Saudi Arabia ramps up efforts to find more gas, but costs in the region may already be moving up
The story is almost as old as the hills: Saudi Arabia is running out of ethane supplies as the US enjoys an abundance of the gas, thanks to shale.
But 80% of Saudi Aramco's capital expenditure on domestic hydrocarbons exploration is being spent on searching for more gas, perhaps the highest percentage ever, according to a Middle East-based chemical analyst.
Saudi Arabia is replacing oil with gas for its power generation
Copyright: RexFeatures
And in a further indication of the dash for gas, King Abdullah, Saudi Arabia's ruler, recently gave instructions that gas should be used instead of oil for Saudi power generation, said Leslie McCune, who runs the consultancy Chemical Management Resources, which specialises in the Middle East.
"The opportunity cost of burning crude oil is clearly its export value," says McCune. "This value is huge, given today's benchmark price of Brent crude oil of around $117/bbl and Aramco's extraction costs of $2-$5/bbl. Extraction costs for gas are three times higher but the net saving of not burning crude oil would still be $70/barrel."
Hassan Ahmed, analyst at Alembic Global Advisors, contends that the cost of gas extraction from non-associated fields in Saudi Arabia "may be as much as $2/MMBtu - well north of the $0.75/MMBtu the petrochemical industry in Saudi Arabia sources its gas at".
DRAMATIC COST UPTICK
Saudi Arabi, Qatar and Iran are "witnessing a dramatic uptick in raw material prices - be it due to the dearth of natural gas or structural country specific changes", says Ahmed.
"These changes come at a time when, stemming from the availability of low cost shale gas, the US industry is moving down the cost curve. We believe the market is still not fully appreciating Middle Eastern producers' move up the cost curve," he adds.
McCune noted that there is a great deal of excitement about a shale gas field that has been discovered in Waad Al-Shamal (Arabic for "the promise of the North") in Saudi Arabia, north of Medina.
"Early studies indicate that the field is wet. However, if it is to be exploited, large amounts of purified water is required, which is not plentiful in Saudi Arabia," he said. "One way around this problem is that there is an existing water pipeline running from the petrochemicals city of Yanbu, on the west coast, to Medina. It might be possible to extend the pipeline to where the shale-gas reserves are located in the north of the Kingdom."
WINDOW OF OPPORTUNITY
Despite all the potential for new gas supplies in Saudi Arabia, observers believe the US still has a window of opportunity.
The only cracker due to start-up in Saudi Arabia over the next five years is Sadara, the joint venture between Saudi Aramco and Dow Chemical. Scheduled to be fully on stream in 2016, the cracker will run on 70% liquid and 30% gas feedstock.
While ethane is priced in line with local natural gas prices, "propane and butane are priced at a 30% discount to Japanese naphtha to comply with [World Trade Organization] rules", noted Ahmed.
"Herein lies the problem - in the current energy price environment, while a pure ethane-based producer in Saudi Arabia remains most advantaged, mixed feed facilities in Saudi Arabia generate economics which are now disadvantaged relative to US ethane-based producers," Ahmed said.
In the US, six new 100% gas-fed crackers are scheduled to come on stream over the next five years, in 2016-2017, with another due around 2019-2020.
The new crackers, expansions of existing facilities and restarts of previously shut-down facilities could add 10.2m tonnes/year to US ethylene capacity - a 38% increase.
FUTURE COST OF GAS
Meanwhile, as excitement builds over the potential for more gas supplies in Saudi Arabia, concern is also growing over the future cost of gas.
"Rumours circulated recently of an increase in Saudi ethane prices from $0.75/MMBtu to $2-3/MMBtu. One producer is said to have lodged a protest." said McCune.
Jamal Malaikah, chief operating officer and president of Yanbu-based polypropylene (PP) producer National Petrochemical Industrial Co (NATPET), was quoted in the UAE's National newspaper on 7 January as saying that this was the "wrong time" for the Saudi government to re-examine gas costs.
"We still have an advantage in Saudi Arabia but we believe that advantage will be affected by the sheer volume of shale gas in the US," he said.
