Shell, Gazprom Neft start Siberia drilling

MOSCOW (MRC) -- Shell and Gazprom Neft have kicked off pilot shale oil exploration under their joint venture partnership in Siberia, said Upstreamonline.

The pair’s Russia-based joint venture Salym Petroleum Development said it had started drilling the first of five pilot horizontal wells this year and next year.

SPD said it plans multi-stage fractures of all five wells in Upper Salym, West Siberia in a bid to tap shale oil potential in the prospective Bazhenov formation.

Chief executive Oleg Karpushin said he hoped the pilot programme would lead to a decision to mount large-scale development of shale oil potential in Upper Salym.

One of the world's largest known shale oil deposits, the Bazhenov formation in West Siberia could hold technically recoverable shale oil resources of 74.6 billion barrels, according to a US Energy Information Administration estimate.

Russia's government has introduced tax breaks to incentivise exploration of the Bazhenov and other shale plays.

We remind that Gazprom Neft signed an agreement with France-based Total to form a joint venture to produce and sell modified bitumen and bitumen emulsions on the Russian market.

Gazprom Neft, is the fourth largest oil producer in Russia and ranked third according to refining throughput. It is a subsidiary of Gazprom, which owns about 96% of its shares. The company is registered and headquartered in St. Petersburg after central offices were relocated from Moscow in 2011.
MRC

MOSCOW (MRC) -- The St. Petersburg-headquartered Russian oil and gas company Gazprom Neft has acquired 100% of the authorized capital of Syntaz Oil, which owns Ryazan Petrochemical Experimental Plant JSC, according to Hydrocarbonprocessing.

Purchase of this asset will enable the company to become a leading producer of polymeric bitumen (PBB) for road construction in Russia.

The Ryazan plant is the largest producer of polymer-bitumen binders (PBB) in the country. The capacity of the plant is 60,000 tpy of PBB.

The production in 2013 reached 25,000 tons. The plant owns modern equipment and infrastructure necessary for production, storage and loading of high quality bitumen materials. The plant’s own laboratory provides quality control of the products. The plant equipment allows packing in the high-tech packages and to load the trucks.

The Russian PBB market in 2013 was estimated at 170,000 tons, which makes a 3.5% increase compared to 2010. Now the largest consumer of PBB in Russia is the Central Federal District, implementing a range of major road building projects.

"We consider the production and sales of high grade bitumen materials as one of the important potential growth area for the company. Experts estimate the market to exceed the capacity of 500,000 tons by 2025. This is a 3 times increase compared to current production," said Anatoly Cherner, Gazprom Neft's deputy CEO for logistics, refining, and sales.

We remind that, as MRC wrote previously, in late 2012, Gazprom Neft and a Russian petrochemicals producer SIBUR decided to collaborate in the polymer road materials production and marketing. SIBUR will deliver styrene-butadiene-styrene (SBS) polymers to the facilities of Gazprom Neft. The materials are applied in the polymer-bitumen binders (PBB) manufacturing to improve the quality characteristics of the road surface and extend its service life.

Besides, last year, Gazprom Neft signed an agreement with France-based Total to form a joint venture to produce and sell modified bitumen and bitumen emulsions on the Russian market. Each partner will have a 50% stake in the joint venture, which will build a special production facility at Gazprom Neft's Moscow oil refinery.
MRC

MOSCOW (MRC) -- Imports of expandable polystyrene (EPS) into the Russian market fell in 2013 by 16% from 2012 and totalled 71,700 tonnes. Russian companies have been reducing purchasing in foreign markets for the third consecutive year, according to MRC Annual report.

MRC analyst Igor Grishchenko said there is a clear picture of import displacement in the production of polystyrene (PS) and styrene plastics in Russia on the back of increased domestic production capacities. The EPS market is no expection.

SIBUR-Khimprom and Angarsk polymer plant increased production last year while Plastik (Uzlovaya, Tula region) reduced its output (EPS production at the plant fell by 14% in from January to November 2013, which also might be a cause for the plant sale).

The construction sector showed a good growth, which contributed to increased consumption of EPSV-S and increased domestic production. Displacing imports, SIBUR has been strengthening its presence in foreign markets by raising export sales.

China is the largest supplier of imported EPS to the Russian market and accounts for more than 45% of the total imports. Chinese EPS imports totalled 32,500 tonnes in 2013 (imports from China fell by 18% last year). Loyal is the largest supplier of Chinese EPS to Russia. The plant's total imports were 25,600 tonnes, with its most popular grades being F-MS (11,600 tonnes) and F-SA (10,200 tonnes). However, China was not always a leader, Korean EPS producers accounted for the largest share in imports two years ago. At present, Korea is the second largest supplier of this polymer with 19,800 tonnes of imports in 2013.

Displacement of imports has also affected European producers. German BASF, Finnish Styrochem, Ineos Nova and others reduced exports to Russia. Only some European manufacturers (Polimeri Europa, Dwory, Styron) managed to slightly raise exports to Russia.

MRC

MOSCOW (MRC) -- A loud noise and flaring at a Southeast Texas chemical plant drew emergency responders but a company official says there was no explosion or fire in the unit, reported Dallas News.

DuPont Co. spokesman Aaron Woods on Wednesday said no workers were hurt at the DuPont Sabine River Works in Orange. Woods says the emergency shutdown Tuesday night has closed one polyethylene unit amid the company investigation into the incident.

The Orange County Sheriff’s Department received 911 calls about a possible explosion.

Woods says the sound was decompression and the unit shutting down as the safety system worked. He had no information on possible damage to the plant in Orange, 100 miles northeast of Houston.

Orange firefighters responded but had no damage reports and never entered the plant operated by Delaware-based DuPont.

DuPont is an American chemical company that was founded in July, 1802. DuPont was the world's third largest chemical company based on market capitalization and ninth based on revenue in 2009. DuPont manufactures a wide range of chemical products, leading extensive innovative research in this field. The company is the inventor of many unique plastics and other materials, including neoprene, nylon, Teflon, Kevlar, Mylar, Tyvek, etc. The company was the developer and main producer of Freon used in the production of refrigeration equipment.
MRC

MOSCOW (MRC) - Ufaorgsintez (Bashneft Group) has changed polypropylene (PP) contract prices, effective from 15 January, according to ICIS-MRC Price Report.

The company has reduced the contract price of homopolymer PP of raffia grade by Rb700/tonne, compared with the level on 16 December, while price of block copolymers of propylene (PP-block), by contrast, was risen by Rb300/tonne.

Ufaorgsintez OAO manufactures organic synthesis products in Russia and Europe. Its products include ethylene, propylene, ethanol, cumol, ethyl benzol, phenol, acetone, copolymer rubber, polyolefines, poly vinyl chloride and polyethylene items, thinners, and dilutants. The company exports its products to Byelorussia, Kazakhstan, Finland, Germany, France, and Brazil. Ufaorgsintez OAO was founded in 1956 and is based in Ufa, Russia.

PP production capacity of the plant is 140,000 tonnes/year. Total PP production at the plant exceeded 106,000 tonnes in the first eleven months of 2013.
MRC