LyondellBasell close to binding offer for Brazil's Braskem -sources

MOSCOW (MRC) -- LyondellBasell Industries NV is close to presenting a binding offer to acquire control of Brazilian petrochemical company Braskem SA, two people with knowledge of the matter said, as per Hydrocarbonprocessing with reference to Reuters.

LyondellBasell is discussing the extension of a long-term naphtha supply contract with Petroleo Brasileiro SA seen as pivotal to valuing Braskem, and talks between the companies are expected to finish over the next days, the sources said, asking for anonymity because talks are private.

A binding offer could be delivered as soon as the end of this month, the people said.

Once a long-term supply contract is established, LyondellBasell is expected to bid for control of Braskem, first through an offer to controlling shareholder Odebrecht SA. Odebrecht, a Brazilian conglomerate involved in the country’s widest-ever corruption probe has been forced to sell assets over the last two years.

The offer will include cash and shares, the people added. The same value per share would be extended to Petrobras, the Brazilian state-controlled oil company, which is a minority shareholder in Braskem, as well as a supplier.

One of the people said Petrobras is still discussing whether to sell its full stake in Braskem or hold onto shares in the combined company. If concluded, the deal would create the world’s largest petrochemical company.

Odebrecht, LyondellBasell and Petrobras did not immediately respond to emails seeking comment on the matter.

As MRC informed before, in October 2017, Petrobras’ (Rio de Janeiro) minority stakes in Braskem and Deten Quimica was excluded from Petrobras’s divestment program. The decree prevents Petrobras from immediatyly selling its minority stake in Braskem, which had been announced last year. A new decree will be required to release the stock sale.

Braskem S.A. produces petrochemicals and generates electricity. The Company produces ethylene, propylene, benzene, toluene, xylenes, butadiene, butene, isoprene, dicyclopentediene, MTBE, caprolactam, ammonium sulfate, cyclohexene, polyethylene theraphtalat, polyethylene, and polyvinyl chloride (PVC).

LyondellBasell is one of the largest plastics, chemicals and refining companies in the world. Driven by its 13,000 employees around the globe, LyondellBasell produces materials and products that are key to advancing solutions to modern challenges like enhancing food safety through lightweight and flexible packaging, protecting the purity of water supplies through stronger and more versatile pipes, and improving the safety, comfort and fuel efficiency of many of the cars and trucks on the road. LyondellBasell sells products into approximately 100 countries and is the world's largest licensor of polyolefin technologies.
MRC

FCC unit at Moscow refinery will remain shut until late November after the fire

MOSCOW (MRC) -- Operations at fluid catalytic cracker (FCC) at the Moscow Oil Refinery (MOR), owned by Gazprom Neft, will remain shut, at least, until end-November, which would lead to a reduction in gasoline production, Kommersant reported, citing preliminary data from Russia's Ministry of Energy.

According to unofficial information, the fire at the refinery may lead to a reduction in the capacity utilisation at polypropylene (PP) facility at NPP Neftekhimia due to a reduction in supply of the main feedstock (propane-propylene fraction).

As MRC informed before, the fire broke out in the oil refinery in Moscow on Saturday morning, shutting down the unit that Thomson Reuters data said produced more than half the plant’s gasoline output. Fire crews battled for more than three hours before extinguishing the blaze at the refinery in the capital’s Kapotnya district, the emergency ministry said.

The plant’s owner - Gazprom Neft, the oil arm of Russian gas giant Gazprom - said the refinery was back working as usual apart from a catalytic cracking unit which was offline. The unit has a daily production capacity of 6,900 tonnes of gasoline that accounts more than a half of the gasoline produced by the plant, according to Thomson Reuters data.

