SIBUR and Gazprom Neft to develop polypropylene production in Omsk

MOSCOW (MRC) -- SIBUR and Gazprom Neft have consolidated 100% of the authorised capital in Poliom, a polypropylene plant in Omsk. Sibgazpolimer, a joint venture of the two companies, has signed an agreement to acquire a 50% stake in Poliom from the Titan Group, said the company.

After completing all corporate and registration procedures, Sibgazpolimer has become the sole member of Poliom, which is to be operated jointly by Gazprom Neft and SIBUR.

Launched in 2013, Poliom is one of Russia's largest polypropylene facilities. In 2014, Poliom became the basis for a JV of Gazprom Neft (25%), SIBUR (25%) and the Titan Group (50%). Its annual capacity is 218 kt of advanced products with a mix of some 100 grades. It sources propane-propylene fraction, its key feedstock, from Gazprom Neft’s Omsk Refinery, while SIBUR helps distribute its end-products in Russia and the CIS. The facility is certified for compliance with international standards and applies best R&D solutions and technologies to ensure waste-free production. In 2014, Poliom became the basis for a JV of Gazprom Neft (25%), SIBUR (25%) and the Titan Group (50%).

"SIBUR is committed to developing its polymer business as the demand in Russia and all over the world keeps growing ahead of global economy. Thanks to their superior qualities, synthetic materials are well on the way to replace their traditional counterparts, while also offering new opportunities in transportation, healthcare, robotics and other areas. Following the build-up of our stake in Poliom, we will focus on its development in addition to product distribution. SIBUR has unique expertise to expand the facility’s polymer range and meet the demand of various processors through streamlined solutions. I would also like to thank the Titan Group for our long-lasting and successful cooperation," said Sergey Komyshan, SIBUR’s Management Board member and Executive Director.

“Increasing the stake in Poliom is an important milestone in Gazprom Neft’s long-term strategy focused, among other things, on developing the petrochemical production. By integrating oil refining and petrochemical assets into our business, we will be able to use the feedstock from our refineries more efficiently to make high value-added products, while also boosting our competitive edge both domestically and internationally through stronger technology ties with SIBUR,” commented Levan Kadagidze, Head of the Commercial Directorate at Gazprom Neft.

“The Titan Group’s vast expertise in building complex industrial facilities and its technological and organisational excellence have made the Omsk polypropylene plant an enticing and valuable asset for Russia’s majors – Gazprom Neft and SIBUR. Poliom has robust process control systems so its products are fully in line with the standards of the world’s top polymer goods manufacturers. The Titan Group is going to continue developing its industrial assets, one of the projects being production facilities that will increase the hydrocarbon refining depth and produce a range of organic synthesis products with a view to substituting the respective imports. Gazprom Neft and SIBUR are going to remain our strategic partners both on the existing and new projects,” said Mikhail Sutyaginsky, Chairman of the Board of Directors at the Titan Group.
MRC

PVC imports to Belarus up by 11% in Jan-May 2019

MOSCOW (MRC) -- Imports of unmixed polyvinyl chloride (PVC) into Belarus grew in the first five months of 2019 by 11% year on year to 15,600 tonnes, according to MRC's DataScope report.


According to the Statistical Committee of the Republic of Belarus, local converters significantly reduced their purchasing of PVC in May 2019 after a surge in demand a month earlier, overall imports totalled 2,800 tonnes versus 4,500 tonnes in April.

Thus, imports of unmixed PVC reached 15,600 tonnes in January-May 2019, compared to 14,100 tonnes a year earlier, with local windows producers accounting for an increase in demand.

Russian producers with the share of about 87% of the Belarusian market were the key suppliers of resin to Belarus over the stated period. Producers from Ukraine and Germany with the share of 7% and 3%, respectively, were the second and third largest suppliers.

