Oil traders wait to assess impact of IMO regulations

MOSCOW (MRC) -- If oil traders and consumers are worried about the impact of new maritime fuel regulations from the start of next year, they have not yet started to mark up prices for low-sulfur middle distillate fuels, said Hydrocarbonprocessing.

Under new rules agreed by the International Maritime Organization (IMO), ships will be forced to switch to using low-sulfur fuels rather than high-sulfur residual fuel oil, or fit scrubbers to remove sulfur dioxide emissions. Refiners have been gearing up to increase the production of IMO-compliant shipping fuels, and many ship owners have installed or plan to fit scrubber units to enable them to continue using cheaper residual fuel oil.

There is considerable uncertainty about exactly how vessel owners will comply with the new regulations and how much extra low-sulfur fuel the refiners will manage to produce. But the forthcoming regulations are expected to increase consumption of middle distillates and cause that segment of the oil market to tighten significantly.

Ships will be competing for the same low-sulfur middle distillates used as diesel, jet fuel and heating oil by road hauliers, railroads, airlines and farmers as well as many homes, offices and factories.

As a result, some analysts are forecasting a severe shortage of middle distillates, causing prices to spike, while others see a more limited impact. The effect of the IMO regulations even merited its own section in the U.S. government's annual "Economic Report of the President" prepared by the Council of Economic Advisors (CEA) and published earlier this month.

"Global bunker fuel represents about 5 percent of total oil demand" and the reported warned "fuel switching by ships in 2020 may cause significant disruptions in specific product markets."

The CEA predicted a shortage of 200,000-600,000 barrels per day in compliant fuels which "will likely trigger higher prices, though estimates of price shocks to fuels including diesel, gasoline and jet fuel vary substantially".

Olympus buys rotomolder Tank Holding Corp

MOSCOW (MRC) -- For the second time in 10 years, private equity firm Olympus Partners has acquired Tank Holding Corp., said to be the largest rotational molder in North America, said Canplastics.

The terms of the deal have not been disclosed. Olympus acquired Tank from private equity firm Leonard Green Partners, who has owned the company since buying it from Olympus in 2012.

Stamford, Conn.-based Olympus originally formed Tank with the management team in 2008 by merging Norwesco and Snyder Industries, creating a rotomolder of polyethylene tanks and containers.

Tank markets its products under the brand names of Norwesco, Snyder, Bonar, Stratis, and Bushman. Aside from plastic tanks, Tank’s product portfolio also includes dry material handling bins, insulated containers, steel transport tanks, medical waste containers, and specialty pallets.

Tanks has corporate headquarters in St. Bonifacius Minn., and Lincoln, Neb. “Our management team cannot be more excited about partnering with Olympus once again. They have a great understanding of our business, and we look forward to working with them in the execution of our many growth initiatives”, said Greg Wade, Tank’s president and CEO, said in a statement.

Engel opens second location in Mexico

MOSCOW (MRC) -- Austria-based injection molding machine maker Engel has opened its second location in Mexico, said Canplastics.

Located in San Pedro near Monterrey – about 640 kilometers southwest of San Antonio – this second office is also about 800 kilometers away from Engel’s first Mexican plant in Queretaro. near Mexico City in the centre of the country, where numerous companies in the plastics industry are also based. “We are thus shortening the distance to our customers in the very important industrial region in the north of the country,” said Peter Auinger, managing director of Engel in Mexico. “In the Monterrey region, the automotive industry in particular is strongly represented."

Engel’s Mexico subsididiary is called Engel de Mexico SA de CV. Engel will have two sales experts and four service technicians at the initial team in Monterrey. In addition to offices, the facility includes a large conference room with state-of-the-art presentation technology, which is also used for customer training courses.

Engel has had its own sales and service subsidiary in Mexico since 1996. In 2010, the premises were moved from Mexico City to Queretaro and significantly expanded. Engel has its own machine technology centre and spare parts warehouse in Queretaro. The two Mexican facilities will employ a total of almost 70 people.

"We are increasingly becoming a partner for our customers over the entire life cycle of our injection molding machines and system solutions,” Auinger said. “The demands placed on our consulting services are increasing, and we are working more and more closely with our customers. The geographic proximity becomes even more important."

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.

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.