🏭 New ethylene derivative

Good morning. The Column is back! Be sure to check out the extra long “more headlines” section to catch-up on the last two weeks.

From the condenser:

· Ineos and Sinopec's $7B JV

· Indorama and battery electrolytes

· POTD: motor oil

Ineos and Sinopec shook hands

Chinese chemical company, Sinopec, has agreed to divest half of its complex in Shanghai and build two new plants with Britain's Ineos as part of a new $7 billion joint venture.

A little history:

Ineos is no stranger to acquisitions. In fact, pretty much all of Ineos' assets were acquired, not built. In the mid-1990s Jim Ratcliffe started piecing together a bunch of chemical businesses that the big guys didn't really want. This wasn't a small undertaking—take a quick stroll through the company's timeline and you'll see how a little financing can create a new chemical giant.

Okay, so what's going on here?

Sinopec built this complex in Shanghai with BP around the same time that Ineos bought $9 billion worth of BP's chemical assets, but this site wasn't part of that sale. BP held on to their half of the steam cracker and all the goodies downstream (mostly polyolefins and styrene derivatives) until Sinopec bought BP's share 5 years ago. Selling that share to Ineos should feel pretty natural to Sinopec since Ineos is basically the new BP. Remember, Ineos bought the rest of BP's chemical business last year.

Bigger picture:

In any case, this deal isn't just about the Shanghai complex. Ineos and Sinopec are also planning to build a high-density polyethylene (HDPE) plant and an acrylonitrile butadiene styrene (ABS) plant together. Building big plants is a new thing for Ineos. Their intent on doing so to the fullest extent in China tells us they don't want to just be the remnants of BP and ICI, they want to be huge.

Indorama is eyeing battery electrolytes

Thailand-based chemical company, Indorama, might build an ethylene carbonate (EC) and derivatives site on the US Gulf Coast with the help of Capchem's process technology.

What are they making?

Lithium-ion batteries (LIBs) are groups of electrochemical cells. You can think of each cell as a rolled-up multilayer sandwich consisting of a cathode, a separator soaked in electrolyte, and an anode. The electrolyte is typically a salt of lithium dissolved in a solvent that transports lithium ions across the battery cell. That solvent is usually EC or made from EC.

Okay, but why Indorama?

We make EC by reacting ethylene oxide (EO) with carbon dioxide. EO is the key here because EO is used to make surfactants via the ethoxylation of fatty acids, and Indorama is largest "ethoxylator" in the Americas (after their Oxiteno acquisition last year). That means the company has a lot of EO in the region with the best feedstock advantage (ethylene, which is used to make EO, is still relatively cheap in the US).

Zooming out:

As of today, Huntsman is the only producer of cyclic carbonates like EC (propylene carbonate is also a thing) in the US. With demand for electric vehicles continuing to grow there is plenty of room for someone like Indorama to enter the market. We'll have to see how it pans out—for now Indorama and Capchem are just in talks and looking to do a feasibility study. Expect to hear something within a year.

Some more headlines:

• SK Geo Centric and Weixing Chemical are building a new ethylene acrylic acid plant in China

• Dow Chemical is interested in developing small modular nuclear power for decarbonization

• Evonik is using up to 40% LPG instead of natural gas at its sites in Germany

• SK Capital's Archroma is buying Huntsman's Textile Effects business

• BASF wants to make more specialty pyrrolidones in the US

• Sasol is monitoring its energy use and emissions with AI at its Lake Charles site

• Shell will supply hydrogenated vegetable oil to Deutsche Bahn for trains

• Covestro is selling its 3D printing business

• Aramco just bought Valvoline's Global Products business for $2.7 billion

• Mitsubishi Chemical will build more EVOH capacity in the UK

• Evonik decided to sell its surfactants and specialty esters business to Kensing

• Chemours will make more low GWP refrigerants in Texas

• CP Kelco plans to expand its biogums production capacity in Oklahoma and China

• LG Chem and GS Caltex are going to build a 3HP pilot plant for PHAs

• BP is spending $50 million on a new battery research center

• Cariflex started building the world's largest polyisoprene latex plant

Product of The Day:

Today, we're breaking down motor oil.

If you're a car owner you know that routine oil changes are important for so many reasons. But what's the difference between conventional and synthetic oil? And what exactly is this stuff made of?

Motor oil is mostly a base oil, or combination of base oils, with some additives like detergents and dispersants sprinkled in. Most base oils, often called gas and lubricating oils, are produced by refiners via crude oil distillation. After those oils come out of the lower fraction of the column (seen here) they are processed into various grades based on purity. When Base I and Base II oils (referred to colloquially as mineral oil) are used to make motor oil we call it "conventional". Motor oils made from Base III oils are considered "synthetic" in the US, but "conventional" outside of the US. Everyone agrees that motor oils made from Base IV oils (polymerized linear alpha olefins, called PAOs) are "synthetic".

To sum it up, Base I-III oils are derived from crude oil and that Base IV oil is derived from natural gas (natural gas -> ethane -> ethylene -> LAOs -> PAOs). Blend them in different ways, toss in some additives, and you get the motor oils with all sorts of viscosity ranges.

In case you're interested:

• Safety Moment: Watch this video to get a crash course of how Pressure Safety Valves work, their main components, and their applications.

• Tip: Add Lustre to your browser so you can see price history and reviews before buying anything online.*

• Article: This is a good read if you want a quick introduction on how to gauge the profitability of a refinery.

• Book: How can you expect to understand the chemical industry without knowing its history? Start with Fred Aftalion's introduction.*

The bottoms: