Gazprom Neft and Novatek to boost their stake in "SeverEnergia" project

MOSCOW (MRC) -- Gazprom Neft and Novatek are reported to be looking to boost their joint controlling stake in SeverEnergia in an apparent move to block any Rosneft bid to acquire a further interest in the coveted West Siberian gas producer, said Upstreamonline.

It follows a report last week that Italian giant Eni may now be looking to sell its 60% stake in the Arctic Russia joint venture, which holds a 49% interest in SeverEnergia, after compatriot utility Enel’s 40% share was acquired by Russian state-owned Rosneft for USD1.8 billion.

Rosneft now has a 19.6% stake in SeverEnergia through the deal with Enel, which reportedly also gives it the pre-emptive right to buy out Eni's holdings and thereby potentially boost its interest to 49%.

The remaining 51% in the gas producer is jointly held by Gazprom Neft, a subsidiary of Russian gas giant Gazprom, and Novatek, and the pair are now also said to be interested in buying Eni’s stake stake in Arctic Russia if it comes onto the market.

"The group, together with Novatek, is considering a possible increase of its stake in SeverEnergia through the purchase of an interest in SeverEnergia held directly or indirectly by third parties," Gazprom Neft said in a prospectus for a Eurobond offering cited by Reuters on Tuesday.

Competition is increasing for Russia’s gas reserves as the Kremlin prepares to open up liquefied natural gas exports to other players than Gazprom, which currently has an export monopoly, from early next year. SeverEnergia is expected to produce 36 billion cubic metres of gas and liquids by 2017.

Rosneft, which is Russia’s leading oil producer, aims to raise its gas output to 100 billion cubic metres by 2020 with plans to build a liquefied natural gas plant jointly with ExxonMobil on Sakhalin island in Russia's far east.

The SeverEnergia assets are believed to be of great importance to Novatek and would fit with its effort to develop the Yamal LNG export project, due on stream in 2017, together with France's Total and China National Petroleum Corporation (CNPC).

The Enel stake sale is said to have increased tensions between Novatek investor Gennady Timchenko, who was opposed to the deal, and Rosneft chief executive Igor Sechin.
MRC

Keyuan Petro Q3 sales dip from production interruption

MOSCOW (MRC) -- Keyuan Petrochemicals Inc. an independent manufacturer and supplier of various petrochemical products in China announced the Company's financial results for the quarter ended September 30th, 2013, said Ecfchina.

Sales for the three months ended September 30, 2013 were approximately USD150.3 million, compared to USD164.3 million for the three months ended September 30, 2012, a decrease of USD14 million, or 8.5%. The decrease was mainly due to lower sales quantities as a result of the 40-day production interruption in the quarter ended June 30, 2013.

Normally it takes a short period of time for the facilities and equipment to reach to their optimum conditions after routine maintenance. The Company sold 129,066 tons of petrochemical and rubber products at an average price of USd1,094 and USD1,888 per metric ton, respectively, in the three months ended September 30, 2013, compared to 155,249 metric tons of petrochemical products and rubber products at an average price of USD982 and USD2,423 per metric ton, respectively, in the three months ended September 30, 2012.

The average sales price for petrochemical products for the three months ended September 30, 2013 increased by approximately 11% compared to the same period of 2012. Petrochemical segment revenues for three months ended September 30, 2013 account for 86% of the total revenue.

Although the average selling price during the three months ended September 30, 2013 was higher than that at the same period of 2012, the overall quantity of sold products decreased by 15%, which caused total sales for the three months ended September 30, 2013 to decline.

Sales for the nine months ended September 30, 2013 were approximately USD453.8 million, compared to USD532.1 million for the nine months ended September 30, 2012, a decrease of USD78 million, or 14.7%.

Overall cost of sales was approximately USD140.0 million for the three months ended September 30, 2013, or 93% of sales, as compared to the cost of approximately USD160.5 million, or 98% of sales for the three months ended September 30, 2012.

The decrease in the cost of sales was mainly due to the lower sales quantities due to the routine inspection and maintenance of the facilities in the quarter ended June 30, 2013 and the higher average selling price of USD1,151 per metric ton for the three months ended September 30, 2013, as compared to USD1,059 per ton for the three months ended September 30, 2012.

Overall cost of sales was approximately USd432.4 million for the nine months ended September 30, 2013, or 95% of sales, as compared to approximately USD512.3 million, or 96% of sales for the nine months ended September, 30, 2012.

As MRC wrote before, Ningbo-based Keyuan Petrochemicals has announced plans to build a new S-SBR production ­facility and expand its existing ethylene-styrene copolymer plant. Keyuan, citing increased demand for S-SBR in the tyre market, said it is building a 150,000 t/y facility that will utilise its own production technology.

