Record US oil exports set to surge further

MOSCOW (MRC) — Already record US oil exports are set to surge further in the coming month as stored oil in one of the world's last areas of excess stockpiles pours into global markets, the chief executive of trading house Mercuria, Marco Dunand, as per Reuters.

The US shale oil revolution upended global energy markets, and in late September the country's oil exports hit a record 1.98 MMbpd. But Dunand said the surplus of oil in tanks meant more was likely to come. "I think the volume that's going to be exported from the US in the next two or three weeks is unprecedented in size," Dunand told the Reuters Global Commodities Summit, adding levels could hit 2.2 MMbpd.

"Looking at the vessel fixtures of recent times, I think we're going to see record exports over the next month." The United States lifted its nearly 40-yr ban on oil exports in late 2015. As US crude production continues to rise, its oil has found buyers in nearly every refining hub from Europe to Venezuela to China and India.

Dunand said after "hundreds of millions of barrels" had departed tanks and floating storage elsewhere in the world over the past year, the United States is an outlier of excess. "The US has an excess of crude stocks. Product stocks are more or less in line," Dunand said. "The rest of the world, crude stocks are more or less in line. The excess of crude stocks to rebalance the market naturally has to find its way."

In July and August, the Brent and Dubai crude contracts flipped into backwardation, a market structure in which immediate prices are higher than those in the future. This structure suggests markets are balanced or in short supply. But US crude futures remain in contango, a structure in which later prices are above the prompt level, indicating there is still a surplus.

"If you have backwardation in Dubai, backwardation in (Brent) and a contango in WTI (West Texas Intermediate crude), it's telling you that some of the WTI excess has to move to other places," Dunand said. "Some of those US barrels are going to go into Europe, and some into Asia. Asia is going to absorb a fair amount of that crude," Dunand said.

Still, he said the market was prepared to absorb the exports without significantly weighing on global price benchmarks. "The refiner will go and buy the cheapest possible barrels."


MRC

Ineos running at 50% at 545,000 mt/year ACN Texas plant

MOSCOW (MRC) -- Ineos Nitriles is currently running two reactors at its 545,000 mt/year Green Lake plant in Texas, as per Apic-online with reference to a company source.

"We are currently operating 50% and we are currently operating two reactors," he said. He declined to give further details or confirm any future plans.

Several market participants said they expect Ineos to start running the whole plant this week. The plant began at the end of September.

Ineos declared force majeure on acrylonitrile from its Green Lake plant early September after disruption by Hurricane Harvey.

As MRC informed before, in September 2016, Ineos Enterprises completed the sale of Ineos Styrenics, its Expandable Polystyrene Business (EPS), to Synthos S.A. for EUR80m. The sale of the Styrenics business included manufacturing sites at Wingles and Ribecourt in Northern France and Breda in the Netherlands. The three production sites are supported by its technology Centre in Breda, including a research laboratory and pilot plant facilities.

Ineos Group Limited is a privately owned multinational chemicals company consisting of 15 standalone business units, headquartered in Rolle, Switzerland and with its registered office in Lyndhurst, United Kingdom. It is the fourth largest chemicals company in the world measured by revenues (after BASF, Dow Chemical and LyondellBasell) and the largest privately owned company in the United Kingdom.
MRC

Petrochina expresses interest in Iraqs Nassiriya refinery

MOSCOW (MRC) — Petrochina has expressed interest in developing the Nassiriya oil refinery in southern Iraq, the oil ministry said in a statement on Friday, as per Reuters.

A Petrochina executive expressed the company’s interest at a meeting with Oil Minister Jabar al-Luaibi in Baghdad. The refinery is part of a larger project to develop the Nassiriya region’s oil and gas reserves.

The plan provides for increasing the fields’ output and the processing of their production at the new Nassiriya refinery, and to recover the associated gas to supply power stations or process it for exports.
MRC

AkzoNobel on way to doubling capacity at organic peroxides plant in China

MOSCOW (MRC) -- AkzoNobel’s Specialty Chemicals business has entered the next phase of a major expansion at its organic peroxides facility in Ningbo, China, which will increase production capacity by more than 100% by the third quarter of 2018, as per the company's press release.

The company’s Ningbo site produces dicumyl peroxide (DCP), an organic peroxide used as a crosslinking agent in the manufacture of polymers. Capacity at the site was boosted by 40% in August, following the completion of an initial project, and is set to double to a capacity of 38,000 tons per year.

