Sinopec 2020 net profit falls 42% on a weaker demand due pandemic

MOSCOW (MRC) -- Sinopec posted a 42.4% decline in net profit last year as the coronavirus pandemic hit demand and caused sharp falls in petrochemical prices, said Reuters.

China Petroleum & Chemical Corp, better known as Sinopec, plans a 23.8% increase in capital spending to 167.2 billion yuan in 2021 following recovery of oil prices and energy demand as the COVID-19 epidemic subsided.

Sinopec expects to spend 66.8 billion yuan on upstream exploration focusing on shale gas development in southwest China and construction of liquefied natural gas (LNG) terminals in coastal areas, up from 56.4 billion yuan last year.

The company on Sunday also reported a 42.9% drop in net profit to 32.92 billion yuan last year, the lowest since 2015, as the pandemic dented fuel consumption amid months-long lockdowns.

In That just beat analysts’ forecast for net profit of 32.3 billion yuan, according to IBES data from Refinitiv.

In 2020, Sinopec’s crude oil throughput fell 4.7% from a year earlier to 236.91 million tonnes, with gasoline and diesel output down 7.7% and 4.3%, respectively, while kerosene production plunged 34.6%.

Its crude oil production was 280.22 million barrels in 2020, down 1.4% year-on-year, and natural gas output at 1,072.3 billion cubic feet, was up 2.3% from 2019.

As per MRC, Sinopec Maoming Petrochemical Company, part of Sinopec, has delayed the turnaround at its No. 2 low density polyethylene (LDPE) unit in Guangdong, China until 24 March. Initially the company intended to take off-stream its 250,000 tons/year No. 2 LDPE unit on 15 March, 2021. However, Sinopec Maoming Petrochemical decided to delay the shutdown slighlty. The outage is expected to last for 63 days.

According to MRC's ScanPlast report, January estimated LDPE consumption in Russia grew to 61,210 tonnes from 43,090 tonnes a year earlier. Russian producers increased their capacity utilisation, and export LDPE shipments decreased. Russia's estimated LDPE consumption was about 563,730 tonnes in 2020, up by 1% year on year.

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.
MRC

Mura Technology started commercial-scale plant to recycle all forms of plastic waste

MOSCOW (MRC) -- Mura Technology, the UK-based technology company, has announced that construction has started on the world’s first commercial-scale plant to use its revolutionary “hydrothermal” process, able to recycle all forms of plastic waste and provide the raw ingredients for a sustainable circular plastic economy, said Hydrocarbonprocessing.

HydroPRS (Hydrothermal Plastic Recycling Solution) is a revolutionary advanced recycling process designed to tackle plastic that cannot currently be recycled and instead ends up polluting the natural environment.

The first plant to use the technology has begun construction in Teesside, UK, to be operational in 2022 and able to process 80,000 tonnes of plastic waste per year. It will form the blueprint for a rapid global rollout that will see one million tonnes of capacity in development worldwide by 2025 – equivalent to nearly half the plastic packaging waste produced in the UK each year. Sites are planned in Germany, the US and Asia.

Mura’s proprietary HydroPRS™ process uses supercritical steam to convert plastics back into the oils and chemicals they were made from, ready to be used for new virgin-grade plastic products. It can recycle all forms of plastic – including ‘unrecyclable’ products such as multi-layer, flexible plastics used in packaging – with no limit to the number of times the same material can be recycled. This means it has the potential to eliminate single use plastic and make the raw ingredients for a circular plastics economy, creating value, not waste.

Global plastic production also creates an estimated 390m tonnes of CO2 every year – equivalent to over 172m cars.It accounts for 6% of global oil consumption today and is set to increase to 20% by 2050.[xi] Advanced recycling processes reduce the need for fossil fuel extraction for virgin plastics. In addition, they can save approximately 1.5 tonnes of CO2 per tonne of plastic recycled compared to incineration.[xii] On completion, the Teesside plant has the potential to eliminate up to 120,000 tonnes of CO2 per year, compared to incineration of the same plastic waste.

