Sasol U.S. plant cost estimate jumps to USD12.9 bn

MOSCOW (MRC) -- Sasol Ltd., the world’s biggest maker of fuel from coal, said the cost of its giant Lake Charles chemicals project in Louisiana will balloon to as much as USD12.9 billion, or about 50% more than initially planned, said Bloomberg.

The cost blowout is a further setback for the development that’s part of the South African company’s plan to expand internationally. It has already suffered a number of budget increases because of factors including weather delays. Sasol shares slumped the most in 20 years after the announcement on Wednesday.

“We’re extremely disappointed with the increase” in costs, co-Chief Executive Officer Bongani Nqwababa said on a conference call Wednesday. The company said in a statement it’s taken measures since February to “further strengthen the oversight, leadership for the project and frequency of reporting,” and will accelerate a previously announced asset-sale program.

The Lake Charles Chemical Project -- dubbed LCCP -- will, once completed, boost the portion of chemicals in Sasol’s sales mix to 70%. It’s one of two massive plants originally planned in the U.S., but the second -- a gas-to-liquids project -- was abandoned during the oil-price crash. The chemical plant was approved in 2014.

Sasol announced on Wednesday a new cost range of USD12.6 billion to USD12.9 billion for the LCCP project, about USD1 billion more than it forecast three months ago. Back in 2016, then-CEO David Constable had said an increase to USD11 billion was a “worst-case scenario.” The company attributed the latest hike to a “correction for duplication of investment allowances,” higher contract expenses, unanticipated work and defective materials.

In last June, Honeywell announced that Secunda Synfuels Operations, an operating division of Sasol South Africa Ltd., will use a Honeywell Connected Plant service to monitor the operating reliability of its two Honeywell UOP CCR Platforming units at its refinery in Secunda.
MRC

MOSCOW (MRC) -- Daelim Industrial Co.Ltd is in plans to shut linear low density polyethylene (LLDPE) plant for a maintenance turnaround, as per Apic-online.

A Polymerupdate source in South Korea informed that the plant is planned to be taken off-stream on May 23, 2019 and it is likely to remain under maintenance for around four weeks.

Located in Yeosu, South Korea, the LLDPE plant has a production capacity of 260,000 mt/year.

As MRC reported earlier, in February 2019, Saudi Aramco with its partner Total announced the signing of a Memorandum of Understanding (MoU) with Daelim, a South Korean petrochemical company. Under the MoU, Daelim is planning to build a new 80,000 tons state-of-the-art Polyisobutylene (PIB) plant, which is expected to come on-stream in 2024. This agreement is another step to drive Saudi Aramco’s petrochemicals growth strategy. This follows Saudi Aramco’s announcement in October 2018 to launch an engineering study to build a large petrochemical complex in Jubail.
MRC

MOSCOW (MRC) - Imports of polyethylene (PE) into Ukraine increased to about 90,200 tonnes in the first four months of 2019, up 18% compared to the same period of 2018. An increase in external supplies accounted for almost all grades of ethylene polymers, according to a MRC's DataScope report.

Last month's PE imports to Ukraine rose to 25,100 tonnes from 23,200 tonnes in March, the supply volumes of all types of ethylene polymers increased except for high density polyethylene (HDPE). Overall PE imports reached 90,200 tonnes in January-April 2019, compared to 76,500 tonnes a year earlier. Shipments of all grades of ethylene polymers grew, with HDPE accounting for the greatest increase.

The supply structure by PE grades looked the following way over the stated period.

April LDPE imports decreased to 9,600 tonnes from 10,300 tonnes a month earlier, with the reduction in supplies accounted for film polyethylene. Overall HDPE imports reached 33,300 tonnes in the first four months of 2019, compared to 23,900 tonnes a year earlier.

April imports of low density polyethylene (LDPE) into Ukraine were about 6,900 tonnes against 6,800 tonnes a month earlier. Overall LDPE imports reached 26,500 tonnes over the stated period, up by 8% year on year.

