Black Sea storm disrupts Russian and Kazakh oil exports

A severe storm in the Black Sea region has disrupted up to 2 million barrels per day (bpd) of oil exports from Kazakhtsan and Russia, according to state's officials and port agent data, said Reuters.

Oil loadings from Novorossiysk and the Caspian Pipeline Consortium (CPC) terminal in nearby Yuzhnaya Ozereyevka have been suspended since last week. Kazakhstan's largest oilfields - Tengiz, Kashagan and Karachaganak - are cutting combined daily oil output by 56% from Nov. 27 as the storm disrupts loadings at CPC, the main export terminal for Kazakh oil, the Kazakh energy ministry said.

The disruption is expected to lower Kazakhstan's oil production by 631,700 metric tons this week, it said, adding that it was unclear when the situation would normalize. Russia's Black Sea port of Novorossiysk, the largest Black Sea outlet for oil and products, remained closed for loadings on Tuesday, according to port agent data seen by Reuters.

Two oil cargoes carrying 80,000 tons each were waiting for improved weather before sailing. Both have been delayed for more than a week, the data shows, along with about 10 tankers yet to start loading. November's initial oil loading plan from Novorossiysk was set at 2.42 million tons (about 580,000 bpd), with actual loadings likely to be around 1.5 million tons, said two traders familiar with the port's operations.

Russian oil companies are expected to re-route most of their volumes to Baltic ports for December, the traders said.

Unlike Russia, Kazakhstan doesn't have many alternative export routes for its oil. Under the current plan, the Kazakh Energy ministry said, output will fall even further by Dec. 3, with the Chevron-led Tengiz field completely halting production and the country's total output decreasing by 126,000 tons per day.

The ministry now sees November oil output, not including gas condensate, at 1.588 million bpd and December production at 1.673 million bpd, down from the previously planned 1.605 million and 1.599 million bpd respectively, but still above the 1.550 million bpd quota.

Kazakhstan's biggest oilfields are developed mostly by Western oil majors such as ExxonMobil, Shell, Eni and TotalEnergies.

We remind, Lukoil and China National Chemical Engineering & Construction Corporation Seven (CC7) have signed a cooperation agreement on creation of a gas chemical facility in the city of Budennovsk in Russia’s Stavropol Region, the Russian oil major reported, said the company. The document provides for the development of project documentation in cooperation with Russian companies. Moreover, an option to use an incentive mechanism is currently being examined in collaboration with the Stavropol region authorities.

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PlantSwitch (Dallas), a startup aiming to produce bioplastics from upcycled agricultural waste, has raised $7.7 million in an early fundraise round, including $2 million from alternative asset manager NexPoint (Dallas), said the company.

The funding will go toward scaling up plastic resin production at PlantSwitch’s recently acquired facility in North Carolina.

PlantSwitch has entered into framework agreements to supply “several nation-wide restaurant and grocery store chains” with bioplastic products, the company said. The company is also aiming to increase the size of its workforce to 50 employees by the end of 2024.

In addition to the $7.7 million funding round, PlantSwitch has received a $4.94 million grant from the US Department of Agriculture.

We remind, TotalEnergies has reported net income of $6.67bn (€6.33bn) in the third quarter of 2023, a marginal 1% increase compared with $6.62bn in the same period a year ago, said the company. In the July–September quarter of 2023, the French oil and gas company reported $54.41bn in revenue from sales, a 16% decline from $64.92bn in Q3 2022.

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Dow announced that its board of directors has declared Final Investment Decision on the Company's Fort Saskatchewan Path2Zero investment to build the world's first net-zero Scope 1 and 2 emissions integrated ethylene cracker and derivatives facility in Alberta, Canada, said Reuters.

The $6.5 billion project, excluding governmental incentives and subsidies, includes building a new ethylene cracker and increasing polyethylene capacity by 2 million MTA as well as retrofitting the site's existing cracker to net-zero Scope 1 and 2 emissions. The investment is expected to deliver $1 billion of EBITDA growth per year at full run rates over the economic cycle while decarbonizing 20% of Dow's global ethylene capacity.

This new capacity will enable Dow to capture growing customer demand in high-value markets, such as packaging, infrastructure and hygiene, among others, with potential additional value captured from commercializing low and zero-emissions products. The project builds on Dow's expertise in successfully implementing large projects, such as its TX-9 cracker in Freeport, Texas, which has delivered more than 15% return on invested capital since its 2017 start-up through best-in-class capital intensity, conversion cost, and low emissions intensity.

The board's approval enables the Company to begin construction in 2024. Capacity additions are expected to come online in phases, with the first phase starting up in 2027, adding approximately 1,285 KTA of ethylene and polyethylene capacity, and the second phase starting up in 2029, adding an additional approximately 600 KTA of capacity.

We remind, Dow could make a final investment decision (FID) on its net zero carbon emissions cracker project at Fort Saskatchewan in Canada’s Alberta province as soon as October. The company announced the Canadian project in October 2021, and in March officials indicated a FID by end 2023.

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Nova Chemicals Corporation is planning to refinance up to USD400 million in senior bonds due in 2024 with a USD400 million private bond offering due in 2028, said the company.

The new bonds carry an interest rate of 8.50% per year, compared with an interest rate of 4.875% per year for the notes that are being retired.

The bonds due in 2024 are the subject of a tender offer, which has been oversubscribed, with an aggregate principal amount of about USD754.5 million validly tendered as of Nov. 22. Nova expects that it will accept USD400 million of these bonds for purchase on a prorated basis.

The new bonds are structured with a redemption feature which allows Nova to redeem up to 10% of the bonds per year at a value of 103% of the bond’s face value. This provision applies during the customary two-year non-call period, when Nova cannot call the bonds in for redemption.

We remind, Amcor, a global leader in developing and producing responsible packaging solutions, today announced a Memorandum of Understanding (MOU) with leading sustainable polyethylene producer NOVA Chemicals Corporation for the purchase of mechanically recycled polyethylene resin (rPE) for use in flexible packaging films. Increasing the use of rPE in flexible packaging applications is an important element of Amcor’s commitment to support packaging circularity.

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Repsol's cracker at Tarragona is offline following a fire in the Olefins plant, according to Plasteurope.

The company is currently investigating the cause, sources said. Repsol has declared force majeure on production from its propylene oxide/styrene monomer (POSM) unit in Tarragona, Spain, after a fire earlier this week forced the company to idle feedstock production at the site, according to market sources. A restart date for the units was not immediately clear.

We remind, Repsol posted net income of EUR 2.785 bn in Jan-Sep 2023 in a context of significantly lower crude oil and gas prices than in Jan-Sep 2022. Investments through Sep 2023 totalled EUR 4.362 bn (+82%), mainly in Spain and the US.

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