ADNOC signs new offshore concession agreement with Cepsa

MOSCOW (MRC) -- On behalf of the Abu Dhabi Government, the Abu Dhabi National Oil Company (ADNOC) today signed an agreement with Cepsa, a Spanish integrated oil and gas company, awarding it a 20% stake in Abu Dhabi’s offshore Sateh Al Razboot (SARB) and Umm Lulu concession, as per company's press release.

The choice of Cepsa, which is wholly-owned by Abu Dhabi’s Mubadala Investment Company and operates across the entire oil and gas value chain, underpins ADNOC’s strategy to maximize returns from its resources, expand its Downstream business, and retain value for the UAE.

The concession area is made up of two main fields under development, Umm Lulu, which is part of the former ADMA offshore concession, and SARB, as well as two smaller fields, Bin Nasher and Al Bateel. The ADMA concession has been split into three new concessions to maximise commercial value, broaden ADNOC’s partner base, expand technical expertise, and enable greater market access.

Cepsa contributed a participation fee of AED 5.5 billion (USD1.5 billion) to enter the concession, which also takes into account previous ADNOC investments in the concession area. ADNOC retains a majority 60% stake in the concession that will be operated by ADNOC Offshore, a subsidiary of ADNOC.

The agreement, which has a term of 40 years and an effective date of March 9, 2018, was signed by His Excellency Dr Sultan Ahmed Al Jaber, ADNOC Group Chief Executive Officer, and Pedro Miro, Vice Chairman and CEO of Cepsa.

H.E. Dr Al Jaber said: "This long-term agreement is a milestone in the development of Abu Dhabi’s integrated oil and gas sector and in the delivery of ADNOC’s 2030 smart growth strategy. This partnership ensures we continue to maximise value from our hydrocarbon resources, in line with the leadership’s directives, by capturing that value and financial return here in the UAE.

"The agreement also reflects ADNOC’s new partnership approach, as we expand and diversify our partner base across ADNOC’s integrated value chain. Reflecting our strategic approach, we are also working with Cepsa as we explore expansion opportunities in our downstream business in the UAE and overseas, that will deliver competitive returns and long term growth opportunities for both parties, and for the UAE."

Cepsa, which has been operating in the energy sector since 1929, has businesses in over 20 countries across five continents. Its operations span exploration, production, refining, distribution and marketing, chemicals, gas and power, trading, bunkering and renewable energy sources. It is the world’s largest producer of Linear Alkyl Benzene (LAB) and also the leading producer of cumene and the second in phenol and acetone, thanks to its seven chemical plants, in Europe, Asia and the Americas. In 2016 it produced 35.4 million barrels of oil, distilled 158.7 million barrels of crude oil and sold 28.3 million tons of petroleum products.

Miro said: “This concession agreement marks an important moment for Cepsa and our close relationship with ADNOC, with whom we are working with on a number of projects in the upstream, downstream and petrochemical sectors. It will add substantial reserves, in a concession with relatively low production cost, to our portfolio, and will enable us to make considerable strides towards achieving our objectives, as set out in our 2030 Strategic Plan”.

In November 2017, ADNOC and Cepsa signed a framework agreement to evaluate a new world-scale Linear Alkyl Benzene complex in Ruwais, Abu Dhabi. LAB is the most common raw material in the manufacture of biodegradable household and industrial detergents. It is also used in house cleaners, fabric softeners, and soap bars.

The companies plan to progress the basic engineering of the proposed LAB complex in 2018. It is envisaged the facility will be integrated with the Ruwais refinery complex, and will incorporate DETAL-PLUSTM technology.

According to Cepsa, the offshore concession agreement strengthens its energy model and long-term strategy, and is in line with the company’s forecasts as outlined in its Cepsa Energy Outlook 2030 report for world demand for oil growth in the coming years.

The agreement increases Cepsa's presence in the UAE, a strategic country for the company where it has operated in both exploration and production and bunker activities since 2013.