NATPET's PP production is based on propylene via propane de-hydrogenation (PDH).
Propane and butane pricing in Saudi Arabia is based on prevailing CFR (cost and freight) naphtha prices in Japan minus a discount of around 28%.
"The discount might be reduced slightly, but I believe it will never be removed entirely," said McCune.
SOURCE ICIS News - For internal use only
Styrindo Mono Indonesia has brought forward the maintenance for its 250,000 tonne/year No.2 styrene monomer (SM) facility by around a month, a source close to the company said.
The unit, located in Merak, was shut in early February for a turnaround which was initially set for the first half of March.
“The catalyst was performing poorly so we decided to start the turnaround sooner”, the source said.
The unit is expected to restart in mid-March.
The company is running its 100,000 tonne/year No.1 SM unit at the same location after it emerged from maintenance shutdown in mid-January.
SM is a liquid chemical used to make plastic resins such as polystyrene (PS) and acrylonitrile-butadiene-styrene (ABS), as well as synthetic rubbers such as styrene-butadiene-rubber (SBR) and styrene-butadiene-latex (SBL).
SOURCE ICIS News - For internal use only
Styrene is an important monomer for the production of polystyrene, its derivatives, and (block) co-polymers. The catalytic dehydrogenation of ethyl benzene is the major method for its synthesis. The process is carried out at temperatures above 600 °C with promoted iron catalysts in the presence of superheated steam. Due to its reversible and endothermic nature, a huge amount of energy is consumed.
Bernd Ondruschka and colleagues, Friedrich-Schiller University Jena, Germany, developed purification and ozonation protocols for the functionalization of multiwalled carbon nanotubes (MWCNT) to modify their surface with respect to increasing the catalytic activity of the samples in the oxidative dehydrogenation of ethyl benzene (ODEB) to styrene. The modified MWCNT exhibit significantly improved conversion and styrene selectivity in the ODEB reaction. For instance, ozonation led to MWCNT-based catalysts revealing conversion and selectivity values of 80% and 92 %, respectively.
An increase in surface oxygen accompanied by high catalytic activity observed on the catalysts suggests that oxygen-containing groups are the dominant active sites for the reaction.
SOURCE ChemPubSoc Europe
OXIS Energy and GP Batteries International announced a joint manufacturing agreement to accelerate the commercialization of OXIS’ proprietary Lithium Sulfur (Li-S) battery systems for use in different energy sectors of the world market. OXIS will benefit from the GP Batteries’ worldwide presence in developing sales of its Li-S polymer battery systems into the defence, automotive and solar panel markets. The manufacturing strength of GP Batteries will provide a solid basis for the mass production of these Li-S cells.
OXIS and GP Batteries have agreed to establish a joint Project Steering Board which will review the improvements in the developing technology and which will be presented to their joint customers. It is expected that GP Batteries will become a leading supplier of the OXIS Lithium Sulfur polymer battery in the future.
SOURCE ChemistryViews
South Korea’s LG Chem has firmed up its turnaround schedule for its crude acrylic acid (AA) lines for this year, a company source said on Wednesday.
LG Chem operates four crude AA lines with a total nameplate production capacity of 353,000 tonnes/year.
The company aims to shut its No 1 crude AA line in March for 14 days, the source said.
LG Chem plans to shut its No 2 and No 3 crude AA lines in May and April respectively for 14 days, the source said.
The company’s No 4 line will be shut in June, for approximately two weeks as well.
All shutdowns are for routine maintenance works, the source added.
SOURCE ICIS News - For internal use only
RELEASED ON 20/02/13 (DD/MM/YY)
Developing countries accounted for the first time last year for more than half the global biotech crop area, though the United States remains the primary nation making use of genetically altered crops, according to an industry report.
"The developments we will see over the next five years will be in favor of developing countries. That is where the mouths are that we have to feed," said Clive James, chairman of the International Service for the Acquisition of Agri-Biotech Applications (ISAAA), which issued the report.
ISAAA is a pro-biotech industry organization and annually releases a survey of biotech crop plantings around the world.
