Mubadala set for exclusive talks with Petrobras to buy Bahia refinery

MOSCOW (MRC) -- Abu Dhabi’s investment fund Mubadala Investment Co will enter into exclusive talks with Petrobras to purchase Brazil’s second-largest refinery, reported Reuters with reference to the Brazilian state-owned oil company's statement in a securities filing.

Reuters was the first to report earlier on Thursday that Mubadala was on an inside track to acquire the refinery, known as Rlam, after beating back competition from India’s Essar Group, according to three people close to the negotiations.

Petroleo Brasileiro SA, as Petrobras is formally known, confirmed in a filing that Mubadala had submitted the best offer and was invited to negotiate.

Mubadala will discuss the contract terms with Brazil’s Petrobras in an exclusive negotiation expected to take several weeks, the people said on Thursday, declining to be named as the talks were not public at the time.

If the contract changes significantly, Petrobras will call back competitors for a second round of bids based on price, the sources said.

Indian conglomerate Essar also made a binding offer for Rlam, as Reuters reported in June, and could compete again for the refinery if Petrobras decides to retender it.

Mubadala and Essar did not immediately respond to requests for comment. Petrobras did not provide any other details outside its securities filing.

A final winner will only be disclosed by Petrobras after all stages are concluded.

Rlam, which is based in the northern state of Bahia and has a 330,000 barrels a day capacity, is the first of a group of eight refineries Petrobras plans to sell to end its near monopoly in fuel processing in Brazil.

As MRC reported previously, Petrobras may need more than a year to divest its stake in Braskem, said Andrea Almeida, Petrobras CFO, in early July. She said during the company’s recent webinar that Petrobras plans to give more time for potential investors to make offers for the company's assets, including for its refineries and stakes at its petrochemical and fuel distribution affiliates. The divestment of Petrobras's stake in Braskem in 2020 would be desirable but "might not be possible" as the COVID-19 pandemic has changed market conditions, she said. The company plans to close part of its refinery sales in 2021. In December, Roberto Castello Branco, CEO of Petrobras, said that he wants to sell the company’s stake in Braskem within a year. Petrobras owns 32.15% of Braskem.

We remind that Braskem is no longer pursuing a petrochemical project, which would have included an ethane cracker, in West Virginia. And the company is seeking to sell the land that would have housed the cracker. The project, announced in 2013, had been on Braskem's back burner for several years.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 595,170 tonnes in the first five month of 2020, up by 10% year on year. Deliveries of all ethylene polymers, except for linear low density polyethylene (LLDPE), rose partially because of an increase in capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market was 457,930 tonnes in January-May 2020 (calculated by the formula production minus export plus import). Deliveris of exclusively PP random copolymer increased.

Headquartered in Rio de Janeiro, Petrobras is an integrated energy firm. Petrobras' activities include exploration, exploitation and production of oil from reservoir wells, shale and other rocks as well as refining, processing, trade and transport of oil and oil products, natural gas and other fluid hydrocarbons, in addition to other energy-related activities.
MRC

MOSCOW (MRC) -- Stepan Co. says that, through subsidiaries in Mexico, it has entered into an agreement with Clariant (Mexico) to acquire Clariant's anionic surfactant business and associated sulfation equipment at Santa Clara, Mexico, reported Chemweek.

The transaction is expected to close in the third quarter of 2020, subject to regulatory approvals and satisfaction of certain other requirements. Financial terms of the transaction were not disclosed.

"The purchase of Clariant's surfactant business in Mexico will enhance our ability to support our customers' growth in the Mexican consumer and functional markets for surfactants," said F. Quinn Stepan, Jr., chairman, president and CEO of Stepan. "We plan to transition manufacturing from Clariant's Santa Clara site to Stepan's Mexican sites located in Ecatepec and Matamoros over the coming months."

As MRC reported earlier, in June 2020, TechnipFMC and Clariant Catalysts entered into a joint development agreement for the demonstration and commercialisation of Clariant’s new state-of-the-art AcryloMax propylene ammoxidation catalyst for the production of acrylonitrile (ACN).

Besides, in May 2020, Clariant’s CATOFIN catalysts was selected by Advanced Global Investment Co. (AGIC), a joint venture between Advanced Petrochemical Company (APC) and SK Group, to build a PDH facility in the Middle East.

Propylene is the main feedstock for the production of polypropylene (PP).

According to MRC's ScanPlast report, PP shipments to the Russian market was 457,930 tonnes in January-May 2020 (calculated by the formula production minus export plus import). Deliveris of exclusively PP random copolymer increased.

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.
MRC

MOSCOW (MRC) -- Thyssenkrupp and BASF said that they have signed a joint development agreement to expand their cooperation on the STAR dehydrogenation process, said Chemweek.

The proprietary technology developed by Thyssenkrupp produces propylene from propane feedstock, or iso-butylene from iso-butane feedstock. Under the collaboration, the partners aim to significantly increase the resource and energy efficiency through targeted improvements in catalyst and plant design. Thyssenkrupp will focus on process and BASF on catalyst development. The aim is to lower plant investment and operating costs and to reduce CO2 emissions in the in the future.

