Sabic, Pashupati Group exploring recycling opportunities in India

Saudi chemical manufacturer Sabic signed a memorandum of understanding with Pashupati Group, an India-based mechanical and chemical recycler of PET and polyolefins, said the company.

The companies will explore, evaluate, and develop local business opportunities for recycling waste plastics in India, including the potential development of a pyrolysis plant to provide Sabic with feedstock for its circular polymers.

Pashupati operates waste management services under the Extended Producer Responsibility (EPR) legislation for plastics introduced in India in 2016. The company uses its Waste Circularity mobile app to collect plastic waste in challenging terrains, including mountains and coastal areas, in addition to serving urban and rural settings. It collects 12 million PET bottles and 2 million polyolefin bottles a day.

Through the new partnership, Sabic and Pashupati will share best practices and exchange knowledge about plastic recycling processes, including the mixing of virgin and recycled polyolefins in manufacturing new products. Pashupati will contribute its expertise in mechanical and chemical recycling, whilst Sabic will focus on the marketing and sales of recycled products.

“This is a crucial first step in our efforts to support and accelerate the transformation of India’s plastics economy towards circularity,” said Sanjay Mishra, general manager, engineering thermoplastics & performance polymers at Sabic. “At the same time, it expands our collaboration with experienced local recyclers in Asia as we are continuously sourcing valuable feedstock to meet the growing demand for our Trucircle portfolio of recycled, circular polymers.”

Sabic has committed to producing 1 million tonnes of circular materials by 2030. At the World Economic Forum 2023 Meeting in Davos, it revealed that it is exploring a new world-scale commercial chemical recycling investment. This new plant would potentially have a capacity of around 200 kilotons of per year.

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Sinopec’s annual profits declined 13%, after oil prices fell and Chinese refiners posted a record year for processing and imports.

China’s largest fuel processor, officially known as China Petroleum & Chemical Corp., reported 58.3 billion yuan ($8 billion) net income for last year, it said in an exchange filing. That compared with 66.2 billion yuan in 2022.

Global oil prices were 17% lower in 2023 than the previous year, which reduced the value of Sinopec’s drilling output but also lowered its crude costs.

The results missed the average analyst estimate despite a rebound in its key refining margins, as upstream profits fell and its chemicals business continued to lose money. Chinese refiners ramped up fuel production last year to feed a populace eager to travel after Covid-19 restrictions were lifted. Still, the company had to grapple with a tepid economic recovery that created a glut of some chemicals like ethylene.

The increase in refining activity also boosted China’s oil imports to a record. The nation’s refiners benefited in particular from cheap Russian crude shunned by many nations after the country’s invasion of Ukraine.

Sinopec set its 2024 capital expenditure budget at 173 billion yuan, slightly below last year’s 176.8 billion yuan spending bill, mainly due to a scale-back in the chemical sector.

It plans to maintain modest growth in both output and processing in 2024, with targeted oil and gas production is 1% higher than 2023 levels and refining throughput to increase 0.8%. Domestic refined oil product sales, which jumped 16% last year, are only expected to rise 1.6% this year.

We remind, Sinopec Engineering (Group) Co. Ltd. has reported CNY/RMB 34.6 billion ($4.8 billion) in revenue from petrochemical contracts for 2023, up 9.5 percent against 2022. The company, majority-owned by the state’s China Petrochemical Corp. (Sinopec Group), attributed the growth to domestic projects including an ethylene production facility of Exxon Mobil Corp., an ethylene co-venture between Sinopec and Ineos, and the second phase of Sinopec’s Zhenhai Base refining and chemical complex.

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The US Department of Energy (DOE) has selected ExxonMobil’s Baytown, Texas, olefins plant carbon reduction project to receive up to USD331.9 million in funding under the USD6-billion Industrial Demonstrations Program (IDP), said Chemweek.

The announcement comes one month after a report in the Houston Chronicle that ExxonMobil might have to cancel the project if proposed federal tax incentives for the production of clean hydrogen exclude the use of carbon capture and sequestration (CCS).

The project, which ExxonMobil announced in March 2022, would include construction of a plant capable of producing 1 billion cubic feet of hydrogen per day from methane, with the associated carbon dioxide emissions to be captured and stored underground. ExxonMobil would use this “blue” hydrogen to fuel its olefins plant, which is currently fueled with natural gas. The company expects to make a final investment decision this year, with startup planned for 2027-2028.

At the time of the project announcement, ExxonMobil estimated that the project would reduce integrated site carbon dioxide emissions at Baytown by up to 30%. DOE, in its IDP announcement, said the project would reduce the olefins plant’s emissions by over 50%, or 2.5 million metric tons per year.

On February 22, the Houston Chronicle reported that executives at ExxonMobil were warning that the project might not proceed. Proposed federal tax rules would grant tax credits of $3 per kilogram for “green” hydrogen produced using power from wind and solar farms, whereas “blue” hydrogen produced from methane with CCS would only be eligible for tax credits of 60 cents per kilogram, the paper reported.

The newspaper quoted Mark Klewpatinond, global business manager for hydrogen at ExxonMobil. “If we’re not able to differentiate natural gas production, it’s highly unlikely Baytown would proceed,” he reportedly told the Chronicle. “It needs to compete for capital against other projects we have.”