The fire was out by 11 a.m. local time (0800 GMT), the ministry said, and there were no reports of any casualties or injuries at the plant.
MRC

Start-up of Turkish new USD6B STAR oil refinery delayed to 2019

MOSCOW (MRC) -- The commercial start-up of Turkey’s new USD6.3 billion oil refinery has been delayed until early next year and the plant is not expected to reach full capacity until mid-2019, three sources familiar with the matter said, as tests revealed minor faults, as per Hydrocarbonprocessing.

The 200,000-barrel-per-day STAR refinery, built by Azerbaijan’s state oil firm SOCAR, is set to be a game changer for Mediterranean oil markets and will increase the country’s total refining capacity by just over a third.

The plant was officially opened by Turkish President Tayyip Erdogan in October but it is not expected to start processing crude commercially until January, one of the sources close to the refinery said, as tests are still being carried out.

"They plan to ramp up slowly through the first quarter and it is expected to reach full processing capacity in the second quarter of 2019," the source said, adding that the start-up has been delayed a few times as tests had revealed small faults.

A second source familiar with SOCAR’s plans said that reaching full capacity could slip even further, into the third quarter.

Commercial production at new refineries, particularly large ones, often falls behind schedule as testing of the various units reveals minor issues that need ironing out.

A SOCAR spokesman said full refining capacity would be reached next year.

"We’ve received two crude oil cargoes and refining is in progress on the plant," the spokesman said.

SOCAR said at the start of this year the refinery would start up in the third quarter of 2018 with commissioning, or testing, to be complete by the end of October.

STAR is the biggest new refinery to start up in Europe for decades, and Turkey’s first in 30 years. It will transform traditional Mediterranean crude flows once it reaches full capacity, traders said.

Erdogan said at last month’s opening ceremony that the plant’s output would cut Ankara’s fuel import bill by about USD1.5 billion per year.

SOCAR plans to supply the refinery 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 last week.

"It may absorb a significant volume of local sour grades and given an outage of Iranian barrels and Kirkuk flow in the market, it may become really tight on the sour side. But the question is how things will look when the actual start-up happens," a European trading source said.

In September, SOCAR signed a contract with Russia’s Rosneft to supply STAR with 1 million tonnes of Urals crude per year, or about 20,000 bpd.

Geneva-based SOCAR Trading has already delivered a 600,000 barrel cargo of Azeri Light and a 1 million barrel cargo of Russian Urals.

As MRC wrote before, in the first half of March 2018, Petkim (part of SOCAR) shut its cracher in Turkey owing to a technical glitch. Located at Aliaga in Turkey, the cracker has an ethylene production capacity of 585,000 mt/year and propylene production capacity of 240,000 mt/year.

SOCAR, which is keen on expanding operations in the retail oil products market abroad, is involved in exploring oil and gas fields, producing, processing, and transporting oil, gas, and gas condensate, marketing petroleum and petrochemical products in the domestic and international markets, and supplying natural gas to industry and the public in Azerbaijan.

Petkim is the leading petrochemical company of Turkey. Specializing in petrochemical manufacturing, the company produces ethylene, polyethylene, polyvinyl chloride, polypropylene and other chemical building blocks for use in the manufacture of plastics, textiles, and other consumer and industrial products.
MRC

Fire shuts unit at Moscow oil refinery: officials

MOSCOW (MRC) -- A fire broke out in an oil refinery in Moscow on Saturday morning, shutting down a unit that Thomson Reuters data said produced more than half the plant’s gasoline output, reported Reuters.

Fire crews battled for more than three hours before extinguishing the blaze at the refinery in the capital’s Kapotnya district, the emergency ministry said.

The plant’s owner - Gazprom Neft, the oil arm of Russian gas giant Gazprom - said the refinery was back working as usual apart from a catalytic cracking unit which was offline.

The unit has a daily production capacity of 6,900 tonnes of gasoline that accounts more than a half of the gasoline produced by the plant, according to Thomson Reuters data. There was no immediate comment from the company on the impact of the unit’s shutdown.

Moscow mayor Sergei Sobyanin said on Twitter the fire would not lead to any fuel shortages in the city.

