First industrial clusters to appear in Azerbaijan

MOSCOW (MRC) -- The state has set the goal that future development of Azerbaijan should be connected with the development of industry. So, the country attracts significant amount of public investment in industrial sectors that are of strategic importance for republic, reported Azernews.

Creation of industrial cluster, a regional concentration of related industries in a particular location, is one of these measures, which can attract all the key players from both home and abroad. Such clusters are actively established in many cities around the world.

The first industrial clusters in Azerbaijan will appear in Sumgayit and Balakhani settlement.

The clusters will be formed around the SOCAR Polymer petrochemical complex in the Sumgayit Chemical Industrial Park and the Balakhani landfill for the disposal of solid domestic waste, the director of the Research Institute of Economic Reforms, Vilayat Veliyev, told journalists on November 13.

"With the advent of clusters in Azerbaijan, a new stage in the development of industry will begin," he added.

Director of the Institute noted that, in particular, SOCAR Polymer will produce about 200 types of raw materials and semi-finished products on the basis of which small and medium-sized enterprises will be able to produce a large number of goods - from household appliances to complex machinery and machines.

"The creation of clusters will provide an opportunity for small and medium-sized businesses to unite around SOCAR Polymer and the Balakhani landfill for solid domestic waste utilization, and create their own production chain based on raw materials produced at these enterprises," Veliyev said.

He added that at present the government is working on the formation of a legal basis for the creation of industrial clusters, in connection with which various studies have been conducted and foreign experience has been studied.

The total cost of the SOCAR Polymer project is USD750 million. In the first quarter of 2018, it is planned to put into operation a plant for the production of polypropylene (PP), and in the third quarter - a polyethylene (PE) plant. At the first stage, the production capacity will amount to 120,000 tons of PE and 180,000 tons of PP. By 2021, the total capacity can reach 570,000 tons of products. The petrochemical complex will sell its products both inside the country and abroad - in Turkey, Europe and CIS countries.

The Balakhani landfill for solid domestic waste utilization was established in the 1960s, and since 2009 it has been transferred to the balance of Temir Seher OJSC. Since that time, the implementation of the project on integrated waste management in Baku jointly with the World Bank, which allowed the activities of the landfill to be brought into line with international standards, has been launched.

As MRC wrote previously, in March 2017, SOCAR GPC, a gas-processing project of the State Oil Company of Azerbaijan Republic (SOCAR), selected UNIPOL PE Technology licensed by Univation Technologies for use in its world-scale 600KTA polyethylene plant to be built in Garadagh, Azerbaijan. This project represents the first UNIPOL PE Process licensed in Azerbaijan and by SOCAR. The new polyethylene facility will take advantage of the flexibility of the UNIPOL PE Process to manufacture conventional and advanced polyethylene products covering a broad range of both high-density polyethylene (HDPE), including best-in-class HDPE injection molding grades, as well as linear low-density polyethylene (LLDPE) resin grades.

SOCAR GPC also selected Univation’s XCAT Metallocene Polyethylene Technology for the manufacture of advanced metallocene film structures suitable for high-performance food packaging, stretch-wrap, heavy-duty sack and specialized multi-layer applications. Production output from this new PE plant will be focused on satisfying growing polyethylene demand in both domestic and European markets in a wide range of goods.

SOCAR Polymer is a subsidiary of the State Oil Company of the Azerbaijan Republic (SOCAR). The entity was formed at the end of 2013 to run investments at the Sumgait Chemical Industrial Park, a production park which intends to become a chemical hub in central Asia.
MRC

MOSCOW (MRC) -- Steady demand for a high-performance polyamide resin used in automotive, consumer, and electronics products is prompting DowDuPont to invest in a new production line at its Mechelen, Belgium plant to boost capacity of DuPont Zytel HTN, reported PowderBulkSolids.

"We continue to invest in our compounding capacity across regions to ensure we can meet the strong growth in demand for highly engineered specialty polymers such as PPAs," Richard Mayo, global business director for DowDuPont Transportation & Advanced Polymers, said in a statement. "Investing in this compounding capacity expansion, coupled with recent investments made in Germany and China, demonstrates the traction for our innovative materials and solutions tailored to meet the evolving and often challenging requirements of our customers, wherever they are in the world."

The Zytel HTN PPA grades, part of the Zytel HTN high-performance polyamide resin portfolio, offers chemical resistance, retention of properties when exposed to moisture, and high-temperature performance, the company said.

DowDuPont expects the new production line to be operational by the fourth quarter of 2017.

As MRC informed before, on 31 August 2017, Dow Chemical Co and DuPont successfully completed their planned USD130 billion merger to form DowDuPont.

Bringing together the complementary, innovative portfolios and pipelines of Dow and DuPont, DowDuPont is comprised of three strong divisions and intends to separate into three independent, publicly traded companies. Each division and intended company will lead its respective industry through productive, science-based innovation to meet the needs of customers and help solve global challenges.
MRC

MOSCOW (MRC) -- Russia exported more than 5.2 MMbpd of crude oil and condensate and more than 2.4 MMbpd of petroleum products in 2016, mostly to countries in Europe, as per Hydrocarbonprocessing.

Exports of crude oil and petroleum products represented nearly 70% of total Russian petroleum liquids production in 2016. Russia’s oil and natural gas industry is a key component of Russia’s economy, with revenues from oil and natural gas activities—including exports—making up 36% of Russia’s federal budget revenues.

Crude oil trade is important to both Russia and Europe: about 70% of Russia’s crude oil exports in 2016 went to European countries, particularly the Netherlands, Germany, Poland, and Belarus. Similarly, Russian imports provided more than one-third of the total crude oil imported to European members of the Organization for Economic Cooperation and Development.

