Saudi Aramco says to set up new chemicals unit

MOSCOW (MRC) -- Saudi Aramco plans to set up a new chemicals subsidiary, the company said in its official magazine, The Arabian Sun, on Wednesday, as per Hydrocarbonprocessing.

"The Board approved the creation of a new subsidiary to conduct the company's chemicals business," Aramco said. It did not give further details in the weekly in-house publication.

Aramco's board met last week in Shanghai to discuss the company's plans and appointed a new downstream head as well as several vice presidents in other key positions.

Abdulaziz al-Judaimi was named as senior vice president for downstream operations.

Downstream, covering refining and chemicals, is an important area for the company as it diversifies operations as it prepares for an initial public offering (IPO) next year, when around 5% of the firm is expected to be listed in Riyadh and on other international bourses.

Last year, Judaimi, then business line head for downstream, said Saudi Aramco aims to almost triple its chemicals production to 34 MMtpy by 2030.

Over the same period Aramco's global refining capacity target is to raise it to 8 MMbpd–10 MMbpd from more than 5 MMbpd now.

Developing petrochemicals is part of the kingdom's major economic reform plan, known as Vision 2030, which aims to diversify the economy away from oil.

This will also help Aramco boost value from hydrocarbons by securing revenue streams and become less vulnerable to oil price swings.

The oil giant is planning to develop a massive oil to chemicals project with Saudi Basic Industries Corp which industry sources say will cost more than USD20 B.

As MRC wrote previously, in June 2016, Saudi Arabian Oil Co. and Saudi Basic Industries Corp. (Sabic) became one step closer to building their first plant to process crude directly into chemicals, cutting out a link in the production chain from hydrocarbons to the finished products that go into plastics and other consumer goods. The state-owned companies signed an agreement to study such a project to be located in Saudi Arabia. A joint venture is possible if the companies decide to move ahead after the study is completed by early 2017, they said. Oil companies normally refine crude into transportation fuels including gasoline and diesel and leave byproducts such as naphtha to be processed separately into chemicals.

Saudi Aramco is an integrated oil and chemicals company, a global leader in hydrocarbon production, refining processes and distribution, as well as one of the largest global oil exporters. It manages proven reserves of crude oil and condensate estimated at 261.1bn barrels, and produces 9.54 million bbl daily. Headquartered in Dhahran, Saudi Arabia, the company employs over 61,000 staff in 77 countries.
MRC

PTTGC plans to shut LLDPE plant in Thailand for maintenance

MOSCOW (MRC) -- PTT Global Chemical (PTTGC) is likely to take off-stream its linear low density polyethylene (LLDPE) in Map Ta Phut, as per Apic-online.

A Polymerupdate source in Thailand informed that the company has schedule to shut the plant in June 2017 for maintenance. The plant is slated to remain off-line for around 4 weeks.

Located at Map Ta Phut in Thailand, the plant has LLDPE production capacity of 400,000 mt/year.

As MRC informed before, PTT is on track to start commercial operations at its new 400,000 mt/year metallocene C6 linear low density polyethylene plant at Map Ta Phut, Thailand, in the first quarter of 2018. PTT will start up the plant by the end of this year.

PTT currently has a total capacity of 800,000 mt/year of high density polyethylene (HDPE), 300,000 mt/year of low density polyethylene (LDPE) and 400,000 mt/year of LLDPE at the same site.

PTT Global Chemical is a leading player in the petrochemical industry and owns several petrochemical facilities with a combined capacity of 8.45 million tonnes a year.
MRC

BASF Q1 operating profit up 29% on petrochemicals

MOSCOW (MRC) -- Germany's BASF, the world's largest chemicals group by sales, posted a stronger-than-expected gain in quarterly operating profit on strong demand for its basic petrochemicals such as precursor materials for insulation foam, said the company on its website.

BASF Group’s sales rose by 19% in the first quarter of 2017 to EUR16.9 billion. In all segments, the positive volume trend seen in previous quarters was maintained and led to growth of 8% in sales volumes. Furthermore, BASF achieved significantly higher sales prices (up 8%), especially in the Chemicals segment. Currency effects and the Chemetall business acquired from Albemarle in December 2016 also contributed to the increase in sales.

BASF Group’s income from operations (EBIT) before special items was 29% higher at EUR2.5 billion. Of this amount, EUR2.0 billion was generated by the chemicals business, which comprises the segments Chemicals, Performance Products and Functional Materials & Solutions. Earnings in the chemicals business thus grew by 37%.

