Gazprom tells Europe gas halt beyond its control

MSOCW (MRC) -- Russia's Gazprom has told customers in Europe it cannot guarantee gas supplies because of 'extraordinary' circumstances, according to a letter seen by Reuters, upping the ante in an economic tit-for-tat with the West over Moscow's invasion of Ukraine.

The July 14 letter from the Russian state gas monopoly said it was retroactively declaring force majeure on supplies dating from June 14. The news comes as Nord Stream 1, the key pipeline delivering Russian gas to Germany and beyond, is undergoing annual maintenance meant to conclude on Thursday. The letter added to Europe's fears that Moscow could keep the pipeline mothballed in retaliation for sanctions imposed on Russia over the war in Ukraine, heightening an energy crisis that risks tipping the region into recession.

Known as an 'act of God' clause, force majeure is standard in business contracts and spells out extreme circumstances that excuse a party from their legal obligations. Gazprom did not respond to a request for comment.

Russian gas supplies have been declining via major routes for some months, including via Ukraine and Belarus as well as through Nord Stream 1 under the Baltic Sea. A trading source, asking not to be identified because of the sensitivity of the issue, said the force majeure concerned supplies through Nord Stream 1.

"This sounds like a first hint that the gas supplies via NS1 will possibly not resume after the 10-day maintenance has ended," said Hans van Cleef, senior energy economist at ABN Amro. “Depending on what ‘extraordinary’ circumstances have in mind in order to declare the force majeure, and whether these issues are technical or more political, it could mean the next step in escalation between Russia and Europe/Germany," he added.

Uniper, Germany's biggest importer of Russian gas, was among the customers who said they had received a letter, and that it had formally rejected the claim as unjustified. RWE, Germany's largest power producer and another importer of Russian gas, also said it has received a force majeure notice.

We remind, Austria is following through on a "use it or lose it" threat to eject Russia's Gazprom from its large Haidach gas storage facility for systematically failing to fill its portion of the capacity there. The country’s industry regulator, E-control, started the process for assuming control over the underground Haidach site using a law which entered into force this month that allows Austria to seize critical storage spaces if operators fail to fill them to at least 10% of capacity.
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The WhiteCycle project, coordinated by French manufacturing company Michelin, was launched July 1, said Recyclingtoday.

It aims to develop a circular economy to convert complex materials containing textiles made of plastic into products with high added value, according to Michelin. Co-financed by the Horizon Europe program of the European Commission, this public/private European partnership includes 17 organizations.

The WhiteCycle ambition by 2030 is to foster the annual recycling of more than 2 million tons of polyethylene terephthalate (PET). Michelin says this project should make it possible to reduce CO2 emissions by approximately 2 million tons and to avoid the landfilling or incineration of more than 1.8 million tons of plastic each year.

Composite postindustrial materials containing polyester (PET) textiles and other components from tires, hoses and multilayer clothes at the end of the products’ life cycles soon could become recyclable, the company says. That material could go into producing new plastic for tires, hoses and clothes.

As per MRC, Nexus Circular and Braskem, the largest polyolefins producer in the Americas, as well as a market leader and pioneer producer of biopolymers on an industrial scale, announced that they have signed a detailed Memorandum of Understanding (MOU) to secure the production output from a new advanced recycling facility planned near Chicago, IL.
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Hexpol has reported a 41% year-on-year increase in second quarter sales, to SEK5,654 mln(EUR534 mln) and earnings (EBIT) up 15% to SEK836 mln, said ERG.

The results for the three months to 30 June, left second-half sales 39% higher at SEK10,827 million and EBIT up 13% to SEK1,611 million. Hexpol continued to handle raw material shortages, transport problems and higher raw materials and energy costs, president and CEO Georg Brunstam said of the second quarter showing.

“Once again, we delivered a very strong quarter,” commented Brunstam, noting “good sales in all markets and all product areas." The Americas region, he said, showed “particularly strong development while sales to automotive-related customers remained pending.

Hexpol’s second quarter figures equated to a 3.4-point lower margin of 14.8%, while its first-half EBIT-margin came in at 14.9% compared to the prior-year 18.3%. “Included in the positive sales development are effects from acquisitions, positive currency effects and increased sales prices,” noted Hexpol’s 15 July results statement.

Leader Brunstam went on to reiterate previously made comments about Hexpol’s preparedness for recovery in vehicle production as well as the group’s continued focus on potential acquisitions.

As per MRC, Hexpol has completed the previously announced acquisition of 100% of Union de Industrias C.A., S.A. (Unica) from Espiga Capital, a Spanish based Private Equity firm. Unica is a significant player in Rubber Compounds in Spain, supplying several demanding customers in the automotive, construction and agriculture sectors.
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Saudi Kayan Petrochemical Company has appointed Metab Zaid Al Shahrani as the company's CEO, effective 24 July 2022, said Argaam.

