SABIC says challenges remain, views Aramco deal positively

MOSCOW (MRC) - Saudi Basic Industries Corp (SABIC) expects to face challenges this year due to uncertainty over the impact of a global trade war on the United States and China, its major markets, the company’s chief executive said, as per Hydrocarbonprocessing.

However, the world’s fourth-biggest petrochemicals company said it has the ability to deal with such challenges and started to see stabilization in prices of some products after a steep decline towards the end of 2018.

SABIC reported a 12.4 percent drop in fourth-quarter profit compared to the year-earlier period, missing analyst forecasts. The company attributed the fall to lower average selling prices and a decrease in the share of results of associates.

"We’ve seen stabilization for some of the prices, still there are some challenges ahead of us," Chief Executive Yousef al-Benyan told a news conference in the Saudi capital.

SABIC will continue to boost its presence in its major markets — the U.S. and China, he added. “We are part of the global economic system, we are always affected by challenges but we are able to adapt with these challenges in the best way."

He said SABIC will continue to raise its presence in Africa, as it is seen a very promising market. SABIC’s biggest shareholder, the Public Investment Fund (PIF), is in talks to sell its majority stake to Saudi national oil giant Aramco IPO-ARMO.SE.

Benyan said he views Aramco’s move to “positively”, but further details are a matter for PIF and Aramco, which aims to become a global leader in chemicals. He added the company will determine later if it needs to increase its 24.99 percent stake in Switzerland’s Clariant after the two companies decided to merge their high-performance materials businesses.

SABIC made a net profit of 3.24 billion riyals (USD864 million) in the three months to Dec. 31, down from 3.7 billion riyals in the year-earlier period, the company said in a statement to the stock exchange.

That was lower than the average forecast of three analysts polled by Refinitiv, who expected SABIC to post a net profit of 4.92 billion riyals.

Shares of SABIC were trading 0.3 percent higher in late morning trade, recovering earlier losses.

SABIC results are closely tied to oil prices and global economic growth because its products - plastics, fertilizers, and metals - are used extensively in construction, agriculture, industry and the manufacturing of consumer goods.

S.Korea S-Oil sees stronger refining margins on diesel demand

MOSCOW (MRC) - S-Oil Corp, South Korea’s third-biggest refiner by capacity, said that refining margins are expected to improve in 2019, boosted by growing diesel demand, said Reuters.

The refiner, whose main shareholder is Saudi Aramco, said in an earnings statement that global supply increase is limited as new crude distillation units (CDUs) are expected to come online in the fourth quarter of the year.

“The margin will gain notable momentum in the second half through soaring demand for diesel ahead of International Marine Organization’s (IMO) 2020 sulfur cap regulation,” according to the refiner’s earnings statement.

Asia’s benchmark Singapore refining margins DUB-SIN-REF, or profits of processing a barrel of Dubai crude into refined products, are now at their lowest levels since August 2013 of USD1.53 a barrel, dragged down by weak gasoline cracks on excess supplies.

Gasoline cracks have been under pressure of slowing fuel consumption and increasing global gasoline supplies, with Asian gasoline margins in the Singapore GL92-SIN-CRK sitting around at minus $2 per barrel on Monday, the lowest level since 2011.

Low refining margins weighed on the company’s fourth-quarter business. The company posted an operating loss of 292 billion won (USD261.37 million) in the fourth quarter ended December, compared with an operating profit of 369 billion won from a year earlier.

Ko Gwang-cheol, head of the company’s investor relations department, said on a call with analysts that refining margins were expected to rebound in 2019 as “supply glut will be eased,” on the back of limited supply increase.

The refiner, which has 669,000 bpd refining capacity, said it plans to shut down a 250,000 barrel per day (bpd) No.3 crude distillation unit (CDU) and 89,000-bpd condensate fractionation unit (CFU) in 2019 for maintenance.

The refiner’s No.3 CDU and CFU maintenance will take place in March for 30 days, Ko said, adding that maintenance for its 73,000-bpd gasoline-making residue fluidized catalytic cracker (RFCC) is scheduled in the second half of the year.

Shares of S-Oil ended 0.4 percent weaker on Monday, while the broader market was 0.02 percent lower.

Saudi Aramco in deal with Axens, TechnipFMC on crude to chemicals technology

MOSCOW (MRC) -- Saudi Aramco, through its wholly-owned subsidiary Saudi Aramco Technologies, signed a Joint Development and Collaboration Agreement (JDCA) with Axens and TechnipFMC to accelerate the development and commercialization of the company’s Catalytic Crude to Chemicals (CC2C™) technology, said Hydrocarbonprocessing.

