PTTGC sets FID deadline by Q1 2021, Dow Canada PE expansion timeline unchanged, Braskem losses deepen
Thailand’s PTT Global Chemical sets new FID deadline by March 2021
Thailand-based PTT Global Chemical’s Final Investment Decision (FID) on whether to build an ethylene-polyethylene complex in Belmont County, Ohio will be announced by the end of March 2021, PTTGC America said on June 1, 2020.
“While the pandemic has prevented us from moving as quickly as we would like within our previous timeline, our best estimate is for an FID by the end of this year or in the first quarter of next year,” said PTTGC America President and CEO Toasaporn Boonyapipat.
The new date is a postponement of the FID of up to nine months. A report by the Thai embassy in Washington D.C. had estimated in February an FID “by the middle of this year.”
As the mid-2020 date approached and following industry commentary related to an indefinite postponement, a company spokesperson replied in mid-May to an e-mail inquiry saying PTTGCA could not provide at that time any firm timeline for an FID decision.
Dow's Fort Saskatchewan PE expansion timeline unchanged
(Story was updated on June 12 to include a reply from Dow saying project timeline unchanged.)
Dow Canada’s project to incrementally expand capacity at its ethylene facility in Fort Saskatchewan, Alberta through the addition of another furnace remains ongoing, a company official said by email on June 12.
"We have not announced any changes to the project timeline," a company spokesperson said.
The comment follows a request for an update following reports that the company was likely to delay construction work for an expansion of an existing polyethylene plant in Western Canada due to Covid-19 contagion concerns.
Bob Masterson, CEO of the Chemistry Industry Association of Canada, estimated the project investment at about C$250 million. He had said early in the month in an interview that a potential delay was likely due to safety concerns as bringing contract workers could be a risk to adjacent operations.
The expansion will add 130,000 tonnes of annual capacity to current production.
Dow announced the expansion on January 29, 2020 saying at the time that 700 workers were going to participate in the construction. It didn’t provide a cost but estimated completion by end of the first half of 2021. The Canadian Press estimated at the time the investment at C$200 million.
Braskem widens net losses in first quarter 2020
Brazil-based Braskem posted on June 3 a net financial result loss of 6.2 billion reais (about $1.2 billion) or more than double compared with a net financial result loss of 2.9 billion reais in the fourth quarter of 2019, as it cited currency depreciation.
The first quarter net financial result loss is several times deeper compared with the Latin America’s biggest petrochemical company net financial result loss of 923 million reais in the first quarter of 2019.
Braskem also said the net loss attributable to shareholders for the first quarter of 2020 was only 3.6 billion reais. This compares with a similar net loss attributable to shareholders of 2.9 billion reais in the previous quarter.
Minority shareholders hold nearly 26% of the company’s equity. However, combined, they only have 3% of total voting rights. The rest of the equity is held by the majority owner, Brazilian construction company Odebrecht and the second-biggest equity holder Petrobras, the Brazilian state oil company.
The loss was mainly due to the “effects from the Brazilian reais depreciation against the U.S. dollar” on the exposure of $2.4 billion and of the Mexican peso against the dollar on the balance of a $2.3-billion loan contracted by the Mexican venture Braskem Idesa.
Braskem also said its first quarter 2020 EBITDA (earnings before interest, taxes, depreciation and amortization) was $294 million, 22% higher than in the fourth quarter of 2019.
The on-quarter EBITDA increase resulted from higher sales volume of resins in the Brazilian market, polypropylene (PP) in the United States and Europe, and polyethylene (PE) in Mexico.
However, total EBITDA decreased on-year by 34% in dollar terms. The decline from the first quarter of 2019 was due to lower spreads in the international market, Braskem said.
EBITDA just for the United States and Europe was $62 million, up 33% from the fourth quarter of 2019 because of “capacity utilization rates normalization in the U.S. and the re-stocking trend in the chain in Europe due to (Covid-19) uncertainties.”
As for Mexico alone, the EBITDA was $79 million or 2% higher than in the fourth quarter of 2019. This represented 21% of the company's consolidated EBITDA.
“The increase in (Mexico’s) EBITDA is mainly explained by the growth in PE sales volume supported by the higher supply of ethane,” the company said.
Braskem Idesa imported 12,600 tons of ethane from the United States during the first quarter.
This helped to offset in part a reduction in the supply of ethane by Pemex. Braskem said that resin demand in the Brazilian market (PE, PP and PVC) grew 3% compared with the first quarter of 2019, reflecting the recovery in construction, consumer goods, packaging and agriculture.
In relation to the fourth quarter of 2019, demand growth of 7% was due to seasonality, it said.
Braskem also reported an unscheduled shutdown of its Rio Grande do Sul polyethylene integrated unit, which resulted in lower capacity utilization rate of its c racker.
Ethylene production increased at the cracker in Bahia compared with the fourth quarter of 2019, when it underwent maintenance.
By Petrochemical Update