Hengyi plans polymer, petchem units in Brunei expansion

Market: Petrochemicals
09/02/21

China's private-sector Hengyi Petrochemical is planning to add a 1.65mn t/yr naphtha cracker, 1.05mn t/yr polyethylene (PE) plant and 1mn t/yr polypropylene (PP) plant as part of a second phase at its refinery and integrated petrochemicals project in Brunei, with completion targeted for 2023.

Zhejiang province-based Hengyi has a 70pc stake in the project at Pulau Muara Besar, with the Brunei state owning the remaining 30pc.

The expansion will give Brunei its first polymers plant. Hengyi will use Univation's Unipol technology for the PE plant, which will be able to produce a broad range of high-density polyethylene and linear low-density polyethylene grades. It will use Lummus' Novolen technology for the new PP plant.

Hengyi is also planning to expand upstream refining capacity by 280,000 b/d and add more downstream petrochemicals units at Pulau Muara Besar. It plans to construct a 1.65mn t/yr ethylene cracker as well as 1.2mn t/yr mono-ethylene glycol, 800,000 t/yr benzene, 2mn t/yr paraxylene (PX), 2.5mn t/yr purified terephthalic acid (PTA) and 1mn t/yr polyethylene terephthalate (PET) plants in the second phase.

Hengyi commissioned a 175,000 b/d refinery in the first phase of project in late 2019. The refinery can produce over 120,000 b/d of oil products, while the project's petrochemical complex can now produce up to 500,000 t/yr of benzene and 1.5mn t/yr of PX. The PX is consumed by Hengyi's PTA production in China.

The Brunei project is the largest overseas investment by a private-sector Chinese firm, Hengyi said.

Yisheng Petrochemical, a 50:50 joint venture between Hengyi and fellow private-sector firm Rongsheng Petrochemical, is China's largest PTA and PET bottle chip manufacturer. Yisheng operates around 13.6mn t/yr of PTA capacity in Ningbo, Dalian and Hainan, along with 2.6mn t/yr of PET bottle chip capacity in Dalian and Hainan. Its capacity will increase further with the imminent start-up of new PTA plants this year.

By Yee Ying Ang and Suzi Shin

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27/12/24

Viewpoint: Consolidation looms in US methanol

Houston, 27 December (Argus) — The sale of Netherlands-based OCI's methanol production assets to rival producer Methanex is set to shift the market, with US methanol production most affected by the move. Methanex in the third quarter of 2024 announced the $2bn acquisition, which is expected to close in the first half of 2025. The boards of directors of both companies and OCI's shareholders approved the transaction, but it is subject to regulatory approvals. OCI operates the 1mn t/yr OCI Beaumont plant and is a 50:50 partner in Natgasoline, a 1.7mn t/yr joint-venture plant between OCI and Proman. Methanex operates three plants in the US, all in Geismar, Louisiana. These plants carry a collective 4mn t/yr capacity and represent one-third of total US methanol capacity. At front and center of the acquisition is the Natgasoline plant in Beaumont. Natgasoline, when operational, represents 14pc of domestic production. The plant opened in 2018, and throughout those six years, the plant has seen its share of operational issues. The most recent was a fire at the reformer unit in early October, resulting in a complete shutdown lasting nearly three months. When the deal was announced, Methanex made it clear that the transaction was subject to approvals by OCI shareholders, as well as a pending legal decision between OCI and Proman. "If it is not settled within a certain period, Methanex has the option to carve out the purchase of the Natgasoline joint venture and close only on the remainder of the transaction," the company said in September. Methanex and OCI declined to give further details, as the deal is still pending. Proman did not respond to a request for comment. If it goes through, the acquisition would result in the exodus of OCI from the US methanol market. But the issue of liquidity in the US spot barge market is also looming. Market participants said OCI is a frequent buyer when the Natgasoline plant goes down. In October, when Natgasoline was completely shut down, 340,000 bl of methanol moved for delivery at ITC, the terminal on the Houston Ship Channel where methanol is exchanged, according to Argus data. Market participants expect liquidity to be about the same until some time after the deal closes. When a plant goes down, a producer will emerge in the spot market for purchases. In the longer term, there are some questions around international distribution and where US methanol exports find a home. Methanex is a major exporter to Asia, whereas OCI sells into the European market. The low-carbon methanol sector will also experience some shakeup. OCI is a major participant in the bio-methanol space, selling volume into Europe. Methanex produces carbon-captured methanol, also known as blue methanol, which has not penetrated the EU market. By Steven McGinn Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Viewpoint: PVC expansions loom over US market in 2025

