Production of caustic soda in Russia decreased by 2.6% in January

MOSCOW (MRC) -- In January 2013, the production of caustic soda in Russia decreased by 2.6% compared to December 2012, according to MRC ScanPlast.

Traditionally, the output of caustic soda in January dropped from December indices of the previous years. This January was no exception. Over the first month of 2013, the production of caustic soda at Russian plants made 94,500 tonnes, down 2.6% or 2,500 tonnes from December 2012.

Over the stated period, the production volumes of caustic soda at Kaustik (Volgograd) amounted to about 18,000 tonnes. At the same time, its capacity utilization was 78%.

Kaustik (Sterlitamak) capacities remain significantly underutilized. With the potential capacity of the plant to produce 25,000 tonnes per month, its output made 16,000 tonnes in January, 2013. Meantime, the operating rates of the producer of caustic soda did not exceeded 64%.

Over the stated period, in the structure of the caustic soda production, the share of Kaustis (Volgograd) made 19%, while the shares of SayanskKhimPlast and Kaustik (Sterlitamak) in the total production volumes of the material made 17% each.

MRC

MOSCOW (ICIS-MRC) - Russian producers of low density polyethylene (LDPE) are going to increase price in March further, despite the low demand, according to ICIS-MRC Price Report.

Seasonal factor still puts pressure on the Russian market of low density polyethylene. Demand for finished products is weak, and as a result, converters limit the purchases. After the January decline large converters increased their purchases of LDPE in February, in particular, for the production of shrinkable films, but the demand in the whole is still poor.

In mid-February, many Russian producers raised prices of LDPE by Rb350-2,000/tonne, from January, citing low margins. However, the rise in PE prices has not resulted in increase in consumer activity. Many converters are still not in a hurry to increase the volume of purchases due to the lack of big orders for finished products.

Some Russian makers this week announced increase in PE prices for March. According to unconfirmed information, Kazanorgsintez plans next month to sell the most of its LDPE to the domestic market through the electronic trading system. In addition, the company is going from 18, April to stop its production of LDPE on 30-days turnaround.

The pricespread of LDPE this week was large enough in the market. The offers for 158 PE were voiced in the range of Rb55,500-57,800/tonne, including VAT, CPT Moscow. PE for production of shrinkable films was offered on average at Rb58,000-59,000/tonne, including VAT, CPT Moscow.

MRC

MOSCOW (MRC) - The contentious USD15.1 billion takeover of Canadian oil and gas company Nexen Inc by Chinese state-owned entity CNOOC Ltd closed on Monday, more than seven months after China's largest-ever foreign takeover was announced, said Reuters.

Nexen, based in Calgary, Alberta, said in a statement on Monday that the deal had closed and its shareholders would receive USD27.50 in cash for each Nexen share.

The company said Kevin Reinhart would remain chief executive of Nexen, which will operate as a wholly owned subsidiary of CNOOC.

As MRC wrote earlier, The takeover, originally announced in July, won approval from Canadian regulators in December (see news MRC). Earlier this month, CNOOC overcame its last major hurdle after the deal was cleared by the Committee on Foreign Investment in the United States, which had a say because of Nexen's exploration and production assets in the Gulf of Mexico.

The two companies have not disclosed what conditions were imposed by Canadian and U.S. regulators for the deal to win approval, but one of CNOOC's advisers said the parameters around the assurances were largely in line with expectations.

The Nexen acquisition gives CNOOC new offshore production in the North Sea, the Gulf of Mexico and off western Africa, as well as producing properties in the Middle East and Canada.

In Canada, CNOOC gains control of Nexen's Long Lake oil sands project in the oil-rich province of Alberta, as well as billions of barrels of reserves in the world's third-largest crude storehouse - the oil sands in the province of Alberta.
MRC

MOSCOW (MRC) -- Shell is closing in on the purchase of a raft of LNG assets from Spain’s Repsol with an announcement imminent, a report has claimed, said Upstreamonline.

The Anglo-Dutch supermajor is finally set to snap up the LNG assets of Repsol in Peru and Trinidad & Tobago.

Repsol is set to land around EUR 1.5 billion (USD1.96 billion) in cash from the deal, claims the report, which also indicates Repsol LNG has gross debts of around EUR1 billion.

