ADNOC signs landmark strategic partnership agreements

MOSCOW (MRC) -- The Abu Dhabi National Oil Company (ADNOC) has signed two new strategic equity partnerships with Eni and OMV covering both ADNOC Refining and a new trading joint venture, which will be jointly established by the three partners, as per Hydrocarbonprocessing.

The signing of the agreements was witnessed by His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, His Excellency Giuseppe Conte, Prime Minister of Italy, and His Excellency Hartwig Loger, Austria’s Federal Minister of Finance. The agreements were signed by His Excellency Dr. Sultan Ahmed Al Jaber, UAE Minister of State and ADNOC Group CEO, Claudio Descalzi, CEO of Eni and Dr. Rainer Seele, Chairman of the OMV Executive Board and CEO.

In one of the largest ever refinery transactions, Eni and OMV will acquire 20% and 15% shares in ADNOC Refining respectively, with ADNOC owning the remaining 65%. The agreement values ADNOC Refining, which has a total refining capacity of 922,000 barrels per day, and which operates the fourth largest single site refinery in the world, at an enterprise value of USD19.3 billion. As a further part and condition of this agreement, the partners will also establish a trading joint venture, in which Eni and OMV will own 20% and 15% of the shares respectively. Proceeds to ADNOC from the sale are estimated to be USD5.8 billion, subject to completion adjustments. The transaction reflects the scale, quality and growth potential of ADNOC Refining’s assets, coupled with an advantageous location from which to supply markets in Africa, Asia and Europe.

Eni and OMV have strong track records in maximizing value from advanced, complex refinery operations and bring to the partnership extensive operational and project management experience and expertise.

Further value will be created from the new global trading joint venture, which, once established, will be an international exporter of ADNOC Refining’s products, with export volumes equivalent to approximately 70 per cent of throughput. Domestic supply within the UAE will continue to be managed by ADNOC.

His Excellency Dr. Sultan Ahmed Al Jaber, UAE Minister of State and ADNOC Group CEO, said: "We are delighted to partner with Eni and OMV in our refining business and the new trading company. Such partnerships follow our leadership’s wise guidance to unlock and drive greater value across our business."

Supported by the high cash flow generation capacity of ADNOC Refining, the three partners have committed to substantial growth plans for ADNOC Refining in the short to mid-term. The partners have also agreed to a comprehensive capital allocation framework to achieve self-funded growth, paired with an attractive dividend policy.

These important new agreements build on ADNOC’s expanded approach to long-term partnerships and the more proactive management of its portfolio of assets, as well as its track record of successful partnerships over the last 50 years in both upstream and downstream. The partnerships will support ADNOC as it evolves to become a leading global downstream player, by expanding refining and petrochemical operations at Ruwais and securing greater downstream global market share, as outlined during the company’s Downstream Investment Forum, in May 2018.

Claudio Descalzi, CEO of Eni, said: "These agreements consolidate our strong partnership with ADNOC. In the space of less than one year, we have been able to create a business hub with world-class upstream operations and a material and efficient refinery capacity with further potential growth."

"This transaction, which allows us to enter the United Arab Emirates’ downstream sector and represents a 35% increase in Eni’s global refining capacity, is in line with our announced strategy to make Eni’s overall portfolio more geographically diversified, more balanced along the value chain, more efficient and more resilient to cope with market volatility."

This sentiment was echoed by Dr. Rainer Seele, Chairman of the OMV Executive Board and CEO, who said: "I am pleased to further build on our strategic partnership with ADNOC and Abu Dhabi. With the acquisition of a share in ADNOC Refining and the creation of a global trading joint venture, OMV has established a strong integrated position in Abu Dhabi along the oil value chain, spanning from upstream production to refining & trading and petrochemicals. We are confident that our extensive operational refining know-how and trading experience will contribute to sustainable value creation and profitable growth."

