New plant important not only for SOCAR and BP, but also for Turkey

MOSCOW (MRC) -- Work is underway to build a new petrochemical plant for BP and Socar Turkey in Aliaga city in Izmir Province, Chief External Affairs Officer at SOCAR Turkey Energy Murat LeCompte said in an interview with Trend.

The chief external affairs officer reminded that an agreement on the construction of a new petrochemical plant was signed between SOCAR and BP in late 2018.

"According to the agreement, both companies, each with a 50-percent-share in the new project, decided to launch its implementation," LeCompte said. "The preliminary engineering and design work has been carried out since the moment of the signing of the agreement. Today, these operations are underway. The operations are planned to be completed till late 2019."

"The work on the territory will begin in 2020," the chief external affairs officer said. "Afterwards, other work, including the preparation of a production sharing agreement, will be carried out. Then financing issue must be resolved."

"In particular, the issue of financing through the company's own funds or a loan will be discussed," LeCompte said. "The exact amount of investments in the project is unknown. This issue will be resolved next year after the final decision on investments is made."

"The amount worth USD1.8 billion was voiced during the preliminary discussions," the chief external affairs officer said. "This figure may increase or decrease while making the final decision."

"If the final investment decision can be made in 2020, then the foundation of the future plant will be laid that year," LeCompte said. "Proceeding from the fact that the construction will last for 3-4 years, the plant can be put into operation in 2023-2024."

The chief external affairs officer added that the new petrochemical plant will bring great benefits.

"This project is important not only for SOCAR and BP, but also for Turkey," LeCompte added. "Presently, Turkey imports 80 percent of the petrochemical products, spending USD11.5 billion a year. After putting a new plant into operation, this figure may be reduced to USD5.5 billion. Therefore, this project will make a great contribution to the Turkish economy."

As MRC reported earlier, BP Plc is expected to resume operation at its small gasoline-producing fluidic catalytic cracking unit (FCCU) at its 430,000 barrel-per-day (bpd) Whiting, Indiana, refinery in late October after about a month of the overhaul. The company began a planned overhaul of the small FCCU on 19 September.

PTA is used to produce polyethylene terephthalate (PET), which is used in the manufacturing of plastic bottles, films, packaging containers, in the textile and food industries.

According to MRC's DataScope report, Chinese bottle grade PET deliveries to Russia increased 34% in the first eight months of 2019 to 95,600 tonnes. China accounted for 90% of the total imports, compared to 85% a year earlier.
August imports of material from China decreased by 41% to 7,600 tonnes from 12,800 tonnes in July. Jiangsu Sanfangxiang, Yisheng, Wankai and Sinopec were the leading Chinese suppliersof material to the Russian market.

SOCAR, which is keen on expanding operations in the retail oil products market abroad, is involved in exploring oil and gas fields, producing, processing, and transporting oil, gas, and gas condensate, marketing petroleum and petrochemical products in the domestic and international markets, and supplying natural gas to industry and the public in Azerbaijan.
MRC

Lotte Chemical Titan divests 49% of stake in new ethylene project in Indonesia

MOSCOW (MRC) -- Lotte Chemical Titan Holding Berhad has approved the proposed divestment of its 49% equity interest in a new ethylene project in Cilegon, Indonesia to its major shareholder, Lotte Chemical Corporation, reported NCT with reference to the Malaysian company's statement.

The divestment brings Lotte Chemical Titan’s parent company as a joint venture partner to help fund its MYR18 billion (USD4.3 billion) project, which is officially known as the Lotte Chemical Indonesia (LCI) New Ethylene Project or the "LINE Project".

The new integrated complex is expected to boost the company’s production capacity by around 80%, with a naphtha cracker of 1 million tons/year ethylene capacity and other related downstream petrochemical facilities.

In December 2018, the company held a groundbreaking ceremony for the project.

As MRC informed earlier, Lotte Chemical Titan plans to add a naphtha-fed steam cracker with an ethylene production capacity of 1 million mt/year to its petrochemical facility in Merak of Banten province, Indonesia, by 2023, making it an integrated petrochemical complex.

The company currently has two high density polyethylene plants and one linear low density polyethylene plant at the same site, with a total production capacity of 450,000 mt/year.

Ethylene is a feedstock for producing polyethylene (PE).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,436,390 tonnes in the first eight months of 2019, up by 9% year on year. Shipments of all PE grades increased.

