| WTI Crude | $66.31/bbl | +4.2% |
| Brent Crude | $69.36/bbl | +4.0% |
| HH Nat Gas | $2.91/MMBtu | +2.5% |
| MB Propane | $0.88/gal | +9.6% |
| 3:2:1 Crack | $18.66/bbl | -2.9% |
Shell decided to sell 2 more refineries
Dutch oil & gas company, Shell, has announced the sale of its refinery in Deer Park, TX for $600 million and Mobile, AL for $75 million.
Feeling déjà vu?
This announcement shouldn't come as a surprise. Shell divested a refinery north of Seattle just a few weeks ago and has told us that it only plans to keep 6 of its most integrated sites. The company now owns just 10 refineries (down from 54 one decade ago).
What's weird:
Shell's refinery in Deer Park has been a 50/50 joint venture with Mexico's state-owned refiner, Pemex, since 1993. The enormous site is well integrated with Shell's adjacent petrochemical plant—until now it seemed to be one of the few sites Shell was planning to hold onto (unlike the tiny non-integrated refinery in Mobile). While Shell will hang on to its chemical assets in Deer Park, Pemex's unsolicited offer for the rest of the site proved to be far too tempting to resist.
Trinseo finally sold its synthetic rubber business
US-based styrenics producer, Trinseo, has announced the sale of its synthetic rubber business to Synthos for $491 million.
Some context:
Trinseo told us back in December that it was looking to sell its synthetic rubber business (which primarily sells SSBR). The proceeds from this sale should reduce the company's debt burden following its recent $1.2 billion MMA/PMMA acquisition.
Why they did it:
Because the low-margin synthetic rubber business (which profited $41 million in 2019) is linked to the cyclical automotive industry it experiences similar cycles. Last year, thanks to COVID-19, Trinseo's synthetic rubber business did $320 million in sales and only profited $2 million before taxes. The company hopes this divestment and its MMA/PMMA acquisition will stabilize its profits.
Read the press release here.
Some big chemical companies set up a recycling investment fund
North American polymer producers, Dow Chemical, LyondellBasell, and Nova Chemicals have decided to establish a joint $25 million investment fund to develop the plastic recycling infrastructure in the US and Canada.
The details:
The investment fund, which will be managed by Closed Loop Partners, plans to deploy the cash in three areas—access, optimization, and manufacturing. That means the firm will invest in companies that improve the collection of waste plastic, the sorting of that plastic, or facilities that use recycled plastic. All of which are areas polymer producers (like Dow, LyondellBasell, and Nova) lack expertise but are desperate for solutions.
Looking forward:
Closed Loop Partners is looking to raise an additional $75 million through "additional corporate investors and financial institutions" so that a total of $100 million can be invested in the plastic recycling infrastructure. The fund will now seek investment opportunities in technologies, companies, and infrastructure projects that will increase the quality and quantity of recycled PE and PP.
Read the press release here.
The Reboiler:
- Total is officially changing its name to TotalEnergies
- Linde will install a CO2-capture pilot plant in Illinois
- CP Chem broke ground on the new 1-hexene plant we talked about a couple weeks ago
- Bechtel was selected to design Nacero's natural gas-to-gasoline plant
- Arkema acquired an Italian polymer compounding and regeneration specialist
- PKN Orlen will be building a $3.7B petrochemical site in Poland
- Cummins is planning to to build a world-scale electrolyzer plant in Spain
- Saint-Gobain decided to acquire a construction-chemicals producer for $85M
MOTD: meg
Today's MOTD is the most important one yet: mono-ethylene glycol.
First prepared by the legendary Charles-Adolphe Wurtz in 1856, the world now produces over 35 million tons of mono-ethylene glycol (MEG) each year.
Virtually all MEG is produced from ethylene through the intermediate ethylene oxide. About 40% of that MEG is used to produce antifreeze (to do things like de-ice airplane windshields) and about 50% is reacted with PTA to produce PET (to make polyester clothing and plastic bottles).
The Carbide and Carbon Chemicals Company (a subsidiary of Union Carbide) was the first to produce MEG and it's remnants still produce it (Union Carbide was bought by Dow Chemical in 2001).
The world's largest producers of MEG are petrochemical companies with access to the ethylene feedstock that make it possible—companies like SABIC, Reliance, BASF, LyondellBasell, and Dow Chemical.