Saudi Aramco to buy stake in SABIC for USD69.1B

MOSCOW (MRC) -- Saudi Aramco said it has agreed to buy a 70% stake in Saudi Basic Industries Corp (SABIC) from Saudi Arabia's sovereign wealth fund for USD69.1 billion, in a deal which the world's top oil producer called "historic", as per Hydrocarbonprocessing.

SABIC and Aramco said in a statement the agreed purchase price is 123.39 riyals per share, a slight discount from SABIC's closing price on Wednesday.

"This is a win-win-win transaction and a transformational deal for three of Saudi Arabia’s most important economic entities," said Yasir Othman Al-Rumayyan, managing director of the Public Investment Fund (PIF).

The deal comes after months of talks between Aramco and PIF, which contributed to the delay of Aramco's planned multi-billion dollar initial public offering.

Aramco has been boosting its investments in refining and petrochemicals to secure new markets for its crude, as it sees growth in chemicals as central to its downstream expansion strategy.

Aramco's CEO Amin Nasser said the deal represented an "historic moment" and a "great opportunity for growth," Saudi-owned broadcaster Al Arabiya reported.

"Solidifying our relationship in this way strategically positions SABIC and Saudi Aramco to accelerate exciting developments in our global chemicals business," said Yousef Al-Benyan, SABIC Vice Chairman and CEO.

Aramco said it has no plan to buy the remaining shares in SABIC, the world's fourth-biggest petrochemicals firm.

Aramco plans to increase its refining capacity from 4.9 million to 8-10 million barrels per day by 2030.

"We think that Aramco will now run all of its future expansion plans directly through SABIC, and with a big part of the 2030 vision focused on expanding petchems, this only bolsters SABIC’s long term growth potential," said Yousef Husseini, an analyst at EFG-Hermes.

Saudi Aramco and SABIC have petrochemicals production capacity of 17 and 62 million tons per year, respectively.

"While we don’t expect Aramco to treat the investment quite as passively as the PIF did, we also don’t expect them to interfere in the day to day of SABIC, especially since both companies’ strategies seem aligned at this point and focused on international growth," Husseini said.

As MRC informed before, in October 2018, Saudi Aramco signed an agreement to invest in a refinery-petrochemical project in eastern China, part of its strategy to expand in downstream operations globally.

Saudi Aramco, officially the Saudi Arabian Oil Company, is a Saudi Arabian national oil and natural gas company based in Dhahran, Saudi Arabia. Saudi Aramco"s value has been estimated at up to USD10 trillion in the Financial Times, making it the world"s most valuable company. Saudi Aramco has both the largest proven crude oil reserves, at more than 260 billion barrels, and largest daily oil production.

Saudi Basic Industries Corporation (SABIC) ranks among the world's top petrochemical companies. The company is among the worldпїЅs market leaders in the production of polyethylene, polypropylene and other advanced thermoplastics, glycols, methanol and fertilizers.
MRC

Sinopec Yangzi resumes production at No. 3 PP unit

MOSCOW (MRC) -- Sinopec Yangzi Petrochemical has restarted its No. 3 polypropylene (PP) unit following a brief maintenance, as per Apic-online.

A Polymerupdate source in China informed that the company has resumed operations at the unit on March 22, 2019. The plant was shut for maintenance on March 17, 2019.

Located in Jiangsu province, China, the No. 3 PP Unit has a production capacity of 200,000 mt/year.

As MRC reported earlier, in November 2018, Sinopec International and Sinopec-SK (Wuhan) Petrochemical Co. (Wuhan) selected LyondellBasell's Hostalen ACP (Advanced Cascade Process) technology for a high-density polyethylene (HDPE) plant in China. The new 300,000-t/y HDPE unit, to be built in Wuhan, Hubei Province, will be the ninth Hostalen ACP line licensed in China, LyondellBasell noted. A schedule for the project was not given.

China Petroleum & Chemical Corporation, or Sinopec Limited is a Chinese oil and gas company based in Beijing, China. It is listed in Hong Kong and also trades in Shanghai and New York . Sinopec is the worlds fifth biggest company by revenue.
MRC

Westlake Chemical Partners acquires 4.50% stake in Westlake Chemical OpCo

MOSCOW (MRC) -- Westlake Chemical Partners has agreed to acquire an additional 4.50% limited partner interest in Westlake Chemical OpCo on a fully diluted basis for approximately USD201.4M, as per TheFly.

The purchase price for the acquisition represents an enterprise value multiple of approximately 10.5x of OpCo's expected 2019 EBITDA.

The Partnership intends to finance the acquisition with borrowings under its revolving credit facility and the proceeds of a private placement of 2,940,818 common units representing limited partner interests of the Partnership to certain institutional investors and an entity for the benefit of certain family members of Albert Chao and James Chao, each of whom serve on the board of directors of Westlake Chemical Partners.

