated oil and chemicals company, a global leader in hydrocarbon production, refining processes and distribution, as well as one of the largest global oil exporters. It manages proven reserves of crude oil and condensate estimated at 261.1bn barrels, and produces 9.54 million bbl daily. Headquartered in Dhahran, Saudi Arabia, the company employs over 61,000 staff in 77 countries.

The Dow Chemical Company is an American multinational chemical corporation. Dow is a large producer of plastics, including polystyrene, polyurethane, polyethylene, polypropylene, and synthetic rubber.
MRC

MOSCOW (MRC) -- Clariant and Huntsman Corporation announced that their Boards of Directors unanimously approved a definitive agreement to combine in a merger of equals through an all-stock transaction, said Clariant.

The merged company will be named HuntsmanClariant. On a pro forma 2016 basis, the combination of both companies will create a leading global specialty chemical company with sales of approximately USD13.2 billion, an adjusted EBITDA of USD2.3 billion and a combined enterprise value of approximately USD20 billion at announcement.

The combined entity will benefit from each other’s strengths. It will have a significantly improved growth profile in highly attractive end markets and geographies. HuntsmanClariant will leverage shared knowledge in sustainability and boast a much stronger joint innovation platform. This will enable the development of new products in order to deliver superior returns and drive shareholder value.

"This is the perfect deal at the right time. Clariant and Huntsman are joining forces to gain much broader global reach, create more sustained innovation power and achieve new growth opportunities," said Hariolf Kottmann, CEO of Clariant. "This is in the best interest of all of our stakeholders. Peter Huntsman and I share the same strategic vision and I look forward to working with him."

The new company will accelerate value creation for shareholders through a more robust combination of technology, products and talent. The combined company expects to realize more than USD3.5 billion of value creation from approximately USD400 million in annual cost synergies. The full synergy run-rate will be achieved within two years of closing. These synergies will be realized by reducing operational costs and improving procurement. The targeted synergies represent roughly 3 percent of total combined 2016 revenue with one-time costs up to USD500 million. There will also be additional cash-tax savings.

The combined company, incorporated in Switzerland, will be governed by a Board of Directors with equal representation from Clariant and Huntsman and will follow Swiss Corporate Governance standards. Hariolf Kottmann, current Clariant CEO, shall become Chairman of the Board of HuntsmanClariant. Peter Huntsman, current Huntsman President and CEO, will become CEO of HuntsmanClariant. Jon Huntsman, founder and Chairman of Huntsman, shall become Chairman Emeritus and board member of HuntsmanClariant.
MRC

MOSCOW (MRC) -- The chemical manufacturing unit of Malaysia's state energy firm Petronas is looking to grow "aggressively" in specialty chemicals to meet demand in new regional markets and profit from higher margins, its CEO told Reuters.

Petronas Chemicals Group Bhd, a subsidiary of Petroliam Nasional Bhd (Petronas), currently sees only 0.2% of its total sales volumes come from specialty chemicals but the company is aiming for 15% in the next 20 years, CEO Datuk Sazali Hamzah said in an interview.

"Our game plan is to aggressively pursue it beyond 2020. We may partner, buy over companies or even do direct licensing," he said.

The affordability of specialty chemicals in its key markets Southeast Asia, China and India is increasing as those economies expand, creating new demand opportunities, Sazali said.

Last month, Petronas Chemicals said it plans to set up a plant to produce specialty chemical isononanol in the Pengerang Integrated Complex (PIC) in the southern Malaysian state of Johor with a total investment cost of USD442 mln.

Sazali said there could be more specialty chemicals plants in PIC as well. Isononanol is a building block for chemicals used in the auto, cable and construction sectors.

The company is spearheading the petrochemicals component of PIC, which is Petronas' largest downstream project in Malaysia with an estimated USD27 bln total investment.

As MRC informed before, in early 2017, Petronas said that its new USD27 billion refining and petrochemical complex project in the southeast Asian country is on track for start-up in 2019. Sources familiar with the matter told Reuters a little bit earlier that Saudi Aramco had shelved its plans for a partnership with Petronas on the Refinery and Petrochemical Integrated Development (RAPID) project. RAPID, located within the Pengerang Integrated Complex in the southern Malaysian state of Johor, is designed to have a 300,000-bpd oil refinery and a petrochemical complex with a production capacity of 7.7 MMt.

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) -- Sabic has extended its impact copolymers with the new phthalate-free SABIC PP FLOWPACT FPC70 grade for rigid packaging, as per the company's press release.

With tomorrow’s resource challenges, packaging has a crucial role to play, particularly in helping to reduce waste in the global food supply and in protecting goods for consumers while complying with ever more stringent regulations that are put in place to increase food and consumer safety in packaging industry. Today’s fast-paced lifestyles also are driving demand for pre-packed food; for hot filled packaging such as cups and bottles as well as microwave use. At the same time, consumer expectations are driving OEMs and brand owners to create packaging that is robust, easy to open and distinctively shaped with vibrant graphics. These challenges need to be met while lowering weight and cost by reducing packaging thickness with down gauging, faster production cycle times, and minimizing waste and the environmental impact.

