Nord Stream 2 AG and European energy companies sign financing agreements

MOSCOW (MRC) -- The Nord Stream 2 project, being pursued by Gazprom, has taken another important step towards its implementation, responding to the need of the European Union for additional gas imports and thereby improving security of supplies to Europe, reported BASF on its site.

Nord Stream 2 AG signed financing agreements for the Nord Stream 2 pipeline project with ENGIE, OMV, Shell, Uniper and Wintershall.

These five European energy companies have committed to provide long-term financing for 50 % of the total cost of the project, which is currently estimated to be EUR9.5 billion. Each European company will fund up to EUR950 million. Gazprom is and will remain the sole shareholder of the project company, Nord Stream 2 AG.

The financial commitment by the European companies underscores the Nord Stream 2 project’s strategic importance for the European gas market, contributing to competitiveness as well as medium and long-term energy security especially against the background of expected declining European production.

The 1,220-kilometer Nord Stream 2 gas pipeline, with a total capacity of 55 billion cubic meters a year, will provide a direct link between reliable Russian gas reserves and European gas consumers from the coast of Russia via the Baltic Sea to Greifswald, Germany. Construction work will begin in 2018 and will be completed by the end of 2019.

Nord Stream 2 is a planned pipeline through the Baltic Sea, which will transport natural gas over 1,200 km from the world’s largest gas reserves in Russia via the most efficient route to consumers in Europe. Nord Stream 2 will largely follow the route and design of the successful Nord Stream pipeline. With Europe’s domestic gas production projected to halve in the next 20 years, Nord Stream 2’s twin pipeline system will help Europe to meet its future gas import needs, with the capacity to transport 55 billion cubic metres of gas per year, enough to supply 26 million European households. This secure supply of natural gas with its low CO2 emissions will also contribute to Europe’s objective to have a more climate-friendly energy mix with gas substituting for coal in power generation and providing back-up for intermittent renewable sources of energy such as wind and solar power.

As MRC informed before, BASF and Gazprom completed the swap of assets with equivalent value effective at the end of September 30, 2015, financially retroactive to April 1, 2013. With the swap, BASF is further expanding its production of oil and gas and has exited the gas trading and storage business.
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Lubrizol selects Jacobs for engineering, procurement and construction services

MOSCOW (MRC) -- Jacobs Engineering Group Inc. has been selected by Lubrizol to provide engineering, procurement and construction (EPC) services for Lubrizol’s new Polyisobutylene (PIB) unit in Deer Park, Texas, said the company on its website.

Executives from both companies, including Eric Schnur, Lubrizol Chairman, President and CEO, and Steve Demetriou, Jacobs Chairman and CEO, as well as dignitaries from the city, county and school board attended the ground breaking ceremony in March.

The project is part of Lubrizol’s plan to upgrade and enhance the company’s global capabilities. The new unit is expected to be fully operational in the first half of 2019.

"Jacobs is honored to partner and support Lubrizol’s goal of renewing its infrastructure," said Jacobs Petroleum and Chemicals President Gary Mandel. "Jacobs will leverage its global chemical industry knowledge to engineer, procure and construct Lubrizol’s Deer Park plant. This project enables us to further demonstrate our proven EPC project delivery skills and expand our strong position in the Gulf Coast."

Jacobs is one of the world’s largest and most diverse providers of full-spectrum technical, professional and construction services for industrial, commercial and government organizations globally. The company employs over 54,000 people and operates in more than 25 countries around the world.
MRC

Covestro raises prices for elastomer products

MOSCOW (MRC) -- Effective May 1st, 2017, Covestro will raise the selling prices for its Desmodur and Baytec elastomer systems, which include prepolymers, polyols and curatives, by up to 9%, said the producer on its site.

The magnitude varies depending upon the product line.

The price increase will be applied globally as contracts allow.

Customers will be contacted by Covestro Elastomers’ Sales Representatives to address the price increase for their specific products.

