AkzoNobel reclaims top ranking on Dow Jones Sustainability Index

MOSCOW (MRC) -- AkzoNobel has returned to the top of the influential Dow Jones Sustainability Index (DJSI) to lead the rankings again for the fifth time in six years, as per the company's press release.

The latest listing, published today, places the company first in the Chemicals industry group. It represents a quick and successful response from the company after its run of four consecutive years at the top came to an end in 2016.

"It’s a great achievement to be leading our industry again," said AkzoNobel CEO Thierry Vanlancker. "We made a huge effort to improve in areas that needed to be addressed and being ranked first again proves the impact we can have by putting sustainability at the heart of our business strategy."

The company has now featured in the top ten for 12 consecutive years, underlining AkzoNobel’s commitment to working with customers to develop sustainable solutions that make a positive impact on the whole value chain.

"The real value and purpose of the DJSI lies in its effectiveness as a benchmark tool to continue to improve our business," added Vanlancker. "So we’re well aware that just because we are leading the ranking again, we can’t afford to become complacent. As a leader in sustainability, we are playing a major role in transforming the industries in which we operate. We therefore need to keep improving in order to make the giant leaps required for us to create a more sustainable future."

He pointed to the progress being made by the Decorative Paints business in transitioning to water-based products, and the continued success of partnerships being forged by Specialty Chemicals, as examples of how the company is helping to transform the industries in which it operates. AkzoNobel is also aiming to become carbon natural by 2050.

Regarded as the most respected independent sustainability ranking system, the DJSI World Index benchmarks the sustainability performance of leading companies based on environmental, social and economic performance, including forward-looking indicators. It assesses various criteria, including supply chain management, operational eco-efficiency, product stewardship, human capital development, integrity and people, process and product safety.

As MRC reported before, on 9 June 2016, AkzoNobel said it was adding marine and protective coatings capacity at its existing performance coatings site at Lipetsk, south of Moscow. The new capacity was expected to be operational in the third quarter of that year. It will enable AkzoNobel to supply protective coatings for the regional oil and gas, mining, power and infrastructure markets, as well as marine coatings for ship building, maintenance and repair. The investment represents a further expansion for the multi-business site at Lipetsk.

Akzo Nobel N.V., trading as AkzoNobel, is a Dutch multinational, active in the fields of decorative paints, performance coatings and specialty chemicals. Headquartered in Amsterdam, the company has activities in more than 80 countries, and employs approximately 55,000 people.
MRC

Nghi Son refinery & petrochemical plants to begin commercial operations in Q4 2017

MOSCOW (MRC) -- The USD9.2-billion Nghi Son Refinery and Petrochemical (NSRP) plant in Thanh Hoa Province, Vietnam, is expected to begin commercial operations in the fourth quarter of this year, according to a report on NSRP's website, of which reported Apic-online.

NSRP has almost completed all preparation works for the project, which includes a 200,000-b/d refinery and petrochemical units to produce 700,000 t/y of paraxylene, 240,000 t/y of benzene and 370,000 t/y of polypropylene.

A joint venture of PetroVietnam, Kuwait Petroleum Europe, Idemitsu Kosan and Mitsui Chemicals, NSRP was originally expected to begin commercial operations in early 2017.

PEC Ltd., along with its subsidiaries and associated companies, received a seven-year single daily maintenance contract earlier this year for the NSRP complex.

As MRC wrote previously, in May 2017, there was a notice on a government website for Deputy Prime Minister Vuong Dinh Hue and a source close to the matter that the commercial start-up of Vietnam's new USD7.5 B Nghi Son oil refinery will be delayed to 2018. Trouble with a mechanical test on some of the refinery's components set back test runs at the plant, causing the delay, according to the notice.

Japan's Idemitsu Kosan and Kuwait Petroleum International each own 35.1% of Nghi Son Refinery and Petrochemicals, while PetroVietnam has 25.1% and Mitsui Chemicals 4.7%.
MRC

PP prices soared in Russia in the first week of September

MOSCOW (MRC) -- September began quite hard for Russian polypropylene (PP) consumers. Scheduled and unscheduled outages at local plants led to an acute shortage of polymer in the market and, consequently, to a major price increase, according to ICIS-MRC's Price report.