Sabic is helping customers in packaging industry to meet these challenges by extending its FLOWPACT impact copolymers family with a new SABIC PP FPC70 Polypropylene solution for rigid packaging. This high flow (MFR 70) impact copolymer grade based on a phthalate free catalyst is an injection-molding grade developed for applications such as containers, caps and closures in rigid packaging and for consumer goods.

Sabic has a strong focus on sustainability in its solutions for the packaging industry. "Our new FLOWPACT grade SABIC PP FPC70 is a part of the new wave of products from Sabic for rigid packaging - and for other segments as well. It is an important step forward that should enable our customers to use less material and less energy to produce rigid packaging with the same or even better properties than before, more quickly than before", says Lada Kurelec, Global Business Director PP for Petrochemicals at Sabic. "Sabic has a team of experts dedicated to packaging with polypropylene and our phthalate free portfolio is designed to cater needs of our customers in the market. This is part of a major innovation drive in the company."

Trials at several packaging manufacturers have already demonstrated the benefits of the new product’s market-leading combination of high stiffness and high impact strength. "We believe SABIC PP FPC70 answers the continuing trends in thin wall packaging by enabling up to 10% thinner walls and fast injection, thus reducing energy consumption and increasing productivity, not only help our packaging customer save on material cost but also production costs," Kurelec further notes.

SABIC PP FPC70 is a new addition to the recently introduced FLOWPACT grades FPC45 (MFR 45) and FPC100 (MFR 100). Rigid packaging made with SABIC PP FPC70 polymer, including applications that can be filled with hot content, has considerably higher top-load strength than identical products made with current benchmark materials. This in turn improves stackability, providing better economics in transport and storage. SABIC PP FPC70 incorporates important advances in polymer chemistry that yield a material with a great balance between high stiffness, impact strength and high heat distortion temperature than a standard impact copolymer. SABIC PP FPC70 can be used for containers intended for packaging foods and non-food products, caps and closures, as well as for production of housewares.

As MRC reported earlier, Sabic has recently announced an important expansion of its industry leading SABIC PP polypropylene portfolio for packaging industry with the introduction of two new high flow, injection-molding grades, SABIC PP "513MK46" and "512MK46", impact copolymers based on a phthalate free catalyst. These new offerings open further opportunities for packaging manufacturers and convertors with production efficiency through shorter cycle times and weight savings through thin wall manufacturing.

Saudi Basic Industries Corporation (Sabic) ranks among the worldпїЅs top petrochemical companies. The company is among the worldпїЅs market leaders in the production of polyethylene, polypropylene and other advanced thermoplastics, glycols, methanol and fertilizers.
MRC

MOSCOW (MRC) -- Nigeria's state oil company is in the final stage of signing USD6 B worth of deals to exchange more than 300,000 bpd of crude oil for imported gasoline and diesel, sources with direct knowledge of the process told Reuters.

The contracts, which come three months later than expected, include three more pairs of companies than last year, reflecting Nigeria's increased reliance on NNPC for fuel imports.

A lack of local refining capacity means Nigeria is reliant on imported gasoline, kerosene and other petroleum products, and the oil price crash and militant attacks on Nigeria's oil industry have starved independents of dollars for fuel imports.

At least four of the 10 groups have signed contracts, set to begin from July 1, with the rest expected to do so by Friday, the sources said.

The NNPC, which is due to approve them by the end of the week, did not immediately respond to a request for comment.

The fuel quality in the final agreements was not immediately clear, but July 1 is the same deadline the country set for switching over to higher quality, lower-sulfur fuels that create less toxic fumes.

Sulphur levels were a major sticking point in the negotiations. The Ministry of Environment and the Standards Organization of Nigeria, the body responsible for setting requirements for imported goods, promised a switch to 150 ppm gasoline and 50 ppm diesel.

Some sources said the new standards would be applied. Others reported that three different gasoline specifications—1,500 ppm, 500 ppm and 150 ppm—would all be included in the contracts, giving NNPC options on which to import.

This year's deal includes international trading houses, not just oil refineries. The 2016 contracts included only companies with refineries in an effort to cut out middlemen.

The latest list contains several companies from 2016, including Varo Energy, Societe Ivorienne de Raffinage (SIR), Total and Cepsa. Italy's ENI and India's Essar, which won 2016 contracts, are absent from this year's list, while Socar and Mercuria are new additions.

The contracts were initially planned to begin in April but last year's swap deals were extended at least twice in order to give NNPC more time to negotiate. NNPC had previously said this year's contracts would exchange up to 800,000 bpd of crude oil, though at some 40% of peak exports that target was seen by markets as unlikely.

NNPC has been forced to ramp up its own fuel imports to around 80% of Nigeria's consumption, according to figures from the company and oil traders.

Nigeria has substantially increased its refining output this year but the first quarter average was still only about 25% of its 445,000 bpd capacity.

It has struggled to run them at higher rates due to years of neglect and consistent theft and sabotage of the pipelines feeding the refineries.
MRC