Imperial Oil seeks to diversify refinery supply after Syncrude outage

MOSCOW (MRC) -- An unplanned shutdown this summer of Canada’s Syncrude oil sands site has caused Imperial Oil Ltd to look to lessen its biggest refinery’s reliance on it, reported Reuters with reference to Imperial’s chief executive.

Imperial holds a 25 percent stake in Syncrude, which is majority-owned by Suncor Energy Inc (SU.TO). It was forced to shut down last month after a power transformer failed.

Syncrude’s 360,000 barrel per day mine and oil upgrading site in northern Alberta accounts for 10 percent of Canada’s oil production. Nearly all of Imperial’s share of its output feeds the Strathcona refinery to produce gasoline and other products, accounting for one-third of the refinery’s oil supply, Chief Executive Rich Kruger said.

"When Syncrude has an unplanned event, the supply folk at Strathcona do need to scramble, and unfortunately they have had to scramble the last few years more than they would like," Kruger said on a conference call with analysts.

Imperial is testing the suitability of other types of light and synthetic crude to determine if it should secure other supply agreements for the refinery, Kruger said.

"The Syncrude events are more troubling for their impact on Strathcona. It does affect the ability to run that refinery at the highest level of reliability without disruptions."

Suncor said this week that some Syncrude production has been restored and full production may come online in September.

Imperial’s second-quarter profit missed analyst estimates by a wide margin on Friday, hurt by higher-than-expected costs from planned maintenance at various projects.

Shares of the company, which is majority owned by Exxon Mobil Corp (XOM.N), dipped 1.3 percent in Toronto.

The company had scheduled maintenance at several projects including a 72-day turnaround at Strathcona.

But cost overruns hurt its bottom line, with analysts at Eight Capital saying the hit from maintenance of about CD250 million, or 31 Canadian cents a share, was bigger than expected.

The company reported net profit of CD196 million (USD149.9 million) or 24 Canadian cents per share in the quarter, compared with a loss a year earlier.

On an adjusted basis, it earned 24 Canadian cents a share, while analysts expected a profit of 57 Canadian cents, according to Thomson Reuters I/B/E/S.

Gross production rose to 336,000 barrels of oil equivalent per day from 331,000 boepd a year earlier, but missed some analysts’ estimates.
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AkzoNobel Specialty Chemicals plans second increase of chloromethanes capacity in Frankfurt

MOSCOW (MRC) -- AkzoNobel Specialty Chemicals has started design work for a second expansion of chloromethanes capacity at its site in Frankfurt, Germany, as per the company's press release.

The project will take place in several steps over the next five years and will raise total capacity by up to 50%, supporting growth of customers that use chloromethanes in the manufacture of products such as pharmaceuticals.

The company recently completed an initial chloromethanes expansion that increased capacity for the chloromethanes methylene chloride, chloroform and carbon tetrachloride. The new expansion phase will begin with an increase in capacity for methyl chloride, to be completed in 2020. Further investments are also planned to improve supply reliability and to expand chlorine production, the key raw material for chloromethanes.

Commenting on the plans, Knut Schwalenberg, Executive Committee Member responsible for Industrial Chemicals, said: "Our continued investments in both chlorine and chloromethanes production will increase reliability of supplies across the entire value chain to support the growth plans of our customers, while increasing energy efficiency thanks to the use of the latest technology."

Chloromethanes are used as intermediates in the production of pharmaceuticals, agrochemicals, refrigerants, silicone polymers, and fluoropolymers, and are important raw materials for the construction and automotive industries, water treatment, cookware, and electronics. AkzoNobel Specialty Chemicals has a leading position in the European chloromethanes market.

"We see strong growth in demand for chloromethanes and derived products from customers in emerging markets, such as India, for the manufacturing of pharmaceuticals and construction materials,” said Werner Fuhrmann, CEO of AkzoNobel Specialty Chemicals. “We are well positioned to capture part of this growth by investing in additional capacity in Frankfurt. In addition, the improved energy efficiency will provide significant sustainability benefits for our company."

As MRC wrote before, in December 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.

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

SIBUR Q2 profit falls on currency effects

MOSCOW (MRC) -- Operational efficiency continues to improve thanks to SIBUR’s investment in high-tech solutions and focus on higher productivity, as per the company's press release.

In the first half of 2018, SIBUR’s gas processing plants (GPPs) processed 10.8 billion cubic metres2 of APG, an increase of 0.7% year-on-year. As a result, natural gas output totalled 9.4 billion cubic metres2. Raw NGL fractionation volumes increased by 5.6% year-on-year to 3.7 million tonnes,1 contributing to an 18.4% increase in LPG sales volumes year-on-year to 2.6 billion cubic metres. Natural gas sales volumes stayed almost flat and totalled 9 billion cubic metres.

