Sinopec sells stake in retail arm for USD17.5bn

MOSCOW (MRC) -- China's largest refiner Sinopec has struck a deal with 25 local and foreign investors, to sell a 30% stake in its retail arm, said Bloomberg.

The retail unit will be issuing new shares to the group of 25 investors, which are mostly financial companies like insurers and fund managers, to raise USD17.5bn. The company's shares fell by 6.8% on Monday in Hong Kong trade. Sinopec's retail arm operates more than 30,000 petrol stations across China.

It also owns more than 23,000 convenience stores under the Easy Joy brand, as well as oil-product pipelines and storage facilities. Local investors named in the transaction include China Life Insurance as well as Chinese white goods manufacturer Haier Electronics and internet giant Tencent.

Last month Sinopec signed a preliminary agreement with Tencent to explore introducing mobile payment systems at its petrol stations. In May this year, the company also signed an agreement with China Taiping Insurance to sell car and life insurance at its petrol stations.

In the case of Sinopec, nearly all of its retail sales come from petrol. The deal marks China's biggest privatisation programme since President Xi Jinping came to power in 2013.

As MRC wrote before, Sinopec’s parent China Petrochemical Corp.agreed to sell Sinopec Oilfield Service Corp. to a Hong Kong-listed polyester maker it controls, Sinopec Yizheng Chemical Fibre Co.

Sinopec Corp. is one of the largest scale integrated energy and chemical companies with upstream, midstream and downstream operations. Its refining and ethylene capacity ranks No.2 and No.4 globally. The Company has 30,000 sales and distribution networks of oil products and chemical products, its service stations are now ranked third largest in the world.
MRC

MOSCOW (MRC) -- SIBUR , Russia’s largest petrochemical company, said today that following the completion of the front-end engineering design (FEED) contracts and assessment of the design documentation, it is proceeding with the previously announced mega ZapSibNeftekhim project at Tobolsk, Russia, said the producer in its press release.

ZapSibNeftekhim's project is designed to operate a steam cracker (by Linde AG, Germany) with a capacity of 1.5 mtpa of ethylene, around 500 ktpa of propylene and 100 ktpa of butane-butylene fraction (BBF), along with units with a total capacity to produce 1.5 mtpa of various grades of polyethylene (by INEOS, UK) and a polypropylene unit of 500 ktpa (by LyondellBasell, Netherlands).

The cracker, polyethylene and polypropylene units’ FEED has been completed. SIBUR has signed an agreement to design infrastructure and off-site facilities with NIPIgazpererabotka, Russia's leading engineering centre in the gas processing industry.

According to preliminary estimates, the total investment in ZapSibNeftekhim will amount to approximately USD9.5 billion, including the expenditure already incurred and costs budgeted for commissioning. Construction of the project is expected to be completed within five to five and a half years.

"SIBUR has a strong financial position. Over recent years, the company has delivered on ambitious projects to expand its gas processing and fractionation capacity, improve transport infrastructure reliability, and build its first large polymer production capacities, providing the basis for a smooth transition into the next stage of the project,” said Dmitry Konov, CEO.

SIBUR's projects in the Tyumen region are part of the investment agreement with the Tobolsk regional government and the Tobolsk city administration aimed at a comprehensive development of the Tobolsk production site. This agreement covered, among other projects, the construction of the Tobolsk-Polymer PP production facility, commissioned in 2013; expansion of a gas fractionation plant; and railway infrastructure development, commissioned in 2014; along with the construction of the main pipeline between Purovsky gas condensate processing plant and Tobolsk-Neftekhim. The parties provide support for the project under applicable law and the current agreement to ensure a comprehensive development of the Tobolsk production site. It has now been agreed to extend the current investment agreements for 10 years – until 2024.

The use of cutting-edge processes will ensure safety and reliability of production. Prior to the implementation of the project, SIBUR commissioned a Russian team from Environmental Resources Management, a global leader in HSE advisory services, to estimate ZapSibNeftekhim's environmental footprint. Comprehensive analysis showed that the prospective operations comply with the applicable Russian laws and environmental requirements. ZapSibNeftekhim's construction and operations will neither exceed environmental standards nor have a material adverse effect on the environment.

The facility will create new jobs, provide more tax and other payments to the budget, and contribute to the social development and quality of life in Tobolsk, SIBUR says.
MRC

MOSCOW (MRC) - Imports of suspension polyvinyl chloride (SPVC) in Ukraine decreased by 15% in the first eight months of this year, with the main decrease occurred for the delivers from Europe, according to MRC DataScope.

