Belarus says Azerbaijan could supply up to 1 M tons of oil in 2020

MOSCOW (MRC) -- Belarusian state energy firm Belneftekhim said Azerbaijan’s state oil company Socar could deliver up to 1 million tonnes of oil to Belarus in 2020, reported Reuters with reference to TASS news agency.

Belarus and Russia failed to agree on oil delivery terms for 2020 and major Russian oil companies suspended pipeline oil supplies to Belarus.

In late January 2020, as MRC wrote before, the country's Naftan refinery received 80,000 mt of Norwegian oil to test out new routes and compare losses with the current price of Russian oil.

Lukashenko said in mid-December 2019 that Russia had agreed in principle to supply 20-22 Bcm of gas and 24 million-25 million mt of oil in 2020 to Belarus.

According to ICIS-MRC Price report, lower capacity utilisation at Polymir (part of Naftan) in January did not affect the balance of the local low density polyethylene (LDPE) market, there was no shortage of polyethylene (PE). Local companies partially compensated for the absence of domestic PE by higher shipments from Russia.

Polymir (part of Naftan) is Belarus' largest petrochemical company, producing a wide range of chemical products, such as LDPE, acrylic fibers, products of organic synthesis, hydrocarbon fractions, etc. Polymir was founded in 1968. The producer uses technologies of the largest foreign companies from Great Britain, Japan, Germany, Italy (Courtaulds, Asahi Chemical Co. Ltd, Kanematsu Gosho, SNIA BPD, etc.), as well as the developments of scientific research institutes and design institutes of the CIS countries. The plant"s annual production capacity is 130,000 tonnes.

EPA mulls ways to stabilize biofuel costs for refiners, with waiver program at risk

MOSCOW (MRC) -- The US Environmental Protection Agency said on Wednesday it is mulling new measures to help oil refiners cope with the cost of complying with the nation's biofuel policy, as the agency faces a sweeping legal challenge to a waiver program worth a fortune to the industry, reported Reuters.

The EPA expects to respond soon to a court decision questioning the legitimacy of its waiver program for small refineries, that exempts them from biofuel blending requirements, EPA Administrator Andrew Wheeler said during a congressional hearing.

The announcement would hopefully "quell" the market for biofuel blending credits, called RINs, he said.

"We’re looking for other avenues to provide stability in the program and make sure we don’t have fluctuations in the RIN market," Wheeler said.

The US Renewable Fuel Standard requires refineries to blend billions of gallons of biofuels such as ethanol into the country's fuel pool, or buy credits from those that do. But the EPA can waive refiners' obligations if they prove compliance would cause them financial distress.

The Trump administration has angered the biofuels industry by roughly quadrupling the number of exemptions it grants to refiners. The biofuel industry says these exemptions hurt demand for corn-based ethanol, but the oil industry disputes that and says the waiver program is crucial to protecting blue collar jobs.

In late January, the US Court of Appeals for the 10th Circuit cast doubt on the program, saying the EPA must reconsider some exemptions it has given to refineries.

The court said the EPA had overstepped its authority to grant waivers in the past for HollyFrontier's Woods Cross and Cheyenne refineries and CVR Energy's Wynnewood refinery because the refineries had not received exemptions the previous year. The court said the RFS requires that any exemption granted to a refinery after 2010 must take the form of an extension.

The bulk of waivers granted to oil refineries by the EPA in recent years do not meet that standard. According to EPA data, the agency granted seven biofuel waivers in 2015. That number rose to 35 in 2017 – meaning 28 waivers were given without having been given in a previous year.

The EPA's options now include complying with the court decision only in the states covered by the 10th Circuit, complying with the ruling nationally, or appealing the court decision.

Wheeler on Wednesday said the agency was still reviewing options and consulting the Department of Justice.

Since the court ruling in January, RIN prices have ballooned, with renewable-fuel credits for 2019 climbing nearly 250%. Credits traded at 31 cents each on Wednesday, traders said, up from 9 cents each just before the decision.

A group of US senators, including Oklahoma's James Inhofe, Texas's Ted Cruz and Pennsylvania's Pat Toomey, has been lobbying the administration to appeal the court ruling - or failing that, to take other moves to reduce the regulatory burden on the refining industry.

A letter from the group to Wheeler, dated Tuesday, urges that any retrenchment in the waiver program should be balanced by a reduction in blending volume requirements for 2020, and measures to stabilize RIN credit prices.

Inhofe, Cruz, Toomey and West Virginia's Shelley Moore Capito, all Republican senators, also introduced an amendment on Tuesday to a Senate energy bill that would put a cap on the price of RIN credits at 10 cents per gallon, according to the amendment.

McDermott to proceed with sale of Lummus Technology

MOSCOW (MRC) -- McDermott International, Inc. has announced that the company intends to move forward with the previously announced share and asset purchase agreement to sell all of the Lummus Technology business to a joint partnership between The Chatterjee Group and Rhone Capital (the "Joint Partnership"), as per Hydrocarbonprocessing.

McDermott did not receive a higher or better bid during the solicitation period, and the auction previously scheduled for Monday, March 9, 2020, will not occur.

