SIBUR closes order book on Rb10 bln exchange-traded bonds

SIBUR closes order book on Rb10 bln exchange-traded bonds

MOSCOW (MRC) -- SIBUR, the largest petrochemical complex in Russia and Eastern Europe, has announced that it has successfully closed the order book on a BO-03 exchange-traded bond issue totalling Rb10 bln, said the company on its site.

The books closed at the lower end of the final guidance range, with the coupon set at 7.65% per annum and the issue enjoying best-in-class distribution at this coupon rate. The issue achieved the narrowest spread to OFZs (ruble-denominated Russian Treasury bonds) on the local bond market in the Company’s history.

The bonds have a par value of Rb1,000 each. The offering price was 100% of the par value. The bonds have a coupon period of 182 days and a tenor of 10 years, with an option to call the bonds or reset the interest rate after four years.

The placement drew strong investor interest, with more than 60 orders and total demand exceeding Rb55 bn. Leading Russian public and private banks, non-government pension funds, investment and asset managers, insurance companies, brokers and retail investors took part in the placement.

Member of the Management Board and Managing Director for Economics and Finance at SIBUR Peter O'Brien commented on the event: “This bond issue is a logical next step in our team’s ongoing work to manage liquidity and optimise the Company’s debt portfolio in line with the current expectations of SIBUR’s projected cash flows. Thanks to the attractive levels of liquidity present on the Moscow Exchange and the speed with which we are able to issue a new instrument in accordance with our established bond documentation, in one day we collected an order book that was more than five times oversubscribed with demand at the tightest spread to OFZs in the Company’s history. This transaction further evidences the level of interest and confidence in SIBUR’s credit profile amongst a wide range of investors including pension funds, financial institutions and individuals.”

The placement was led by Gazprombank, Sberbank CIB and UniCreditBank. Gazprombank also acted as the placement agent. The bonds will begin trading on Moscow Exchange on 13 July 2021 and included in MOEX’s Level 2 Quotation List.

As reported earlier, in May 2020, SIBUR Holding closed the order book for the placement of exchange-traded bonds of two series in the volume of Rb10 and 5 billion, respectively. Based on the results of the book formation, the semi-annual coupon rate was set at 5.50% per annum, which is the lowest coupon among the market issues of corporate issuers in the entire history of the modern Russian public debt market. The nominal value of one bond is Rb1,000. The placement price is 100% of the face value. The maturity date is 10 years from the date of commencement of the placement. The coupon period is 182 days. The term until the offer is 2.5 years.

As MRC informed previously, SIBUR is ready to quickly conduct an initial public offering (IPO) upon receipt of an appropriate decision of shareholders, the company is structurally ready for placement, the head of the company Dmitry Konov said to reporters in sidelines of the international industrial exhibition "Innoprom". At the same time, in case of an IPO, SIBUR may place its shares on the Moscow Exchange, D. Konov added.

It was also reported that in June,, 2021, the international rating agency S&P Global Ratings confirmed the long-term issuer default rating of the Russian petrochemical company SIBUR at "BBB-" with a "stable" outlook.

SIBUR manufactures and sells petrochemical products on the Russian and international markets in two business segments: olefins and polyolefins (polypropylene, polyethylene, BOPP, etc.), as well as plastics, elastomers and intermediate products (synthetic rubbers, expanded polystyrene, PET, etc.)
MRC

QP signs agreement with TotalEnergies to acquire interest in three South African exploration blocks

QP signs agreement with TotalEnergies to acquire interest in three South African exploration blocks

MOSCOW (MRC) -- State-owned Qatar Petroleum (QP) said it signed an agreement with France's TotalEnergies to acquire an interest in three South African offshore exploration blocks as the Gulf state seeks to expand its international footprint, reported S&P Global.

Under the terms of the agreement that are subject to approval by the South African government, QP will own 25% of the South Outeniqua block, 30% of the DWOB block, and 29.17% of the OBD block, the company said in a July 4 statement.

