Sinopec and Novatek are in talks on Yamal

MOSCOW (MRC) -- Chinese giant Sinopec is in talks to take a stake in Novatek’s Yamal liquefied natural gas project, a report has claimed, said Upstreamonline.

A formal deal between the pair could be signed as early as next week, Reuters reported, citing an unidentified source with knowledge of the situation.

Novatek currently has an 80% stake in the project on the Yamal peninsula with French supermajor Total in for the other 20%.

In late May Gazprom axed its plans to take a working interest in Yamal to develop three gas fields. Last year, Gazprom and Novatek signed a memorandum of understanding on joint co-operation to tap the three deposits, with the independent player getting a 25% stake in the planned joint venture.

Gazprom still holds a 10% stake in Novatek, which is lobbying the government to allow unrestricted LNG exports from South Tambey, bypassing Gazprom’s monopoly.

Also last month, Novatek commissioned France’s Technip to carry out an eight-month open book exercise to come up with a cost estimate and plans to execute the project, so as to make a final investment decision.

The Yamal facility will have an annual production capacity of 16.5 million tonnes and will be based on the resources of the South Tambey gas condensate field located on Russia’s Yamal Peninsula.

South Tambey’s proven and probable reserves are estimated at about 1.3 trillion cubic metres of gas.

In 2011, the Novatek and Total joint venture contracted CB &I Lummus of the US to conduct preliminary front end engineering and design work.

As MRC wrote previously, ConocoPhillips had joined up with Sinopec to explore for shale gas in China as the country grapples with the best way to exploit its potentially significant unconventional resources. This marks the official entrance of a third major international oil company into China's shale gas industry. Shell signed a similar agreement in 2009 with PetroChina before it green-lighted a more formal production sharing contract in March. Chevron signed a joint study agreement with Sinopec in April 2011 and began initial drilling in the first quarter. Other international oil majors such as BP and Total have said they are studying similar agreements, but have yet to announce any partnerships.
MRC

Import prices of Chinese PET continue to decline - CIS converters

MOSCOW (MRC) - This week the price of Chinese PET granulate for the CIS market have declined, according to ICIS-MRC Price Report.

According to one of the largest Ukrainian producer of PET preforms, the prices of Chinese material in the week have slightly fallen and were voiced at USD1,450/tonne CIF Odessa.

Another converter said that the company has managed to buy the granulate for the price USD1,430 /tonne CIF Odessa.

Many market players expect the price of imported PET will fall even lower in mid-summer.

PET prices for Russian companies also have been reduced. The price of bottle grade PET was at USD1,416-1,436/tonne CFR NE, including the freight cost of material.

Export prices in the Chinese port were in the range of USD1,380-1,390/tonne FOB (under deferred terms of payment for 90 days). The export prices of Korean granulate were stronger and were at USD1,440-1,450/tonne FOB Busan.

According to a trader, the attempts to raise prices earlier in the week were not successful. By the middle of the week producers were ready to make concessions in an attempt to support the demand.
MRC

Petronas to invest USD20bn in British Columbia LNG export project

MOSCOW (MRC) -- Malaysia's state oil and gas company Petronas plans to invest USD20 billion in its liquefied natural gas project in West Canada, one of the biggest investments aimed at capitalizing on cheap North American gas, reported Hydrocarbonprocessing with reference to a senior company official.

The company is planning two LNG trains of 6 million tpy each under the Pacific NorthWest LNG project by the end of 2019, Anuar Ahmad, head of Petronas' gas and power business, said in an email to Dow Jones Newswires.

The export terminal project in British Columbia was acquired by Petronas last year as part of its USD5.2 billion purchase of Canada's Progress Energy Resources. It is just one of several energy companies building LNG export terminals in Canada and the US to create outlets for surplus gas that has resulted from shale-drilling technology unlocking massive new reserves.

Royal Dutch Shell is spearheading one LNG venture at Kitimat, some 200 kilometers from the Petronas one, working with several Asian partners, including Japan's Mitsubishi. Another LNG project is a 50-50 joint venture between Chevron and Apache, also at Kitimat.

TransCanada was picked by Progress Energy to build, own and operate a 5 billion Canadian dollar (USD5.1 billion) pipeline that would transport natural gas to the terminal.

The project is crucial for Petronas as well as Malaysia, which has the third-largest oil-and-gas reserves in the Asia-Pacific region, but is struggling to maintain its status as a net exporter of fossil fuels.

Petronas aims to make a final investment decision on the West Canada project by the end of 2014 and start commercial operations by the end of 2018.

The Malaysian company is in talks to sell stakes in the project, Mr. Anuar said, after upstream energy company Japan Petroleum Exploration agreed in March to buy a 10% stake. Petronas is also looking for potential partners to be offtakers of the gas, he added.