MRC

PDVSA partly restarts Amuay refinery after blackout

MOSCOW (MRC) -- Venezuelan state oil company PDVSA partly restarted activity at its 645,000 barrel-per-day (bpd) Amuay refinery where a blackout halted operations in early July, sources said, though it remained well below capacity, reported Reuters.

The refinery’s catalytic cracker restarted and was processing 68,000 bpd, one of the sources said. Three other sources said two distilling units were processing a total of 135,000 bpd. The neighboring 310,000 bpd Cardon refinery remains offline, the sources said.

Neither PDVSA nor Venezuela’s oil ministry immediately responded to requests for comment.

Outages are frequent at the twin facilities that together form the 955,000 bpd Paraguana Refining Center, which has been operating well below capacity for years because of chronic operational problems aggravated by OPEC member Venezuela’s economic crisis.

Low output from the refineries, together with sanctions on PDVSA by the United States as part of its effort to oust socialist President Nicolas Maduro, has contributed to fuel shortages throughout Venezuela in recent months.

We remind that, as MRC informed before, in late February 2019, Houston-based Citgo Petroleum slowed work on an overhaul of its 235 Mbpd Aruba refinery due to a lack of financing stemming from US sanctions on Venezuela's state-run PDVSA.
MRC

PP imports to Belarus rose by 11% in January-May

MOSCOW (MRC) -- Overall imports of polypropylene (PP) to Belarus rose in the first five months of 2019 by 11% year on year, totalling slightly over 45,700 tonnes. Demand for all grades of propylene polymers increased, according to MRC's DataScope report.

May PP imports to Belarus were about 11,500 tonnes, compared to 9,500 tonnes a month earlier, local companies raised their purchasing of propylene copolymer in Russia. Overall imports of propylene polymers reached 45,700 tonnes in January-May 2019, compared to 41,100 tonnes a year earlier, whereas the need for a homopolymer PP and propylene copolymers increased approximately equal.

The supply structure by PP grades looked the following way over the stated period.

May imports of homopolymer PP exceeded 6,500 tonnes, compared to 6,600 tonnes a month earlier. Overall imports of homopolymer PP reached 30,500 tonnes in January-May 2019, up by 11% year on year.

Russian producers with the share of about 87% of the total shipments were the key suppliers. May imports of propylene copolymers into Belarus were 3,700 tonnes versus 2,900 tonnes a month earlier, local companies increased their procurement of injection moulding statistical copolymers (PP random copolymers) in Russia.

Thus, overall imports of propylene copolymers reached 15,100 tonnes in January-May 2019, down by 11% year on year.

MRC

Lead banks work to shift Evonik unit loan

MOSCOW (MRC) -- Lead banks are in talks with private debt funds and family offices to shift excess paper on a €1.8bn buyout financing for German chemicals group Evonik’s methacrylates plastics unit, Madrid, that they are stuck with and are considering launching a second syndication process, banking sources said, said Reuters.

Evonik agreed to sell its clear acrylic sheet unit to Advent International for EUR3bn in March, backed with a EUR1.785bn-equivalent euro- and dollar-denominated leveraged loan financing.

It was increased by €21m prior to closing in June, to cover some of the issue discount on the loan after it priced at 500bp over Euribor/Libor at 95 OID, having struggled during syndication as investors shy away from cyclical businesses.

It is unclear how much of the loan the arranging banks were stuck with prior to close but at one point it was EUR500m, sources said.

The lead banks on the deal — Barclays, Deutsche Bank and Goldman Sachs — are now coordinating the sell down process and are holding talks with private debt funds and family offices, to offload the paper.

Advent was not immediately available to comment. It is unusual for underwriters to approach this money directly but it has become more commonplace of late on difficult deals that haven’t found a natural home with CLOs and credit funds – the typical buyers of syndicated leveraged loans.

In June, Bank of Americal Merrill Lynch sold to direct lenders a EUR300m term loan backing Platinum Equity’s acquisition of a majority stake in Spain’s frozen fish producer Iberconsa.
MRC