CC2C™ technology has the potential to significantly increase the efficiency and yield of chemicals production, converting more than 60% of a barrel of crude oil into chemicals. The agreement aims to achieve commercial readiness for the CC2C™ technology by 2021.

The CC2C™ technology converts crude oil directly to chemicals which will eliminate several energy-intensive processes and create high-value product streams that produce larger quantities of chemicals while generating less emissions.

“This is another milestone in the company’s effort to develop groundbreaking technology that maximizes the value of each barrel of crude oil,” said Amin H. Nasser, Chief Executive Officer of Saudi Aramco. “Oil will become increasingly more important as a feedstock in the production of petrochemicals. Saudi Aramco is leveraging its position as the world’s oil powerhouse to capitalize on the strong growth potential for chemicals globally. Through the strategic partnership with Axens and TechnipFMC, we advance cutting-edge technology to meet the increasing demand for petrochemicals, and support our efforts to build a global chemicals business.”

Jean Sentenac, Axens’s Chairman and CEO, said: “It is an honor and a pleasure to partner with Saudi Aramco and TechnipFMC to develop technology for the future. According to the IEA, an additional 4 Mbpd of crude oil will have to be converted into petrochemicals by 2035 to meet the demand. This is a unique opportunity to create this next generation technology that will be of great interest to the market for converting crude oil into petrochemicals.”

Stan Knez, President, Process Technology at TechnipFMC, said: “TechnipFMC’s solid position in FCC technologies, as well as down flow catalytic cracking experience, will provide a strong foundation for this joint development. The CC2C™ technology will be an innovative approach for producing a full range of petrochemicals using crude oil as the feedstock. We are pleased to be teaming with Saudi Aramco and Axens in the effort to commercialize this process quickly and expand our technology portfolio.”

The innovative CC2C™ technology builds on the success of the proven high-severity fluid catalytic cracking (HS-FCC™) technology, which Saudi Aramco co-developed with King Fahd University of Petroleum & Minerals (KFUPM) and JXTG Nippon Oil & Energy, to directly convert crude oil to high value chemicals.

Saudi Aramco, Axens, and TechnipFMC are all members of the HS-FCC™ technology Alliance. Axens and TechnipFMC are also the exclusive licensors of HS-FCC™ technology and two of the leading providers of technology and infrastructure for the energy industry.

BASF is combining digitalization and IT expertise in a single division

MOSCOW (MRC) -- BASF, the wold's petrochemical major, is combining digitalization and IT expertise in a single division, as per the company's press release.

Digitalization is a key element of BASF’s new corporate strategy. The company has been addressing this topic for many years with great success.

Since 2015, cross-divisional teams have explored the opportunities for the intelligent use of data and digital technologies, tested them in pilot projects and rolled them out in the company. Work in research and development has also been supported by digital solutions, with the Quriosity supercomputer being a main driver in this area. In order to pool all these activities and bring the experts from digitalization and IT closer together, BASF established the new Digitalization & Information Services functional division on January 1, 2019.

The division is headed by Christoph Wegner (49), who will also serve as Chief Digital Officer (CDO) at BASF.

"Over the last few years, we have shown how to implement digitalization in a chemical company," Wegner explained. "Now, the new organization will help lend more assertiveness to the topic. We will support the digital activities at BASF and drive them forward more quickly than before in collaboration with the colleagues from the different business units, functions and research and development units. We are pursuing a clear goal with this approach: We want to introduce new digital solutions which provide our customers with clear added value."

As MRC informed before, in December 2016, AkzoNobel finalized the acquisition of BASF’s global Industrial Coatings business, which supplies a range of products for industries including construction, domestic appliances, wind energy and commercial transport, strengthening its position as the global number one supplier in coil coatings.

BASF is the leading chemical company. It produces a wide range of chemicals, for example solvents, amines, resins, glues, electronic-grade chemicals, industrial gases, basic petrochemicals and inorganic chemicals. The most important customers for this segment are the pharmaceutical, construction, textile and automotive industries.

PET unit to be brought on-stream by Jiangyin Chengxing

MOSCOW (MRC) -- Jiangyin Chengxing Industrial Groups is likely to restart a polyethylene terephthalate (PET) plant, as per Apic-online.

A Polymerupdate source in China informed that the plant is expected to be brought on-stream following a maintenance turnaround in mid-February, 2019. The plant was shut on December 27, 2018 for maintenance.

Located at Jiangyin, Jiangsu province in China, the plant has a production capacity of 600,000 mt/year.

We remind that, as MRC reported earlier, Indorama shut its PET plant for a maintenance turnaround in November 2018 for a period of around two weeks. The exact date of the shutdown could not be ascertained. Located at Lop Buri, Thailand, the PET plant has a production capacity of 180,000 mt/year.