Russian crude exports fall to six-year low as Putin emphasizes refining

MOSCOW (MRC) -- Russia’s crude exports on tankers are poised to fall to the lowest in at least six years as a government push to improve and expand domestic refineries means more oil is exported as fuels like diesel, reported Hydrocarbonprocessing.

Seaborne crude shipments from the world’s biggest energy exporter via the state-run pipeline system in August will fall 9.2% from this month to 2.215 million bpd, according to loading programs obtained by Bloomberg News. That’s the lowest since Bloomberg began tracking the data in 2008.

Russia’s two biggest crude terminals, Primorsk and Novorossiysk, will both export the least on record.

Russian oil companies are refining more crude domestically after President Vladimir Putin pushed them to spend billions of dollars modernizing plants. Output of diesel and fuel oil are the highest since at least 2009, Energy Ministry data show.

This puts pressure on European refiners who are already receiving less Russian crude as flows are diverted to China, which has been less critical of the Kremlin’s role in Ukraine, according to KBC Energy Economics.

"This trend of falling crude exports means we’re finally seeing results from the refinery modernization push," said Alexander Nazarov, an oil analyst at OAO Gazprombank in Moscow. "Refining is picking up and crude output has peaked."

Russia produced 10.55 million bbl of crude in June, up 0.1% from a month earlier in the first increase since January, according to the Energy Ministry’s CDU-TEK unit. The country’s refineries operated at the highest rate in two years on June 26, with offline daily processing capacity falling to 26,000 metric tons, before rising to 48,500 tons on July 23, according to CDU-TEK.

As MRC wrote previously, Russia will give all the necessary support to Shell in the Anglo-Dutch supermajor’s projects in the country, said President Vladimir Putin in April 2014. Putin, under pressure from international powers over continued destabilisation in Ukraine, met with Shell’s chief executive Ben van Beurden in Moscow in late April. "I am very pleased that your company plans to expand its area of activities in Russia," Russian news agency Itar-Tass quoted the president as saying to van Beurden. Shell has a large presence in oil and gas-rich Russia, including at the Sakhalin-2 project off the country’s far eastern region.
MRC

LyondellBasell reports widening polymer margins

MOSCOW (MRC) -- LyondellBasell Industries, the world’s biggest maker of polypropylene plastic, posted second-quarter earnings that topped analysts’ estimates as margins widened on higher prices, said Hydrocarbonprocessing.

Net income was USD2.23/share, compared with USD1.61 a year earlier, London-based LyondellBasell said in a statement Friday. Income from continuing operations was USD2.22, which exceeded the USD1.92 average estimate of 18 analysts compiled by Bloomberg. Sales were USD12.1 billion, compared with USD11.1 billion a year earlier, beating the USD11.5 billion average estimate.

CEO Jim Gallogly is expanding LyondellBasell’s US chemical plants as hydraulic fracturing in shale rock formations boosts supplies of natural gas and cuts raw-material costs. Polypropylene, used in bottle caps and carpets, and polyethylene, used in plastic bags, is mostly made from gas in North America.

"Integrated polyethylene margins in the US were up as much as 4 cents a pound, so that’s a big positive," Hassan Ahmed, a New York-based analyst at Alembic Global Advisors who recommends buying the shares, said yesterday by phone.

Operating earnings at LyondellBasell’s Americas olefins unit, which makes polyethylene and polypropylene, rose 3% on higher product prices, it said.

As MRC wrote before, LyondellBasell has received a key permit required in the company's multi-plant ethylene expansion program which, when fully operational, is expected to increase annual ethylene capacity by an estimated USD3.12 billion, for a total estimated capacity of USD19.9 billion in North America. The ethylene expansion program began in 2013 and represents a total investment of approximately USD1.3 billion in the company's Channelview, La Porte and Corpus Christi, Texas plants which benefit from shale gas production.

LyondellBasell moved its tax residence to the UK from the Netherlands last year to avoid payments on dividends and gain flexibility in managing its cash. LyondellBasell is run from Houston and remains incorporated in Rotterdam.

LyondellBasell Industries NV is a manufacturing company. The Company produces chemicals, fuels, and polymers used for packaging, clean fuels, durable textiles, medical applications, construction materials, and automotive parts. LyondellBasell Industries operates globally and is headquartered in the Netherlands. LyondellBasell is also a leading licensor of polypropylene and polyethylene technologies. The more than 250 polyolefin process licenses granted by LyondellBasell are twice that of any other polyolefin technology licensor.
MRC

PVC imports to Kazakhstan surged by 68% in H1 2014

MOSCOW (MRC) -- Imports of polyvinyl chloride (PVC) into Kazakhstan rose by 68% over the first six months of 2014 and reached 31,000 tonnes, according to MRC DataScope report.


June PVC imports to Kazakhstan dropped to 6,000 tonnes after the peak April and May (6,500 tonnes and 6,900 tonnes, respectively).

Thus, the overalll PVC imports to the local market rose to 30,000 tonnes from January to June 2014 versus 18,500 tonnes a year earlier.

Producers from China are the main PVC suppliers to the local market because of the geographical factor. They account for over 95% of the local market this year.

MRC

Imports of titanium dioxide in Russia increased by 1.6% in the first six months 2014

MOSCOW (MRC) - Imports of titanium dioxide in the Russian market grew by to 40,200 tonnes in the first half of 2014, up 1.6% compared to January-June 2013, according to MRC DataScope report.
Russia's titanium dioxide imports were 9,000 tonnes in June, up 32% compared to May, reaching the highest level in the current year.

The largest supplier of titanium dioxide in Russia remained the company Dupont. Imports of Ti-pure grade were 9,400 tonnes in the first half of 2014, up 8.6% year on year.

Crimean Titan supplied 6,500 tonnes in the first half of 2014 in Russia, up 10% year on year.

The main suppliers still continued to be Ukraine, the USA, China, Finland and Germany.
MRC

Petkim opens plastic packaging factory in Turkey

MOSCOW (MRC) -- Turkish petrochemicals major Petkim Petrokimya Holdings has staged an official opening for a new plastic packaging factory at its petrochemical complex in the western Turkish town of Aliaga, reported SeeNews with reference to the company's statement.

The factory was built in five months, Petkim said in a statement, adding that the bulk of its output will be exported.

Petkim is constantly investing in new facilities, as well as in expanding the capacity and raising the efficiency of the existing ones, its general manager Sadettin Korkut said.

Petkim has made capital expenditures of more than USD500 million (EUR370 million) since its privatisation in 2008 and plans to invest an average of USD100 million annually until 2018, Korkut added. The company targets 6.0 million tonnes of gross production annually and a 40% share in the domestic market by 2023.

As MRC informed previously, The production capacity of the Turkish Pektim Petrochemical Holding where SOCAR, Azerbaijan’s state energy company has equity participation will increase from 3.2 million tons to 3.6 million tons in 2014. An increase in production capacity will be possible thanks to the improved capacity of ethylene and purified terephthalic acid (PTA) production enterprises. In particular, the ethylene production enterprise's capacity will increase from current 520,000 tons to 587,000 tons by late 2014. The PTA production capacity will increase from 70,000 tons to 105,000 tons which will require investments worth USD25 million.

Petkim is the leading petrochemical company of Turkey. Specializing in petrochemical manufacturing, the company produces ethylene, polyethylene, polyvinyl chloride, polypropylene and other chemical building blocks for use in the manufacture of plastics, textiles, and other consumer and industrial products.
MRC