Aramco to shift more crude production to petrochemicals

MOSCOW (MRC) -- Saudi Aramco aims to allocate some 2-3 million barrels per day of its crude oil production to petrochemicals, CEO Amin Nasser said on Tuesday, a sign the state energy group is hedging its bets against a possible demand slowdown, as per Hydrocabonprocessing.

Aramco has been boosting its investments in refining and petrochemicals to secure new markets for its crude, as it sees growth in chemicals central to its downstream expansion strategy. The company is working on buying a stake in Saudi Basic Industries Corp (SABIC), the world's fourth largest petrochemical maker, as part of plans to become a leader in the chemical industry, Nasser told an investment conference in Riyadh.

But anti-trust regulations abroad will mean that the company's planned acquisition of a controlling stake in SABIC will take time, he said, noting that SABIC has a presence in 50 countries around the world. Aramco hired JP Morgan and Morgan Stanley to advise on a potential acquisition of as much as 70 percent stake in SABIC, currently held by Saudi Arabia's Public Investment Fund, sources told Reuters in July.

Nasser said the Saudi Arabian government was still committed to an initial public offering of Aramco, while the timing depended on market conditions and other factors. He added that Aramco could not list while the SABIC deal was ongoing. Nasser also said bankers had not expressed any concerns about a recent rise in Saudi funding costs ahead of the company's potential acquisition of the SABIC stake.

The cost of insuring against a Saudi sovereign default over the next five years touched 100 basis points last week for the first time since June, showing how the killing of journalist Jamal Khashoggi has damaged sentiment toward the country. Asked whether bankers raised any concerns about the death of Khashoggi or whether it would cause higher funding costs for the deal, Nasser said: "None whatsoever."

"Aramco is well positioned financially," Nasser told reporters on the sidelines of an investment conference in Riyadh. "So far we have no issue to finance any of our projects. I don't anticipate seeing any issues in financing." He also said it would take Aramco three months to reach maximum oil production capacity of 12 million bpd, if needed.

Aramco plans to raise its refining capacity to between 8 million and 10 million barrels per day, from some 5 million bpd now, and double its petrochemicals production by 2030. Aramco pumps around 10.7 million bpd of crude oil.
MRC

Phillips 66's profit beats on higher refining margins

MOSCOW (MRC) -- Independent oil refiner Phillips 66 beat analysts' estimates for third-quarter profit on Friday, as cheaper domestic crude prices boosted its refining margins, Reuters.

Margins for most independent U.S. refiners, which process heavy crude from countries such as Venezuela and Canada into diesel, gasoline and other products, have been boosted as U.S. crude's discount to Brent widened to more than USD10 a barrel.

The spread has widened on transportation constraints, that led to steeper discounts for Canada's oil than U.S. crude, which analysts say benefits refiners in the midwest that process a higher volume of Canadian crude than those on the Gulf Coast.

Houston-based Phillips 66 primarily operates in the midwest and southwest region of the United States. The company said earnings from its refining business, its biggest, rose 70.2 percent to USD936 million.

Consolidated earnings rose to USD1.49 billion from USD823 million. The company's adjusted earnings rose to USD1.46 billion, or USD3.10 per share, in the third quarter, from USD858 million, or USD1.66 per share, a year earlier.

Analysts on average had expected the company to earn USD2.48 per share on an adjusted basis, according to Refinitiv data.
MRC

Metso to increase its valve production capacity in China

MOSCOW (MRC) -- To respond to the growing global demand in the valve market, Metso has decided to invest in a new green-field valve technology center in Jiaxing, China, as per Hydrocarbonprocessing.

The new-build plant will strengthen Metso's valve and related products production capabilities and increase capacity for customers across various process industries, both in China and globally. Metso expects to invest a total of approx. EUR 10 million by 2020. The new technology center will start operations in spring 2020.

"China is an extremely important market for our valves business. The new technology center will improve our competitiveness in China and will have a strong role within the global operations footprint. We also expect the investment to expand our delivery capabilities, helping us to better meet the growing needs both in terms of capacity and product availability," says John Quinlivan, President, Valves business area, Metso.

Strong valve production foothold in China and on every continent The new location is designed to be a workplace for a total of 400 valve technology professionals. In addition to the new technology center, Metso has a valve technology center in the Waigaoqiao Free Trade Zone in Shanghai, which was inaugurated in 2010.

Metso has valve technology or production centers in locations around the world: in China, North America, Brazil, Germany, Finland, South Korea and India. Metso employs more than 1100 people at seven locations in China, serving all customer industries.
MRC

PE production in Russia rose by 3% in Jan-Sept 2018

MOSCOW (MRC) -- Russia's production of polyethylene (PE) grew in the first nine months of 2018 by 3% year on year to 1.346,200 tonnes.
Output of high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) increased, according to MRC's ScanPlast report.

September PE production in Russia decreased to 130,800 tonnes, while in August it was about 142,800 tonnes. The main reason for the reduction in the output was the scheduled shutdowns of Kazanorgsintez and Ufaorgsintez. Overall PE production reached 1.346,200 tonnes in January-September 2018, compared to 1.302,300 tonnes a year earlier. HDPE and LLDPE output increased, whereas production of low density polyethylene (LDPE) decreased slightly.

The structure of PE output by grades looked the following way over the stated period.

September production of high density polyethylene (HDPE) in Russia decreased to 79,200 tonnes, compared with 81,500 tonnes in August; Kazanorgsintez shut its capacities for scheduled turnaround in the third decade of September. Russian plants' overall HDPE output reached 731,7 00 tonnes in the first nine months of 2018, up by 3% year on year.

September output of low-density polyethylene (LDPE) slightly exceeded 41,500 tonnes, compared with 42,500 tonnes in August. Part of the Ufaorgsintez facilities was shut for scheduled maintenances in September, and Kazanorgsintez also reduced capacity utilisation. Overall LDPE output exceeded 471,600 tonnes over the stated period, down by 2% year on year.

Overall linear low density polyethylene (LLDPE) production reached 143,000 tonnes in the first nine months of 2018, up by almost a third year on year.


MRC

Saudi hopes to attract USD427 billion in investments by 2030

MOSCOW (MRC) - Saudi Arabia expects to attract investments of more than 1.6 trillion riyals (USD427 billion) by 2030 in its push to boost industry, Energy Minister Khalid Al-Falih said on Thursday, according to state TV al-Ekhbariya, as per Hydracarbonprocessing.

"The programme to develop national industries and logistics services (is) the largest and most important, and has a huge impact on the Saudi economy," Al-Falih said.

The minister estimated that the country's mineral wealth was worth more than 1.3 trillion riyals.

As MRC informed earlier, state oil giant Saudi Aramco signed an agreement to invest in a refinery-petrochemical project in eastern China, part of its strategy to expand in downstream operations globally. The memorandum of understanding between the company and Zhejiang province included plans to invest in a new refinery and co-operate in crude oil supply, storage and trading, according to details released by the Zhoushan government after a signing ceremony in the city south of Shanghai.
MRC