Lanxess to acquire US phosphorus additives business of Solvay

MOSCOW (MRC) -- Specialty chemicals company Lanxess is expanding its Additives segment and plans to acquire the phosphorus chemicals business with a US production site from Belgian chemical group Solvay, said the company on its site.

Both companies have signed an agreement to this effect.

The transaction is projected to conclude in the first half of 2018, subject to customary regulatory approvals. The acquisition fully complements Lanxess' strategy to grow its business in mid-sized markets and in the regions North America and Asia.

The site in Charleston, South Carolina, includes six production units, where roughly 90 employees manufacture phosphorus chloride plus numerous derivative products such as flame-retardants and intermediates for the agrochemical industry. The business represents annual sales of around EUR 65 million.

"With this acquisition, we are benefitting from a North American platform for phosphorus-based specialty chemicals - a key component of our additive business - and are able to further drive our growth in this key region," said Anno Borkowsky, General Manager of the Additives business unit at Lanxess.

With annual sales of around EUR 2 billion and roughly 2,000 employees around the globe, the additives business is an important pillar of the Lanxess group.

As MRC reported earlier, following the completion of the acquisition of US chemical company Chemtura at the end of April 2017, specialty chemicals company Lanxess has subsequently adjusted its group structure. In September 2017, Lanxess reported on five segments comprising a total of twelve business units. Thus, flame retardant and lubricant additives are the two main pillars of Chemtura’s business and they now complement the current Lanxess portfolio combined in a new “Additives” business unit. These two business activities are integrated with Lanxess’s 'Rhein Chemie” business unit to form a new segment - 'Specialty Additives'.

Lanxess is a leading specialty chemicals company with sales of EUR 7.7 billion in 2016 and about 19,200 employees in 25 countries. The company is currently represented at 74 production sites worldwide. The core business of Lanxess is the development, manufacturing and marketing of chemical intermediates, additives, specialty chemicals and plastics. Through Arlanxeo, the joint venture with Saudi Aramco, Lanxess is also a leading supplier of synthetic rubber.

Lukoil makes final investment decision on coker at Nizhny Novgorod refinery

MOSCOW (MRC) -- PJSC LUKOIL announces that the final investment decision on the delayed coker complex at Nizhny Novgorod refinery was taken, as per Refiningandpetrochemicals.

The complex includes the construction of the delayed coker unit itself, the diesel hydro treatment unit, the gas fractionation unit, the sulfur and hydrogen production units and other infrastructure. The designed capacity of the complex is 2.1 million tons per annum.

The construction of the complex and related operations optimization will improve the refinery's light product yield by more than 10% while reducing the fuel oil production by 2.7 million tons per annum. The planned launch of the complex in 2021 will lead to the new technology intensive workplaces in the region.

PJSC LUKOIL has already developed the project documentation and signed contracts with CB&I and Kinetics Technology for the development of technical documentation and the delivery of the main long lead items. "While working on this project, we are extensively relying on our successful track record of the construction and use of the similar unit at our refinery in Perm.

Thanks to that, for example, the preparation of the project documentation and the receipt of necessary state approvals took us less than a year. The accumulated expertise also allows us to optimise the time and the costs of the facilities' construction. The partnership with CB&I and Kinetics Technology gives us an opportunity to implement the project's technical solutions in a time-efficient and a high-quality way. The Russian companies with the necessary expertise will be involved in the construction," said Vladimir Nekrasov, First Vice-President of PJSC LUKOIL.

Nizhny Novgorod refinery produces fuels and lubricants and has capacity of 17.0 mln tonnes pa. It is located in the town of Kstovo in Nizhny Novgorod Region. During the first nine months of 2017 the refinery's light product yield was 64%, the refining depth was 77%.

Russia remains top oil supplier to China for eighth month

MOSCOW (MRC) -- Russia held its position as China's top crude oil supplier for the eighth month in a row in October, reported Reuters with reference to customs data.

Shipments from Russia in October hit 4.649 MMt, or around 1.095 MMbpd, according to the detailed breakdown of commodity trade data released by China's General Administration of Customs. That was 1.9% lower than a year earlier and off the record in September at 1.545 MMbpd.

Saudi Arabia came a close second, with supplies in October up 16 percent from a year ago at 1.086 MMbpd.

For the first 10 months, crude volumes from Russia rose 15.9 percent year-on-year to about 49.65 MMt, or 1.19 MMbpd.

That comes as CEFC China Energy is set to start lifting ESPO and Sokol cargoes in January from Russian oil giant Rosneft, in an annual deal that will see the private Chinese firm overtake Trafigura as the top trader of Russian oil in Asia.

Third-ranking Angola supplied 45.3% more crude oil last month versus a year earlier at 839,840 bpd.

The West African exporter stood as the second-largest supplier, ahead of Saudi Arabia, for the January-October period with total supplies up nearly 18% on-year.

Saudi volumes rose less than 1% on-year during the same period at about 1.036 MMbpd.

Shipments from Iran were down 11.5% last month from a year earlier at about 685,150 bpd, while volumes for the first 10 months gained 2.2% year-on-year.

