Indomesia to cut gas prices for petrochemical, fertilizer industries in 2017

MOSCOW (MRC) -- Indonesia on Tuesday told energy companies to cut natural gas prices for fertilizer, steel and petrochemical industries starting Jan. 1, 2017, in a renewed effort to bring down domestic gas prices, reported Reuters.

Earlier this year, the government had introduced regulations to cut domestic gas prices to help to spur economic growth and improve the competitiveness of domestic industry.

But some contractors have continued to sell natural gas above the price the government had planned for, according to government data.

New rules from the energy ministry published on its official website on Tuesday, require gas contractors like PT Pertamina EP and Kangean Energy Indonesia Ltd, among others, to use new price formulas for contracts with PT Krakatau Steel Tbk, PT Petrokimia Gresik and several fertilizer makers.

Based on the new formulas, gas buyers would only pay around USD6/MMbtu, compared to a range of prices they currently pay of between USD5.73 to USD7.54.

There will be no change for companies with contract terms already below USD6/MMbtu.

Suryaningsih, a senior official at the ministry's directorate general of oil and gas, said the new formulas would mean less revenue for gas producers as well as the government, but "all contractors have agreed."

There were no more details available on how much revenue gas companies and the government could expect to lose.

We remind that, as MRC informed before, in early October 2016, Rosneft and Pertamina signed a JV agreement that serves as the underlying agreement for the creation of a JV company that would implement the construction of the Tuban refining and petrochemical complex located in the eastern part of Java, Indonesia.

The JV agreement specifies the allocation of equity stakes between JV participants (Rosneft - 45%, Pertamina - 55%, respectively), JV management and governance, feedstock, marketing and offtake, funding principles, HR, standard clauses and further steps for implementation.

The parties are currently developing a bankable feasibility study of the project. The final investment decision (FID) on the project will be made upon the results of the bankable feasibility study, basic engineering design and front end engineering design.The design capacity of primary processing at the Tuban complex is 15 MMtpy. It will run on imported medium and heavy grades of sour crude. The project provides for the construction of a large fuel oil catalytic cracker and a petrochemical complex. The complex is assumed to be able to accommodate VLCC supertankers with a deadweight of up to 300 Mt.

INEOS Compounds entered into a licence agreement with Resysta International

MOSCOW (MRC) -- INEOS Compounds announced that it has entered into a licence agreement with Resysta International GmbH, said INEOS.

Under the terms of the Agreement, INEOS will acquire the rights to the exclusive production and marketing of Active Resysta Filler (ARF) in Europe. ARF is the key raw material for the production of Resysta PVC Compound which is used in a wide range of wood replacement applications. The Resysta ARF will be initially manufactured at the INEOS Compounds site in Sins, Switzerland and is well placed to respond to the growing demand from customers in Europe.

Jonathan Stewart, COO of INEOS Compounds, said "the selection of INEOS Compounds by Resysta to be their partner of choice for the production and marketing of ARF in Europe is another milestone in the ongoing strategic partnership between the two companies. We are looking forward to working with Resysta to develop this fast growing sector by having a real alternative to tropical wood. This agreement is further evidence of INEOS compounds' commitment to new innovation in PVC compounding and in particular to the fast growing wood polymer composite market."

Resysta succeeded where many failed by developing a weather- and water-resistant material which truly has the noble look and feel of wood. A standardized material which does not splinter or rot over time, obtained from a renewable resource, and which is fully recyclable. Even against salt water, sun and wind, Resysta carries on when other materials give up. This is the key innovation to what was needed to address the shrinking rainforests and the inferior quality of previous wood composite products. It has opened a new market to all PVC resin producers.

As it was written earlier, in 2014, INEOS Compounds and Doeflex Compounding implemented the combination of their respective PVC compounding businesses.

Part of the INEOS group of companies, INEOS Compounds is a PVC compounds manufacturer with three sites located in the UK, Switzerland and Sweden. The business supplies specialised formulations of both rigid and flexible PVC compounds predominantly into the construction and medical supplies sectors across Europe.

Ford Sollers announces start of new Ford Kuga production in Elabuga, Tatarstan

MOSCOW (MRC) -- Ford Sollers has started full-cycle production of the new Ford Kuga at its modernized assembly plant in Elabuga, Republic of Tatarstan, Russia, said Ford.

More than 52,000 Kuga vehicles have been sold in Russia since its launch. In 2016, Ford Kuga sales have increased by 21 per cent in Russia.

"The start of the new Ford Kuga production is a significant milestone for both the manufacturing facility and the Russian automotive industry in general," said Alexander Morozov, Deputy Minister of Industry and Trade of the Russian Federation.

The new Kuga will be available for Russian customers with the new 1.5-litre EcoBoost petrol engine with a choice of 2 power ratings (150 and 182 hp), as well as a 2.5-litre engine.. The new Kuga will offer customers the choice of front- and all-wheel drive.