Monsanto Co., DuPont, Syngenta and other global chemical and seed companies have over the last decade and a half rolled out a variety of genetic traits for agricultural seeds. The most popular genetically modified (GM) traits alter crops like corn, soybeans and cotton so that they can be sprayed with weed killer and still thrive, or resist damaging pests.
Many new types of biotech crops have "stacked traits," or multiple enhancements. The seeds are generally much more costly than conventional seeds, but are marketed as helping boost productivity.
Critics say biotech crops lead to increased pesticide use and environmental damage and have not been proven safe for human and animal consumption, but backers say the crops are no different to normal crops.
ISAAA's report issued Tuesday showed a record 170.3 million hectares of biotech crops were grown around the world last year, up 10.3 million hectares from 2011.
The number of farmers using biotech crops also rose to 17.3 million, up 600,000 from 2011, the report said.
And for the first time, thanks to Brazil's appetite for biotech corn and soybeans, developing countries accounted for more than half of the global biotech crop area, 52 percent, while industrial countries accounted for 48 percent.
In Brazil, biotech crops were planted on 36.6 million hectares in 2012, up 6.3 million hectares from 2011, and approximately 21 percent of the global total.
U.S. farmers continued to be the chief users of biotech crops, however, planting 69.5 million hectares in 2012, up from 69 million in 2011, and roughly 41 percent of the global total.
Argentina planted 23.9 million hectares, or 14 percent of the global total area last year, and Canada had 11.6 million hectares planted to biotech crops, or 7 percent of the global total.
SUDAN TRIES BIOTECH CROPS
Sudan planted biotech crops for the first time last year, sowing about 20,000 hectares of biotech Bt cotton, making it the fourth country in Africa, after South Africa, Burkina Faso and Egypt, to commercialize a biotech crop.
Cuba also planted biotech crops for the first time as farmers there seeded 3,000 hectares of hybrid biotech maize.
Not all countries where farmers have been trying biotech crops were expanding their use. Colombia grew 28,172 hectares of biotech cotton in 2012, down from 49,333 hectares in 2011.
Also, Romania, which planted more than 7,000 hectares of Bt cotton in 2008, planted only 217 hectares in 2012. Prior to its entrance into the European Union, Romania planted more than 100,000 hectares of biotech crops, the report said.
And Egypt planted 1,000 hectares of BT maize in 2012, down from 2,800 hectares in 2011.
The European Union continued to be a difficult market for biotech crop expansion efforts. Though five EU countries planted Monsanto's biotech maize in 2012, BASF ceased commercial operations for biotech crops in the EU last year citing market resistance.
"The EU region is particularly difficult to predict because the issues are not related to science and technology considerations but are of a political nature and influenced by ideological views of activist groups," the ISAAA report states.
The three-year outlook for biotech crops globally was "cautiously optimistic", the report said. Biotech sugarcane is seen as likely to be available in the near term and enhanced Vitamin A rice, transfat-free soybeans and omega-3 rich soybeans are seen becoming prevalent, ISAAA said. The world's first biotech wheat is also expected by 2020, the group said.
SOURCE Reuters News
Evonik's owners on Friday announced they will revive preparations for a planned listing of the Germany-based specialty chemicals company’s shares on the Frankfurt Stock Exchange.
Owners RAG Foundation and private equity firm CVC Capital Partners said the move has been prompted by “the improved capital market environment as well as investors' growing interest in the shares of successful companies”.
As a first step, RAG and CVC have placed a stake of less than 10% of Evonik with selected German and international institutional investors.
The purchase share price was not disclosed, however the owners said it was in line with the market valuation of European peers and significantly exceeded the price indications of an aborted listing originally planned in June 2012.
The companies added that Evonik, supported by a broader group of shareholders, will continue to pursue its growth strategy and plans investments exceeding €6bn ($8bn) between 2012 and 2016. “A substantial amount of these funds will be dedicated to fast-growing emerging economies,” they said.
"For RAG Foundation, the sale of shares in Evonik has two advantages: We have achieved a good result while making further headway towards the planned listing of the company," said Werner Muller, chairman of RAG, which holds 74.99% of Evonik.
