Citgo, Valero drive up U.S. purchases of Venezuelan oil in September

MOSCOW (MRC) - Venezuela’s September crude sales to the United States rose to their highest in over a year, boosted by purchases by Citgo Petroleum, the U.S. refining arm of Venezuela’s state-run PDVSA, and Valero Energy, according to Refinitiv Eikon trade flows data, said Reuters.

A collision in August at a dock of Venezuela’s main oil port of Jose has limited exports in large vessels to Asia, spurring loading of more medium-size tankers including those typically covering routes to the United States.

Venezuela’s overall crude exports fell 14 percent in September to 1.105 million bpd due to declining oil output and dock woes at Jose terminal. The OPEC-member country’s crude production fell for third time in a row to 1.448 million bpd in August, according to official figures.

The United States imported 601,505 barrels per day (bpd) of Venezuelan crude last month, a 28-percent increase versus August and the highest monthly average since August 2017, according to the Refinitiv Eikon data.

Valero and Citgo bought over 250,000 bpd each of Venezuelan crude last month compared with an average of 170,000 bpd earlier this year, according to the data.

A total of 38 cargoes were purchased by U.S. customers from PDVSA and its joint ventures in September. At least three of those shipments were co-loaded in different Venezuelan ports to avoid problems at Jose, where repairs are expected to take at least one more month to be completed.

PDVSA’s exports last month included more light and medium crudes, generally produced at very low levels in Venezuela and leaving less of these grades for PDVSA’s domestic refineries to produce fuels.

In September, PDVSA sold Citgo and Valero some 84,000 bpd of Santa Barbara, Mesa and Leona crudes, which are typically processed at Venezuelan refineries.

PDVSA regularly imports gasoline, diesel, liquefied petroleum gas and refining feedstock to offset low production at its refineries.
MRC

MOSCOW (MRC) -- Negotiations over October shipments of suspension polyvinyl chloride (SPVC) began in the Russian market in the first week of the month. Some producers managed to achieve a further price increase, according to ICIS-MRC Price Report.

Contrary to many converters' expectations, October did not become a month of price reduction. Some Russian producers still managed to achieve a price increase of Rb1,000/tonne from September. Some converters still agreed prices at the lat month's level.

Demand for PVC began to subside in the Russian market in September under the pressure of seasonal factors, and some producers started to increase their exports, especially since the rouble devaluation against the dollar virtually equalized prices of export material, to be shipped to certain countries, with domestic prices.

Some converters maintained September volume of PVC purchasing in October, but overall demand for resin continued to decline gradually. Producers are going to sell for export the freed from the domestic market quantities of polymer.

PVC imports were insignificant in the past few months. Export prices for acetylene resin went down significantly in China in October, and some companies have already expressed their willingness to purchase resin. But due to the delivery complexity, the current external purchases do not put pressure on the Russian market.

Traditionally, many converters were in no hurry to agree on deals for October shipments, and PVC purchases before the start of the winter season corresponded only to the current needs.

Overall, October deals for resin with K=64/67 were negotiated in the range of Rb78,000-79,000/tonne CPT Moscow, including VAT, for lots of less than 500 tonnes. Resin with K=58/70 was contracted at the prices, which were by an average of Rb1,000/tonnes higher.
MRC

MOSCOW (MRC) -- Elliott Group announced that it is moving forward with plans to relocate manufacturing and testing of cryogenic pumps and expanders to Jeannette, as per Hydrocarbonprocessing.

The pumps and expanders, which are used in gas liquefaction applications, are a new addition to Elliott’s product lines following the acquisition last October of Ebara International Corporation’s Cryodynamics Division located in Sparks, Nevada.

The cryogenic pumps and expanders will be manufactured at Elliott’s global headquarters at 901 North Fourth Street, Jeannette. The ability to test these products prior to shipping is a key element of the manufacturing process and is essential to Elliott’s expansion plans. A new, separate test facility is required for this purpose. The site under purchase agreement for the new test facility is the former Jeannette Glass property currently owned by the Westmoreland County Industrial Development Corporation (WCIDC). The sale is contingent upon meeting all environmental, air quality, and zoning requirements.

"Elliott’s decision to expand our business in Jeannette is based upon our long history in the community and the synergies between our existing manufacturing capabilities and the new test facility that we intend to build,” said Carol Gatewood, Vice President, Legal Affairs and General Counsel for Elliott Group. “Throughout this project development process, we have worked closely with WCIDC, the Jeannette City Council, the Jeannette Zoning Commission, the Westmoreland Conservation District, and the Pennsylvania Department of Environmental Protection (PA DEP) to ensure that the new facility will meet or exceed all state and local regulatory requirements."

