KMGI to expand petrol station network in Romania, Bulgaria once legal issues resolved

MOSCOW (MRC) — Oil refiner KMG International (KMGI) wants to open more petrol stations in Romania and Bulgaria and is on the lookout for acquisitions in central Europe once its legal problems are resolved, a company executive told Reuters.

KMGI is controlled by Kazakhstan's state oil and gas company, KazMunayGaz, but its main assets are in Romania as it holds a controlling stake in Rompetrol Rafinare, which owns the Petromidia and Vega refineries, and Rompetrol Petrochemicals.

The Petromidia refinery on the Black Sea was seized by Romanian authorities in 2016 as part of an investigation into Rompetrol's initial privatisation in 2000. KazMunayGaz acquired the company in 2007. Alexey Golovin, KMGI strategy and corporate development vice president, said the legal issues were making it difficult for KMGI to secure financing.

"The total amount of assets seized is USD1 B, which we perceive as excessive," Golovin told Reuters in an interview on Wednesday.

"This does not affect our day-to-day operations, but we cannot use them as leverage to acquire financing lines, which are like lifeblood for any company."

CEFC China Energy is buying a 51% stake in KMGI in a deal expected to go through in the next few months. It will be co-owner with KazMunayGaz and has committed to pour USD3 B into the group over five years, but there would be little incentive to invest before legal problems are solved.

Golovin said the asset seizure would be in place at least until the first court hearing into Rompetrol's privatization case, a date for which has yet to be set. A Bucharest court rejected KMGI's request to have the seizure lifted last year.


MRC

India set to unveil new biofuel policy in bid to cut oil, gas, coal imports -minister

MOSCOW (MRC) — India will soon announce a new policy to promote biofuels as part of efforts by the world's third-largest emitter of greenhouse gases to cut imports of fossil fuels like oil, gas and coal, a government minister said on Thursday, said Hydrocarbonprocessing.

The government aims to develop a biofuel economy worth USD15.6 B in the next two years, Oil Minister Dharmendra Pradhan told a conference on renewable energy on Thursday.

India's top three state-owned oil companies have pledged a combined USD2 B to carry out research to develop biofuel technologies and the government has pledged to guarantee a return on their investments, Pradhan said. "The roadmap to lower crude oil imports is connected to biofuel," Pradhan said. India, the world's third-biggest oil consumer, aims to cut its crude imports by 10% by 2022.

New Delhi also plans to lower its carbon footprint by raising the use of natural gas in its energy mix to 15% in the next three to four years, up from 6.5% currently. The government has already asked state oil companies to set up ethanol plants at 12 locations over the coming year.

Energy consumption in India is expected to grow as the government aims for economic growth of 8%–9% this fiscal year through March 2018, against around 7% in 2016/17.

Indian Oil Corp, the country's top refiner, plans to enhance the capacity of its biofuel refineries to 100 tpd from about 12 tpd in the next two years, Chairman Sanjiv Singh told reporters at the conference.

IOC runs three biofuel plants with an investment of about 30 billion rupees and is looking to increase the number of such plants, Singh said.

India needs private investment in the sector and once the cost of production comes down, the country could see some private sector participation, Singh said.

Separately, transport minister Nitin Gadkari said Prime Minister Narendra Modi's cabinet could soon consider allowing the use of alternative fuel methanol in shipping.
MRC

Indorama on track for Q4 restart of Louisiana ethylene plant

MOSCOW (MRC) -- Indorama Ventures is on track for a fourth-quarter restart of a dormant ethane cracker near Lake Charles, Louisiana, said Apic-online, citing the company's earnings release.

"Approximately 90% of the output produced will be used as a feedstock at [Indorama's] Texas EO/EG facility," the company said in a statement.

The currently dormant cracker, which Indorama acquired in September 2015, can to produce 420,000 mt/year of ethylene and 20,000 mt/year of propylene.

The site was previously owned by Equistar Chemicals and was taken out of service on February 17, 2001 as a result of reduced demand for petrochemical derivatives and escalating oil, natural gas and utility prices.

Indorama has signed a long-term agreement with Targa Resources for ethane and propane feedstock supply, along with an agreement with Boardwalk Louisiana Midstream, for pipeline transportation and storage of ethylene.

Boardwalk's Evangeline Pipeline will enable Indorama to supply ethylene to its petrochemical sites in Louisiana and Texas.