As MRC wrote before, Covestro is moving forward with a repurposing of its production operations in Brunsbuttel, Germany. In July 2016, the Board of Management officially approved an expansion of production capacity for the foam component MDI (feedstock for polyurethane) at the site. An existing, idled plant for the precursor TDI will be converted for production of MDI. The plans call for roughly doubling production capacity at the site to a total of approximately 400,000 metric tpa of MDI. Commissioning of the new plant complex is scheduled for late 2018.

With 2016 sales of EUR 11.9 billion, Covestro (formerly Bayer MaterialScience) is an independent subgroup within Bayer. It was created as part of the restructuring of Bayer AG from the former business group Bayer Polymers, with certain of its activities being spun off to Lanxess AG. Covestro manufactures and develops materials such as coatings, adhesives and sealants, polycarbonates (CDs, DVDs), polyurethanes (automotive seating, insulation for refrigerating appliances) etc. Covestro has 30 production sites around the globe and employs approximately 15,600 people (full-time equivalents) as of the end of 2016.
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Valero Energy quarterly profit slumps 38.4 pct

MOSCOW (MRC) -- Valero Energy Corp, the largest U.S. oil refiner, reported a 38.4 percent fall in quarterly profit, hurt by weak margins in its core refining business, said Reuters.

The company said on Tuesday that its net income attributable to shareholders fell to USD305 million, or 68 cents per share, in the first quarter ended March 31, from USD495 million, or USD1.05 per share, a year earlier.

Operating revenue rose 38.6 percent to USD21.77 billion.

As MRC informed earlier, Valero Energy Partners’ (the Partnership) board of directors of its general partner has approved the Partnership’s acquisition of the Meraux and Three Rivers Terminal Services Business from a subsidiary of Valero Energy Corp. (Valero) for total consideration of approximately USD325 M.

Valero Energy Corporation is a Fortune 500 international manufacturer and a marketer of transportation fuels, other petrochemical products, and power. It is based in San Antonio, Texas, United States. The company owns and operates 16 refineries throughout the United States, Canada, United Kingdom, and the Caribbean with a combined throughput capacity of approximately 3 million barrels (480,000 m3) per day, 10 ethanol plants with a combined production capacity of 1.2 billion US gallons (4,500,000 m3) per year, and a 50 megawatt wind farm.
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Ineos Q1 earnings up on cheap feedstocks

MOSCOW (MRC) -- Ineos Group Holdings S.A. announced its trading performance for the first quarter of 2017, said the company on its site.

Based on unaudited management information INEOS reports that EBITDA for the first quarter of 2017 was a record EUR753 million, compared to EUR554 million for Q1, 2016 and EUR559 million for Q4, 2016.

North American markets have continued to be strong, taking full benefit from their current feedstock advantage. Market conditions in Europe have remained good, supported by the continued weakness of the Euro. In addition, markets in Asia have seen some strength in the quarter.

O&P North America reported EBITDA of EUR284 million compared to EUR229 million in Q1, 2016. The business has continued to benefit from its flexibility to be able to utilise cheaper NGL feedstocks to maintain healthy margins. The US cracker business environment was solid with healthy margins and high operating rates throughout the quarter. Polymer demand was strong, with balanced markets and high margins.

O&P Europe reported EBITDA of EUR221 million compared to EUR175 million in Q1, 2016. Demand for olefins in the quarter was solid in a tight market with top of cycle margins. Butadiene prices in particular have remained elevated throughout the quarter. European polymer demand was firm in a balanced market, with solid volumes and high margins in the quarter.

Chemical Intermediates reported EBITDA of EUR248 million compared to EUR150 million in Q1, 2016.

As MRC informed earlier, INEOS Group Ltd. is considering expansion of its plants in USA to take advantage of low-cost natural-gas liquids as feedstock for ethylene production.

INEOS Group Limited is a privately owned multinational chemicals company consisting of 15 standalone business units, headquartered in Rolle, Switzerland and with its registered office in Lyndhurst, United Kingdom. It is the fourth largest chemicals company in the world measured by revenues (after BASF, Dow Chemical and LyondellBasell) and the largest privately owned company in the United Kingdom.
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