Keyuan Petrochemicals, Inc., established in 2007 and operating through its wholly-owned subsidiary, Keyuan Plastics, Co. Ltd., is located in Ningbo, China and is a leading independent manufacturer and supplier of various petrochemical products. The company is located in Qingshi Industrial Park, Ningbo, China and has annual petrochemical manufacturing design capacity of 720,000 metric tons for a variety of petrochemical products, including BTX aromatics, propylene, styrene, MTBE and other chemicals.
MRC

October imports of PET to Ukraine fell by more than three times

MOSCOW (MRC) - In October, imports of polyethylene terephthalate (PET) to Ukraine fell by more than three times, compared with the September level (70%) and totalled 4,100 tonnes, according to MRC DataScope report.

The sharp decline in October PET imports resulted from the significant inventories of finished products in the warehouses of the major producers of PET preforms. Decline in the consumption of water and drinks in the autumn led to an increase in carryovers and reduced activity in the market of PET chips. Many companies have cut the volume of purchases in foreign markets and postponed some of the supplies to the later time.
Total PET imports to Ukraine was 146,000 tonnes in January-October 2013, up by 6% from the same period in 2012.

However, taken into account the market situation this autumn MRC analysts have changed their forecasts for the final figures of PET imports for the year. Large carry-overs will result in a decrease of PET imports. In this regard, the high growth of PET chips consumption in the beginning of the year will slow down and in the end of 2013 imports of PET to Ukraine will be at the level of 160,000 -167,000 tonnes, compared with 163,000 tonnes in 2012.
MRC

DGCX to list plastics futures contract

MOSCOW (MRC) -- The new DGCX Polypropylene plastic futures contracts will create a transparent market and new pricing benchmark for the MENA region, said Cpifinancial.

The contract is sized at five metric tons (MT), with the contract price quoted in US dollars per MT. Physical delivery will ensure price convergence between the futures market and the physical market. DGCX has approved leading warehouses for the delivery of the product.

Global production of polypropylene exceeds 65 million metric tons annually, over twice the annual global production of aluminium. The UAE is one of the world's largest producers of polypropylene - the most common plastic product used in manufacturing and packaging.

Gary Anderson, CEO of DGCX, said, "The price of plastics fluctuates, as does the price of other commodities, but currently market participants in the region do not have the ability to hedge against price fluctuations via a futures contract. We believe this is the opportune time to launch our plastic futures contract in the region, allowing market participants in the plastics supply chain, including producers, traders, convertors and end-users to hedge their polymer price risk".

"The GCC produces more than 20 percent of the world’s plastics and a significant percentage of flows into the Far East. Our plastics contract will be a key contract for DGCX as the Exchange seeks to support its Members and clients and tap into the growing trade corridors to the Far East, one of the largest consuming regions of plastics."

DGCX has been closely working with the Dalian Commodities Exchange (DCE) since both parties signed a memorandum of understanding (MoU) in 2012 to develop a plastics futures contract. DCE also aims to launch its first polypropylene contract in 2014.

As MRC wrote before, China National Petroleum Corporation is planning a logistics hub in Dubai to minimize possible disruptions from geopolitical risks in the Mena. CNPC, state owned parent of PetroChina, plans to build an industrial park of 200,000 square meters in Dubai's Free Zone with production lines for engineering equipment. CNPC source said that the company would use the park as an equipment store in the event of an emergency withdrawal from the Mena. CNPC has a strong presence in the region, developing large oilfields from Iraq to Sudan.

In addition, DGCX has established a working group, constituting of leading plastics trading companies, producers, refiners and banks, which provide counsel on the contract design and specifications and also help facilitate vital market feedback. The working group includes international commodities companies and financial institutions.
DGCX executives are showcasing the prospective plastics futures contract and its specifications at the Gulf Petrochemicals & Chemicals Association (GPCA) forum, 19 November 2013 in Dubai. Market simulation is now available.
MRC

Two people dead in Total refinery blast

MOSCOW (MRC) -- An explosion at Total's Antwerp refinery in Belgium, Europe's second-largest, killed two people, forced the evacuation of the site and caused the shutdown of a gasoline producing unit on Tuesday, reported Reuters.

Two people have died following an explosion at a Total refinery in Belgium. A third person who was missing following the blast at the facility in Antwerp has now been found safe.

"The explosion occurred in a steam system of a gasoline producing unit," Total said in an emailed statement.

Industry intelligence firm Genscape said the 57,500 barrel per day (bpd) gasoline hydrotreater was shut at 1402 GMT shortly after the explosion.

French supermajor and refinery operator Total said the situation is now under control and there was no release of hydrocarbons. There was also no resultant fire or environmental damage.

We remind that, as MRC informed previously, last autumn Total announced its plans to invest over EUR1 billion into its Belgian refining and petrochemical complex to boost its diesel-making capacity and create cost-cutting synergies. This investment could bring Europe's largest refiner extra cash of USD500 mln a year.

Total S.A. is a French multinational oil and gas company and one of the six "Supermajor" oil companies in the world with business in Europe, the United States, the Middle East and Asia. The company's petrochemical products cover two main groups: base chemicals and the consumer polymers (polyethylene, polypropylene and polystyrene) that are derived from them.
MRC