Lotte Chemical Titan produces Malaysia's most comprehensive portfolio of olefins and polyolefins which contribute to the enhancement of everyday life. Lotte Chemical Titan's production site in Malaysia consists of eleven process facilities, two co-generation plants and three tank farms. They are located on 2 sites in Pasir Gudang and Tanjung Langsat in the state of Johor. In 2006, Lotte Chemical Titan acquired PT Lotte Chemical Titan Nusantara, Indonesia’s first and largest polyethylene plant in the country. This acquisition boosted the polyolefins capacity by approximately 50%, thus making the company one of the largest producers in South East Asia. Lotte Chemical Titan was acquired by Lotte Chemical Corp., forming part of the Lotte conglomerate of Korea, in 2010. The company thus became one of Lotte Chemical Corp.’s largest overseas subsidiaries.
MRC

Saudi Aramco to list shares on local exchange on December 11

MOSCOW (MRC) -- Saudi Aramco, the state-owned company seeking to sell up to a 5% stake in an IPO, will list its shares on the local Saudi exchange on December 11, with a final price for the flotation set to be announced on December 4, according to S&P Global with reference to Saudi-owned Al Arabiya TV report on Tuesday.

The Capital Market Authority, the country's financial regulator, will announce the launch of the Aramco IPO on November 3, according to a report on the Al Arabiya TV's website, citing unnamed sources. The report didn't mention the size of the stake to be listed on the local exchange, known as Tadawul. Aramco couldn't be reached immediately for comment.

Saudi Crown Prince Mohammed bin Salman has said he wants a local and international listing for Aramco, which he has valued at USD2 trillion, but some analysts are skeptical the company could fetch such a price.

Saudi officials have yet to choose an international jurisdiction for Aramco, but Aramco CEO Amin Nasser has said the local listing will be the "primary" one.

The IPO, which was supposed to take place in 2018, was delayed partly to allow Aramco to finalize the $69 billion acquisition of a 70% stake in SABIC, the Middle East's largest petrochemical company, Saudi officials have previously said.

The Aramco IPO is a cornerstone of the Crown Prince's Vision 2030, the economic roadmap to wean the kingdom off oil income.

As MRC informed earlier, Saudi Aramco, which temporarily lost half of its oil production following the September 14 attacks on two key oil facilities, is running its local refineries at full capacity and is forging ahead with plans to start up new refineries. The company is also starting up a joint venture refinery in Malaysia next year. According to Aramco's bond prospectus released in April, the refining and petrochemical joint venture with Petronas - the Malaysian national oil company - collectively known as PRefChem, was supposed to start this year.

The PRefChem joint venture includes a 300,000 b/d refinery, an integrated steam cracker with capacity to produce 1.3 million mt of ethylene located in Johor, Malaysia. Aramco was supposed to provide a significant portion of PRefChem's crude supply under a long-term supply agreement. Jazan and PrefChem will help Aramco reach a gross refining capacity of 5.6 million b/d, it said in the prospectus. The company currently owns and has stakes in four refineries abroad with a total refining capacity exceeding 2 million b/d.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polyprolypele (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,436,390 tonnes in the first eight months of 2019, up by 9% year on year. Shipments of all PE grades increased. At the same time, the PP consumption in the Russian market was 909,260 tonnes in January-August 2019, up by 10% year on year. Shipments of PP block copolymer and homopolymer PP increased.

Saudi Aramco is an integrated oil and chemicals company, a global leader in hydrocarbon production, refining processes and distribution, as well as one of the largest global oil exporters. It manages proven reserves of crude oil and condensate estimated at 261.1bn barrels, and produces 9.54 million bbl daily. Headquartered in Dhahran, Saudi Arabia, the company employs over 61,000 staff in 77 countries.
MRC

September exports in South Korea decrease 11.7% to USD44.7 billion

MOSCOW (MRC) -- The Ministry of Trade, Industry and Energy announced on October 1 that Korean exports in September decreased 11.7 percent year-on-year to USD 44.7 billion, said Motie.

Imports fell 5.6 percent to USD38.7 billion and the trade balance recorded a surplus of USD6.0 billion, remaining positive for 92 consecutive months. The fall in exports was affected by unfavorable external conditions such as the U.S.-China trade conflict and Japan’s stricter export restrictions against Korea. Another factor that contributed to the decline was a base effect caused by all-time monthly high exports of semiconductors recorded in September 2018 (USD12.4 billion). Decreasing prices of dynamic random-access memory (DRAM) semiconductors also dragged down exports. Meanwhile, the impact of Japan’s measure on Korean exports so far seems to be limited.

Daily average exports last month were USD2.2 billion, the highest since January. The trade surplus of USD6.0 billion was also the highest this year. Moreover, exports, in volume terms, grew 3.1 percent. By item, exports of semiconductors, petrochemicals, and petroleum products decreased while those of automobiles, ships, and bio-health products increased.

