$1.8 Billion Gas Deal Between KOGAS and Uzbekneftegaz

Korea Gas (KOGAS) consortium is signing a massive $1.8 Billion investment on gas deal to develop gas field and downstream of a cracker complex via a joint venture of 50:50 with Uzbekistan’s Uzbekneftegaz. Uzbekneftegaz is the state-oil company of Uzbekistan and the plan is to process the natural gas from Uzbekistan's Ust-Yurt region. Construction is expected to complete between 2008 and 2010.

The downstream chemical cracker complex will use the Ust-Yurt gas as feedstock for production of ethylene, 360,000 tonnes/year of high density polyethylene (HDPE) and 80,000 tonnes/year of polypropylene (PP), the official added.

$270 Million Base Oil Investment by Lukoil

2017 will mark another investment expansion by Lukoil which is planning for a $270 million base oils production by first increasing production of group III oils from 24,000 tonnes/year to 50,000 tonnes/year by 2010.

They are also looking at improving quality of Volgograd learning from the success of Lukoil's Perm and Norsi quality improvement. Another Lukoil base oils production facility is in Russia is located at Nizhni Novogorod (Norsi). The Perm facility has produced the first 600 tonnes of brightstock in January 2008 and is on an uptrend to increase production.

Chevron Getting Wild in Kazakhstan

Chevron, a spin-off company from Standard Oil with its affiliate Tengizchevroil is progressively expanding operation at the Tengiz Field in Kazakhstan.

According to today's reserve, Tengiz is the world's deepest producing super-giant oil field, in which Chevron is planning to use the volumes as commercial gas, propane, butane and sulphur, apart from injecting it to the reservoir.
Due completion, the facility will be able to produce 90,000 bbl/day and once the Tengizchevroil's stabilizes, the end capacity will shoot up to approximately 400,000 bbl/day.

The Tengiz project will also include Chevron's the Sour Gas Injection (SGI) project and the front end of the Second Generation Plant (SGP).

Shareholders for Tengizchevroil are Chevron with 50%, KazMunaiGas with 20%; ExxonMobil Kazakhstan Ventures at 25%; and LUKArco with 5%.

Sasol Polymer Unit Blast: Employees Charged Instead of Sasol

Sasol Chemicals, a South African Chemical Company has been discharge from any allegation towards the 2004 blast that killed several people at a plant in Secunda near Johannesburg. The South Africa’s National Prosecuting Authority (NPA) instead has made a decision to charge two Sasol employees for the deadly blast at Sasol polymers unit.

NPA has claimed that there is no evidence showing that Sasol to be responsible for any negligence regarding the blast.

The unlucky two Sasol employees would be charged with culpable homicide, which killed 10 people and injured scores of others. South African trade union Solidarity had demanded that South Africa’s Labour Department publish the report on the explosion for the public, but has been denied.

European Companies Urged to Grow in Specialty Chemicals

Central and Eastern Europe (CEE) chemical companies were urged to grow in specialty chemicals. European specialty market’s production value expected to rise 7% a year until 2012, compared to only 4% for the commodity market.

Long gone the commodities game of sustainable long-term success with a focus on operational excellence, the money now is in specialty markets as value-added chemicals.

CEE companies should venture into huge strong domestic demands for specialty chemicals such as titanium oxide (TiO2), soda ash, methylene diphenyl diisocyanate (MDI), toluene di-isocyanate (TDI), specialty plastics and adhesive.

In general, CEE companies have great advantage in terms of highly qualified and motivated workforce with solid experience and tradition in running petrochemical plants. The biggest obstacle currently is probably sourcing of oil and gas, which most CEE companies are dependant on Russia.

Environmental: PC Bottles Release BPA for Hot Liquid

BPA, a substance that has been shown to affect reproduction and brain development in animal studies is found to be realeased in bottles containing hot liquids. BPA (Bisphenol-A) is a harmful chemical released from polycarbonate plastic bottles.

