Saudi Aramco, Reliance Industries deal at risk amid oil price rash

MOSCOW (MRC) -- Saudi Aramco’s plan to buy USD15-billion stake in Reliance Industries hydrocarbon business may not go through due to the rising risk of collapsing oil prices, US-based brokerage Bernstein has warned, reported Kemicalinfo.

The unique combination of excess crude oil global supply, 30% drop in demand due to coronavirus crisis and continuous price fall weighed heavily on Aramco’s investment plans.

"With the collapse in oil prices, the risk is rising that the deal will not go has increased although we now value downstream at USD55 billion gross, which is a 20% discount to Aramco valuation," Bernstein said in a report on Wednesday.

Last August, Saudi Aramco entered into a non-binding initial agreement to buy 20% stake in Reliance Industries’ oil to chemicals divisions with an enterprise value of USD75 billion. The oil to chemicals division included RIL’s Jamnagar refining complex, petrochemicals and fuels marketing businesses.

Apart from Reliances oil to chemicals business, Aramco also agreed last year to buy the controlling stake in SABIC from the kingdom’s wealth fund for USD69.1bn, sealing one of the biggest-ever deals in the global chemical industry.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 383,760 tonnes in the first two month of 2020, up by 14% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments increased due to the increased capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market were 192,760 tonnes in January-February 2020, down by 6% year on year. Homopolymer PP accounted for the main decrease in imports.

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.

Reliance Industries is one of the world's largest producers of polymers. Thus, the company produces among others polypropylene, polyethylene and polyvinyl chloride.

Ukraine increased import of injection moulding PET chips by 4% in January-March

MOSCOW (MRC) -- Imports of bottle grade polyethylene terephthalate (PET) in Ukraine increased by 4% year on year to 35,500 tonnes in Q1 from 33,700 tonnes a year earlier, according to MRC's DataScope report.

Last month, imports amounted to 13,100 tonnes, 40% more than the previous month. External supplies of material were at the level of 15,700 tonnes in March last year. The volume of supplies of bottle grade PET from China to Ukraine over the three months of the year fell almost four times: from 26,500 tonnes in January-March 2020 to 6,700 tonnes.

Nevertheless, the supply of Chinese PET chips to the Ukrainian market last month quadrupled and amounted to 2,900 tonnes against 700 tonnes a month earlier, compared to March last year, imports decreased by 76%. The share of imports from China in the total volume amounted to 22% in March against 8% a month earlier and 37% in March 2019.

In the first quarter, the share of Chinese material decreased from 79% in the first three months of last year to 19%. The key suppliers of injection moulding Chinese PET chips to the Ukrainian market were producers Dragon, China Resources Chemicals and Yisheng Petrochemical.
At the same time, import of injection moulding PET chips from Lithuania grew three and a half times in the three months of this year and amounted to 22,000 tonnes. This figure was at 6,100 tonnes in January- March 2019.

Last month, the volume of foreign deliveries from Lithuania to Ukraine decreased by 4% compared to February to 7,200 tonnes against 7,500 tonnes. In February of the previous year, shipments of PET chips were 2,800 tonnes.

The volume of Lithuanian imports to the country in the total supply volume increased to 63% in he first quarter against 18% in January - March 2019. The main supplier of Lithuanian material is the manufacturer Neo Group (21,900 tonnes). The main buyers of Lithuanian bottled PET were Coca-Cola Beverages Ukraine Limited and Retal.


Imports of injection moulding PET into Belarus increased by 8% in January-February

MOSCOW (MRC) - Import deliveries of injection moulding PET chips to the Belarusian market increased by 8% in the two months of this year and reached 3,300 tonnes compared to 3,600 tonnes in January-February last year, said MRC DataScope.

February imports of material into Belarus decreased by 10% and amounted to 1,580 tonnes compared to 1,750 tonnes in February 2020; in February 2019 supply amounted to 1,840 tonnes. The main supplier of material was Russia with a share in the total volume of imports of 89% (3,000 tonnes).

February imports of Russian injection moulding PET chips decreased by 17% and amounted to 1,350 tonnes compared to 1,620 tonnes in January, in February 2020 supply amounted to 1,780 tonnes. Export deliveries of injection moulded PET chips from Belarus in January-February increased by 31% compared to the same period last year and amounted to 2,700 tonnes against 2,000 tonnes year on year.

In February, export shipments of Russian PET fell by 29% compared with January and totalled 1,110 tonnes. IFebruary ofof last year, material from the country was exported in the amount of 1,200 tonnes. Deliveries to Russia increased three times and amounted to 71% (1,880 tonnes) in January-February from the total exports against a share of 27% (560 tonnes) in the same period last year.

