Saudi, Abu Dhabi crude stocks in Japan climb 28% in November

MOSCOW (MRC) -- Crude oil stocks held by Saudi Arabia and Abu Dhabi in Japan surged 28% month on month to 8.87 million barrels at the end of November after Saudi Aramco discharged a crude cargo at its leased oil storage terminal in Okinawa, according to S&P Global.

The supply of 1.41 million kiloliters of crude, equating to four days of Japanese oil consumption, increased from 1.1 million kiloliters a month earlier, according to data released Wednesday by the Ministry of Economy, Trade and Industry.

Saudi Aramco also made shipments from the Okinawa terminal in October and March, a source familiar with the matter said. S&P Global Platts trade flow software cFlow showed the fully laden VLCC Arsan discharged a crude cargo there from Saudi Arabia's Ras Tanura over November 4-7.

Saudi Aramco shipped a 136,000 mt Arab Light crude cargo on the Suezmax tanker Glorycrown from the Okinawa terminal to China in October after shipping another crude cargo on the Suezmax Jag Lakshya to the same country in March.

According to METI data covering January-November 2019, a total of 1.09 million kiloliters, or 6.86 million barrels, of crude oil was shipped from Saudi Arabia and Abu Dhabi's leased oil storage terminals in Japan in shipments made in March, July, August and October.

The crude stocks held by Saudi Arabia and Abu Dhabi accounted for 1.7% of Japan's total petroleum reserves of 81.87 million kiloliters, or 514.95 million barrels, at the end of November, equating to 235 days of Japanese oil consumption, a slight drop from 81.98 million kiloliters at the end of October, METI data showed.

Japan's petroleum reserves have been in the spotlight following the escalation of tensions in the Middle East between the US and Iran. The Middle East supplies close to 90% of Japan's oil imports.

Japan agreed Monday to boost Abu Dhabi's leased crude oil storage capacity to 1.3 million kiloliters, or 8.18 million barrels, from 1 million kiloliters, to enhance its security of supply and expand the Middle East supplier's access to the East Asian market.

Under the agreement, which involved the renewal of the existing joint crude oil storage scheme for three years, the Abu Dhabi National Oil Company can use the leased facility at Kiire in southwestern Japan as an East Asian supply base in exchange for prioritizing supply to Japan in the event of an emergency.

Following the latest deal, crude storage capacity in Japan leased to its top two crude suppliers, Saudi Arabia and the UAE, rose to a total of 2.6 million kiloliters, or 16.35 million barrels, equating to eight days of domestic consumption.
MRC

MOSCOW (MRC) -- Reliance’s petrochemicals business’ fiscal third-quarter (October-December 2019) earnings before interest and taxes (EBIT) fell nearly 30% year on year on the back of lower selling prices, affecting margins, said the company.

RIL will announce its results for the quarter ended December 2019 on Friday. In a Bloomberg poll, 10 analysts estimated revenue of Rs 1.45 trillion and net profit of Rs 11,435 crore for the third quarter on a consolidated basis.

For the quarter ended December 2018, the company reported a consolidated net profit of Rs 10,251 crore and consolidated revenue was at Rs 1.71 trillion.

"RIL’s profit is expected to be sequentially flat,” said Nitin Tiwari, vice-president at Antique Stock Broking. For the September 2019-ended quarter, RIL reported a net profit of Rs 11,262 crore. “The retail segment will show better numbers as it was a festive quarter. Telecom should benefit from increase in rates and levy of interconnect usage charges (IUC). Petchem could see a weak quarter while refining margins are expected to be sequentially flat to marginally lower," said Tiwari.

In the refining business, RIL is expected to report gross refining margins (GRMs) in the range of $9.2 to $9.9 a barrel. “Benchmark refining margins have collapsed, given the sharply lower high sulphur fuel oil (HSFO) cracks.We forecast RIL’s reported GRM’s to be flattish, sequentially, at $9.4 per barrel and this would imply record premiums over the Singapore benchmark. But most of the premium would be because of fuel oil,” analysts at JP Morgan wrote in a note.

