Chinese CEFC wins preliminary government approval for Rosneft deal

MOSCOW (MRC) -- Privately-run conglomerate CEFC China Energy has obtained preliminary state approval for its proposed USD9.1 billion investment in Russian oil major Rosneft, three sources with knowledge of the matter told Reuters.

CEFC said earlier this month it will buy a 14.16 percent stake in Rosneft from a consortium of Glencore and the Qatar Investment Authority, strengthening energy ties between Moscow and Beijing.

The approval was received just about a week after the deal was announced, the sources said.

"It’s a preliminary approval from the NDRC which means the government gave the in-principle go-ahead for the deal," said an industry executive with direct knowledge of the government decision. NDRC, or the National Development and Reform Commission, is China’s top economic planner.

"The preliminary approval means the government sees the strategic significance of this deal and shall lend its backing in financing."

The government, including the State Council, or Cabinet, is expected to give final approval unless there are "material errors" during the process of proceeding with this transaction, said the executive and a second source briefed by CEFC on the matter.

Both NDRC and CEFC did not immediately comment.

CEFC China Energy has grown in recent years from a niche oil trader into a USD25 billion sprawling energy and financial conglomerate with strong political ties and a rare contract to store part of China’s state oil reserve.

CEFC has long held overseas expansion ambitions and grabbed the spotlight in the Rosneft deal at a time when larger state-run peers like Sinopec Group have shifted gears from rapid expansion to divestment.

A stake in Rosneft will allow China, the world’s top energy consumer and crude oil buyer, to boost cooperation with the world’s top oil producer.

CEFC has tapped China Development Bank and Russian lender VTB to help fund the Rosneft deal, banking and company source said. CDB, a Chinese policy bank, has long supported CEFC and is its biggest lender.

As MRC wrote before, in December 2016, a consortium of Glencore and Qatar bought a 19.5% stake in Rosneft for over EUR10 billion in one of the biggest energy deals of 2016.

Rosneft became Russia's largest publicly traded oil company in March 2013 after the USD55 billion takeover of TNK-BP, which was Russia’s third-largest oil producer at the time.
MRC

Celanese raises October VAM prices in China

MOSCOW (MRC) -- Celanese Corporation, a global technology and specialty materials company, will increase list and off-list selling prices for Vinyl Acetate Monomer (VAM) in China, said the producer in its press release.

The price increase of CNY300/mt will be effective as of 1 October 2017, or as contracts otherwise allow, and is incremental to any previously announced increases.

As MRC informed before, Celanese Corporation last raised its VAM prices in this region on 13 September. Then the price increases were as stated below:

- CNY500/mt for China and USD100/mt for Asia (outside of China).

Earlier, on 6 September, 2017, the same price increase was already implemented by Celanese for the same products and regions.

Celanese Corporation is a global technology leader in the production of differentiated chemistry solutions and specialty materials used in most major industries and consumer applications. Based in Dallas, Celanese employs approximately 7,300 employees worldwide and had 2016 net sales of USD5.4 billion.
MRC

Hyundai Oilbank resumes production at Daesan RFCC unit

MOSCOW (MRC) -- Hyundai Oilbank has completed maintenance at its residue fluid catalytic cracker (RFCC) unit at Daesan, as per Apic-online.

A Polymerupdate source in South Korea informed that the company has resumed operations at the unit on September 25, 2017. The unit was shut for turnaround on August 23, 2017.

Located at Daesan in South Korea, the RFCC unit has a propylene production capacity of 350,000 mt/year.

As MRC informed earlier, in March 2017, Clariant, a world leader in specialty chemicals, announced that it had been awarded a contract by Dongguan Grand Resource Science & Technology Co. Ltd. to develop a new propane dehydrogenation unit in cooperation with CB&I. The project includes the license and engineering design of the unit, which is to be built in Dongguan City, Guangdong Province, China.

The Dongguan plant will be one of the largest single-train dehydrogenation units in the world. Clariant's technology partner CB&I will base the plant's design on its Catofin® catalytic dehydrogenation technology, which uses Clariant's tailor-made Catofin catalyst and Heat Generating Material (HGM).
MRC

DowDuPont commissions Texas ethylene, PE plants

MOSCOW (MRC) -- DowDuPont Materials Science, the business division of newly formed DowDupont, has commissioned ethylene and polyethylene (PE) units in Freeport, Tex., as part of Dow Chemical Co.'s previously announced USD6-billion US Gulf Coast (USGC) investment program in Texas and Louisiana on projects to utilize low-cost and advantaged US shale gas feedstock, said the company on its website.

The 1.5 million-tonne/year ethylene plant and 400,000-tpy PE plant—which is based on Dow’s proprietary Solution process technology for production of the company’s ELITE brand enhanced PE resins—were both in operation as of Sept. 21, DowDupont said.

Due to continue ramping up through the third quarter, both units are scheduled to reach full production rates during the fourth quarter, the operator said.

The company also confirmed plans to expand nameplate capacity of the ethylene plant—a central component of its current USGC investments—to 2 million tpy. Alongside supporting additional debottlenecking projects aimed at unlocking additional polyethylene capacity, the planned ethylene expansion also will support the proposed construction of another grassroots polyethylene unit as part of the operator’s next USD4-billion wave of comprehensive growth investments over the next 5 years to expand its US petrochemicals manufacturing business (OGJ Online, May 12, 2017).

Further details regarding the proposed ethylene expansion and future PE unit, however, were not disclosed.
The first of four derivative investments to be completed at Dow’s operations in Texas and Louisiana, the recently commissioned Freeport ELITE PE unit will be joined by startup of the following projects by yearend 2018:
MRC

Russia keeps spot as top oil supplier to China for sixth month

MOSCOW (MRC) -- Russia beat Saudi Arabia to become China’s top crude oil supplier for a sixth month in August, as independent refiners ramped up purchases and as state-owned refiners bought seaborne shipments from the Russian Far East port of Kozmino, reported Reuters.

China’s crude oil imports from Russia in August were 4.426 MMt, or about 1.04 MMbpd, down 4.5% over the same month last year, according to a detailed breakdown of commodity trade data released on Tuesday by the General Administration of Customs.

For the first eight months of 2017, Russia’s volumes rose 13% year-on-year to 38.65 MMt, or 1.16 MMbpd.

Supplies from Saudi Arabia last month dropped 16.2% from a year earlier to 3.657 MMt, or about 861,200 bpd, with the kingdom the third-biggest China supplier, slipping behind Angola.

Shipments from Angola last month surged nearly 28% from a year ago to about 983,500 bpd, the data showed.

Saudi supplies for the January-August period fell 1.7% on-year to 34.24 MMt, or 1.03 MMbpd.

Reuters reported last week that Russian state oil firm Rosneft, the world’s largest producer, is poised to send 50% more ESPO blend crude to state-run Chinese major PetroChina next year compared to 2017.

China’s imports of US crude, which started last year, were about 107,620 bpd in August and totaled 5.26 MMt for the January to August period.

Imports from Iran last month were up 5.45% from the same time a year ago at 3.34 MMt, or 786,720 bpd. That was the highest monthly amount since 2006, according to data on Reuters Eikon.

Imports for Iraq increased 30% to 736,400 bpd, the data showed.

China’s total crude oil imports slid to their lowest level since January at around 8 MMbpd, as some independent plants in the independent refining hub of Shandong closed for longer-than-expected overhauls amid a wave of government environmental checks.

As MRC wrote before, Russian crude imports to China rose in early 2017 as the country's independent, or teapot, refiners had expanded their diet to include the Urals grade, trade sources said in February 2017.
MRC