State player Repsol has had its LNG assets on the sales block for some time with various companies linked with a purchase in recent months. In late January Spanish newspaper Cinco Dias claimed Shell would beat off competition from the likes of GDF Suez, Gaprom and others to claim the prize.

Repsol said in the summer that it will sell assets in Canada where it controls 75% of the Canaport LNG terminal, its 20% stake and sole off-taker position in the 4.4 million tonnes per annum Peru LNG, and its shareholding in Trinidad and Tobago’s Atlantic LNG. However, the Canadian assets are set to be kept out of the mooted Shell deal, Tuesday’s report claims.

Repsol also controls a number of LNG carriers and holds a stake in a Spanish LNG import terminal.

The aim is to help finance investment of EUR19 billion (USD23.3 billion) set in its 2012-2016 business plan to boost the company’s oil and gas production. The company’s liquefied petroleum gas interests in Chile is also part of the programme.

As MRC wrote earlier, spanish energy giant Repsol is in talks with Pemex regarding a new strategic partnership. The new alliance comes as Repsol tries to reorganise its Latin American business, having been stripped of its shares in the now nationalised Argentinian producer YPF.

Repsol S.A. is an integrated Spanish oil and gas company with operations in 28 countries. The bulk of its assets are located in Spain. It is now the 15th largest petroleum refining company according to the Fortune Global 500 list.

Shell, one of the world's largest oil producers, is increasingly focused on natural gas. It has interests in converting it into clean-burning diesel in Qatar, and is building LNG export facilities in Australia, Africa and Canada. Shell Chief Executive Peter Voser said earlier this year that he expects gas to play a significant role over the next 40 years, with much higher growth rates than oil. In a statement, the company said it expects that the Repsol assets, once the deal closes, will provide immediate additional cash flow.

MRC

MOSCOW (MRC) -- European markets were shaken with news about unexpected production outages at several crackers across the region last week which restricted spot olefins availability at a time when maintenance season is right around the corner, said Apic-online.

Nevertheless, weak demand from derivative markets and the softer energy complex overshadowed the impact of lower availability.

Softer feedstock markets combined with scant demand prevented increases in monomer markets despite recently emerging supply issues across Europe, market sources commented.

Among most recent supply issues, LyondellBasell reportedly declared a force majeure on their propylene supplies from their Muenchsmuenster cracker with 400,000 tons/year capacity in Germany due to technical problems. The force majeure was expected to remain in place for around one month. Versalis took their Dunkirk cracker in France offline for repair work with 380,000 tons/year capacity and it is due to remain offline for a week or a little longer.

In addition, PropanChem shut their PDH (propane dehydrogenation) unit located at Tarragona, Spain for a turnaround that will take place between February 7 and end-March, according to market sources in Europe. The unit has a capacity of 350,000 tons/year.

Moreover, the unplanned shutdown at Naphthachimie’s 745,000 tons/year cracker was expected to persist until the first half of March. The maintenance at the Lavera cracker had started in the last month of 2012.

This recent shutdown news came on the top of the fact that the region is set to enter a maintenance season in spring. BASF will shut their cracker in Antwerp, Belgium for a turnaround between April and June. The cracker with 1.08 million tons/year capacity is known to be the largest across Europe, sources noted. Plus, Shell will implement a maintenance at their Moerdijk cracker during March and April. For the medium term, BP Refining and Petrochemicals plans to shut their 540,000 tons/year cracker in Gelsenkirchen for two months of maintenance starting from May.

Nonetheless, restricted supplies via the latest outages in addition to upcoming scheduled shutdowns have yet to find a visible reflection on European olefin markets yet as costs followed a steady to slightly firmer trend last week.

As MRC wrote earlier, the growth in demand for North American PVC from both domestic and foreign markets, as well as scheduled outages for maintenance at Formosa and Georgia Gulf facilities in January-February, have led to a major increase in export prices over the past three months. This week price offers for February shipment of PVC from the U.S. were voiced in the range of USD1,010-1,020/tonne, FAS Houston. For March shipments, some manufacturers reported the need to raise the price by USD40-50/tonne.
MRC