Scientists from University of Cincinnati found that hot liquids increased the rate of BPA released 55 times more. This has not included the increment if you repeatedly scrub, dish-wash and boil polycarbonate baby bottles. In a study using boiling water, the rate of release from individual bottles ranged from 0.2 to 0.8 nanograms/hour to a range of 8-32 nanograms/hour after exposure.

Saudi Chemanol Floating IPO for Expansion

Chemanol, a Saudi Arabia’s Methanol Chemicals Co is looking at ways to finance $302m facility to fund the company’s expansion plans most probably by an initial public offering (IPO) for a sale of 50% of Chemanol shares for $200m.

Saudi Arabia's Methanol Chemicals Co is a major producer and international supplier of premium grade formaldehyde and derivative products, which previously known as Saudi Formaldehyde Chemical Co.

The$302 facility will expand Chemaol's operations, to convert gas from raw materials to use internally and to decrease its dependance on Saudi Aramco. Currently, Chemaol receives gas feed from Saudi Aramco. The IPO will be arranged by SAAB, SAMBA, Riyadh bank, Saudi Hollandi Bank, Alahli bank and Arab Banking Corporation (Bahrain).

New Polyethylene Plant in Russia by Sibur

Sibur Holding, a Russia-based petrochemical company is planning a $9.6m for a pre-feasibility study for a new polyethylene (PE) chemical plant with a capacity of 450,000-500,000 tonnes/year in the country's southern Astrakhan region.

Cellulosic Ethanol for Biorefineries Hitting US

US is investing $114m for cellulosic ethanol projects to explore cellulosic ethanol feedstock options and production processes for biorefineries. The investment is for four years development of funding of four pilot plants before contribution from private sector. The government funding is seen as part of US goal of making cellulosic ethanol cost-competitive with gasoline by 2012 under the President Bush administration.

The pilot plant will be able to produce about 2.5m gal/year of cellulosic ethanol in a plant to build a commercial ethanol plant with annual output capacity of around 25m gallons or 75,000 tonnes.

There are as yet no commercial-scale cellulosic ethanol production units in the US. Current technologies explored under study for cellulosic ethanol production includes conventional cellulosic conversion technologies, biogenetic and microbiotic conversion of cellulosic feedstock into cost-effective fuels.

Cellulosic Ethanol Production Route from Biomass

Incentives to go with ethanol is pressured under the Energy Independence and Security Act of 2007 which requires the US to produce at 100m gal/year of cellulosic ethanol by 2010 and 500m gal/year by 2012 in the route to achieve 36bn gal/year of renewable fuels in 2022.

Peru to have $100 million Investment for Biofuels

Peru is expected to have more than $100 million for biofuels sector coming from the private investment especially in the ethanol and biodiesel projects. The renewable fuels would come mostly from the country's sugar cane. palm oil and jathropa in which companies have had talks with the local governments for land acquisition and collaboration with the agricultural caompanies.

The demand is fueled by Peru's law which requires diesel supply to have a blend of 2% biodiesel by the first of 2009 an the amount is to be increased to 5% by 2011. The biofuels demand is not only for the growing internal market but also following free trade agreement between US and Peru which has seen a new chapter in the development of Peru's energy and technological resources.

The Romero group is expected to complete a biofuels plant based on palm oil next month. Bioterra, is in the process of acquiring land to start up its own biofuels operation while Maple Energy is investing $157m to build an ethanol plant, export terminal and power plant in northern Peru.

Jurong Aromatics Corp (JAC) & BP on $10 Billion Petrochemical Deal

British Petroleum (BP) struck a deal with Jurong Aromatics Corp (JAC) worth $10 billion contract for the Jurong island facility with feedstock. Under the agreement, JAC will supply refined products to BP

BP will be supplying a large proportion of feedstock requirements to JAC for the $2bn world-scale petrochemical plant on Jurong island for the 2011 commencement. JAC will then supply refined products for consumption within BP’s own plants and key third parties around the world.

Typical paraxylene chemical structure, an aromatic.