"…This cooperation combines BASF’s expertise as a world-leading catalyst manufacturer with our plant engineering competence,” says Uwe Boltersdorf, head of chemical & process technologies sales at Thyssenkrupp. “With our combined knowhow we can further reduce consumption of energy and resources. New catalyst shapes will enable a smaller reformer design, which also lowers the investment costs of dehydrogenation plants."

Detlef Ruff, senior vice president/process catalysts at BASF, says, “The cooperation between BASF and Thyssenkrupp is another example of our successful approach to collaboration with engineering companies and technology providers. We contribute our unique knowhow as a world-leading catalyst manufacturer, and together with our partners, drive the implementation of new processes and innovative future technologies."

"We will specifically address topics like reducing precious metal content. This lowers catalyst costs and additionally reduces feedstock and energy consumption through increased selectivity," said Adrian Steinmetz, vice president/global chemical catalysts & adsorbents at BASF.

We remind that BASF 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 721,290 tonnes in the first four month of 2020, up by 4% year on year. Low density polyethylene (LDPE) and linear low density polyethylene (LLDPE) shipments grew partially because of the increased capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market totalled 347,440 tonnes in January-April 2020 (calculated by the formula production minus export plus import). Supply exclusively of PP random copolymer increased.

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 EUR59 billion in 2019.

MRC

MOSCOW (MRC) -- US propane and propylene stocks rose by 3.5 million bbl, to 80.3 million bbl last week, reported Chemweek with reference to the Energy Information Administration's (EIA) latest Weekly Petroleum Status Report.

An OPIS survey of analysts, traders, brokers and other market participants forecast an average propane and propylene stock build of 2.24 million bbl. Year-on-year (YOY), stocks have risen by nearly 10%.

Exports were down by 432,000 b/d to 901,000 b/d. YOY, they have fallen by 6.8%.

Imports decreased by 51,000 b/d to 58,000 b/d. YOY, they have fallen by 39.6%.

Propane and propylene product supplied rose by 266,000 n/d to 913,000 b/d. YOY, they have fallen by 27.1%.

Refiner, blender, and gas plant net production increased by 71,000 b/d to 2.26 million b/d. YOY, they have risen by 0.6%.

Stocks in Gulf Coast (PADD 3) region rose by 2.2 million bbl to 48.2 million bbl week-over-week. YOY, they have risen by 13.7%.

The Midwest (PADD 2) rose by 800,000 bbl to 20.1 million bbl. YOY, they have fallen by 11.1%. PADD 1 inventories rose by 600,000 bbl to 8.2 million bbl. YOY, they have risen by 64%. PADDs 4 and 5 inventories fell by 100,000 bbl to 3.8 million bbl. YOY, they have risen by 1.9%.

As MRC informed earlier, Dow Chemical has begun scheduled maintenance at its propane dehydrogenation (PDH)unit in Freeport, Texas. Thus, the planned turnaround at this PDH unit with the capacity of 750,000 mt/y of propylene started in the week ended July 10 and will last 45 days.

Propylene is the main feedstock for the production of polypropylene (PP).

According to MRC's ScanPlast report, PP shipments to the Russian market was 457,930 tonnes in January-May 2020 (calculated by the formula production minus export plus import). Deliveris of exclusively PP random copolymer increased.
MRC

MOSCOW (MRC) -- The Nigerian National Petroleum Corporation (NNPC) has fired 850 workers, many of them from refineries, amidst the coronavirus pandemic, an oil union said, said Hydrocarbonprocessing.

The workers are both skilled and unskilled contractors, including technicians who helped maintain Nigeria’s oil refineries, said Lumumba Okugbawa, general secretary of the Petroleum and Natural Gas Senior Staff Association of Nigeria, speaking on the phone.

The NNPC did not immediately respond to requests for comment. Layoffs in Nigeria’s oil sector are a tense issue, with frequent stand-offs between the NNPC and unions. Nigeria is dependent on crude sales to prop up its struggling economy, now at risk of its worst recession in four decades due to the coronavirus and the pandemic tanking global oil prices.

Yet Nigeria’s refineries are barely operational. Almost all of the country’s fuel supply is processed overseas at great cost, despite Nigeria being Africa’s largest crude producer. In May, the NNPC said it had more than 6,600 staff.

As MRC informed earlier, NNPC has issued a crude-for-product swap tender, the company said. The Direct Sale Direct Purchase (DSDP) tender document did not specify the start date or the quantities involved but said the arrangement would be for one year. The tender is set to close on May 2 at noon (1100 GMT), NNPC said on its official Twitter account. Crude-for-product swap contracts are the country’s main avenue to meet the bulk of its gasoline and gasoil needs.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 721,290 tonnes in the first four month of 2020, up by 4% year on year. Low density polyethylene (LDPE) and linear low density polyethylene (LLDPE) shipments grew partially because of the increased capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market totalled 347,440 tonnes in January-April 2020 (calculated by the formula production minus export plus import). Supply exclusively of PP random copolymer increased.
MRC