PetroChina unloading first Chinese purchase of oil from US strategic reserves

MOSCOW (MRC) -- PetroChina is last week unloading the first Chinese purchase of crude oil from US strategic petroleum reserves at a port in eastern China, according to shipping data and two industry sources, reported Reuters.

The move comes as China, the world's No.2 oil consumer, steps up imports from the Americas to diversify supply sources.

PetroChina unit, PetroChina International America Inc, bought the 550,000-bbl cargo of Bryan Mound sour crude in a sale from US strategic petroleum reserves in March for USD28.8 MM.

Supertanker Cosrising Lake, chartered by PetroChina, is unloading the US oil at Qingdao port in Shandong province this week, shipping data on Thomson Reuters Eikon showed.

The crude has an API gravity of 33.3 degrees and sulfur content of 1.41%, according to the US Department of Energy's website, similar in quality to Middle East grades such as Oman crude.

After discharging that cargo, the ship will unload close to 1 MMbbl of US Mars crude at Rizhao port for independent refiner Shandong Wonfull Petrochemical, an industry source said, citing Chinese port data. He declined to be identified as he was not authorised to speak with media.

The Mars cargo is not from US strategic reserves.

PetroChina declined to comment, while Wonfull could not be reached for comment.

More Asian refiners are turning to the Americas for oil after OPEC cuts tightened heavy crude supplies and as governments respond to a call from United States President Donald Trump to buy US oil and gas.

State-owned PetroChina is one of the key players moving Americas crude to Asia. It recently sold India that country's first US crude import via an Indian Oil Corp tender.

As MRC reported earlier, in late 2015, PetroChina, China's largest oil and gas producer, commissioned a new crude oil refinery in China. Located at Anning in Yunnan province of China, the refinery has a crude processing capacity of 260,000 bpd.

PetroChina Company Limited, is a Chinese oil and gas company and is the listed arm of state-owned China National Petroleum Corporation, headquartered in Dongcheng District, Beijing. It is China's biggest oil producer.
MRC

US fines ExxonMobil over Ukraine-related sanctions violations

MOSCOW (MRC) -- The US Treasury Department on Thursday said it was fining global oil company Exxon Mobil Corp $2 MM for violating sanctions on Russia in May 2014, as per Reuters.

The heads of the company's US subsidiaries signed eight documents between May 14 and May 23, 2014 with Igor Sechin, the head of Russia's largest oil producer, Rosneft, Treasury's Office of Foreign Assets Control said in a statement on its website.

Sechin had been blacklisted by the United States just weeks earlier.

The Treasury unit, which enforces sanctions, found ExxonMobil had not voluntarily self-disclosed the violations, "and that the violations constitute an egregious case."

Rex Tillerson, ExxonMobil's chief executive at the time of the dealings, is now US secretary of state. The State Department referred questions about the fine and Tillerson's knowledge of the dealings to Exxon Mobil.

Exxon said it fully complied with sanctions guidelines in 2014 from former President Barack Obama's administration that ongoing oil and gas business activities with Rosneft were allowed, but not personal dealings with Sechin.

The oil company cited a May 2014 Treasury Department spokesman's comments that BP Plc Chief Executive Bob Dudley - an American citizen - would be allowed to remain on Rosneft's board so long as he did not discuss personal business with Sechin.

The Treasury Department "is trying to retroactively enforce a new interpretation of an executive order that is inconsistent with the explicit and unambiguous guidance from the White House and Treasury issued before the relevant conduct and still publicly available today," ExxonMobil spokesman Alan Jeffers said in a statement.

On April 28, 2014, the Treasury announced it was sanctioning Sechin as part of a package of measures aimed at pressuring Russia over its intervention in Ukraine, and said he had shown "utter loyalty to Vladimir Putin," Russia's president.

As MRC wrote previously, in 2015, U.S. oil and gas major ExxonMobil has asked the Russian government to reimburse taxes worth "several billion roubles" it says it overpaid on a project in the far east of Russia. ExxonMobil believes it overpaid profit taxes on its Sakhalin-1 oil and gas project. Russia reduced the profit tax in 2009 to 20 percent but ExxonMobil continued to pay at the earlier level of 35 percent after the project broke even in 2008. ExxonMobil owns 30 percent in Sakhalin-1.

