SOCAR Polymer investment project to generate USD10-11 billion in revenues

MOSCOW (MRC) -- State owned energy company SOCAR’s Polymer investment project, which is first of its nature and scale implemented for the last 40 years in Azerbaijan’s downstream oil and gas industry, will make USD10-11 billion of revenues during the plant’s lifetime, reports the company’s official website.

Some 30 percent of this sum will be the net profit of the company. In the meantime, cooperate taxes and property taxes worth USD800 million and value added tax worth USD700 million will be paid to the government.

Polypropylene and High Density Polyethylene plants of SOCAR Polymer are being built within the Sumgayit chemical industrial park’s territory which was established by the decree of the President Ilham Aliyev and provides a number of significant privileges for its residents.

Upon completion of the project, 180,000 tons of polypropylene and 120,000 tons of high density polyethylene will be produced annually.

At the moment, Azerbaijan exports low-density polyethylene and imports high -density one. The main aim of the project is import substitution and increase of the country’s export potential.

As much as 30 percent of the production output will be directed to the domestic market while the remaining 70 percent will be exported to Turkey and other European countries.

The products of the SOCAR Polymer will be used for the production of high pressure gas, sewage and water pipes, packaging, textiles, stationery, automotive components, electronic and electrical appliances, medical industry, etc.
The overall investment cost of SOCAR Polymer project (2014-2018) will amount to USD750 million.

At this project SOCAR is partnering with the country’s leading industrial group- Pasha, Azersun and Gilan Holdings.
On 16 July, 2013 a separate company- SOCAR Polymer was established to expedite the development of the country’s chemical industry. The company is opening new frontiers in the petrochemical industry of Azerbaijan.

Polymer investment project will contribute to expanding the national economy of the country.

SOCAR is involved in exploring oil and gas fields, producing, processing, and transporting oil, gas, and gas condensate, marketing petroleum and petrochemical products in domestic and international markets, as well as, supplying natural gas to industry and the public in Azerbaijan. Three production divisions, one oil refinery and one gas processing plant, a deep water platform fabrication yard, two trusts, one institution, and 23 subdivisions are operating as corporate entities under SOCAR.
MRC

Monsanto rejects USD62 billion Bayer bid, still open to talks

MOSCOW (MRC) -- Monsanto Co. rejected a USD62 billion takeover offer from Bayer AG as too low while saying it’s still open to further deal talks, putting pressure on the German company to raise a bid that has already sent its stock tumbling, said Bloomberg.

Bayer’s USD122-a-share offer also doesn’t "adequately address or provide reassurance for some of the potential financing and regulatory execution risks" related to the deal, St. Louis-based Monsanto’s Chief Executive Officer Hugh Grant said Monday in a statement. Monsanto’s board was unanimous in its rejection of the bid, according to a person with knowledge of the matter.

Bayer will likely come back with a higher bid, Jonas Oxgaard, an analyst with Sanford C. Bernstein & Co. in New York, said Tuesday in a note, adding that an offer below USD135 per share would be “challenging” for Monsanto to agree to. Monsanto rose 3.1 percent to USD109.30 in New York.

Buying Monsanto would create the world’s biggest supplier of farm chemicals and seeds. Monsanto is the largest seed supplier and a pioneer of genetically modified crops, which two decades on from their introduction have come to account for the majority of corn and soybeans grown in the U.S. Monsanto also sells seeds in foreign markets including Latin America and India.

The offer from Bayer, which was made May 10 in a letter to Monsanto, marks a reversal of roles for the U.S. company. Monsanto previously sought to buy Swiss pesticide maker Syngenta AG, abandoning the USD43.7 billion bid in August after the other company refused to agree to a deal.

Regulators are already examining the proposed USD130 billion Dow-DuPont tie-up while national security officials in the U.S. are weighing the ChemChina-Syngenta combination. U.S. senators said Monday they will pay Bayer’s proposed deal close scrutiny. The German company said it doesn’t see major regulatory risks.

Despite its preeminence in seeds, Monsanto has become vulnerable to a takeover as a number of problems piled up this year. The company has cut its earnings forecast, clashed with some of the world’s largest commodity-trading companies and become locked in disputes with the governments of Argentina and India.


MRC

PetroRabigh restarted cracker and PE units in Saudi Arabia

MOSCOW (MRC) -- PetroRabigh has brought on-stream its cracker and PE units following an unplanned outage, according to Apic-online.

