Socar's oil trading arm rolls back expansion after weak profits

MOSCOW (MRC) -- Azerbaijan's Socar is refocusing its trading arm's activities on LNG and its new Turkish refinery while winding down less profitable trades as it feels the sting of weak profits, reported Reuters with reference to sources familiar with the matter.

Many trading houses had weaker performances in 2017 due to a less lucrative, backwardated market structure for much of the year and relatively low volatility.

Geneva-based Socar Trading also was stung, costing its chief executive Arzu Azimov his job.

The firm was set up in 2007 and has become a global player in the last few years, having previously been only a marketer of its country's crude, Azeri Light. Poaching top traders from established rivals, it moved into paper trading and third-party oil.

At the end of May, executive chairman Adnan Ahmadzada was appointed and the CEO role was taken by Mariam Almaszade, formerly of trading firm Maddox.

Last year the firm traded 1.54 million barrels per day of crude, of which about 1.06 million bpd was third-party, the company said. Combining crude and oil products, it traded 104 million tonnes.

The firm closed its back office in Estonia's capital Talinn last month and plans to exit fuel oil trading by the end of the year, one of the sources said.

At least four traders in the heavy distillates division have left, including manager Pino Petricone, the sources said.

Adding impetus is an upcoming change in shipping fuels. In 2020, the International Maritime Organization (IMO) will ban ships using fuel with a sulphur content higher than 0.5 percent, compared to 3.5 percent now, unless a vessel has equipment to clean up its sulphur emissions.

The industry expects demand for fuel oil to plummet as few ships have such equipment.

Socar has previously grappled with some over-stretches. The firm announced the closure of its Calgary office at the end of 2017 to focus on its Houston one instead. It also previously left middle distillates, such as diesel.

For traders, liquefied natural gas is the flavor of the month. As the market slowly becomes more liquid, firms are rapidly expanding their LNG divisions and investing in infrastructure.

Socar sold its first cargo of LNG in 2017 as part of its investment in an LNG-to-power project in Malta.

It is studying several options in Africa and Asia and plans to increase its headcount in London, including with more LNG-focussed hires, one of the sources said.

Looking forward, the firm may beef up products trading once more after its Star refinery in Turkey starts up, including a return to middle distillates depending on possible export volumes and how the market looks after the IMO change, they said.

Socar is sending a cargo of Azeri Light and Russian Urals crude to start the commissioning of its new 200,000-barrels-per-day refinery in Turkey.

The process is expected to be complete by the end of October and the plant will later run mainly on medium sour grades, namely Russian and Iraqi oil, one of the sources added. (Additional reporting by Ahmad Ghaddar and Shadia Nasralla in London, Devika Krishna Kumar and Liz Hampton in New York; Editing by Dale Hudson)


MRC

Maire Tecnimont SpA awarded EPC contract for Borouge new PP unit

MOSCOW (MRC) -- Maire Tecnimont SpA announced that its main subsidiaries have been awarded new contracts and additions to existing contracts for a total value of USD730 million licensing, engineering services and Engineering, Procurement & Construction (EPC), as per Hydrocarbonprocessing.

These contracts were awarded by some of the most prestigious international clients based in Europe, the Middle East, Southeast Asia and the Americas.

Among the new acquisitions, Tecnimont SpA has been awarded an EPC contract by the Abu Dhabi Polymer Company(Borouge) for a new polypropylene unit ( PP5 project )in Ruwais, Abu Dhabi, United Arab Emirates. Borouge is the joint venture between the Abu Dhabi National Oil Company (ADNOC), one of the largest oil & gas companies in the world, and Borealis, an Austrian manufacturer of petrochemical and plastic solutions, an international leader.

The purpose of the work consists of a new polypropylene unit (PP5) and the attached structures, to be integrated into the existing Complex Borouge 3. The Polypropylene Unit will have a maximum capacity of 480,000 tons per year. The completion of the project is expected by the end of 2021.