Indorama has an ethylene oxide and monoethylene glycol plant at Clear Lake, Texas, with a capacity of 550,000 mt/year of EO and MEG, according to the company's website.
MRC

HDPE production in Russia decreased by 0.7% in January-July

MOSCOW (MRC) - Production of high density polyethylene (HDPE) in Russia decreased to about 573,100 tonne in the first seven months of 2017, down 0.7% year on year. Gazprom neftekhim Salavat and Nizhnekamskneftekhim showed a decrease in production, according to MRC ScanPlast report.

July HDPE production in Russia decreased to 72,700 tonnes, while in June it was 95,100 tonnes. Such a significant decrease in the output was mainly caused by the scheduled shutdown for maintenance at Gazprom neftekhim Salavat and by Nizhnekamskneftekhim's switch for LLDPE production. Overall HDPE production reached 573,100 tonnes in the first seven months of the year, compared to 577,200 tonnes a year earlier. Kazanorgsintez and Stavrolen's higher output did not allow to offset the reduction in production at the other two plants.

Structure of HDPE production over the reported period looked as follows.

Russia's July HDPE production at Kazanorgsintez increased to 46,800 tonnes from 46,700 tonnes a month earlier. The producer's total HDPE production was 316,300 tonnes in the first seven months of the year, up 13% year on year.

July HDPE production at Stavrolen reached about 25,900 tonnes against 26,000 tonnes in June. Stavrolen plans to shut its capacity for two months of maintenance works for the modernisation of part of the facilities from 1 September. The plant's HDPE output reached 168,200 tonnes in the first seven months of 2017, up by 8% year on year.

Gazprom neftekhim Salavat shut its capacity for long-term preventive maintenance from 1 July; June production of HDPE at the Salavat enterprise amounted to about 10,000 tonnes. Thus, overall HDPE production at Gazprom neftekhim Salavat reached 51,500 tonnes in the first seven months of 2017, down by 20% year on year. Such a noticeable decrease in the volume of output was a result of long preventive maintenance, whereas last year the company worked without long-term turnaround.

Nizhnekamskneftekhim in late June, switched to the production of linear polyethylene and plans to resume the production of HDPE only in early September. HDPE production at the Tatar plant was 12,500 tonnes over an incomplete month of work. Overall HDPE production at the plant in January-July was 37,100 tonnes compared with 77,700 tonnes year on year. Such a significant reduction in output was a result of the growth in the share of linear polyethylene in total production.


MRC

Major turnaround at Neste refinery to complete planned production structure change

MOSCOW (MRC) -- In mid-August, Neste will begin a two-month shutdown at its refinery in Naantali, Finland. The major turnaround will complete the plan first introduced in 2014 to implement closer integration of the operations of the two Finnish refineries under uniform management, said Hydrocarbonprocessing.

The Finnish refinery operations of Neste consist of four production lines at the Porvoo refinery, and one in Naantali.

"With the ongoing investment program, we're aiming for an additional margin of at least $5.5/bbl after the ongoing strategic investments in Porvoo and Naantali are completed," said Matti Lehmus, Executive Vice President of Oil Products at Neste. "The production structure will be revamped to decrease the importance of heavy fuel oil and to increase the proportion of more valuable products."

In the future, the Naantali production line will produce gasoline, diesel oil and special products, including solvents and bitumen. Naantali also produces important feedstocks such as vacuum gas oil for the Porvoo refinery's production lines. Naantali's terminal capacity will be used to distribute products produced in Porvoo and Naantali.

Planned major turnarounds are significant projects for the maintenance of the refinery's competitiveness, safety and reliability, and they are carried out every four to five years. Furthermore, statutory pressure equipment inspection and maintenance require scheduled shutdowns. The previous major turnaround at Naantali took place in 2012. The impending turnaround will be the most extensive ever carried out at the Naantali refinery.

The multinational project will have a total of about 30 different nationalities among the contractors. The maximum workforce active at any one time will be 1,500.

The Naantali turnaround with the related investments aims to improve the competitiveness of the Finnish refinery operations of Neste. The total cost of the turnaround will be around EUR 90 MM. The sum consists of investments related to the turnaround, maintenance investments made at the same time, and the value of lost production. Work related to the change of production structure at the Naantali refinery has already been carried out for more than 700 days during production operations with no lost workday injury cases.
MRC