Iran scrambles to lift petrochemical sales as sanctions hammer oil

MOSCOW (MRC) -- Iran has been racing to step up exports of petrochemicals and tap new markets to compensate for sliding oil sales, Iranian and international industry sources said, but now risks losing that crucial revenue as Washington tightens the screw on sanctions, said Hydrocarbonprocessing.

Tehran has been selling increased volumes of petrochemical products at below market rates, in countries including Brazil, China and India, since the United States reimposed sanctions on Iranian oil exports in November, according to the six sources who include two senior Iranian government officials. Available ship-tracking data also points to a rise in monthly shipments since then.

The scramble to bolster petrochemical sales could be an indication of how successful the U.S. administration of Donald Trump has been in choking off Iran's oil revenues, which have fallen further than under previous sanctions in 2012.

While the November sanctions applied to petrochemicals as well, the four industry sources said there was a degree of ambiguity given the multiple types of products - including urea, ammonia and methanol - which allowed Iran to keep selling.

However on Friday the U.S. Treasury moved to tighten the restrictions by prohibiting companies from doing any business with Iran's largest petrochemical group, Persian Gulf Petrochemical Industries Company, citing its ties to Iran's elite Revolutionary Guards. The measures also apply to 39 subsidiary companies and foreign-based sales agents.

The Treasury said it intended to "vigorously enforce" the new petrochemical sanctions, which could deal another hammer blow to the Iranian economy. It is difficult to put a comprehensive figure on Iran's income from petrochemicals, Iran's second-largest export industry after oil and gas, but officials said in February that non-oil revenues had surpassed the amount earned by oil exports.

This week Iranian media quoted Ahmad Sarami, a member of the Iranian Oil, Gas and Petrochemical Products Exporters' Union, as saying Tehran received USD11 billion from petrochemical exports in the year ending in March.

The petrochemicals push comes as Iran's oil exports fell to around 400,000 barrels per day (bpd) in May, less than half of April's level and down from at least 2.5 million bpd in April last year, according to tanker data and industry sources.

Iran's annual oil revenue has averaged around USD50 billion in recent years. However a senior U.S. official said in March that Tehran had lost USD10 billion in revenue since sanctions were reimposed in November.

In a sign of the shifting industry landscape, Iran's Supreme Leader Ayatollah Ali Khamenei said in Tehran in April that Iran should move towards the sale of oil products such as petrochemicals instead of crude.

Iranian authorities, who do not recognise U.S. sanctions, dismissed the latest restrictions announced on Friday and vowed to press on with petrochemical exports. Sarami of the exporters' union described the American measures as "psychological warfare". A spokesman for Iran's National Petroleum Company confirmed the ramp-up of petrochemical exports since November, but declined to comment on the destinations.

Shell agrees to sale of Martinez Refinery

MOSCOW (MRC) -- Equilon Enterprises LLC d/b/a Shell Oil Products US (Shell), a subsidiary of Royal Dutch Shell plc announced it has reached an agreement for the sale of Shell’s Martinez Refinery in California to PBF Holding Company LLC, a subsidiary of PBF Energy, Inc., for USD1.0 billion consideration plus the value of hydrocarbon inventory, crude oil supply and product offtake agreements, and other adjustments, as per Hydrocarbonprocessing.

This divestment aligns with Shell’s strategy to reshape refining efforts towards a smaller, smarter refining portfolio focused on further integration with Shell Trading hubs, Chemicals, and Marketing.

"This deal is another step in our transformation to high-grade and optimise our portfolio to drive resilient returns," said Shell’s Downstream Director, John Abbott.

The transaction is subject to closing conditions and regulatory approvals and is expected to close in 2019.

As MRC reported before, in March 2018, Shell EP Middle East Holdings B.V. completed the sale of the entire share capital of Shell Iraq B.V (SIBV), which held its 19.6% stake in the West Qurna 1 oil field, for USD406 million, to a subsidiary of ITOCHU Corporation.

Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.

Engel appoints Michael Traxler to head Mould Technology division

MOSCOW (MRC) -- Following the retirement of Udo Stahlschmidt, Michael Traxler has now been appointed head of ENGEL’s Mould Technology division, an in-house department at Engel’s headquarters in Austria that has been involved in the project planning of injection moulds for more than ten years, said Plasticsnewseurope.

The department is also contracted as a consultant, for example, when it comes to particularly demanding new product developments or feasibility studies.

Traxler has more than 30 years of experience in precision tool making and injection moulding. He joined Engel in 2015 and previously headed the Packaging business unit in North America.

Engel is currently working towards a decentralised approach to the development of mould technology know-how.

“The project planning of injection moulds requires a great deal of coordination and very close cooperation between us as a system solution provider and the plastics processors. That's why it's so important to be on site and speak the native language of our customers,” said Christoph Steger, CSO of the Engel Group.

Engel has established a strong worldwide network of system partners, each of whom is also one of the leading providers in their field. Often commissioned as a general contractor for the complete production cell, including the mould, Engel assumes the overall responsibility, even if other companies are involved in the project, acting as the central point of contact for the customer. This serves in many cases to accelerate the project while offering the customer a greater feeling of security.

As MRC informed earlier, in May 2019, Austria-based injection molding machine maker Engel has opened its second location in Mexico.

Daesan cracker brought on-stream by Hanwha Total

MOSCOW (MRC) -- Hanwha Total Petrochemical has restarted its Deasan cracker following a maintenance and debottlenecking exercise, as per Apic-online.

A Polymerupdate source in South Korea informed that the company has resumed operations at the cracker on June 10, 2019. The cracker was shut for maintenance and expansion in end-March, 2019.

Following the expansion, the ethylene capacity has been increased by 310,000 MT and propylene capacity by 120,000 MT.

Located at Daesan in South Korea, the cracker has an ethylene capacity of 1.09 million mt/year and propylene capacity of 640,000 mt/year.

As MRC reported earlier, Hanwha Total Petrochemical is investing approximately USD500m to further expand its Daesan integrated refining and petrochemical complex in South Korea. The company operates as a 50/50 joint venture (JV) between Total and Hanwha. The planned investment is expected to increase annual polypropylene capacity by almost 60% to 1.1 million tonnes and ethylene capacity by 10% to 1.5 million tonnes by the end of 2020.

Kaustik Volgograd resumed PVC production

MOSCOW (MRC) -- Volgograd Kaustik, Russia's fourth largest polyvinyl chloride (PVC) producer, resumed its polyvinyl chloride (PVC) production capacities after a scheduled turnaround, according to ICIS-MRC Price report.

The company's customers said that the producer on 11 June began PVC production after almost a month of shutdown. The plant was shut down for the turnaround on 15 May. The plant's PVC production capacity is 90,000 tonnes/year.

It is also worth noting that next shutdowns for maintenance at Russian PVC plants are scheduled from July.
SayanskKhimPlast and Bashkir Soda Company, which annual capacities are 350,000 tonnes and 240,000 tonnes, respectively, will take off-stream their production capacities for maintenance.

PVC production at Volgograd Kaustik was launched in December 1972 with the assistance of the Japanese firm Kureh's specialists. Nikokhim Group is one of the leaders of the Russian chemical industry, the main production assets of which are located in the southern industrial hub of Volgograd.

The holding company includes: JSC Kaustik is the principal plant of the group, manufactures basic products - caustic soda, chloroparaffins, synthetic hydrochloric acid, chlorine trademark, polyvinyl chloride, sodium hypochlorite, etc .; CJSC NikoMag - production of anti-icing materials, magnesium chloride, magnesium oxide and hydroxide; Zirax, Ltd. - production of high-purity reagents for various industries and JSC Poligran - the production of plastic compounds and rigid PVC compounds.