Following the surge in PVC imports in July (18.600 tonnes) Ukraine's imports expectedly decreased to 10,700 tonnes in August. Carryovers left from the July deliveries, as well as the going to an end of the high season were the main reasons for the fall of resin imports. Total SPVC imports in the country decreased to 76,800 tonnes in January - August 2014, compared with 90,600 tonnes year on year.

Structure of SPVC imports in Ukraine for the period under review was as follows. August imports of US SPVC reduced to 7,200 tonnes following the record highs in July of 12,900 tonnes. Total imports of US SPVC in Ukraine grew to 45,700 tonnes in the first eight months of this year, compared with 44,300 tonnes year on year. The relatively low export prices in the North America and the ease conditions of exports were the main reasons for the increase in the supply.

August imports of European SPVC in the country declined to 3,400 tonnes, compared with 5,600 tonnes in July because of the scheduled maintenance works at some plants. Total imports of European SPVC in Ukraine were 29,600 tonnes in the first eight months of 2014, compared with 43,100 tonnes in the same time year earlier.

Key suppliers of the suspension PVC in the Ukrainian market because of to geographical nearness were producers from Hungary, Poland and Germany. SPVC imports from other regions (Asia, Turkey, Russia) were rare.

MRC

MOSCOW (MRC) -- SIBUR has announced that overall sales increased by 32.1% to RUB 171,712m (EUR3.4bn) for the first half of 2014 from RUB 130,030m (EUR2.6bn) in the first half of 2013, said the producer in its press release.

The company states that its sales of basic polymers increased by 58.2% year-on-year to RUB 16,695m (EUR334m) from RUB 10,555m (EUR211m) in the first half of 2013 following the launch of its Tobolsk-Polymer Plant.

Its EBITDA for the period increased by 29.8% year-on-year to RUB 49,486m (EUR991m) from RUB 38,117m (EUR764m) in the first half of 2013.

SIBUR also announced that it is proceeding with the ZapSibNeftekhim project, which is designed to enable the company to operate a steam cracker, with a capacity of 1.5 mtpa of ethylene, along with units with a total capacity to produce 1.5 mtpa of various grades of polyethylene and a polypropylene unit of 500 ktpa. The project sees a total investment of around USD9.5bn (EUR7.3bn).

The cracker, polyethylene and polypropylene units’ feed has been completed. Sibur says that it has signed an agreement to design infrastructure and off-site facilities with NIPIgazpererabotka, Russia's leading engineering centre in the gas processing industry.

Dmitry Konov, CEO of Sibur, said: "SIBUR has a strong financial position. Over recent years, the company has delivered on ambitious projects to expand its gas processing and fractionation capacity, improve transport infrastructure reliability, and build its first large polymer production capacities, providing the basis for a smooth transition into the next stage of the project."

SIBUR says that construction and other works for the project are to be completed within five to five and a half years.

SIBUR is a uniquely positioned vertically integrated gas processing and petrochemicals company. SIBUR owns and operates Russia’s largest gas processing business in terms of associated petroleum gas processing volumes, and is a leader in the Russian petrochemicals industry.

As of 30 June 2014, SIBUR operated 26 production sites located all over Russia, had over 1,400 major customers engaged in the energy, automotive, construction, fast moving consumer goods (FMCG), chemical and other industries in approximately 70 countries worldwide and employed over 26,000 personnel.
MRC

MOSCOW (MRC) -- Imports of polycarbonate (PC) from Europe to Russia dropped from January to August 2014 by 4% year on year and ]totalled 17,800 tonnes, according to MRC DataScope report.
Grades for sheet extrusion accounts for more than 70% of the total imports of PC granules. Extrusion segment is the most developed and promising in the Russian market. About 95% of all delivered quantities are imported from Europe. These are shuch companies, as Sabic Innovative Plastics and Bayer with the shares of 83% and 11%, respectively. The bulk of extrusion grade PC production facilities of Sabic Innovative Plastics is located in the Netherlands and Spain, and those of Bayer - in Belgium.
Kazanorgsintez, the only national PC producer, accouts for an average of 60% in the total consumption of extrusion grade PC. Since recently, Kazanorgsintez has decided to expand its share in the domestic market, particularly, in its extrusion segment. Consumers reacted positively to this because of a perceptible rise in domestic prices of imported material on the back of the rouble devaluation.

MRC