Novatek enters Polish gas market

MOSCOW (MRC) -- Russian independent gas producer Novatek has joined the Polish gas market, purchasing storage facilities and a retail network for liquified petroleum gas from Statoil Fuel & Retail Polska, said Petrolworld.

The new assets will allow Novatek to tap enter an LPG market worth an estimated EUR300m per year. Local subsidiary Novatek Polska announced the purchase, but did not disclose financial details. The distribution network includes 300 stations.

Novatek exported more than half of its 470,000 tonne production to Poland last year.

As MRC wrote earlier, Total has increased its stake in Novatek to 16%, Novatek said in a statement. Total took a 12% stake in Novatek in 2011, saying it would increase its share up to 19.4% in three years. Novatek's main shareholders are its Chief Executive, Leonid Mikhelson, and oil trader Gennady Timchenko.

Novatek is Russia's largest independent gas producer and the second-largest natural gas producer in Russia. Founded in 1994, Novatek is engaged in the exploration, production, processing and marketing of natural gas and liquid hydrocarbons. Its upstream activities are concentrated in the prolific Yamal-Nenets Autonomous Region, which is the world's largest natural gas producing area and accounts for approximately 90% of Russia's natural gas production and approximately 17% of the world's gas production. Novatek is an open joint stock company established under the laws of the Russian Federation.
MRC

MOSCOW (MRC) -- German engineering giant Siemens has scooped a contract to supply a large number of turbines and transformers to the USD20 billion Yamal liquefied natural gas project in Russia, said Upstreamonline.

The deal will see Siemens design, build, deliver, install and commission eight SGT-800 industrial gas turbines for the power station which is set to supply the project with heat and electricity.

Four of the turbines will have waste heat recovery units with the plant to have electrical output of 376 megawatts.

Siemens will also provide nine step-up transformers for the power station following the order from Rostec State Corp subsidiary Technopromexport.

A spokesperson for the German group was unwilling to disclose the value of the contract, citing a confidentiality agreement.

Yamal LNG is envisaged as a 16.5 million tonnes per annum scheme using gas from the giant South Tambeskoye field, which held proven and possible reserves of 907 billion cubic metres of gas as of 31 December 2012.

Construction of the three-train liquefaction project is due to be completed by the end of 2016, with first cargoes targeted for the following year.

Russian independent Novatek is currently an 80% holder of the project with France’s Total in for 20%. However, China National Petroleum Corporation (CNPC) recently penned a framework agreement with Novatek to take a 20% stake which also paves the way for CNPC to conclude a long-term purchase deal for 3 million tpa of LNG.

MRC

MOSCOW (MRC) -- Global capital expenditure in the liquefied natural gas sector will more than double to around USD228 billion in the 2013-2017 period, compared to the previous five years, according to consulting firm Douglas Westwood, said Hydrocarbonprocessing.

It said the increase in capital expenditure includes onshore and offshore projects to liquefy gas for export, import terminals to regasify LNG and LNG carriers for transporting the fuel, with Australasia and North America bringing most of the new supply in to the market.

LNG liquefaction projects will drive expenditure at an estimated USD143 billion, while spending on import terminals is forecast at around USD50 billion, and LNG carriers at around USD35 billion, it said.

"Spending will peak in 2015 and decline slightly in 2016 and 2017. This is due to the surge of Australian LNG export projects reaching completion," Michelle Gomez, author of the firm's World LNG Market Forecast said.

The Middle East, one of the world's top LNG exporters, will see very little expenditure in the 2013-2017 period, while Australian LNG spending will fluctuate, Douglas Westwood said.

As MRC wrote before, lower house of parliament in Russia may consider a bill to liberalize the exporting of LNG in its autumn session. "It is planned that it will be reviewed in the fall session of this year by the State Duma Alexander Novak told reporters. The announcement comes after President Vladimir Putin said in late June that Russia will move towards the liberalization of LNG exports.