The JAC facility is expected to have a capacity of around 1.5 million tonne per year of aromatics including paraxylene, orthoxylene, benzene and petroleum products.

Membrane-cell Chlor Alkali Plant in Texas by Dow

Dow is planning to build a new chlor alkali plant in Freeport, Texas using a membrane cell expected completion in 2011. The unique investment scheme for the chemical plant is utilizing Shintech, a vinyl producer to partly invest in the chemical plant while Dow in return will supply a steady amount of vinyl feedstock vinyl chloride monomer (VCM) from Dow.

During construction, the existing chlor-alkali complex that will be replaced with the membrane cell will result in chlorine and caustic soda production in the US in the amount of 3.6 mil tonnes of chlorine and 4 mil tonnes of caustic soda capacity per year.

The membrane-cell technology is expected to greatly decrease the production cost through efficient energy use replacing the diaphragm-cell production process in currently in Freeport.

New Fertilizer Plant in Inner Mongolia, China

China is planning another new fertilizer plant in central Mongolia by Yunnan Yuntianhua company of China. The fertilizer facility is expected to produce 500 ktpa ammonia and 800 ktpa urea capacity with total investment cost of $480 million. The project will utilize rich coal reserves as feedstock for the plant.

The company will be a join venture between Hong Kong's Jinxin Group and Yuntianhua 51% stake. The fertilizer complex capacity will eventually be increased into 2 mil tonnes per year of ammonia and 3.2 mil tonnes of urea.

SABIC & Sinopec in Joint Venture for Tianjin Ethylene Derivatives Plant

SABIC and Sinopec had announced their collaboration by signing a Heads of Agreement (HoA) between the two companies for development of a 1 mil tonne per year capacity of ethylene derivatives chemical plant in Tianjin, China. It will be a 50:50 joint venture investment for production of 600 ktpa of polyethylene (PE) and 400 ktpa of ehtylene glycol (EG) chemical plants.

The feedstock for the downstream derivatives will be supplied from a cracker by Tianjin Petrochemical. Completion of the project is expected to be by Q4 2009 with investment cost of $1.7 billion.

The collaboration is the first SABIC's joint venture in China, a step that is seen will be a stepping stone for an even more agressive move towards establishing a petrochemical base in China from SABIC.

Glycerol Technology by Rohm and Haas, Novasep

Rohm and Haas, a US specialty chemical company has struck a deal with Novasep to market and sell a new biotechnology that will purify crude glycerol, a by-product from biodiesel processing. The technology purifies crude glycerol through a separation processes developed by Novasep and Ambersep BD50, a resin produced by Rohm and Haas. The technology would be able to reduce the production cost significantly unlike the conventional purification process through distillation.

Currently, there is an abundance of crude glycerol available at disposal due to the rapid growth of biodiesel production. Rohm & Haas and Novasep most likely will license the glycerol purification technology in late 2008 or 2009.

B2 Biodiesel Starts Selling in Thailand

B2 Biodiesel, a 2% biodiesel blending has started selling in Thailand in February upon Thailand's government approval. The biodiesel includes government subsidy in which it will be sold at cheaper price than regular diesel at 0.80 Baht/ litre cheaper.

Bangkok's major diesel sellers including Shell, PTT and Bangchak will be selling B2, making it available nationwide. The market price for B2 will be tied to feedstock palm oil price.

B2 is seen as major advancement in Thailand's policy towards green environment as the country has already used E10, a 10% blend of ethanol after the ban of MTBE for gasoline blending which includes government subsidy. The ethanol mostly comes from tapioca and sugarcane in Thailand. The government policy has helped bringing up biodiesel companies in Thailand, some includes Thai Oleochemicals Co, with biodiesel plant capacity includes a 200 ktpa of palm methyl ester (PME), or palm biodiesel.

Nigeria Planning MTO Project Using UOP Technology

Nigeria will be home to 1.3 mil tonne per year capacity olefins complex using MTO technology by UOP in Lagos. The project is the first MTO technology that would be constructed at commercial-scale including olefins cracking process technologies by EuroChem.