Christian Wildmoser, partner at CVC, said: "After four and a half years of close cooperation, CVC and RAG Foundation have used this private placement to open Evonik to responsible new investors. Interest was already very strong at the time of the planned listing in 2012, when market conditions in the end were too volatile.
"The private placement puts us in a more positive position towards achieving an intended stock exchange listing with less effort and makes us less dependent on what is a volatile market environment."
In June 2012, RAG decided to cancel its plans for Evonik's initial public offering (IPO). RAG at the time said under uncertain capital market conditions – in particular with regard to further developments in the eurozone - it could not achieve IPO proceeds that reflect the company's value.
RAG is a German coal foundation. Proceeds from Evonik’s IPO will go towards paying for environmental and other costs related to the closure of coal mines in North Rhine-Westphalia state. It also ended IPO preparations in 2008, again because of unfavourable capital market conditions at the time. Instead, RAG sold a 25.01% stake of Evonik to CVC.
SOURCE ICIS News - For internal use only
RELATED STORIES
RELEASED ON 19/02/13 (DD/MM/YY)
DuPont, the world’s second largest seed producer after Monsanto has seen impressive growth in agricultural science products in recent years driven by strong industry fundamentals and increased adoption of genetically modified (GM) seeds. Biotech crops are considered the fastest adopted crop technology in the history of modern agriculture. Since the commercialization of biotech crops in 1996, the global area under cultivation of these crops grew impressively at a CAGR of 37% to 160 million hectares in 2011 and the positive trend still continues. [1]
The key factors driving this sharp growth are higher yields and better traits like increased tolerance to herbicides, pests and specific environmental conditions. These factors have also been responsible for driving increased R&D expenditures by companies operating in this segment. As such, the business strategy of players in the GM seeds market has been to invest heavily in R&D of new seed varieties and broadly license the successful patents to other players. Monsanto, the market leader in GM seeds, has been most successful in this business approach led by its Roundup Ready technology, while DuPont’s flagship brand of seeds, Pioneer, has not been as successful in this respect.
Herbicide Tolerance Optimum GAT Failure
Glyphosate-based herbicides are used widely for weed control because they are non-selective like the Roundup marketed by Monsanto; however, the chemical also negatively impacts the crop. The Roundup Ready (RR) variety of GM seeds made by Monsanto was specifically engineered to be tolerant to glyphosate. This variety allowed farmers to spray the herbicide over the top of the growing crop, killing all the weeds without affecting the crop. The RR variety of seeds was very successful and went on to become the world’s most widely grown GM seed.
More than 90% of soybean grown in the United States contains Monsanto’s Roundup Ready gene. In attempts to create its own variety of glyphosate resistant seeds, DuPont was alleged to have used the RR gene. In May 2009, Monsanto filed a patent infringement suit against DuPont. The suit was aimed at forcing DuPont to shelve a herbicide-resistant Optimum GAT soybean seed, which used Monsanto’s RR gene. In July 2012, the eight-person jury in the United States District Court in St. Louis awarded $1 billion in damages to Monsanto. [2]
Advantage in the Drought Resistant Category
The drought resistant trait is another technology expected to be a huge playground for the GM seed industry. As of now, DuPont seems to have a slight advantage in this game as it is the first to announce performance results of its Optimum Aquamax corn hybrid. The company announced that its Optimum Aquamax seeds provided a yield advantage of almost 9% in water-limited environments based on 3,606 comparisons of average yield results with other competitive hybrids in the market. According to DuPont, Optimum Aquamax showed a higher yield in 69% of comparisons under water-limited conditions. [3] DuPont also introduced new varieties of soybean seeds earlier this year. (See: Dupont Looks At Extending Market Share With New Soybean T Series Seeds)
See Our Complete Analysis for DuPont
The global corn, soybean and other seed market is fast evolving led by advancements in GM seed technologies, which implies that innovation holds the key to success of any player in the market. If DuPont is able to leverage this rapidly growing GM seeds market through innovative seed varieties, it will not only help the company extend its market share but also improve profitability through additional patent licensing revenues.
We currently forecast DuPont’s market share to grow marginally by 2% over our forecast period, primarily led by consolidation in the global seed industry. However, if the company is able to expand its market share to around 30% over the same period, it would imply 10% upside to our current price estimate.
