Saudi Aramco and ADNOC sign framework agreement on strategic natural gas and LNG cooperation

MOSCOW (MRC) -- Saudi Aramco and the Abu Dhabi National Oil Company (ADNOC) have signed a framework agreement to explore opportunities for collaboration in the Natural Gas and Liquefied Natural Gas (LNG) sector, as per Saudi Aramco's press release.

The cooperation brings together two of the world’s leading energy producers from the Arabian Gulf to jointly work together in an area of strategic importance for both companies as they seek to boost revenues from the natural gas and LNG business segments.

The agreement was signed by Amin H. Nasser, Saudi Aramco President and CEO, and His Excellency Dr. Sultan Ahmed Al Jaber, UAE Minister of State and ADNOC Group CEO on the sidelines of ADIPEC.

Saudi Aramco and ADNOC will jointly assess investment opportunities across the natural gas and LNG value chain, exchange technical knowledge and expertise in natural gas and LNG growth markets.

Nasser said: "Our partnership with ADNOC continues to strengthen, after the recent decision to jointly develop a major refinery in India. We have shared strategic interest to expand our gas businesses, and this new agreement underlines our confidence in strong global gas demand growth. Our cooperation further supports the corporate transformation strategy of both ADNOC and Saudi Aramco to pursue opportunities that help unlock greater value for both companies, and meet the growing needs of stakeholders around the world that depend on our energy to develop and grow their economies."

Al Jaber said: "The UAE and the Kingdom of Saudi Arabia have a strong relationship built on shared strategic interests. Increased cooperation between ADNOC and Saudi Aramco will ensure greater energy security and long-term economic prosperity for both nations."

"This agreement reinforces our strategy to undertake partnerships with forward-thinking partners who can help accelerate access to new growth centers of global demand. It will ensure that we are well positioned to secure greater returns from global natural gas and LNG demand growth by combining the technological and operational expertise of two of the world’s leading National Oil Companies."

ADNOC LNG, a subsidiary of ADNOC, is a reliable LNG supplier with a proven track record over 40 years and 2% of the global share of the LNG market.

LNG is the fastest-growing hydrocarbon with a growth rate of 4% per annum. Global LNG demand is expected to exceed 500 million tonnes per annum by 2035, up from nearly 300 million tonnes per annum in 2017.

We remind that, as MRC reported before, in early October 2018, Saudi Aramco signed a long-term deal with Zhejiang Rongsheng to supply crude oil to the Chinese company’s new refinery in eastern China.

Saudi Aramco is an integrated oil and chemicals company, a global leader in hydrocarbon production, refining processes and distribution, as well as one of the largest global oil exporters. It manages proven reserves of crude oil and condensate estimated at 261.1bn barrels, and produces 9.54 million bbl daily. Headquartered in Dhahran, Saudi Arabia, the company employs over 61,000 staff in 77 countries.
MRC

MOSCOW (MRC) - Azeri state energy company SOCAR plans to supply its new refinery in Turkey with oil from different producers in Europe, the Black Sea region and the Gulf, the head of SOCAR's trading arm said in an interview, said Reuters.

SOCAR last month launched the $6.3 billion SOCAR Turkey Aegean Refinery (STAR), the first to be built in Turkey for the past 30 years. The facility on Turkey's Aegean coast will supply feedstock to Turkish petrochemicals firm Petkim to help cut Turkey's dependence on imports of refined oil products. It will boost the country's refining capacity by 25-30 percent.

"Initial consumption (of oil) will be 100,000 barrels per day with a further increase to 215,000 bpd," Adnan Ahmadzadeh, SOCAR Trading executive chairman, said in answers to Reuters questions sent by email.

"SOCAR Trading will supply oil (to STAR) from different producers at ports in the Mediterranean, Black Sea and Persian Gulf, as well as from Russian company Rosneft."

He said the company had secured contracts to buy А-92 grade gasoline from producers in Russia, Switzerland and Turkmenistan due to planned maintenance at the Azeri Heydar Aliyev refinery in the capital Baku. Russia and Swiss company Vitol have provided around 30,000 tons of gasoline each, while around 5,000-10,000 tonnes will be shipped from Turkmenistan.

Geneva-based SOCAR Trading was set up in 2007 and has become a global player in the last few years, having previously been only a marketer of its country's crude, Azeri Light. Poaching top traders from established rivals, it moved into paper trading and third-party oil.