While RIL’s refining segment performance is expected to remain flattish, petchem performance is expected to take a further hit.

As MRC informed earlier, Sibur and India’s Reliance Industries Ltd. have launched butyl rubber production at the joint integrated petrochemical plant Reliance Sibur Elastomers Private Ltd. in the Indian city of Jamnagar.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,904,410 tonnes in the first eleven months of 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments increased from both domestic producers and foreign suppliers. The PP consumption in the Russian market was 1,161,830 tonnes in January-November 2019, up by 7% year on year. Deliveries of all grades of propylene polymers increased, with the homopolymer PP segment accounting for the largest increase.
MRC

MOSCOW (MRC) -- Following the appointment of Chris Tane as Chairman of INOVYN, the company is pleased to welcome Geir Tuft as the new INOVYN CEO, as per the company's press release.

Geir returns to INOVYN from INEOS Oil & Gas, where he was CEO, and brings with him extensive experience of petrochemicals and the chlorvinyls value chain.

Comments Geir: "Since its formation in 2015, INOVYN has delivered consistent year-on-year growth. I very much look forward to working with colleagues to build on this performance as we carry INOVYN forward into the next decade."

Alongside his role as Chairman of INOVYN, Chris Tane retains his existing roles as Chairman of INEOS Automotive and Director of Belstaff.

There are no other changes to the INOVYN Executive Team.

As MRC wrote before, in July 2016, Solvay completed the divestment of its shareholding in INOVYN (London), bringing to an end Solvay's chlorvinyls joint venture with Ineos. INOVYN was formed on 1 July 2015 as a jv between Ineos and SolVin, a subsidiary of Solvay. Solvay and Ineos signaled their decision to end their chlorvinyls jv in March 2016.

Besides, we remind that INOVYN conducted maintenance works at its polyvinyl chloride (PVC) plant at its Jemeppe Site, Belgium in October 2019. According to the company’s website, the Jemeppe site is one of the largest PVC production capacities in Europe with 420,000 tons/year of material supplied to key sectors including building, automotive and piping.

According to MRC's ScanPlast report, Russia's estimated consumption of unmixed PVC was 857,450 tonnes in January-November 2019, up 4% year on year. Emulsion and suspension PVC (EPVC and SPVC) markets showed an increase in supplies. November consumption of SPVC (excluding exports to Belarus) decreased to 70,620 tonnes from 71,720 tonnes in October. Some producers reduced PVC production in November, which affected export sales. Overall shipments of suspension to the Russian market totalled 736,570 tonnes in the first eleven months of 2019, up by 3% year on year. Local producers managed to increase suspension output by 3%, whereas exports grew by 24%.

Headquartered in London, INOVYN has pro-forma sales of more than EUR3 billion, with 4,300 employees and assets across 14 sites in Belgium, France, Germany, Italy, Norway, Spain, Sweden and the UK. Governance of the Joint Venture is equally split between the partners.
MRC

MOSCOW (MRC) -- An explosion and fire Monday damaged Sasol's new low density polyethylene (LDPE) plant at its Louisiana complex as the unit was coming online while wrapping up commissioning, reported S&P Global with reference to the company's statement Tuesday.

The company's new 1.5 million mt/year cracker was not affected by the incident and was operating at its nameplate capacity, the company said.

The 420,000 mt/year LDPE unit "has been shut down and an investigation is underway to determine the cause of the incident, the extent of the damage" and impact on its startup schedule, Sasol said. No one was hurt in the blast.

Sasol had intended to start up the cracker and LDPE plant by the end of 2019, but shut the cracker in late November to replace an acetylene reactor catalyst because it had only reached 60% of its capacity. The company initially started up the cracker in July, but brought it down to address a heat exchanger problem before resuming its startup in August.

Last month the company finished the second repair, resumed startup, and worked to finish commissioning and transition to startup of the LDPE plant as well.

