ChemChina Announces Strategic Investment by Blackstone
China National Chemical Corporation (“ChemChina” 中国化工集団公司), a leading international diversified chemical company, and The Blackstone Group today announced a strategic partnership to build a global leader in the specialty chemical industry.
The Blackstone Group will invest up to US$ 600 million into China National Bluestar (Group) Corporation (“Bluestar”藍星グループ), a wholly-owned subsidiary of ChemChina, for a 20% stake. Antony Leung and Ben Jenkins, a former director of Celanese, will join the board.
Commenting on the deal, Mr. Ren Jianxin, Chairman, ChemChina stated, “We are excited to have Blackstone as a long term partner. Given Blackstone’s extensive and successful experience in the global chemical industry, notably past ownership of Celanese Corp. and Nalco Company, this investment will assist Bluestar in its growth and expansion.
Antony Leung, Blackstone’s Chairman of Greater China, stated, “We believe that continued economic growth will drive long term growth in China’s chemical sector. It is a privilege to invest alongside a superb management team in a leading company in one of China’s key industrial sectors.”
Ben Jenkins, Head of Blackstone Asia Pacific Private Equity, added, “Bluestar’s focus on innovation and technology has made it the leading specialty chemical company in China. We are looking forward to using our global network to accelerate and extend growth of the Company both in China and abroad.”
UBS AG acted as financial advisor to ChemChina, and Merrill Lynch acted as financial advisor to Blackstone on this transaction.
The transaction is subject to final regulatory approvals.
ChemChina, a large State-owned enterprise, was established in 2004 following the restructuring of certain enterprises directly subordinate to the former Ministry of Chemical Industry. After three years’ development, it has become a leading chemical group in China. ChemChina has 92 production and operation enterprises, and 24 scientific and research and design institutes.
China National Bluestar (Group) Corporation is a core part of ChemChina’s subsidiary companies. Bluestar was founded twenty three years ago by Mr. Ren Jianxin with a group of seven individuals taking a loan of RMB 10,000 in Lanzhou. Bluestar is a leading manufacturer of new material and specialty chemical products. For detailed information, please visit www.china-bluestar.com
About The Blackstone
The Blackstone Group is a leading global alternative asset manager and provider of financial advisory services. Its alternative asset management businesses include the management of corporate private equity funds, real estate opportunity funds, funds of hedge funds, mezzanine funds, senior debt funds, proprietary hedge funds and closed-end mutual funds. The Blackstone Group also provides various financial advisory services, including mergers and acquisitions advisory, restructuring and reorganization advisory and fund placement service.
China to restrict foreign capital in ethanol projects
China said Thursday it
would restrict foreign investment in the
corn-processing industry as one measure to address a
projected domestic supply deficit of corn in the the country by
In guidelines on the industry's development published by the National Development and Reform Commission on its website, the country's top economic planning agency said all new corn-processing projects and production expansion projects would have to be evaluated and approved by the relevant investment departments of the cabinet, the State Council.
Foreign investments in all corn-processing projects are in the restricted category, the NDRC guidelines said. The Chinese central government will not approve foreigners investing in new ethanol projects, nor will they be allowed to merge, acquire or restructure ethanol producers operating in China.
Any new corn-processing project plans which have been submitted to the government for approval, but have yet to start construction, should be called off, the NDRC said. The government would also tighten the evaluation of expansion projects which are being developed.
Corn processing typically involves separating corn into its four basic components -- starch, germ, fiber and protein. More intensive or deeper processing such as fermentation and enzyme treatment eventually converts some of the components into syrups, alcohol, ethanol and amino acids.
According to the NDRC, a big increase in corn production during the Eleventh Five-Year plan period of 2006-2010 was unlikely given the shrinking supply of arable land and water resource. It projected domestic corn output to reach 150 million mt in 2010, up 3.5% from 2006. Yet the country's corn demand would exceed 150 million mt by the end of the decade, up 14.3% from the 2006 level.
China's corn consumption rose from 112 million mt in 2000 to 127 million mt in 2005, at an average annual growth rate of 2.5%. But last year, consumption increased 5.5% year on year to 134 million mt, the NDRC said.
In 2006, 64.2% of the corn consumed was used for commerical feed production. The deep-processing sector used 35.89 million mt, or 26.8%, of last year's total. However, more significant was the deep-processing sector's corn consumption growth rate. It chalked up an accumulated 117.5% increase from 16.5 million mt just three years ago, the NDRC said.
Meanwhile, globally, the balance in corn supply and consumption also looks tight.
According to the NDRC, the world's corn output last year was 690 million mt, with China accounting for 21% of the total. However, while output was forecast to grow by almost 19% to 820 million mt by 2010, global corn consumption was also estimated at 800 million mt.
The global corn inventory was at a 20-year low of 93 million mt last year.
"It will be difficult for China to rely on the international market to solve our short [corn] supply problem in the deep-processing sector," the guidelines said.
Chinese corn deep processing industry like cornstarch, modified starch, corn ethanol and starch sugar industries
China to freeze approvals for corn processing projects for 3 yrs
China will freeze approvals for industrial corn processing for three years and suspend approved projects which have not yet started construction, the National Development and Reform Commission (NDRC) said.
The ban on so-called 'deep processing' of corn - involving the transformation of corn into industrial products like ethanol - comes amid concerns in China about the security of the food supply and the inflationary impact of biofuels which use grains as feedstock.
The commission said in a notice on its website that it will not 'in principle' approve new corn deep-processing projects until 2010.
The NDRC will also closely review the expansion plans of existing deep-processing projects which use corn.
During the early stages of the new policy, foreign companies will also be forbidden to invest in bio-ethanol production projects, and not allowed to acquire or invest in domestic bio-ethanol producers.
The NDRC said the development of deep-processing industries was excessively rapid in some areas, and the growth of production capacity has exceeded that of corn output.
In the 10th Five-year between 2001-2005, annual growth of corn consumption by the sector was 14 pct, against an annual growth of 4.2 pct in corn output.
Over the next three years, corn consumption by the deep-processing sector will be restricted to 26 pct of China's total corn consumption, the NDRC said.
China corn output in 2010 is expected to hit 150 mln tons, up 3.5 pct from the level in 2006, while market demand will be over 150 mln tons, up 14.3 pct from 2006.
The NDRC said that it will adjust corn export and import policies, with an export rebate adjustment on corn products to be studied.
The commission also proposed a reduction in corn exports and urged the import of more corn to ensure supply.
Manpower crisis likely to delay China's new ethylene projects
China's new ethylene,
polyethylene and polypropylene projects, scheduled to start up
between 2007 and 2011, are expected to face delays due to shortage of
Gao Chunyu, a senior engineer at China Petrochemical Consulting
Corporation, said Thursday afternoon.
Speaking at IBC's polyolefins outlook conference at the Shangri-la Hotel in Pudong, Shanghai, Gao said most of the new naphtha crackers were slated to start up over 2008-2009. The influx of new ethylene projects had resulted in most of the new crackers not being able to award engineering contracts on time.
Meanwhile, delay in the construction of China's new crackers affected downstream PE and PP projects, whose schedules were drawn up in tandem with the timeline for the new crackers. Crackers scheduled for large-scale expansion were also unlikely to complete construction on time, Gao said.
He added that naphtha crackers scheduled to be built in the Middle East and Southeast Asia were also likely to see delays as the shortage of chemical engineers was a global problem.
|CHINA'S NEW ETHYLENE PROJECTS (mt/year):|
September 12, 2007 Methanex
Methanex Completes Acquisition of 20% Interest in China DME Venture
Methanex Corporation announced today that it has purchased a 20% interest in a DME production and marketing company from China's XinAo Group for a purchase price of US$5.4 million, representing an investment in a 200,000 tonne per annum dimethyl ether (DME) plant near Shanghai. This plant is the first phase in XinAo's plans to potentially build up to a one million tonne per annum DME complex on the site. Through its interest in the company, Methanex has the ability to participate in future phases of the project. Construction of the phase-one plant has already commenced and is expected to be operational by November 2007. Under a separate arrangement announced last November, Methanex will supply up to 300,000 tonnes per annum of methanol for the production of DME at the phase-one plant.
DME, which is produced from methanol, can be blended by up to 15%-25% with liquefied petroleum gas (LPG) and used for household cooking and heating. DME can also be used as a clean burning substitute for diesel in transportation and as a clean fuel for power generation.
Methanex's President and CEO, Bruce Aitken, commented, "We are delighted with this exciting investment in the DME market, an emerging industry offering significant demand potential for our core methanol business. We are also very pleased to be entering into this project with XinAo Group, a first mover in the DME business and an established clean energy distribution company with an existing portfolio of commercial and residential customers in China."
Mr Aitken added, "Our first investment in the DME market will give us considerable insight into the DME industry and help us evaluate the potential for further growth opportunities in China and other countries around the world."
XinAo Group Chairman Wang Yusuo, commented, "We are pleased to have Methanex as a partner as we establish and grow our position in the DME business. We are optimistic about the growth prospects of the DME market in China over the next few years, as it is an economical, clean energy source recognized by the Chinese government as an important alternative energy source in the future."
XinAo Group is a private company which is focused on building a growing industrial portfolio consisting of energy development, energy chemicals, energy trade and distribution. XinAo Group owns controlling interests in XinAo Gas, which is a publicly-traded company on the Hong Kong Stock Exchange.
