Russia defaults on foreign debt for first time since 1918

Russia defaulted on its foreign-currency sovereign debt for the first time in a century, the culmination of ever-tougher Western sanctions that shut down payment routes to overseas creditors, said Bloomberg.

For months, the country found paths around the penalties imposed after the Kremlin’s invasion of Ukraine. But at the end of the day on Sunday, the grace period on about USD100 million of snared interest payments due May 27 expired, a deadline considered an event of default if missed.

It’s a grim marker in the country’s rapid transformation into an economic, financial and political outcast. The nation’s eurobonds have traded at distressed levels since the start of March, the central bank’s foreign reserves remain frozen, and the biggest banks are severed from the global financial system.

But given the damage already done to the economy and markets, the default is also mostly symbolic for now, and matters little to Russians dealing with double-digit inflation and the worst economic contraction in years.

Russia has pushed back against the default designation, saying it has the funds to cover any bills and has been forced into non-payment. As it tried to twist its way out, it announced last week that it would switch to servicing its $40 billion of outstanding sovereign debt in rubles, criticizing a “force-majeure” situation it said was artificially manufactured by the West.

As per MRC, TotalEnergies' Leuna refinery in eastern Germany is reducing its intake of Russian crude oil via the Druzhba pipeline as it has started working on a supply solution via the Polish port of Gdansk. Druzhba feeds not just Leuna but also the PCK Schwedt refinery, majority-owned by Russia's Rosneft. Poyanne said Russian oil use in May had fallen to filling 555,000 tons of refinery capacity at the plant, down from 900,000 tons last October, and 800,000 tons in February.
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Canada is banning the manufacture and import of single-use plastics by the end of the year, the government announced on Monday, in a major effort to combat plastic waste and address climate change, said Washingtonpost.

The ban will cover items like checkout bags, cutlery, straws, and food-service ware made from or containing plastics that are hard to recycle, with a few exceptions for medical reasons. It will come into effect in December 2022, and the sale of those items will be prohibited as of December 2023 to provide businesses in Canada enough time to transition and to deplete existing stocks, the government said.

Single-use plastics make up most of the plastic waste found on Canadian shorelines. Up to 15 billion plastic checkout bags are used each year and approximately 16 million straws are used every day, according to government data.

Prime Minister Justin Trudeau, who vowed in 2019 to phase out plastics, said the ban will eliminate more than 1.3 million tons of plastic waste over the next decade — the equivalent of 1 million garbage bags of trash.
“We promised to ban harmful single-use plastics, and we’re keeping that promise,” Trudeau wrote in a tweet on Monday.

Canada will also prohibit the export of those plastics by the end of 2025 to address international plastic pollution. “By the end of the year, you won’t be able to manufacture or import these harmful plastics,” said Steven Guilbeault, the federal minister of environment and climate change. “After that, businesses will begin offering the sustainable solutions Canadians want, whether that’s paper straws or reusable bags."

"With these new regulations, we’re taking a historic step forward in reducing plastic pollution, and keeping our communities and the places we love clean,” Guilbeault said.

As per MRC, Canada will offer a substantial incentive to companies that invest in carbon capture technologies (CCT) and will set aside as much as USD3 B over eight years to accelerate critical mineral exploration, extraction and processing as it seeks to cut carbon emissions. In this year's budget, Canada is introducing a 60% tax credit for equipment used to capture carbon from the air, and 50% for all other capture equipment, plus a 37.5% credit for transportation and storage equipment.
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ExxonMobil, Grieg Edge, North Ammonia, and GreenH have signed a memorandum of understanding to study potential production and distribution of green hydrogen and ammonia for lower-emission marine fuels at ExxonMobil’s Slagen terminal in Norway, said the company.

The study will explore the potential for the terminal, which is powered by hydroelectricity, to produce up to 20,000 metric tons of green hydrogen per year and distribute up to 100,000 metric tons of green ammonia per year. The hydrogen would be produced from hydro-powered electrolysis.

"Hydrogen has the potential to significantly reduce CO2 emissions in key sectors of the global economy that create valuable products that support modern life,” said Dan Ammann, president of ExxonMobil Low Carbon Solutions. “This study will explore the potential for ExxonMobil’s Slagen fuel terminal to help reduce emissions from Norway’s maritime sector and help achieve society’s net-zero ambitions."

ExxonMobil brings its experience and expertise in developing complex, global projects to advance meaningful greenhouse gas emissions reductions, such as the Slagen terminal opportunity. Grieg Edge, GreenH and North Ammonia will provide their expertise in sustainable maritime transport, hydrogen infrastructure, and green hydrogen and ammonia project development, to study the feasibility for a green hydrogen and ammonia redistribution facility.

"Slagen is an exceptionally suitable location as a central hub for hydrogen and ammonia to the maritime sector,” said Matt Duke, CEO of Grieg Maritime Group. “With the complementary expertise amongst the MOU partners, we have now taken an important next step in our efforts to achieve emissions reductions in the maritime sector."

The International Energy Agency projects hydrogen will meet 10% of global energy needs by 2050, and says it is critical to achieving societal net-zero global emissions. The Norwegian government has published a road map for hydrogen that includes establishing low-emissions hydrogen hubs along the coast of Norway. The Slagen terminal is located at the opening of the Oslofjord, where more than 10,000 ships pass through every year.

