FlexPO+ Digital Conversation with Bob Maughon, EVP, SABIC
FlexPO+, ADI Chemical Market Resources' annual conference, will return once the world moves past COVID-19. Until then, we bring you our new series of digital conversations with industry leaders.
Kicking this off is a conversation with Bob Maughon, who leads SABIC as EVP, Chief Technology Officer, and Chief Sustainability Officer. We discuss how the chemical industry is approaching technology and sustainability, what COVID has done to the industry's outlook, and where the industry is headed in terms of its future.
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Key Chemical Industry Drivers
GDP growth across major economies has recovered as well as some economic indicators are showing signs of recovery
Global GDP growth is forecasted to contract by 4.4% to 6.0% for 2020
Both auto sales and Purchasing Manager’s Index have witnessed growth at the end of the third quarter across most economies
Select Industry News Highlights
The U.S. chemical industry can expect a stable and more predictable environment in the Biden administration.
The new administration in the U.S. under President-elect Joe Biden could mean subsiding trade tensions with China in the upcoming years easing disruptions in petrochemical markets. This could also mean the U.S. re-joining the Paris Accord and increased focus on policies to address climate change.
The America Chemistry Council (ACC) has urged President-elect Joe Biden that the current costly tariff policy hinders the U.S. petrochemical industry’s competitive advantage. With $136bn in exports, the U.S. chemical industry remains a key player and lower trading costs and a more predictable trading environment will help the industry.
Canada is mulling a plastics ban significantly denting the U.S. chemical industry.
Canada plans to designate plastic as toxic under the Canadian Environmental Protection Act (CEPA) which would ban certain single-use plastic products such as bags, straws, and utensils. Nearly 70 American industry groups claim that any ban on plastic products manufactured in the U.S. could violate Canada’s obligations under the United States-Mexico-Canada Agreement (USMCA) and the World Trade Organization and such a ban could affect more than $12.1 billion in U.S. exports to Canada.
Alberta government in talks with private Saudi firm to invest in a petrochemical plant.
Alberta is in talks with a private Saudi firm to open a $3.8 - $7.6 billion petrochemical plant in Canada. Alberta is offering various incentives for developers and operators to build and operate petrochemical plants in order to boost domestic natural gas demand without increasing pressure on the pipeline and midstream sector.
The 20,000-tons-per-year rubber bitumen plant at the Zala site of MOL has been completed.
Built in one year with an investment of about $10 million, the plant recycles 8-10% of Hungary's domestic tire waste. The plant capacity is sufficient to meet nearly 10-15% domestic demand for bitumen for large projects such as road construction and the technology patent by MOL also gives them the opportunity to license the technology. About 75% of the $10 million investment was provided by MOL from its own resources, and 25% was financed through state aid.
Plans to build the world’s first petrochemical plant fully powered by renewable energy have been put on hold due to COVID-19.
BASF, ADNOC, and Indian conglomerate, and Adani had planned a $4-billion Mundra acrylics and polypropylene plant at Mundra, India. The site was planned as the world’s first CO2-neutral petrochemical site to be fully powered with renewable energy. The plant was supposed to be operational by 2024 but has been put on hold for now with the possibility of revival at some point in the future.
State-owned Saudi Aramco and petrochemical company SABIC are reassessing the $20-billion integrated crude-to-chemicals project at Yanbu.
In the wake of depressed demand due to COVID-19, Saudi Aramco and SABIC are reevaluating their plans for an integrated crude-to-chemicals project at Yanbu in Saudi Arabia. The companies are now looking at integrating existing refineries in Yanbu with a world-scale mixed feed steam cracker and downstream olefin derivatives units as part of their original plan. The planned project is expected to process 400,000 bbls/day crude oil and produce nearly 9 million tons per year of petrochemicals.
AkzoNobel is expanding in Europe with the decision to acquire the Spanish decorative paints business, Industrias Titan S.A.U.
The completion of the deal is expected before the end of Q1 2021 after necessary regulatory approvals. Titan has a presence in Portugal in addition to Spain. AkzoNobel will benefit from the high growth in the two countries while establishing a strong position for themselves in the paints and coatings market.
Clariant is relaunching the sale of its pigments unit after putting the auction on hold due to COVID-19.
Clariant is concentrating on its faster-growing segments such as catalysts, shampoo ingredients, and oil & gas chemicals while divesting commoditized operations. Before the delay, the sale of the business unit that manufactures dyes for car and building industries was expected to sell for up to $984 million although it might be lower due to the pandemic.
SIBUR introduces a unique digital technology to model gas chemical reactions.
SIBUR has developed a solution to accurately model physical and chemical processes at petrochemical facilities. A pilot was launched at the company’s LLDPE plant in Tomskneftekhim, where the reactor was digitally modeled to deliver a 12% reduction in the rate of consumption of costly additives without compromising quality. The expected annual savings could reach RUB 50–60 m facility-wide. Comparing the number of digital simulations of the model that were run over 18 months costing RUB 15 million, the same number of physical experiments would have costed the company a decade and RUB 1 billion.
Covestro reported receiving its first delivery of certified renewable phenol from Borealis to be used a feedstock.
Germany-based polymer producer Covestro received its first 1,000-ton batch of renewable phenol from Borealis for production of polycarbonate plastic. Covestro plans to use the renewable polycarbonate in automotive and electronic sectors. The phenol is manufactured by Borealis using renewable hydrocarbons feedstock supplied by Neste, sourced from waste and residual oils and fats.
UK Research and Innovation (UKRI) invests £20 million into four recycling projects to reduce the amount of waste plastic.
The £20 million investment from the Industrial Strategy Challenge Fund, along with over £65 million of industry investment represents the largest funding UK has made into plastic recycling technologies. Investments include:
Veolia, Unilever, Charpak Ltd, and HSSMI will develop U.K.'s first dual-ET bottle and tray recycling facility, capable of recycling 100% of clear rigid PET in a closed-loop system.
ReNew ELP proposed to set up a catalytic hydrothermic reactor in Wilton, Teeside, capable of converting 20,000 tonnes of plastic per annum into oils and chemicals for use in virgin-grade plastics.
Recycling Technologies has been awarded funding for a thermal cracking site that recycles plastic that cannot normally be reused by conventional methods.
Poseidon Plastics aims to commercialize its novel enhanced recycling technology through a 15,000-tonne-per-annum recycling facility.
Austria's OMV completed its $4.68 billion deal to increase its Borealis shareholding to 75%.
OMV acquired an additional 39% stake in Borealis from Abu Dhabi-based Mubadala. OMV now owns 75% stake in the chemical company, Borealis, with Mubadala retaining the remaining 25%. The transaction furthers OMV’s strategy to expand their value chain and support their growth in chemicals space globally.
Lummus Technology to supply 14 ethylene cracker furnaces to for a gas chemical complex in Russia, on the Gulf of Finland.
The gas chemical complex is a part of the ethane-rich gas processing complex (GCC EFPC) located near Ust-Luga, Russia. The contract was within the framework of an EPC contract for the GCC EPGC project between China National Chemical Engineering & Construction Corporation Seven Ltd. (CC7) and the Baltic Chemical Plant LLC.
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