As per MRC, Russia's output of chemical products rose in February 2021 by 5.3% year on year. Thus, production of basic chemicals increased year on year by 7.5% in the first two months of 2021. According to the Federal State Statistics Service of the Russian Federation, mineral fertilizers accounted for the greatest increase in the January-February output.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 241,030 tonnes in January 2021 versus 217,890 tonnes a year earlier. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, PP shipments to the Russian market reached 141,870 tonnes in January 2021 versus 123,520 tonnes a year earlier. Supply of homopolymer PP and PP block copolymers increased.
MRC

Lummus targeting petchems opportunities with Saudi company

MOSCOW (MRC) -- Lummus Technology entered into a Distributor Agreement with Saudi ICON Oil & Gas (ICON), a subsidiary of Salem Balhamer Holding, one of The Kingdom of Saudi Arabia’s leading industrial conglomerates, said Hydrocarbonprocessing.

The agreement is for heat transfer opportunities in KSA, and will leverage the strengths of both companies. The agreement is designed to create heat transfer opportunities in KSA, and has the opportunity to strengthen Lummus’ competitiveness and client engagement in KSA.

Under the agreement, Both companies will leverage expertise, capabilities, local knowledge and local resources. ICON will offer the deep knowledge of the local industry and construction experience in The Kingdom. Lummus will offer heat transfer equipment expertise, engineering, design and supply chain capabilities, as well as Lummus’ legacy and brand name.

"Our agreement with ICON enhances our competitiveness and client engagement in KSA, and more broadly, it strengthens our position in The Middle East,” said Fadi Mhaini, Managing Director of Lummus’ Middle East Region. “This is a critical and growing market for petrochemicals, and as a result, it is critical for Lummus to capitalize on these opportunities."

"With ICON, we are partnering with a company that has in-depth relationships with clients and potential clients in The Kingdom’s market,” said Rutger Theunissen, Vice President of Lummus Heat Transfer (LHT). “And like Lummus, ICON has the drive and entrepreneurial spirit to play a key role in KSA’s petrochemical industry."

Asc per MRC, Lummus Technology will design and supply 14 cracking furnaces for the Baltic Chemical Plant (BCP) for the gas chemical complex under construction in Ust-Luga, Russia. The contract for the design and supply of SRT VI furnaces was concluded under the EPC contract with the EPC contractor of the project - China National Chemical Engineering & Construction Corporation Seven, Ltd. (CC7).

Besides, Lummus Technology has announced an award for its ethylbenzene technology from a customer in Jiangsu Province, China. Once complete, the unit will produce 508,000 tonnes/year of ethylbenzene via the EBOne technology.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 241,030 tonnes in January 2021 versus 217,890 tonnes a year earlier. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, PP shipments to the Russian market reached 141,870 tonnes in January 2021 versus 123,520 tonnes a year earlier. Supply of homopolymer PP and PP block copolymers increased

Lummus Technology is a master licensor of proprietary technologies in refining, petrochemicals, gas processing and coal gasification sectors, as well as a supplier of proprietary catalysts, equipment and related engineering services. It has about 130 licensed technologies and more than 3,400 patents and trademarks.
MRC

PPG extends tender offer deadline for all Tikkurila shares

MOSCOW (MRC) -- PPG has extended the tender offer period for all issued and outstanding shares of Tikkurila Oyj to April 14, 2021, according to BusinessWire.

The tender offer period, which commenced on January 15, 2021, was scheduled to expire on March 30, 2021.

PPG is acquiring Tikkurila for EUR34/share, or around EUR1.52bn in cash.

As MRC reported earlier, the European Commission and the Ministry of Economic Affairs and Employment of Finland each have granted approval of the tender offer.

The European Commission’s merger control approval applies without conditions across the European Union, including Poland. The offer remains subject to the receipt of other regulatory approvals outside of the European Union, which PPG anticipates receiving within this extended period, and to additional customary conditions to completion, including the valid tender of shares representing, together with shares otherwise held by PPG and its subsidiaries, more than 66.7% of the outstanding shares.

PPG will provide additional updates on or shortly after the extended tender offer period expires on April 14, 2021, and expects to close the acquisition shortly thereafter.

Additional details about the extension of the tender offer are contained in the attached Nasdaq Helsinki stock exchange release.

We remind that in February 2020, PPG completed its acquisition of Industria Chimica Reggiana (ICR, Reggio Emilia, Italy), a maker of automotive refinish products. Financial terms of the deal, including purchase price, were not disclosed. The deal was announced on 8 January. ICR was founded in 1961 and employs about 180 people. ICR manufactures automotive refinish products, including putties, primers, basecoats and clear coats. It also makes a range of coatings, enamels and primers for light commercial vehicles and other light industrial coatings applications. ICR employs about 180 people and sells its products in more than 70 countries in Europe, Africa, the Middle East, the US and Latin America.

