BP awarded Petrofac the Operations and Maintenance contract at Rumaila oil field

(Arabian Oil and Gas) -- Petrofac has announced that BP has awarded it and its joint venture partner, China Petroleum Engineering & Construction Corporation, an inspection, maintenance and repair contract worth USD 90 mln for the Rumaila oil field in Southern Iraq.

This is the second deal for Petrofac in Iraq this year. The firm bagged a USD 240 mlon contract from the Shell Petronas joint venture partnership for production facilities at the Majnoon oilfield.

Petrofac's Offshore Engineering & Operations business will lead the one-year contract, which is effective from 28 June 2011, and is worth USD 63 mln to the group. Work will commence following a short transition and the scope of the contract covers rotating machinery, degassing stations and cluster stations. The project is being undertaken in partnership with CPECC, a company which has well established operations and infrastructure in Iraq. As part of the agreement Petrofac's staff will be based at CPECC's accommodation facilities in Rumaila.

The Rumaila oil field, discovered by BP in 1953, is located in Southern Iraq, 32km from the country's border with Kuwait.

MRC

(ICIS) -- Asia's liquid epoxy resin (LER) prices are expected to continue falling in line with the region's weak downstream demand and declining feedstock epichlorohydrin (ECH) and bisphenol A (BPA) prices, industry sources said on Wednesday.

LER prices fell by USD 200/tonne (EUR 140/tonne) over the last four weeks to settle at USD 3.250-3.550/tonne FOB (free on board) northeast (NE) Asia (iso-tank) on 28 June, according to ICIS.

The Chinese government has imposed two interest rate hikes and raised the reserve requirement ratio six times this year, causing the poor performance in the country's downstream markets, several Chinese producers said.

The weak downstream demand in China is causing regional LER prices to decline, as end-users are finding difficulty in raising capital for their purchases, Chinese producers said. LER prices are likely to soften further if downstream demand in China continues to weaken.

MRC

(ICIS) -- Spot prices of linear low density polyethylene (LLDPE) film in the Middle East continued to plunge, taking the cue from the key China market, market players said on Wednesday.
Offers for July LLDPE film cargoes were at USD1.280-1.290/tonne (EUR 896-903/tonne) DEL (delivered) Saudi Arabia and USD 1.320-1.350/tonne DEL Dubai, down USD 100-120/tonne week on week, they said. The GCC offers for July cargoes were about USD 130-150/tonne lower than the prices for June shipments.

Prices have fallen by 13% from the year's peak in of USD 1.520-1.560/tonne DEL Dubai in early April, tracking the slide in Chinese prices, according to ICIS data.

Meanwhile, mounting LLDPE inventory of Middle Eastern producers lead them to substantially lower offers to entice buyers, market sources said, adding that procurement by converters is very limited.

Regional converters do not welcome the price slump in LLDPE as it as creates difficulty in cost management. They said they prefer a gradual price decline.

MRC

(ICIS) -- Synthetic rubber producers in Asia are mulling cutting output or shutting plants for maintenance in July and August, as costs of feedstock butadiene (BD) continued to spike, wiping out margins, industry sources said on Wednesday.

Losses will likely be incurred with BD prices hitting an all-time high of USD 4.000/tonne (EUR 2.800/tonne) CFR (cost and freight) Asia on 24 June. BD prices have shot up by USD 1.200/tonne from 1 April, according to ICIS data.

Korea Kumho Petrochemical Co (KKPC), Asia's largest synthetic rubber producer, plans to halve production at its 410 KTa butadiene rubber (BR) plant next month, said a company source.
⌠Our BR margins are now negative and we have no choice but to cut our BR production output by 50% in July, and may shut down our BR plant in August if the BD price continues to rise, the source said.

MRC

(ICIS) -- US cellulosic ethanol production will sharply fall short of targets mandated under the Renewable Fuels Standard (RFS), an industry executive predicted on Tuesday. Cellulosic ethanol is identical to regular ethanol, except that the product is made from biomass that does not include edible feedstocks, such as corn.

Under the RFS, the US would have to use 10.5bn gal of cellulosic ethanol by 2020, but global production of that type of biofuel will likely only total 500m gal that year, said Phil Madson, president of KATZEN International.

Cellulosic ethanol production is still at the lab stage and there will not be enough of it to meet those targets, he said on the sidelines of the International Fuel Ethanol Workshop (FEW) in Indianapolis.
Madson pointed to a recent move by the Environmental Protection Agency (EPA), which last week proposed reducing the mandate for US cellulosic ethanol consumption for 2012 to 3.45m-12.90m gal, from a previous 500m gal target.

MRC