Methanex is a Vancouver based, publicly traded company engaged in the worldwide production, distribution and marketing of methanol. Methanex shares are listed for trading on the Toronto Stock Exchange in Canada under the trading symbol "MX", on the NASDAQ Global Market in the United States under the trading symbol "MEOH", and on the foreign securities market of the Santiago Stock Exchange in Chile under the trading symbol "Methanex". Methanex can be visited online at www.methanex.com.
US' PetroSun enters China biofuels program via new subsidiary
US-headquartered PetroSun has formed a wholly owned
subsidiary, PetroSun BioFuels China, to expand into the Chinese
alternative fuels market.
It has got the license to introduce the algae-to-biofuels techonology in China through an exclusive agreement with another PetroSun wholly owned subsidiary PetroSun BioFuels.
PetroSun BioFuels China will produce and market algae-based biodiesel and ethanol through agreements that will be announced in the next two weeks, the company announced.
PetroSun's alternative fuels division is in the pre-commercial stage of the algae-to-biofuels production technology.
The company plans to establish algae farms and algal oil extraction plants in Alabama, Arizona, Louisiana, California, Mexico and Australia during 2007/2008, it said. The oil product will be marketed as feedstock to existing biodiesel refiners, it added.
According to industry estimates, 1 mt of vegetable oil needs around 0.1-0.15 mt of methanol to produce biodiesel.
PetroSun said on its website that it planned to establish algae cultivation pods and extraction plants with a potential lower case production capacity of 2.56 billion gallons of algal oil per year.
PetroSun is a diversified energy company specializing in the discovery and development of both traditional fossil fuels and renewable energy resources.
Oct 1, 2007 Reuters
Shell surprised by report Kuwait may drop China JV
Royal Dutch Shell was
surprised by a report last week that Kuwait wanted to drop it as
a partner in a project to build a $5 billion refinery in China,
its Chief Executive Jeroen van der Veer said on Monday.
Last week, Kuwaiti news agency KUNA said there were various reasons state-owned Kuwait Petroleum Corp. no longer wanted Shell involved on the Guangdong plant, including objections from China's National Development and Reform Commission.
"We were surprised to read that but that's about it," Van der Veer told Reuters on the sidelines of an energy conference in Madrid.
"We have all kinds of options about refineries in China. We look at the various options and discussions are on-going but I can't be more specific," he said.
Shell had hoped to gain a foothold in the domestic fuel market of China, the world's second-largest energy consumer, through the Guangdong plant.
The company failed to win a share in another refining project last year.
KPC and China's largest refinery Sinopec received preliminary Chinese government approval for the Guangdong plant last year. In August, Sinopec said Shell and U.S. Dow Chemical Co were also in talks to participate.
Van der Veer would not comment on problems at the Kashagan oil field where the Kazakh government is threatening to strip Italy's Eni of the leading role in a consortium that includes Shell because of delays and cost overruns.
"We are working in a consortium and you have to ask the leader and (ENI CEO Paolo) Scaroni isn't here today," he said.
SABIC says $5.2 bln China
chemical project stalled
Saudi Basic Industries Corp (SABIC) said talks had stalled on a $5.2 billion petrochemical project in China's Dalian area, although it was making progress on another venture with Sinopec Corp.
SABIC has been in talks for three years with private Chinese firm Shide to build a complex -- including an oil refinery, and an ethylene plant in northeastern Dalian.
"On Dalian, there is no progress so far," Chief Executive Officer Mohamed al-Mady told Reuters by telephone on Tuesday.
"We are in talks with other Chinese partners apart from Dalian, including Sinopec, and there is positive progress in the talks with Sinopec," he said.
A industry source close to the deal told Reuters in China in May that SABIC may invest just over $1 billion in building a one million tonne a year naphtha cracker with Sinopec to produce ethylene, a key building block for petrochemicals, in the northern city of Tianjin.
Mady declined to give details of the deal.
China imports nearly half of SABIC's petrochemicals to feed its economy.
SABIC expects chemical prices to hold steady next year despite slowing growth in the United States.
"There is a decline in growth from the United States, the impact of this decline on other markets remains to be seen," Mady said.
"But China and India still represent the main areas of growth for our type of products. We expect growth in these two markets to continue (in 2008)," he said.
"Global growth will not be affected greatly."
Delays in new projects will keep prices relatively stable, Mady said.
"This will help demand and with the increase in the price of oil, prices should stay at their levels," he said.
Continental Chemical to convert China biodiesel plant to DOP
Chemical Corporation plans to convert its biodiesel plant in
China into a dioctyl phthalate plant, said a company source on
Existing technology at the biodiesel plant will be replaced to make way for a new 30,000 mt/year DOP plant. The biodiesel plant currently produces a non-petroleum based fuel from vegetable oils.
The company was currently in the process of sourcing for 2-ethylhexanol feedstock for the new DOP plant from Chinese domestic suppliers. "We are trying to set up meetings with the local suppliers," said the source. 2-EH is a co-feedstock along with phthalic anhydride in the production of DOP.
It was not clear at press time when the DOP plant was slated to begin operations.
Continental Chemical plans to relocate Singapore PA plant
Singapore's Continental Chemical Corporation plans to relocate its existing phthalic anhydride plant in Singapore to Zhuhai province, China eventually, said a company source on Monday.
"We are still in the process of getting official permission to dismantle the Singapore plant and ship its parts to Zhuhai," said the source.
The company hopes to increase its presence in China's domestic PA market with the move. PA produced at the relocated plant will be sold in the domestic market to Chinese buyers.
The company's plant in Singapore has a nameplate capacity of 80,000 mt/year. It was unclear whether the plant was currently in operation. The plant appears to have been idled for at least one year, according to a Southeast Asian market source.
Nufarm agrees to
exclusivity for acquisition proposal at $17.25 cash plus a
dividend of up to $0.30 per share
Nufarm advises that it has received a non-binding and conditional proposal from a consortium comprising China National Chemical Corporation (“ChemChina”), The Blackstone Group (”Blackstone”) and Fox Paine Management III, LLC (“Fox Paine III”) (collectively, the “Consortium”) relating to a proposal to acquire, by way of scheme of arrangement, 100% of Nufarm shares for $17.25 per share. Additionally, Nufarm will pay a dividend of up to $0.30 per share based on the company’s earnings and cashflow prior to the acquisition (for total consideration of up to $17.55 per share).
Nufarm expects that its earnings and cashflow prior to completion of the transaction will support the payment of the maximum $0.30 dividend per share.
The Board of Nufarm has thoroughly reviewed the proposal and on the basis that the Consortium agrees to allow Nufarm to pay the maximum $0.30 dividend per share, has unanimously resolved that it proposes to recommend shareholders vote in favour of the scheme, should it proceed, subject to there being no superior proposal and subject to an independent expert finding that the scheme is in the best interests of Nufarm shareholders.
Nufarm has entered into an Exclusivity Deed with the Consortium to facilitate the negotiation of a Transaction Implementation Agreement. The principal terms of the Exclusivity Deed are set out in Annexure 1.
The proposal of $17.25 per share and a dividend of up to $0.30 per share values Nufarm’s market capitalisation at up to $3.0 billion, which represents: 3 billion Australian dollar bid (US$2.77 billion)
・ a 27% premium to Nufarm’s closing share price on 30 October 2007, the day before significant takeover speculation in Nufarm shares;
・ a 25% premium to Nufarm’s volume weighted average share price for the three months prior to 30 October 2007; and
・ a 35% premium to Nufarm’s volume weighted average share price for the 12 months prior to 30 October 2007.
Commenting on the proposal Nufarm’s Chairman Mr. Kerry Hoggard said “we acknowledge the Consortium’s proposal which may lead to a transaction which realises fair value for Nufarm shareholders.”
As contemplated, the transaction would combine Nufarm with certain agricultural chemical businesses of ChemChina to create the global leader in off-patent crop protection. The Consortium has proposed that the Nufarm management team continue to manage the combined operations of Nufarm and ChemChina, and has indicated that retaining senior management and preserving the Nufarm business culture is an important element of the transaction. The Consortium intends to maintain Nufarm’s corporate headquarters in Melbourne.
ChemChina is the largest state-owned, diversified chemical enterprise in China with a significant focus on agricultural chemicals through its ChemChina Agrochemical Corporation subsidiary (“ChemChina Agchem”). At present, ChemChina Agchem is the largest producer of pesticides in China and is focused on growing its agrochemical enterprise, both domestically and through international acquisitions. ChemChina has demonstrated a successful track record of the acquisition and integration of market leading international businesses into the ChemChina group, including Adisseo Group, Rhodia’s global silicones and sulfuric businesses and Qenos, Australia’s leading petrochemical company.
The involvement of Blackstone and Fox Paine III in the transaction provides additional access to capital and focused expertise to facilitate execution of strategic growth through acquisitions.
The proposed dividend of up to $0.30 per share does not include and is not affected by the $0.21 per share dividend which was announced on 26 September 2007 and will be paid to Nufarm shareholders on 9 November 2007. It is customary for Nufarm to pay an interim dividend to shareholders in late April / early May. If the proposed acquisition of Nufarm shares has not completed prior to that time and if the Nufarm Board resolves to pay an interim 2008 dividend at the time Nufarm’s 1H2008 results are announced, such dividend would be deemed to be part of the $0.30 per share amount.