Under the terms of the agreements, ADNOC, Eni and OMV’s trading joint venture will be incorporated at Abu Dhabi Global Markets. Physical and derivative trading will likely begin as early as 2020 when all necessary processes, procedures and systems are in place. Eni and OMV will provide ADNOC with know-how, operational experience and support to accelerate the development of the trading joint venture, enabling ADNOC and its partners to optimize their systems and better manage their international product flows.

Once operational, the trading joint venture will help guide ADNOC Refining’s activity and operational decision-making, ensuring ADNOC secures the best possible value from its refining and trading activity. The stated objective of the trading joint venture is to expand its global presence over time.

The partnerships, announced today, reinforce the growing importance of ADNOC’s Ruwais complex, located in Abu Dhabi’s Al Dhafra region, in the global refining and petrochemical supply chain and highlight the attractiveness of the UAE as a stable and reliable investment and industrial destination.

As MRC informed before, in May 2017, ADNOC announced that it would work together with the Austrian producer OMV to help grow Adnoc’s downstream businesses.

Besides, we remind that a USD3.1 billion project to introduce crude processing flexibility, at the ADNOC owned Ruwais oil refinery, was announced in February, 2018. Known as the Crude Flexibility Project (CFP), the announcement was another significant step forward as ADNOC accelerates delivery of its Downstream refining strategy that aims to enhance margins by introducing asset flexibility, backed by strong crude and product marketing initiatives.

Output of products from polymers in Russia up 2.4% in 2018

MOSCOW (MRC) -- Russia's output of products from polymers grew in December 2018 by 1.3% year on year. And this figure increased by 2.4% year on year in 2018, reported MRC analysts.

According to the Russian Federal State Statistics Service, December production of unreinforced and non-combined films was 93,600 tonnes, compared to 95,400 tonnes a month earlier. Output of films products grew in 2018 by 7.9% year on year to 1,105,000 tonnes.

December production of non-porous polymer boards, sheets and films increased to 30,500 tonnes, compared to 29,600 tonnes in November. Thus, overall production of these products reached 356,000 tonnes over the stated period, up by 6.1% year on year.

Output of porous polymer boards, sheets and films was 24,840 tonnes in the last month of the year, compared to 27,200 tonnes a month earlier. Last year's overall production of these products reached 305,760 tonnes, compared to 278,300 tonnes a year earlier.

December output of plastic windows and door blocks was 1,990,000 sq metres and 93,400 sq metres, respectively, versus 2,210,000 sq metres and 91,000 sq metres a month earlier. Overall production of these products was 24,800,000 sq meters and 1,035,100 sq meters, respectively, over the stated period, up by 13% and 7% year on year, respectively.

December output of plastic bottles and flasks exceeded 1,626,000 items versus 1,660,000 items a month earlier. Overall production of these plastic products totalled 20,840,000 units in 2018, compared to 19,370,000 units a year earlier.

Output of polymer pipes, hoses and fittings was 43,900 tonnes in the last months of the year versus 46,700 tonnes a month earlier. Overall output of these products totalled 590,100 tonnes last year, down by 0.9% year on year.

Magellan eyes Freeport, Texas as spot for crude export

MOSCOW (MRC) -- Magellan Midstream Partners LP has begun talks with companies developing crude transportation assets in Freeport, Texas, as it considers building a US crude export terminal there instead of its previously planned spot off Corpus Christi, reported Reuters with reference to an executive.

The Houston pipeline operator is still actively exploring the construction of an inland exporting facility on a harbor island off Corpus Christi, but has begun considering "all of our options," including an offshore terminal off Freeport, closer to its crude storage and terminal assets in Houston, said Mark Roles, senior vice president at Magellan.

"Barrels from pretty much every basin in the U.S. come through Houston so you can get a variety of grades, which is good for international buyers," Roles said on the sidelines of the Argus Americas Crude Summit in Houston.