Supply of PP was tight from some producers in the Russian market back in the second half of August. The market situation deteriorated sharply in the first week of September because of the shutdowns at three plants: SIBUR Tobolk, Stavrolen and Ufaorgsintez. The shortage of PP amid strong demand led to a sharp and significant rise in prices of both propylene homopolymers (homopolymer PP) and propylene copolymers.

In early September, because of technical issues, SIBUR Tobolsk, Russia's largest producer (with the annual capacity of 500,000 tonnes), took off-stream some of its PP production capacities, the exact dates of the outage has not been announced yet. Since 6 September, Stavrolen (with the annual capacity of 120,000 tonnes) began a scheduled shutdown for about a two-week turnaround. Ufaorgsintez (with the annual capacity of 120,000 tonnes) plans a 12-day maintenance from 11 September.

And if the shutdowns in Budennovsk and Ufa were planned, then the outage at some production capacities in Tobolsk became a complete surprise for the market. Back in July, there was a surplus in the PP market, the market balance began to change in August, and many converters simply did not have time to build up additional inventories.

Last week, many sellers suspended or restricted their PP sales because they had scarce stocks, as a result, there were very few deals for homopolymer PP concluded. And in some cases, offer prices reached Rb88,000/tonne FCA, including VAT, for homopolymer PP raffia.

The propylene copolymers market responded following the homopolymer PP market. Deals for September shipments of Nizhnekamskneftekhim's propylene copolymers reached Rb98,000/tonne FCA, including VAT, in the electronic trades, whereas they were in the range of Rb90,000-92,000/tonne FCA, including VAT, in late August.
MRC

Saudi energy giants shuffle project stakes

MOSCOW (MRC) -- US-based Dow Chemical and state-run Saudi Aramco announced plans in late August for the American firm to acquire an additional stake in their joint five-year-old Sadara Chemical joint venture (JV), said Yourpetrochemicalnews.

Sadara is the project company for the ground-breaking multi-billion dollar petrochemicals complex completed in August at Jubail on the East Coast. The partners have been discussing equalising their holdings for some time, against a backdrop of wider corporate flux.

Meanwhile, Royal Dutch Shell, likewise emerging from a period of major internal change, finally completed its withdrawal earlier in August from a decades-old downstream partnership with Aramco’s parastatal counterpart, Saudi Basic Industries Corp. (SABIC).

Dow and Aramco on August 28 announced their signature of a non-binding memorandum of understanding (MoU) calling for the US firm to acquire an additional 15% holding in Sadara, leaving the two as 50:50 equal partners.

The financial terms were not disclosed and the deal was said to be contingent on Dow’s intended separation of a “materials services company” within 18 months of the company’s USD147 billion merger with fellow American chemicals titan DuPont – which was formally concluded on August 31 – and Sadara’s completion of a “creditors’ reliability test” required as part of the project-financing sealed some four years ago.

The two US giants’ plans to divide the company into three spin-offs – focusing on ‘materials’, agriculture and certain specialist products – has been a source of controversy among both companies’ investors in the lead-up to the ground-breaking deal. The shape and number of the separated businesses will remain under review after the tie-up.

Dow described the firm’s Saudi move as being “another accelerator in Dow’s long-term growth strategy designed to capture growing consumer-led demand in our key end-markets of transportation, infrastructure, packaging and consumer products in developing regions”. Meanwhile, Aramco hailed the additional investment as a signal of confidence in the kingdom’s economy.

Energy sector ties between the two countries have tightened over the past six months – with Aramco concluding a deal in May to acquire full control over the US’ largest refinery in the process of the dissolution of the Saudi firm’s Motiva Enterprises JV with Shell.

Dow deepened its engagement with the Sadara scheme in particular and with the kingdom’s economic development efforts in general in the same month. Plans were announced for a greenfield polymers plant at the PlasChem Park being developed by Sadara in co-operation with the government’s Royal Commission for Jubail & Yanbu (RCJY) adjacent to the new complex to house a cluster of conversion and specialist industries supplied by the main plant.

The American company also signed an MoU to carry out feasibility studies into the development of a ‘world-scale’ siloxanes and silicones facility at an unspecified location in the kingdom.