Shareholders should be aware that the Consortium’s proposal is subject to a number of significant conditions and that there is no certainty that it will ultimately result in a formal offer to Nufarm shareholders. Nufarm will continue to keep shareholders informed of developments as appropriate.
Nufarm is being advised by Goldman Sachs JBWere and Arnold Bloch Leibler.
November 3, 2007 biz.thestar.com.my/
Blackstone making joint US$3bil offer for Nufarm
China National Chemical Corp (ChemChina) and Blackstone Group are teaming up to offer more than US$3bil for Australian farm chemicals group Nufarm Ltd, a source said yesterday.
Nufarm said on Thursday it had received a letter tied to earlier takeover talks but did not say whom it was from. The company said it would say more by Monday.
A source told Reuters the consideration was likely to be more than A$3.4bil.
At that level, the offer would represent more than a 25% premium to Nufarm's market capitalisation of A$2.68bil, based on its last trade at A$15.60.
ChemChina's plan marks its latest push offshore, which began in 2005, when it bought a European silicone business Rhodia of France and acquired Australia's top polyethylene producer, Qenos, from Exxon Mobil and Orica Ltd.
The company was created in 2004 by putting together several chemical firms spun off from China's dismantled Ministry of Chemical Industry.
Chief executive Aye Ren Jianxin, a former communist youth league leader, has turned it into a US$10bil-a-year business with 120,000 employees, but it is still overshadowed by state-owned behemoths Sinopec Corp and PetroChina Co Ltd.
Several other pesticide companies and private equity groups are seen as potential suitors for Nufarm, the world's No. 2 generic farm chemicals company behind Israel's Makhteshim Agan Industries.
Any takeover would need the support of Nufarm chief executive Doug Rathbone, who owns 17% of the company, and the Goodfellow family in New Zealand, whose affiliates together own about 10% of the company.
Analysts have speculated that Makhteshim, also known as MA Industries, and US agrochemicals giant Monsanto Co, would have the best fit with Nufarm.
Other potential bidders named include buyout funds Bain Capital and Advantage Partners, which lost out in the recent sale of Japanese firm Arysta LifeScience Corp to European private equity firm Permira for US$2.2bil.
Nufarm Limited is one of the world's leading crop protection companies. We produce products to help farmers protect their crops against damage caused by weeds, pests and disease.
With manufacturing and marketing operations based in Australia, New Zealand, Asia, Europe and the Americas, Nufarm employs more than 2,600 people, all of whom make a vital contribution to the company's reputation for quality products, innovation and first class marketing and technical support.
Proudly based in Australia, Nufarm is listed on the Australian Stock Exchange (symbol NUF). Its head office is located at Laverton in Melbourne.
November 2, 2007 International Herald Tribune
China National Chemical offers to buy Nufarm, an Australian firmx
China National Chemical has offered 2.96 billion Australian dollars for Nufarm, an Australian maker of farm chemicals, inviting two U.S. buyout firms to join, said three people with knowledge of the situation.
China National, known as ChemChina Group, submitted a letter to Nufarm on Wednesday with an indicative bid of 17.25 dollars, or $15.86, per share, two of the people said, declining to be identified because the details are private. The company asked Blackstone Group, manager of the world's biggest buyout fund, and Fox Paine to take minority stakes in Nufarm, they said.
ChemChina would be the first state-owned Chinese company to team up with buyout firms for an overseas acquisition, the people said. It is offering an 11 percent premium for one of the world's largest suppliers of off-patent agricultural chemicals as farmers plant bigger crops to take advantage of rising prices for wheat, soybeans and other foods.
"You'll see more of the giant state-owned firms teaming up with the big boys in the buyout industry," said Vincent Chan, chief executive officer of Spring Capital Asia, a buyout firm based in Hong Kong. "The benefits are complementary. It helps Chinese companies go overseas to seek growth, and boosts returns for buyout firms."
Blackstone, which counts China's $200 billion sovereign wealth fund among its investors, in September agreed to buy a stake in ChemChina's specialty chemicals unit, China National BlueStar Group, for $600 million.
The offer is 11 percent above Nufarm's last traded price. ChemChina may seek to make the acquisition through BlueStar, of which it owns 80 percent, said the people. Nufarm, based in Melbourne and the biggest maker of herbicides in Australia, was expected to announce the bid late Friday or on Monday, the people said.
Nufarm has manufacturing operations in 14 nations and sells products in more than 100 countries. The company sells 36 percent of its products, mainly herbicides used to protect crops, in North and South America and 32 percent in Australia.
The Australian company completed the acquisition of Agripec Química e Farmacêutica of Brazil in May, increasing its presence in what is anticipated to be the fastest-growing agricultural market in the world, Credit Suisse Group analysts said Thursday in a report.
Nufarm saw its shares suspended from trading Thursday and said it received a letter the day before that "relates to previous discussions that Nufarm has been involved in concerning a transaction that may result in a change of control."
The company's shares rose 13 percent to 15.6 dollars on Saturday following a report in the South China Morning Post that Nufarm may get a revised bid from Blackstone and BlueStar after rejecting an initial offer of 17.1 dollars a share.
Mergers and acquisitions in the chemical industry are likely to increase as manufacturers compete to secure supply, some analysts say. Permira Advisers, Europe's biggest buyout firm, last month agreed to buy Arysta LifeScience, the world's largest closely held farm chemicals maker, for about $2.2 billion.
ChemChina plans to buy some shares from Nufarm's chief executive officer, Douglas Rathbone, and make a general offer to other stockholders, the people said. Rathbone, who owns 17 percent of Nufarm, would be asked to remain in his position after the takeover, they said.
Zhou Chuanrong, a spokesman for ChemChina in Beijing, declined to comment, as did John Ford, a Blackstone spokesman based in New York.
Chinese companies, buoyed by economic growth of more than 11 percent at home and flush with cash after raising about $95 billion in stock sales this year, are seeking overseas takeovers. China is home to 5 of the world's 10 largest companies by market value, compared with three for the United States.
November 03, 2007 The Australian Business
China bid for Nufarm marks new global era
THE Chinese industrial octopus bidding for Australia's largest agricultural chemicals maker Nufarm is a national standard-bearer in the new government initiative for state-owned corporations to "go global".
China National Chemical Corporation (ChemChina) is a young company hungry for expansion, forged in May 2004 from a merger between two huge state businesses, China National BlueStar Corp and China National Haohua Chemical Corp.
The new group absorbed 63 small regional refiners as the government sought to rationalise its fragmented, often highly competitive operations in key sectors, and redeployed the many businesses run by the national ministries.
When the Ministry of Chemical Industries was abolished, ChemChina absorbed many of its enterprises.
Beijing-based ChemChina has 120,000 employees and eight subsidiaries, consolidated from 130 operations, with five companies listed domestically, though with only minority stakes traded.
National BlueStar is being slated for a Shanghai float in the first half of next year, and some time in the future the parent itself, ChemChina, is likely to be listed too.
ChemChina sold $200million corporate bonds in April.
Control remains firmly in the hands of the government, by way of the state-owned Assets Supervision and Administration Commission (SASAC) that supervises all the 160 core corporations in what the government views as China's strategic industries.
The group's total assets are now approaching $12 billion, about the same as its turnover this year, with a target of $15billion annual turnover in three years. Its executive chairman, 47-year-old Ren Jianxin, was the general manager of China National BlueStar at the time of its merger.
Today ChemChina controls more than 70 per cent of the domestic polyethylene market.
Its BlueStar, its biggest operational entity, is focused on industrial chemicals, Agrichem on pesticides.
Mr Ren swiftly became one of the champions of China's thrust to use its massive liquidity -- $US1.4trillion in foreign reserves to graduate from being the world's factory to becoming the owner of great businesses all over the world.
Thus China plans to set its capital to work rather than leave it in passive Treasury largely US Treasury -- holdings, and thereby also help relieve upward pressure on the yuan.
Mr Ren says his expansion strategy is to buy "where we can immediately take a leadership position" in his target markets.
Last year, he set a scorching pace. His first acquisition was France's feed additives company Adisseo, for $524 million.
Then he bought Australian olefins and polyethylene producer Qenos for $220 million.
French silicon producer Rhodia was next, costing about $630 million.
He then pulled off a major coup in gaining US private equity giant Blackstone as an ally. In May, the China Investment Corp, with $224 billion at its initial disposal, made its first move, buying 9 per cent of Blackstone for $3.3 billion.
In September, Blackstone which has a strong global focus on the chemical industry -- in turn paid $654 million for 20 per cent of BlueStar, and Blackstone China's chairman Antony Leung, a former financial secretary of Hong Kong, and Ben Jenkins, Blackstone Asia Private Equity head, became directors of BlueStar.
The official newspaper China Daily quoted Mr Ren as saying: "Through overseas mergers and acquisitions, BlueStar has enhanced its technology and management level.
"We will continue the overseas strategy to make the company more multinational."
三菱商事 中国石炭最大手と提携 開発や環境事業など
Nov 26, 2007 Reuters
Chinese pollution plan
includes tougher fines
China's water and air are straining to cope with the country's industrial take-off, the government said on Monday, vowing steps to make polluters pay more for environmental damage.
The cabinet gave a stark picture of ecological damage when belatedly releasing the country's plan for environmental protection from 2006 to 2010.
"The conflict between our country's economic and social development and environment and resources grows starker by the day," said the plan, released on the government's Web site (www.gov.cn). "Environmental protection faces severe challenges."
