Rosneft steps up environmental monitoring in Samara refineries

MOSCOW (MRC) -- Russian oil major Rosneft said its oil refineries in the Samara region are increasing their level of environmental monitoring, said Hydrocarbonprocessing.

Kazakhstan on Tuesday reduced oil supplies via the Atasu-Alashankou pipeline to China after tests carried out at the end of the last week showed a high content of organic chloride.

Some oil transit from Kazakhstan to Russia goes via a pipeline which has a connection with the Russian pipeline system in the Samara region.

Rosneft said five stationary environmental posts will monitor the ecological parameters around the Novokuibyshevsky and Kuibyshev refineries around the clock. It did not specify if the move was linked to the Kazakh tests.

As MRC informed earlier, Rosneft said that its German subsidiary Rosneft Deutschland GmbH had completed the deal to acquire a 3.57% stake in Germany’s Bayernoil Raffineriegesellschaft mbH from BP.

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.

Rosneft became Russia's largest publicly traded oil company in March 2013 after the USD55 billion takeover of TNK-BP, which was Russia’s third-largest oil producer at the time.
MRC

MOSCOW (MRC) -- US oil and natural gas output in major shale formations is expected to rise by the smallest in about a year in February to record highs, the US Energy Information Administration (EIA) said on Tuesday, as producers pull back on new drilling, reported Reuters.

Shale oil output is expected to rise by about 22,000 barrels per day (bpd) in February to about 9.2 million bpd, which would be the smallest monthly increase since production declined in February 2019.

US gas output in the big shale basins was projected to increase less than 0.1 billion cubic feet per day (bcfd) to a record 86.0 bcfd, its smallest monthly increase since a drop in January 2019.

The Permian and Bakken regions have been the biggest drivers of a shale boom that helped make the United States the biggest oil producer in the world, ahead of Saudi Arabia and Russia.

However, the rate of growth has slowed as independent producers cut spending on new drilling and completions to focus more on improving earnings results.

Oil output at the largest formation, the Permian Basin of Texas and New Mexico, is expected to rise 45,000 bpd to a record 4.80 million bpd. That would be the smallest increase since June 2019, the EIA said in its monthly forecast.

Crude production from North Dakota and Montana’s Bakken region is expected to rise by about 5,000 bpd to a fresh peak of about 1.53 million bpd.

Low US gas prices are also expected to prompt companies to keep cutting spending on new drilling.

Oil production is forecast to decline in the Eagle Ford, Niobrara and Anadarko basins, the EIA said.

Meanwhile, US gas output in the Appalachia region, the biggest US shale gas formation, was set to decline less than 0.1 bcfd to 33.3 bcfd in February from 33.4 bcfd in January. That would be the first time gas production declined for two successive months since October 2016.

Most of the increase in gas production was in the Permian, where output is expected to rise 0.2 bcfd to a record 16.8 bcfd in February.

EIA said producers drilled 1,036 wells - the least since June 2017 - and completed 1,086 in the biggest shale basins in December, leaving total drilled but uncompleted (DUC) wells down 50 to 7,573, the lowest since October 2018.
MRC

MOSCOW (MRC) -- McDermott International, Inc. has announced that it has the support of more than two-thirds of all its funded debt creditors for a restructuring transaction that will equitize nearly all the Company's funded debt, eliminating over USD4.6 billion of debt, according to Hydrocarbonprocessing.

The restructuring transaction will be implemented through a prepackaged Chapter 11 process that will be financed by a debtor-in-possession financing facility of USD2.81 billion. Subject to court approval, McDermott expects the DIP financing, combined with cash generated by McDermott, to enable the Company to stabilize its cash flows, continue operating in the normal course and fulfill its commitments to key stakeholders, including customers, suppliers, joint-venture partners, business partners and employees.

The Company also has secured committed exit financing of over USD2.4 billion in letter of credit facility capacity and will emerge from Chapter 11 with approximately USD500 million in funded debt. The restructuring transaction will strengthen the Company's balance sheet, normalize its trade debt and position the Company for long-term growth.

All of McDermott's businesses are expected to continue to operate as normal for the duration of the restructuring. McDermott expects to continue to pay employee wages and health and welfare benefits, and to pay all suppliers in full. All customer projects are expected to continue uninterrupted on a global basis.

The Company commenced solicitation of votes from its lenders and bondholders in support of a prepackaged Chapter 11 Plan of Reorganization. The Company intends to commence the prepackaged Chapter 11 filing in the US Bankruptcy Court for the Southern District of Texas later on 22 January. The Company's support from all of its creditor constituencies is memorialized in a Restructuring Support Agreement. The Company plans to move swiftly toward Court approval of the Plan, with confirmation expected within approximately two months from filing.

As part of the restructuring transaction, subsidiaries of McDermott have entered into a share and asset purchase agreement with a joint partnership between The Chatterjee Group and Rhone Group pursuant to which the Joint Partnership will serve as the "stalking-horse bidder" in a court-supervised sale process for Lummus Technology.

Under the terms of the Agreement, the Joint Partnership has agreed, and is committed, to acquire Lummus Technology for a base purchase price of USD2.725 billion. McDermott will have the option to retain or purchase, as applicable, a 10 percent common equity ownership interest in the entity purchasing Lummus Technology. McDermott expects to hold an auction in approximately 45 days to solicit higher or better bids for the Lummus Technology business. Either the Joint Partnership or the winning bidder at the auction will purchase Lummus Technology as part of the Chapter 11 process, subject to regulatory and court approval.

Proceeds from the sale of Lummus Technology are expected to repay the DIP financing in full, as well as fund emergence costs and provide cash to the balance sheet for long-term liquidity.

