Russia expects OPEC+ to raise its output in November

Russia expects OPEC+ to raise its output in November

MOSCOW (MRC) -- Russia expects OPEC+ to raise its output by 400,000 barrels per day (bpd) at the Nov. 4 meeting, as previously agreed, Deputy Prime Minister Alexander Novak told Reuters.

Novak also said he expects oil demand to reach a pre-pandemic level by the end of next year but said it was difficult to predict if oil prices will hit record highs as gas prices have done.

"Demand (for oil) can decline as there is still uncertainty. We also see there is yet another pandemic wave spreading across the world," Novak said.

The Organization of the Petroleum Exporting Countries and allies led by Russia, or OPEC+ as the alliance is known, raised its output targets by 400,000 bpd in September.

As per MRC, crude oil prices reached a ceiling during morning trade in Europe Oct. 27, dropping from bullish fundamentals after the US reported a larger-than-expected stock build. At 10:07 AM (0907 GMT) London time, the ICE December Brent futures contract was USD1.15/b (1.33%) lower from the previous close at USD85.25/b, while the NYMEX December light sweet crude contract was USD1.48/b (1.75%) lower at USD83.17/b.

We remind that in late August, 2021, US crude stocks dropped sharply while petroleum products supplied by refiners hit an all-time record despite the rise in coronavirus cases nationwide, the Energy Information Administration said. Crude inventories fell by 7.2 million barrels in the week to Aug. 27 to 425.4 million barrels, compared with analysts' expectations in a Reuters poll for a 3.1 million-barrel drop. Product supplied by refineries, a measure of demand, rose to 22.8 million barrels per day in the most recent week. That's a one-week record, and signals strength in consumption for diesel, gasoline and other fuels by consumers and exporters.

We also remind that US crude oil production is expected to fall by 160,000 barrels per day (bpd) in 2021 to 11.12 million bpd, the US Energy Information Administration (EIA) said in a monthly report, a smaller decline than its previous forecast for a drop of 210,000 bpd.
MRC

Saudi Aramco plans to develop a new green hydrogen production unit in Saudi Arabia

Saudi Aramco plans to develop a new green hydrogen production unit in Saudi Arabia

MOSCOW (MRC) -- Saudi Aramco is planning to develop a new green hydrogen and ammonia production unit in Saudi Arabia, said the company.

The Saudi Arabia-based firm has signed a memorandum of understanding (MoU) with conglomerate Modern Industrial Investment Holding Group and green hydrogen specialist Intercontinental Energy. These plans were announced at the Future Investment Forum in Riyadh, Saudi Arabia.

The Company is pursuing investment opportunities in projects that could potentially reduce Greenhouse Gas (GHG) emissions, following the recent announcement of its ambition to achieve net-zero Scope 1 and Scope 2 GHG emissions across its wholly-owned operated assets by 2050.

Details of new initiatives were outlined as global leaders and investors gathered at the Future Investment Forum to discusses the future of venture capital and key issues facing the world. The company did not disclose details on capacity, location or the scale of the proposed project.

As it was said earlier, Aramco, Air Products, ACWA Power and Air Products Qudra have signed a deal for the asset acquisition and project financing of a USD12bn air separation unit (ASU)/gasification/power joint venture (JV) at Jazan Economic City in Saudi Arabia. Aramco via its subsidiary Saudi Aramco Power Company (SAPCO) has a 20 percent share in the JV; Air Products 46 percent; ACWA Power 25 percent; and Air Products Qudra 9 percent. Moreover, Air Products’ total ownership position is 50.6 percent by owning an additional 4.6 percent through Air Products Qudra.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,396,960 tonnes in January-July 2021, up by 7% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 841,990 tonnes in the first seven months of 2021, up by 29% year on year. Supply of propylene homopolymers (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of statistical copolymers of propylene (PP random copolymers) subsided.

Saudi Aramco, officially the Saudi Arabian Oil Company, is a Saudi Arabian national oil and natural gas company based in Dhahran, Saudi Arabia. Saudi Aramco's value has been estimated at up to USD10 trillion in the Financial Times, making it the world"s most valuable company. Saudi Aramco has both the largest proven crude oil reserves, at more than 260 billion barrels, and largest daily oil production.
MRC

Phillips 66 to buy remaining stake in partnership for USD3.4 billion

Phillips 66 to buy remaining stake in partnership for USD3.4 billion

MOSCOW (MRC) -- Phillips 66 and Phillips 66 Partners have announced that they have entered into a definitive agreement for Phillips 66 to acquire all of the publicly held common units representing limited partner interests in the Partnership not already owned by Phillips 66 and its affiliates, reported Reuters.

