ADNOC to extend long-term gas supply agreement for LNG production

MOSCOW (MRC) -- The Abu Dhabi National Oil Company (ADNOC) has agreed, in principle, to extend to 2040 its gas supply agreement with ADNOC LNG, in coordination with ADNOC LNG’s joint venture partners, Mitsui, BP and Total, as per Hydrocarbonprocessing.

The new gas supply agreement is scheduled to take effect from April 1, 2019, replacing an existing agreement, due to expire on March 31, 2019.

The extension announcement follows the Abu Dhabi’s Supreme Petroleum Council (SPC) approval of ADNOC’s new integrated gas strategy that will sustain LNG production to 2040 and allow ADNOC to seize incremental LNG and gas-to-chemicals growth opportunities where they arise from the UAE’s dynamic demand/supply position and evolving energy mix.

Abdulaziz Alhajri, Director of ADNOC’s Downstream Directorate, said: "The LNG market is projected to grow at a robust pace, fueled by demand from Asia and developing countries who want access to a clean and affordable source of energy. With over four decades of experience in the LNG market, ADNOC LNG is well-positioned to leverage this opportunity and is now modernizing its commercial approach to transition from a single-customer to a multi-customer business that includes a number of global utilities as well as portfolio players and traders."

As it moves to diversify its customer portfolio, ADNOC LNG has signed seven term contracts for the supply of more than 4.2 million tons per annum (mmtpa) of liquefied natural gas (LNG).

The contracts, which cover the supply of LNG on a mid-term basis starting April 2019, have been signed with various international well-established LNG buyers, including Japan’s JERA Co., which announced, in August, it plans to purchase up to 8 cargoes per annum of LNG from ADNOC LNG, for a period of three years, starting in April 2019.

Meanwhile, discussions continue with other potential customers as ADNOC seeks to capitalize on the forecasted mid- to long-term demand for energy, particularly in the growth markets of Asia.

ADNOC was the first LNG exporter in the Middle East and has been a reliable supplier of gas to global markets for over 40 years. Abu Dhabi’s strategic geographical location gives ADNOC advantaged access to growth markets in the Middle East and Asia, which are expected to drive significant gas demand in the near- and long-term future. Historically, ADNOC has sold the majority of its LNG to Japanese customers, through ADNOC LNG.

LNG is the fastest-growing hydrocarbon with a growth rate of 4 percent per annum, twice that of natural gas. Global LNG demand is expected to exceed 500 million tons per annum by 2035, up from nearly 300 million tons per annum in 2017.

As MRC reported earlier, in November 2018, Saudi Aramco and ADNOC signed a framework agreement to explore opportunities for collaboration in the Natural Gas and Liquefied Natural Gas (LNG) sector. The cooperation brings together two of the world’s leading energy producers from the Arabian Gulf to jointly work together in an area of strategic importance for both companies as they seek to boost revenues from the natural gas and LNG business segments.
MRC

MOSCOW (MRC) - A South Korean delegation including oil buyers is expected to head to Iran next week to discuss resuming Iranian oil imports after a three-month halt, Reuters said.

South Korea is one of eight countries that received waivers from the United States to continue importing Iranian oil for 180 days. It can import up to 200,000 barrels per day (bpd) of Iranian oil, mostly condensate, the sources said, without invoking U.S. economic sanctions re-imposed on Iran on Nov. 5.

The North Asian country was the third-biggest buyer of Iranian oil and also the largest importer of its condensate before it stopped imports in September ahead of U.S. sanctions.

South Korea's condensate imports from Iran stood at 159,770 bpd in January-August, down about 49 percent from 311,885 bpd in the same period last year, according to Reuters calculations based on the Korea National Oil Corp (KNOC) data.

Condensate is an ultra light oil processed at splitters, typically to produce naphtha for petrochemicals. While the waiver has given South Korea the green light to resume Iranian oil imports, the sources said issues such as payment, shipping and insurance needed to be worked out.

"The actual (import) volume will depend on next week's negotiations," one of the sources said, adding that the oil's price will be a key factor.

The U.S. sanctions waivers have eased pressure on Iran to further discount its oil against Saudi Arabia's.

SK Incheon Petrochem, a petrochemical unit of SK Innovation ; Hyundai Chemical, a unit of Hyundai Oilbank ; and Hanwha TotalPetrochemicals, a joint venture between Hanwha Corp and France's Total , are regular buyers of Iranian condensate.
MRC

MOSCOW (MRC) -- Shanghai Golden Phillips Petrochemical Co, a subsidiary of Sinopec Shangai Petrochemical Co, is in plans to brought on-stream a high density polyethylene (HDPE) plant following a maintenance turnaround, as per Apic-online.