"The restructuring transaction, which has the full support from all of our funded creditors, including our unsecured bondholders, is further recognition of McDermott's fundamentally solid operating business and proven strategy," said David Dickson, President and Chief Executive Officer of McDermott. "Our record backlog, the majority of which has been booked in the last two years, and high rate of new project awards demonstrates our customers' continued confidence in our business, the demand for our skills and our long-term opportunities ahead."

Mr. Dickson continued, "This financial restructuring will create a sustainable capital structure that matches the strength of our operating business. As a result of the transaction, we are eliminating over USD4.6 billion in debt from our balance sheet and we will emerge with robust liquidity and significant financing to execute on customer projects in our backlog. Throughout this process, which we expect to complete expeditiously, McDermott will continue all business operations as normal and deliver on our commitments to our customers. I would like to thank our customers, employees, suppliers and partners for their ongoing dedication, and our lenders for their continued collaboration in reaching this comprehensive and definitive balance sheet solution. McDermott will emerge a stronger, more competitive company with a solid financial foundation, and we will build upon our reputation as a premier, fully integrated provider of technology, engineering and construction solutions to the energy industry."

As a result of the upcoming Chapter 11 filing, McDermott expects to be delisted from the New York Stock Exchange within the next 10 days. McDermott common stock will continue to trade in the over-the-counter marketplace throughout the pendency of the Chapter 11 process. The shares are proposed to be cancelled as part of McDermott's restructuring.

As MRC informed before, in late November 2019, McDermott International, Inc. was awarded a sizeable technology contract from Baltic Chemical Company (BCC) and a sizeable Extended Basic Engineering (EBE) contract from China National Chemical Engineering No. 7 Construction Company Limited (CC7). The ethane cracking project is owned by Baltic Chemical Complex LLC, a subsidiary of RusGazDobycha. McDermott's Lummus Technology will provide both the Process Design Package (PDP) Engineering and the license for its olefin production and recovery technology. Lummus Technology's proprietary ethylene steam cracking process is the most widely-applied process for the production of polymer-grade ethylene, representing approximately 40 percent of the world's capacity.

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.

McDermott is a premier, fully integrated provider of technology, engineering and construction solutions to the energy industry. For more than a century, customers have trusted McDermott to design and build end-to-end infrastructure and technology solutions to transport and transform oil and gas into the products the world needs today. Our proprietary technologies, integrated expertise and comprehensive solutions deliver certainty, innovation and added value to energy projects around the world. Customers rely on McDermott to deliver certainty to the most complex projects, from concept to commissioning. It is called the "One McDermott Way." Operating in over 54 countries, McDermott's locally focused and globally-integrated resources include approximately 32,000 employees, a diversified fleet of specialty marine construction vessels and fabrication facilities around the world.
MRC

MOSCOW (MRC) -- The bankrupt Philadelphia Energy Solutions is expected to sell its fire-damaged refinery site to real estate developer Hilco Redevelopment Partners, reported Reuters with reference to three sources familiar with the situation.

The agreement between PES and Hilco, a Chicago-based developer, was expected to be announced later on Tuesday. PES and Hilco did not immediately respond to requests for comment. A city official declined to comment.

The sale reduces the possibility that the more-than 1,300-acre (526-hectare) Philadelphia site would be resurrected as an oil refinery, but it is possible that Hilco could lease it to a refinery, biofuels or other heavy industrial operation, the sources said.

The 335,000 barrel-per-day refinery is the largest and oldest on the US East Coast, but was shut after a fire and series of explosions on June 21 last year that destroyed a key processing unit.

There were more than a dozen initial bidders for the site, but only one bidder had publicly stated intentions to revive the site as a refinery. Any sale would have to be approved by the United States Bankruptcy Court for the District of Delaware.

A bankruptcy court hearing is set for Feb. 6, which could confirm any potential sale of the site.

PES had struggled financially for years and had only exited a previous bankruptcy in 2018. More than 1,000 workers were laid off after the site closed last summer.

As MRC wrote previously, in November 2019, US and local officials were opposing the sale procedure for the bankrupt Philadelphia Energy Solutions oil refinery, arguing the plan discourages bidders and keeps the city locked out of the process.

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) -- BASF has recently closed the previously announced transaction to divest its ultrafiltration membrane business to DuPont Safety & Construction (DuPont), according to Kemicalinfo.

The divestiture includes the shares of inge GmbH, the business’ headquarters and production site in Greifenberg, Germany, including all employees, its international sales force, and certain intellectual property previously owned by BASF SE.

Financial details of the transaction are not being disclosed.

The ultrafiltration membrane business had been part of BASF’s Performance Chemicals division. The division’s portfolio includes plastic additives, fuel and lubricant solutions, oilfield chemicals and mining solutions as well as kaolin minerals.

As MRC wrote earlier, BASF, the world's petrochemical major, has restarted its No. 1 steam cracker following a maintenance turnaorund. Thus, the company resumed operations at the plant on September 30, 2019. The plant was shut for maintenance in mid-August, 2019. Located at Ludwigshafen in Germany, the No. 1 cracker has an ethylene production capacity of 235,000 mt/year and a propylene production capacity of 125,000 mt/year.

Ethylene and propylene are feedstocks for producing 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.

BASF is the leading chemical company. It produces a wide range of chemicals, for example solvents, amines, resins, glues, electronic-grade chemicals, industrial gases, basic petrochemicals and inorganic chemicals. The most important customers for this segment are the pharmaceutical, construction, textile and automotive industries. BASF generated sales of around EUR63 billion in 2018.
MRC