To date, environmental remediation of the site is complete, and WCIDC has received Act 2 clearance from PA DEP. Elliott is awaiting approval from PA DEP of the company’s air quality plan which was submitted in August. The next step in the process is to seek approval for conditional use as a heavy manufacturing site. This must be approved by the Jeannette Planning Commission and the Jeannette City Council. Elliott will present site plans and request approval of conditional use at a public meeting of the Planning Commission scheduled for October 3, 2018.

The company anticipates an increase to its workforce of approximately 110 to 140 as a result of this expansion. “If all goes as planned, we expect to begin construction in 2019, with operations to begin in 2020,” said Gatewood.
MRC

MOSCOW (MRC) -- INEOS Phenol announced that it is planning to expand the capacity of its plant in Mobile, Alabama (US) up to 850,000 tonnes a year, making it the largest phenol production unit in the world, as per Hydrocarbonprocessing.

Hans Casier, CEO INEOS Phenol said "An investment to increase the capacity of our Mobile production facilities up to 850 kt will make our plant the largest unit in the world. This expansion will meet anticipated growth in demand and shows a clear commitment to our customers to meet their long-term needs in North America."

"The Mobile asset is already the largest and most efficient single train plant in the USA and the expansion will build on this key strength. It also takes full advantage of our Gulf Coast location and our propriety best in class operating technology."

The INEOS Phenol business is the largest producer of Phenol and Acetone in the world, and the only Phenol and Acetone manufacturer with production facilities spanning Europe and America. Its products are used in a diverse range of end-markets including the automotive, construction, electronics and fibre industries.

As MRC wrote before, in August 2017, INEOS Phenol unveiled plants to invest in world-scale cumene unit in Germany. The construction of a new cumene plant will support customer demand improve the security of raw material supply to INEOS phenol and acetone plants located in Gladbeck and Antwerp. INEOS Phenol is a producer of phenol and acetone and the largest consumer of cumene, which is an essential raw material. This investment reinforces its commitment to its customers across its world markets.

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

MOSCOW (MRC) -- India is cutting prices of petrol and diesel by 2.50 rupees (USD0.03) a liter, Finance Minister Arun Jaitley said on Thursday, the government’s latest step to tackle the impact of a sharp rise in crude oil prices and a weak local currency, Reuters said.

The cut includes a reduction in excise duty of 1.50 rupees per liter, which will reduce government revenue by 105 billion rupees, Jaitley said. State-run refiners will also cut the price they charge by 1 rupee per liter. Jaitley also asked state governments to cut value-added tax on fuel by a further 2.50 rupees per liter.

Taxes on petrol and diesel, which account for more than a third of retail fuel prices, are one of the biggest sources of income for the government, which is seeking to keep the country’s budget deficit in check. “It certainly has fiscal implications. If the government wishes to stick to its glidepath of fiscal consolidation, then it will have to cut its expenditures significantly,” said Rupa Rege Nitsure, chief economist at L&T Finance Holdings.

Shares in Indian Oil Corp, the country’s biggest oil refiner, dropped 11.4 percent in reaction to the news. The price cut is likely to result in a loss of margin of 70-72 billion Indian rupees on auto fuel sales, according to K Ravichandran, senior vice president, corporate ratings, at ratings agency ICRA Ltd.

Among other state-run companies, shares in Hindustan Petroleum Corp closed down 13.5 percent, and Bharat Petroleum Corp Ltd lost 12.4 percent. The Nifty Energy Index fell 6.14 percent.

Global crude prices hit near 4-year highs on Wednesday, and a weak rupee has added to the woes of Indians, who have been hit by record high fuel prices. India’s fuel demand grew at its slowest pace in the last twelve months in August.

India stopped controlling petrol prices in 2010 and diesel prices in 2014, linking them to global crude markets in a bid to ease pressure on government finances and improve the earnings of oil refiners. But analysts said the announcement on Thursday shows there is still a heavy government hand in the industry.

Prime Minister Narendra Modi’s ruling Bharatiya Janata Party is facing a tough election in three key states this year, followed by a national election which is due by May. Asked by a reporter about the economic implications of the move, Jaitley said the decision was “good economics” as it won’t impact the fiscal deficit and will allow consumers to boost spending on other goods.

Devendra Kumar Pant, chief economist at India Ratings and Research, said the move could act as a “minor comforting factor” for the central bank during its monetary policy meeting scheduled on Friday, as a fuel price cut will ease retail inflation.

The national reduction translates to a 3 percent cut in petrol prices, and a 3.3 percent fall in diesel prices in India’s capital New Delhi. Fuel prices are not uniform across the country due to variable state taxes. Petrol was sold at 83.85 rupees a liter, while diesel was sold at 75.25 a liter on October 3, according to state-run retailer Indian Oil Corp’s website.

Some states such as Gujarat, Chhattisgarh, Tripura, Uttar Pradesh, Assam and Maharashtra, ruled by Modi’s BJP, cut their own taxes following the federal government’s announcement. But it is unclear how many of India’s 29 states will meet the request, though some had in recent weeks already reduced their take.
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