The five-year plan urges officials to abandon a fixation on economic growth and turn to cutting pollution that the document says threatens citizens' health and long-term prosperity.
At the end of the previous five-year plan that ended in 2005, water in 26 percent of "key" lakes and rivers targeted for clean-up was so contaminated that it was classified as unfit even to touch or to irrigate crops.
Emissions of sulphur dioxide, the industrial pollutant that causes acid rain, grew by almost a third, despite a goal set in 2000 to cut emissions by 10 percent.
The new plan brings together a set of policy promises that have mostly been announced before: cutting two key pollution measures by 10 percent between 2006 and 2010; healing stretches of spoiled lakes and rivers; and recycling much more of the waste and domestic run-off from growing towns and cities.
Officials are urged to do more to rein in greenhouse gas emissions by embracing energy-saving technology and policies and growing more forests to absorb rising carbon dioxide levels that scientists say are dangerously heating the atmosphere.
Beijing has set similar goals before, only to be overwhelmed by the break-neck economic growth that many local officials see as vital to more jobs and revenue.
But the new plan spells out that the government wants to tie environmental goals to policy measures that may hit polluters through tougher fines and revenue restrictions.
"Clean-ups of industrial pollution must follow the principle that the polluter bears responsibility," the plan states, also urging tax reforms to discourage waste and pollution.
"Give scope to the role of price levers and establish a pollution emissions pricing and fees mechanism that reflects the costs of cleaning up pollution," it says.
Trading in emissions quotas for sulphur dioxide may also be introduced in areas where "feasible."
China Approves $5 Billion Sinopec-Kuwait Oil Project
China Petroleum & Chemical Corp. and Kuwait Petroleum Corp. received government approval to start initial work on an oil refinery and chemical project in southern China.
The proposed ethylene plant in Nansha in the province of Guangdong will produce 1 million metric tons a year of the chemical, Sinopec, as China Petroleum is known, said in its online newsletter today, without giving the refinery size. The approval allows the partners to start feasibility studies on the project, said Sinopec spokesman Huang Wensheng.
China, the world's fastest-growing major economy, wants to increase oil-processing capacity by 25 percent by 2010 to meet rising consumption of fuels and petrochemicals. The Nansha complex, with a planned investment of $5 billion, would be the largest joint venture in China, exceeding the nearby Nanhai petrochemical facilities built by Royal Dutch Shell Plc and China National Offshore Oil Corp., the central bank said May 30.
``It's Sinopec's ambition to strengthen its play in the southern China market, where energy demand growth is always massively outpacing supply,'' Qiu Xiaofeng, an oil analyst with China Merchants Securities Co., said in Shanghai today.
The Nansha plant will be able to process 12 million tons of crude oil a year and the ethylene unit will have an annual capacity of between 800,000 tons and 1 million tons, Wang Tianpu, president of Sinopec, said in August.
The provincial government of Guangdong, the nation's manufacturing hub, wants to develop the province into a major petrochemical production center for Asia, the Chinese central bank said in May.
Guangdong accounts for 8 percent of the nation's total energy use and 18 percent of total fuel demand in 2005, according to the government Web site.
Sinopec will halt expansion work on the ethylene unit at its Guangzhou refinery, close to the Nansha complex, according to today's statement. The existing 200,000 ton-a-year ethylene unit will be closed after the Nansha plant starts operation, it said. Sinopec had planned to increase the Guangzhou refinery's annual ethylene capacity fourfold to 800,000 tons.
The Chinese refiner and its partners plan to start operating the Nansha plants in 2010, parent company China Petrochemical Corp. said in July 2006.
Sinopec's Wang said Aug. 10 that the company was in talks with Kuwait Petroleum, Shell and Dow Chemical Co. to develop the Nansha project. ``The talks are still going on,'' Huang said today.
Sinopec has a separate venture in southern China with Saudi Aramco and Exxon Mobil Corp. The project in Fujian, the first Chinese refining and marketing venture with foreign partners, was agreed in March after more than a decade of talks.
The three companies will expand a crude oil refinery to about 240,000 barrels a day from 80,000 barrels a day, and add four petrochemicals units. The venture, which will include 750 gas stations, will mostly process crude from Saudi Arabia.
China may use 25 percent of global chemical output by 2015, Exxon Mobil said May 25.
Shaw to Provide Technology, Engineering and Procurement for Two Grassroots ABS Plants in China
The Shaw Group Inc. announced today that its Energy & Chemicals Group has been awarded a contract to provide proprietary technology, engineering and procurement services for two 200,000 metric tons per annum acrylonitrile butadiene styrene (ABS) plants for Tianjin Dagu Chemical Industry Co., Ltd. The plants will be located in Tianjin Industrial Park, Lingang Industry Area, in the city of Tianjin. The value of Shaw's contract, which has been included in the company's previously announced backlog, was not disclosed.
The contract covers the licensing, process design package, detailed engineering support, training and commissioning of the plants as well as procurement of proprietary and critical equipment. Shaw's agreement with SABIC Innovative Plastics Technologies, Inc. (formally GE Plastics Global Technology, LLP) will enable the two Tianjin Dagu plants to utilize the licensed styrenic emulsion ABS technology.
"We are pleased to be the first company in the world selected by SABIC Innovative Plastics to license its leading ABS technology," said J.M. Bernhard Jr., chairman, president and chief executive officer of Shaw. "We look forward to working with our long-term client, Tianjin Dagu, on this important project as we further establish Shaw as a market leader in the Chinese petrochemicals market."
In 2007, Shaw announced another contract with Tianjin Dagu Chemical Industry Co., Ltd. to provide technology, basic engineering and critical equipment procurement services for a 500,000 metric tons per annum ethylbenzene/styrene monomer (EB/SM) plant also located in Tianjin, China.
The Shaw Group Inc. is a leading global provider of technology, engineering, procurement, construction, maintenance, fabrication, manufacturing, consulting, remediation and facilities management services for government and private sector clients in the energy, chemical, environmental, infrastructure and emergency response markets. A Fortune 500 company with nearly $6 billion in annual revenues, Shaw is headquartered in Baton Rouge, La., and employs approximately 27,000 people at its offices and operations in North America, South America, Europe, the Middle East and the Asia-Pacific region. For further information, please visit Shaw's Web site at www.shawgrp.com.
First LyondellBasell license granted for innovative Spherizone technology to PetroChina
PetroChina Daqing Refining & Chemical Company has selected LyondellBasell Industries’Spherizone process technology for a new 300 KT per year polypropylene plant to be built at Daqing, Heilongjiang Province in the People's Republic of China. Start up is planned for 2010. This is PetroChina's ninth polyolefin license from LyondellBasell in this decade.
“The first license granted as LyondellBasell is also a reflection of the continued long lasting and valued relationship with PetroChina” said Just Jansz, president of LyondellBasell's Technology Business.
Jansz added: “PetroChina’s selection of this innovative technology confirms our view that the Spherizone process enables users to access new applications and markets with unique products and capture additional value well into the future."
LyondellBasell's Spherizone process technology is an advanced manufacturing process for the production of polypropylene that uses a unique, multi-zone circulating reactor system. Spherizone process plants can produce the full range of polypropylene grades, as well as entirely new families of propylene-based polymers. The Daqing plant will be the eleventh to be built worldwide using Spherizone technology. To date, over three million tonnes of annual capacity have been licensed.
In the last decade, LyondellBasell technologies have been selected in about half of all new polypropylene projects worldwide.
PPG Sinoma Jinjing Fiber
Glass to add third furnace
PPG approves plan to grow capacity of joint venture in Zibo, China
PPG Industries and Sinoma
Jinjing Fiber Glass Co. Ltd. announced their respective boards of
directors have approved the addition of a third furnace at the
PPG Sinoma Jinjing Fiber Glass Co. Ltd. joint-venture
manufacturing site in Zibo, China. The joint venture is a 50-50
arrangement for manufacturing glass-fiber reinforcement.
The investment is expected to add 60,000 metric tons of single-end roving production capacity annually. Startup of the third furnace is projected for the end of 2008 or early 2009.
“PPG is pleased to continue supporting the growth of the global composites industry with this capacity expansion in Asia,” said Victoria M. Holt, PPG senior vice president, glass and fiber glass. “Demand for single-end rovings, such as HYBON fiber glass direct-draw roving by PPG, has grown globally by double digits each of the past few years. We expect this growth to continue, especially in support of wind energy and energy infrastructure applications.”
Tan Zhongming, director of Sinoma Jinjing Fiber Glass, said, “Higher volumes of fiber glass reinforcements are needed to support customers with enough input material to satisfy market demand for manufacturing wind turbine components, as well as marine and composite pipe, in all regions. This additional furnace will enable PPG Sinoma Jinjing Fiber Glass to continue serving its customers’ growing needs.”
In related news, the Zibo facility gained ISO 9001:2000 registration last month in recognition of superior quality systems and processes. “This accomplishment underscores the disciplined quality process that has been implemented in Zibo and supports PPG’s goal of providing the qualifications necessary to best serve its customers and compete in today’s global marketplace,” Holt said.
In addition to the PPG Sinoma Jinjing Fiber Glass Co. Ltd. joint venture in Zibo, China, which serves the global thermosets market, PPG also operates two joint ventures in the region with Nan Ya Plastics Corp., serving the Asian markets for fiber glass electronic and specialty materials yarns and reinforcements. PPG and Nan Ya Plastics have operated PFG Fiber Glass Corp. in Chia Yi, Taiwan, since 1991, and PFG Fiber Glass (Kunshan) Co. Ltd. in Kunshan, China, since 2003.
