🏭 Not your typical alkali

Good morning. Welcome to weekly free edition of The Column! Last week paid readers saw Shell and Technip's CO2 capture plans & BP's $4.1B renewable natural gas acquisition ($) + Exxon and LyondellBasell's new plastic sorting plant & the start-up of a blue pigment used to make sodium-ion batteries ($).

From the condenser:

· Exxon sold its Montana refinery

· Ineos bought into caustic potash

· MOTD: toluene

ExxonMobil just sold its refinery in Montana

Houston-based refiner, Par Pacific, has acquired ExxonMobil’s refinery and pipeline assets in Billings, Montana for $310 million.

The context you need:

Par Pacific is an independent refiner—a company who owns little assets upstream or downstream from the refinery, and makes the majority of its revenue from its refining operations (some might call it a pure play refiner). ExxonMobil is an integrated refiner, which means they make most of their revenue from oil production, and everything downstream is just additional value capture or a hedge against falling oil prices.

So, what's the deal here?

In case you haven't heard, refineries are operating at high margins that they haven't seen since the early 2000s. There are a lot of intertwined reasons for this, but at a high level it boils down to a lack of refining capacity (partially due to lack of construction and partially due to COVID-19-related refinery closures or conversions) and participation in global petroleum markets. The high refining margins mean independent refiners (like Par Pacific, Valero, and Marathon) are relatively more cash flush than the integrated refiners (like ExxonMobil, Shell, and Chevron), so Par Pacific is cashing-in.

Looking forward:

Profit margins will remain high for refiners until we build capacity (which is exactly what this price signal is saying to do—it's giving these companies a lot of cash to go out and build refineries) or we destroy demand (another pandemic, a recession, or an export ban). If the latter doesn't happen before the former, it's just a matter of time (multiple years) before the independent refiners invest their earnings in new capacity.

Ineos is getting into caustic potash

British chemical company, Ineos, has acquired Ashta Chemicals and its chlor-alkali site in Ashtabula, Ohio.

Not your typical alkali:

Usually when we talk about chlor-alkali we're referring to the production of caustic soda (sodium hydroxide), chlorine, and hydrogen via the electrolysis of brine (a sodium chloride solution). But the chlor-alkali process can also be used on other salty solutions, like water with a high concentration of potassium chloride. If you do electrolysis on that stuff you end up with caustic potash (potassium hydroxide), chlorine, and hydrogen—the only difference is the alkali (potassium instead of sodium).

The details:

The brine used for typical chlor-alkali processes usually comes from saltwater, but it can also be produced by pumping hot water underground to a salt deposit (halite for sodium chloride, sylvite for potassium chloride). In any case, the majority of potassium chloride mining is done by pumping the bring to the surface and evaporating the water, leaving behind solid potassium chloride crystals for the fertilizer industry. Ashta Chemicals is either (1) dissolving those crystals on-site and then doing electrolysis, or (2) doing electrolysis directly from a mine nearby (I'm not sure if there is one nearby).

Why the acquisition?

Ineos already owns the process technology currently in use at the site, and the site is located near Ineos' Ashtabula titanium dioxide site. There are probably some potassium-based derivatives Ineos is interested in producing, after-all, potassium hydroxide is the largest volume potassium chemical for non-fertilizer use, but their specific plans aren't clear.

Some more headlines:

• Clariant announced a portfolio for purifying pyrolysis oil from mixed plastic waste

• Eni might build a new biorefinery at Livorno site

• Air Liquide, Chevron, LyondellBasell, and Uniper are pursuing blue hydrogen and ammonia on U.S. Gulf Coast

• Haldor Topsoe is going to support the first SAF production in Brazil

• Neste’s polyalphaolefins technology was selected by CNOOC and Shell

Molecule of The Day:

Today's MOTD is the most interesting one of all: toluene.

Owing its name to the balsam of Tolu, the world now produces some 33 million tons of toluene each year. Most of that toluene is made at refineries thanks to the catalytic reforming of naphtha, but a good bit is made from the production of coke (which you'll see the most of in China). At refineries that toluene is found as a component in BTX and most of it is never separated from its aromatic friends—it's just blended into gasoline.

Even when that toluene is isolated, most of it ends up being used to make B and X (benzene and xylene). The rest is used to make TDI (for polyurethanes), TNT (for blowing up stuff), benzoic acid, and benzaldehyde.

Given that most of the molecule is made at refineries it shouldn't be a surprise that ExxonMobil, Sinopec, and Shell are some of the key players.

In case you're interested:

• Course: Want a complete overview of the major petrochemicals and how we make them? This will cover all the bases.*

• Podcast: Check out this episode featuring a metallurgy and process development expert.

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

• Product: Does measuring the pH of random liquids sound fun to you? If so, then try out this pH meter.*

The bottoms: