Chexpress - June 30, 2011

North America

Production Resumed

Hoeganaes’ Gallatin, Tennessee plant is expected to restart over the coming weeks after reviews. The plant is the site where four workers have died in fires. The four died in three flash fires, most recently in late May.

Purchase

Eastman Chemical Co. has signed an agreement to buy Sterling Chemicals Inc. for $100 million in cash, boosting Eastman’s market share in more environmentally friendly plastic products. The purchase has been approved by the companies’ board of directors, but must receive regulatory and shareholder approval.

Settlement

Weatherford U.S. LP, a BP PLC contractor, has agreed to pay $75 million to settle all potential claims between the companies over last year’s deadly rig explosion and the massive oil spill in the Gulf of Mexico. In exchange for the payment, BP has agreed to cover Weatherford’s compensatory claims related to the disaster, including those over environmental damage and economic losses. Civil and criminal fines and penalties and claims for punitive damages aren’t covered by the indemnity agreement.

Fines

The Occupational Safety and Health Administration (OSHA) has said titanium and zirconium recycler AL Solutions could have prevented a plant explosion, but instead exposed workers to unnecessary risks. The explosion killed three men. OSHA cited the New Cumberland, West Virginia plant with 18 violations, 16 of them considered series and one labeled “willful.” The proposed fines total $154,000.

Shutdown

Westlake Chemical Corp.’s North American Pipe Corporation subsidiary has shut down its Springfield, Kentucky PVC pipe production facility in an effort to reduce costs and optimize production operations as a result of excess capacity in the PVC pipe market. Customers currently being serviced from Springfield will not experience any supply disruption and will now be serviced through North American Pipe’s other PVC pipe plaints.

Expansion Contract

Fluor Corp. has been awarded a contract by The Dow Chemical Company to provide basic engineering and design services on its propane dehydrogenation (PDH) expansion project in Freeport, Texas. The terms of the contract were not disclosed. The basic engineering will be executed in Fluor’s Houston, Texas office with support from its office in Manila, Philippines. Once construction is complete, the facility will produce polymer-grade propylene.

World

Collaboration Deal

Sekisui Chemical Company and Avantium have entered into a collaboration agreement. Avantium will be contributing its proprietary high-throughput technologies and expects to the development and improvement of catalysts and process optimization of Sekisui Chemicals’ product portfolio.

$5B Facility

AMEC has been appointed by BASF Polyurethane Company Limited and Chongqing Chemical and Pharmaceutical Holding Company Limited as the project management contractor for the development of a new 400,000 tons/year MDI facility in Changshou, Chongqing, China. The value of AMEC’s three-year contract has not been announced, but the overall capital cost of the complex will be more than $5 billion. AMEC's role is to provide project management services and interface coordination in relation to the facilities as part of an integrated project management team.

Alliance

KBR and Shell Global Solutions International B.V. have formed a new alliance in which KBR will market, sell and provide technology and design packages with Shell Global Solutions on hydroprocessing solutions worldwide. This alliance combines the companies’ core technology and processing strengths to provide customers with quality and competitive hydroprocessing solutions. The agreement is effective immediately.

Contract

Clough awarded a $45 million contract to the STREICHER-Clough Joint Venture (SCJV) for pipeline construction work on the Macedon Project. The scope of the work includes horizontal directional drilling, construction of an onshore wet gas pipeline and sales gas pipeline, and umbilical installation. Work should begin in June 2011 and is expected to be completed in May 2012.