"The market for DCP is strong and continues to grow globally," says Johan Landfors, Managing Director of AkzoNobel’s Polymer Chemistry business. "This new expansion is necessary to meet that demand, and is also a visible demonstration of the company’s continued commitment to invest in the future of the Specialty Chemicals business."

DCP is used in the production of a variety of polymers that need to have exceptional durability. These polymers can be found in many different products, including shoe soles – a market which is growing significantly, especially in developing countries. DCP is also used in polymers for insulating high voltage cables, which are increasingly in demand for upgrading electricity networks, connecting offshore wind parks and other sources of renewable energy.

"The continued development in Ningbo is a clear sign to our customers that we are dedicated to retaining our leadership position in the organic peroxides industry," adds Werner Fuhrmann, AkzoNobel’s Executive Committee member responsible for Specialty Chemicals. "By continuing to invest in our production sites and focusing on operational excellence, we will be better positioned to accommodate the growth of our customers."

More than 500 people are employed at the Ningbo site, which houses manufacturing plants for several of AkzoNobel’s Specialty Chemicals businesses. AkzoNobel’s Ningbo DCP plant is the largest of its kind in the world.

As MRC informed before, in Decmeber 2016, AkzoNobel finalized the acquisition of BASF’s global Industrial Coatings business, which supplies a range of products for industries including construction, domestic appliances, wind energy and commercial transport, strengthening its position as the global number one supplier in coil coatings. The transaction includes relevant technologies, patents and trademarks, as well as two manufacturing plants in the United Kingdom and South Africa. Completing this transaction also positions AkzoNobel as a full service coatings provider for the protection and maintenance of wind turbines, providing essential protection to wind power stations around the globe.

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

Lukoil chief says sanctions may last a decade

MOSCOW (MRC) -- Sanctions against Russia are likely to stay in place for at least the next 10 years, the country’s second-largest oil company has said, at a time of sharply deteriorating relations between Moscow and the west, as per FT.

Russian oil and gas companies should prepare for long-term restrictions, Lukoil’s chief executive said, while also backing the extension of a deal between Russia and Opec to reduce crude output if oil prices fall below USD50 a barrel.

"Our current strategic plan for the next 10 years is that sanctions will remain in place," Vagit Alekperov told the Financial Times. "I don’t perceive that sanctions will be removed in the coming years, and even (when they are) it will be a lengthy and very complicated process."

Mr Alekperov is Lukoil’s largest shareholder and owns about a quarter of the shares, having founded the company from state oil assets during the break-up the Soviet Union. With daily production of 1.8m barrels, it is Russia’s largest private oil producer and second only to Kremlin-controlled Rosneft.

Washington, Brussels and other western capitals have imposed financial and technology-sharing sanctions on many Russian energy companies, including Lukoil, in response to Moscow’s 2014 invasion of Ukraine and annexation of Crimea.

Despite hopes in Moscow that Donald Trump’s entry into the White House would usher in better relations, allegations of Russian interference in the 2016 election have only increased distrust between the two countries.

"Three years ago I was in Washington and met the gentleman in charge of the US sanctions department. That was at the beginning of the events related to Ukraine," Mr Alekperov said in an interview. "And he said: 'If Russia does this and that, then we will do that and this'. And so I told him: ‘My country is never going to leave you unemployed."

The 67-year-old praised a landmark agreement between oil cartel Opec and Moscow last year that cut oil output and helped raise crude prices to about USD55 a barrel, describing it as a “new instrument that has been established that can impact the (oil) price, a control system".

Mr Alekperov echoed remarks by Russian president Vladimir Putin last week that the deal could be extended past its March 2018 expiry date.

“If the price is less than USD50, then we must go for an extension. If it is USD55, then there is no need. Just a gradual withdrawal," he said.

“The most important thing for now is to not allow another time of $100 a barrel, that would be major trouble for the industry. We want to have a predictable level of USD55-USD60 at least for the 10 years to come and keep both consumers and producers happy."

As MRC informed earlier, in February 2017, The Antimonopoly Committee of Ukraine gave permission for the mediated purchase of plant Karpatneftekhim from the Russian group Lukoil to the Ukrainian. The Antimonopoly Committee gave permission for the purchase of a 75% stake in Lukoil Chemical B.V. (Netherlands), which owns 100% of LLC "Karpatneftekhim" (Kalush, Ivano-Frankivsk region).

Lukoil is one of the leading vertically integrated oil company in Russia. The main activities of the company include operations for exploration and production of oil and gas, production and sale of petroleum products. Lukoil is the second largest private oil Company worldwide by proven hydrocarbon reserves. Lukoil structure includes one of the largest Russian petrochemical plant - Stavrolen.
MRC