Indonesian Energi Mega Persada to enter petrochemical business

MOSCOW (MRC) -- Publicly-listed oil and gas firm PT Energi Mega Persada (EMP) is seeking to diversify its business by developing two purified terephthalic acid (PTA) plants worth USD 600 million this year, according to GV.

The new facilities will have a combined production capacity of 1.6 million t/y of PTA.

EMP, through its subsidiary PT Energi Mega PTA, signed a memorandum of agreement with China’s Reignwood International Investment Group on 3 Feb., through which the former will acquire the latter’s future PTA plants in an unspecified location under an engineering, procurement and construction contract.

Reignwood currently operates two PTA facilities with an overall capacity of 2.1 million t/y in China and has another two PTA projects on the pipeline.

"The company (EMP) is taking a chance to diversify by penetrating the petrochemical business industry, which has been growing with a more stable cash flow (compared to the oil and gas industry)," said EMP president director Imam P. Agustino.

EMP expected to secure loans with low-interest rates from several Chinese lenders to finance the acquisition of the two facilities this year, he added.

SIBUR reports 2017 results

MOSCOW (MRC) -- PAO SIBUR Holding, an integrated gas processing and petrochemicals company, today published its operational and financial results for the full year 2017 in accordance with International Financial Reporting Standards (IFRS), as per the company's financial report.

In 2017 SIBUR’s gas processing plants (GPPs) processed 22.8 billion cubic metres of APG, an increase of 1.6%(1) year-on-year largely attributable to higher supplies from oil companies and higher capacity load at previously expanded gas processing facilities. As a result, production of natural gas rose by 1.5% year-on-year to 19.7 billion cubic metres(1). Raw NGL fractionation volumes increased by 6.7% year-on-year to 8.7 million tonnes(2) following the expansion of fractionation facilities in Tobolsk.

Natural gas sales volumes increased by 1.3% year-on-year to 18.5 billion cubic metres. External LPG sales volumes increased by 4.5% year-on-year to 4.9 million tonnes.

In 2017 SIBUR increased sales volumes of majority of its petrochemical products. Sales volumes of polypropylene increased by 10.9% year-on-year to 598 thousand tonnes, while sales volumes of polyethylene increased by 12.6% year-on-year to 268 thousand tonnes - both following the increased production at our new and upgraded facilities in Tobolsk and Tomsk.

Sales of elastomers increased by 9.7% year-on-year to 485 thousand tonnes, inter alia following the increased capacity load at SBS production in Voronezh on the back of improved market environment . Our sales of plastics and organic synthesis products remained flat year-on-year at 771 thousand tonnes. Sales of intermediates increased by 13.0% year-on-year to 520 thousand tonnes due to higher propylene production volumes following the change of feedstock composition at our crackers, and higher external sales of benzene during the maintenance shutdown at our production site in Perm.

The company's integrated business model and investments in new production facilities enabled us to counterbalance the shifts in segments’ margins and improve SIBUR results with EBITDA up by 15.2% to RR 160,851 million year-on-year and EBITDA margin reaching 35.4%.

This performance was significantly attributable to higher energy products’ prices, while our petrochemicals businesses encountered higher intragroup feedstock costs, which was partially compensated by higher selling volumes.

The company's revenue increased by 10.4% year-on-year to RR 454,619 million on increased production and sales volumes, as well as positive price dynamics in LPG and elastomers.

The company's net profit in 2017 totaled RR 120,246 million, a 6.3% growth year-on-year. The increase was primarily a result of growth in operating profit and gain on disposal of Uralorgsintez, which was partially offset by lower net finance income due to high base of 2016 when we observed significant FX fluctuations.

SIBUR's cash from operating activities increased by 10.9% on the back of increased EBITDA that was significantly offset by increased Income tax paid.

SIBUR is a uniquely positioned vertically integrated gas processing and petrochemicals company. SIBUR owns and operates Russia’s largest gas processing business in terms of associated petroleum gas processing volumes, and is a leader in the Russian petrochemicals industry.

SIBUR operates 22 production sites located all over Russia, serving over 1,400 large customers engaged in the energy, chemical, fast moving consumer goods (FMCG), automotive, construction and other industries in approximately 80 countries worldwide and employed about 27,000 personnel.

Saudi Aramco to supply Egyptian refineries for 6 months

MOSCOW (MRC) -- Saudi Aramco, the world’s largest oil producer, agreed to supply Egyptian refineries with crude oil for six months, starting January 2018, Egypt’s Petroleum Minister Tarek El Molla told Reuters on Thursday.

Aramco will supply 500,000 barrels per month of crude oil to Egyptian refineries, Molla added.

As MRC reported earlier, in May 2016, PKN ORLEN signed a contract with Saudi Aramco for the supply of ca. 200 thousand tonnes of crude oil monthly to its refineries. The contract was effective from May 1st to December 31st 2016, with an option of automatic renewal for successive years. The oil will be processed by all PKN ORLEN's refineries in Poland, the Czech Republic and Lithuania.

