Iran pushes to retain Asia oil buyers as possible US sanctions loom

MOSCOW (MRC) -- 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 US sanctions on the country looms, reported Reuters.

The National Iranian Oil Company has in the last few weeks offered spot cargoes, ranging from light to heavy grades, to its term buyers in Asia, after setting December prices at the lowest in years against comparable Saudi grades, three sources with knowledge of the matter said.

The sources declined to be identified as they were not authorized to speak with media, while NIOC was not immediately available for comment.

That comes as US Congress has until mid-December to decide whether to reimpose sanctions on Iran that were lifted in exchange for it limiting its nuclear activity, with President Donald Trump disavowing Tehran’s compliance with the terms of that deal.

"The threat of US Congress sanctions has put pressure on Iran to ‘firm up’ markets via discounts and freight adjustments for its crude," said Tilak Doshi, consultant at Muse & Stancil in Singapore.

NIOC first cut the official selling price (OSP) of Iran Heavy crude against Saudi’s Arab Medium grade for October, before lowering it again for December. That puts the Iran Heavy price for December at the widest discount against Arab Medium in over a decade, data on Thomson Reuters Eikon showed.

Meanwhile, price cuts for Iranian Light placed the oil at its lowest premium in two years against Saudi Arabia’s Arab Light.

The discounts were made to retain existing buyers of Iranian oil, which already have government-backed arrangements in place from when the original western sanctions hit Iran’s oil exports in 2012-2014, the sources said.

Japanese and Indian buyers responded to the price cuts for October by increasing imports and are expected to keep volumes elevated due to competitive prices, trade sources said.

Iran’s offers for December come weeks before the Organization of the Petroleum Exporting Countries and non-OPEC producers meet on Nov. 30 to decide whether to extend a deal to cut production and support prices.

They also follow rising Basra crude exports from Iraq and an increase in Qatari supplies in January that have been putting Iranian grades under pressure, said Ehsan Ul-Haq, director of crude oil and refined products at consultancy Resource Economist.

Still, traders and analysts do not expect a repeat of the battle for market share that was waged prior to OPEC’s 2016 supply cut deal, with Tehran set to maintain steady output of about 3.8 MMbpd and exports of 2.4 MMbpd–2.6 MMbpd.

"They have maxed out their (export) volume unless they can increase production further," said a trader who handles Iranian oil.

We remind that, as MRC informed earlier, in March 2016, The National Petrochemical Company (NPC) of Iran and France-based Total signed an memorandum of understanding (MoU) to build a petrochemical complex in Iran, news reports said on Wednesday. The complex will include a world-scale steam cracker unit in the coastal area. It will be based on a combination of feedstocks comprised of ethane, naphtha and LPG, as well as other available feed. In addition to steam cracker unit, the complex will include relevant downstream units for supplying its products to domestic and international markets.
MRC

TKOC resumed Shuaiba cracker production

MOSCOW (MRC) -- Kuwait Olefins Co (TKOC) has brought on-stream its cracker following a maintenance turnaround, as per Apic-online.

A Polymerupdate source in Kuwait informed that the company has recently resumed operations at the plant. The cracker was taken off-line in end-October 2017

Located at Shuaiba in Kuwait, the cracker has a ethylene production capacity of 850,000 mt/year.

EQUATE Petrochemical Company is the single operator of Greater EQUATE, which includes The Kuwait Styrene Company (TKSC), Kuwait Paraxylene Production Company (KPPC) and The Kuwait Olefins Company (TKOC) under one fully integrated operational umbrella at Kuwait’s Shuaiba Industrial Area.
MRC

Kinder Morgan Canada denied expedited appeal for oil pipeline

MOSCOW (MRC) — Canada's National Energy Board (NEB) will take until at least Dec. 4 to review Kinder Morgan Canada Ltd's appeal over its Trans Mountain oil pipeline expansion, the regulator said on Tuesday, rejecting the company's proposed "expedited" timeline, said Reuters.

The company, a unit of Houston-based Kinder Morgan Inc, last month asked the regulator to intervene after it said it was unable to obtain permits from the city of Burnaby, British Columbia. Burnaby has long opposed the expansion over environmental concerns, and the lack of permits from the city adds to the hurdles facing the USD5.9 B expansion, as North American energy projects face increasing opposition from activists.

Kinder Morgan Canada declined to comment, although in previous regulatory filings it said such cases could result in delays for the expansion, which is scheduled to go online December 2019. In a statement on Tuesday, the NEB said it will hear cross-examinations on affidavits on Nov. 29 and oral summaries on Dec. 4, without saying when it will make a decision.

Kinder Morgan had asked for the case to involve only written submissions to the board, and for that process to conclude by Nov. 10. The company had noted a related case was resolved in a month.

Canadian oil producers, whose landlocked product trades at a discount to the West Texas Intermediate benchmark, say they need additional pipeline capacity to fetch better prices.

The proposed expansion of the Trans Mountain pipeline from Canada's oil-rich Alberta province would nearly triple its capacity to 890,000 bpd and significantly increase crude tanker traffic off the west coast.

Alberta and fellow crude-producing province Saskatchewan have since joined Kinder Morgan in its appeal, while British Columbia has joined on the side of Burnaby.

Saskatchewan Premier Brad Wall on Monday rejected Burnaby's request that the province's attorney general retract his accusation that the city is purposely denying the permits.
MRC

Evonik to acquire additive compounding business from 3M

MOSCOW (MRC) -- German speciality chemicals company Evonik Industries AG has signed an agreement to acquire the high-concentrates additive compounding business of US-based 3M, the company announced 28 Nov, said the company on its website.

The move is part of Evonik’s plan to further expand capabilities in speciality additives, with the acquisition adding solid additives to its portfolio. The parties did not disclose the price of the purchase.

Commenting on the takeover, Dietmar Schaefer, head of Evonik’s interface & performance business line, said the transaction would enable it to “significantly expand” its product portfolio.

The deal includes the Accurel brand product portfolio which is produced in Obernburg, Bavaria, Germany, as well as the Obernburg production facility with approximately 25 jobs which will be retained. The high-concentrates additive compounding technology allows plastic manufacturers to introduce large volumes of additives into a polymer matrix via a solid polymer carrier.

The new addition will enable Evonik to target new applications, including the packaging industry. The deal is expected to be completed in the first quarter of 2018 subject to customary closing conditions. These operations will be incorporated into Evonik’s interface & performance business line, which produces and markets speciality additives for the plastics industry.
MRC

PVC imports to Kazakhstan down by 6% in ten months of 2017

MOSCOW (MRC) -- Imports of unmixed polyvinyl chloride (PVC) into Kazakhstan dropped in January-October 2017 by 6% year on year to 45,500 tonnes, reported MRC analysts.


Imports of unmixed PVC to Kazakhstan slightly increased in October, reaching 3,800 tonnes, compared to 3,400 tonnes a month earlier. Thus, overall imports of resin reached 45,500 tonnes in the first ten months of 2017, compared to 48,400 tonnes a year earlier.

Due to the geographical position, Chinese producers with the share of about 91% of the local market over the stated period.are the main suppliers of PVC to Kazakhstan.

But some Russian producers have begun to enter the Kazakh market more actively for the past several months. Imports of resin exceeded 4,000 tonnes in the first ten months of 2017.

MRC