Output of chemical products in Russia grew by 3.4% in January-August 2018

MOSCOW (MRC) -- Russia's output of chemical products dropped in August 2018 by 0.4% month on month.
Thus, this figure increased by 3.4% in the first eight months of the year of 2018, according to Rosstat's data.

According to the Federal Service of State Statistics, last month's production of basic chemicals decreased by 0.4% from July 2018, with ethylene accounting for the main reduction. Overall production of chemical products grew in January-August 2018 by 3.4% year on year, with benzene accounting for the greatest increase in the output.

243,000 tonnes of ethylene were produced in August versus 237,000 tonnes a month earlier, Angarsk Polymers Plant and Tomskneftekhim's production capacities were shut down for maintenance last month. 2,002 tonnes of this olefin were produced in the first eight months of 2018, up by 1.6% year on year.

Last month's production of benzene dropped to 115,000 tonnes from 117,000 tonnes in July. Overall output of this product reached 965,800 tonnes over the stated period, up by 6%year on year.

August output of sodium hydroxide (caustic soda) was 108,000 tonnes (100% of the main substance) versus 106,000 tonnes a month earlier, increase production was caused by a the resumprion of the capacities of SayanskKhimPlast. Overall production of caustic soda grew to 844,500 tonnes in January-August 2018, up by 3.6% year on year.

Last month's output of mineral fertilizers was 1.819 m tonnes (in terms of 100% nutrients) versus 1.783 m tonnes in July, Russian producers increased their production of nitrogen and potash fertilizers. Overall, Russian plants produced 13.645 m tonnes of mineral fertilizers in the first eight months of 2018, up by 2.2% year on year. Nitrogen fertilizers accounted for the greatest increase in the output - up by 6% year on year.

TNKPZ shuts PP production

MOSCOW (MRC) - Turkmenbashi complex of oil refineries (TKNPZ) intends to shut the production of polypropylene (PP) for scheduled maintenance works. The outage will be quite long, according to ICIS-MRC Price report.

Customers of the complex said, the shutdown of capacities for PP production is scheduled from 20 September, the turnaround of the production will take 20 days. The plant's annual PP production capacity is 100,000 tonnes.

The Turkmenbashi complex of oil refineries (TKNPZ) in 2017 produced 84,100 tonnes of polypropylene (PP), slightly exceeding the plan for the year (82,500 tonnes). As mentioned earlier, a new plant for the production of high density polyethylene (HDPE) and polypropylene with a total capacity of 382,000 tonnes and 86,000 tonnes, respectively, was recently launched in Turkmenistan.

As the potential customers of the enterprise reported, now there is a test run of polyolefins, and the official start-up of production is scheduled for 17 October. The first shipments from the new petrochemical complex have been already sold in early September, and recently there were deals for PP done at USD1,050/tonne, FCA.

TKNPZ produces automobile gasoline, aviation and technical kerosene, hydrotreated diesel fuel, petroleum coke, polypropylene, a wide range of technical lubricating oils, liquefied gas, road and construction bitumen. A significant part of the production of the complex is exported to Russia, Japan, Italy, Turkey, China, Iran, the United Arab Emirates, Afghanistan, Pakistan, Tajikistan, Georgia, Armenia.

Total exits Canadian Joslyn oil sands project

MOSCOW (MRC) -- Canadian Natural Resources Ltd. said Aug. 31 it will acquire full ownership in the Joslyn oil sands lease from the project’s partners for roughly CD225 million, as per OilandGasInvestor.

The price tag consists of CD100 million cash at closing plus annual cash payments of CD25 million over each of the next five years. The sellers consist of several partners led by operator Total SA.

Total said the Joslyn project partners decided to put its further development on hold following the oil price fall in 2014. Therefore, activities have since been limited to fulfilling regulatory requirements and ensuring the safety of the site.

"Reducing our exposure to Canada’s oil sands by selling this asset is in line with our global strategy to focus our oil investments on low breakeven resources and develop a resilient portfolio in the mid and long term. It is also consistent with the gradual reduction of our stake in the Fort Hills oil sands project in 2017," Patrick Pouyanne, chairman and CEO of Total, said in a statement.

The Joslyn lease is located directly south of Canadian Natural’s current Horizon oil sands mining and upgrading project in Alberta within the Athabasca region.

Canadian Natural said its acquisition of 100% working interest in the Joslyn oil sands project "adds significant value to the company’s already extensive portfolio of high-quality long life low decline assets and will allow for more effective lease-line development opportunities between the Horizon and Joslyn projects."

As MRC informed before, in December 2017, Total inaugurated the new units at its Antwerp integrated refining & petrochemicals platform, which have progressively started up in the last few months.

Total S.A. is a French multinational oil and gas company and one of the six "Supermajor" oil companies in the world with business in Europe, the United States, the Middle East and Asia. The company's petrochemical products cover two main groups: base chemicals and the consumer polymers (polyethylene, polypropylene and polystyrene) that are derived from them.

Ergon Inc to close ethanol plant in Mississippi

MOSCOW (MRC) - Ergon BioFuels LLC, a subsidiary of privately held Ergon Inc, will close its ethanol plant in Vicksburg, Mississippi, in December, the company said in a press release, as per Reuters.

"Unfortunately, continued erosion in margins, coupled with underperforming production equipment and the economic challenges of being a destination plant, forced us to make this very difficult decision," Ergon Chief Operating Officer Kris Patrick said in the statement.

The company had planned to invest in improvements in the corn dry mill facility, including a corn oil extractor, before deciding to close it, Patrick said.

Ergon purchased the plant, which has capacity to produce 56.5 million gallons of ethanol annually, from Bunge Ltd late in 2013.

Wood Mackenzie on Chinas new retaliatory tariff on US LNG

MOSCOW (MRC) -- In the 12 months up until June 2018, China was the second largest buyer of US LNG, accounting for approximately 3 mmtpa of US LNG, with Shell being the largest seller, as per Hydrocarbonprocessing.

However as the US-China trade dispute escalated, Chinese buyers have gradually reduced purchases of US LNG.

The impact on the short-term market, is likely to be less than we previously indicated. This is partly because the level of the tariff is lower than initially proposed, 10% now vs 25% in August, but also because we think China has already completed the majority of its procurement for winter. Possibly because of this, we have recently seen spot and futures prices for winter come down despite strengthening oil prices.

If China still needs to procure spot cargoes, we think that this is likely to result in a premium of up to 10% on supply from non-US, lean sources like the Australia East Coast projects, Tangguh, Gorgon or the Qatari Mega-trains. Chinese buyers' appetite to pay significantly higher prices for LNG from other sources may be limited by the price they can sell gas domestically.

For the long-term market, the consequences are likely to be felt on new supply developments. It restricts the target market for developers of new US LNG projects trying to sign new long-term contracts. However, there is still plenty of appetite for second wave US LNG projects from other buyers in Asia and Europe, as evidenced by recent contracting momentum at Freeport, Calcasieu Pass and Sabine Pass Train 6. The first wave of US LNG projects were successful despite not signing contracts with Chinese buyers.

It could also support development of other projects outside of the US targeting the Chinese market (including Russia pipeline projects), potentially allowing them to push for higher long-term contract prices. The recent deal between PetroChina and Qatar is evidence of this.