Gazprom ‘wants third train for Sakhalin-2’

MOSCOW (MRC) -- The giant Sakhalin-2 liquefied natural gas project off eastern Russian looks set to go from two to three trains after local gas monopoly Gazprom approved an expansion, according to Upstreamonline.

Gazprom boss Alexei Miller met with Peter Voser, chief executive of the other major partner in the project, Shell, in Moscow and discussed the deal, Reuters reported.

The pair agreed to recommend that the board of Sakhalin Energy discuss the design of the third train, something Shell has been for and Gazprom against for some time.

Japanese pair Mitsui and Mitsubishi are also partners in the project that as things stand is Russia’s only LNG export project.

As MRC wrote before, Gazprom is already building a gas liquefaction plant in Vladivostok, eastern Russia, to supply the Asia-Pacific region. Companies from Japan, a large consumer of LNG, are in talks on purchasing supplies from the facility.

Gazprom Neft, is the fourth largest oil producer in Russia and ranked third according to refining throughput. It is a subsidiary of Gazprom, which owns about 96% of its shares. The company is registered and headquartered in St. Petersburg after central offices were relocated from Moscow in 2011.
MRC

MOSCOW (MRC) -- SIBUR and Gazprom Neft have signed an agreement for construction of a new gas processing plant (GPP) with an annual associated petroleum gas (APG) processing capacity of 900 million cubic metres on the basis of existing Yuzhno-Priobskaya compressor station in the Khanty-Mansi Autonomous Area, said the producer in its press release.

The GPP is designed to have liquids recovery ratio at least of 95%, in line with global practices. The project will be implemented by OOO Yuzhno-Priobskiy GPP, a joint venture of Gazprom Neft and SIBUR (each having a 50% stake) and the owner of the Yuzhno-Priobskaya compressor station. Under the memorandum, Gazprom Neft will supply APG to Yuzhno-Priobskiy GPP on a long-term basis while SIBUR will pay for half of the volume. The partners plan to process APG and produce refined products pro rata their stakes in the JV. SIBUR will then sell its share of dry gas to Gazprom Neft and purchase Gazprom Neft’s share of NGLs. All the contracts, with price formula agreed, will be long-term.

Dry gas will be transported to the "Khanty-Mansiysk Gas Supply" gas transmission pipeline, while NGLs will be supplied to the pipeline connected to SIBUR’s Tobolsk production site. The GPP construction project will include setting up infrastructure to handle and store NGLs, and modernisation of the pipeline to deliver dry gas to the gas transmission pipeline.

As MRC wrote before, Gazprom Neft, a subsiduary of Gazprom, SIBUR will collaborate in the polymer road materials production and marketing. SIBUR will deliver styrene-butadiene-styrene (SBS) polymers to the facilities of Gazprom Neft. The materials are applied in the polymer-bitumen binders (PBB) manufacturing to improve the quality characteristics of the road surface and extend its service life. Moreover, the parties are ready to carry out a joint research to develop the utilization of road materials based on polymers, in particular, to work up SBS polymers brands.

SIBUR is a vertically integrated gas processing and petrochemicals company, which operate Russia’s largest gas processing business in terms of associated petroleum gas processing volumes and are the leader in the Russian petrochemicals industry.

Gazprom Neft is a vertically integrated oil company primarily engaged in oil & gas exploration and production (E&P), the sale and distribution of crude oil, and the production and sale of petroleum products.

MRC

MOSCOW (MRC) -- Carlyle Group and Vitol Group agreed to buy a 45 % stake in Germany’s Bayernoil refinery from OMV as they expand oil-processing, distribution and storage operations in northwestern Europe, said Hydrocarbonprocessing.

Carlyle and Vitol will acquire the plant as part of an investment in Varo Energy BV, OMV said in a statement on its website, without disclosing terms. The purchase, confirmed by the buyers, also includes a bitumen plant in Grossmehring.

OMV has looked to sell its Bayernoil stake since hiring Deutsche Bank AG to handle a divestment program in January 2012. The Austrian company is focusing on exploration and production as Europe’s refining industry struggles to maintain profits amid stagnant demand. For Carlyle and Vitol, they gain access to a 207,000 bpd plant as well as pipe and storage assets.

"The sale decreases OMV’s exposure to the downstream segment where there is higher volatility," Oleg Galbur, an analyst at Raiffeisenbank Centrobank, said by phone. The sale puts OMV’s restructuring program “ahead of schedule,” according to Galbur, who advises holding the stock.

"They’re betting on a sector that is currently under pressure, that has prices which are low," Galbur said. He estimated the probable transaction value at 400 million euros to 600 million euros, including inventory. The companies expect the deal to close next year.

As MRC wrote before, Clariant, a world leader in specialty chemicals, has announced that it has signed a long-term supply contract with OMV. From 2015, the Austrian oil and gas company will supply Clariant’s site in Gendorf (Germany) with ethylene. This agreement will enable Clariant to source most of its requirements for this important basic chemical in southern Bavaria.

OMV is an integrated international oil and gas company, headquartered in Vienna. OMV's main business is in Exploration & Production (E&P), Gas & Power (G&P) and Refining & Marketing (R&M). With group sales of more than EUR34 billion (2011) and a global workforce of around 30,000 (2011), OMV is the largest listed manufacturing company in Austria.
MRC

Moscow (MRC) -- Stavrolen (LUKOIL) shut production of polypropylene (PP) because of technical problems at the facility on 24 December, according to MRC analysts.

The production of high density polyethylene (HDPE) at the plant functions as normal.

According to unofficial information, the producer's PP facilities will be shut for three days.

This is the second shutdown of PP production at Stavrolen over the last two weeks. The producer shut its PP capacities on 17 December for three days.

Production capacity for polypropylene production at Stavrolen is 120,000 tonnes/year, for high-density polyethylene - 300,000 tonnes/year. Total production of PP and HDPE at Stavrolen was about 116,300 tonnes and 280,700 tonnes respectively.
MRC

MOSCOW (MRC) -- Imports of polyethylene (PE) into Belarus decreased by 4% over the first ten months of 2013. Reduced imports were registered in the low density polyethylene (LDPE) and linear low density polyethylene (LLDPE) markets, according to MRC DataScope.

According to the National Statistical Committee of Belarus, PE imports to Belarus decreased to 90,000 tonnes in January-October 2013 from 94,000 tonnes over the same period a year earlier. Demand for high density polyethylene (HDPE) increased, whereas demand for LDPE and LLDPE fell by almost a quarter.

The structure of PE imports looks the following way.

October HDPE imports to Belarus totalled about 4,700 tonnes, while this figure was 5,500 tonnes in September. HDPE imports into the country rose to 52,400 tonnes over the ten months of the year, up by 18.3% year on year.

The main HDPE suppliers are still Russian producers with the supply volumes of about 27,900 tonnes over the said period. The second and third places occupy PE producers from Saudi Arabia (Sabic) and Hungary (TVK) with supply volumes of 9,500 tonnes and 3,600 tonnes, respectively.

October LDPE and LLDPE imports grew to 4,300 tonnes from 3,900 tonnes in September. Imports of these PE grades fell from January to October of 2013 by 24.2% year on year and totalled 37,600 tonnes. The key suppliers of LDPE and LLDPE to Belarus are producers from Saudi Arabia and Russia with import volumes of 20,500 tonnes and 5,800 tonnes, respectively, over the stated period.
MRC