Sinopec ZRCC resumes PP production in China

MOSCOW (MRC) -- Sinopec Zhenhai Refinery and Chem (ZRCC), has restarted its No. 3 polypropylene (PP) unit following a turnaround, according to Apic-online.

A Polymerupdate source in China informed that, the company resumed operations at the unit on April 17, 2020. The unit was shut for maintenance on April 7, 2020.

Located at Ningbo city in Zhejiang province, China, the No. 3 PP unit has a production capacity of 350,000 mt/year.

As MRC wrote before, Sinopec ZRCC has also unexpectedly shut its high density polyethylene (HDPE)/linear low density polyethylene (LLDPE) swing plant and monoethylene glycol (MEG) plant due to technical glitches on its ethylene unit on 16 April, 2020. Based in Zhenhai, China, the plant has a 450,000 tons/year HDPE/LLDPE plant and 650,000 tons/year MEG plant. Both plants are expected to remain shut for 7 days.

According to MRC's ScanPlast report, PP shipments to the Russian market were 192,760 tonnes in January-February 2020, down by 6% year on year. Homopolymer PP accounted for the main decrease in imports.

Sinopec corp. is one of the world's largest integrated energy and chemical companies. Business Sinopec Corp. includes oil and gas exploration, production and transportation of oil and gas, oil refining, petrochemical production, production of mineral fertilizers and other chemical products. In terms of refining capacity, Sinopec Corp. ranks second in the world, in terms of ethylene capacity - fourth.

Indorama Ventures supports communities in tackling COVID-19

MOSCOW (MRC) -- With operations on six continents and in over 30 different countries, Bangkok-headquartered petrochemicals giant Indorama Ventures is seeing at close hand the public health and well-being issues caused by the COVID-19 outbreak around the world, said Sustainableplastics.

In response, the company has been providing support to communities and people where the company operates in the belief that ‘we will soon overcome this crisis together,’ said Richard Jones, senior vice president and head of Corporate Communication and Sustainable in a statement released by the company.

“At Indorama Ventures, we recognize that employees are essential to the company’s existence. We have provided health and safety measures worldwide to keep our employees secure since the beginning of the COVID-19 spread. We also act to support medical personnel, patients and affected people in this difficult situation. Our contributions help relieve suffering by managing access to resources that are urgently needed until the gradual unwinding of this pandemic," he declared.

To date, the contributions, in the form of everything from masks, gloves and ventilators to food and funds, have been delivered in eight countries - Thailand, America, France, India, Brazil, Lithuania, Poland and the Czech Republic, and the company will continue to offer additional support through group companies in other countries.

In Thailand, Indorama Ventures donated two million Baht - almost €58,000 - through the IVL Foundation, in support of COVID-19 medical treatment to the Ramathibodi Foundation and King Chulalongkorn Memorial Hospital. These funds will contribute to treating patients and the purchase of supplies, including medicine, medical equipment and utilities that help prevent the further spread of COVID-19.

The company also supplied sanitary necessities - PPE, soap, shampoo, hand sanitiser and fabric masks - to Ramathibodi Hospital, Siriraj Hospital, Chulalongkorn Hospital, Thammasat University Hospital, and Bamrasnaradura Infectious Diseases Institute, which are key institutions handling the COVID-19 outbreak.

Indorama Ventures’ Thai operations, Indorama Polyester Industries PCL in Nakhon Pathom and TPT Petrochemicals in Rayong supported their local communities, offering disinfecting services, food, digital thermometers and more, in the fight against coronavirus.

As MRC reported previously, in February 2019, IVL commenced production of purified terephthalic acid (PTA) and polyethylene terephthalate (PET) at plants it acquired from Artlant PTA in Portugal and EIPET in Egypt. IVL completed the acquisition of the 700,000-t/y PTA facility, located at the Sines industrial complex, in Late 2017. Value of the transaction, which included all equipment, surface rights and employment contracts, was not disclosed.

As per MRC's ScanPlast report, the estimated consumption of polyethylene terephthalate (PET) in Russia increased in January 2020 by 9% year on year. Totally, Russia recycled 55,390 tonnes of PET chips in January (excluding shipments of Russian material to the countries of the Customs Union). PET chips production in Russian in January 2020 totalled 43,200 tonnes.

Indorama Ventures Public Company Limited, listed in Thailand, is one of the world's leading petrochemicals producers, a global manufacturing footprint with 59 sites in 20 countries across Africa, Asia, Europe and North America. The company's portfolio is comprises necessities and high value-added (HVA) categories of polymers, fibers, and packaging. Indorama Ventures has approx. 15,000 employees worldwide and consolidated revenue of USD 8.4 billion in 2017. The company is listed in the Dow Jones Sustainability Index (DJSI).