The limited-recourse project financing for Sadara referred to in the latest MoU was completed in mid-2013 – with the USD12.5 billion raised breaking the regional record for such deals.

The packages were comprised primarily of funding from export credit agencies, including a USD5 billion tranche from US Export-Import Bank, as well as a commercial loan and a bond issue.

Plans at the time to stage an initial public offering (IPO) of part of Aramco’s stake were abandoned in the wake of the market downturn the following year but had been mooted again in April this year by Sadara CEO Ziad al-Labban as an alternative means of reducing the Saudi firm’s equity interest.

The estimated USD20 billion project, launched in 2012, covers the development of the kingdom’s first mixed-feed cracker and 26 downstream units producing around 3 million tpy of a diverse range of chemicals. The final unit was commissioned on August 14.

Shell’s landmark acquisition of the UK’s BG Group last year by contrast prompted a loosening of Saudi ties.

Just under a year after Motiva’s intended break-up was disclosed, the super-major revealed plans in January to divest the company’s 50% stake in Saudi Arabia Petrochemical Co. (SADAF) – a Jubail-based JV with SABIC formed in 1980 to develop a petrochemicals complex at the industrial city – as part of a wider USD30 billion programme of asset sales.

Announcing completion of the USD820 million deal on August 16, the Saudi downstream behemoth claimed that full ownership would “enable SABIC to optimise operations at SABIC and further invest in the facilities, integrating them with SABIC’s other affiliates”.

In late 2014, the JV cancelled plans to add a polyurethane plant at the SADAF complex based on Shell technology at an estimated cost of some USD3 billion – which would have been the first of its kind in the Middle East, a mantle now stolen by Sadara.

The SADAF facility currently produces around 4 million tpy of chemicals including ethylene, styrene, caustic soda and ethylene dichloride.
MRC

Oil steady as Irma heads for Florida, Saudi Arabia cuts supply

MOSCOW (MRC) -- Oil prices steadied on Friday after almost a week of sharp rises as Hurricane Irma, one of the most powerful storms in a century, drove towards Florida after tearing through the Caribbean, reported Reuters.

Irma is the second major hurricane to approach the United States in two weeks and has already killed 14, flattening whole islands. Its predecessor, Harvey, shut a quarter of US refineries and 8% of US oil production.

"Hurricanes can have a lasting effect on refinery and industry demand," said Eugen Weinberg, head of commodities research at Commerzbank in Frankfurt. "The impact of the forces of nature on US oil production should not be overestimated - nor should their impact on demand be underestimated."

Brent crude was up 16 cents at USD54.65/bbl by 1145 GMT, after earlier reaching its highest level since April at USD54.80. US light crude oil was 14 cents lower at USD48.95/bbl.

Brent found some support from news that Saudi Arabia will cut oil supply allocations to its customers worldwide in October by 350,000 bpd.

US crude prices fell as a result of low refining activity following Harvey, which sharply reduced demand for oil to process, traders said.

Harvey's impact was also felt in oil production. US oil output fell by almost 8%, from 9.5 MMbpd to 8.8 MMbpd, according to the Energy Information Administration (EIA).

But the slowdown in refining and output should be temporary.

"Most refineries are restarting and we expect a near-full recovery by month-end," US investment bank Jefferies said.

Port and refinery closures along the Gulf coast and harsh sea conditions in the Caribbean have also affected shipping.

"Imports (of oil) to the US Gulf Coast fell to levels not seen since the 1990s," ANZ bank said.

It will take weeks for the US petroleum industry to return to full capacity, analysts say.

Hurricane Irma hit the Dominican Republic and Haiti on Friday, heading for Cuba and the Bahamas. It was predicted to reach Florida by Sunday.

The US National Hurricane Center (NHC) said that Irma was a Category 5 hurricane, with wind speeds of 160 mph-185 mph.

As MRC informed previously, Hurricane Harvey, which had killed more than 40 people and brought record flooding to the oil heartland of Texas, paralyzed a quarter of the US refining industry. Harvey, downgraded to a tropical storm and losing steam as it moved inland, shut at least 4.4 MMbpd of refining capacity in the USA.
MRC