Eni, OMV close investments in ADNOC refining

MOSCOW (MRC) -- Eni and ADNOC, Abu Dhabi’s National Oil Company, said today they closed their strategic partnership, announced in January, through which Eni acquired a 20 percent equity interest in ADNOC refining, said Eni.

The partners – which include Austria’s OMV – also set up a new trading joint venture. ADNOC Refining refines in excess of 922,000 barrels per day of crude at its Ruwais and Abu Dhabi based refineries. The transaction is one of the world’s largest-ever in the refining business and reflects the scale, quality and growth potential of ADNOC Refining’s assets. Ruwais is the 4th biggest single-site refinery in the world and is the focus of further expansion and integration to develop the world’s largest single-site refining and petrochemicals complex. Expanding its refining and petrochemical operations at Ruwais supports ADNOC as it evolves to become a leading global downstream player.

The final cash price is approximately USD3.24 billion.

ADNOC, Eni and OMV have now incorporated a new trading joint venture at Abu Dhabi Global Market, with the same shareholding as in ADNOC Refining. Trading is expected to begin in 2020 when all necessary processes, procedures and systems are in place. Eni and OMV will provide ADNOC with know-how, operational experience and support to accelerate the development of the trading joint venture, enabling ADNOC and its partners to optimize their systems and better manage their international product flows.

These agreements demonstrate the strong partnership between Eni and ADNOC. With this transaction, Eni enters the UAE downstream sector and increases its global refining capacity by 35%. It follows the company’s strategy of making Eni’s overall portfolio more geographically diversified and more balanced along the value chain.

Eni has been present in the UAE upstream sector since March 2018 when it was awarded a 10 percent interest in ADNOC’s Umm Shaif and Nasr concession and a 5 percent interest in the Lower Zakum concession, followed in November 2018 by the award of a 25 percent interest in the Ghasha Concession, ADNOC’s mega offshore sour gas project. On 12 January this year Eni was awarded a 70 percent interest in offshore exploration blocks 1 and 2. In addition to the United Arab Emirates, in the Middle East Eni is also present in Oman, Bahrain, Lebanon and Iraq.

MRC

MOSCOW (MRC) -- A piece of equipment that will process crude oil for Nigeria’s Dangote refinery set sail from China, oil company Sinopec said in a tweet, said Hydrocarbonprocessing.

The 650,000 barrel per day (bpd) refinery near Lagos is set to be Africa’s largest, and could transform the country from a fuels importer to a net exporter.

“On July 29, the world’s largest atmospheric tower built by Sinopec slowly left a wharf in Ningbo,” the Sinopec tweet said. “Following the Maritime SilkRoad, it will travel to Nigeria and be installed at the world’s biggest single-train facility - Nigeria’s Dangote Refinery."

For the type of refinery the company is building, the atmospheric tower is the primary unit processing crude oil into fuels, Citac analyst Jeremy Parker told Reuters. It will likely take at least a month to reach Lagos.

Billionaire Aliko Dangote, who built his fortune on cement, said last year that he planned to finish building the USD12-14 billion refinery in 2019 and to start production in early 2020.

Most analysts and observers said the ambitious project would take longer in order to begin pumping out fuels such as diesel and gasoline.

"This is a major milestone, but there is still much work to be done, both in terms of sourcing the other units and in terms of interconnection at the site," Parker said of the atmospheric tower shipment.

Citac expects the refinery to start producing fuels in 2023. Sources told Reuters last year that it was unlikely to start production until at least 2022, two years later than the target date.

Dangote Group did not immediately respond to a request for comment.
MRC

MOSCOW (MRC) -- W.R. Grace & Co. has licensed its Unipol PP process technology to Nayara Energy for a new world-scale polypropylene (PP) plant to be built at the site of Nayara's 20-million-t/y Vadinar refinery in Gujarat, India, as per Apic-online.

The 450,000-t/y PP unit is part of Nayara's USD850-million investment at the refinery to expand into petro-chemicals. A start-up date was not available.

The PP plant will use 450,000 t/y of propylene feedstock to produce a broad range of phthalate-free products for the Indian market.

"We are confident that the wide range of homo-, ran-dom- and impact copolymer products, combined with our non-phthalate Consista catalysts, will give Nayara Energy the edge it is seeking in the polypropylene resin marketplace," noted Laura Schwinn, president of Grace's Specialty Catalysts business.

