Possible delay in start of olefins, MEG, polymers production after fire at Malaysian PIC

MOSCOW (MRC) -- The fire at Malaysian Petronas' Refinery and Petrochemical Integrated Development, or PRefChem, at the Pengerang Integrated Complex in Johor early Friday is expected to delay the start of production of olefins, polymers and MEG at the plant, according to Apic-online with reference to market sources.

Petronas said in a statement released early Friday, 12 April, that a fire and a subsequent explosion took place at the complex at 1.25 am local time.

The fire was contained within 30 minutes and the situation is under control, the state-owned refiner said. As investigations are being carried out, Petronas did not reveal details as to which units of the plant were affected by the fire.

RAPID had earlier targeted to produce ethylene by April 15, and has been running its cracker since mid-March, according to earlier reports by Platts.However, market sources said they now anticipate a delay in the production of ethylene and other downstream products.

The steam cracker at PRefChem is able to produce 1.2 million mt/year of ethylene, 600,000 mt/year of propylene and 180,000 mt/year of butadiene.

A butadiene trader said that Petronas executives had told him previously that PRefchem was targetting to export butadiene in H2 May. "I think it will be delayed now," he said.

For its downstream operations, its linear low density polyethylene and polypropylene units have been in operation since last week, with the first cargo due to be shipped, a company source said.

"We do not have any idea on the impact, and are waiting for the production report to comment," the source said.

PRefChem's polymer facilities consist of a 400,000 mt/year of high density polyethylene unit, 900,000 mt/year polypropylene plant and 350,000 mt/year LLDPE unit, which may be converted to mLLDPE production in the future, other company officials had said previously.

The company's other plants were running smoothly, according to the source, with plans to shut its 250,000 mt/year low density polyethylene plant in Kertih in August for around 45 days of maintenance, the same company source said.

There are no plans to take its 200,000 mt/year high density/linear low density polyethylene swing plant at the same site for a similar maintenance as of yet, the source added.

The LDPE plant is owned by Petlin (Malaysia), a 60%-owned subsidiary of Petronas, while the HDPE/LLDPE plant is owned by Polyethylene Malaysia in which Petronas has a 40% share.

For monoethylene glycol, its downstream 740,000 mt/year MEG unit managed to produce on-specification MEG end-March via imported ethylene. It was currently offline waiting for stable ethylene supply from the cracker unit, S&P Global Platts reported previously.

Two Southeast Asian market sources said that they expect the start up of ethylene cracker to be delayed, and in turn, the delay of the MEG unit.

As MRC wrote before, in late January 2017, Petronas said its new USD27 billion refining and petrochemical complex project in the southeast Asian country is on track for start-up in 2019. RAPID, located within the Pengerang Integrated Complex in the southern Malaysian state of Johor, is designed to have a 300,000-bpd oil refinery and a petrochemical complex with a production capacity of 7.7 MMt.

Petronas, short for Petroliam Nasional Berhad, is a Malaysian oil and gas company wholly owned by the Government of Malaysia. The Group is engaged in a wide spectrum of petroleum activities, including upstream exploration and production of oil and gas to downstream oil refining; marketing and distribution of petroleum products; trading; gas processing and liquefaction; gas transmission pipeline network operations; marketing of liquefied natural gas; petrochemical manufacturing and marketing; shipping; automotive engineering; and property investment.
mrcpast.com

MOSCOW (MRC) -- Russian billionaire Mikhail Gutseriyev is set to gain control over a debt-ridden Afipsky oil refinery, sources said, as per Reuters.

The refinery in southern Russia has a capacity of 6 million tons per year (120,000 barrels per day). Since last year, it has been under the management of Russia’s largest bank, Sberbank, its top lender.

The sources said that a company called Forteinvest, where Gutseriyev’s son, Said, is director-general will take over the Afipsky refinery next month and will supply oil to the plant.

Business daily Kommersant citing sources said that Mikhail Gutseriyev’s Safmar company had bought a controlling stake in the refinery from the family of businessman Vladimir Kogan.

"Sberbank wants to get its money back. Forteinvest is appointed as operator," an industry source told Reuters. Sberbank declined to comment. Forteinvest did not respond to a request for comment.

Gutseriyev’s oil assets include mid-sized companies Russneft and Neftisa which combined produce 280,000 barrels per day.
MRC

МОSCOW (MRC) -- French energy giant Total lifted oil and gas output to record levels to bolster cash flow and lift first quarter net profits Friday -- but price volatility kept results in check, said France24.

