SOCAR to supply its new Turkish refinery with third-party oil

MOSCOW (MRC) - Azeri state energy company SOCAR plans to supply its new refinery in Turkey with oil from different producers in Europe, the Black Sea region and the Gulf, the head of SOCAR's trading arm said in an interview, said Reuters.

SOCAR last month launched the $6.3 billion SOCAR Turkey Aegean Refinery (STAR), the first to be built in Turkey for the past 30 years. The facility on Turkey's Aegean coast will supply feedstock to Turkish petrochemicals firm Petkim to help cut Turkey's dependence on imports of refined oil products. It will boost the country's refining capacity by 25-30 percent.

"Initial consumption (of oil) will be 100,000 barrels per day with a further increase to 215,000 bpd," Adnan Ahmadzadeh, SOCAR Trading executive chairman, said in answers to Reuters questions sent by email.

"SOCAR Trading will supply oil (to STAR) from different producers at ports in the Mediterranean, Black Sea and Persian Gulf, as well as from Russian company Rosneft."

He said the company had secured contracts to buy А-92 grade gasoline from producers in Russia, Switzerland and Turkmenistan due to planned maintenance at the Azeri Heydar Aliyev refinery in the capital Baku. Russia and Swiss company Vitol have provided around 30,000 tons of gasoline each, while around 5,000-10,000 tonnes will be shipped from Turkmenistan.

Geneva-based SOCAR Trading 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.

Ahmadzadeh said oil was still "playing a central role" in the firm's trading strategy, having a 50 percent share in its portfolio. The firm last year traded 1.54 million bpd of crude oil, of which about 1.06 million bpd was from third parties, it said in July. Combining crude and oil products, it traded 104 million tons. The firm also started trading liquefied natural gas in 2017.

Ahmadzadeh said the company had decided to reduce the share of fuel oil - recently at 30 percent - in its trading portfolio. "The strategic decision has been made, but it will start to reflect on figures in 2019," he said.

Ahmadzadeh said SOCAR Trading was open to discussions on obtaining crude from Russia's Filanovsky and Rakushechnoye oilfields in the Caspian Sea operated by Russian company Lukoil , with shipment via the Baku-Tbilisi-Ceyhan pipeline.


Croatia picks Golar Power to supply future LNG terminal

MOSCOW (MRC) - State-owned LNG Croatia picked Golar Power Ltd as the best bidder to deliver a floating storage and regasification unit (FSRU) for a planned European Union-backed liquefied natural gas (LNG) terminal in the northern Adriatic, said Hydrocarbonprocessing.

Golar Power was picked from three bidders, including Mitsui O.S.K. Lines and Maran Gas Maritime Inc, LNG Croatia, the company behind the project, said in a statement. It said Golar Power, a joint venture between Golar LNG Ltd and Stonepeak Infrastructure Partners, offered to convert the existing LNG carrier to an FSRU at a cost of 159.6 million euros (USD180.8 million).

The selected FSRU vessel has LNG storage capacity of 140,000 cubic metres, with a nominal LNG regasification capacity of 300,000 cubic metres of natural gas per hour, giving an annual capacity of 2.6 billion cubic metres of gas, it added.

In September, Croatia again extended a deadline - this time to Dec. 20 - for submitting binding bids to use the terminal, planned as part of the EU's efforts to diversify from Russian energy imports. The targeted markets are countries in central and southeastern Europe.

The total cost of the terminal is seen at 250 million euros, with the EU financing just over 120 million. The capacity of the terminal, which has a tentative date for operation from January 2021, will eventually depend on demand, said LNG Croatia.

The unsuccessful bidders can appeal the decision by Nov. 15, the company added.

Borealis obtains strong investment grade rating

MOSCOW (MRC) -- Borealis, a leading provider of innovative solutions in the fields of polyolefins, base chemicals and fertilizers, announces that it was issued a BBB+ rating with stable outlook by S&P Global Ratings on 9 November 2018, said the company.

It is the first public rating for the company, which has been successfully active in various financing markets over the last ten years and has built up a robust and diversified funding portfolio.

"We consider the assigned strong investment grade rating as a recognition for the excellent work done over the last years to make Borealis one of the strongest players in our industry," says Borealis Chief Executive Alfred Stern.

"With the rating, Borealis will further expand its financing strategy and give our bank partners and investors further comfort in the excellent credit metrics of the company. Now is the right time to take this important step," concludes Borealis CFO Mark Tonkens.

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).

Prices of European PE fell for CIS markets

MOSCOW (MRC) -- The November contract price of ethylene in Europe was agreed down by EUR10/tonne from October. And, as a result, European producers proportionally reduced their polyethylene (PE) prices for this month's shipments to the CIS markets, according to ICIS-MRC Price report.

Negotiations over November PE shipments from Europe to the CIS countries began last Monday. Following the increase of EUR10/tonne in ethylene prices, most European producers announced a similar cut in this month's export PE prices. At the same time, in some cases, producers still maintained October prices.

Thus, negotiations over November high density polyethylene (HDPE) shipments were held in the range of EUR1,080-1,155/tonne FCA, down by EUR10/tonne from October. The Czech producer still had restrictions on exports.

Deals for November shipments of European low density polyethylene (LDPE) were negotiated in the range of EUR1,020-1,080/tonne FCA. In rare cases, deals were reported to have been done at EUR980/tonne FCA.

HDPE production in Russia up by 4.6% in Jan-Oct 2018

MOSCOW (MRC) -- Russia's production of high density polyethylene (HDPE) totalled 795,900 tonnes in January-October 2018, up by 4.6% year on year. At the same time, only two out of four Russian producers increased their output, according to MRC's ScanPlast report.

October HDPE production in Russia decreased to 64,200 tonnes, whereas this figure was 79,200 tonnes a month earlier. Shutdown for a scheduled maintenance at Russia's two largest producers - Kazanorgsintez and Stavrolen - was the main reason. Overall HDPE production reached 795,900 tonnes in the first ten months of 2018, compared to 760,600 tonnes a year earlier. Gazprom neftekhim Salavat and Stavrolen increased their output, whereas Nizhnekamskneftekhim reduced its production by more than a third in favour of linear low density polyethylene (LLDPE).

The structure of polyethylene (PE) production by plants looked the following way over the stated period.

Kazanorgsintez's total HDPE output fell to 16,800 tonnes in October from 38,200 tonnes a month earlier, the Kazan producer shut down its production capacities for almost a one-month scheduled turnaround on 25 September. The Kazan plant's overall HDPE output totalled 412,400 tonnes in January-October 2018, down by 0.3% year on year.

Stavrolen produced 18,600 tonnes last month versus 25,000 tonnes in September, the Budenovsk producer took off-stream its production capacities for maintenance in the first decade of October. The plant's overall HDPE output reached 241,100 tonnes in the first ten months of 2018, up by 17% year on year. Such a high amount of the increase in the output was caused by the absence of a long scheduled maintenance this year.

Gazprom neftekhim Salavat raised its capacity utilisation in October, the plant produced 11,500 tonnes last month, compared to 9,500 tonnes a month earlier. The Bashkir plant's total HDPE output reached 100,900 tonnes in the first ten month of 2018, up by 33% year on year. Such a high amount of the increase in the output was caused by the absence of a long scheduled turnaround this year, as it was the case with Stavrolen.

Nizhnekamskneftekhim produced HDPE only in April-May and in late September-October during the stated period. Thus, the Nizhnekamsk producer manufactured only 41,600 tonnes of HDPE over the incomplete four months of operations versus 64,700 tonnes a year earlier.