Lukoil Q4 net profit nearly doubles

MOSCOW (MRC) -- Lukoil Holdings, Russia's No. 2 crude oil producer, has reported its net profit for the final three months of 2012 nearly doubled year-on-year, when it was hit by a nearly USD1 billion write-off, according to The Wall Street Journal.

Lukoil said net profit for the period totaled USD2.69 billion, compared with USD1.35 billion in 2011. That was slightly below a forecast of USD2.72 billion from a Dow Jones Newswires survey of five analysts.

The company didn't provide a breakdown of fourth-quarter results, but said revenue for the full year increased 4.1% to USD139.2 billion from USD133.7 billion, on the back of higher oil prices. Earnings before interest, taxation, depreciation and amortization, or EBIDTA, rose 1.7% to USD18.9 billion from USD18.6 billion. Net profit for the year was up 6.2% on 2011 at USD11.0 billion.

We remind that, as MRC wrote previously, Lukoil started construction of combined cycle gas turbine unit (CCGT) at the regional industrial park, located in the immediate vicinity of Stavrolen, which has recently resumed production of polyethylene (PE) and polypropylene (PP) after a short outage for maintenance. On Tuesday, 5 March, the plant launched ethylene production and on 6 March - the productrion of polyethylene (PE) and polypropylene (PP).
MRC

MOSCOW (MRC) -- SIBUR has undertaken construction of Tobolsk-Polymer plant, a large scale world-class petrochemicals complex located in Tobolsk at the same production site as the Group’s flagship GFU, reported Fibre2Fashion.

The complex will apply the propane dehydrogenation technology to produce 510,000 metric tonnes of propylene per annum (technology provided by UOP, the USA) to be further processed into polypropylene (PP) using the technology of INEOS. As MRC wrote earlier, last September, eleven employees from Tobolsk-Polymer were trained in INEOS Houston, Texas (USA) with regard to the technology of gas-phase polymerization of propylene Innovene PP.

As of 30 September 2012, the project was largely completed. Sibur (the managing company of Tobolsk-Polymer) has already officially announced its intention to start up the new plant with the capacity of 500,000 tonnes of PP per year in April, 2013.

Tobolsk-Polymer Plant is on the state top-priority project list in the region and represents a major step in execution of SIBUR’s strategy of creating a full-scale petrochemicals hub in Western Siberia in close proximity to the hydrocarbon resource base.
MRC

MOSCOW (MRC) -- SABIC announced a product range expansion to encompass specialized medium-density (MD) LDPE film grades - typically used for applications requiring high clarity and stiffness, such as collation shrink films, said Sabic.

Production is taking place at SABIC's manufacturing facility in Wilton, Teesside, U.K., on the world's largest low-density polyethylene (LDPE) plant.

SABIC LDPE 2801TH00W resin was developed with key features of high purity and superior optical properties, as well as excellent machinability and cutting/punching performance. This material, which is SABIC’s first MD LDPE grade, is the initial product in a planned series of innovative grades in the 928 to 935 g/cm3 density range.

"We are on track in our planned expansion of Teesside’s capabilities to offer European customers a portfolio of specialty materials for food, beverage and hygienic packaging. In addition to their high quality, attractive aesthetics and excellent processing characteristics, our new MD LDPE films promote sustainability in packaging," said Ben Raven, Technical Marketing Engineer, SABIC.

The new grade is designed for collation shrink packaging of food and beverages, such as multi-packs of bottles. This transparent, printable film provides several customer benefits such as excellent optical properties, including low haze and high gloss that produces a brilliant print appearance. A higher level of stiffness streamlines cutting to enable higher converting speeds. Other processing advantages include excellent bubble stability and good welding properties. This film’s high stiffness and puncture resistance enable down-gauging without sacrificing strength.

The 400,000 tpa high-pressure SABIC plant at the Wilton International site in Teesside came on stream in the second half of 2009.

As MRC wrote earlier, SABIC in late 2012 developed a new grade of high density polyethylene (HDPE) - SABIC HDPE PCG4906 - for large containers used in healthcare applications in close cooperation with Mauser, a well-known supplier of blow moulded industrial packaging solutions.
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MOSCOW (MRC) -- Iran is preparing to celebrate the week long Nowruz holiday around March 21. Ahead of the beginning of the year according to the Iranian calendar, sellers are said to be trying to deplete their stocks these days. Nevertheless, players widely report that logistics issues are creating an obstacle to smooth deliveries from Iran to Turkey, said Apic-online.

A source from an Iranian trading company said, "Exporters need to receive permission from the government to take material out of the country and these permissions are valid only for a short period of time and for a set amount of material. If the material is not exported on time, the sellers must apply for another export license and it takes around 3-10 days."

Indeed, players in Turkey have been complaining about the delivery problems from Iran for the past few weeks. "The problem is that trucks come full but they return empty, which causes congestion on the logistics side and naturally pulls the freight rates higher," commented a trader. Freight from Iran has moved higher by at least USD40-50/ton, according to market sources. "Because of this unexpected increase in freight rates, we have had to sell some our products with no margins," said another trader in Turkey.

The approaching Nowruz holiday in Iran is also pushing sellers to deplete their stocks and make aggressive sales ahead of the new year. Although Iranian PP is not a regular and common source of supply for the Turkish market, a market source said, "Iran has approved up to 7,500 tons of PP exports to Turkey." Accordingly, Iranian PP fibre offers have been showing up in the Turkish market for the past two to three weeks at prices forming the low end of the overall market range.

Nevertheless, a distributor thinks that their destocking activity will not make a big impact on the Turkish market due to the problems on the delivery side. "New shipments from Iran will be sharply lower after next week as many players will start to go to the sidelines prior to the holiday," commented another distributor.

As MRC wrote earlier, Iran opened a new petrochemical plant in the western province of Kermanshah. The Kermanshah Polymer Petrochemical Plant has an annual production capacity of 300,000t of heavy polyethylene. It will employ nearly 1,500 people and is also expected to market nearly USD429mln petrochemical products annually.

Iran is the second largest supplier of HDPE to Turkey, with more than 180,000 tons of imports. In the LLDPE market, Iran is the third largest supplier although its portion is way below Saudi Arabia, which is in first place.

MRC

MOSCOW (MRC) -- Specialty chemicals manufacturer Sasol North America has chosen Univation Technologies' UNIPOL PE Process for its petrochemical project at the Lake Charles site in Louisiana, US, said Chemicals-technology.

"The flexibility of the UNIPOL PE Process is expected to help Sasol meet long-term market needs."
The 450 kilotonnes per annum LL/HD swing polyethylene plant, which will be the second UNIPOL PE Process facility for Sasol and its affiliates, will manufacture a broad product portfolio, including metallocene linear low density polyethylene (mLLDPE).

Sasol Polymers International Investments managing director Mike Biesheuvel said: "After nearly 30 years of operating a UNIPOL PE plant in South Africa, Sasol has a long-standing relationship with Univation, and Sasol is looking forward to expanding its product portfolio to include latest generation Univation metallocene technologies."

The broad product portfolio and the flexibility of the UNIPOL PE Process are expected to help Sasol meet long-term market needs both domestically and in export markets.

Sasol's facility in Sasolburg, South Africa, has been using UNIPOL PE Process since 1983, according to Univation.

As MRC wrote earlier, in the end of 2012 Sasol said in a filing to the United States Securities and Exchange Commission that due to the company's investments in Iran, there was a possible risk that sanctions may be imposed on it by the United States, the European Union, and the United Nations.

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