A Polymerupdate source in China informed that the company is likely to resume operations at the plant in mid-November 2018. The plant was taken off-stream on October 21, 2018.

Located in Shanghai, China, the HDPE plant has a production capacity of 135,000 mt/year.

As MRC reported earlier, the company shut down its HDPE plant in Shanghai from end-May to 13 June, 2017, owing to a lack of feedstock availability.

China Petrochemical Corporation (Sinopec Group) is a super-large petroleum and petrochemical enterprise group established in July 1998 on the basis of the former China Petrochemical Corporation. Sinopec Group's key business activities include the exploration and production of oil and natural gas, petrochemicals and other chemical products, oil refining.
MRC

MOSCOW (MRC) -- Air Products and Sonatrach, the largest state-owned oil and gas company in Africa, have signed two gas production and delivery agreements, said producer.

Conducted through both companies' joint venture (JV), HELIOS, the deals have a combined value of USD100 million. Through the deal, Sonatrach will recover helium from two existing liquefied natural gas (LNG) facilities (GL1Z and GL3Z), and that helium will be delivered to HELIOS' existing liquid helium plant in Arzew. The HELIOS plant is an important part of Air Products' total global helium source portfolio, and the new feedstock will increase the amount of liquid helium produced by the JV plant.

"The potential for helium production in Algeria is significant thanks to its large, established natural gas industry and LNG operations," said Walter Nelson, vice president and general manager–Global Helium at Air Products. "Connecting the HELIOS plant to Sonatrach's other LNG facilities in Arzew is a further illustration of how unlocking Algeria's helium potential can further diversify the helium supply chain and improve the reliability of supply for customers in Africa and Europe."

Another important component of Air Products' and Sonatrach's agreement is that Air Products will design and build, and HELIOS will own and operate, two new air separation plants in Algeria. One will be located in the Hassi Messaoud District, with the second in Arzew. Once in operation, these plants will produce nitrogen, oxygen and argon, which will be supplied to the Algerian and Maghreb markets through Sonatrach's subsidiary, COGIZ.

These latest agreements are part of Sonatrach's 2030 Vision for growth, which includes a multi-billion dollar investment program to expand Algeria's energy sector and infrastructure.

Mr. Abdelmoumen Ould KADDOUR, President and CEO of Sonatrach, said, "Delivering these industrial gas production projects with our renowned international partner, Air Products, is a key part of Sonatrach's diversification strategy. It will allow us to better value our resources and provide us with secure and reliable industrial gases to meet our needs and those of our customers."

Air Products has built a solid foundation in Algeria since entering the market over 40 years ago. The company's proprietary process technology and main cryogenic heat exchangers are in operation at Sonatrach's LNG facilities in Skikda and Arzew, with both facilities making up a significant portion of Algeria's LNG exports. Additionally, both Air Products' and Sonatrach's successful HELIOS joint venture has produced helium for the European market for more than 25 years.

Air Products is a world-leading industrial gases company in operation for over 75 years. The company provides industrial gases and related equipment to dozens of industries, including refining, chemical, metals, electronics, manufacturing, and food and beverage. Air Products is also the world's leading supplier of liquefied natural gas process technology and equipment.
MRC

MOSCOW (MRC) -- Idemitsu Kosan is installing a new high-efficiency naphtha cracking furnace at its Tokuyama complex in Japan to replace two existing naphtha cracking furnaces at the site, as per Apic-online.

The project is part of the company's Fifth Consolidated Medium-Term Management Plan, which calls for improvements to cost competitiveness through adoption of high-efficiency equipment.

Construction began this past September and completion is scheduled for December 2020.

"By taking a shorter residence time to pyrolyze raw materials, the high-efficiency naphtha cracking furnace will increase both the ethylene yield ratio and thermal efficiency," the company noted.

"This will result in energy-efficient improvements of approximately 30% compared to ethylene production using conventional cracking furnaces."

As MRC informed before, the company conducted maintenance at its cracker in Chiba from 22 September to early November 2017.

Idemitsu Kosan is a Japanese petroleum company. It owns and operates oil platforms, refineries and produces and sells petroleum, oils and petrochemical products. The company runs two petrochemical plants in Chiba and Tokuyama. The two naphtha crackers can produce up to 997,000 tonnes of ethylene per year.
MRC