Phillips 66 psts higher Q3 2021 financial results

MOSCOW (MRC) -- Phillips 66, a diversified energy manufacturing and logistics company, has announced third-quarter 2021 earnings of US402 million, compared with earnings of USD296 million in the second quarter of 2021, as per the company's press release.

Excluding special items of USD1.0 billion, primarily an impairment of the Alliance Refinery following Hurricane Ida, the company had adjusted earnings of USD1.4 billion in the third quarter, compared with second-quarter adjusted earnings of USD329 million.

“In the third quarter, we delivered a significant improvement in earnings and cash generation,” said Greg Garland, Chairman and CEO of Phillips 66. “Our Midstream, Chemicals, and Marketing and Specialties businesses continued to deliver strong results. In Refining, we saw a notable improvement in realized margins, operated well and navigated hurricane-related challenges.

“So far this year we have reduced debt by USD1 billion, further strengthening our balance sheet. We recently increased the dividend, reflecting our confidence in the company’s strategy and cash flow recovery, as well as our commitment to a secure, competitive and growing dividend. We will continue to focus on debt repayment, disciplined capital allocation, and delivering attractive shareholder returns.

“Earlier this week we announced an agreement to buy-in Phillips 66 Partners. The transaction simplifies our structure and asset ownership across our integrated portfolio. We believe both PSX shareholders and PSXP unitholders will benefit from the combination.

“In addition, we recently announced our greenhouse gas emissions intensity reduction targets, demonstrating our commitment to sustainable providing energy today and in the future. Our targets are measurable, achievable and meaningful. We believe achieving the targets will drive value for shareholders and other stakeholders. We are expanding our presence in the battery supply chain through our investment in NOVONIX and announced a collaboration with Plug Power to identify and advance green hydrogen opportunities. We will continue to focus on lower-carbon initiatives that generate strong returns.”

The Chemicals segment reflects Phillips 66’s equity investment in Chevron Phillips Chemical Company LLC (CPChem). Chemicals third-quarter 2021 pre-tax income was USD631 million, compared with USD623 million in the second quarter of 2021. Chemicals results in the third quarter included a USD2 million reduction to equity earnings for pension settlement expense and USD1 million of maintenance and repair costs related to Hurricane Ida. Second-quarter results included an USD18 million reduction to equity earnings for pension settlement expense and USD16 million of winter-storm-related maintenance and repair costs.

CPChem’s Olefins and Polyolefins (O&P) business contributed USD613 million of adjusted pre-tax income in the third quarter, compared with USD593 million in the second quarter. The USD20 million increase was primarily due to higher polyethylene sales volumes driven by continued strong demand, partially offset by higher utility costs. Global O&P utilization was 102% for the quarter.

CPChem’s Specialties, Aromatics and Styrenics (SA&S) business contributed third-quarter adjusted pre-tax income of USD37 million, compared with USD82 million in the second quarter. The decrease was driven by lower margins.

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 1,638,370 tonnes in the first eight months of 2021, up by 10% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 989,570 tonnes in the first eight months of 2021, up by 30% year on year. Deliveries of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased, whereas shipments of injection moulding PP random copolymers decreased significantly.

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. Headquartered in Houston, the company has 14,100 employees committed to safety and operating excellence. Phillips 66 had USD56 billion of assets as of Sept. 30, 2021.
MRC

MOSCOW (MRC) -- Austrian plastics packaging firm Alpla will build a new 23,000 square-metre manufacturing plant in Kansas City, Missouri, said the company.

Alpla Group, a global packaging solutions manufacturer and recycling specialist headquartered in Hard, Austria, announced that it has selected the Kansas City region for its new 23,000-square-metre manufacturing plant.

In a facility located at the Blue River Commerce Center in Kansas City, Missouri, the regional organisation Alpla will create 75 jobs while continuing to invest in the city over the next several years.

The new addition in Kansas City will be the company’s fourth site in Missouri and the first dedicated to injection moulding. As such, the manufacturer will produce innovative packaging systems, bottles, caps and injection-moulded parts for a wide range of industries. Led by Cushman & Wakefield, the project is slated to begin in late 2021, with a completion date in the fourth quarter of 2022.

The company cited the Kansas City region’s central location and strong community relationships as key drivers for the decision.

Details about project costs or annual capacities in terms of tonnes or pounds were not disclosed.

As MRC informed earlier, Alpla and Krones developed a returnable PET container that provides an optimal environment for sensitive ESL (Extended Shelf Life) products such as juice and milk in the cold chain.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,638,370 tonnes in the first eight months of 2021, up by 10% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 989,570 tonnes in the first eight months of 2021, up by 30% year on year. Deliveries of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased, whereas shipments of injection moulding PP random copolymers decreased significantly.

Alpla, with about 21,600 employees, produces custom-made packaging systems, bottles, caps and moulded parts at 178 sites across 45 countries. It also operates recycling plants for polyethylene terephthalate (PET) and high density polyethylene (HDPE).
MRC

MOSCOW (MRC) -- Higher tax payments and foreign exchange losses pushed Mexico's Petroleos Mexicanos back into the red in the third quarter, even as crude production recovered somewhat, reported Reuters with reference to the state oil company's statement last week.

Pemex lost 62.8 billion pesos (USD3 billion) compared to a profit of 1.4 billion pesos in the same period last year, and it was also a setback compared to the second quarter, when Pemex logged a net profit of 14.4 billion pesos.

Still, new oil fields in operation since 2019 produced 280,000 barrels per day (bpd), helping to lift average output to 1.74 million bpd in the quarter, Pemex said. Crude processing was up 15% year-on-year in the quarter to 695,000 bpd.

