Pemex and Mexichem to form a joint venture

MOSCOW (MRC) -- Mexico's state-owned oil Pemex Petroquimica and Mexichem entered into a joint venture, which will enable greater competitiveness of the domestic petrochemical industry in the global market through the integration of a new company, which will create value to the chlorine-vinyl Chain, according to Mexichem's press release.

The joint venture includes a cash investment and assets contribution up to the amount of USD518 million, of which PEMEX will participate with USD228 million in assets while Mexichem will contribute with both, USD90 million in assets and USD200 million in cash in order to modernize the Pajaritos complex. Likewise, this joint venture will generate additional jobs in the region.

This partnership will capitalize on the strengths of both companies and as a result increase their competitive advantages, improve their technology and infrastructure, which are elements that will encourage greater productivity, viability and competitiveness of the Pajaritos complex.

Once the cash is contributed to this joint venture, the Pajaritos complex and Mexichem will increase all their products manufacturing related to the Chlorine-Vinyl Chain, eliminating soda imports, significantly decreasing the import of vinyl chloride monomer (VCM), and directly integrating the production and supply of chlorine to the complex. With all the aforementioned, the Pajaritos complex will become modern, efficient and profitable.

The Pajaritos complex is expected to produce in the first year 24,000 additional tons of vinyl chloride monomer, 146,000 tons in the second year, and in 217,000 tons in the third year in order to reach a capacity of 400,000 tons per year, which in turn will generate proportionate increases in the production of all products related to the Chlorine-Vinyl Chain.

As MRC wrote previously, in early 2013, Mexichem announced that PEMEX's Management Board authorized the co-investment between Pemex Petroquimica and Mexichem, seeking to bring viability and generate value in the country's VCM chain.

Mexichem is the Latin American leader in the production of polyvinyl chloride (PVC).

Pemex, Mexican Petroleum, is a Mexican state-owned petroleum company. Pemex has a total asset worth of USD415.75 billion, and is the world's second largest non-publicly listed company by total market value, and Latin America's second largest enterprise by annual revenue as of 2009. Company produces such polymers, as polyethylene (PE), polypropylene (PP), polystyrene (PS).
MRC

MOSCOW (MRC) - August imports of high-density polyethylene (HDPE) to Russia increased by 17% compared with the July level, according to MRC DataScope.

External supply of HDPE to Russia increased to 27,200 tonnes in August, from 23,300 tonnes in July. Seasonal increase in demand and scheduled maintenance works at Russian plants caused a growth in imports in all sectors of consumption, the only exception was blown HDPE.

Last month, imports of HDPE for extrusion coating of large diameter steel pipes increased to 7,600 tonnes compared to 5,300 tonnes in July.
The external supply of HDPE for extrusion coating of large diameter steel pipes exceeded 52,100 tonnes in the eight months of this year, up by 26% year on year.

Import of HDPE for pressure pipe under the seasonal factor rose in August to 5,300 tonnes compared to 4,400 tonnes in July. The external supply of pipe PE was about 50,000 tonnes in the first eight months of this year, while in 2012 this figure came close to the level of 70,000 tonnes.

Imports of film and injection moulding HDPE in August rose slightly to 4,700 tonnes and 5,300 tonnes respectively, compared to 4,100 tonnes and 4,700 tonnes in July. Imports of these types of polyethylene to Russia reached 34,700 tonnes and 36,300 tonnes in January - August against 64,300 tonnes and 32,100 tonnes year on year.


External supply of blow moulding HDPE last month declined to 2,900 tonnes compared to 3,600 tonnes in July. The main decrease in imports occurred in polyethylene from Uzbekistan.

Russia's HDPE imports in the eight months of the year decreased to 206,000 tonnes, down by 17% year on year.

MRC

MOSCOW (MRC) -- Polystyrene (PS) imports to the Russian market fell by 7.6% in August from July on rising import prices in Europe and Asia, according to MRC ScanPlast.

The overall PS imports totalled 18,400 tonnes in August. Expandable polystyrene (EPS) accounted for the largest decrease in shipments. If in July 2013 EPS imports was 7,500 tonnes, in August shipments fell to 6,400 tonnes. At the same time, demand for Russian EPS grew amid higher prices for imported material.

Imports of general purpose polystyrene (GPPS) have also been dropping (from 3,800 tonnes in July to 3,200 tonnes in August). Meanwhile, imports of acrylonitrile-butadiene-styrene (ABS) and high impact polystyrene (HIPS) rose to 4,100 tonnes and 2,900 tonnes, respectively, in August.

