Rosneft to sell USD6 billion of refined products to BP

MOSCOW (MRC) -- The board of Rosneft has approved deals to sell refined products to BP worth more than USD6 billion, reported Hydrocarbonprodcessing with reference to the Russia-based company's statement.

This comes on top of a prior agreement to sell oil worth USD5.3 billion to BP.

In a regulatory filing, the Russian producer said it would ship up to 3.2 million metric tons of fuel oil to BP Singapore between November 2013 and December 2014.

Rosneft will also sell up to 1.44 million tons of diesel to BP with an estimated value of USD1.77 billion.

Additionally, Rosneft will supply BP with up to 2 million metric tons of fuel oil to BP worth approximately USD1.62 billion, and up to 60,000 tons of naphtha estimated at USD65 million.

The announcement follows a deal last month when BP said it would purchase USD5.3 billion worth of oil from Rosneft.

As MRC informed earlier, in May, 2013, Rosneft and Mitsui signed an agreement to jointly develop the massive Far East Petrochemical Company (FEPCO) project. FEPCO, a subsidiary of Rosneft, is developing the project. Processing capacity of the petrochemical complex is planned at 3.4 million tpy of hydrocarbon feedstock, predominantly naphtha. The capacity of ethylene and propylene production unit is planned at 2 million tpy.

Rosneft became Russia's largest publicly traded oil company in March 2013 after the USD55 billion takeover of TNK-BP, which was Russia’s third-largest oil producer at the time.
MRC

MOSCOW (MRC) -- SIBUR and Rail Garant, a freight transportation group, have signed an agreement on sale of SIBUR’ fleet of liquefied petroleum gas (LPG) rail cars to Rail Garant, said SIBUR.

The deal is expected to be closed following all the necessary approvals, including the approval of regulators. The LPG rail car fleet owned by SIBUR includes 4,364 tank cars. The deal value is valued at RR 11.5 billion.

According to the agreement, following the transaction the entire fleet will be operated by SIBUR-Trans, SIBUR’s freight operator. Half of the fleet will be leased, and the other half may be used by SIBUR-Trans for product transportation under a service contract. The contracts are valid for six years, thus, reinforcing SIBUR’s ability to transport required volumes of its own products while generating return on investments made earlier into the rail car fleet.

SIBUR-Trans will continue its operations within SIBUR Group to ensure reliable transportation of the Company's products and help develop non-public railway tracks.

SIBUR-Trans transport fleet currently includes 13,113 LPG tank cars, including 4,364 tank cars in ownership and 8,749 tank cars in lease or in operation. Additionally, SIBUR-Trans either owns or operates 3,870 tank cars for petrochemical products, 2,013 LPG tank containers, 386 tank containers for liquid cargo, and 16 all-purpose cars. SIBUR-Trans also operates public railway tracks of a total length of 330 km.

The transaction will enable Rail Garant Group to become a major player at the growing LPG transportation market and will guarantee full utilization of the fleet in spite of prevailing surplus of rail cars at the market.
The LPG transport fleet currently operated by Rail Garant Group comprises 1,500 tank cars and 1,608 tank containers. The Group also operates 6,132 tank cars for crude oil and gasoline and 1,953 tank containers for liquid chemicals.

As MRC wrote before, SIBUR, a leading Russian gas processing and petrochemicals company, and the German chemicals giant BASF signed a Long-Term Cooperation Memorandum to supply additives used for polymer production and processing at SIBUR’s production facilities.

SIBUR is the leading petrochemical company in Russia and Eastern Europe. The Company operates across the entire petrochemical process chain from gas processing to the production of monomers, plastics and synthetic rubbers, as well as the processing of plastics.
MRC

MOSCOW (MRC) -- Weak demand and sufficient supply from Russian producers continue to reduce the imports of high density polyethylene (HDPE) to Russia. HDPE imports to Russia decreased by 16% in October, compared with September level, according to MRC DataScope.

Serious decline in demand for HDPE and stable production in Russia were the main reasons for the decline of external deliveries this year.
Weakening of the rouble against the dollar and the euro has stepped up pressure on HDPE imports.

Following the July surge HDPE imports to Russia declined in October to about 19,400 tonnes compared with 23,200 tonnes in September. The largest decrease occurred for the imports of pipe PE.

Imports structure in the consumption sectors looked as follows. Imports of pipe HDPE fell to 4,900 tonnes in October from 7,200 tonnes in the previous month. The external supply of pipe PE decreased to 62,000 tonnes in January-October 2013, from 101,600 tonnes year on year.
The peak in imports occurred for March and was 8,900 tonnes.

The October imports of blow moulding and injection moulding HDPE reduced by 22% and 25%, respectively, compared with September and reached 2,900 tonnes and 2,500 tonnes in the same period last year. Total imports of these types of HDPE was 43,000 tonnes and 30,000 tonnes in January-October 2013, from 40,000 tonnes and 43,000 tonnes year on year.

External supplies and film and extrusion HDPE (for coating of steel pipes of large diammetrom) in October remained virtually at the level of September and reached 2,100 tonnes and 5,100 tonnes respectively.

Total Russia's imports of these types of HDPE in the first ten months in 2013 reached 39,100 tonnes and 62,500 tonnes respectively, from 86,600 tonnes and 51,100 tonnes year on year. In general, Russian producers has reduced the dependence of HDPE imports by 26% to 249,500 tonnes in the ten months of this year, from 335,800 tonnes in the same period of 2013.

MRC

MOSCOW (MRC) -- October polystyrene (PS) imports to the Ukrainian domestic market fell by 8% from September to 5,400 tonnes, according to MRC DataScope.

Decreased imports was caused by reduced consumption in the general purpose polystyrene (GPPS) and high impact polystyrene (HIPS) sectors, while in the expandable polystyrene (EPS) segment, purchases showed an upward trend.

EPS import to Ukraine grew by 10% in October to 2,550 tonnes on feedstock shortages and vivid seasonal activity. High consumer activity remained in the market in November, the shortage of material became more accute because of an outage at Stirol.

At the same time, GPPS and HIPS imports dropped by a quarter in October to 2,400 tonnes.

Exports of Ukrainian EPS and GPPS also fell down in October due to stronger demand and tight supply in the domestic market. A sharp drop in exports from Ukraine are expected in November, which will be caused by the absence of PS production in Ukraine.

As reported earlier, Stirol (Gorlovka) shut down its PS production in late October, 2013, because of a shortage of styrene monomer (SM).

MRC

MOSCOW (MRC) -- There was a surge in imports in the linear low density polyethylene (LLDPE) market after a drop in August-September, 2013. LLDPE imports last month rose by 29% from September, according to MRC DataScope.

Middle Eastern producers accounted for the decline in LLDPE imports in August-September, which led to shortages in the Russian market. As expected, October LLDPE imports rose to 19,300 tonnes from 15,000 tonnes in September because of increased supply of film LLDPE.

Films producers still remained key LLDPE consumers. October imports of film LLDPE exceeded 17,100 tonnes, whereas in September this index was 12,200 tonnes. The overall imports of film LLDPE totalled about 150,000 tonnes (117,000 tonnes a year earlier).

October imports of LLDPE for large items produced by rotational moulding halved compared with September under the pressure of seasonal factors and totalled about 775 tonnes. This index fell to 7,900 tonnes during the first ten months of the year from 9,400 tonnes in 2012.

Imports also dropped in other sectors of LLDPE consumption with the exception of injection moulding PE.

The overall LLDPE imports to Russia exceeded 171,000 tonnes in January-October 2013, up 24% year on year.

MRC