"These acquisitions represent an excellent addition to our South African regional upstream portfolio, and build upon the positive progress following the recent drilling success in the 11B/12B block," Saad al-Kaabi, Qatar's minister of state for energy affairs, and QP CEO, said in the statement.

QP, the world's biggest LNG producer, has moved in the past few years to expand its overseas footprint and recently stepped up its activity to grow a gas-focused worldwide upstream portfolio.

It has boosted its international presence through a number of overseas upstream and downstream deals in countries including Oman, Mexico, Mozambique, Angola, Kenya, Guyana, the US, Brazil, Ivory Coast, Mozambique, Kenya and Morocco.

As MRC infromed previously, in June 2021, TotalEnergies and Novatek have signed a Memorandum of Understanding (MoU) to jointly work on sustainable reductions of the CO emission resulting from the production of liquefied natural gas (LNG) including with the use of renewable power, to develop large-scale carbon capture and storage solutions (CCS) and to explore new opportunities for developing decarbonized hydrogen and ammonia.

We remind that in November 2019, Total disclosed that itis evaluating construction of a new gas cracker at its Deasan, South Korea, joint venture (JV) with Hanwha Chemical.

Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 744,130 tonnes in the first four month of 2021, up by 4% year on year. Shipments of all PE grades increased. At the same time, PP deliveries to the Russian market were 523,900 tonnes in January-April 2021, up by 55% year on year. Supply of homopolymer PP and PP block copolymers increased, whereas shipments of PP random copolymers decreased.

TotalEnergies is a 19.4% shareholder in Novatek and holds a 20% stake in Yamal LNG, a project that started up in December 2017 and produced more than 18.8 million tons of LNG in 2020. The company also holds a 10% stake in Arctic LNG 2, a project currently under construction and on track to deliver its first LNG cargo in 2023.
MRC

Fire broke out at Formosa PP storage tank in Linyuan, Taiwan

Fire broke out at Formosa PP storage tank in Linyuan, Taiwan

MOSCOW (MRC) -- An explosion occurred at a polypropylene (PP) storage tank belong to Formosa Plastics (FPC) in Linyuan, Taiwan in the early hours of 7 July 2021 and caused a flare-up, which was distinguished within an hour, according to CommoPlast with reference to local media reports.

Formosa Plastics Corp (FPC) runs a 230,000 tons/year PP plant in the Linyuan complex.

There are no further details on the affected unit at the time of this report. It is uncertain if the fire incident affects the operation at the PP unit.

As MRC reported earlier, the company encountered a similar issue on 15 May 2020, when the (T-913B) storage tank stowed PP pallets burst into flame due to a faulty safety valve.

We remind that FPC, part of Formosa Petrochemical, conducted a scheduled turnaround at its PP plant in Linyan from mid-June to mid-July 2019.

According to MRC's ScanPlast report, Russia's PP production increased to about 851,100 tonne in first five months of 2021, up by 13% year on year. Three producers raised their output

Formosa Petrochemical is involved primarily in the business of refining crude oil, selling refined petroleum products and producing and selling olefins (including ethylene, propylene, butadiene and BTX) from its naphtha cracking operations. Formosa Petrochemical is also the largest olefins producer in Taiwan and its olefins products are mostly sold to companies within the Formosa Group. Among the company's chemical products are paraxylene (PX), phenyl ethylene, acetone and pure terephthalic acid (PTA). The company"s plastic products include acrylonitrile butadiene styrene (ABS) resins, polystyrene (PS), polypropylene (PP) and panlite (PC).
MRC

Pembina, Inter Pipeline mull petchem project prospects

Pembina, Inter Pipeline mull petchem project prospects

MOSCOW (MRC) -- Canadian midstream energy companies Pembina Pipeline and Inter Pipeline (IPL) are mulling the prospects of dehydrogenation/polypropylene (PDH/PP) production in Alberta province, said the company.

On May 31, 2021, Pembina and Inter Pipeline entered into an agreement (the "Strategic Combination") to create one of the largest and best positioned energy infrastructure companies in Canada. Together the companies' diversified and integrated asset base can support and grow an extensive value chain for natural gas, natural gas liquids and crude oil, from wellhead to end user, that far exceeds anything either company can do separately.