That Magellan is considering Freeport adds a new wrinkle to the race to build US export terminals capable of loading crude onto supertankers. The company had followed global commodities trader Trafigura SA and investor Carlyle Group in making plans for export terminals off Corpus Christi.

A Freeport facility would put Magellan in competition with Enbridge Inc, Kinder Morgan Inc and Oiltanking Partners LP, which have jointly proposed an offshore facility that would load 2 million barrels per day (bpd) onto supertankers 80 miles off Freeport.

Magellan’s potential Corpus Christi terminal would be capable of loading as much as 1.5 million bpd onto supertankers and would have room for up to 20 million barrels of storage capacity, Magellan told Reuters.

The Houston pipeline operator owns a terminal in Corpus Christi’s inner harbor, as well as other undeveloped property that could be used for additional storage tanks to connect to the terminal.

It is in talks with potential customers about the terminal, and has also held discussions about building pipelines between Houston and Corpus Christi and from the US oil storage hub in Cushing, Oklahoma to Houston, the company said.

But the oil flowing to Corpus Christi comes almost exclusively from Texas fields in the Permian Basin and the Eagle Ford Shale, while Freeport pipelines have connections to the U.S. oil storage hub in Cushing, Oklahoma, which holds crude from a variety of basins around the United States, Roles said.

"With all the politics involved, the permitting, I don’t believe more than two of these are going to get built," Roles said. "We want to be on one that’s successful and has long-term commitments on it."

Samsung Electronics to replace plastic packaging with sustainable materials

MOSCOW (MRC) -- Samsung Electronics will start taking steps this year to replace plastic packaging materials with paper and other environmentally sustainable elements, said the company.

From the first half of 2019, the packaging used currently for Samsung’s products and accessories – ranging from mobile phones and tablets to home appliances – will be substituted with environmentally sustainable materials like recycled/bio-based plastics and paper.

To revamp product packaging, Samsung Electronics has formed a task force involving design and development, purchasing, marketing and quality control for innovative packaging ideas.

For mobile phone, tablet and wearable products, Samsung will replace the plastic used for holder trays with pulp molds, and bags wrapping accessories with eco-friendly materials. Samsung will also alter the phone charger design, swapping the glossy exterior with a matte finish and eliminating plastic protection films, reducing the use of plastics.

The plastic bags used to protect the surface of home appliances such as TVs, refrigerators, air conditioners and washing machines as well as other kitchen appliances will also be replaced with bags containing recycled materials and bioplastics, which are respectively made from plastic wastes and non-fossil fuel materials like starch or sugar cane.

Regarding paper, Samsung will only use fiber materials certified by global environmental organizations like the Forest Stewardship Council, Programme for the Endorsement of Forest Certification Scheme and the Sustainable Forestry Initiative for packaging and manuals by 2020.

"Samsung Electronics is stepping up in addressing society’s environmental issues such as resource depletion and plastic wastes,” said Gyeong-bin Jeon, head of Samsung’s Global Customer Satisfaction Center. “We are committed to recycling resources and minimizing pollution coming from our products. We will adopt more environmentally sustainable materials even if it means an increase in cost."

Under the company’s circular economy policy, Samsung Electronics has set a mid-term implementation plan to only use paper packaging materials certified by forestry initiatives by next year. By 2030, Samsung aims to use 500 thousand tons of recycled plastics and collect 7.5 million tons of discarded products (both cumulative from 2009).


BASF appoints chief digital officer, creates new division

MOSCOW (MRC) -- BASF SE said Monday that it has combined its digitalization and IT units into one division called digitalization and information services, said the company.

The German chemical company said Christoph Wegner will lead the new division, becoming the group's chief digital officer.

"Over the last few years, we have shown how to implement digitalization in a chemical company. Now, the new organization will help lend more assertiveness to the topic," Mr. Wegner said.

BASF’s Digitalisation & Information Services division, which has been in operation since 1 January, will aim to “accelerate” the company’s digital drive.

The German producer reshuffled its corporate structure and board responsibilities as recently as December.