A Polymerupdate source in Saudi Arabia informed that the company has recently resumed operations at its cracker and PE units. The complex was taken off-stream on May 19, 2016 owing to a power failure.

Located in Jubail, Saudi Arabia, the complex has an ethylene production capacity of 1.6 million mt/year, HDPE production capacity of 300,000 mt/year and LLDPE production capacity of 600,000 mt/year.

As MRC informed previously, in April 2015, Rabigh Refining & Petrochemical Co. (Petro Rabigh) received ownership of the Rabigh Phase II project from Saudi Aramco and Sumitomo Chemical, major shareholders in Petro Rabigh, and will now integrate the project into Petro Rabigh's existing refining and petrochemical complex in Rabigh, Saudi Arabia.

The Rabigh II project, expected to cost about USD 8.1-billion, involves expanding an existing ethane cracker and adding production of ethylene propylene rubber, thermoplastic polyolefins, methyl methacrylate monomer, polymethyl methacrylate, low-density polyethylene/ethylene vinyl acetate, paraxylene/benzene, cumene and phenol/acetone. Production facilities are expected to begin operations "one after another, beginning in the first half of 2016," Sumitomo said.

PetroRabigh, a joint venture between Saudi Aramco and Japan's Sumitomo Chemical, has an annual output capacity of 18 million tonnes of refined products and 2.4 million tonnes of petrochemicals. Thus, the complex currently has a cracker to produce 1.3-million t/y of ethylene and 900,000 t/y of propylene, as well as downstream production of polyethylene, polypropylene, propylene oxide, ethylene glycol and butene-1.
MRC

UK local government approves Third Energy shale gas fracking permit

MOSCOW (MRC) -- Officials in northern England approved a shale gas fracking application from Third Energy on Monday in a shift indicating growing support for shale gas that Britain's government hopes can counter the decline in North Sea output, said Reuters.

Britain is estimated to have substantial amounts of shale gas trapped in underground rocks and Prime Minister Cameron has pledged to go all out to extract these reserves. Councillors at North Yorkshire County Council voted in favour of the application 7 to 4 after two days of hearings.

The approval gives a boost to Britain's shale gas industry nearly a year after local government officials in Lancashire rejected two permits for shale gas firm Cuadrilla that have essentially brought progress to a standstill. Cuadrilla has appealed against the decision and the government has since changed the rules to be able to approve shale gas permits at government level.

Cuadrilla said if its permits receive government approval this summer, first shale gas from its wells could hit the British market in mid-2017.

With permission to carry out fracking, Third Energy will now be able to test how much shale gas it could eventually produce from its site at Kirby Misperton.

"This is an absolute travesty of a decision but the battle is very far from over." said Simon Bowens, Yorkshire and Humber campaigner for Friends of the Earth. Third Energy is 97 percent owned by Barclay's Global Natural Resources Investments.

As MRC informed earlier, in the late March 2016, Ineos confirmed that its vessel, the INEOS Intrepid, has arrived at the INEOS petrochemicals plant at Rafnes in Norway, carrying 27.500m3 of US shale gas ethane. This is the very first time that ethane from US shale gas has ever been exported from the USA and the first time it has been imported into Europe. It gives the continent the chance to benefit from US shale gas economics which did so much to revitalise manufacturing in the USA.
MRC

SIBUR rolled over export EPS prices for June

MOSCOW (MRC) -- SIBUR, Russia's largest producer of expandable polystyrene (EPS), rolled over export prices for Ukrainian consumers for June, according to ICIS-MRC Price report.

June export prices were announced to customers at the beginning of the week. The informed market sources said SIBUR would export polystyrene (PS) from a warehouse in Voronezh in June, however, the plant's export quantities were also limited.

SIBUR's export prices were announced in US dollars to foreign markets. Prices for the Russian domestic market are set in roubles.

As reported earlier, shipments of Russian polystyrene (PS) and styrene plastics into foreign markets dropped in the first quarter of 2016 by 7% year on year to 17,610 tonnes. Exports to Belarus and Kazakhstan decreased, whereas shipments to Ukraine increased. The EPS market was the exception. EPS exports more than doubled and were 4,240 tonnes versus 2,000 tonnes a year earlier. Ukraine accounted for the main EPS shipments.
MRC