BASF received an initial insurance payment of EUR100 million in connection with the accident that occurred at the North Harbor in Ludwigshafen last October. Around three-quarters of this amount was recognized in the Chemicals segment.

EBIT grew by EUR585 million to EUR2.5 billion compared with the first quarter of 2016.

Net income rose by EUR322 million to EUR1.7 billion. Earnings per share were EUR1.86 in the first quarter of 2017, compared with EUR1.51 in the same quarter of 2016. Adjusted for special items and amortization of intangible assets, earnings per share amounted to EUR1.97 (first quarter of 2016: EUR1.64).

As MRC informed earlier, the European Commission has approved under the EU Merger Regulation the acquisition of the industrial coatings business of German chemicals company BASF by AkzoNobel of the Netherlands.

BASF is the largest diversified chemical company in the world and is headquartered in Ludwigshafen, Germany. BASF produces a wide range of chemicals, for example solvents, amines, resins, glues, electronic-grade chemicals, industrial gases, basic petrochemicals and inorganic chemicals. The most important customers for this segment are the pharmaceutical, construction, textile and automotive industries. BASF had sales of over EUR74 billion in 2014 and over 113,000 employees as of the end of the year.
MRC

PVC production in Russia increased by 18% in January-April 2017

MOSCOW (MRC) - Production of unmixed polyvinyl chloride (PVC) in Russia increased to about 302,600 tonnes in the first four months of this year, up 18% compared to the same period of 2016. A low production of the previous year was a result of the forced shutdown of SayanskKhimPlast, according to MRC ScanPlast.

April production of unmixed PVC in Russia grew to 77,800 tonnes, compared with 72,600 tonnes in March 2017. SayanskKhimPlast shut its capacities for short scheduled maintenance works in March. Overall PVC production reached 302,600 tonnes in January-April 2017, compared to 257,200 tonnes a year earlier. Such a high level of growth in production was a result of long forced shutdown of SayanskKhimPlast in February-July last year.

The structure of PVC production by plants looked the following way over the stated period.

RusVinyl (joint venture of SIBUR and SolVin) in April produced about 25,000 tonnes of PVC, with 2,100 tonnes of them accounted for emulsion polyvinyl chloride (EPVC), compared with 27,000 tonnes in March. Total SPVC production at RusVinyl exceeded 102,600 tonnes in January-April 2017, down 3% year on year.

SayanskKhimPlast increased capacity utilisation last month, the plant's SPVC production reached 24,000 tonnes, whereas this figure was only 15,800 tonnes in March. SayanskKhimPlast's production of SPVC over the four months totalled 83,500 tonnes against 35,300 tonnes year on year (the low production in 2016 was forced long shutdown in February-July).

Bashkir Soda Company (BSC) in April 2017 produced about 21,100 tonnes of suspension PVC (SPVC), while in March it was 22,100 tonnes.
The producer's PVC production increased to about 86,100 tonnes in the first four months of 2017, compared with 84,400 tonnes year on year.

Kaustik (Volgograd) in April slightly increased SPVC production, reaching about 7,800 tonnes, compared with 7,700 tonnes in March. Total SPVC production at the plant over the reported period reached 30,300 tonnes, compared with 31,300 tonnes year on year.


MRC

Prices of film grade HDPE fell significantly in Russia in mid-May

MOSCOW (MRC) -- Prices of film grade polyethylene (PE) went down significantly in the Russian high density polyethylene (HDPE) market in mid-May. Supply of film grade HDPE also grew greatly in the market, as per ICIS-MRC Price report.

Market participants said prices of film grade HDPE had slumped in the market since 15 May. Polyethylene (PE) prices dropped by Rb2,000-5,000/tonne from early May. At the same time, supply of PE by Russian producers increased significantly.

Large imports of cheap material shipped from Central Asia, particularly, from Uzbekistan (Uz-Kor Gas Chemical's PE), was one of the factors of a major price reduction of Russian film grade PE. This PE has begun to be actively shipped to the Russian market since the beginning of last year and occupied its niche. In early May, offer prices for Uzbek film grade HDPE reached Rb87,000-87,500/tonne FCA, including VAT, in the central part of Russia and in the Urals.

Some market participants said a major increase in supply, particularly, from Nizhnekamskneftekhim, was the second factor for lower PE prices. The Nizhnekamsk producer resumed its HDPE production this month, whereas it manufactured exclusively linear low density polyethylene (PE) since mid-January.

Under the pressure of all these factors, prices of Russian film HDPE of most suppliers fell to Rb88,000-90,500/tonne FCA, including VAT, depending on the region.
MRC