SOURCE http://www.trefis.com
RELEASED ON 28/02/13 (DD/MM/YY)
By a News Reporter-Staff News Editor at Agriculture Week -- Valent BioSciences Corporation (VBC) announced that the U.S. Environmental Protection Agency has granted registration approval for PoMaxaTM Plant Growth Regulator (PGR). PoMaxa is a potent auxin-based product that maximizes thinning and harvest management programs on apples and pears and will also increase return bloom in both apples and pears.
The newest addition to VBC's biorational portfolio of pome fruit products, PoMaxa is based on the active ingredient 1-Naphthaleneacetic acid and offers growers the convenience of multiple uses in a single, easy-to-use formulation.
"The addition of PoMaxa to our product portfolio gives pome fruit growers another powerful tool to get the best results from their PGR program," said Johan Pienaar, global business manager of the PGR business unit for VBC. "The versatility of this product and the outstanding results we've seen through our intensive trial work adds up to tremendous potential in 2013 and beyond."
Pienaar says PoMaxa was developed specifically for use in a program with VBC plant growth regulators MaxCel(R) and ReTain(R), both industry standards in the production of high quality pome fruit. PoMaxa is used with MaxCel in early season applications to maximize thinning, fruit size and return bloom. Later in the season, PoMaxa is used with ReTain to maximize harvest management potential without sacrificing fruit quality or storageability.
"The convenience of having one product and one formulation with multiple uses is definitely a plus for growers," Pienaar says. "The development of PoMaxa is a testament to what's possible when industry leaders come together to find ways to improve productivity and efficiencies in an environment where fruit quality is still king, and is the result of our commitment to helping growers sustainably improve productivity, efficiency, fruit quality and value."
Sales of PoMaxa will begin immediately through VBC's sister company, Valent U.S.A. Corporation. Valent's team of technical support and sales representatives have worked closely with VBC throughout the development process and are positioned to assist its customers in the adoption of PoMaxa throughout pome fruit growing regions of the U.S. About Valent BioSciences Corporation About Valent BioSciences Corporation: Headquartered in Libertyville, IL, Valent BioSciences is a subsidiary of Tokyo-based Sumitomo Chemical Company. Valent BioSciences is the worldwide leader in the development, manufacturing and commercialization of biorational products, with sales in 95 countries around the world. Valent BioSciences is an ISO 9001:2008 Certified Company. For additional information, visit the company's website at www.valentbiosciences.com. About Valent U.S.A. Corporation Valent, headquartered in Walnut Creek, Calif., develops and markets products in the United States and Canada that protect agricultural crops, enhance crop yields, improve food quality, beautify the environment and safeguard public health. Valent products include a well-known line of quality herbicide, insecticide, fungicide and plant growth regulator products for agricultural, seed protection and professional use. It differentiates itself from its competitors as a leader in marketing and sales of both biorational and traditional chemical products.
SOURCE Agriculture Week
Due to rising costs, particularly for raw materials, Evonik Industries sees the need to adjust the prices of methacrylate monomers.
The sales prices in Europe for products from the Acrylic Monomers Business Line will increase by €120/metric ton as of March 1, unless otherwise contractually specified.
SOURCE Chemeurope
China’s Qixiang Tengda Chemical is planning to start up its new 50,000 tonne/year butadiene (BD) plant at Zibo in Shangdong province in March, a company source said on Friday.
The plant consists of two lines with equal capacity, he said.
The company currently operates a 100,000 tonne/year BD plant at the same site.
SOURCE ICIS News - For internal use only
Nippon Shokubai Indonesia plans to shut its 60,000 tonne/year crude acrylic acid (AA) plant located at Cilegon, West Java in June for its maintenance, a company source said on Thursday.
The company plans to shut the unit for approximately three weeks, the source said.
“The plant was recently shut for a short 10-day turnaround earlier in the year, and the maintenance in June usually takes longer,” the source added.
According to the source, Nippon Shokubai Indonesia usually shuts the unit twice a year for maintenance.
