Shell completes sale of its stake in US Deer Park refinery to Pemex

MOSCOW (MRC) -- Mexican state oil company Pemex on Thursday took control of the Deer Park refinery in Texas, after concluding the purchase of Royal Dutch Shell's half of that plant, reported Reuters with reference to two people familiar with the matter.

Pemex and Shell in May announced the transaction, which is worth almost $600 million and will make the Mexican firm the sole owner of the refinery in Houston. The facility has a capacity to process 340,000 bpd.

"The formal event will take place at around noon on Thursday in Texas," one of the sources said.

Pemex Chief Executive Officer Octavio Romero is on site for the handover, the sources said.

The Mexican company did not immediately respond to a request for comment on the handover, which Reuters reported last week.

After mentioning Pemex's purchase of Deer Park, Mexican President Andres Manuel Lopez Obrador told a news conference on Thursday that he would on Friday announce some "very good news" on energy matters, without providing details.

The sources said the Mexican side carried out the transaction as agreed: USD596 MM for the refinery's assets - equivalent to Shell's 50% stake in the joint venture's debt - as well as the liquidation of the USD596 MM that made up Pemex's stake in the refinery.

As MRC informed previously, Royal Dutch Shell plc. said in November that its petrochemical complex of several billion dollars in Western Pennsylvania is about 70% complete and in the process to enter service in the early 2020s. The plant's costs are estimated to be USD6-USD10 billion, where ethane will be transformed into plastic feedstock. The facility is equipped to produce 1.5 million metric tons per year (mmty) of ethylene and 1.6 mmty of polyethylene (PE), two important constituents of plastics.

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 2,265,290 tonnes in the first eleven months of 2021, up by 14% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,363,850 tonnes in January-November, 2021, up by 25% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding PP random copolymers decreased significantly.

Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.
MRC

1.Oil refining capacity down for first time in 30 years in 2021

MOSCOW (MRC) -- Global oil refining capacity fell for the first time in 30 years last year, as new capacity was outweighed by closures, reported Reuters with reference to the International Energy Agency's (IEA) statement in its monthly oil market report on Wednesday. Refining capacity was down by 730,000 bpd in 2021, the IEA said, but net additions were expected to amount to 1.2 MMbpd in 2022.

MRC

MOSCOW (MRC) -- The January contract price of ethylene was agreed in Europe at the last month's level. However, some European producers announced a slight reduction in export polyethylene (PE) prices for shipments to the CIS markets, according to ICIS-MRC Price report.

Negotiations over January prices of European PE began in the first decade of the month. All market participants said some European producers reduced their export prices of ethylene polymers by EUR30-60/tonne for this month's shipments. But demand for European PE was very weak from companies from the CIS countries, buyers reported significantly lower prices of suppliers of Middle Eastern and North American PE.

January deals for low density polyethylene (LDPE) were discussed in the range EUR1,750-1,820/tonne FCA, whereas last month's deals were done in the range of EUR1,800-1,880/tonne FCA.

Deals for January shipments of high density polyethylene (HDPE) were negotiated in the range of EUR1,430-1,560/tonne FCA versus EUR1,460-1,590/tonne FCA a month earlier.

Many buyers do not plan to purchase PE in January, citing weak demand, as well as more attractive offer prices for PE shipments from other regions. Thus, Middle Eastern HDPE for January shipments was offered at USD1,480/tonne CFR and lower. Suppliers of North American HDPE for February shipments reduced their prices well below USD1,350/tonne CFR.

A similar situation was registered for LDPE shipments.
MRC

MOSCOW (MRC) -- Hanwha Total Petrochemical has reportedly reduced operating rates at its polyethylene (PE) plants in Daesan, South Korean amid the negative profit margins, according to CommoPlast with reference to market sources.

The producer owns PE plants at this site with the combined capacity of 1.1 million mt/year of PE, which have been operating at 70% capacity since early January 2022.

Hanwha Total Petrochemical has yet to set the date to restore normal run rates at its PE units.

At the same time, it is unclear on the operating rates at the company's polypropylene (PP) and polyvinyl chloride (PVC) plants in Daesan at the time of this report.

As MRC informed before, Hanwha Total Petrochemical Co Ltd said in December 2017 that it planned to spend USD331.29 MM on a new factory in South Korea to increase PE output by 400,000 mt by 2019. The joint venture of South Korean conglomerate Hanwha Group and French oil and gas company Total SA in a statement said the factory will raise its PE capacity to 1.12 mln mt/year when completed by the end of 2019. However, the new PE plant started up in January, 2020.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,265,290 tonnes in the first eleven months of 2021, up by 14% year on year. Shipments of all grades of ethylene polymers increased.

Hanwha Group is one of the largest business conglomerate in South Korea. Founded in 1952 as Korea Explosives Inc., the group has grown into a large multi-profile business conglomerate, with diversified holdings stretching from explosives, their original business, to retail to financial services.
MRC

MOSCOW (MRC) -- Hanwha Total Petrochemical has reportedly cut operating rates at its styrene monomer (SM) plants in Daesan, South Korean amid the negative profit margins, according to CommoPlast with reference to market sources.

The producer operates two plants with a capacity of 400,000 tons/year and 650,000 tons/year of SM, respectively, which have been operating at 70% capacity since early January 2022.

The producer has yet to set the date to restore normal run rates at its SM plant in Daesan.

As MRC reported earlier, Hanwha Total Petrochemical declared force majeure on SM supply from its No. 2 unit in Daesan im mid-May, 2019, due to an ongoing labour strike.

According to MRC's ScanPlast report, Russia's overall estimated consumption of PS and styrene plastics was 518,560 tonnes in January-November 2021, up by 14% year on year. November estimated consumption of PS and styrene plastics rose by 7% year on year, totalling 48,620 tonnes.

Hanwha Group is one of the largest business conglomerate in South Korea. Founded in 1952 as Korea Explosives Inc., the group has grown into a large multi-profile business conglomerate, with diversified holdings stretching from explosives, their original business, to retail to financial services.
MRC