We remind, QatarEnergy and ExxonMobil are on track to commence LNG production at their Golden Pass LNG export terminal, situated on the US Gulf Coast near Sabine Pass, Texas, during the first half of 2025. QatarEnergy, a state-owned entity, holds a substantial 70 percent stake in the Golden Pass project, which boasts a capacity exceeding 18 million metric tons per annum (mtpa). Notably, QatarEnergy will offload 70 percent of the terminal's capacity. In parallel, ExxonMobil, a prominent US-based energy firm, possesses a 30 percent share in the venture.

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JERA, Japan's top power generator, said it has agreed with ExxonMobil to jointly explore the development of a low-carbon hydrogen and ammonia production project in the U.S., said hydrocarbonprocessing.

ExxonMobil is developing what is expected to be the world's largest low-carbon hydrogen production plant at its Baytown Complex east of Houston in Texas, with an annual output capacity of about 900,000 metric tons of hydrogen and more than 1 million tons of ammonia. The project aims to start production in 2028.

Under the agreement, JERA may invest in the project and buy about 500,000 tons annually of low-carbon ammonia from the project for demand in Japan, it said in a statement.

Ammonia is seen as an effective future energy source. It does not emit carbon dioxide when burned, though its production releases emissions if it is made with fossil fuel.

"Cooperation among leading companies is essential to establish supply chains for ammonia, hydrogen, and other products that are key to zero-emission thermal power," said Steven Winn, JERA's senior managing executive officer.

Dan Ammann, president of ExxonMobil Low Carbon Solutions, said in the same statement: "Building world-scale projects for new markets requires supply, demand and supporting regulation to all come together in sync."

Japan, the world's fifth-biggest CO2 emitter, has been promoting ammonia as an alternative fuel to help reduce CO2 emissions at coal-fired power plants and other factories.

It aims to grow its demand for ammonia as a fuel to 3 million tons by 2030 as it pushes to achieve its goal of becoming carbon neutral by 2050.

JERA is set to start a trial this week of co-firing 20% of ammonia with coal at its Hekinan thermal power station in central Japan, in what it said will be the world's first trial using a large amount of the gas at a major commercial plant.

Environmentalists have, however, criticized the move as a way to extend the life of dirty coal-fired power generation.

We remind, QatarEnergy and ExxonMobil are on track to commence LNG production at their Golden Pass LNG export terminal, situated on the US Gulf Coast near Sabine Pass, Texas, during the first half of 2025. QatarEnergy, a state-owned entity, holds a substantial 70 percent stake in the Golden Pass project, which boasts a capacity exceeding 18 million metric tons per annum (mtpa). Notably, QatarEnergy will offload 70 percent of the terminal's capacity. In parallel, ExxonMobil, a prominent US-based energy firm, possesses a 30 percent share in the venture.


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Major South Korean petrochemical companies are actively investing in battery material businesses despite the current slump in the electric vehicle market, said Pulsenews.

Sources from the petrochemical industry said on Sunday that LG Chem Ltd. recently began fully operating its cathode material plant 4 in Cheongju, North Chungcheong Province, which began construction in 2020. The plant 4 had been the subject of test checks until recently after completing the installation of its last third line at the end of 2023. The first two lines, which were built earlier, each produce 10,000 tons of nickel-cobalt-manganese (NCM) cathode materials annually.

According to LG Chem‘s business report, the company’s advanced materials division, which includes battery materials, invested 690.3 billion won ($518.82 million) in 2023. This is more than four times the 164 billion won in 2021 and similar to the 696.5 billion won it invested in 2022, when the battery boom was going strong. The advanced materials division is known to have an overwhelming share of battery materials in its investments.

The proactive investments, contrary to market conditions, are believed to reflect the company’s determination to strengthen its non-petrochemical portfolios. The outlook for the petrochemicals business is bleak due to challenges from Chinese companies with price competitiveness and refiners entering the petrochemical sector.

Petrochemical companies are often rumored to be selling naphtha cracking centers (NCCs), which are particularly targeted by refiners as NCC uses naphtha, a byproduct of petroleum refining, as raw material in the initial stage of the petrochemical value chain. Refiners can expect to expand their profitability by vertically integrating into the NCC business.

LG Chem has been accelerating related investments since announcing its three major growth drivers (battery materials, eco-friendly materials, and new drugs) in 2023, and plans to secure a production capacity of up to 60,000 tons annually at its cathode material plant in Gumi, North Gyeongsang Province. The company also expects its cathode material plant in Tennessee, the United States, and lithium iron phosphate (LFP) cathode material plant in Morocco to begin mass production, in 2026, with the plants projected to produce 60,000 tons and 50,000 tons per year respectively. LG Chem is also considering building new nickel refining and precursor plants in Indonesia.

For its part, Lotte Chemical Corp. is actively investing in battery materials as a future growth driver. It is currently preparing to enter the electrolyte organic solvent market after producing materials for battery separators and plans to inaugurate a cathode foil production facility in the United States in 2026.

SKC Co. also plans to inaugurate two plants in Malaysia and one in Poland in the first half of 2024, via its subsidiary SK nexilis Co., which produces copper films. The company is also considering additional investments in production facilities in North America.

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