Continuing growth of demand for petrochemicals helped to increase sales volumes of most products in this segment. Sales volumes of polypropylene increased by 5.4% year-on-year to 293 thousand tonnes despite a scheduled maintenance shutdown at the Tobolsk production site, which was offset by faster growth of sales of this product from other SIBUR facilities and JVs. Sales volumes of polyethylene (LDPE) increased by 3% year-on-year to 136 thousand tonnes as we channelled higher volumes for export, primarily to China and Europe, where the market environment was more favourable. Sales volumes of plastics and organic synthesis products decreased by 4.4% year-on-year to 387 thousand tonnes following the shifts in shutdowns schedule at some production sites in comparison with the same period of 2017. New contracts boosted sales volumes of elastomers by 4.2% year-on-year to 248 thousand tonnes.

In the first half of 2018, revenue increased by 21.6% year-on-year to RUB 257.7 billion with the following dynamics across the segments:

Growth was driven primarily by the strong performance of the Midstream segment*, where revenue increased by 34.4% year-on-year to RUB 106.5 billion largely due to higher LPG prices and sales volumes.
Olefins & Polyolefins revenue increased by 13% year-on-year to RUB 48.2 billion, mainly due to higher effective average selling prices for PP, BOPP films and ethylene, and following the launch of new facilities and expansion of existing facilities during previous years. Revenue growth in the segment was offset by a slight decline in revenue from polyethylene sales.

Plastics, Elastomers & Intermediates revenue increased by 2.6% year-on-year to RUB 78.2 billion, largely due to positive pricing for plastics and organic synthesis products.

EBITDA increased by 18.7% year-on-year to RUB 89.2 billion, fuelled by the strong performance of the Midstream segment, where EBITDA increased by 58% year-on-year and partially offset by the decrease in EBITDA from the Olefins & Polyolefins segment on the back of tighter polyolefin spreads.

Net profit in the first half of 2018 decreased by 30.3% year-on-year to RUB 45.9 billion largely on the back of a gain recorded in the first half of 2017 from the disposal of JSC Uralorgsintez, versus FX loss incurred in the first half of 2018 due to the depreciation of the ruble against the US dollar and respective euro and revaluation of the Company’s FX-denominated debt.

Capital expenditures5 increased by 44.3% year-on-year to RUB 70.3 billion as spending on ZapSib rose as a result of the transition to the final stage of project implementation. Overall progress on the project increased from 71% as of 1 January 2018 to 84% as of 30 June 2018. As of 30 June 2018 investment in the project totalled RUB 354 billion, or approximately USD 6 billion.
MRC

OMPL to shut aromatics plant for maintenance in August

MOSCOW (MRC) -- India's ONGC Mangalore Petrochemicals Ltd., or OMPL, will shut its aromatics plant for maintenance of "approximately seven days starting the second week of August," as per Apic-online with reference to a source close to the company.

The turnaround period will be spent performing standard maintenance works on its aromatics plant, which has a nameplate production capacity of 900,000 mt/year of paraxylene and 300,000 mt/year of benzene.

During the turnaround, the Mangalore Refinery and Petrochemicals Ltd.'s 15 million mt/year (300,000 b/d) refinery, from which OMPL procures its feedstock, will continue to operate.
MRC

PVC production in Russia up by 4% in January-July 2018

MOSCOW (MRC) - Production of unmixed polyvinyl chloride (PVC) in Russia increased to 551,800 tonnes in the first seven months of this year, up 4% compared to the same period of 2017. All producers increased production volumes over the reported period, according to MRC ScanPlast.

July output of unmixed PVC decreased to 67,200 tonnes against 83,900 tonnes a month earlier, the low indicator of July was a result of a scheduled maintenance works at SayanskKhimPlast. Overall PVC production reached 551,800 tonnes in January-July 2018, compared to 530,800 tonnes a year earlier. All plants raised their production, with Bashkir Soda Company accounting for the greatest increase in the output.

The structure of PVC production by plants looked the following way over the stated period.

RusVinyl (JV of SIBUR and SolVin) produced about 27,800 tonnes of PVC in July, with emulsion polyvinyl chloride (EPVC) accounting for 2,500 tonnes, compared to 28,800 tonnes a month earlier. RusVinyl's overall production of resin reached 183,600 tonnes in the first seven months of 2018, up 2% year on year.

SayanskKhimPlast shut its capacity for scheduled 30-day scheduled maintenance works from 15 July, so the final production of suspension PVC was only 13,100 tonnes, while in June this figure reached the level of 27,000 tonnes. The Sayansk plant managed to produce more than 162,800 tonnes of resin in the first seven months of the year, compared to 156,000 tonnes a year earlier.

Baskhir Soda Company produced about 18,400 tonnes of SPVC in July, against 21,300 tonnes a month earlier. The Bashkir plant's overall production of PVC exceeded 151,000 tonnes in January-July 2018, up by 7% year on year. Such a high increase in production was largely a result of the lack of a scheduled shutdown this year, whereas last year the company shut its capacity in mid-July.

Kaustik (Volgograd) in July slightly increased SPVC production, exceeding 8,000 tonnes, compared with 6,900 tonnes in June. The plant's overall production of resin exceeded 54,500 tonnes over the stated period versus 53,600 tonnes a year earlier.


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