"The timid increase in crude production has not been substantial enough to improve their outlook," said Arturo Carranza, director of energy projects at Akza Consultores.

"Internal factors, like its excessive tax burden, had a negative impact. External factors, like the fluctuation of the dollar versus the peso, also increased costs."

Pemex has the largest tax obligations of any company in Mexico and contributes some 16% to state coffers. Foreign exchange losses were 47 billion pesos for the third quarter, in which Pemex reported revenues of 732.1 billion pesos (USD35.5 billion).

Pemex's financial debt, much of which is issued in dollar-denominated bonds and held widely by investors around the world, stood at USD113 billion. Between October and December, USD1.557 billion in debt repayments are due, the company said.

Alberto Vazquez, chief financial officer, said the company had not ruled out tapping bond markets in 2022, and was in constant talks with the finance ministry. President Andres Manuel Lopez Obrador has pledged to revive Pemex and has pumped billions of dollars in financial support for the company. But some financial experts say it is not enough.

"Instead of seeking to further reduce Pemex taxes, they should reduce their operational and financial burden to bring it in line with that of private upstream companies," said Emily Medina, a fellow at the Energy Policy Research Foundation.

Medina said Mexico should also lower costs in projects like the president's new Dos Bocas refinery, seek efficiency gains and prioritize investment in profitable areas. Lopez Obrador has moved aggressively to strengthen the state's role in the energy sector via Pemex, whose fortunes contrast with those of Brazil's Petroleo Brasileiro (Petrobras), which President Jair Bolsonaro is considering privatizing.

As MRC wrote previously, in September 2021, Brazilian petrochemical producer Braskem said its Mexican subsidiary Braskem Idesa ha reached a new gas supply agreement with Pemex to settle differences between the companies and build a USD400 million ethane terminal.

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 1,638,370 tonnes in the first eight months of 2021, up by 10% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 989,570 tonnes in the first eight months of 2021, up by 30% year on year. Deliveries of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased, whereas shipments of injection moulding PP random copolymers decreased significantly.

Petroleos Mexicanos (Pemex) is a Mexican state-owned oil and gas and petrochemical company. Since the nationalization of the Mexican oil industry in 1938, Pemex has remained a state-owned company and, by law, has exclusive rights to explore and produce oil in the country. Almost 60% of the company's revenues go to the state budget. Petrochemical products include, but are not limited to, polyethylene, polyvinyl chloride.
MRC

MOSCOW (MRC) -- Saudi petrochemicals major SABIC is to restart its Wilton, UK steam cracker after an GDP850m investment, said the company.

With nameplate capacity to produce 865,000 /t of ethylene, alongside 415,000 t/y of propylene, the cracker first commissioned by erstwhile chemical conglomerate ICI in 1979 is Europe’s second largest. Originally run on liquid naphtha, it was later modified to handle both liquid and gas feedstock, including ethane, naphtha, propane and butane.

After being shut down for maintenance a year ago and not restarted, the facility’s future looked in doubt, and several other plants at the Teesside complex, where production activity has been subdued in recent years, had been expected to close.

Local officials, who reportedly negotiated with SABIC and Aramco to help secure the site’s future, said the new investment in the cracker will create hundreds of jobs and support “thousands more.” No update on the fate of the other plants has yet been forthcoming. SABIC also operates an LDPE plant at Wilton.

As MRC informed before, the British government said that Saudi petrochemical firm Saudi Basic Industries Corp (SABIC), the world's fourth-biggest petrochemicals firm, would invest nearly 1 billion pounds (USD1.37 billion) at its Teesside facility in northeast England with the aim of decarbonisation.

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 1,638,370 tonnes in the first eight months of 2021, up by 10% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 989,570 tonnes in the first eight months of 2021, up by 30% year on year. Deliveries of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased, whereas shipments of injection moulding PP random copolymers decreased significantly.

Saudi Basic Industries Corporation (SABIC) ranks among the world's top petrochemical companies. The company is among the world's market leaders in the production of polyethylene, polypropylene and other advanced thermoplastics, glycols, methanol and fertilizers.
MRC

MOSCOW (MRC) -- Trinseo, a global materials company and manufacturer of plastics, latex binders and synthetic rubber, and its affiliate companies in Europe have announced a price increase for all polycarbonate (PC) grades in Europe, as per the company's press release.

Effective November 1, 2021, or as existing contract terms allow, the contract and spot PC prices for the products listed below increased as follows:

- CALIBRE PC resins - by EUR300 per metric ton.

The present price increase is in response to unprecedented and escalating pressure from energy prices and apply to all current agreements and contracts for deliveries as of November 1, 2021 and are subject to further potential adjustments linked to fluctuating energy prices.

As MRC reported earlier, Trinseo last raised its prices for all PC grades in Europe on August 1, 2021 by EUR100 per metric ton.

According to MRC's ScanPlast report, Russia's consumption of PC granules (excluding imports and exports to Belarus) decreased by 14% and reached 62,000 tonnes in January-August 2021 against 72,100 tonnes in the same period of 2020.

Trinseo is a global materials company and manufacturer of plastics, latex and rubber. Trinseo's technology is used by customers in industries such as home appliances, automotive, building & construction, carpet, consumer electronics, consumer goods, electrical & lighting, medical, packaging, paper & paperboard, rubber goods and tires. Formerly known as Styron, Trinseo completed its renaming process in 1Q 2015. Trinseo had approximately USD3.8 billion in net sales in 2019, with 17 manufacturing sites around the world, and approximately 2,700 employees.
MRC