Ahmadzadeh said oil was still "playing a central role" in the firm's trading strategy, having a 50 percent share in its portfolio. The firm last year traded 1.54 million bpd of crude oil, of which about 1.06 million bpd was from third parties, it said in July. Combining crude and oil products, it traded 104 million tons. The firm also started trading liquefied natural gas in 2017.

Ahmadzadeh said the company had decided to reduce the share of fuel oil - recently at 30 percent - in its trading portfolio. "The strategic decision has been made, but it will start to reflect on figures in 2019," he said.

Ahmadzadeh said SOCAR Trading was open to discussions on obtaining crude from Russia's Filanovsky and Rakushechnoye oilfields in the Caspian Sea operated by Russian company Lukoil , with shipment via the Baku-Tbilisi-Ceyhan pipeline.

MRC

MOSCOW (MRC) - State-owned LNG Croatia picked Golar Power Ltd as the best bidder to deliver a floating storage and regasification unit (FSRU) for a planned European Union-backed liquefied natural gas (LNG) terminal in the northern Adriatic, said Hydrocarbonprocessing.

Golar Power was picked from three bidders, including Mitsui O.S.K. Lines and Maran Gas Maritime Inc, LNG Croatia, the company behind the project, said in a statement. It said Golar Power, a joint venture between Golar LNG Ltd and Stonepeak Infrastructure Partners, offered to convert the existing LNG carrier to an FSRU at a cost of 159.6 million euros (USD180.8 million).

The selected FSRU vessel has LNG storage capacity of 140,000 cubic metres, with a nominal LNG regasification capacity of 300,000 cubic metres of natural gas per hour, giving an annual capacity of 2.6 billion cubic metres of gas, it added.

In September, Croatia again extended a deadline - this time to Dec. 20 - for submitting binding bids to use the terminal, planned as part of the EU's efforts to diversify from Russian energy imports. The targeted markets are countries in central and southeastern Europe.

The total cost of the terminal is seen at 250 million euros, with the EU financing just over 120 million. The capacity of the terminal, which has a tentative date for operation from January 2021, will eventually depend on demand, said LNG Croatia.

The unsuccessful bidders can appeal the decision by Nov. 15, the company added.
MRC

MOSCOW (MRC) -- Borealis, a leading provider of innovative solutions in the fields of polyolefins, base chemicals and fertilizers, announces that it was issued a BBB+ rating with stable outlook by S&P Global Ratings on 9 November 2018, said the company.

It is the first public rating for the company, which has been successfully active in various financing markets over the last ten years and has built up a robust and diversified funding portfolio.

"We consider the assigned strong investment grade rating as a recognition for the excellent work done over the last years to make Borealis one of the strongest players in our industry," says Borealis Chief Executive Alfred Stern.

"With the rating, Borealis will further expand its financing strategy and give our bank partners and investors further comfort in the excellent credit metrics of the company. Now is the right time to take this important step," concludes Borealis CFO Mark Tonkens.

Borealis is a leading provider of innovative solutions in the fields of polyolefins, base chemicals and fertilizers. With its head office in Vienna, Austria, the company currently has around 6,600 employees and operates in over 120 countries. Borealis generated EUR 7.5 billion in sales revenue and a net profit of EUR 1,095 million in 2017. Mubadala, through its holding company, owns 64% of the company, with the remaining 36% belonging to Austria-based OMV, an integrated, international oil and gas company. Borealis provides services and products to customers around the world in collaboration with Borouge, a joint venture with the Abu Dhabi National Oil Company (ADNOC).
MRC

MOSCOW (MRC) -- The November contract price of ethylene in Europe was agreed down by EUR10/tonne from October. And, as a result, European producers proportionally reduced their polyethylene (PE) prices for this month's shipments to the CIS markets, according to ICIS-MRC Price report.

Negotiations over November PE shipments from Europe to the CIS countries began last Monday. Following the increase of EUR10/tonne in ethylene prices, most European producers announced a similar cut in this month's export PE prices. At the same time, in some cases, producers still maintained October prices.

Thus, negotiations over November high density polyethylene (HDPE) shipments were held in the range of EUR1,080-1,155/tonne FCA, down by EUR10/tonne from October. The Czech producer still had restrictions on exports.

Deals for November shipments of European low density polyethylene (LDPE) were negotiated in the range of EUR1,020-1,080/tonne FCA. In rare cases, deals were reported to have been done at EUR980/tonne FCA.
MRC