ADNOC in talks with Austria’s OMV for potential Borouge-Borealis merger

ADNOC in talks with Austria’s OMV for potential Borouge-Borealis merger

MOSCOW (MRC) -- The UAE is likely to see the emergence of a new petrochemicals firm if the ongoing negotiations between the Abu Dhabi National Oil Co. and Austrian energy firm OMV materialize, said the company.

The two firms have announced that they are currently in talks on the possible creation of a new combined petrochemicals holding entity under their respective existing shareholdings in Borouge and Borealis respectively. The potential merger falls in line with ADNOC’s ongoing value creation and chemicals growth strategy, according to a statement.

Listed on the Abu Dhabi Securities Exchange, Borouge is owned 54 percent by ADNOC, 36 percent by Borealis, and 10 percent held by retail and institutional investors. On the other hand, Borealis is owned 75 percent by OMW and the remaining 25 percent is owned by ADNOC.

While ADNOC is undertaking these negotiations as a majority stakeholder in Borouge, OMV is undertaking the negotiations as a major stakeholder in Borealis. The final decision regarding the proposed merger is subject to Borouge’s and other relevant parties’ governance processes, the statement revealed.

In 2019, OMV announced that it was shifting its attention toward the Middle East in an attempt to make the Austrian oil and gas group a major supplier of plastics, after years of largely banking on low-cost Russia for growth.

At that time, OMV spent more than USD4.5 billion — 40 percent of the group’s mergers and acquisitions budget until 2025 — for oil and gas concessions in the region, a 15 percent stake in ADNOC’s refining business, and a to-be-formed trading joint venture with ADNOC and Italy’s Eni.

“We want to have a fully integrated business model in Abu Dhabi — from the well via the refinery and the petrochemicals all the way to marketing and trade in international markets,” the then CEO of Austria’s second-largest listed company, Rainer Seele, told shareholders.

Founded in 1971, ADNOC seeks to reduce emissions intensity in the UAE by 25 percent by the year 2030 and achieve climate neutrality by 2050. Its vision is to unlock the full potential of the country’s natural and human resources.

MEGlobal raises Aug MEG ACP by USD20/tonne

MEGlobal raises Aug MEG ACP by USD20/tonne

MOSCOW (MRC) -- MEGlobal has nominated its August 2023 monoethylene glycol (MEG) Asian Contract Price (ACP) at USD810/tonne, up by USD20/tonne from its July ACP, the company said.

The price is on a CFR (cost & freight) Asia basis.

Spot MEG prices closed at USD478-487/tonne CFR CMP (China Main Ports) on 14 July.

We remind, MEGlobal nominated its July 2023 monoethylene glycol (MEG) Asian Contract Price (ACP) at USD790/tonne, down by USD50/tonne from its June ACP.

Fire breaks out at Dow Louisiana facility

Fire breaks out at Dow Louisiana facility

MOSCOW (MRC) -- A fire broke out at Dow's Plaquemine chemical facility in Louisiana, the U.S. chemical maker said in a statement late on Friday, said Reuters.

Everyone at the facility was accounted for and the fire was being managed by the company's Emergency Operations Center, Dow Louisiana said in a statement posted on Facebook, adding that they were in contact with officials.

Explosions at the facility in Iberville Parish shook homes in the nearby state capital, Baton Rouge, WAFB TV reported. Plant officials said they were still working to assess the cause of the incident, which began around 9:15 p.m. (0215 GMT), the CBS affiliate said.

Dow did not immediately respond to a Reuters request for comment. The Iberville Parish Council Office Of Emergency Preparedness issued a "shelter in place" for residents in a half-mile radius, officials said in a Facebook post, adding that Dow's air monitoring was not picking up any readings.

We remind, Dow reported a net loss of USD73m for the first quarter (Q1) on a slump in volumes and sales prices in key segments and important geographies. Net sales for the largest US chemical company were down 22% at USD11,851m reflecting, Dow said, declines in all its operating segments driven by lower macroeconomic activity.

Russia sets plans for oil export cuts in August

Russia sets plans for oil export cuts in August

MOSCOW (MRC) -- Russian oil exports from western ports are set to fall by some 100,000-200,000 barrels per day next month from July levels, a sign Moscow is making good on its pledge for fresh supply cuts in tandem with OPEC leader Saudi Arabia, two sources said on Friday, citing export plans said Reuters.

OPEC and major producers including Russia, together known as OPEC+, have been cutting supply since November to support prices. Moscow this month pledged to cut exports by 500,000 bpd in August, while Saudi Arabia extended its 1 million bpd output cuts.

As Russia did not reveal the baseline for its cut, analysts and traders had said it would be difficult to monitor. But according to trading sources and Refinitiv Eikon data, the August cuts will deepen export reductions between May and July that already total 500,000 barrels per day.