The concession award is the first to be announced for the second of three new offshore concession areas, which have been created from the former ADMA offshore concession. On February 10, ADNOC announced the award of a 10% interest in Abu Dhabi’s offshore Lower Zakum concession to an Indian consortium, led by ONGC Videsh.

In support of its expanded 2030 strategy, ADNOC plans to grow its crude refining capacity by 60 per cent and more than triple its petrochemical production, to 14.4 mtpa by 2025, through a staged expansion plan aimed at initially optimizing its existing assets to grow and diversify its products portfolio, as it delivers its strategic imperatives of a more valuable Upstream, more profitable Downstream and an economic and sustainable supply of gas.

ADNOC is finalizing concession agreements with potential partners for the remaining stakes in the SARB and Umm Lulu, the Lower Zakum and the Umm Shaif and Nasr concession.
MRC

Westlake Chemical Corporation declares quarterly dividend

MOSCOW (MRC) -- The Board of Directors of Westlake Chemical Corporation has declared a regular dividend distribution of USD0.2100 per share, as per the company's press release.

The dividend will be payable on March 13, 2018, to stockholders of record on February 27, 2018.

This is the 54th successive quarterly dividend that Westlake has declared since completing its initial public offering in August 2004.

As MRC informed previously, Westlake Chemical Corporation has recently announced that it will expand capacities for the production of polyvinyl chloride (PVC) and vinyl chloride monomer (VCM) at three of its chemical facilities. Two of the plants are located in Germany (Burghausen, Gendorf) and one is located in Geismar, Louisiana. The expansions in Burghausen and Geismar are expected to be completed in 2019. The Gendorf expansions are expected to be completed in 2020 and 2021.

Westlake Chemical Corporation is an international manufacturer and supplier of petrochemicals, polymers and building products with headquarters in Houston, Texas. The company's range of products includes: ethylene, polyethylene, styrene, propylene, chlor-alkali and derivative products, PVC suspension and specialty resins, PVC Compounds, and PVC building products including siding, pipe, fittings and specialty components, windows, fence, deck and film.
MRC

Total, Borealis and NOVA Chemicals sign definitive agreements to form a joint venture in petrochemicals

MOSCOW (MRC) -- As announced in March 2017, the new USD1.7 billion ethane steam cracker is being built alongside Total’s Port Arthur refinery and Total/BASF existing steam cracker, as per company's press-release.

The project, which is scheduled to start up in 2020, will create around 1,500 jobs during peak engineering and construction activity. "This agreement is a key milestone for this integrated petrochemicals project. This joint venture is aligned with Total’s strategy to strengthen our position by taking advantage of low-cost U.S. gas," said Bernard Pinatel, President, Refining & Chemicals, Total. "We look forward to working with Borealis and NOVA Chemicals to create world-class facilities and become a major player in the growing U.S. and global market for polyethylene."

"The JV with Total and NOVA Chemicals is a key project in advancing our global growth. Not only are we convinced of the excellent cost-economics of this integrated brownfield investment project, but we are also excited to bring our unique product grades based on our Borstar technology to the North American market," said Borealis CEO Mark Garrett.

"A key component of NOVA Chemicals’ growth strategy is to expand beyond our traditionally Canadian footprint by extending our presence in the U.S. Gulf Coast," stated NOVA Chemicals CEO, Todd Karran. “Partnering with Total and Borealis will allow us to better serve our customers throughout the Americas by delivering a broader slate of products that help make everyday life healthier, easier and safer."

NOVA Chemicals develops and manufactures chemicals and plastic resins that make everyday life safer, healthier and easier. Our employees work to ensure health, safety, security and environmental stewardship through our commitment to sustainability and Responsible Care®. NOVA Chemicals, headquartered in Calgary, Alberta, Canada, is wholly-owned, ultimately by Mubadala Investment Company of the Emirate of Abu Dhabi, United Arab Emirates.

