Saudi Kayan swings to Q2 net profit

Saudi Kayan Petrochemical posted a second-quarter net profit of Saudi riyal (SR) 781m (USD208m), reversing a loss in the same period last year on the back of higher product prices and lower cost, said the company.

The company swung into a net profit for the period despite higher average cost of feedstock and reduced sales volumes and production due to a turnaround, the company said in a filing on the Saudi Exchange on 26 July.

We remind, Saudi Kayan Petrochemical Company has appointed Metab Zaid Al Shahrani as the company's CEO, effective 24 July 2022. 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.

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Japan's second-biggest oil refiner Idemitsu Kosan Co restarted the 150,000 bpd crude distillation unit (CDU) at its Hokkaido refinery in northern Japan on July 25 after maintenance, said Hydrocarbonprocessing.

The company said last month that it had begun a minor turnaround at the Hokkaido refinery in late May, without indicating whether the CDU had been shut as part of the work.

An RIM Intelligence report said the unit was shut on May 30.

As MRC wrote before, in early February, Idemitsu Kosan had no plan to give fresh financial aid to Vietnam's Nghi Son Refinery and Petrochemical (NSRP), which ha cut production to 80% of capacity due to a funding problem. Vietnam's largest refinery avoided a lengthy shutdown that month after a major shareholder secured short-term funding following a disagreement between shareholders about financing for crude, having earlier cut its run rate.

We remind that in October 2018, Idemitsu Kosan finalized a deal to buy out Showa Shell Sekiyu through a share swap in a deal worth about USD5.6 billion.
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Borealis suspends construction in Kallo after serious allegations against contractor and continues to support Belgian authorities in investigation, said the company.

Restart of work on mega project postponed to allow time for investigation and additional social compliance measures
In light of recent developments and media reports of alleged misconduct by its contractor IREM at the construction site for the new propane dehydrogenation (PDH) plant in Kallo, Belgium, on July 27 Borealis decided to halt the construction of its Kallo PDH for three days and suspended the contract with IREM-Ponticelli, the contractor responsible for the piping and mechanical work for the construction of the new PDH project. As the thorough investigation and implementation of additional compliance measures is ongoing, Borealis decided on 1 August 2022 to extend the shutdown for its PDH construction site in Kallo until further notice. Project work will be resumed step by step.

For large construction projects, Borealis works together with specialized construction companies and pays market prices according to Western European standards. Contracts concluded with business partners and contractors contain safeguard clauses that oblige them to comply with all applicable laws, in particular social legislation.

In the specific case, the mega-project PDH in Kallo, Borealis commissioned the company IREM with work and included the protective clauses applicable to all business partners, in particular the Business Ethics Code of Conduct, in the agreement. At the end of June 2022, Belgian social inspectors came to the site and carried out standard interviews on a number of works on the PDH site. The team involved in this review fully cooperated and was not aware of allegations of human trafficking at any time.

It was only after the intervention of the Belgian authorities in mid-July that Borealis realized that there might have been social fraud on a large scale. The extent of the social fraud and the possibility of human trafficking was not evident earlier and only became clear later in particularly alarming press reports end of July 2022.

Borealis has a zero-tolerance policy when it comes to endangering the safety of its own and contractors' employees and strongly condemns any form of human rights abuse. As a result, Borealis immediately suspended the contract with IREM-Ponticelli on 27 July 2022 due to IREM's alleged breach of several terms of the contract and the ongoing investigation by the Social Inspectorate. Borealis is investigating this matter with the highest priority and is working closely with the Social Inspectorate to advance their investigation. At the same time, Borealis engaged an external law firm to analyse the case.

As per MRC, Borealis lifted the cracker products force majeure, declared on 23 June, on 9 July, following the successful restart of the cracker. A company spokesperson said the cracker was back in normal operations. Borealis (Vienna, Austria) has declared force majeure on all cracker products from its ethane-fed steam cracker at Stenungsund, Sweden, after encountering technical difficulties during a restart of the facility following a maintenance turnaround.
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The Novoshakhtinsk oil refinery in Russia's southern Rostov region has fully resumed operations after it was struck by drones in June, said Hydrocarbonprocessing.

The plant said in June that it was hit by two drones flying from the direction of Ukraine, prompting it to suspend production.

We remind, Gazprom stopped supplying Latvia with gas, the Russian gas giant announced on Saturday citing a violation of the conditions for gas withdrawal. The move comes as a response to the announcement of Latvian energy firm Latvijas Gaze, which said it was buying gas from Russia, but not from Gazprom. During the last month, approximately one terawatt-hour of natural gas was delivered to Latvia from Russia and the payment was made in euros rather than in roubles as required by Gazprom.
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INEOS Styrolution, the global leader in styrenics, announced today that it has entered into an agreement for the sale of its entire shareholding interest in INEOS Styrolution India to Shiva Performance Materials, said the company.

Shiva Performance Materials Private Limited is part of the Shiva Group, which has businesses in specialty chemicals for pharmaceuticals, agrochemicals and other intermediates.

Upon completion of the transaction, Shiva Performance Materials will acquire INEOS Styrolution’s 61.19% equity interest in INEOS Styrolution India.

Steve Harrington, CEO INEOS Styrolution, comments: “The business continues in Shiva Performance Materials’ experienced hands, serving the existing customer base and seeking future growth potential to enhance the Company’s current position in the Indian market".

The transaction triggers a mandatory tender offer (MTO) and the completion is subject to fulfillment of customary conditions.

As per MRC, INEOS and Sinopec have today signed three back-to-back deals worth a combined value of USD7bn.
These landmark agreements are expected to generate a combined turnover of around USD10bn from 7 million tonnes of capacity. The three agreements will significantly reshape Ineos’ petrochemicals production and technology in China.
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