27/12/24

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27/12/24

Viewpoint: PVC expansions loom over US market in 2025

Houston, 27 December (Argus) — US polyvinyl chloride (PVC) market participants expect some domestic demand growth in 2025, but recent expansions could limit price increases in both the domestic and export markets. Most producers are optimistic PVC demand will grow at a strong rate in 2025, with some expecting growth above 5pc. But producers also caution that greater volume sales may not translate into higher prices because of additional capacity brought on line in the second half of 2024. Formosa added 130,000 metric tonnes (t) of PVC capacity to its Baton Rouge, Louisiana, plant in the third quarter, and Shintech added 380,000t/yr of PVC capacity to its Plaquemine, Louisiana, plant in the fourth quarter. Producers' concerns that higher sales volume would not translate into higher prices have proven true so far. Domestic PVC sales have grown as much as 8pc in the year through November, according to producers, but PVC contract prices in November were unchanged from January at 57.5¢/lb after some fluctuations during the year. Prices fell by 2¢/lb in the months following Formosa's expansion. Contracts for December, which will represent the month following Shintech's expansion, have not yet settled. Buyers have more muted expectations than producers for demand in 2025, further adding to the modest price outlook for the coming year. This is partly because many buyers believe interest rates that recently began to fall will take time to stimulate housing construction, potentially delaying a rise in PVC demand until late 2025 or even 2026. Lower interest rates can reduce homebuilders' borrowing costs and ease mortgage rates for prospective homebuyers. The cautious outlook was already pervasive among PVC buyers and converters before the US Federal Reserve in December reduced its forecast for 2025 interest rate cuts to half a percentage point, down from a full point in the September projections. Reliance on exports US producers may need to rely on exports to absorb the new capacity, a trend that has kept export prices low since August. US PVC export spot prices were at $700/t fas on average in late September after Formosa ramped up its capacity expansion, compared to an average of $750/t fas a year earlier. After Shintech's expansion, export prices fell to $673/t fas on average by late-December, compared to $695/t fas on average during the same time in 2023. While spot export prices initially had a floor of $670/t fas after both expansions, the global environment has become even more competitive at year-end with some overseas producers struggling to move volume, according to traders. A greater reliance on exports at a time when several countries recently implemented anti-dumping duties on US material could make for a difficult market in 2025, with pricing needing to come down to start the year if there is too much volume on hand, traders said. India recently announced preliminary anti-dumping duties on US PVC from 80-150pc, with duties exceeding $300/t for some US producers. Brazil in October raised import taxes on PVC from 12.6pc to 20pc. The European Commission last month confirmed duties on US-origin PVC between 58-71.2pc, and the UK is considering duties from 38.4-56pc. The Indian duties in particular could pose a challenge to US exporters because US producers and traders had become reliant on Indian customers as an outlet for US supply. India is one of the few countries for US exports with steady demand growth. Should US exporters lose market share in India, there are no immediate alternatives to offset that loss. By Aaron May Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Viewpoint: US PGP prices set to rise in 2025

26/12/24

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26/12/24

Viewpoint: US PGP prices set to rise in 2025

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Viewpoint: US BD demand awaits 1Q rebound as risks loom

24/12/24

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24/12/24

Viewpoint: US BD demand awaits 1Q rebound as risks loom

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Viewpoint: US LPG cargo premiums poised to fall

23/12/24

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23/12/24

Viewpoint: US LPG cargo premiums poised to fall

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