About Sinoma Jinjing Fiber Glass
Sinoma Jinjing Fiber Glass Co. Ltd. is a joint venture between China National Materials Industry Group and Shandong Glass Group. China National Materials Industry Group is a Beijing-based, government-administered enterprise directly under the State Assets Supervision and Administration Commission of the State Council, with total assets of more than 10 billion RMB (more than US$1.2 billion). It covers the full range of technology and innovation in the non-metallic minerals industry, with manufacturing, engineering and mining of non-metallic materials as well as construction and international trade components. Shandong Glass Group is one of the leading glass manufacturers in China and among the top 100 enterprises of Shandong Province, with total assets of more than 2 billion RMB (more than US$247 million).
Pittsburgh-based PPG is a global supplier of paints, coatings, chemicals, optical products, specialty materials, glass and fiber glass. The company has manufacturing facilities and equity affiliates in more than 30 countries. PPG shares are traded on the New York Stock Exchange (symbol: PPG). For more information, visit www.ppg.com.
Cabot Announces Joint Venture With China National Bluestar Group To Build A Second Fumed Silica Manufacturing Facility in China
Cabot Corporation announced today that its subsidiary, Cabot (China) Ltd., has signed a joint venture agreement with the China National Bluestar Group to build a facility for the manufacture of fumed silica in China. The agreement was signed in Beijing on May 16, 2008 and represents an expansion of the relationship between the two companies, which began with the construction of China's first state of the art fumed silica manufacturing facility in Jiangxi province in 2004.
To expand the relationship, Cabot Bluestar Chemical (Tianjin) Co., Ltd, the new joint venture company, will invest approximately US $40 million to build Cabot's next world class fumed silica facility, with a manufacturing capacity of approximately 7000 metric tons per year. The plant will be located in Tianjin, China and will be commissioned in early 2010.
Patrick Prevost, Cabot's President and CEO said, "China is an increasingly important part of Cabot's global business. Our business and manufacturing experience in China over the past 20 years has been extremely positive. The Bluestar Group has been a highly valued partner in our Jiangxi silica plant. Our new joint project in Tianjin will allow us to broaden this partnership. The expansion will build on the success of our other manufacturing facilities in Tianjin's rapidly developing Binhai New Area. Once commissioned, our new Tianjin silica plant will be a long-term, reliable source of high quality materials for Bluestar and other customers in and outside China."
Ren Jianxin, founder of China National Bluestar Group and President of its parent company ChemChina, said, "We are pleased with the expansion and deepening of our relationship with Cabot. This new facility, which will be built in close cooperation between Cabot and Bluestar, will be state-of-the- art for fumed silica production and will be a great help to the growth of the Chinese silicone industry."
About Cabot Corporation
Cabot Corporation is a global specialty chemicals and materials company headquartered in Boston, Massachusetts, USA. Cabot's major products are carbon black, fumed silica, inkjet colorants, capacitor materials, and cesium formate drilling fluids. The Company's website is: http://www.cabot-corp.com.
About China National
Bluestar (Group) Corporation
A leading chemical corporation in the areas of new chemical materials and specialty chemicals, Bluestar owns 45 production facilities and 17 scientific research institutes around the world, including a controlling interest in three publicly listed companies, with businesses spanning 150 countries and territories. Bluestar has pursued a strategy of mutual development with its business partners, meeting customer requirements for safer and more environmentally friendly products and services through constant technological innovation. The Company's website is: http://www.china-bluestar.com.
People's Daily 2008/8/5
Sinopec in 'takeover' bid
Sinopec, China's largest
oil refiner, has launched a bid for the London-listed Imperial
Energy as part of its overseas development.
Imperial Energy's board has allowed Sinopec to start due diligence, the Sunday Telegraph reported, without revealing the source.
Sinopec is understood to have approached the Russian authorities and been given the approval to carry out a potential takeover, said the British newspaper.
If Sinopec succeeds in buying the $2.5 billion firm, it would be the biggest takeover by a Chinese company of a rival listed on the London market, said the report.
A Sinopec spokesman declined to comment on the report yesterday.
Analysts said the move signified that China, the world's second biggest energy consumer, is marching at a fast pace to enter the Russian energy market. The country will enable China to have better access to oil worldwide.
Imperial Energy has oil blocks in Russia and Kazakhstan. It produced about 10,000 barrels of oil per day in December 2007 and is aiming to raise the production to 80,000 barrels per day by the end of 2011.
Imperial Energy said last month it was in talks regarding a possible offer of 12.90 pounds a share. India's state-controlled Oil and Natural Gas Company (ONGC) may be a potential bidder, said the Sunday Telegraph.
Chinese Vice-Premier Wang Qishan said last month that energy cooperation plays an important role in the strategic cooperation between China and Russia. The two nations would achieve more progress in large-scale items concerning crude oil trade, construction of oil and gas pipelines, prospecting and exploitation, refining and chemical industries.
Sinopec said in July that its net profit for the first half of the year would decrease by over 50 percent from a year earlier as it saw big losses in its oil refining business.
The gap between the high crude price on the international market and the relatively low price of refined oil products domestically has put the company's refining business in the red, the company said in a statement.
In the first half of 2007, Sinopec's net profit was 34.93 billion yuan.
Imperial Energy confirms new possible 'cash offer'
Independent oil and gas group Imperial Energy Corp. PLC confirmed Monday that it has received an approach regarding another "possible cash offer" for the company.
Imperial Energy, whose shares are traded in London, did not identify the company involved. But the statement issued on its Web site followed reports by British-based media that state-owned Chinese oil refiner Sinopec Corp. was planning an offer.
London's Sunday Telegraph reported over the weekend that Imperial had agreed to let Sinopec begin due diligence on a possible offer for Imperial, valued at 1.1 billion pounds ($2.2 billion). The report did not give the source of the information.
That report followed earlier rumors that India's Oil & Natural Gas Corp., or ONGC, was making a bid for Imperial.
Imperial Energy earlier acknowledged that it was in negotiations on a possible offer.
"The board of Imperial confirms that it has received another approach in relation to a possible cash offer for the company," said Imperial's statement. "There can be no certainty that any offer will ultimately be made for the company or as to the terms on which any such offer might be made," it said.
The company said a further announcement would be made "when appropriate."
According to its Web site, Imperial Energy, founded in 2004, is an independent oil and gas exploration company with holdings mainly in western Siberia and Kazakhstan. Both China and India have encouraged their state-owned oil and gas giants to diversify and expand their access to scarce energy resources.
Sinopec, whose parent company is China Petroleum & Chemical Corp., is Asia's biggest oil refiner by capacity. Its earnings have been pummeled in recent months by the widening gap between surging international crude oil prices and Chinese domestic prices for oil products, which are government-controlled.
Calls to the offices of the spokesmen for both Sinopec and its parent company rang unanswered Monday.
Sinopec's Shanghai-traded shares fell 2.2 percent Monday to 11.13 yuan. Its shares traded in Hong Kong slipped 2.3 percent to 8.10 Hong Kong dollars.
Imperial is an independent upstream oil and gas exploration and production company focused on the Commonwealth of Independent States (CIS) and, in particular, the Russian Federation. Since its founding in 2004, Imperial has expanded by acquisition and acquired exploration licences and exploration and production licences, principally in the Tomsk region of Western Siberia, Russia.
The licences were acquired through both private treaty and auctions held by the Ministry of Natural Resources in Russia and hold typically underdeveloped discoveries from the Soviet era, during which time exploration and development techniques were limited and the potential of these assets was not fully realised.
In addition, Imperial has a 75 per cent interest in Sevkazgra, a limited liability partnership registered in Kazakhstan, which holds a licence over 2,022 square kilometres of exploration area in North Central Kazakhstan known as the Torgai Block.
|Sevkazgra (Northern Torgai Block), Kazakhstan.||Tomsk region of Western Siberia, Russia|
Chinese companies said to place joint bid for Peru oil assets
CNPC and Sinopec Group have put in a rare joint bid of between $1.5 billion and $2.5 billion for Petro-Tech Peruana, a private company with oil and gas assets in Peru, a Beijing-based industry official said on Tuesday.
The Chinese companies, teamed up under Beijing's coordination, expect Petro-Tech to make a decision on the bid by about late September, the industry official said, asking not to be identified because he was not authorized to speak to the media.
After a flurry of overseas deals in the first half of the decade, China appears to have slowed acquisitions as big, premium-quality assets get scarcer and more costly, forcing its state companies to look at smaller assets.
Increasingly, there is more coordination among Beijing's oil trio - CNPC, Sinopec and the offshore specialist CNOOC - to avoid clashes in competing for the same targets.
"With little success securing bigger assets, companies are now forced to look at medium or small-sized ones like this Peru one," the official said. "Then it means you pay a higher cost per barrel."
The official said that Petro-Tech currently produces close to 22,000 barrels per day of oil in waters off Peru.
Neither Sinopec nor CNPC officials were immediately available for comment.
Sinopec Group is the parent of the top Asian refiner Sinopec, and CNPC is the parent of PetroChina, Asia's largest oil and gas company.
Petro-Tech, owned by the Houston-based Offshore International Group, operates shallow-water offshore blocks in Peru covering more than two million hectares, or five million acres.