Net profits rose 18 percent year-on-year to USD3.11 billion, enabling the firm to keep a swathe of new projects on the ramp and hail its "strong" balance sheet. But that figure was aided by exceptional items that helped rein in adjusted net income which slipped four percent to USD2.76 billion, slightly below analysts' expectations.

"Markets remain volatile with Brent settling at a first-quarter average USD63 a barrel, down six percent on last year, while gas prices were down 11 percent in Europe and 30 percent in Asia," chairman and CEO Patrick Pouyanne said in a statement.

During the final quarter of last year Brent dove from USD80 a barrel down to USD50. However the benchmark has risen this year on unrest in Libya, collapsing production in Venezuela, toughened US sanctions on Iran and an accord to limit production between OPEC members and non-members, notably Russia.

That led to Brent pushing past the USD75 mark on Thursday for the first time in six months. Total pushed production of hydrocarbons by nine percent year-on-year to a record 2.95 million barrels of oil equivalent per day.

That was instrumental in lifting cash flow by more than 15 percent year-on-year to USD6.5 billion. Total has a number of new and major gas projects in the offing with Russia's Yamal in the Arctic and Ichthys in Australia as well as offshore oil ventures in Angola and Nigeria and has also benefited from its recent purchase of Danish group Maersk Oil.

The group confirmed a 2019 target to raise overall output by more than nine percent while adding it would seek to maintain financial "discipline" which it has pursued since oil prices slumped from 2014.

Net investment targets for this year remain at USD15-16 billion on planned savings of USD4.7 billion for average per barrel production costs of USD5.5 with Total noting that refinery margins remained volatile. Total shares were down 1.4 percent on the news in late Friday trading on Paris stock market.
MRC

MOSCOW (MRC) -- Exxon Mobil reported that its first-quarter profits fell nearly 50% from a year ago, hit by poor results in its refining and chemicals segments, said Cnbc.

Shares of the oil giant were down more than 2% on Friday. Exxon reported a quarterly loss in its downstream business, which focuses on refining oil into fuels like gasoline and diesel. The company said brimming stockpiles of gasoline led to weak fuel margins during the quarter. It also continued a heavy slate of refinery maintenance.

That maintenance has weighed on downstream profits in recent quarters, and Exxon warned analysts on Friday that it will continue in the second quarter of 2019. Profits in the chemicals business also tumbled USD219 million from a year ago. While Exxon sold more chemicals, profit margins came under pressure because the industry has recently added capacity.

The oil major’s output of crude, natural gas and other fossil fuels reached 4 million barrels of oil equivalent, up 2% from last year. Still, income in the upstream exploration and production unit fell by USD621 million from last year. While crude oil prices strengthened, they still remained relatively weak, Exxon said.

“Solid operating performance in the first quarter helped mitigate the impact of challenging Downstream and Chemical margin environments,” Exxon Chairman and CEO Darren Woods said in a statement.

Exxon earned USD2.35 billion in the first quarter, compared with USD4.65 billion a year ago. Earnings per share came in at 55 cents, compared with 70 cents forecast by a Refinitiv survey. Revenues were USD63.63 billion, down 6.7% from a year ago and short of analysts’ estimates for USD64.82 billion.

Exxon also saw capital and exploration expenses increase from USD4.87 billion a year ago to USD6.89 billion this quarter. The results showed Exxon continuing to increase its oil and natural gas production after the energy giant broke a streak of declining output last quarter. The company’s production figures were in line with Wall Street expectations, according to StreetAccount.

Last month, Exxon announced plans to hike oil and gas production from the Permian Basin by 80 percent, with a goal of pumping 1 million barrels of oil equivalent per day as soon as 2024. The Permian is the top U.S. shale oil region, stretching across western Texas and southeastern New Mexico. On Wednesday, Exxon raised its quarterly dividend by 5 cents to 87 cents per share.
MRC

MOSCOW (MRC) -- BP and Azeri state energy company SOCAR plan to start construction of a new petrochemical plant in Turkey at the end of 2020, SOCAR’s Turkey Enerjji project director said, said Businessturkeytoday.

BP and SOCAR signed an agreement for the construction of the plant in 2018.

"A tender for the design of the complex has been announced and three companies are taking part in it ... Results will be announced next month," Emil Alkhasly told Reuters.

He said that construction was expected to be completed by 2023.

Capacity is designed to be 1.250 million tones of purified terephthalic acid, 840,000 tonnes of paraxylene and 340,000 tonnes of benzene.

The cost of the project is expected to be USD1.8 billion.

SOCAR is known as the largest foreign investor in Turkey with a total investment of USD 19.5 billion to include Star refinery in Izmir that cost of USD 6.3 billion
MRC