We also remind that Russia's output of chemical products rose in February 2021 by 5.3% year on year. Thus, production of basic chemicals increased year on year by 7.5% in the first two months of 2021, according to Rosstat's data. Last month's production of polymers in primary form in Russia was 861,000 tonnes versus 196,000 tonnes in January. Overall output of polymers in primary form totalled 1,770,000 tonnes over the stated period, up by 8.4% year on year.
MRC

BASF to invest up to USD4.7 bln to cut emissions 25% by 2030

MOSCOW (MRC) -- In pursue of more ambitious goals on its journey to climate neutrality and net zero emissions by 2050, BASF, the world's petrochemical major, is also significantly raising its medium-term 2030 target for reductions in greenhouse gas emissions: the company now wants to reduce its greenhouse gas emissions worldwide by 25% compared with 2018 – and to achieve this despite targeted growth and the construction of a large Verbund site in South China, according to Hydrocarbonprocessing.

Excluding the effects of the planned growth, this means cutting CO2 emissions in half in the current business by the end of this decade. Overall, BASF plans to invest up to EUR1 billion by 2025 to reach its new climate target and a further EUR2 billion to EUR3 billion by 2030. Thus, BASF will invest up to EUR4.0 billion (US4.7 billion) to cut its greenhouse gas (GHG) emissions 25% by 2030 compared with 2018.

In 2018, BASF Group’s worldwide emissions amounted to 21.9 million metric tons of CO2 equivalents. In 1990, this figure was roughly twice as high. The new 2030 emissions goal represents a reduction of approximately 60% compared to 1990 levels, which exceeds the European Union’s target of minus 55%.

“The new climate goals underscore our determination and BASF’s commitment to the Paris Climate Agreement. Climate change is the greatest challenge of the 21st century. In response, we must adapt our processes and our product portfolio. We need to accelerate this transformation now. We must first concentrate on the initial steps of this journey, not the final ones. That is why BASF will increase its use of renewable energies. And we will accelerate the development and deployment of new CO2-free processes for the production of chemicals. With transparency and offerings to systematically and incrementally reduce the carbon footprint of BASF products throughout the entire value chain, we help our customers in all industries to reduce the carbon footprint of their own products,” said Dr. Martin Brudermuller, Chairman of the Board of Executive Directors of BASF SE.

At the heart of the long-term transition toward net zero CO2 emissions by 2050 is the use of new technologies, which will replace fossil fuels such as natural gas with electricity from renewable sources. Most of these technologies are being pioneered by BASF in collaboration with partners and are currently in a pilot stage. Broad scaleup of these technologies will only be fully realizable after 2030. In order to accelerate the avoidance of CO2 emissions prior to that date, BASF also continues to systematically implement continuous improvement processes for existing production plants. In addition, BASF will progressively switch to renewable sources to meet its electricity needs and intends to invest in wind parks to facilitate this.

One of the most important new technologies that BASF is currently developing are electrically heated steam crackers for the production of basic chemicals such as ethylene, propylene and butadiene. These chemicals are building blocks for numerous value chains and are essential for chemical production. Hydrogen is another important feedstock for many chemical production processes. To achieve CO2-free production of hydrogen, BASF is pursuing two processes in parallel: the commercially available water electrolysis and methane pyrolysis, for which BASF has developed a new process technology. Another important lever to increase energy efficiency is the use of electrical heat pumps to produce CO2-free steam from waste heat. BASF’s goal is to work with Siemens Energy to gradually ramp up this technology to industrial scale and use it for waste heat recovery at entire sites.

BASF expects that this switch to climate-neutral production processes will lead to a sharp increase in electricity demand at the group’s major sites, including the largest production site in Ludwigshafen, in the coming decade. From around 2035, the group’s electricity demand is expected to be more than three times higher than it is today.

As MRC reported before, in mid-February, BASF said it was restarting one of its steam crackers at its Ludwigshafen complex in Germany after operations were halted last Wednesday due to a technical issue. The naphtha cracker produces ethylene and propylene, and is one of two crackers on the site. One has a production capacity of 420,000 metric tons/year, with the other's capacity at 240,000 metric tons/year, according to IHS Markit data.

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

According to MRC"s ScanPlast report, Russia's estimated PE consumption totalled 241,030 tonnes in January 2021 versus 217,890 tonnes a year earlier. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, PP shipments to the Russian market reached 141,870 tonnes in January 2021 versus 123,520 tonnes a year earlier. Supply of homopolymer PP and PP block copolymers 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.
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