The fire was out by 11 a.m. local time (0800 GMT), the ministry said, and there were no reports of any casualties or injuries at the plant.

We remind that, as MRC wrote before, in October 2017, Russian oil producer Gazprom Neft, through its subsidiary Naftna Industrija Srbije (NIS), started construction of a new deep conversion complex (DCC) at its Pancevo Refinery in Serbia with an investment of over EUR300m.
MRC

ADNOC and Mubadala to jointly explore global investment and growth opportunities

MOSCOW (MRC) – The Abu Dhabi National Oil Company (ADNOC) and Mubadala Investment Company (Mubadala), today, signed a framework agreement to explore together potential global growth opportunities that build on Mubadala’s diverse portfolio of refining and petrochemicals assets and support ADNOC’s international Downstream investment ambitions, as per Hydrocarbonproceesing.

The agreement was signed by Abdulaziz Alhajri, Director of ADNOC’s Downstream Directorate, and Musabbeh Al Kaabi, CEO of Petroleum and Petrochemicals at Mubadala, during the Abu Dhabi International Petroleum Conference and Exhibition (ADIPEC) being held in Abu Dhabi. The signing was witnessed by H.E. Dr. Sultan Ahmed Al Jaber, UAE Minister of State and ADNOC Group CEO, and Khaldoon Al Mubarak, Group CEO and Managing Director of Mubadala.

Alhajri said: "This agreement is a natural evolution of the close relationship between ADNOC and Mubadala. It will ensure that, in partnership, we continue to maximize value from our hydrocarbon resources, in line with the UAE Leadership’s wise directives of stretching the value of every barrel of oil we produce. We look forward to jointly identifying and securing mutually beneficial value enhancing opportunities and securing more effective market access for our products."

Al Kaabi said: "Mubadala has an extensive and successful refining and petrochemical portfolio, which already has a number of strong partnerships with ADNOC. With the same shareholder, it was a very natural conclusion to reach that we should extend our collaboration into the global arena by pooling our technology, market knowledge, access to feedstock and operating experience."

Mubadala has successfully developed a diverse portfolio of refining and petrochemicals assets, including CEPSA, OMV, Cosmo Oil, PARCO, NOVA Chemicals and Borealis. The refining operations, in this portfolio, are renowned for their technical and commercial excellence and are net buyers of crude, while the petrochemical operations include leading proprietary technologies for production of polyolefins and other products.

As part of the framework agreement, ADNOC and Mubadala will explore the potential for the processing of crude oil and other hydrocarbons supplied by ADNOC, as well as potentially utilizing technologies owned by Mubadala with product offtake by other ADNOC companies. This end-to-end investment model allows for the UAE to not only assure long-term security of its hydrocarbon resources but allows for margin capture along the value chain.

ADNOC and Mubadala have a growing record of successful partnership, working together to maximize value from Abu Dhabi’s oil and gas resources. Borealis, 67 percent owned by Mubadala, owns a 40 percent share in Borouge, which is ADNOC’s joint venture with Borealis. In February 2018, ADNOC awarded CEPSA, wholly-owned by Mubadala, a 20 percent stake in the SARB and Umm Lulu offshore concessions, and, in May, ADNOC and CEPSA signed a project development agreement for a new, world-scale Linear Alkyl Benzene facility in ADNOC’s refining and petrochemicals complex in Ruwais, UAE. Meanwhile, in April, ADNOC awarded OMV a 20 percent stake in Abu Dhabi’s SARB and Umm Lulu offshore concession. OMV, an Austrian integrated oil and gas company, is part-owned by Mubadala.

ADNOC has embarked on the execution of its Downstream strategy, which includes a AED 165 billion (US $45 billion) Downstream investment program that will see the Ruwais Industrial Complex upgraded to significantly increase its flexibility and integrated capabilities to produce greater volumes of higher-value refined and petrochemical products and significant expansion internationally through ADNOC International.
MRC