The cracker and LDPE plant are part of Sasol's USD12.6 billion-USD12.9 billion Lake Charles Chemical Project (LCCP), a new chemical complex. A 470,000 mt/year linear low density PE plant started up in February last year. Rounding out the LCCP newbuilds will be this month's startup of an ethoxylates facility and Guerbert alcohols unit followed by the March startup of a Ziegler alcohols unit.

Sasol's new LDPE plant was one of 13 that had been slated to come online from 2017 through 2019, the first wave of new petrochemical infrastructure to emerge from the US natural gas shale boom, adding 6.4 million mt/year of capacity. Another 7.27 million mt/year is planned to start up after 2020, according to company announcements.

Sasol's new cracker is the seventh of eight that had been expected to start up in that first wave. The eighth is a 1.5 million mt/year facility at Formosa Plastics USA's Point Comfort, Texas, complex, which was delayed from its year-end 2019 startup as well. Formosa has not disclosed a new startup target date, and the company also delayed startup of its new 400,000 mt/year LDPE plant at Point Comfort.

All told, the first wave will bring online nearly 10 million mt/year of new ethylene capacity, while the second wave - through the 2020s - is expected to add another 8.3 million mt/year.

Sasol's LCCP started with a USD9 billion price tag, but grew to the current estimate as labor costs increased and officials discovered delayed reporting of issues with internal controls and flawed forecasts.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,904,410 tonnes in the first eleven months of 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments increased from both domestic producers and foreign suppliers. The PP consumption in the Russian market was 1,161,830 tonnes in January-November 2019, up by 7% year on year. Deliveries of all grades of propylene polymers increased, with the homopolymer PP segment accounting for the largest increase.

Sasol is an international integrated chemicals and energy company that leverages technologies and the expertise of our 31 270 people working in 32 countries. The company develops and commercialises technologies, and builds and operates world-scale facilities to produce a range of high-value product stream, including liquid fuels, petrochemicals and low-carbon electricity.
MRC

MOSCOW (MRC) -- Royal Dutch Shell Plc is looking to sell its oil refinery in Anacortes, Washington, reported Reuters with reference to three people familiar with the matter.

If completed, this and other asset sales currently underway would reduce Shell’s North American refining operations to large plants on the U.S. Gulf Coast, said the people, speaking on condition of anonymity as the talks are private.

Oil and gas major Shell has publicly committed to selling more than USD5 billion of assets per year in 2019 and 2020. The Netherlands-based company is trying to use its global scale to build a power business as the world moves toward cleaner energy.

The refinery, located north of Seattle, has the ability to process 144,000 barrels per day (bpd) of crude oil, according to Refinitiv Eikon data.

This is Shell’s third effort to divest a plant in the past year. In June, Shell agreed to sell its Martinez, California, refinery to independent refiner PBF Energy Inc (PBF.N) for up to USD1 billion.

The company retained advisers about a year ago to sell its 75,000-bpd Sarnia, Ontario, refinery.

If all three sales are completed, including Anacortes, Shell would operate only three North American refineries: the 340,000-bpd Deer Park, Texas, refinery, a joint venture with Petroleos Mexicanos, and two refineries on the Louisiana coast that together can process almost 500,000 bpd of crude oil.

Shell has also divested refineries in other regions, selling its 50% stake in the SASREF refinery in Saudi Arabia last year.

As MRC informed earlier, Shell Singapore restarted its naphtha cracker in Bukom Island in early December 2019, following a two months maintenance shutdown since the beginning of October 2019. Thus, this cracker was taken off-stream for the turnaround on 1 October 2019. The cracker is able to produce 960,000 tons/year of ethylene and 550,000 tons/year of propylene.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,904,410 tonnes in the first eleven months of 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments increased from both domestic producers and foreign suppliers. The PP consumption in the Russian market was 1,161,830 tonnes in January-November 2019, up by 7% year on year. Deliveries of all grades of propylene polymers increased, with the homopolymer PP segment accounting for the largest increase.

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.
MRC