The agreement, expected to close in the first quarter of 2022, provides for an all-stock transaction in which each outstanding PSXP common unitholder would receive 0.50 shares of PSX common stock for each PSXP common unit. The Partnership’s preferred units would be converted into common units at a premium to the original issuance price prior to exchange for Phillips 66 common stock.

“We are announcing an agreement to acquire all outstanding units of Phillips 66 Partners,” said Greg Garland, Chairman and CEO of Phillips 66. “We believe this acquisition will allow both PSX shareholders and PSXP unitholders to participate in the value creation of the combined entities, supported by the strong financial position of Phillips 66.”

The transaction value of the units being acquired is approximately US3.4 B based on Oct. 26, 2021 market closing prices of both companies. Upon closing, the Partnership will be a wholly owned subsidiary of Phillips 66 and will no longer be a publicly traded partnership. Phillips 66 Project Development Inc., a wholly owned subsidiary of Phillips 66 and the holder of a majority of the outstanding common units of the Partnership, has voted its units to approve the transaction.

The terms of the transaction were unanimously approved by the board of directors of the general partner of Phillips 66 Partners based on the unanimous approval and recommendation of its conflicts committee, comprised entirely of independent directors.

As MRC informed earlier, US Refiner Phillips 66 said on 30 September it would cut greenhouse gas emissions by 30% from its operations by 2030, amid mounting pressure on the industry to join the fight against climate change and cut carbon emissions by mid-century.

We remind that US-based Phillips 66 remains open to developing another ethane cracker for its Chevron Phillips Chemical (CP Chem) joint venture, the refiner's CEO said in March 2018.

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 1,396,960 tonnes in January-July 2021, up by 7% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 841,990 tonnes in the first seven months of 2021, up by 29% year on year. Supply of propylene homopolymers (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of statistical copolymers of propylene (PP random copolymers) subsided.

Phillips 66 is a diversified energy manufacturing and logistics company. With a portfolio of Midstream, Chemicals, Refining, and Marketing and Specialties businesses, the company processes, transports, stores and markets fuels and products globally. Phillips 66 Partners, the company’s master limited partnership, is integral to the portfolio. Headquartered in Houston, the company has 14,300 employees committed to safety and operating excellence. Phillips 66 had USD55 billion of assets as of Dec. 31, 2020.
MRC

Neftekhim Ltd resumed PP production

Neftekhim Ltd resumed PP production

MOSCOW (MRC) -- Kazakh Neftekhim Ltd, Kazakhstan's sole polypropylene (PP) producer, has resumed its PP production after the scheduled maintenance works, according to the ICIS-MRC Price report.

According to the clients of the plant, the Kazakh producer began to resume the production of PP on 25 October after carrying out planned maintenance works. The outage began on 27 September.

Neftekhim Ltd was commissioned in 2009. The company produces methyl tertiary butyl ether (MTBE) and polypropylene (PP). The plant's PP production with the capacity of 45,000 tonnes/year was launched in 2011; the plant did not have PP granulation unit then, polymer was produced in the form of powder, which limited its field of application.
MRC

LDPE prices reached another historical record in Russia at the end of October

LDPE prices reached another historical record in Russia at the end of October
MOSCOW (MRC) - Despite the low demand in the spot market and the end of turnarounds, Russian producers continue to raise prices for low density polyethylene (LDPE) for supplies to the domestic market. Last week, prices rose again by roubles (Rb) 1,000-7,000/tonne, according to ICIS-MRC Price Report.

Kazanorgsintez resumed LDPE production after a scheduled shutdown in mid-October, thereby completing the period of scheduled maintenance works of Russian producers this year. The supply of polyethylene increased in October in the spot market, but demand remained at a low level. At the same time, domestic producers increased LDPE prices further for supplies to the domestic market under the pressure of rising cost of raw materials and the situation on foreign markets.

Last week, polyethylene prices rose by Rb1,000-7,000/tonne, breaking another record. Demand for LDPE has remained low in the spot market since September, and is largely due to the another jump in prices.

Quite a lot of companies carry out their purchases of polymer within the framework of annual contracts, and almost completely refused from buying in the spot market due to a significant difference in price. The volume of LDPE imports to Russia decreased in October, in particular, the Belarusian producer Polymir almost halved its supplies to the Russian market.

Nevertheless, this factor did not affect the market balance, low demand offset everything. Nevertheless, despite low demand, spot prices from Russian producers continue to grow. Last week one of the producers raised prices by Rb7,000/tonne. That is why price offers for 158 PE reached Rb164,000/tonne CPT Moscow, including VAT.

Spot prices for the 108 LDPE have grown less significantly and so far do not exceed the level of Rb150,000/tonne CPT Moscow, including VAT.
MRC