July oil loadings from western ports, such as Primorsk and Ust-Luga in the Baltic Sea and Novorossiisk in the Black Sea, are set to fall to 1.9 million bpd this month compared to 2.3 million bpd in June and 2.4 million bpd in May.

Russia exports oil and products via the Pacific and a direct pipeline to China as well as its European ports. Its export plans via eastern export routes are not yet available. Three sources familiar with the matter told Reuters that Russia had instructed oil companies to reduce supply plans for the next month.

Its energy authorities held a meeting with the companies' top managers earlier this week, asking them to make more efforts to guarantee lower exports in August. A spokesperson for Russian Deputy Prime Minister Alexander Novak, who is in charge of Moscow's relations with OPEC+, did not reply to requests for comment.

Novak said on Thursday that Russian companies themselves would decide whether to cut oil production in August, but that Russia's task was to reduce supplies to world markets. Russia's total crude and products exports are estimated at up to 7 million bpd, but data has been secret since the country's actions in Ukraine, which Moscow calls special military operation.

Prior to Russia's announcement of plans to reduce overseas supplies, OPEC+ was only managing oil production, not exports. Igor Sechin, a powerful head of Russia's largest oil producer Rosneft, first hinted at the need to reduce exports as well as output last month.

Russian offline primary oil refining capacity is seen rising by 40% in August from July, making additional oil export cuts next month even tougher for many. If Russia wants to cut oil exports in August from July, companies may postpone some planned works to autumn months to increase domestic oil consumption, or cut oil production, traders said.

We remind, Russian Deputy Prime Minister Alexander Novak said on Thursday that individual companies would decide whether to cut oil production or exports in August but Russia's task was to reduce supplies to world markets. Russia said it would cut oil output by 500,000 million barrels per day (bpd) in August, but it was not clear from which level it would reduce supplies. There were also conflicting signals about whether Russia would cut the corresponding amount of oil production.

BASF to supply neopentyl glycol from Zhanjiang to KHUA

BASF to supply neopentyl glycol from Zhanjiang to KHUA

MOSCOW (MRC) -- BASF and Zhejiang Guanghua Technology Co.,Ltd. (KHUA) have signed a Letter of Intent (LoI) for the supply of Neopentyl Glycol (NPG) from BASF’s Zhanjiang Verbund site to KHUA, said the company.

This agreement marks a significant milestone in the long-term partnership between both parties. KHUA, a reputed manufacturer of saturated polyester resins for the powder coatings industry in China, is planning to build a 100 kilotons per annum (KT/a) production plant for high-end powder coatings resins in Donghai Island, Zhanjiang Economic & Technological Development Zone, where BASF is building a world-scale NPG plant with an annual production capacity of 80,000 metric tons.

Vasilios Galanos, Senior Vice President, Intermediates Asia Pacific, BASF, said, “We are pleased to strengthen our long-standing partnership with KHUA through co-location. We are confident that this strategic move will create synergies that benefit both parties, including enhanced collaboration and supply reliability, faster delivery, access to shared resources, and reduced costs. In addition, this partnership will help to meet the growing demand for eco-friendly powder coatings in China and the wider Asia Pacific region.”

“We have high hopes of BASF’s Zhanjiang Verbund site, which will set a new standard in the petrochemical industry by utilizing clean energy, conserving energy, and reducing emissions. Leveraging our competitive advantages, backed by the strategic partnership with BASF, one of the world’s leading NPG suppliers, as well as Zhanjiang’s unique geographical location, we are confident in the success of our 100KT/a powder coating resin expansion project. This will enable us to reduce VOCs and contribute to a sustainable future with clear blue skies and white clouds,” said Jeffrey Sun, Chairman, KHUA.

With the new NPG plant at the Zhjanjiang Verbund site expected to be available from Q4 2025, BASF’s global NPG capacity will be boosted from 255,000 metric tons to 335,000 metric tons annually, strengthening its position as one of the world’s leading NPG manufacturers. Upon completion, this will be BASF’s fifth NPG plant, following the ones in Ludwigshafen, Germany; Freeport, Texas, United States; as well as Nanjing and Jilin, China.

NPG is an intermediate mainly used in the production of powder coating resins, which are particularly successful for the coating of household appliances and in the construction industry. Due to their low volatile organic compounds (VOC), powder coatings enable their users to comply with VOC emission standards by reducing the release of VOCs by up to 50% compared to liquid coatings. Other applications for NPG include the manufacture of lubricants, plasticizers and pharmaceuticals.

We remind, BASF celebrated the opening of Europe’s first co-located center of battery material production and battery recycling in Schwarzheide, Germany. The inauguration of a state-of-the-art production facility for high-performance cathode active materials and the unveiling ceremony for a battery recycling plant for the production of black mass represent important steps toward closing the loop for the European battery value chain – from the collection of used batteries and the recovery of mineral raw materials to their use in the production of new battery materials. Major step in Europe to participate in the rapidly growing global battery market.