"There is high value in producing green hydrogen close to where consumption is,” said Morten S. Watle, CEO of GreenH. “At Slagen, bunkering of hydrogen could be offered straight from the production facility." Green ammonia is made by using renewable power to separate hydrogen from water (electrolysis). When used as a fuel, green ammonia has no carbon and generates zero CO2.

"This MOU underlines our strategy to make ammonia available where there is market demand,” said Vidar Lundberg, CEO of North Ammonia. “We will also assess the potential distribution of ammonia from production facilities south of Slagen."

ExxonMobil is working to commercialize lower-emission technologies and support society’s net-zero ambitions by leveraging the skills, knowledge and scale of the business. In addition to evaluating development of ammonia and hydrogen, the company is pursuing strategic investments in carbon capture and storage and biofuels to help bring those lower-emissions energy technologies to scale for hard-to-decarbonize sectors of the global economy.

ExxonMobil is planning to build one of North America’s largest low-carbon hydrogen production facilities at its Baytown, Texas petrochemical complex and is also studying potential for a similar facility at its Southampton Fawley complex in the United Kingdom.

ExxonMobil is exploring opportunities to use ammonia as a low-emission and high-efficiency energy carrier, particularly to ship and store hydrogen over long distances. Ammonia is typically produced from natural gas and is commonly used as an industrial and agricultural chemical, particularly in fertilizer, but has the potential for wide use in power generation, industrial heat and marine fuels.

As per MRC, Neptune Energy, ExxonMobil subsidiary XTO Netherlands, Ltd., Rosewood Exploration Ltd., and EBN Capital B.V. announced the signing of a Cooperation Agreement to progress the L10 large-scale offshore carbon capture and storage project in the Dutch North Sea. The agreement brings together the technical and commercial capabilities necessary to create a robust carbon storage offering for industrial customers in the Dutch sector. It intends to take the L10 carbon capture and storage development to the concept select stage in 2022 and to have the project FEED-ready by the end of the year, followed by the submission of a storage licence application.

As per MRC, ExxonMobil expects to add approximately 20,000 bpd of light, heavy and extra-heavy lubricant base stocks when upgrades at its Singapore integrated refining and petrochemical complex are complete in 2025.
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Entegris, Inc. and CMC Materials, Inc. announced a definitive merger agreement under which Entegris will acquire CMC Materials in a cash and stock transaction with an enterprise value of approximately USD6.5 billion, said the company.

Under the terms of the agreement, CMC Materials shareholders will receive USD133.00 in cash and 0.4506 shares of Entegris common stock for each share of CMC Materials common stock they own. The total per share consideration represents a 35% premium over CMC Materials’ closing price on December 14, 2021, and a 38% premium to the 10-day volume weighted average share price. Upon completion of the transaction, Entegris shareholders will own approximately 91% of the combined company and CMC Materials shareholders will own approximately 9%.

As per MRC, A new report by the EIA, titled Global Surplus Crude Oil Production Capacity, provides estimates of global surplus crude oil production capacity in both OPEC countries and non-OPEC countries. Preliminary estimates for these data show that, as of May 2022, surplus capacity in non-OPEC countries decreased by 80% compared with 2021. The data show that, in 2021, 1.4 MMbpd of surplus production capacity was available in non-OPEC countries, about 60% of which was in Russia.

CMC Materials is a leading supplier of advanced materials primarily for the semiconductor industry. The addition of CMC Materials’ leading CMP portfolio will broaden Entegris’ solutions set, creating a comprehensive electronic materials offering. The complementary nature of the companies’ technology platforms will enable Entegris to bring to market a broader array of innovative and high-value solutions, at a faster pace. These enhanced materials and process solutions for the most advanced manufacturing environments will help customers improve productivity, performance and total cost of ownership.
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A major new oil refinery under construction on Mexico's Gulf coast will ultimately cost between USD11 B and USD12 B, up from around USD8 B originally estimated by the government, President Andres Manuel Lopez Obrador said Hydrocarbonprocessing.

Lopez Obrador told reporters at his regular morning news conference that the flagship project owned and operated by state-run oil company Pemex will be ready to start producing gasoline in 2023. The leftist president argues that the Olmeca refinery, Mexico's first such new facility built in four decades, is needed to wean the country off of foreign supplies of motor fuels, mostly imported from U.S. refiners.

The refinery, with a crude oil processing capacity of 340,000 barrels per day, will be Pemex's largest once it comes online. Reuters reported in April that the refinery was running over budget and unlikely to come online this year as promised, according to documents and sources close to the project, despite being a presidential priority.

Lopez Obrador conceded that the project's price tag has exceeded its initial budget, but that it has been approved by Pemex's board of directors. "There has been an increase," he said, referring to the project's budget, which he said has grown by between 20%-30%. It was not immediately clear why the percentage increase given did not match the U.S. dollar figures provided.

As per MRC, The Association of American Railroads (AAR) reported U.S. rail traffic for the week ending June 18, 2022. For this week, total U.S. weekly rail traffic was 501,207 carloads and intermodal units, down 2.5 percent compared with the same week last year. Total carloads for the week ending June 18 were 232,921 carloads, up 0.4 percent compared with the same week in 2021, while U.S. weekly intermodal volume was 268,286 containers and trailers, down 4.9 percent compared to 2021.
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