Al Shahrani succeeded Omar Ali Al Ruhaily, who occupied another position in the manufacturing sector at Saudi Basic Industries Corporation (SABIC), according to a press release. The new appointment was based on the recommendation of the remuneration and nominations committee.

Al-Shahrani holds an Executive MBA from London Business School and a Bachelor’s degree in chemical engineering from King Fahd University of Petroleum and Minerals. He has diverse experience in the industrial and petrochemical sector and has held many leadership positions in SABIC. Previously, he was the president of Saudi Methanol Co. (Ar-Razi).

As MRC wrote previously, Saudi Kayan conducted a 21-day scheduled maintenance at its ethylene glycol (EG) and ethylene oxide (EO) facilities at Jubail, Saudi Arabia, starting on 1 February, 2020. The company said that some of its other facilities that rely on EG and EO feedstocks would also undergo periodic maintenance and improvements.
EO is one of the main feedstocks for the production of purified terephthalic acid (PTA), which is used to produce polyethylene terephthalate (PET). And PET is used in the manufacturing of plastic bottles, films, packaging containers, in the textile and food industries. Saudi Kayan operates a MEG plant in Jubai, Saudi Arabia, which has a production capacity of 566,000 mt/year.

Saudi Kayan Petrochemical Company is a manufacturing affiliate of the Saudi Basic Industries Corporation (SABIC). Headquartered in Jubail Industrial City, Saudi Kayan is a leading chemical maker operating in the Kingdom’s petrochemical sector since 2007.
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Repsol and Navantia Seanergies, Navantia's green energy division, have signed a collaboration agreement to jointly explore business opportunities in renewable hydrogen production in Spain, said the company.

Tomas Malango, Hydrogen Director of Repsol and Javier Herrador, Director of Navantia Seaenergies, signed the agreement in the presence of Francisco Conde, Vice President of the Xunta de Galicia and Regional Minister of Economy and Industry, Raul Blanco, General Secretary for Industry and SMEs, Juan Abascal, Executive Director of Industrial Transformation and Circular Economy of Repsol and Ricardo Dominguez, President of Navantia.

The event was also attended by Jose Minones, the Government delegate in Galicia, Angel Mato, mayor of Ferrol, Valentin Gonzalez Formoso, president of the Provincial Council of A Coruna and Maria Rivas, subdelegate of the Government in A Coruna, among other authorities and representatives of business and social entities.

The signing took place at Navantia's Turbine Factory in Ferrol, a center that will play a key role in this agreement. The two companies have agreed to combine knowledge and efforts for the industrial development of renewable hydrogen. On the one hand, Navantia Seaenergies has announced the start-up of an electrolyzer production line at its Turbine Factory in Ferrol. On the other hand, Repsol will promote the installation of this equipment for the production of renewable hydrogen in its ambition to lead the market in the Iberian Peninsula and thus reach its capacity targets, set at 1.9 GW in 2030.

In this way, both entities seek to position Spain as an international leader in the production of renewable hydrogen, while also contributing to reindustrialization, quality employment and economic development in the country. Juan Abascal, executive director of Industrial Transformation and Circular Economy, stated that "at Repsol we are convinced that initiatives like this are essential to accelerate the deployment of the hydrogen economy in Spain and Europe from a leadership position. This reinforces our commitment to the transformation of the industry through the development of capabilities associated with key technologies to achieve climate neutrality."

"Navantia Seanergies is committed to a model of collaboration and partnership with leading companies in both offshore wind and hydrogen, an energy vector that offers enormous possibilities for decarbonizing the economy and committing to sustainable growth. The manufacture of electrolyzers to produce hydrogen is a new business opportunity with great potential for our Turbine Factory”, said Javier Herrador, director of Navantia Seanergies.

As per MRC, Repsol will build a new plant in Tarragona, with an investment of over EUR35 M for the manufacture of Cross-linkable Polyethylene (XLPE), a polymer used in cable insulation, located between the conductor and the outer protective layers. The plant will have an annual capacity of 27 kt and is scheduled to start in mid-2024. The LSHC (Linear Short Hyperclean) new technology selected for the plant, from Buss AG, will provide a product with very competitive properties, enabling Repsol to complete its product range for cables by incorporating materials for HV (high voltage) and EHV (extra-high voltage) cables.

Repsol is currently the leading producer and consumer of hydrogen on the Iberian Peninsula, and has renewable hydrogen as one of its key transformation pillarsfor achieving its goal of being a company with zero net emissions by 2050. The multi-energy company has its own renewable hydrogen strategy to deploy projects throughout the value chain, with a planned investment of 2,549 million euros by 2030.

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