Senate Passes Energy Bill

Acquisition

Spectra Energy Partners, LP agreed to acquire the equity interests of Saltville Gas Storage Company L.L.C. and the P-25 Pipeline from subsidiaries of Spectra Energy Corp. for $107 million, consisting of newly issued partnership units and approximately $5 million in cash.  The transaction is awaiting regulatory approvals and is expected to close during the second quarter of 2008.

Job Cuts

Dow Chemical plans to close at least four plants and cut 1,000 jobs in an effort to improve the efficiency and cost-effectiveness of its global operations.  Dow will take a charge against fourth-quarter earnings of $500 million to $600 million to cover severance and asset write-down costs.  The company says it should realize annual savings of $180 million/year when it completes all cutbacks now planned.  In addition to the shutdowns, Dow intends to exit the automotive sealers business in North America, the Asia-Pacific region and Latin America within the next 18 months.

Chemical Plant Security Review

Lawmakers have been urged by an industry security expert to give the Department of Homeland Security (DHS) and the nation’s chemical manufacturers an opportunity to fully implement existing DHS regulations to protect plant sites from terrorist attacks before making big changes.  The existing DHS regulations expire in October 2009, and Congress is laying the groundwork for legislation next year to make the plant security rules permanent.  The bill would require facilities designated as “high risk” to adopt inherently safer technologies, such as using smaller quantities of toxic substances or lowering operating temperatures.   

Basell, National Gas Company of Trinidad and Tobago, Ltd. (NGC) and National Energy Corporation of Trinidad and Tobago, Ltd. (NEC) have a memorandum of understanding confirming their intention to construct and operate a fully integrated polypropylene complex in Trinidad and Tobago.  They intend to construct a methanol plant, which will exclusively supply a methanol-to-propylene unit at the complex.  The propylene produced will be the feedstock for a 450 kilo-ton/year polypropylene plant.  Startup is tentatively scheduled for 2012.

Petrochemical Project

Braskem is partnering with Pequiven to create two companies to install an integrated petrochemical project at the Jose Petrochemical Complex in Venezuela.  The two companies will be called Propilsur and Polimerica.  Propilsur will be responsible for the construction of a polypropylene plant with 450,000 tons/year capacity integrated into a propane dehydrogenation unit, providing the project with greater integration and operational flexibility.  The plant should require a $900 million investment and should be ready for operation during the second half of 2010.  Polimerica will be responsible for the construction of an ethane cracker with natural gas as its feedstock, with capacity to produce 1.3 million tons/year ethylene, combined with the production of 1.1. million/year polyethylene produced in three industrial plants (high density polyethylene, low density polyethylene and low linear density polyethylene).  The plant is estimated to cost $2.6 billion with startup scheduled for the second half of 2012.

Petrochemical Complex

Chevron Phillips Chemical Co. plans to raise $1.8 billion to fund its plans to build a large petrochemicals complex in Jubail, Saudi Arabia.  The funds will be used for the construction of an estimated $5 billion petrochemicals project known as National Chevron Phillips (NCP), a 50-50 joint venture between Chevron Phillips and Saudi Industrial Investment Group.  The facilities will include a 1.2 million ton/year ethylene plant, a 1.1 million ton/year polyethylene unit, a 400,000 ton/year polypropylene unit and a 100,000 ton/year 1-hexane plant.

Acquisition

Indorama Polymers has agreed to acquire Eastman Chemical’s polyethylene terephthalate plants in Rotterdam, the Netherlands and Workington, England for approximately $95 million.  Indorama continues a rapid expansion in the PET business while Eastman continues its retrenchment from the PET business.

New Plant