ExxonMobil is the largest non-government owned company in the energy industry and produces about 3% of the world's oil and about 2% of the world's energy.
MRC

PP imports to Belarus rose by 5.5% in January-May

MOSCOW (MRC) -- Overall imports of polypropylene (PP) into Belarus grew in the first five months of 2017 by 5.5% year on year, totalling about 38,000 tonnes. All PP grades accounted for the increase in demand, according to a MRC's DataScope report.

May PP imports into Belarus increased to 8,300 tonnes from 7,800 tonnes a month earlier, local companies raised their purchasing of all PP grades. Overall imports of propylene polymers reached 38,000 tonnes in January-May 2017, compared to 36,000 tonnes a year earlier. Demand for all PP grades increased, but propylene copolymer accounted for the greatest growth.

The supply structure by PP grades looked the following way over the stated period.


May imports of homopolymer PP to the Belarusian market rose to 5,500 tonnes from 5,400 tonnes a month earlier, shipments of injection moulding homopolymer PP from Europe increased. Overall shipments of homopolymer PP exceeded 25,600 tonnes in the first five months of 2017 versus 25,200 tonnes a year earlier. Russian producers, with the share of 86% in the total shipments, were the key suppliers of homopolymer PP.

May imports of propylene copolymers to Belarus exceeded 2,700 tonnes, compared to 2,400 tonnes a month earlier, purchasing of PP in Europe increased. Thus, overall imports of propylene copolymers reached 12,240 tonnes in January-May 2017, whereas this figure was 10,800 tonnes a year earlier.

MRC

Sipchem in CO2 supply agreement with Sasref

MOSCOW (MRC) -- Saudi International Petrochemical Co (Sipchem) said on Wednesday its methanol affiliate will start receiving supplies of carbon dioxide feedstock from Saudi Aramco Shell Refinery (SASREF) in the first quarter of 2019, reported Reuters.

Sipchem said the long-term agreement is designed to improve efficiency at its plant in Jubail.

In December, the International Methanol Co (IMC) signed a contract with South Korea's eTEC E&C for work costing $144.6 MM expected to be completed in the fourth quarter of 2018.

The IMC-65% owned by Sipchem, with the rest owned by a group of Japanese companies - has an annual production capacity of 967,000 t of methanol.

Sipchem said in the statement on Wednesday the positive financial impact from the supply agreement will start from the first quarter of 2019.

As MRC wrote previously, on July 26, 2014, Sipchem commenced trial runs at a new ethylene vinyl acetate (EVA)/low density polyethylene (LDPE) swing plant. Located in Jubail Saudi Arabia, the plant has a production capacity of 200,000 mt/year.

Established in 1999, Saudi International Petrochemical Company (Sipchem) manufactures and markets methanol, butanediol, tetrahydrofuran, acetic acid, acetic anhydride, vinyl acetate monomer. Besides, it has launched several down-stream projects to manufacture ethylene vinyl acetate, low density polyethylene, ethyl acetate, butyl acetate, cross linkable polyethylene, and semi conductive compound that are scheduled to start in 2013.
MRC

India allows ONGC to buy out government stake in refiner HPCL

MOSCOW (MRC) -- India on Wednesday approved a plan to sell federal government's stake in state-refiner Hindustan Petroleum Corp to explorer Oil and Natural Gas Corp, a source said, in a bid to create oil giants to compete with global rivals, as per Hydrocarbonprocessing.

Indian government owns 51.1% stake in HPCL.

"ONGC has forwarded a proposal to acquire HPCL. Process for in-principle approval for this proposal has been initiated," Oil Minister Dharmendra Pradhan told lawmakers earlier on Wednesday.

As MRC reported earlier, state-owned refiner HPCL is building a new 9 mln tpa refinery-cum-petrochemical complex at Pachpadra in Rajasthan and a petrochemical complex at Kakinada in Andhra Pradesh as part of a Rs 61,000-crore expansion.

Hindustan Petroleum Corporation Limited (HPCL) is an Indian state-owned oil and natural gas company with its headquarters at Mumbai, Maharashtra and with Navratna status. HPCL has about 25% marketing share in India among PSUs and a strong marketing infrastructure. The Government of India owns 51.11% shares in HPCL and others are distributed amongst financial institutes, public and other investors.
MRC