Borealis is a leading provider of innovative solutions in the fields of polyolefins, base chemicals and fertilizers. With its head office in Vienna, Austria, the company currently has around 6,600 employees and operates in over 120 countries. Borealis generated EUR 7.5 billion in sales revenue and a net profit of EUR 1,095 million in 2017. Mubadala, through its holding company, owns 64% of the company, with the remaining 36% belonging to Austria-based OMV, an integrated, international oil and gas company. Borealis provides services and products to customers around the world in collaboration with Borouge, a joint venture with the Abu Dhabi National Oil Company (ADNOC)..

MRC

Chemical production in Russia grew by 4.7% in January 2018

MOSCOW (MRC) -- Overall output of chemicals rose in 2017 by 4.7% year on year, with mineral fertilizers accounting for the greatest increase in production, according to Rosstat's data.

According to the Federal Service of State Statistics, last month's production of basic chemicals grew by 4.7% year on year. Production of mineral fertilizers went up significantly, whereas a number of other chemicals accounted for a minimal increase.

Thus, overall output of basic chemicals rose in 2017 by 4.3% year on year, with chemical fertilizers accounting for the greatest increase in production and ethylene - for the least growth.

274,000 tonnes of ethylene were manufactured in January, compared to 267,500 tonnes a year earlier, all producers maintained almost 100% of capacity utilisation. Overall, about 2,860,000 tonnes of this olefin were produced last year, up by 2.5% year on year.

Last month's production of benzene rose to 134,000 tonnes from 130,800 tonnes in January 2017. Overall output of this material reached 1,360,000 tonnes in 2017, up by 4.2%year on year.

January production of sodium hydroxide (caustic soda) was 113,000 tonnes (100% of the basic substance) versus 112,000 tonnes a year earlier. Overall output of caustic soda grew to 1,240,000 tonnes in 2017, up by 6.1% year on year.

Last month's production of mineral fertilizers was 2,019,000 tonnes (in terms of 100% nutrients) versus 1,940,000 tonnes in January 2017. Overall, Russian plants produced over 22,520,000 tonnes of fertilizers last year, up by 8.2% year on year.
MRC

Ras Tanura Refinery celebrates successful completion of major T&I

MOSCOW (MRC) -- Ras Tanura Refinery (RTR) recently celebrated the successful completion of a major turnaround and inspection (T&I), with proper planning and a collaborative effort from everyone involved credited for the success, as per Hydrocarbonprocessing.

Responsible for a significant portion of fuel production in the Kingdom, production up-time of the RTR Gas Condensate Fractionation and the Platformer/Naptha Hydrotreater (NHT) units is of the essence at RTR. The T&Is on both units were completed in a new best-in-class duration for the respective units when compared to their global peers as per globally accepted Solomon Study refinery benchmarks. The Fractionation Unit T&I was completed in 27 days, and the Platformer Unit T&I was completed in 32 days, against their benchmarks of 28 days and 35 days, respectively.

"Planning and successfully executing the scope required a team effort," RTR general manager Yahya A. Abushal said during the celebration event. "The management team appreciates the efforts of the RTR team and the support extended by all of the departments within Saudi Aramco that went to extra lengths to support the RTR T&I, including Support Services and Central Engineering, along with all of our RTR contractor partners."

Refinery Maintenance manager Sami Burushaid said "beating Solomon top performers, increasing RTR’s 2017 cash margin significantly, and the additional value created are only glimpses of the success story of this exemplary T&I."

Raed AlSaadoun, Refinery Maintenance superintendent and T&I chairman, said: "The success of this major T&I was measured by zero safety incidents, worldwide best-in-class duration, significant cost avoidance, early startup, and most importantly, knowledge transfer to the major company asset — our young workforce."

The RTR Gas Condensate Fractionation unit, and the Platformer/NHT units were shut down for the T&I to carry out inspections and maintenance as per the Equipment Inspection Schedule (EIS), and to execute other maintenance and projects that require plant downtime. The plants are on a five-year T&I cycle.
MRC