Saudi Aramco is an integrated oil and chemicals company, a global leader in hydrocarbon production, refining processes and distribution, as well as one of the largest global oil exporters. It manages proven reserves of crude oil and condensate estimated at 261.1bn barrels, and produces 9.54 million bbl daily. Headquartered in Dhahran, Saudi Arabia, the company employs over 61,000 staff in 77 countries.

BASF launches new PU slipper system with light soles

MOSCOW (MRC) -- BASF has presented its latest developments regarding Elastopan PU systems and Elastollan TPU at Simac, the international machinery and technology trade fair for footwear in Milan, Italy, as per GV.

According to the company, light and flexible soles are two central requirements for slippers. With Elastopan ULD (ULD = ultra low density) a density up to 30 % lower compared to conventional slipper systems (from 280 - 200 kg/m3) - depending on the model - can be reached. This system is softer and more flexible, thus leading to an increased wearing comfort, and lighter at the same time. Moreover, despite its low density, the material offers good processing properties thus ensuring more comfort not just when being worn, said BASF.

At the trade show, BASF exclusively presents the latest design creations of students from Politecnico Calzaturiero. Under the motto "Young City Wild", the prospective shoe designers developed unisex sneakers which examine the aspects man and nature, their connection and juxtaposition, in their full spectrum. "Blood Diamond" by Diego Turrin was inspired by the diamond war in Sierra Leone. The model from Greta Concolato connects the urban landscape with the art of recycling. The hybrid shoe from Marco Degan is a sneaker which can also be worn as a sandal or boot and consists of an innovative material mix. The prototype from Nicolo Guido divides the shoe into the two hemispheres man and nature and the connecting middle section is designed as a hand grenade.

In addition, the company is highlighting its new footwear app - a consolidated platform for information regarding the wide range of products for the footwear industry of BASF. It gives a quick overview of which products are suitable for which applications, shows optimal production and processing methods and presents the characteristics of the respective products in detail. Via the app, it is possible to ask experts questions quickly and easily. Besides, the app provides interesting insights into successful customer projects and presents the latest trends regarding footwear, said BASF.

As MRC informed before, in February 2018, BASF and Solvay signed an agreement for the sale of Solvay’s integrated poly­amide (PA) business to BASF. The business has approximately 2,400 employees globally, thereof approximately 1,300 in France, and achieved net sales of more than EUR 1,3 billion in 2016. Worldwide, it operates twelve production sites, four R+D locations and ten technical support centres. The purchase price would be EUR 1.6 billion.

BASF is the leading chemical company. It produces a wide range of chemicals, for example solvents, amines, resins, glues, electronic-grade chemicals, industrial gases, basic petrochemicals and inorganic chemicals. The most important customers for this segment are the pharmaceutical, construction, textile and automotive industries. BASF generated sales of about EUR58 billion in 2016.

US crude oil production hit record high in November - EIA

MOSCOW (MRC) -- US crude oil production shattered a 47-year output record in November and retreated slightly in December, the US Energy Department said, as oil production from shale continued to upend global supply patterns, reported Reuters.

Oil output rose to 10.057 MMbpd in November, a revision from earlier estimates, the EIA said. December production fell 108 Mbpd to 9.949 MMbpd, it said.

November's figure exceeded the 10.044 million barrels produced daily in November 1970. Output has surged in the last several years due to the shale boom, pushing the United States past Saudi Arabia among top producers. Only Russia now has greater daily oil output.

The new record probably will not last. The US government forecasts production will hit 11 million barrels per day later this year.

"We’ve got a lot more oil to produce and we'll be through that 11 million barrel-per-day threshold much sooner than expected," said Phillip Streible, senior market strategist at RJO Futures in Chicago.

The gains are primarily due to rising production in shale regions in Texas and North Dakota. Output there ramped up sharply at the beginning of the decade as new techniques involving hydraulic fracturing, or fracking, allowed drillers to extract vast quantities of crude from oil fields.

The increase in crude output has cut U.S. oil imports by a fifth over a decade and boosted energy exports.

Soaring US production kept a lid on oil prices this year, even though the Organization of the Petroleum Exporting Countries and Russia have reduced output.

In December, production pulled back after three consecutive increases, according to the EIA. The decline was driven by offshore Gulf of Mexico output, which dropped by 131,000 bpd in the month. Four Gulf of Mexico platforms were shuttered throughout the month after a fire.

The EIA said total crude oil and products demand in December was 20.08 million bpd, up about 0.5 percent from 19.98 million bpd a year earlier and down about 1 percent from the previous month.

Americans consumed 0.01 percent less gasoline in 2017 than they did in the prior year, EIA data showed, marking the first year-to-year decrease since 2012.

US gasoline demand was 9.32 million barrels in 2017, the data showed. Demand for gasoline hit record levels in 2016, averaging 9.326 million barrels per day.

U.S. natural gas production in the lower 48 states rose to a monthly all-time high of 87.1 billion cubic feet per day in December, from the prior record of 86.4 bcfd in November, the EIA said.

The increase was driven by a 3.1 percent gain in Pennsylvania to a record 16.2 bcfd, and a 3.7 percent gain in Louisiana to 7.0 bcfd. Output in Texas, the largest U.S. gas producer, eased 0.2 percent to 22.7 bcfd.