Last month's imports of linear low density polyethylene (LLDPE) were about 7,500 tonnes, compared to 5,200 tonnes in March. In general, January - April LLDPE imports into Ukraine increased to 25,900 tonnes compared with 23,700 tonnes year on year.

Imports of other grades of polyethylene, including EVA for the period under review reached about 4,500 tonnes against 4,400 tonnes a year earlier.


MRC

MOSCOW (MRC) -- GAIL (India) Ltd. has approved the revival of an existing liquefied petroleum gas (LPG) plant for conversion into a new polypropylene (PP) complex in Usar, Raigad district of Maharashtra, India, according to Apic-online.

The "first of its kind project in India" will have 500,000 t/y of PP capacity, as well as an integrated propane dehydrogenation unit, at an estimated cost of Rs 8,800 crore, GAIL noted.

The project is scheduled to be commissioned by fiscal year 2023-2024.

As MRC wrote previously, India's state-owned gas utility company GAIL India plans to import ethane from countries including the US, for its upcoming USD5 billion joint-venture Andhra Pradesh petrochemical plant. GAIL is seeking 1.3 million mt/year of ethane for 15 years for its JV ethane cracker with India's Hindustan Petroleum Corp Ltd (HPCL), located on the east coast of India beginning 2022, the company said in February 2016.

Gas Authority of India Limited (GAIL) is the largest state-owned natural gas processing and distribution company in India. It is headquartered in New Delhi. It has the following business segments: natural gas, liquid hydrocarbon, liquefied petroleum gas transmission, petrochemicals, city gas distribution, exploration and production, GAILTEL and electricity generation.
MRC

MOSCOW (MRC) -- The Abu Dhabi National Oil Company (ADNOC) has awarded Bilfinger three separate projects in the first quarter of 2019, according to Hydrocarbonprocessing.

The contracts, secured by Bilfinger's Middle East division, involve turnkey installation, replacement and modification services in ADNOC's Ruwais-based refining unit.

Bilfinger, a leading global engineering and industrial services provider with nearly half a century of presence in the UAE, will design, supply and install upgrade solutions related to hydrocracker (HCK) and hydroskimmer (HSK) units. Tie-ins are expected to be carried out during a major turnaround in 2020.

Under a second contract, Bilfinger will provide specialized EPC services for the installation of Bernoulli filters for the HCK unit's seawater network as well as LPG transfer pumps and progressive cavity pumps at the HSK plant.

At the same industrial complex, Bilfinger was also awarded a contract to perform piping modifications for service water and eye shower facilities. The scope involves the replacement of certain lines, with associated civil and structural works for above-ground and underground pipe network systems.

All three projects are expected to be completed in 2020.

Commenting on the triple contract wins, Ali Vezvaei, President & CEO of Bilfinger Middle East said, "We are grateful for ADNOC's continued trust in our capabilities and equally delighted to build upon our long-standing relationship focusing on the optimization of their already world-class downstream operations at the epicenter of the country's hydrocarbons industry in Ruwais."

"It is definitely a great start into 2019 for our team in Abu Dhabi."

As MRC informed before, in early May 2019, McDermott International, Inc. announced it had been awarded a sizeable contract by ADNOC Refining to provide front-end engineering design (FEED) services for the Refinery Offgases (ROG) project at the Ruwais Refinery in Abu Dhabi.

Bilfinger is a leading international industrial services provider. The Group enhances the efficiency of assets, ensures a high level of availability and reduces maintenance costs. The portfolio covers the entire value chain from consulting, engineering, manufacturing, assembly, maintenance, plant expansion as well as turnarounds and also includes environmental technologies and digital applications.

The company delivers its services in two service lines: Technologies and Engineering & Maintenance. Bilfinger is primarily active in the regions Continental Europe, Northwest Europe, North America and the Middle East. Process industry customers come from sectors that include chemicals & petrochemicals, energy & utilities, oil & gas, pharma & biopharma, metallurgy and cement. With its 36,000 employees, Bilfinger upholds the highest standards of safety and quality and generated revenue of €4.153 billion in financial year 2018.
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