India's ONGC to pay $2.6bln for Imperial Energy
India's biggest oil producer, ONGC, said it had agreed a 1.4 billion pounds ($2.6 billion) takeover of Russia-focused Imperial Energy on Tuesday in a bid to secure supplies for India's booming economy.
State-owned ONGC beat China's Sinopec to snatch the British-based oil explorer, though sources close to the deal said the Kremlin would likely expect ONGC to sell a stake on to a Russian state oil group such as Rosneft.
Imperial Energy Corp Plc said that ONGC's overseas arm, ONGC Videsh, would pay 1,250 pence in cash for each of its shares.
"This is a good price, given consideration for the current softening in oil prices, the turbulence on global stock markets and the geopolitical stage," brokerage Daniel Steward said in a research note.
Shares in Imperial, whose assets are mainly in the Tomsk region of Siberia, traded down 2.1 percent at 1,214 pence at 1454 GMT, suggesting investors do not expect a rival bid.
Last month, Imperial reported it had received a 1,290 pence/share approach from an unnamed bidder, which sources familiar with the matter identified as ONGC.
A subsequent approach from another party, which sources identified as Sinopec, sparked hopes of a bid battle.
But Sinopec downplayed talk of a bid on Tuesday and sources close to the deal said the state-owned oil refiner had done little due diligence despite being invited to do so.
"Our parent company is doing preliminary work on these deals, but there's been no substantial progress," Su Shulin, Chairman of Sinopec's Sinopec Corp unit said.
Korea National Oil Corp on Monday denied reports it had expressed an interest in Imperial.
The takeover will require the approval of the Russian authorities, and in recent years the Kremlin has increased its control of the Russian oil and has sector.
Several sources close to the parties said high-level talks had taken place between the Indian and Russian governments.
However, sources close to both sides said they doubted the Kremlin would allow ONGC retain all of Imperial.
"We initiated parallel discussions with the Russian government and will give some stake to a Russian firm if we get Imperial, most likely it will be Rosneft," an ONGC Videsh source said.
Such a move would follow a recent pattern of the state-backed giants winning majority stakes in big, formerly privatised energy assets.
In 2006, Sinopec bought Udmurtneft, a 120,000 barrels per day crude production unit from BP's Russian unit TNK-BP for about $3.5 billion (1.79 billion pounds) but later sold a 51 percent stake to Rosneft.
Beijing and Delhi have ordered their state oil companies to buy up oil and gas assets overseas to ensure future energy supplies.
The location of Imperial's fields means ONGC is unlikley to ship oil from them to India, but its ownership provides a hedge against rising energy costs.
The drop in the price ONGC is willing to pay reflects the drop in the oil price to around $114/barrel from a July 11 peak above $147/barrel, the deteriorating relationship between Russia and other countries following its invasion of Georgia and the results of due diligence, the sources said.
CHEAP RESERVES, HIGH TAXES
The bid values Imperial's 920 million barrels of proved plus probable reserves (2P) -- an estimate of recoverable oil and gas -- at around $2.77/barrel, according to Reuters calculations.
The reserves of larger Russian rival Novatek NVTK.MM are valued at around $2.82/bbl, while Lukoil's are worth around $1.93/bbl for OAO Lukoil, based on their market capitalisations and including other assets such as pipelines.
Russian reserves sell at a relatively low price compared to other regions such as the North Sea and Gulf of Mexico due to high taxation and political uncertainty in Russia. In the North Sea, 2P reserves sell for over $10/bbl.
Imperial produced 10,000 barrels of oil equivalent per day at the end of 2007 but plans to raise this to 25,000 by the end of 2008.
ONGC Videsh already has a presence in Russia through its 20 percent stake in the Exxon Mobil (nyse: XOM - news - people )-led Sakhalin-1 oil and gas project, which is currently locked in a dispute with the Kremlin.
Moscow is blocking the consortium from exporting gas while Exxon says its contract allows this.
Imperial founder Peter Levine should net about 100 million pounds from the sale, according to Reuters data.
Deutsche Bank advised ONGV Videsh and Merrill Lynch advised Imperial.
Sinopec rules out bid for Imperial
China’s Sinopec has ruled out a counterbid for Russia-focused, London-listed Imperial Energy, leaving the field clear for India’s ONGC to proceed with a takeover deal. India’s biggest oil producer agreed a £1.4 billion ($2.6 billion) takeover of Imperial on Tuesday, beating Sinopec, which was widely speculated to be the London-listed company’s second suitor.
“Sinopec announces that they are no longer considering making an offer for Imperial,” the Chinese group said in a statement, putting to rest talk of an Indian-Chinese contest for control of the company.
India’s oil minister Murli Deora said on Thursday that Russian President Dmitry Medvedev was “very supportive” of Oil and Natural Gas Corp’s (ONGC) bid for Imperial Energy. “I met him (Medvedev) on Friday. I discussed with him primarily the Imperial deal. He was very supportive,” Deora said from Dushanbe in Tajikistan, where the two leaders met on the sidelines of a regional forum.
Sources close to the Imperial deal said the Kremlin would likely expect ONGC to sell a stake on to a Russian state energy group such as Rosneft or gas export monopoly Gazprom, though neither Imperial nor ONGC would comment.
The Linde Group enters into joint venture with SINOPEC subsidiary in China
The technology group The
Linde Group has entered into a joint venture with SINOPEC Fujian
Petrochemical Company Limited (FPCL), a subsidiary of China
Petroleum & Chemical Corporation (SINOPEC), for the long-term
supply of industrial gases to customers in the province of Fujian
in south-eastern China. This collaboration will result in a
capital outlay of around 100 million euro.
The joint venture company Fujian Linde-FPCL Gases Company Limited will be located in Quangang Petrochemical Industrial Park in Quanzhou, Fujian, and will produce and distribute nitrogen, oxygen and argon from that site. Each of the partners, FPCL and Linde Gas (Hong Kong) Limited, a fully-owned Linde subsidiary, has a 50 percent share in the new joint venture.
"This joint venture will create the largest industrial gases company in the fast-growing province of Fujian," explained Dr Aldo Belloni, member of the Executive Board of Linde AG. "This is the region of China in which our gases operations began. The collaboration is a further example of our long-term growth strategy in the emerging Asian nations, underpinning our position as number One in the Chinese gases market."
Fujian Linde-FPCL Gases Company Limited is currently building two air separation plants on the Quanzhou site which are nearing completion. Each of the plants has a capacity of 40,000 normal cubic metres oxygen per hour (Nm3/hr). In future, the principal function of these plants will be to supply air gases via pipeline to our major customer, Fujian Integrated Refining and Ethylene Project (FREP) in Quangang. The plants will also produce the liquefied gases oxygen, nitrogen and argon, as well as raw krypton and raw xenon for the regional market in Fujian.
In addition to the liquefied gases business, Fujian Linde-FPCL Gases intends to set up a local gases centre in Quangang, providing a high-quality gas supply infrastructure to various customers in the industrial park. Linde is therefore making a useful contribution to the continuing economic development of southern China.
FREP is a large-scale refinery and petrochemical project in China which involves Chinese and non-Chinese partners. It is a joint investment between FPCL, ExxonMobil China Petroleum and Petrochemical Company Limited as well as Saudi Aramco Sino Company Limited. In Quangang, imported crude oil is processed in order to create high-grade petrochemicals, such as low-sulphur fuels, light diesel and aviation fuel.
The Linde Group is a world leading gases and engineering company with more than 50,000 employees working in around 100 countries worldwide. In the 2007 financial year it achieved sales of EUR 12.3 billion. The strategy of The Linde Group is geared towards sustainable earnings-based growth and focuses on the expansion of its international business with forward-looking products and services. Linde acts responsibly towards its shareholders, business partners, employees, society and the environment - in every one of its business areas, regions and locations across the globe. Linde is committed to technologies and products that unite the goals of customer value and sustainable development.
Linde is the largest industrial gases and engineering company in China, where it achieves double-digit annual growth rates. Linde, which has more than 2,000 employees in China, currently has a presence in the country's major industrial centres, with around 50 wholly-owned companies and joint ventures and over 100 plant sites.
China's Hualian Sunshine faces cashflow crisis, insolvency
China's biggest purified
terephthalic acid producer Zhejiang Hualian Sunshine
Petrochemicals is facing a cashflow crisis that could force it
into insolvency, according to a Shanghai Securities News report
The company's cashflow crisis stems from long positions it took on PTA future contracts, SSN reported, citing market sources as saying that Hualian Sunshine had been actively buying PTA futures contracts on China's Zhengzhou Commodity Exchange, physically securing over 100,000 mt.
The company held an emergency board meeting during last week's Golden Week Holidays in an attempt to resolve the crisis, SSN reported.
The company was not available for comment.
"The bulk of Hualian Sunshine's 100,000 mt PTA purchase comprises mostly September delivery TA809 PTA contracts," a fiber intermediates trader in Shanghai told Platts.
Hualian Sunshine's cashflow crisis likely started mid-September, when it was forced to pay for its contracts, sources said. The last trading day for PTA contracts on the Zhengzhou Commodity Exchange is the 10th business day of the delivery month. Physical delivery takes place on the 12th business day of the delivery month. With each PTA contract worth 5 mt of material, Hualian Sunshine would have needed to buy 20,000 contracts to secure 100,000 mt of PTA.
Assuming September futures at an average price of Yuan 7,500/mt, Hualian Sunshine would have paid around 750 million Yuan, or over $100 million, to take delivery of 100,000 mt of PTA.