The overall PS imports in January- August 2013 fell by 7.1% year on year and totalled 140,800 tonnes. EPS market accounts for the largest import substitution. EPS imports slumped by 18% year on year because of the increased share of Russian material in PS consumption.
MRC

MOSCOW (MRC) -- A Texas jury began hearing arguments Wednesday in a lawsuit in which neighbors of a former BP refinery allege the oil giant's release of toxic gases exposed residents to potential health dangers, according to Hydrocarbonprocessing.

The suit is the latest BP has faced over the refinery it used to own in Texas City, where a 2005 explosion killed 15 workers, injured scores of others and cost the oil company USD2.1 billion in legal settlements.

The air emissions lawsuit, which is unrelated to the 2005 blast, could potentially put BP on the hook for an additional USD10 billion in punitive damages, according to court documents. BP has said in regulatory filings that the refinery emitted toxic gases, but that the releases weren't large enough to sicken neighbors.

The refinery, among the largest in the US, has been a mixed blessing for the roughly 45,000 people living in Texas City, an industrial area along the Gulf of Mexico about 45 minutes southeast of Houston. The 475,000 bpd plant employs thousands of people but has been prone to accidents, including an April 2011 power outage that caused a refinery fire and forced residents to shelter in place.

BP sold the refinery and affiliated assets to Marathon Petroleum in February 2013, in a deal valued at USD2.4 billion.

BP, which has said it invested heavily to improve operations, has paid state and federal regulators tens of millions of dollars in fines and settlements stemming from previous environmental and safety issues at the refinery. In November 2011, BP agreed to pay the Texas government USD50 million in a settlement related to pollution emissions at the plant after the 2005 explosion.

In the latest case, residents allege that the refinery emitted 500,000 pounds of carbon monoxide, benzene and other air pollutants in April and May of 2010, lowering their property values and putting their health in danger.

Mr. Buzbee has tussled unsuccessfully with BP before over emissions from the Texas City refinery. In 2009, a jury ordered BP to pay USD100 million to plaintiffs Mr. Buzbee represented who claimed to have been subjected to health risks by breathing toxic air from the plant. A judge later overturned the decision, saying the plaintiffs didn't prove BP was grossly negligent.

BP has previously said in information filings with the Texas Commission on Environmental Quality that a hydrogen compressor damaged by fire started emitting toxic materials in April 2010. BP continued operating the damaged equipment while it made repairs, sending emissions into the air for the next 40 days.

But BP said health problems cited by plaintiffs could be attributed to any number of factors outside the refinery.

As MRC wrote previously, The US Justice Department and Gulf Coast states consider offering BP a USD16 billion deal to settle civil claims related to the Deepwater Horizon incident. The settlement offer would cover potential fines owed by BP under the Clean Water Act and payments under another process known as the Natural Resources Damage Assessment, or NRDA, the people said. The fines stem from the massive Gulf of Mexico oil spill that ensued from the Deepwater Horizon well blowout in April 2010.
MRC

MOSCOW (MRC) -- Repsol is considering taking over a portion of a heavy oil project in Venezuela that was dropped by Petronas, Venezuelan Oil Minister Rafael Ramirez said, as per Hydrocarbonprocessing.

Mr. Ramirez said a committee of the joint venture at the Carabobo development in Venezuela's Orinoco heavy oil belt will soon determine how to allocate the 11% stake previously held by Petronas. He added the portion also could be absorbed by state oil company Petroleos de Venezuela, or PdVSA, which owns 60% of the project.

Repsol is already a stakeholder in the same Carabobo bloc along with Oil & Natural Gas Corp. and two other Indian companies.

An official for an oil company doing business in Venezuela said finding a partner to fill in for Petronas wouldn't be a challenge.

"It's not going to be hard to find somebody who is interested," the official said, speaking on condition of anonymity because of the political sensitivities surrounding the project. The official pointed at Indian oil partners as another possible suitor.

Petrobras said in a statement it was pulling out of the joint venture it entered in May 2010. Petronas said it had notified Venezuelan officials of the decision on August 27.

A person familiar with the Petronas-PdVSA negotiations said the frequent breakdown in communications with the Venezuelan government, along with regulatory uncertainty in the South American country contributed to the withdrawal.

As MRC informed previously, in early 2013, Shell closed the purchase of a raft of LNG assets from Spain's Repsol with an announcement imminent. The Anglo-Dutch supermajor was finally set to snap up the LNG assets of Repsol in Peru and Trinidad & Tobago. Repsol was set to land around EUR1.5 billion (USD1.96 billion) in cash from the deal, which also indicates Repsol LNG has gross debts of around EUR1 billion.

Repsol S.A. is an integrated Spanish oil and gas company with operations in 28 countries. The bulk of its assets are located in Spain. It is now the 15th largest petroleum refining company according to the Fortune Global 500 list.
MRC