SOURCE ICIS News - For internal use only
South Korea's Taekwang Petrochemical shut its 290,000 tonne/year acrylonitrile (ACN) plant in Ulsan on 20 February for a scheduled turnaround, a company source said on Thursday.
The plant is expected to restart on 10 March, according to the source.
The ACN plant was running at reduced rate of around 80% amid higher feedstock costs.
Asia’s ACN prices were assessed as stable at $1,900-1,980/tonne (€1,425-1,485/tonne) CFR NE Asia in the week ended on 15 February, compared with the previous week, according to ICIS.
SOURCE ICIS News - For internal use only
RELATED STORIES
Taekwang reduces ACN plant capacity & plans turnaround
Isagro SpA announced that it has entered into a regional commercial agreement with Syngenta AG for the exclusive supply and distribution of Remedier, a biological fungicide for the control of soil-borne diseases in vegetables and ornamentals based on Trichoderma asperellum and Trichoderma gamsii technology and developed by Isagro's research. The agreement will allow Isagro to gain access to Syngenta's distribution network, sales and marketing experience, while enabling Syngenta to strengthen its offer of integrated solutions and its own range of fungicides by earning the right to distribute Remedier, under its own trademark on an exclusive basis, in countries of Europe, Middle East and Africa. In such countries Isagro will exclusively supply Syngenta, who will be the sole distributor and collaborate in registration activities with the product. Further terms of this commercial agreement were not disclosed.
SOURCE Reuters
C'est le même véhicule qu'Autolib', de couleur bleu marine, et équipé de la même technologie de batterie LMP (lithium métal polymère) qui devrait être proposé à la vente.
La voiture électrique
Bluecar, qui sillonne l'agglomération parisienne depuis le lancement il y a dix-huit mois du libre-service
Autolib', va être disponible à la vente au prix de 12.000 euros, a indiqué Vincent Bolloré, PDG du groupe
Bolloré.
«Après 18 mois, après plus de 15 millions de kilomètres réalisés par nos abonnés d'Autolib', on a décidé de la mettre en vente pour ceux qui ont envie», a indiqué Vincent Bolloré sur RTL.
«C'est 12.000 euros après le bonus écologique», a-t-il ajouté, en amont d'une présentation de l'offre à la presse dans la matinée.
Vincent Bolloré a rappelé le «grand succès commercial» d'Autolib', qui compte plus de 65.000 abonnés en région parisienne. Le service offre «4000 places pour pouvoir recharger les voitures et que l'on peut réserver à distance», a-t-il souligné. «Vous pouvez (...) dire “j'ai envie d'aller faire des courses à Opéra ou d'aller au cinéma sur les Champs-Élysées, je réserve ma place”, et on vous garde une place», a-t-il expliqué.
La Bluecar est une petite citadine, de couleur «aluminium gris brossé» pour Autolib', qui dispose d'une autonomie de 250 km en ville et 150 km au-delà. Sa vitesse est limitée à 130 km/h, avec une accélération de 0 à 60 km en 6,3 secondes. Une source proche avait indiqué mardi à l'AFP que c'est le même véhicule, de couleur bleu marine, et équipé de la même technologie de batterie LMP (lithium métal polymère) qui devrait être proposé à la vente.
«Tout le monde voit bien qu'on a besoin dans les villes d'avoir moins de pollution. (...) La voiture électrique, c'est évidemment l'avenir parce que pas de bruit, pas d'odeur», a relevé M. Bolloré. «Ça va marcher forcément, en tout cas, c'est ce que je crois».
«On a fait Paris, (...) demain on va essayer d'aller dans d'autres villes et puis dans d'autres villes. À la fin, vous aurez des réseaux de bornes électriques partout», a-t-il ajouté. «C'est un avenir en ville parce que l'autonomie de la voiture électrique ne sera jamais au-delà de 200-250 kilomètres.»
Autolib' a représenté un tiers des 6000 ventes de voitures électriques en France en 2012, selon M. Bolloré.
http://www.lefigaro.fr/societes/2013/02/21/20005-20130221ARTFIG00507-la-bluecar- sera-vendue-12000-euros.php