Inter Pipeline to conclude efforts to find partner for PDH/PP complex by June; Celanese retakes and expands acetic acid project in Texas; S&P CEO discusses integration after IHS Markit planned acquisition

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Inter Pipeline's Heartland Petrochemical Complex in Alberta. Image courtesy of Inter Pipeline.

Inter Pipeline to conclude efforts to find PDH/PP partner by June

Canada’s InterPipeline said on Feb. 18 that it plans to conclude by June efforts started about a year ago to find a partner for its C$4 billion Heartland Petrochemical Complex near Edmonton, Calgary, under construction and scheduled to start operations in early 2022.

“While there can be no certainty that a definitive agreement will be reached, a partner would benefit from joining a well-developed, world-scale petrochemical project that has substantial commercial advantages,” the company said on Feb. 18 along with its fourth quarter 2020 earnings.

The company anticipates that the propane dehydrogenation facility will be mechanically complete by May and the polypropylene plant by year’s end.

Inter Pipeline invested during the fourth quarter of last year C$270 million on the project, bringing the total to C$3.2 billion, it said.

The company completed last year the reactor structure, the pelletizer and flare stack, as well as a railyard from which it will ship polypropylene.

Company officials had previously estimated that the partner-finding process would end in early 2021.

Inter Pipeline separately said on Feb. 22 that an affiliate of Brookfield Infrastructure Partners started a conditional, unsolicited takeover bid to acquire all outstanding common shares of the company not already owned by Brookfield.

The board has 15 days to provide shareholders with a recommendation regarding the offer, the company said. It urged shareholders to wait for the recommendation.

Celanese retakes and expands acetic acid project at Clear Lake, Texas

Celanese decided to retake but at a bigger scale an expansion of its acetic acid plant in Clear Lake, Texas after it re-evaluated original plans that were placed under review shortly after the start of the pandemic.

“We're actually going to be able to expand Clear Lake to be about 2.6 million tons capable,” said Lori Ryerkerk, chief executive officer at Celanese, during the Dallas-based company’s fourth quarter earnings discussion on Jan. 29.

“The delay turned out to be a good thing. We actually had a chance to go back and re-examine some elements of the project and have, what I think is, a stronger, more robust economically project now as well as additional capacity we can use for the future,” she said.

“We had originally announced Clear Lake expansion from 1.3 million tons to 2 million tons. When we did that, we assumed we would either shut down our cutback capacity in Asia,” she added, according to a transcript of the call by Motley Fool.

“And we also found other sources of productivity, specifically around catalyst usage in Clear Lake and some other areas,” she added.

A strong recovery in acetic acid since the start of the pandemic, and expectations that acetic acid “will continue to grow at GDP plus” contributed to the decision, she said.

“We'll have that capability fully in 2023. Now, we need methanol and things to go with that and we're working on that. But that capacity would be able to come up to that rate at the start-up. So, essentially, we will double the size of Clear Lake capacity,” she said.

S&P Global CEO discusses integration after planned IHS Markit acquisition

Douglas Peterson, chief executive of S&P Global, said on Feb. 9 that it was too early to discuss a future price strategy for subscriptions after the IHS Markit acquisition is completed, but said there would be multiple possibilities for integration of data offered by the companies, which includes petrochemical products pricing and analysis.

Asked during the company’s latest earnings call whether there would be a higher price level after having more data to offer, a move that would change the provider’s low-price competitor position, or whether it will seek subscriber growth by adding value, Peterson discussed possibilities for sharing distribution channels.

“This is really a little bit premature for me to be giving you the strategy. But if you think about what we're going to be bringing together, Market Intelligence right now has a really strong base of installed customers, hundreds of thousands of users that are already using our information. So you think about that as one distribution channel for all of the very rich IHS Markit data,” he said

“On the other hand, IHS Markit also has very powerful tools which include workflow for financial institutions and for corporate and asset management industry, etc. So getting those two together is going to allow us to have a much more comprehensive strategy both looking at the value that we bring, which you talk about is a price strategy, but I think of more as a value strategy (…),” he added according to a Motley Fool transcript.

Ewout Steenbergen, S&P’s CFO, reiterated the company is looking at $480 million in annual cost synergies from the acquisition announced at the end of November. S&P said at the time IHS Markit was to be valued at $44 billion in the planned transaction.

“At this moment, the expense synergies of $480 million is still our best estimate,” he said.

“We will always look for further opportunities, but the $480 million of expense synergies is the number we are committed to right now,” he added.

“We think that there are opportunities for us to continue to grow in the ratings business and Platts, Market Intelligence, and Indices, very specifically with the capabilities that we have today expanding into new markets like we've mentioned Asia or China, new product capabilities, or customer experience,” Peterson said.

IHS Markit brings 50,000 customers in 140 countries and “they're serving 80% of the global Fortune 500,” he said.

Shareholders from S&P Global and IHS Markit will have separate meetings with their shareholders on March 11 to decide on the transaction. Separately, there is ongoing work to obtain regulator’s approval. S&P had costs related to the IHS Markit planned acquisition of $24 million in the fourth quarter.

By Reuters Events