Petronas, short for Petroliam Nasional Berhad, is a Malaysian oil and gas company wholly owned by the Government of Malaysia. The Group is engaged in a wide spectrum of petroleum activities, including upstream exploration and production of oil and gas to downstream oil refining; marketing and distribution of petroleum products; trading; gas processing and liquefaction; gas transmission pipeline network operations; marketing of liquefied natural gas; petrochemical manufacturing and marketing; shipping; automotive engineering; and property investment.
MRC

Evonik launches new composites project house to develop new materials for lightweight construction sector

MOSCOW (MRC) -- Evonik Industries, the German specialty chemicals company, has launched its Composites Project House, based primarily in Marl, with a branch in Darmstadt, to develop new materials and system solutions for the lightweight construction sector, according to the company's press release.

This is Evonik’s tenth project house. Among the topics addressed will be automotive and aviation applications and applications in the domain of renewable energies. Having established the Composites Project House, the specialty chemicals company is intensifying its strategic research for resource-efficient, sustainable solutions, particularly in the field of mobility.

"Our aim in setting up the Composites Project House is to expand our expertise in the field of composites. Innovative composites will make it possible to improve resource efficiency significantly at the same time," says Dr. Dahai Yu, Evonik’s Executive Board member responsible for the Specialty Materials segment, who believes that composite materials for the lightweight construction sector are an attractive market for Evonik.

The research findings are then commercialized by Evonik’s operating units or an internal start-up.

Evonik has been offering composites for specific applications in the lightweight construction industry for some time now: ROHACELL as a structural foam in fiber-reinforced composite parts, VESTAMIN as a hardener component for thermoset matrix systems, and VESTAKEEP as a matrix for thermoplastic composites, to name just a few examples.

As MRC informed previously, last summer Evonik Industries developed and launched on the market a novel combination of bio-based high-performance polyamides and bio-based high-performance fibers. Reinforcing fibers are often mixed into a plastic to improve its mechanical properties. Polyamide grades of VESTAMID Terra with rayon fibers retain the high bio-content along with excellent reinforcing potential. The combination of viscose fibers and polymer matrix offers a significantly improved carbon balance.

In 2012, Evonik invested EUR393 million in research and development to be able to offer customers and partners innovative products, solutions, and methods.

Evonik, the industrial group from Germany, is one of the world leaders in specialty chemicals. Its activities focus on the key megatrends health, nutrition, resource efficiency and globalization. Evonik is active in over 100 countries around the world. In fiscal 2012 more than 33,000 employees generated sales of around EUR13.6 billion and an operating profit (adjusted EBITDA) of about EUR2.6 billion. The international rating agency Moody's has upgraded the credit rating of Evonik Industries AG from Baa3 with a positive outlook to Baa2 with a positive outlook. The rating agency quotes, among other things, the robust operational performance.
MRC

IPC signs a loan agreement to support greenfield EVA/LDPE plant

MOSCOW (MRC) -- International Polymers Company (IPC), Sipchem's affiliate, has signed on 10 June 2013 a financing agreement of SR 704 million (USD 188 million) with Public Investment Fund (PIF), reported the company on its site.

The loan is repayable over 14 years in 26 semiannual and equal installments commencing December 2014. The loan is payable until 30 June 2027 and secured until project completion by order notes.

The purpose of this agreement is to support the project financing of a greenfield EVA/LDPE plant.

The plant will produce ethylene vinyl acetate (EVA) and low density polyethylene (LDPE) with an annual production capacity of 200,000 tonnes in its industrial complex in Jubail Industrial City. Plant start-up is scheduled in the third quarter of 2013.

We remind that, as MRC wrote previously, in December 2012, Sipchem launched the construction of its EVA films project in Hail Industrial City. The SR 120 million plant will manufacture 4,000 tpa of EVA films. The project will be financed by the company and other local backers and is expected to be operational by Q3-2013.

EVA is used as a feedstock in the production of heat soluble adhesives, resin products and high-quality sports bandages; while LDPE is used as a feedstock in the production of various types of containers, bottles and medical detergents.

IPC is jointly owned by Sipchem 75% and Hanwha Chemical Corporation 25%.

Established in 1999, Saudi International Petrochemical Company (Sipchem) manufactures and markets methanol, butanediol, tetrahydrofuran, acetic acid, acetic anhydride, vinyl acetate monomer. Besides, it has launched several down-stream projects to manufacture ethylene vinyl acetate, low density polyethylene, ethyl acetate, butyl acetate, cross linkable polyethylene, and semi conductive compound that are scheduled to start in 2013.
MRC