Under the Strategic Combination, Inter Pipeline shareholders will receive 0.5 of a common share of Pembina for each common share of Inter Pipeline. This represents immediate value of USD20.06 per share based on the closing price of Pembina's common shares on June 25, 2021, as detailed in the Joint Circular.

Once completed, the highly complementary asset base is expected to lead to opportunities for significant expansion, customer benefits, material efficiencies and ultimately enhanced value for the combined companies' shareholders. With Pembina and Inter Pipeline shareholders expected to own 72% and 28%, respectively, of the combined company, the significant benefits of the Strategic Combination outlined below will accrue to the shareholders of both companies.

Brookfield’s offer is due to expire on 13 July, if it is not extended again. The IPL shareholder vote on the combination with Pembina is scheduled for 29 July.

As per MRC, the Canadian company Inter Pipeline Ltd will complete the construction of a polypropylene (PP) plant in Alberta province, Canada by the end of the year, and the polypropylene production itself will begin in early 2022. In addition, the construction of a propane dehydrogenation unit is due to be completed next month. The polypropylene production capacity will be 525,000 tonnes.

Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 744,130 tonnes in the first four month of 2021, up by 4% year on year. Shipments of all PE grades increased. At the same time, PP deliveries to the Russian market were 523,900 tonnes in January-April 2021, up by 55% year on year. Supply of homopolymer PP and PP block copolymers increased, whereas shipments of PP random copolymers decreased.

Inter Pipeline Ltd is a multinational oil transportation and infrastructure limited company that ranks among North America's leading natural gas production and processing companies. It is one of the top 100 companies in Alberta in terms of earnings and assets.

Pembina Pipeline has been a gas supplier to the North American power system for over 60 years. Pembina owns and operates pipelines that transport a variety of hydrocarbon fluids, including conventional and synthetic crude oil and others, produced in Western Canada and North Dakota.
MRC

Roehm to build MMA plant on US Gulf Coast

Roehm to build MMA plant on US Gulf Coast

MOSCOW (MRC) -- Roehm intends to begin construction of its 250,000 tonnes per year methyl methacrylate (MMA) plant on the US Gulf Coast, with completion scheduled for 2023, the manufacturer said.

Integrated into the OQ Chemicals manufacturing facility in Bay City, Texas, the plant will be the first to commercialize Roehm's low energy and wastewater LiMA MMA technology on an industrial scale.

Separated from its former parent company Evonik and acquired by private equity firm Advent International in early 2019, Roehm has already hired Wood to provide engineering, procurement and construction (EPC) services for the project.

OQ, formerly Oxea, signed a Memorandum of Understanding (MoU) with the project firm in February 2021, including agreements to integrate the plant into its existing site and provide raw materials, utilities and services at Roehm's site.

When the market first spoke about the project in question in 2019, sources said the Baytown plant could replace the company's manufacturing facility in Fortier, Louisiana.

Mitsubishi Chemical Corp (MCC) is also considering building an MMA facility from economically viable US ethylene instead of using acetone as a feedstock. Construction of a 350,000 tonnes per year plant in Geismar, Louisiana is under consideration. The final investment decision should be made in mid-2022.

The main sector consuming approximately 75% of MMA is the production of polymethyl methacrylate acrylic plastics (PMMA). Methyl methacrylate is also used to produce methyl methacrylate-butadiene-styrene copolymer (MBS), used as a modifier for polyvinyl chloride (PVC).

According to ICIS-MRC Price Report, global polyvinyl chloride (PVC) prices are no longer putting pressure on the Russian market. During the summer months, an acute shortage is the main factor behind the price rise in Russia. At the same time, the shortage of resin intensified in July due to scheduled shutdowns for maintenance at the two largest plants. An acute shortage led to another wave of price increases, and July PVC prices increased by Rb5,000-47,000/tonne, reaching new record levels.


MRC