Chip exports fell 31.5 percent to USD8.5 billion despite rising NAND prices. This was largely attributable to declining DRAM prices and uncertainty in the industry stemming from issues such as the U.S.-China trade dispute. Shipments of petrochemicals decreased 17.6 percent to USD3.4 billion. The export volume increased due to the operation of newly established facilities, but oil prices continued to slide.

Exports of petroleum products dropped 18.8 percent to USD3.5 billion, mainly because of falling oil prices, the growing number of refineries in Asia, and more regular maintenance compared to a year earlier.

Automobile exports, on the other hand, grew 4.0 percent to USD3.1 billion on the back of growing demand for eco-friendly cars in markets such as the EU. Ship exports jumped 30.9 percent to USD1.8 billion thanks to a greater number of deliveries of liquefied natural gas (LNG) carriers and tankers.

Shipments of bio-health products rose 25.2 percent to USD768 million. Newly launched medicines and Botox products were shipped to more diverse destinations, and demand for medical devices such as dental implants and dental braces was robust in China and the Association of Southeast Asian Nations (ASEAN).

By region, exports to China and the U.S. contracted while those to the EU and the Commonwealth of Independent States (CIS) expanded. Exports to China slowed down 21.8 percent to USD11.4 billion mainly because of decreased sales of semiconductors, general machinery, displays, and petroleum products.

The value of Korean products shipped to the U.S. amounted to USD5.7 billion, down 2.2 percent. Items that saw a decrease in exports were general machinery, semiconductors, home appliances, and wireless communication devices.

In contrast, shipments to the CIS improved 41.3 percent to 1.2 billion, owing to increased exports of general machinery, home appliances, computers, and ships. Exports to the EU saw a growth of 10.6 percent to USD4.4 billion, following greater sales of ships, petroleum products, and wireless communication devices.

PX is a feedstock for the production of purified terephthalic acid (PTA). PTA is used to produce polyethylene terephthalate (PET), which, in its turn, is used in the manufacturing of plastic bottles, films, packaging containers, in the textile and food industries.

According to MRC's DataScope report, Chinese bottle grade PET deliveries to Russia increased 34% in the first eight months of 2019 to 95,600 tonnes. China accounted for 90% of the total imports, compared to 85% a year earlier.
August imports of material from China decreased by 41% to 7,600 tonnes from 12,800 tonnes in July. Jiangsu Sanfangxiang, Yisheng, Wankai and Sinopec were the leading Chinese suppliersof material to the Russian market.
MRC

Lukoil and MOL to sign dirty oil settlement

MOSCOW (MRC) - Russian oil producer Lukoil and Hungarian energy company MOL are set to sign a settlement deal over contaminated oil during Russian President Putin's visit to Budapest this week, said Hydrocarbonprocessing.

A high level of organic chloride was found in late April in Russia's Druzhba pipeline, which connects Siberian oilfields with Belarus, Ukraine, Poland, Germany, Czech Republic and Hungary. The substance, which can damage refining equipment, was also detected in the Baltic Sea port of Ust-Luga.

The contamination disrupted oil exports from Russia to the West and has led to protracted negotiations over compensation. A source familiar with the plans of Lukoil and MOL, said the companies were unlikely to disclose the amount of compensation to be received by MOL.

"We've been cooperating very closely, so it's just to make an official statement about successful settlement and prospects for future cooperation," the source said.

The agreement is set to be signed during Putin's visit to Budapest. Last week, his aide, Yury Ushakov, said Putin would travel to Hungary on Oct. 30.

Last month, Russia and Kazakhstan reached a preliminary deal over compensation for tainted oil, though the final agreement is yet to be signed.

Lukoil, MOL and Russian oil pipeline monopoly Transneft have not replied to requests for comments.

Up to five million tonnes of crude may have been contaminated by organic chloride, which is used in oil extraction.

Traders such as Glencore and BP have been struggling to sell the tainted oil, which could potentially be mixed with unaffected crude to become usable.

Transneft has said compensation won't exceed USD15 per barrel.

According to ICIS-MRC Price report, Stavrolen (part of Lukoil), Russia's major polyolefins producer, has resumed its polypropylene (PP) production in Budennovsk after a long scheduled turnaround. The plant's customers said Stavrolen had fully resumed its PP production after the long scheduled maintenance by 15 October. The outage began on 6 September. The start-up of the plant"s high density polyethylene (HDPE) production will take place with a week delay.

Lukoil is one of the leading vertically integrated oil company in Russia. The main activities of the company include operations for exploration and production of oil and gas, production and sale of petroleum products. Lukoil is the second largest private oil Company worldwide by proven hydrocarbon reserves. Lukoil's structure includes one of the largest Russian petrochemical plant - Stavrolen.
MRC