Hualian Sunshine produces only PTA, operating three 600,000 mt/year PTA production lines in Zhejiang, giving it a total nameplate capacity of 1.8 million mt/year.
Oct 7, 2008 Reuters
China Union says PTA affiliate halts production
China Union Holdings 華聯発展集団 said on Tuesday that an affiliate making purified terephthalic acid (PTA) had halted production and was discussing an asset restructuring.
The affiliate, Zhejiang Hualian Sunshine Petro-Chemical Co, is one of China's biggest producers of PTA, a compound used in making polyester. It is 26.4 percent owned by China Union.
China Union said it was asking Hualian Sunshine for information on a report in the official Shanghai Securities News, which said Hualian Sunshine had incurred a large loss trading PTA futures.
The outlook for the asset restructuring is unclear, but it could have a major impact on China Union's earnings this year, the company said without elaborating.
Shares in China Union were suspended on Monday. The company posted a net loss of 53.9 million yuan ($7.9 million) in the first half of this year. ($1 = 6.84 Yuan)
Hualian Sunshine to get Yuan 1.5 bil bailout: report
Troubled Chinese purified terephthalic acid maker Zhejiang Hualian Sunshine Petrochemical will get Yuan 1.5 billion ($219.6 million) in financial aid, to be one-third funded by the local government, Shanghai Securities News reported Thursday.
Yuan 1 billion will come from majority shareholder Jiangsu Huaxi Group and Yuan 500 million from Shaoxing county's Binhai Industrial Zone Investment Company, the report said, citing unnamed senior officials.
It added that Shaoxing county and city authorities and the provincial government of Zhejiang were "trying their best to rescue Hualian Sunshine," which it described as the pillar of the textile industry in Shaoxing.
The company, which reportedly suffered major losses in PTA futures speculation, has the capacity to produce 1.8 million mt/year of PTA at its three lines in Zhejiang province.
Hualian Holdings, Zhejiang Zhanwang Holdings and Zhejiang Gabriel Holdings are its other major shareholders.
2008/10/1 Peabody Energy
Peabody Energy Signs
Agreement to Advance Major Mine and Coal Conversion Project in
Peabody Energy has entered into an agreement with the government of Inner Mongolia and other Chinese partners to explore development opportunities for a large surface mine and downstream coal gasification facility that would produce methanol, chemicals or fuel products. The majority of coal from the mine would be dedicated for fuel supply to the coal conversion plant.
The agreement was signed today in St. Louis with the Inner Mongolia Jitong Railway Group Limited Company, the People's Government of Inner Mongolia Autonomous Region and the Administrative Office of Xilinguole Region. An 11- member delegation participated in the signing ceremony, including Mr. Ren Yaping, Executive Vice Chairman of People's Government of Inner Mongolia Autonomous Region; Mr. Wang Zhiyuan, Deputy Chief Executive of Xilinguole League of Inner Mongolia Autonomous Region; and Mr. Su Nan, Vice Chairman of the Board, Inner Mongolia Jitong Railway Group Limited Company.
The project is expected to have an annual capacity of at least 1.2 million tonnes of methanol or equivalent fuel and chemical production, and is being planned for the Xilinguole League. In the coming months, the companies will begin a feasibility study to examine the potential for the project. Peabody is also continuing discussions with major global chemical companies as project partners. The major open-cut mine would be located on coal resources that, subject to additional confirmatory drilling, could total up to 3 billion tonnes.
"China's coal conversion initiatives are providing the vital energy security that China needs by using abundant domestic energy resources to reduce dependence on increasingly expensive oil and natural gas," said Peabody Energy Chairman and Chief Executive Officer Gregory H. Boyce. "Peabody is continuing our global leadership in advancing coal conversion projects. We are pleased to be working with our Chinese partners in cooperation with the Chinese government to develop a world-class coal-to-chemicals facility."
"Eastern Inner Mongolia, with total coal reserves of 210 billion tonnes, one fifth of the probable reserves in Inner Mongolia, is one of the large- scale bases in the 11th Five-Year Plan of China Coal Industry Development," said Mr. Su. "Jitong Group has made a commitment to the construction and operation of the railway network of Eastern Inner Mongolia. To accelerate energy development and railway network construction in this region, we will put all our efforts into our partnership with Peabody to build an advanced large-scale open-cut mine and down stream coal-chemical project in China, and make full use of our railway resources while being aligned with the Chinese government policies."
Coal has been the fastest-growing fuel in the world for the past five years, and China is the largest and fastest-growing coal market in the world. China is also emerging as a leading producer of coal-based chemical feedstocks, which are used in the manufacturing of plastics, paints and construction materials, and increasingly as transportation fuel additives.
Inner Mongolia has a vast reserve base and is China's fastest-growing coal region, expected to increase annual production more than 40 percent over the next three years, with coal seams ranging from 25 to 175 meters in height near the potential mine. Many of the region's deposits are suitable for large- scale surface mining projects.
China is the largest coal producing region in the world and uses coal to generate about 70 percent of its electricity. In the past two years alone China has added the equivalent of half of U.S. coal-fueled generating capacity. Several major coal conversion projects are in development in Inner Mongolia, including a large coal-to-liquids facility.
Jitong Railway Group is a joint venture railway company established by the Ministry of Railway of the Chinese Government, Inner Mongolia Government and North United Power, which owns four rail lines across Inner Mongolia.
Inner Mongolia, with the capital of Hohhot, has an area of 1.2 million square kilometers, spanning nearly 12 percent of the country's land area. The facility would be developed near the city of Xilinhaote.
Peabody is the only non-Chinese participant in GreenGen, China's signature carbon initiative, and the company has an office in Beijing and growing coal trading activities.
Peabody Energy is the world's largest private-sector coal company, with 2007 sales of 238 million tons and $4.6 billion in revenues. Its coal products fuel approximately 10 percent of all U.S. electricity generation and 2 percent of worldwide electricity.
ピーボディーのグレゴリー・Ｈ・ボイス会長兼最高経営責任者（ＣＥＯ）は「中国の最も重要な気候問題計画で世界のほかの部分を代表するのはピーボディー にとって光栄だ。ピーボディーは気候問題に対する技術ベースのソリューションを前進させるリーダーである。グリーンジェンはオーストラリアのコール２１計 画、米国のフューチャージェン、アジア・太平洋パートナーシップなど、いくつかの大陸でピーボディーが関与している重要な炭素問題計画に加わることにな る」と語った。
中国華能グループの李雰鵬社長は「このエネルギー・環境プロジェクトを前進させる有力な石炭会社としてピーボディー・エナジーがグリーンジェンに加わる のはうれしい。ピーボディーの参加は長期的なエネルギー問題に対応し、よりクリーンな環境を推進し、気候変動への懸念に対応する技術ソリューションをつく り出すための自主的な世界的パートナーシップの新たな重要な一歩前進を示すものである」と語った。
中国華能はグリーンジェンの多数派株主である。ピーボディーは６％を所有することになる。華能は世界の１０大電力会社の１つであり、中国最大の発電会社 である。華能とピーボディーは、世界最大級の石炭会社を含み米エネルギー省との提携を活用して炭素捕捉、貯蔵機能を備えたほぼゼロエミッションの２７万 ５０００キロワットの技術プロトタイプを開発、設置するフューチャージェン連合のメンバーでもある。フューチャージェンは今年建設地を選定し、２０１２年 に発電を開始する。
世界で最大、最良の経済を持つ国は石炭を使って繁栄と生活の質の向上を支えている。中国にとっても米国にとっても石炭は経済成長の中心であり、エネル ギー安全保障の根源である。石炭は過去５年間に最も急成長した燃料であり、石炭の使用は中国とアジア全体の巨大な成長によって今後２５年間に７５％近く増 加する見込みである。
QPI , PetroChina & Shell sign LOI for refinery and petrochemical manufacturing and marketing in China
In the presence of His Highness Sheikh Tamim Bin Hamad Al-Thani, the Heir Apparent of the State of Qatar, Qatar signed today with PetroChina Company Limited (PetroChina), and Shell (China) Limited (Shell), a Letter of Intent (LOI) to commence joint preliminary studies to assess the viability of building a refinery and petrochemical manufacturing complex and marketing its products in China. The signing was witnessed also by Mr. Xi Jinping, Vice President of the People’s Republic of China and His Excellency Sheikh Hamad Bin Jassem Bin Jabor Al-Thani, Qatar’s Prime Minister and Minister of Foreign Affairs
The LOI was signed by His Excellency Abdulla Bin Hamad Al Attiyah, Deputy Prime Minister, Minister of Energy and Industry, Chairman of Qatar Petroleum International, Mr. Jiang Jiemin, President of China National Petroleum Corporation (CNPC), and Ms. Linda Cook, Executive Director of Royal Dutch Shell plc.
The integrated refinery and petrochemical complex will have world-class production capabilities to produce refined fuels and petrochemical products. PetroChina will have a 51% shareholding, QPI 24.5% and Shell 24.5%.
His Excellency Abdulla Bin Hamad Al Attiyah said: “This step will help draw up a road map for setting up economic bridges between Qatar and China and opens investment opportunities.” H.E. added: “On this occasion, I am very pleased that Shell has joined this first project of Qatar Petroleum International in China, and pleased to be partnering with PetroChina. We have here a great opportunity for our respective companies to reinforce their business relationship and to play a significant role in the refining and petrochemical sectors in China.”