As announced on Jan. 21, 2020, subsidiaries of McDermott entered into a share and asset purchase agreement (the "Agreement") to sell Lummus Technology to The Chatterjee Group and Rhone Capital, as the "stalking horse bidder," for a base purchase price of USD2.725 billion, subject to higher or otherwise better bids received through a court-supervised auction process. Under the terms of the Agreement, McDermott will have the option to retain or purchase, as applicable, a 10 percent common equity ownership interest in the entity purchasing Lummus Technology.

The sale hearing to confirm the sale of Lummus Technology to the Joint Partnership will take place on Thursday, March 12, 2020, at 9:00 a.m. CT.

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

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 2,093,260 tonnes in 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments rose from both domestic producers and foreign suppliers. The estimated PP consumption in the Russian market was 1,260,400 tonnes in January-December 2019, up by 4% year on year. Supply of almost all grades of propylene polymers increased, except for statistical copolymers of propylene (PP random copolymers).

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.

Sabic raises stake in Clariant to 31.5%

MOSCOW (MRC) -- Sabic has announced that it has purchased additional shares in Clariant, increasing its holding in the company from 24.99% to 31.5%, reported Chemweek.

The move is part of Sabic’s growth strategy to achieve a leadership position among global peers in specialties and increase this segment’s contribution to Sabic. Completion of the transaction is subject to regulatory approvals.

Sabic acquired the original stake in Clariant in 2018 and became its anchor shareholder. At that time, Clariant’s chairman Hariolf Kottmann said that Sabic pledged not to increase its shareholding to the one-third level at which Swiss law would oblige it to make a full offer for the company.

The two companies tried to link in a major, specialties joint venture (JV) by combining Clariant’s additives and high-value masterbatches with parts of Sabic’s specialties business. Clariant was expected to hold a majority stake in the combined company and make a payment to Sabic to equalize the value of their contributions to the JV, but the companies failed to agree on price. Since then, Clariant decided to divest part of the business that was to be included in the JV.

Sabic confirmed late last year that it targets a top-five global position in specialty chemicals, seeking to match its leading position in petrochemicals. Sabic’s specialties business generates annual sales of about $1.8 billion with EBITDA margins of 20%. The goal is to boost overall EBITDA into the “billions” through both organic growth and acquisition, Ernesto Occhiello, executive vice president/specialties, told CW recently.

Sabic is in the process of being acquired by Saudi Aramco. Aramco recently received unconditional approval from the European Union to proceed with the acquisition. This means that Aramco now has all the relevant antitrust approvals and hopes to close the deal in the first half of this year. Aramco is acquiring a 70% stake in Sabic from the Saudi Investment Fund for $69.1 billion. The remaining 30% of Sabic is traded on the Saudi Stock Exchange.

As MRC informed earlier, SABIC Europe, an affiliate of SABIC, conducted a maintenance work at its cracker No.3 at Geleen site in the Netherlands last autumn. The planned maintenance started in September and lasted around 2 months. The company operates two steam crackers in Geleen which are capable of producing 1,250,000 tons/year of ethylene and 675,000 tons/year of propylene in total.

Earlier last year, SABIC took off-stream its SABIC Olefins 4 cracker owing to technical issues on May 10, 2019. Further details on duration of the shutdown could not be ascertained. Located in beek, the Netherlands, the cracker has an ethylene production capacity of 690,000 mt/year and a propylene production capacity of 360,000 mt/year.

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.

Saudi Basic Industries Corporation (Sabic) ranks among the world's top petrochemical companies. The company is among the world's market leaders in the production of polyethylene, polypropylene and other advanced thermoplastics, glycols, methanol and fertilizers.

Clariant AG is a Swiss chemical company and a world leader in the production of specialty chemicals for the textile, printing, mining and metallurgical industries. It is engaged in processing crude oil products in pigments, plastics and paints.

Asia Polymer Corporation eyes maintenance at EVA plant in Taiwan

MOSCOW (MRC) -- Asia Polymer Corp (APC), part of USI Corporation, has planned to shut its ethylene-vinyl-acetate (EVA) plant owing to feedstock availability issues, according to Apic-online.

A Polymerupdate source in Taiwan informed that, the company is likely to halt operations at the plant in March 2020 for a period of around 8-10 days. The exact of date of the shutdown could not be ascertained.

Located at Kaohshiung, Taiwan the EVA plant has a production capacity of 150,000 mt/year.

According to MRC's DataScope report, December 2019 EVA imports to Russia dropped by 4,1% year on year to 3,600 tonnes from 3,760 tonnes a year earlier, and overall imports of this grade of ethylene copolymer into the Russian Federation decreased in January-December 2019 by 17,8% year on year to 39,55 tonnes (48,09 tonnes in 2018).

Asia Polymers Corporation is a Taiwan-based company principally engaged in the manufacture, processing and sales of polyethylene and related products. Its products include low-density polyethylene (LDPE) resins and ethylene-vinyl acetate (EVA) resins. Its LDPE products are applied in the processing of packaging films, the manufacture of plastic products and accessories and the manufacture of plastic films. Its EVA products are applied in the production of foam materials, sports equipment, solar cell films, laminating films and insulation materials for wire and cable. The company operates businesses in China, Southeast Asia, South Asia, Middle East, South Africa, Europe and Northeast Asia, among others. The company is also engaged in investment businesses through its subsidiaries.