Latest news with #Sabic
Yahoo
25-05-2025
- Business
- Yahoo
Ed Miliband's net zero targets threatened by BP retreat
A massive hydrogen project at the heart of Ed Miliband's net zero plans risks being cancelled as BP retreats from green targets. The H2Teesside scheme, announced in 2021 by the company's then chief executive Bernard Looney, was designed to produce 'blue' hydrogen from natural gas, and then capture and store the carbon emissions. It had been slated to deliver more than 10pc of the 2030 target set by Mr Miliband, the Energy Security and Net Zero Secretary, for hydrogen production and was expected to come online by the late 2020s. But sources have warned that BP is now likely to scale back or even cancel the 1.2 gigawatt project as it struggles to secure enough customers to make the investment worthwhile. The FTSE 100 company is currently in talks with the Government about whether greater state support can be provided, with Mr Miliband's department viewing the scheme as a potentially important source of hydrogen for both industrial uses and power plants. On Friday, Ben Houchen, the Tees Valley mayor, said he was seeking urgent talks with BP about the 'highly concerning' potential setback. He said: 'Asking for increased government subsidy in this way is not a sound basis for an investment of such scale and BP must now be clear in setting out a coherent plan for the project. 'There remains a high level of interest for this site from alternative investors and we will continue to pursue all options.' The H2Teesside project is thought to have run into trouble because of doubts about the future of a nearby chemical facility run by Sabic, the Saudi-owned petrochemicals giant. The plant was expected to be an anchor customer, providing a steady source of demand. But a major upgrade of the facility, that would have made it capable of using hydrogen feedstock, was recently paused and Sabic is understood to be considering the site's closure. Against this backdrop, The Telegraph understands BP has been considering reducing the scope of H2Teesside by as much as 75pc or scrapping it altogether. A source said BP had warned the Government that the project was now unlikely to be viable unless the state agreed to support both the hydrogen factory and its customers. BP has already cancelled the other hydrogen scheme it had proposed in the area, HyGreen Teesside, which would have made 'green' hydrogen via electrolysis. A decision to scrap H2Teesside as well would represent a complete reversal of the company's pledge under Mr Looney to invest £2bn in regional hydrogen projects. Mr Looney travelled to Teesside to announce both schemes personally as part of his quest to reinvent BP as a net zero champion. It also means Mr Miliband may face a choice between allowing the project to collapse or promising even bigger subsidies at the expense of billpayers. Amid warnings that sky-high energy prices are killing British manufacturing, he has promised to 'revitalise our industrial communities' with almost £22bn of support for projects such as H2Teesside that will capture and store carbon dioxide emissions. Under current boss Murray Auchincloss, who took the reins after Mr Looney left over an undisclosed office relationship in September 2023, BP has been slashing investment in green energy projects. It follows pressure from Elliott Management, an activist investor, which accused the company of 'abysmal' cost discipline. One person briefed on the situation claimed that Elliott Management had signalled its opposition to the H2Teesside scheme in the past, although a source close to the investor denied that. Hydrogen has been hailed as a possible green 'superfuel' of the future, with investors touting its potential to replace other gases in heavy industry, fuel aircraft and heavy machinery, and be burned in power plants to generate electricity. However, experts have warned that formidable obstacles remained to making it commercially viable. On Friday, BP said it was 'focused on a few high-graded projects in hydrogen and carbon capture and storage'. The company has confirmed it is pressing ahead with the separate Net Zero Teesside Power scheme, which will see it build a flexible gas-fired power plant equipped with carbon capture technology. It is also participating, alongside other firms, in the Northern Endurance Partnership, a network that will transport CO2 captured from sites along the east coast out to storage wells under the North Sea. A BP spokesman said: 'We continue to work with [the] Government to progress H2Teesside.' A government spokesman said: 'We are delivering first-of-a-kind carbon capture and hydrogen projects in the UK, including in Teesside, supporting thousands of jobs, securing the future of heavy industry and tackling the climate crisis. 'H2Teesside could provide hydrogen to both industry and potential hydrogen-to-power projects that could be operational from 2030, and we are continuing to work with BP on the project.' Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
