BP 2012 Annual Report Download - page 81

Business review: BP in more depth
Business review: BP in more depth
BP Annual Report and Form 20-F 2012
79
Gelsenkirchen refinery. In October 2012 we sold our interest in BP
Chemicals (Malaysia) Sdn Bhd (BPCM), which manufactures PTA with a
production capacity of 610,000 tonnes per annum, to Reliance Global
Holdings Pte. Ltd. for $230 million.
Our portfolio is underpinned with proprietary technology and leading cost
positions allowing BP assets to remain competitive against the newest
world-scale units being built in China. These capacity additions and
technology advances have resulted in a sharp fall in margins resulting in
losses for the older, less efficient producers.
Our technology team develops, deploys and optimizes advantaged
chemicals technology to advance the competitiveness of the installed
asset base and deliver competitively advantaged projects to access
growth. We plan to continue to deploy our advantaged technology in new
asset platforms to access the demand centres of Asia and advantaged
feedstock sources.
In 2012 we progressed our 1.25-million tonnes per annum PTA project in
Zhuhai, China. Below ground preparation work is now complete. We also
furthered our growth strategy in Asia by signing a memorandum of
understanding with SK Global Chemical Co., Ltd (SKGC) and Sinopec
Sichuan Vinylon Works (SVW), to explore the development of an
integrated 1,4-butanediol (BDO) and acetic acid project in Chongqing. The
proposed 200,000-tonnes per annum BDO plant will be built by SKGC and
SVW while the 600,000-tonnes per annum acetic acid plant will be built
by our existing acetic acid joint venture in Chongqing. The units in the
integrated project are planned to be inter-dependent: the BDO plant will
supply acetylene off-gas to the acetic acid plant, which, in return, will
supply hydrogen to the BDO plant. This integrated approach is expected
to enhance the competitiveness of the complex.
We continue to make progress on our joint study with IndianOil Corp (IOC)
to invest in a 1-million tonnes per annum acetic acid plant in Gujarat, India,
and have recently completed a refinery integration study to optimize the
integration benefits of the proposed project with IOC’s refinery.
In 2012, we created a new revenue stream in petrochemicals through
third-party licensing of our proprietary PX and PTA technology with two
licences being sold in 2012 for use in large-scale plants in India. We also
secured a 15-year methanol off-take agreement with Lake Charles’s
Petcoke Gasification project in Louisiana, US, which will place us well to
access advantaged feedstock supply to our acetic acid business.
Petrochemicals production capacitya b
Geographical area Site Product
Group interest
%
BP share of
capacity
thousand tonnes
per annumc
US
Cooper River Purified terephthalic acid (PTA) 100.0 1,300
DecaturdPTA 100.0 1,000
Paraxylene (PX) 100.0 1,100
Texas City Acetic acid 100.0e 600
e
PX 100.0 1,300
Metaxylene 100.0 100
5,400
Europe
UK HulldAcetic acid 100.0 500
Acetic anhydride 100.0 200
Belgium Geel PTA 100.0 1,300
PX 100.0 700
Germany GelsenkirchenfOlefins and derivatives 50.0 to 61.0 1,800bg
MülheimfSolvents 50.0 100b
4,600
Rest of World
China Caojing Olefins and derivatives 50.0 3,300
b
Chongqing Acetic acid 51.0 200b
Esters 51.0 100b
Nanjing Acetic acid 50.0 300b
Zhuhai PTA 85.0 1,800h
Indonesia Merak PTA 50.0 300b
South Korea Ulsan Acetic acid 51.0 300b
Vinyl acetate monomer 34.0 100b
Malaysia Kertih Acetic acid 70.0 400b
Taiwan Kaohsiung PTA 61.4 900b
Taichung PTA 61.4 500b
Mai Liao Acetic acid 50.0 200b
8,400
Total BP share of capacity at 31 December 2012 18,400
a Petrochemicals production capacity is the proven maximum sustainable daily rate (MSDR) multiplied by the number of days in the respective period, where MSDR is the highest average daily rate
ever achieved over a sustained period.
b Includes BP share of equity-accounted entities, as indicated.
c Capacities are shown to the nearest hundred thousand tonnes per annum.
d These sites have capacity under 100,000 tonnes per annum for a speciality product (e.g. naphthalene dicarboxylate and ethylidene diacetate).
e Group interest is quoted at 100%, reflecting the capacity entitlement, which is marketed by BP. This capacity is not part of the refinery divestment.
f Due to the integrated nature of these plants with our Gelsenkirchen refinery, the income and expenditure of these plants is managed and reported through the fuels business.
g Group interest varies by product.
h BP Zhuhai Chemical Company Ltd is a subsidiary of BP, the capacity of which is shown above at 100%.