Outside of Europe, China was the largest recipient of Russia’s 2016 crude oil exports, receiving 953,000 bpd, or about 18%, of Russia’s total crude oil exports. Russia was the largest supplier of crude oil to China in 2016, surpassing Saudi Arabia for the first time on an annual basis.

Russian crude oil exports to China have grown steadily since 2010. Russia exports crude oil to China using the East Siberia-Pacific Ocean (ESPO) pipeline and pipeline connections through Kazakhstan. Russian ESPO-grade crude oil exported from Russia’s Pacific port of Kozmino can reach Chinese ports quicker than crude oil shipped from the Middle East, allowing Russian crude oil to be shipped in smaller volumes and with more flexible scheduling.

In 2016, more than 80% of Russia’s crude oil and condensate exports were seaborne. However, regardless of the ultimate mode of transport, most of Russia’s crude oil exports must traverse Transneft’s pipeline system, either as a direct route to reach bordering countries or to reach Russian ports. Russia’s state-owned Transneft holds a near-monopoly over Russia’s pipeline network, although some smaller volumes of exports are shipped by rail and on vessels that load at independently owned terminals.

Russia also exports sizeable volumes of petroleum products. According to Eastern Bloc Energy, Russia exported about 1.3 MMbpd of fuel oil, 990,000 bpd of diesel, and 120,000 bpd of gasoline in 2016. It exported smaller volumes of liquefied petroleum gas (75,000 bpd) during the same year, according to Clipper Data. Product exports have grown significantly over the past several years and are expected to continue to grow as Russian refineries add capacity to produce more high-quality products.
MRC

MOSCOW (MRC) — Profits for Japanese oil refiners rose for the latest reporting period as they pushed their plants at the highest rates in 46 yr amid high margins and after a government mandated industry consolidation, as per Reuters.

Japan's biggest refiner, JXTG Holdings, and other processors also raised their full-year profit forecasts because of the increase in margins from converting crude oil to gasoline, diesel and aircraft fuel. "Domestic margins for gasoline and light distillates were excellent in July to September when they hovered at more than 11 yen ($0.10) (per litre)" Katsuyuki Ota, a senior vice president at JXTG told an earnings briefing on Friday.

"Because crude prices rose, the margins expanded." JXTG, formed from a merger of Japan's biggest and third-biggest oil refiners, on Friday reported a USD1.72 B operating profit in the six months ending on Sept. 30, compared with a combined profit of 118.6 B yen for JX Holdings and TonenGeneral Sekiyu a year earlier.

JXTG, which meets about half of Japan's domestic oil demand, also projected full-year operating profit of 400 B yen, achieving the goals for the new firm one year ahead of plan. Japan, the world's fourth-largest oil user, has cut refining capacity by more than a quarter since 2009 to 3.52 MMbpd, under pressure from the government as fuel demand has declined due to a shrinking population.

Refinery profits gained and margins rose because of the capacity cuts even though domestic fuel demand in the 6 mos ending in September dropped to a 31-yr low of about 2.8 MMbpd, according data from the Ministry of the Economy, Trade and Industry. The average utilization rate for Japanese crude processing units was 95.4% in August, the highest since 97.9% recorded in March 1971, according to the Petroleum Association of Japan.

The refiners said the profits from oil refining business more than offset small inventory losses due to high oil prices at the start of the year. Idemitsu Kosan Co on Tuesday said net profit in the six months through September more than doubled to 57.33 B yen. The company also raised its full-year profit forecast to 100 B yen from 89 B yen.

Showa Shell Sekiyu reported on the same day a 71% increase in profit while raising its forecast for the full-year by nearly 25% to 52 B yen. There is still no progress in the planned merger between Idemitsu and Showa Shell after opposition by the Idemitsu founding family but the companies have been consolidating some operations, Idemitsu officials said.

Cosmo Energy Holdings on Thursday said net income for the 6 mos through September rose more than five times to 22.39 B yen and more than doubled its full-year profit forecast.
MRC

MOSCOW (MRC) — China’s refiners raised crude oil processing runs to near record monthly levels in October as refining margins jumped after the country’s state planner hiked prices for gasoline and diesel at the pumpб фы зук Reuters.

Also on the rise last month, according to data released by China’s statistics bureau on Tuesday, was the country’s natural gas production—jumping 15% to a seven-month high as oil majors ramped up output to meet growing winter demand spurred by Beijing’s squeeze on the use of coal for heating.

The data showed crude runs rose 7.4% in October to 50.51 MMt, or 11.89 MMbpd on a daily basis, easing off the record pace of 12 MMbpd set in September. For the first 10 mos of the year, refinery output rose 5% from the same period a year earlier to 468.92 MMt, or 11.26 MMbpd.

"Throughput rose strongly as refiners expect margins to firm, with government raising retail fuel prices in tandem with spikes in the global crude oil market," said Seng-Yick Tee, senior director at Beijing-based SIA Energy. China’s state planner, the National Development and Reform Commission (NDRC), raised both gasoline and diesel retail prices by USD22.60/t on Nov. 2, the second price hike in two months. The higher prices have boosted margins for both state owned and independent refineries.

The NDRC is set to adjust retail prices again on Nov. 16, with analysts and refiners forecasting another big hike in prices. Meanwhile natural gas output rose 15% in October from the same month a year ago to 12.4 Bcm, the highest since March.

Oil majors are ramping up domestic gas production at key fields like Changqing, and also boosting imports of pipeline gas and liquefied natural gas. Demand for the cleaner fuel is set to grow at the fastest pace since 2011, spurred by Beijing’s gasification drive.

October domestic crude oil production inched down 0.4% on year to 16.01 MMt, or 3.77 MMbpd, hovering close to August’ s record monthly low of 3.75 MMbpd.
MRC