Yahoo
18-05-2025
- Business
- Yahoo
Saudi Arabia's Sabic Is Said to Explore IPO of Its Gas Business
(Bloomberg) -- Saudi Arabian chemicals giant Sabic is exploring an initial public offering of its gas business, according to people familiar with the matter, amid a broader operational review. As Coastline Erodes, One California City Considers 'Retreat Now' How a Highway Became San Francisco's Newest Park Maryland's Credit Rating Gets Downgraded as Governor Blames Trump America, 'Nation of Porches' Power-Hungry Data Centers Are Warming Homes in the Nordics Saudi Basic Industries Corp. is in early-stage talks with potential advisers — including Lazard Inc., HSBC Holdings Plc, JPMorgan Chase & Co. and Morgan Stanley — about a possible listing as soon as this year, the people said, asking not to be identified because the information is private. National Industrial Gases Co., in which Sabic owns a 74% stake, generated 1.6 billion riyals ($427 million) in revenue in 2024, according to its financial statements. Sabic also has exposure to the gas business through its petrochemicals unit. Deliberations are at a preliminary stage, and no final decisions have been made on timing or adviser mandates, the people said. Representatives for Lazard, HSBC, JPMorgan and Morgan Stanley declined to comment. Sabic did not respond to a request for comment. Get the Mideast Money newsletter, a weekly look at the intersection of wealth and power in the region. Saudi companies have raised about $1.3 billion through IPOs so far this year, making it the most active market in the Gulf. Demand for recent listings has remained strong despite tariff-driven volatility. First-time share sales by low-cost carrier Flynas Co. and Specialized Medical Co. were oversubscribed shortly after bookbuilding began this month, while United Carton Industries Co. drew $20 billion in orders for its Riyadh IPO. Global chemicals producers are under pressure from soft demand, rising costs and shrinking margins. Sabic itself has posted two consecutive quarterly losses and is planning a restructuring to reduce expenses. Its shares have fallen nearly 10% since the start of the year, compared with a decline of about 5% for the broader Saudi index. --With assistance from Anthony Di Paola. Microsoft's CEO on How AI Will Remake Every Company, Including His Cartoon Network's Last Gasp DeepSeek's 'Tech Madman' Founder Is Threatening US Dominance in AI Race As Nuclear Power Makes a Comeback, South Korea Emerges a Winner Tariffs Won't Reindustrialize America. Here's What Will ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Bloomberg
18-05-2025
- Business
- Bloomberg
Saudi Arabia's Sabic Is Said to Explore IPO of Its Gas Business
Saudi Arabian chemicals giant Sabic is exploring an initial public offering of its gas business, according to people familiar with the matter, amid a broader operational review. Saudi Basic Industries Corp. is in early-stage talks with potential advisers — including Lazard Inc., HSBC Holdings Plc, JPMorgan Chase & Co. and Morgan Stanley — about a possible listing as soon as this year, the people said, asking not to be identified because the information is private.
Yahoo
09-05-2025
- Business
- Yahoo
Major British chemical plant faces closure as energy prices soar
One of Britain's biggest chemical plants is at risk of closure after the site's Saudi owners paused a multimillion-pound upgrade project. The Olefins 6 'cracker' facility in Teesside, controlled by Sabic, employs hundreds of workers and had been undergoing a major conversion to run on gas feedstock. But Sabic paused that work months ago and is now understood to be on the verge of announcing the plant's closure amid spiralling costs and concerns about high energy prices. The company, which is owned by Saudi state oil giant Aramco, has not responded to a request for comment. However, bosses recently said they were looking to scale back their European presence or exit the region entirely. Another cracker in the Netherlands was shuttered last year. The closure of one of the UK's most significant chemical plants would deal a fresh blow to the Government as it prepares to unveil its industrial strategy. Earlier this year, chemical company bosses warned Jonathan Reynolds, the Business Secretary, to expect mounting closures as the industry reached 'breaking point'. Sir Jim Ratcliffe, one of Britain's richest men, has also warned the UK's multibillion-pound chemicals industry faces 'extinction' because of soaring energy costs and the shift to net zero. Sources close to Sabic suggested the plant's closure was partly due to Britain's high energy prices as well as the perceived lack of interest shown by the Government in the crisis-hit sector. Olefins 6 is the second-largest cracker in Europe and has been a feature on the Teesside skyline since it began operating in the late 1970s, notable for its bright flaring. The plant uses extreme heat to break down, or 'crack', hydrocarbons into ethylene, a raw material used by other neighbouring Sabic plants. Jos Visser, site director of Sabic's Teesside operation, confirmed to local newspaper TeessideLive that the cracker's conversion had been 'paused' but insisted it had not yet been mothballed. He said the company needed to 'reaffirm the business case', adding: 'Also, we needed to understand what the cost was of completing project from where we were at that moment. 