"The launch of the new Kuga will allow Ford Sollers to further strengthen Ford’s position in the SUV segment on the Russian market," said Mark Ovenden, president and CEO, Ford Sollers.

As it was written before, on 1 October 2011, the CEO of Ford Alan Mulally and Sollers' general director Vadim Shvetsov announced the creation of an equally owned joint venture called Ford Sollers to produce Ford-branded cars. The new company took control of the Ford's factory in Vsevolozhsk, near Saint Petersburg, (opened in 2002)and two Sollers' factories in Tatastan region, one in Yelabuga and the other in Naberezhny Chelny. The head offices/product development centre were established in Khimki, Moscow.

Ford Sollers is a joint venture between the American car manufacturer Ford and the Russian Sollers established in 2011. The purpose is to produce vehicles for Russia, Kazakhstan and Belarus locally.

Russian HDPE market: November results

MOSCOW (MRC) -- Prices of high density polyethylene (HDPE) continued to go down in the Russian market in November. Prices of all polyethylene (PE) grades decreased, however, film grade and injection moulding PE accounted for the greatest fall in prices, according to ICIS-MRC Price reports.

Demand was traditionally weak in the HDPE market in the last month of autumn, and this November was no exception for the Russian market. The need for PE was reduced in all consumption sectors, whereas supply of material was excessive in the market. HDPE prices were virtually adjusted weekly during the month, and this factor put an additional pressure on demand.

Supply of HDPE by producers slumped in November, but even this fact did not help to balance the Russian market. Specifically, some producers more than doubled their export PE sales compared to October. Thus, 24,000 tonnes of HDPE were shipped to foreign markets during 27 days of November, whereas only 13,500 tonnes were sold for export in October.

Nizhnekamskneftekhim switched to linear low density polyethylene (LLDPE) production from mid-October to 27 November (the plant's annual production capacity is 210,000 tonnes), which also reduced supply of HDPE in the domestic market.

However, all these factors did not help to balance the domestic market.

Prices of film grade HDPE had dropped to Rb97,300-99,000/tonne by early December, CPT Moscow, including VAT. The price spread remained quite wide in the blow moulding and injection moulding HDPE markets. Prices of injection moulding HDPE fell to Rb90,000-98,300/tonne, CPT Moscow, including VAT, whereas prices of blow moulding PE decreased to Rb95,500-101,300/tonne CPT Moscow, including VAT.

A wide price dispersion between natural and coloured PE also remained in the pipe grade HDPE segment. Prices of natural PE 100 had dropped to Rb94,000-97,800/tonne by early December, CPT Moscow, including VAT. Prices of coloured PE 100 reached Rb104,300/tonne, CPT Moscow, including VAT, and lower.

Sumitomo Chemical signs joint-venture agreement with Zeon

MOSCOW (MRC) -- Japan-based Sumitomo Chemical has entered into a joint-venture agreement with Tokyo-based Zeon, for creating a joint-venture company between the two companies and integrating their Solution Styrene Butadiene Rubber (S-SBR) businesses, said Chemicals-technology.

Both the firms will be focusing on developing new products and serve the customers in a better manner as well as in meeting their expectations.

The new joint venture will also try to bring their technologies together, which would further enhance their cost-competitiveness, and also bolstering their business through an ensured stable supply of products, or transferring their S-SBR business operations.

Sumitomo Chemical’s S-SBR will be used as a feedstock for fuel-efficient tires, adhering to environmental awareness as well as tightening environmental regulations.

The company anticipates that the demand for fuel-efficient tires is likely to increase steadily in the future. Most of the companies are looking forward to enhance their production capacities.

The two Japanese companies have also agreed that certain synergistic benefits should accrue from integrating their businesses in a manner outlined below.

As agreed in the joint-venture agreement, Zeon will establish a new wholly owned subsidiary called ZS Elastomer. Upon establishment of the new subsidiary, Sumitomo and Zeon will then succeed the rights and obligations of the sales and R&D functions of each company’s respective S-SBR business to ZSE.

Sumitomo and Zeon will be focusing on developing new products and serve the customers in a better manner, as well as in meeting their expectations.

The new joint venture will also try to bring their technologies together, which would further enhance their cost-competitiveness, and also bolstering their business through an ensured stable supply of products, or transferring their S-SBR business operations.

As MRC informed earlier, Kuraray, Sumitomo, and PTT Global Chemical have signed a Head of Agreement (HOA) to jointly perform a Detailed Feasibility Study (DFS) for potential project development of manufacturing and sales of butadiene derivatives in Thailand. This has been announced by the companies on 13 September 2016.

Sumitomo Chemical is a Japanese based manufacturer of a diverse range of products, including basic chemicals, petrochemicals and plastics, fine chemicals, agricultural chemicals, IT-related chemicals and pharmaceuticals.