The project would produce 10000 tonnes per day of methanol capacity from natural gas due for completion in 2012 and the MTO technology is expected to be more cost effective than traditional olefins production from crude oil-derived feedstocks.

Upon completion, the MTO plant would give a competitive edge against other petrochemical producers using normal technology such as steam cracker and dehydrogenation.

Malaysia to Build Epichlorohydrin Plant

Epichlorohydrin or ECH is used for epoxy resins production, something that is not widely available in Malaysia. Spolchemie, a Czech epoxy resins producer is building an $80 million epichlorohydrin (ECH) chemical plant in Malaysia, the first in Malaysia, and the first for the company as well. The announcement was made in the 4th Annual CEE Chemical & Petrochemical Forum in Prague.

The construction of the plant would start in 2009 would be owned 100% by Spolchemie integrating the ECH chemical plant capacity with its epoxy-resin production. This is amidst rising concern of economic downturn with market outlook would be to supply demand in China and India.

Spolchemie has first intended Vietnam for the ECH chemical plant but found it lacks the infrasturcture needed. The project is part of Spolchemie plant to be a global player for epoxy resins producer.

Petrochemical Outlook 2008: Latin America Growing in Polyethylene

2008 seems to be a growing time for Latin America Polyethylene (PE) industry with growth in 2008 is expected to come from Brazil, Columbia, Venezuela and Chile. This is amidst Brazil's new resolution to become the regional leader of petrochemicals.

Brazil will become the key player in the region with export of polyethylene into Argentina, where growth is very limited due to the political crisis with the victory of Cristina Kirchner.

Argentina's local polyethylene producer, Dow has been actively looking associations with O&G (oil and gas) companies for feedstock guarantee. Brazil will continue exporting its LDPE (low density polyethylene) into Argentina and with raw materials climbing up, revenues would hit Brazil.

Biodegradable Plastics Need Organics Disposal Program

Biodegradable bags which have been in discussion for many years, seem to have grown at slower pace with development expected to happen due to the growth of organic recycling in the US as predicted by BASF.

Biodegradable bags are now extensively used as organic waste collection bags, can liners and lawn and leaf bags in the US, Canada and Europe. The long waited biodegradable into grocery bags is yet to happen. Grocery bags are one of the major used of plastics in the bags segment. Currently polyethylene bags (PE Bags) are used.

The conversion of biodegradable bags, is only feasible if an organics collection program is available, since the technology is in place but it needs implementation to fully close the life cycle.

Recently, BASF has launched its Ecovio, a biodegradable plastic using foam. Ecovio is made from BASF’s biodegradable polyester Ecoflex and polyactic acid.

No New MTBE Capacity Addition in Asia Despite High MTBE Price

The outlook for MTBE in Asia, and for the rest of the world looks bright for the MTBE producers with supply is looking very tight and no new MTBE plants announced. The lack of capacity addition for MTBE makes it undersupplied for the rest of 2008 and 2009 supply demand balances.

MTBE is still considered environmentally unfriendly following the US concern due to leaks into groundwater system. MTBE is no longer a favourite blending stock in the US, Japan, Taiwan, New Zealand and Australia. MTBE usage as blending component for gasoline has been quickly replaced by other anti-knocking agent such as ethanol, another oxygenate for octane booster. Other popular blending components are toluene, xylenes, ETBE and TAME instead.

World Health Organization in its report has suggested that there has been insufficient evidence to classify MTBE as a carcinogen, but with global perception for MTBE remains, it is unlikely that the market outlook for MTBE will get anywhere in the balance area.

The wake of biofuels and ethanol production all around the world has even reduced the dependence on fossil fuels including MTBE. In Thailand for example, policy makers are curbing MTBE usage due to economic and political factors. Thailand advices the industry to use Gasohol - gasoline blended with 10% locally-produced ethanol.