Mr. Nasser Al-Jaidah, QPI CEO also added “We have established for QPI short-range and long-range performance targets. This project is a significant addition to QPI’s portfolio. By associating with strong partners like PetroChina and Shell, we are confident that this first petrochemical project for QPI will rank in the top leading projects in China and in the world. ”
Mr. Jiang Jiemin of CNPC said: “By building the integrated refinery and petrochemical complex jointly with QPI and Shell, the cooperation in the petrochemical sector between CNPC, and Qatar (QPI) and international oil companies will be further strengthened and promoted.”
Ms. Linda Cook of Shell said: “Shell is pleased to continue building its partnership with QPI and PetroChina to meet China’s growing energy needs. This project builds on a strong foundation of existing activities in Qatar and China, both of which are strategic to Shell. We are committed to leveraging our strong partnership with both companies and look forward to strengthened ties with the Chinese market.”
Ethylene on hold
China’s top two producers to postpone projects
Petrochemicals production is facing overcapacity
SINOPEC AND CNPC, China’s top two oil and chemical producers, will postpone plans for six ethylene plants currently under construction due to a slump in demand.
The six plants include Sinopec units in Ningbo, Quanzhou and Tianjin with a combined capacity of 3m t/y and CNPC’s facilities at Duzishan, Fushun and Chengdu. Startup for Sinopec’s units has been delayed from 2009-2011t until 2013; the CNPC plants are expecting similar delays.
Li Xihong, president of the Economics & Development Research Institute (EDRI) at Sinopec, says that demand for petrochemicals in Asia, especially China, slumped greatly since October.
In addition, new ethylene facilities in the Middle East are due to start up soon which will further increase overcapacity. “Petrochemical producers in China are wise to minimize their operational costs and integrate petrochemicals with refinery businesses to face challenges of the troubled global economy and competition from the Middle East,” says Li.
A planned ethylene joint venture between Sinopec and SK of Korea in Wuhan city will also be postponed. According to the plan, both companies will have a combined investment of 14.67b yuan (US$2.1b) in the construction of a 800,000 t/y ethylene plant and eight other production units such as a 300,000 t/y HDPE unit, a 300,000 t/y LLDPE unit and a 400,000 t/y PP unit.
China's polymer industry mulls anti-dumping proposal
The China Petroleum and
Chemical Industry Association said the country's petrochemical
sector might call for anti-dumping measures on polymers to
protect the local industry.
"At present, the South Korean, American and Middle Eastern producers are targeting China to avert a domestic crisis. They are exporting petrochemical and polymer products to China at extremely low prices, severely hurting our domestic markets," Feng Shiliang, vice-secretary of CPCIA, was quoted as saying at a seminar in mid-December, according to the association's website.
Official statistics showed that in November, China's petrochemical export values fell 4% to Yuan 32.5 billion ($4.75 billion) -- the first decline this year, the CPCIA website reported.
In addition to falling exports, China is also flooded with cheap petrochemical imports from LG, SK Energy, Samsung and other multinational companies, worsening the situation for domestic producers.
Industry sources said South Korea is one of China's major polymer import countries, and will bear the brunt of the anti-dumping probe. "South Korea is not an oil-producing country so China can get tough with the Koreans but not with the Middle Eastern producers," a industry watcher told Platts.
"Anti-dumping requires a lot of political maneuver so China needs to tread carefully." In September, South Korean polypropylene imports accounted for 32.5% of total imports, or 81,000 mt while polyethylene accounted for 20.1% or 64,400 mt. However, their prices were at least Yuan 700 cheaper than domestic products.
In October, LLDPE's import price was Yuan 8,511/mt, Yuan 789 cheaper than domestic produce; polypropylene was at Yuan 7,234/mt, Yuan 1,366/mt cheaper.
Hurt by cheap imports, domestic olefins and polymer production fell.
According to CPCIA, ethylene production in October fell by 3% while polyethylene plunged 33%. Domestic petrochemical giants Sinopec and China National Petroleum Corp. are severely affected and suffered major losses this year.
Consequently, many petrochemical companies have proposed anti-dumping probes on South Korean goods. CPCIA chairman Li Yongwu said China is currently taking a soft approach toward South Korea, but if the dumping situation worsens, the petchem industry will make a formal request to the Department of Commerce to begin investigations. "From data collection to investigation and implementation of measures, the entire process will take about six to seven months," he was quoted as saying.
For the time being, South Korean producers interviewed by Platts have no inkling of what is to come. "We have not heard about (the anti-dumping probes) yet. We will take it as it comes," a producer said.
Taiwanese producers, meanwhile, are confident that their polymers will not be affected. "We will be protected by the 'one-China' policy. Anti-dumping measures against the South Koreans will actually benefit us," said a polypropylene producer. "The biggest threat will come from the Middle East."
Mar 8, 2009 Reuters
Sinopec unit gets $336
mln subsidy for refining loss
Sinopec Shanghai Petrochemical Co received over 2.3 billion yuan ($336 million) in subsidy from China in 2008 to help offset refining losses caused by low state-set fuel prices.
President Rong Guangdao declined to say how large a loss it incurred last year, but said on Sunday the subsidy normally accounted for less than half of refining losses.
"My feeling is that refiners' profit margin is now guaranteed under the new fuel pricing mechanism if crude oil prices are below certain levels," Rong told reporters on Sunday on the sidelines of China's annual legislation meeting. "But they may still face losses if crude oil prices are too high."
China introduced a fuel pricing scheme in December which stipulated that Beijing will consider crude oil costs, refining margin, market demand and supply as well as other factors when setting refined oil products prices.
Analysts said the scheme was similar to an older one that had never been followed in practice, with the market unsure about when and by how much prices are changed.
"We hope to see a more transparent and market-based pricing mechanism," Rong said.
Sinopec Shanghai, controlled by Asia's top refiner Sinopec (SNP.N), has refining capacity of over 200,000 barrels per day (bpd) and its major crude facilities feed its downstream petrochemical business.
Sinopec Shanghai has two ethylene crackers with stated capacity of 850,000 tonnes per year although actual production could reach 950,000 tonnes.
Rong said the National Development and Reform Commission had approved its plan last year to build a new 600,000 tonne ethylene cracker while mothballing its smaller existing unit which has capacity for 150,000 tonnes. The company has yet to start construction due to weak demand.
It has also postponed completion of two petrochemical facilities, including one 600,000-tonne paraxylene unit costing around 3 billion yuan, to the second half of this year from the first half due to low product prices.
"The prices of paraxylene have recovered a bit recently to nearly $900 a tonne, still less than half of the highest of some $2,000 in last year," Rong said. ($1 = 6.839 Yuan)
China's Shenhua to invest $58.5 bil on 7 coal conversion centers
China's largest coal
producer, the Shenhua Group, plans to invest Yuan 400 billion
($58.5 billion) in developing seven coal
in the country to produce oil products, natural gas, methanol and
olefins, Chinese official news agency Xinhua reported Thursday.
The centers will be located in the Inner Mongolia autonomous region and Shanxi province in northern China, as well as Shaanxi province, Ningxia Hui and Xinjiang Uygur autonomous regions in northwestern China, the report said quoting vice president of project planning with Shenhua Coal Liquefaction Corp. (Beijing), Zhang Diankui. He was speaking at an industry conference in Inner Mongolia's Hohhot city.
By 2020, the Shenhua Group plans to produce 30 million mt of oil products and chemicals annually through conversion of more than 100 million mt of coal, Zhang said.
Shenhua commenced operations end-2008 at its first coal-to-liquids project in Inner Mongolia using self-developed direct coal liquefaction technology. The 1 million mt/year (22,000 b/d) first phase of the Erdos CTL plant in Inner Mongolia is capable of converting 3.45 mt of coal into 1.08 mt of oil products. The plant's output consists mostly of gasoil, and to a smaller extent naphtha and LPG.
Being the world's largest coal producer, China started encouraging development of CTL projects a few years ago in a bid to reduce the country's reliance on petroleum imports. However, the CTL technologies release carbon dioxide into the atmosphere and consume huge amounts of water raising environmental concerns.
Work on most CTL projects in China was halted since September 2008 as the central government asked local governments not to approve any new coal-to-liquids projects, saying "coal liquefaction is a technology-, talent-and capital-intensive project, and most domestic enterprises lack advanced technologies, management experience and equipment."
The only exceptions then were two involving the Shenhua Group: the Erdos facility and the 80,000 b/d Ningdong coal liquefaction project jointly planned by the group's subsidiary Shenhua Ningxia Coal Group and South African oil and gas major Sasol.
Ansteel approved to raise stake in Australian steelmaker
China's steel giant, Ansteel, had got government approval to increase its stake in Australian iron ore explorer Gindalbie Metals, a spokesman with Ansteel said Saturday.
The approval came Tuesday, allowing the Anshan Iron and Steel Group (Ansteel) in northeast China's Liaoning province to increase its interest in Gindalbie from 12.6 percent to 36.28 percent to become its biggest shareholder, according to the spokesman of Ansteel.
The purchase will be finished within a week. Then the two sides will invest a A$534-million in Karara iron ore project in western Australia, with a 50-50 ownership.
Gindalbie proposed Ansteel buy more of its shares in August last year. The application was approved by the board of Gindalbie early February.
トルクメン ガス、カザフ 原油 パイプラインで対中輸出