The private placement will result in gross proceeds of approximately USD62.9M. The acquisition is expected to close on March 29 and be immediately accretive to the Partnership's MLP distributable cash flow. The acquisition will increase the Partnership's limited partner interest in OpCo from approximately 18.3% to approximately 22.8%.

OpCo sells approximately 95% of its ethylene production to Westlake Chemical Corporation under a long-term supply agreement.

The acquisition and the affiliate entity's participation were approved by a Conflicts Committee, which is composed entirely of independent directors of the Board.

As MRC informed before, in early 2018, Westlake Chemical Corporation announced that it will expand capacities for the production of polyvinyl chloride (PVC) and vinyl chloride monomer (VCM) at three of its chemical facilities. Two of the plants are located in Germany (Burghausen, Gendorf) and one is located in Geismar, Louisiana. The expansions in Burghausen and Geismar are expected to be completed in 2019. The Gendorf expansions are expected to be completed in 2020 and 2021.

Westlake Chemical Corporation is an international manufacturer and supplier of petrochemicals, polymers and building products with headquarters in Houston, Texas. The company's range of products includes: ethylene, polyethylene, styrene, propylene, chlor-alkali and derivative products, PVC suspension and specialty resins, PVC Compounds, and PVC building products including siding, pipe, fittings and specialty components, windows, fence, deck and film.
MRC

US crude stockpiles rise unexpectedly as exports slow

MOSCOW (MRC) -- US crude oil stocks rose unexpectedly last week after a fire disrupted movements on the Houston Ship Channel and slowed exports, while gasoline and distillate inventories fell more than forecast, reported Hydrocarbonprocessing with reference the Energy Information Administration.

Crude inventories rose by 2.8 million barrels in the week to March 22, compared with analysts' expectations for a decrease of 1.2 million barrels.

Crude stocks at the Cushing, Oklahoma, delivery hub rose 541,000 barrels, the EIA said.

Net US crude imports rose last week by 114,000 barrels per day as exports alone fell 506,000 bpd.

"The report was bearish relative to expectations, as crude inventories rose, due, in part, to a steep drop in exports week-on-week," said Phil Flynn, an analyst at Price Futures Group in Chicago.

The draw on refined products inventories did not completely offset the bearish crude data, he said.

US crude futures extended losses after the data was released, and Brent crude briefly turned negative. US crude was down 11 cents at USD59.83 a barrel by 11:01 a.m. EDT (1501 GMT), while Brent up 8 cents at USD68.04 a barrel.

A storage tank fire on March 18 at Intercontinental Terminals Co Deer Park facility on the Houston Ship Channel led to restrictions on shipping at the busiest US energy port.

"The tank fire caused a lot of problems in the ship channel with benzene and other chemicals slipping into the water and the Coast Guard shut down ship movement for a couple of days," said Donald Morton, who runs an energy trading desk at investment banking firm H.J. Sims & Co. "It was a very short-term situation that will get better quickly and already has started getting better," he said.

Refinery crude runs fell by 367,000 bpd, the EIA data showed. Refinery utilization rates fell by 2.3 percentage points.

Gasoline stocks fell by 2.9 million barrels, a slightly greater draw than analysts expected in a Reuters poll that called for a 2.8 million-barrel drop.

Distillate stockpiles, which include diesel and heating oil, fell by 2.1 million barrels, versus expectations for a 896,000-barrel drop, the EIA data showed.
MRC

LyondellBasell refinery production still 14% below capacity

MOSCOW (MRC) -- Lyondell Basell Industries Houston refinery's production continues to run at about 14% below its 263,776 barrel-per-day capacity due to shipping limitations on the Houston Ship Channel, reported Reuters with reference to Hysaid Gulf Coast market sources.

The lack of shipping prevents Lyondell from removing sulfur made as a byproduct of gasoline production at the refinery, the sources said. The refinery has limited storage capacity on-site.

As MRC wrote previously, in September 2016, LyondellBasell selected its La Porte, Texas, manufacturing complex as the site for a new high density polyethylene (HDPE) plant. The plant will be the first commercial plant to employ LyondellBasell's new proprietary Hyperzone PE technology and will have an annual capacity of 1.1 billion pounds (500,000 metric tons). Construction began in early 2017 with start-up planned for 2019.

LyondellBasell is one of the world's largest plastics, chemical and refining companies. The company manufactures products at 57 sites in 18 countries. LyondellBasell products and technologies are used to make items that improve the quality of life for people around the world including packaging, electronics, automotive parts, home furnishings, construction materials and biofuels. LyondellBasell sells products into approximately 100 countries and is the world's largest licensor of polyolefin technologies.
MRC