The biggest hit is the petrochemical industry that uses MTBE as a feedstock such as methyl methacrylate or MMA producers. MMA monomers are transformed into transparent Polymethyl Methacrylate or PMMA which is a nice glass replacement, largely used for aquarium manufacturing. MTBE consumption in Asia's petrochemicals sector is expected to skyrocket with estimated over 200 ktpa capacity addition which would increase demand of MTBE in the region in 2008. The jump in demand comes from South Korea and Singapore.

With MTBE price skyrocketing, gasoline blenders in Asia are looking at other alternatives for gasoline blending, reducing the threat of high price. However, it seems that MMA producers are left with hand-tight.

Petrochemical Deals: PETRONAS Acquiring Star Energy

Petronas International Corporation has announced that it has successfully received valid acceptances of Star Energy Share by acquiring approximately 97.56% in value and voting rights of Star Energy Group PLC. The acquisition was done through PETRONAS subsidiary, Petronas International Corporation Ltd (PICL)

It is expected that the full transfer of Star Energy Shares in accordance with the compulsory acquisition notices will happen by March 2008.

Petrochemical Plant: Epichlorohydrin Plant in Thailand

Thailand is planning to build an epichlorohydrin plant. The epichlorohydrin plant was considered as "green friendly" chemical plant with total cost in the range of $200 million using Solvay's technology.

The EPH plant would be able to produce 100 ktpa epichlorohydrin for epoxy resin production. The green friendly chemical plant tagname comes from the feedstock for the plant which will use 110 ktpa of glycerin as the raw materials, a renewable source from biodiesel by-products.

The step was seen by analysts as a good venture into not only renewable petrochemicals for Thailand but also expanding Mab Ta Phut petrochemical complex. Solvay is ranked no four as world's largest producer of ephicholorohydrin.

Petrochemical News: BASF Becoming European Company

BASF has completed on its European Company status, changing the name of the company from BASF to BASF SE (Societas Europea). The company had also established BASF Euaropa Betriebsrat consisting 23 members from 12 European countries. BASF SE now has 12 boardmembers representing equal half for shareholders and employee representatives.

The European status would make BASF SE in the near future incorporation of more European employees especially in the area of EU cross border information and employees consultation and rights.

Petrochemical News: EU Banning Biofuels Import

More and more countries are eyeing European Union (EU) stance on biofuels as development of banning of biofuels into EU countries are in talks. The EU is in the process of drafting a law that will propose on the ban imports of certain biofuels. If successful, the law would stop imports of crops cultivated in forests, wetlands and grasslands biofuels. The legislation, backed by environmentalists is due to proliferation of greenhouse gas emissions by reducing natural forests for biofuels plants.

The new EU legislation would monitor Europe's biofuels from crops such as rapeseed and imports of palm oil from South-East Asia, mostly Malaysia, Indonesia and Thailand and soya from Latin America and ethanol from Brazil. The ban would most likely impacted palm oil imports for biofuels on the basis that growing the crops for fuel can harm the environment.

Petrochemical Disaster: China Sulphur Warehouse Incident

A sulphur warehouse in Kunning, China exploded killing seven people and injuring 32 people. The Yunnan Yuntianhua International Chemical sulphuric acid warehouse happened on 14th January 19:50 GMT during unloading of the sulphur powder into the warehouse.

Luckily the production facility with capacity of 1.39 mil tonnes per annum of sulphuric acid was not affected.

Petrochemical News: China to Triple Methanol Export

China is on its way to become a prominent methanol exporter with methanol export has tripled with added capacity of 570 ktpa. China exports its methanol to South Korea , Taiwan, South-east Asia, US and Europe.

China's CNOOC-Kingboard Chemical’s produces 600,000 ktpa capacuty methanol unit and Inner Mongolia Boyuan United Chemical’s completed its two units with total capacity of 1 million tonnes/year in 2006. The large figure will be tripled in 2008 and continue to increase until 2009 with large scale methanol units are on their way.