MRC

MOSCOW (MRC) -- Specialty chemicals company Westlake Chemical Corp. second-quarter 2013 profit shot up 26% year over year to USD145.8 million as the company gained from lower cost natural-gas based ethylene production stemming from North American shale gas and oil production,said Nasdaq.

Revenues rose roughly 3% year over year to USD939 million in the quarter, beating the Zacks Consensus Estimate of USD932 million. Westlake benefited from increased sales volumes for PVC resin, building products and caustic in the quarter, which offset lower feedstock and ethylene sales volumes.

Westlake saw higher olefins and vinyls integrated product margins in the quarter, helped by lower feedstock costs. It also gained from sequentially higher sales prices for polyethylene and PVC resin and increased volumes for most of its major vinyls products.

Sales from the Olefins segment fell roughly 7% year over year to USD623.3 million. Income from operations jumped 20% year over year to USD187.7 million in the quarter on higher olefins integrated product margins owing to lower feedstock costs.

The Vinyls segment recorded sales of USD315.7 million in the reported quarter, a 31% year-over-year surge. Income from operations more than doubled year over year to USD52.9 million, attributable to higher vinyls integrated product margins and increased volumes for major products.

Westlake ended the quarter with cash and cash equivalents of USD625.5 million, down 44% year over year. Long-term debt stood at USD763.8 million, essentially flat on a year-over-year basis. Net cash provided by operating activities was USD255.5 million in the first half of 2013, down 19% year over year. Capital expenditures were USD297.9 million for the period.

During the second quarter, Westlake closed its acquisition of CertainTeed Corporation's Pipe and Foundation Group ("PFG") for about USD175 million in cash. The acquisition is a strategic fit for Westlake as it enhanced the company's North American Pipe and building products portfolio by adding specialty product lines and supporting technology.

Westlake Chemical is a vertically integrated manufacturer and marketer of basic chemicals, vinyls (PVC), polymers (PE) and fabricated products.

MRC

MOSCOW (MRC) -- Chevron agreed to pay nearly USD2 million in fines and restitution stemming from the August 2012 fire at its refinery in Richmond, California, which sent hundreds of nearby residents to emergency rooms with breathing problems, said Hydrocarbonprocessing.

Chevron's no contest plea agreement comes after the Contra Costa District Attorney's Office and the California Department of Justice charged the company with six criminal violations of the state's labor and health and safety codes.

The fire occurred after a corroded pipe burst in the 245,000 bpd refinery's crude distillation unit, a major piece of equipment that heats oil to extreme temperatures before sending it to other machines for processing. The resulting fire emitted black smoke over the San Francisco Bay that could be seen for miles.

The fire had already hit Chevron's bottom line, as repair work forced the company to run the refinery at reduced rates for the better part of the year. The suspension of operations at the refinery, the largest in the San Francisco area that accounts for 10% of the fuel refining capacity on the West Coast, also raised gasoline prices in the region.

California's state Occupational Safety and Health division also fined Chevron USD1 million in January, a citation Chevron is appealing. The blaze increased community opposition to the refinery; last weekend, police arrested hundreds of people who had gathered at the site to protest the one year anniversary of the fire.

In all, Chevron will pay nearly USD1.3 million in fines and penalties, USD575,000 to local government agencies for costs related to the fire response and USD145,000 into a fund for training skilled workers in the construction and renewable energy industries, the district attorney's office said.

Chevron will also be on probation for three and a half years, during which the company must inspect every piece of pipe identified as being susceptible to certain types of corrosion, the District Attorney's office said.

Chevron said it reimbursed residents and local government agencies in Richmond and west Contra Costa County for medical and response costs. "We are committed to continuous improvement in process safety and reliability at the refinery," Chevron spokeswoman Melissa Ritchie said. Chevron said in a statement that it is also installing what it described as a "multi million dollar" air monitoring system at the refinery.
MRC