The Maire Tecnimont Group has supported the development of the Abu Dhabi petrochemical value chain since the end of the 1990s, with the first Borouge complex of polyolefins (Borouge 1) completed in 2001. The Group has completed two further expansion projects. of the complex in 2007 and 2010 (respectively Borouge 2 and Borouge 3). This new EPC contract, which follows the Front End Engineering Design (FEED) phase , already successfully completed by Tecnimont, confirms the Group's great leadership in polyolefins worldwide and further consolidates its presence in one of its historical markets in the Middle East. Orient.

"The United Arab Emirates is our second home and we have a deep knowledge of its market and its players: it is one of the most suitable environments for a technology-driven EPC contractor like our Group" commented Pierroberto Folgiero, CEO of the Group Maire Tecnimont. "We are honored to contribute once again to the Abu Dhabi development plans, and to further strengthen a mutually beneficial partnership with a prestigious client like Borouge."
MRC

Houthis attack Aramco refinery in Riyadh using drone

MOSCOW (MRC) -- The Iran-aligned Houthi movement in Yemen said that one of its drones had attacked the Saudi state oil company ARAMCO's refinery in Riyadh, according to Houthi-run al-Masira TV, based in Yemen, reported Reuters.

"Our drone air forces have targeted the refinery of ARAMCO company in Riyadh," a tweet on al-Masira account's said.

Aramco earlier said its fire control teams and the Saudi civil defence had contained a limited fire that erupted in the early evening in a storage containers at the refinery.
MRC

PP imports to Ukraine rose by 7% in H1 2018

MOSCOW (MRC) -- Overall polypropylene (PP) imports to the Ukrainian market totalled 60,800 tonnes in the first six months of 2018, up by 7% year on year. Demand for propylene copolymers increased, according to a MRC's DataScope report.

June PP imports into Ukraine dropped to 10,800 tonnes from 11,400 tonnes a month earlier, with propylene homopolymers (homopolymer PP) accounting for the main decrease in shipments. Overall imports of propylene polymers reached 60,800 tonnes in January-June 2018, compared to 57,100 tonnes a year earlier. Demand grew only for propylene copolymers, with statistical copolymers of propylene (PP random copolymer) accounting for the greatest increase.

The supply structure by PP grades looked the following way over the stated period.


June imports of homopolymer PP to the Ukrainian market dropped to 8,000 tonnes from 8,500 tonnes a month earlier. Local films producers reduced their purchasing of film grade homopolymer PP. Overall shipments of homopolymer PP reached 44,000 tonnes in the first six months of 2018, which virtually equalled the last year's figure.

Last month's imports of block propylene copolymers (PP block copolymers) were 1,500 tonnes, compared to 1,300 tonnes in May. Demand for injection moulding propylene copolymers increased from local companies. 6,900 tonnes of PP block copolymers were imported over the stated period, whereas this figure was slightly over 6,100 tonnes a year earlier.

June imports of PP random copolymers did not exceed 1,300 tonnes versus 1,400 tonnes a month earlier, demand for PP subsided from injection moulding products producers. Overall imports of PP random copolymer reached 8,600 tonnes in January-June 2018, whereas this figure was 6,100 tonnes a year earlier.

Overall imports of other propylene copolymers totalled slightly over 1,100 tonnes over the stated period.

MRC

MEG unit taken off-stream by Qianxi Coal Chemical

MOSCOW (MRC) -- Qianxi Coal Chemical has shut its monoethylene glycol (MEG) unit for turnaround, as per Apic-online.

A Polymerupdate source in China informed that the company has undertaken an planned shutdown at the unit on mid-July, 2018. The unit is expected to remain under maintenance until early-August 2018.

Located at Qianxi, Guizhou, China, the MEG unit has a production capacity of 300,000 mt/year.

As MRC informed before, in summer 2017, Reliance Industries Ltd (RIL) started up its new MEG plant at Jamnagar by the month end. The production capacity of the new MEG plant is 750,000 mt/annum. The new plant is in addition to the existing 750,000 mt/annum MEG output capacity that RIL has from multiple lines.
MRC