Chexpress - December 3, 2014

North America

Merger

Kinder Morgan, Inc. has completed its acquisition of the outstanding equity securities of Kinder Morgan Energy Partners, L.P., Kinder Morgan Management, LLC and El Paso Pipeline Partners, L.P. The approximately $76 billion transaction was initially announced earlier this year on August 10. Kinder Morgan, Inc. is the largest energy infrastructure company in North America. It owns an interest in or operates approximately 80,000 miles of pipelines and 180 terminals. The company’s pipelines transport natural gas, gasoline, crude oil, CO2 and other products, and its terminals store petroleum products and chemicals, and handle bulk materials like coal and petroleum coke.

Approval

British Columbia approved a liquefied natural gas export terminal being developed by Petronas, along with two pipelines to service Canada’s LNG industry. A federal environmental review of Petronas’ Pacific NorthWest LNG project is continuing, with Petronas expected to make a final investment decision on the $11 billion facility before the end of the year. In addition to the federal review, Petronas must now meet eight social and environmental conditions set out in the provincial approval and secure various permits from all levels of government. Petronas is also in the process of negotiating with aboriginal communities and refining its terminal design plans to mitigate the impact on sensitive fish populations.

Acquisition

Halliburton is buying Baker Hughes in a cash-and-stock deal worth $34.6 billion. Global oil prices have fallen 31 percent over the past 5 months to levels not seen in four years, which has forced the industry to cut costs by delaying or scaling back drilling. This means less work for companies that manage oil and gas fields for energy companies like Halliburton and Baker Hughes. It is believed that the combined company will be able to reduce costs by $2 billion a year.

World

Biosludge

Sasol has opened an industrial plant that converts toxic waste sludge into fertilizer. The Secunda project in South Africa’s Mpumalanga province produces synthetic fuels like petrol and gas by burning coal, a process that leaves behind 80,000 tons/year of toxic waste (or biosludge). Sasol used to burn the waste or send it to a landfill. Now, the new waste-to-fertilizer plant at Secunda will use bacteria and fungi micro-organisms to break down the biosludge and convert it into organic compost, which can be recycled as fertilizer.

Restart

An affiliate of Saudi International Petrochemical Co (Sipchem) has restarted a methanol plant after scheduled maintenance. The International Methanol Co. (IMC) plant, which produces 967,000 tons of methanol/year, was shut on Nov. 3 for three weeks for maintenance and repairs. IMC Is 65 percent owned by Sipchem, while a group of Japanese companies hold the rest.

Thinner-diaper technology

BASF will invest $624 million over the next two years in upgrading its production plants to make superabsorbers that allow for thinner diapers. The market launch of the new generation of superabsorbers will start at the end of 2016. Superabsorbent polymers can absorb and retain a large amount of liquid and are the main component in baby diapers, incontinence products and feminine hygiene products.

Investment

Ineos announced plans to invest $1 billion in shale gas exploration in Britain. The investment is subject to Ineos winning UK shale gas licenses currently being decided. The investment would mainly cover exploration costs.