Iran is pushing to retain customers for its oil in Asia, hoping that price reductions will boost the appeal of its crude compared with other Middle Eastern supply even as the potential threat of further U.S. sanctions on the country looms.

October U.S. shipments to China came in 878,623 tonnes, or 206,900 bpd, the second strongest monthly rate since China started importing U.S. crude late last year. Supplies in the January-October period totaled 5.6 MMt, or 135,300 bpd.

China's total crude oil imports slid in October to their lowest monthly level in 13 months, tumbling from a near-record in September.

US regulator raises concerns about weights on energy pipelines

MOSCOW (MRC) — A US regulator's preliminary investigation into the biggest oil pipeline spill this year has raised a red flag that could trigger an extensive and costly inspection of tens of thousands of miles of underground energy lines, said Hydrocarbonprocessing.

The 5,000-bbl leak on TransCanada Corp's Keystone pipeline on Nov. 16 in South Dakota might have stemmed from damage caused by a weight put in place when it was built in 2008, the Pipeline and Hazardous Materials Safety Administration said in a report published on Tuesday. Weights are used to prevent pipelines from moving and reduce the risk of damage or ruptures when water tables rise.

The regulator's finding has implications for the 2,687-mi pipeline and others throughout the world. The weights, which tip the scales at 7,000 lbs (3,175 kg) or more, are commonly used, but only the pipeline operators know where they are located.

Damage from weights "could happen on other segments of this pipeline and other pipelines," said Najmedin Meshkati, professor of civil and environmental engineering at the University of Southern California. The Keystone pipeline carries 590,000 bpd from Alberta's oil sands to US refineries. TransCanada's proposed Keystone XL line would add another 830,000 bpd of capacity.

Nebraska officials approved the construction of that line even after the leak, although it is still unclear if TransCanada will build it. Depending on the results of the full investigation, construction plans for new lines such as the Keystone XL may need modification. Existing lines may also have to be checked, a difficult and potentially expensive undertaking.

US regulators do not have specific information on the types of weights or their locations because pipeline companies are not required to submit data, said Carl Weimer, executive director of the non-profit Pipeline Safety Trust. PHMSA did not respond to requests for comment on this question.

The Canadian Energy Pipeline Association also said operators, not regulators, keep tabs on this information. "We would not have an inventory; that would need to come from the individual companies,” said Carla Beynon, a spokeswoman for the industry group.

On Tuesday, PHMSA ordered TransCanada to clean up the site and analyze data on the location of other weights on the Keystone line where the land may have similar characteristics as where the leak occurred. TransCanada would not say how many weights were placed along the pipeline, which runs through several states and Canadian provinces, during construction.

In one of those states, the North Dakota Public Service Commission, which regulates pipelines, has asked for briefings with TransCanada on its monitoring procedures. Commissioners are also waiting to see the full PHMSA report and results of testing on the damaged section of pipeline.

"If there are issues on how this pipeline was designed and constructed, we will certainly be concerned," said commission Chairman Randy Christmann.

Shell Midstream Partners to acquire additional assets from Shell

MOSCOW (MRC) — Shell Midstream Partners, L.P. entered into a purchase and sale agreement to acquire from wholly owned subsidiaries of Shell a 100% interest in five products terminals and partial interest in two Gulf of Mexico corridor pipelines and in two strategic onshore pipelines for USD825 MM, said Hydrocarbonprocessing.

The acquisition price reflects an approximate 7.9 times multiple of the assets' forecasted 2018 adjusted earnings before interest, taxes, depreciation and amortization and is expected to be immediately accretive to unitholders. Shell Midstream Partners intends to fund the acquisition with borrowings under new and existing credit facilities. The acquisition is expected to close on or around Dec. 1, 2017, subject to customary closing conditions.

Highlights of the assets to be acquired: A 100% interest in Triton West LLC which owns the Anacortes, Colex, Des Plaines, Portland, and Seattle products terminals. The terminals are strategically located with take-or-pay contracts with wholly owned subsidiaries of Shell. Each contract has an initial term of 10 yr with options to extend up to 20 yr. The acquisition of the products terminals builds upon Shell Midstream Partners' strategy to access assets across Shell's broad asset base.

A 22.9% interest in Mars Oil Pipeline Company LLC (Mars) and a 22% interest in Odyssey Pipeline LLC (Odyssey). Both Mars and Odyssey serve high growth areas of the Gulf of Mexico. Following the closing of the transaction, Shell Midstream Partners will own 71.5% of Mars and 71% of Odyssey.

A 10% interest in Explorer Pipeline Company (Explorer) and a 41.48% interest in LOCAP LLC (LOCAP). Explorer owns an 1,830-mi products pipeline extending from Gulf Coast refineries to the upper Midwest. LOCAP owns a 55-mi common carrier crude pipeline from the LOOP Clovelly Salt Dome facility to the active trading hub of St. James, Louisiana.

The terms of the acquisition were approved by the conflicts committee of the Board of Directors of the General Partner of Shell Midstream Partners, which is comprised entirely of independent directors. This committee was advised by Tudor, Pickering, Holt & Co. as to financial matters and Akin Gump Strauss Hauer & Feld LLP as to legal matters.