Chemical production in Russia grew by 0.2% in January 2019

MOSCOW (MRC) -- Russia's output of chemical products rose in January 2019 by 0.2% month on month. This figure increased by 2.7% in 2018, according to Rosstat's data.

According to the Federal Service of State Statistics, last month's production of basic chemicals increased by 0.2% from January 2019, up by 9.3% from December 2018. Last year, the output of chemical products and substances grew by 2.7%.

January ethylene imports was 275,000 tonnes from 274,000 tonnes and 278,000 tonnes in January and December 2018, respectively. 2.999,000 tonnes of ethylene were produced in 2018 in Russia.

Benzene production last month amounted to 122,000 tonnes against 130,800 tonnes and 124,000 tonnes in January and December a year earlier. Total production of this product for the entire last year reached 1.406,000 tonnes.

January production of sodium hydroxide (caustic soda) was 110,000 tonnes (100% of the basic substance) against 113,000 tonnes and 115,000 tonnes in January and December 2018. Overall output of caustic soda grew to 1.279,000 tonnes in January-December 2018, up by 6.3% year on year.

Last month's production of mineral fertilizers was 2,019,000 tonnes (in terms of 100% nutrients) versus 2.121,000 tonnes in January and December 2018. Overall, Russian plants produced over 22.870,000 tonnes of fertilizers last year.

Karpatneftekhim resumed operations at olefins complex

MOSCOW (MRC) -- Karpatneftekhim (Kalush, Ivano-Frankivsk region), Ukraine's largest petrochemical plant, had resumed operations at its olefins complex by 20 February, after the forced outage, reported MRC.

A plant's source said Karpatneftekhim had resumed ethylene production by 20 February, after a long shutdown, which started on 12 January and was caused by a fire on the pipeline. The Ukrainian producer also launched its high density polyethylene (HDPE) production, which was shut along with the ethylene unit.

The plant's polyvinyl chloride (PVC) production was not shut and was partially supported by shipments of ethylene from Hungary.

As reported earlier, Karpatneftekhim resumed operations on 9 June 2017, after a five-year outage. Besides, the scheduled turnaround at the plant's HDPE and PVC production capacities was conducted last year, it began on 5 November and was quite long. Karpatneftekhim had resumed its PVC production by 7 December, the start-up of its HDPE production began 10 December.

Karpatneftekhim is one of the largest enterprises of Ukraine's petrochemical complex. Currently, the plant can produce annually 300,000 tonnes of PVC, 200,000 tonnes of caustic soda, about 180,000 tonnes of chlorine, as well as 250,000 tonnes of ethylene and 100,000 tonnes of polyethylene.

PE imports to Kazakhstan rose by 10% in 2018

MOSCOW (MRC) -- Last year's imports of polyethylene (PE) into Kazakhstan grew in 2018 by 10% year on year, totalling 133,600 tonnes. Only shipments of high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) increased, reported MRC analysts.

PE imports to Kazakhstan were 11,200 tonnes in December 2018, compared to 11,700 tonnes a month earlier, local companies reduced their purchases of HDPE in Russia. Overall PE imports totalled 133,600 tonnes in 2018, compared to 121,400 tonnes a year earlier. HDPE and LLDPE shipments increased, whereas demand for low density polyethylene (LDPE) subsided.

The structure of PE imports by grades looked the following way over the stated period.

December HDPE imports to Kazakhstan decreased to 8,300 tonnes from 9,300 tonnes a month earlier, local companies reduced their purchases of black pipe grade PE in Russia. Thus, last year's overall HDPE imports exceeded 105,200 tonnes, up by 14% year on year.

Purchasing of LDPE by local companies virtually remained in the last month of 2018 at the level of November, totalling 1,600 tonnes. Overall LDPE imports to Kazakhstan were 17,500 tonnes over the stated period, down by 19% year on year.

Purchasing of LLDPE by local companies was 10,800 tonnes in 2018, compared to 7,200 tonnes a year earlier.


Kenya says crude oil capacity insufficient for refinery

MOSCOW (MRC) - Crude oil deposits discovered in Kenya are insufficient to justify construction of a refinery, a senior petroleum ministry official said. Kenya discovered commercial oil in 2012 in its Lokichar basin, which Tullow Oil estimates contains an estimated 560 million barrels in proven and probable reserves, as per Reuters.