'I think you see more companies holding back their new investment plans to sort of wait and see how the market is going to develop. We're exactly in that position.' However, sources warned an announcement may be imminent. An email sent this week to employees at Wilton International, which runs nearby facilities and counts Sabic as a major client, said the company had been advised that 'no decision has been taken'. Ben Houchen, the Mayor of Tees Valley, said he was seeking urgent talks with Sabic executives to see whether local jobs could be saved. He added: 'This is concerning news that I know will cause uncertainty for those employed within the chemical sector in Teesside. 'Teesside was built on its industrial heritage and whilst this is a decision that has been taken overseas, I will be fighting with everything I have to try and safeguard our chemical sector. 'The Government cannot allow the chemical industry to fail on their watch. Their Industrial Strategy cannot be defined by industrial failure. They must act and save these good quality jobs.' Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
Telegraph
09-05-2025
- Business
- Telegraph
Major British chemical plant faces closure as energy prices soar
One of Britain's biggest chemical plants is at risk of closure after the site's Saudi owners paused a multimillion-pound upgrade project. The Olefins 6 'cracker' facility in Teesside, controlled by Sabic, employs hundreds of workers and had been undergoing a major conversion to run on gas feedstock. But Sabic paused that work months ago and is now understood to be on the verge of announcing the plant's closure amid spiralling costs and concerns about high energy prices. The company, which is owned by Saudi state oil giant Aramco, has not responded to a request for comment. However, bosses recently said they were looking to scale back their European presence or exit the region entirely. Another cracker in the Netherlands was shuttered last year. The closure of one of the UK's most significant chemical plants would deal a fresh blow to the Government as it prepares to unveil its industrial strategy. Earlier this year, chemical company bosses warned Jonathan Reynolds, the Business Secretary, to expect mounting closures as the industry reached 'breaking point'. Sir Jim Ratcliffe, one of Britain's richest men, has also warned the UK's multibillion-pound chemicals industry faces 'extinction' because of soaring energy costs and the shift to net zero. Sources close to Sabic suggested the plant's closure was partly due to Britain's high energy prices as well as the perceived lack of interest shown by the Government in the crisis-hit sector. Olefins 6 is the second-largest cracker in Europe and has been a feature on the Teesside skyline since it began operating in the late 1970s, notable for its bright flaring. The plant uses extreme heat to break down, or 'crack', hydrocarbons into ethylene, a raw material used by other neighbouring Sabic plants. Jos Visser, site director of Sabic's Teesside operation, confirmed to local newspaper TeessideLive that the cracker's conversion had been 'paused' but insisted it had not yet been mothballed. He said the company needed to 'reaffirm the business case', adding: 'Also, we needed to understand what the cost was of completing project from where we were at that moment. 'I think you see more companies holding back their new investment plans to sort of wait and see how the market is going to develop. We're exactly in that position.' However, sources warned an announcement may be imminent. An email sent this week to employees at Wilton International, which runs nearby facilities and counts Sabic as a major client, said the company had been advised that 'no decision has been taken'. Ben Houchen, the Mayor of Tees Valley, said he was seeking urgent talks with Sabic executives to see whether local jobs could be saved. He added: 'This is concerning news that I know will cause uncertainty for those employed within the chemical sector in Teesside. 'Teesside was built on its industrial heritage and whilst this is a decision that has been taken overseas, I will be fighting with everything I have to try and safeguard our chemical sector. 'The Government cannot allow the chemical industry to fail on their watch. Their Industrial Strategy cannot be defined by industrial failure. They must act and save these good quality jobs.'
