MUSCAT, APRIL 16
OQ Chemicals, the wholly-owned subsidiary of OQ – the integrated energy group of the Sultanate of Oman – has announced the completion of a key milestone in the construction of a site in the US state of Texas that will house its ‘Propel’ project – a joint initiative with German-based global chemicals giant Röhm.
The Propel facility, built at OQ Chemicals’ Bay Site complex in Texas, will support the operation of Röhm’s world-scale Methyl Methacrylate (MMA) plant. Integrated with OQ Chemicals’ existing complex, the Propel site will source part of its feedstock requirements from OQ Chemicals to produce 250,000 tonnes per annum of MMA - a crucial precursor for applications like coatings, adhesives, medical products, road markings, and Plexiglas (acrylic sheets).
OQ Chemicals (formerly known as OXEA) is a global manufacturer of Oxo Intermediates and Oxo Performance Chemicals such as alcohols, polyols, carboxylic acids, specialty esters, and amines. These are used to produce high-quality coatings, lubricants, cosmetic and pharmaceutical products, flavours and fragrances, printing inks, and plastics. It was acquired by wholly Omani state-owned OQ Group in 2013 and subsequently rebranded as OQ Chemicals.
Significantly, as part of its role in the Propel project, OQ Chemicals has ramped up production of high-purity propionaldehyde, a key raw material for the MMA facility.
Construction work on the Propel project (short for “Propyls Elevated’) began in October 2022. Upon its final commissioning and start-up, the plant will be the first to employ Röhm’s proprietary LiMA technology (‘Leading in Methacrylates’), for the production of MMA. Besides constructing the infrastructure, OQ Chemicals is also providing services vital for Röhm’s plant operation.
Commenting on the milestone, Kyle Hendrix, OQ Chemicals President USA, said: “Achieving mechanical completion underscores OQ Chemicals’ commitment to delivering projects on time and to the highest quality standards. As we move forward, our focus remains on the final phases of the project, including commissioning, testing, and handover. We are committed to ensuring a seamless transition to operational readiness, so that our partner can realize the full potential of their investment.”
The announcement represents a shot in the arm for OQ Chemicals as it seeks to expand and diversify its portfolio. It comes on the heels of a ratings downgrade announced by S&P Global Ratings just over a week ago. The ratings agency lowered its rating on OQ Chemicals to 'CCC-' from 'B', with a negative outlook.
In lowering its rating, S&P Global cited parent company OQ’s decision to cancel its equity contribution, which was an important consideration for the expected refinancing of OQ Chemicals’ debt.
“We also understand that OQ is looking to dispose of its stake in the company. Therefore, we no longer assess OQ Chemicals as a moderately strategic subsidiary and strategic investment of OQ,” the ratings agency noted.
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