Tullow has said this would translate to 60,000 to 100,000 barrels per day of gross production. It is proven the world over that a refinery would make money only when it has a refining capacity of at least 400,000 barrels a day, Andrew Kamau, principal secretary at the petroleum and mining ministry, told reporters.

"And we have 80,000 barrels a day, so where are we going to make money on that? We can import cheaper from India," he added. Kenya, which does not export any oil, previously had a crude oil refinery at its port city of Mombasa but halted operations in 2013 after plans for a USD1.2 billion upgrade were abandoned on the advice of consultants who said it was not economically viable.

The government took it over in 2016 and converted it into a storage facility. Other partners in the blocks with crude oil discoveries are Africa Oil Corp and Total.

Last week Tullow said it expected commercial framework agreements from the government and deals over land acquisition for an 800 km pipeline and oilfield infrastructure in the first quarter.

The government announced its intention to list state-run National Oil Corporation of Kenya in November 2017 to raise USD1 billion in a dual listing on the Nairobi bourse and London Stock Exchange (LSE) by early 2019. The Nairobi Securities Exchange has said the local listing will be by the end of 2019.

Kamau said the listing will only take place after a final investment decision (FID) is agreed. Tullow says it expects that decision to happen by the end of this year.

"The listing will only be done after FID. Because that’s when you book the reserves; before that you really can’t do anything," he said.

Top Citgo executives removed amid battle to control firm

MOSCOW (MRC) - Citgo Petroleum Corp has removed at least three top executives close to Venezuelan President Nicolas Maduro, people familiar with the matter said, in a move to cement management control under a new board of directors, said Reuters.

The U.S. refining arm of Venezuelan state-run oil company PDVSA has been thrust in recent weeks into the center of a political battle between an opposition leader and self-declared president backed by many Western nations, including the United States, and Maduro, a socialist whose re-election last year they consider illegitimate.

Monday’s departures appeared to shift control of Citgo’s day-to-day operations to officials expected to recognize a new board of directors appointed last week by the opposition-controlled congress, led by self-proclaimed president Juan Guaido.

Citgo Vice Presidents Frank Gygax, Nepmar Escalona and Simon Suarez, all of them Venezuelans promoted by Citgo Chief Executive Asdrubal Chavez from 2017 to 2018, were escorted out of Citgo’s Houston headquarters on Monday by human resources staff, the people said.

It was not immediately clear if the executives were fired, forced to resign or if they retired. Chavez, a cousin of late Venezuelan leader Hugo Chavez, has been running Citgo from the Bahamas since last year as the U.S. government denied his visa petition to work from Houston. Other Venezuelan members of the oil refiner’s board are also working with him from the Caribbean office.

Citgo is the eighth-largest U.S. refiner and runs plants in Illinois, Texas and Louisiana that provide about 4 percent of U.S. refining capacity. It also operates fuel pipelines and terminals and supplies fuel to a retail network of 5,500 gas station across 29 U.S. states.

The company has been hurt by U.S. sanctions imposed on Jan. 28 to curtail Maduro’s access to oil revenue. Citgo, the largest U.S. buyer of Venezuelan crude, can continue importing PDVSA’s oil only if the sale proceeds go to banks accounts controlled by Guaido.

Citgo’s new board of directors is led by Venezuelan Luisa Palacios, four veteran oil executives and current Vice President of Strategy and Compliance Rick Esser. The new members have yet to take office in Houston. A fourth top Citgo official, General Auditor Eladio Perez, also was removed from his office on Monday, according to one of the people.

Citgo’s manager for corporate social responsibility and legislative affairs, Larry Elizondo, declined to comment on Monday, saying he was not authorized to speak publicly on the matter. A Citgo spokeswoman did not respond to requests for comment.

Escalona, Suarez and Perez could not be immediately reached for comment. An assistant for Gygax said she was unaware of the decision.

A Citgo unit on the Caribbean island of Aruba, said a project to refurbish and reopen a 209,000-barrel-per-day idled refinery rented by the company since 2016 was put on hold and remaining employees would be laid off by Feb. 27 because of sanctions.