As MRC reported earlier, in April 2019, W. R. Grace & Co. completed the USD416 million acquisition of the Polyolefin Catalysts business of Albemarle Corporation,

A leader in polyolefin catalysts and licensing, Grace has the world’s broadest portfolio of polypropylene and polyethylene catalyst technologies used to produce thermoplastic resins for a variety of applications. A leading innovator and strategic partner to its customers, Grace supplies catalyst solutions for all polyolefin processes, as well as polypropylene process technology and process controls. Grace employs approximately 3,700 people in over 30 countries.
MRC

MOSCOW (MRC) - German chemicals maker BASF (BASFn.DE) on Thursday stuck with its investment budget and future earnings forecasts to try to move on from a surprise cut to its profit outlook for 2019 earlier this month that hit its shares, said Reuters.

BASF, the world’s largest chemicals group after the breakup of rival DowDuPont (DD.N) (DOW.N), in July warned of a fall of as much as 30% in 2019 operating profit instead of a rise, partly because of U.S./China trade friction.

But Chief Executive Martin Brudermueller, who has launched asset sales and cutbacks since taking office last year, said the guidance cut would not make him more cautious in the future. “Our response to this can’t be to be without ambition to avoid having to review our targets. The management team remains committed to an ambitious development at BASF,” Brudermueller told reporters on a conference call.

The CEO said ongoing investment projects would continue as planned and reaffirmed a payout policy to increase dividends year by year. He has faced criticism from analysts for sticking with what they categorized as “aspirational targets” for too long, and for catching the market off guard with the profit warning.

BASF on Thursday also cut its 2019 growth expectations for global industrial production and for global chemical production to 1.5% from a previous forecast of 2.7%. The CEO said the trade dispute showed no sign of abating, rattling its customers, but long-term growth prospects of the chemical industry remained intact.

But he also said new plant and equipment projects due to break ground next year and in 2021 might be postponed depending on how the business cycle developed.

BASF is shedding its construction chemicals and pigments businesses, is carving out its oil and gas business, and in June unveiled plans to cut 6,000 jobs as Brudermueller seeks to stem an earnings decline.

BASF, which also reported this month that second-quarter adjusted group operating income had almost halved, on Thursday said that lower volumes and margins at its basic petrochemicals businesses accounted for most of the weakness in the second quarter.

The Chemicals and Materials businesses accounted for 83% of the overall earnings decline in the second quarter.

BASF shares were down 1.3% at 0941 GMT at 63.04 euros, underperforming a 0.5% decline in the STOXX Europe 600 Chemicals .SX4P but were still trading above levels before the profit warning on July 8.
MRC

MOSCOW (MRC) -- JXTG Holdings, Japan’s biggest oil refiner, said it plans to close a 115,000 barrel per day (bpd) Osaka refinery that it owns with PetroChina next year, amid falling demand for crude products in Japan, reported Reuters.

The closure will cut Japan’s refining capacity to just over 3.4 million bpd, down from 5.6 million bpd in the 1980s when Japan accounted for almost 10 percent of global oil product output.

Four of Japan’s biggest refiners have merged into two in recent years and cut operations as they seek business from a shrinking, aging population that consumes less fuel because of more efficient vehicles and gasoline-electric hybrids.

"In light of the increasingly severe business environment, (JXTG) has decided to terminate refinery operations at the Osaka refinery," the company said in a statement, citing declining domestic demand as well as competition in Asia.

The refinery will be shut in October next year, a month after the expiry of JXTG’s venture with PetroChina, and the site will be converted to an asphalt-fueled electric power station, JXTG said.

JXTG holds 51% of the venture while PetroChina, one of China’s biggest energy companies, has the rest. No details were given on costs, although JXTG said the changes would not affect its earnings in the current financial year.

In the meantime, JXTG is in talks with PetroChina about the Chinese company becoming a partner in its 129,000 bpd Chiba refinery near Tokyo.

A JXTG spokesman told Reuters by phone that it was likely the companies would agree to similar stakes in that refinery as in the Osaka facility, but the arrangement has not been finalized.

PetroChina did not immediately respond to requests for comment.

The Osaka refinery mostly processes crude from the Middle East and Asia-Pacific supplied by PetroChina.

JXTG is focusing on growth areas such as chemical products, power generation and electronic materials under a plan through 2040, when it expects Japanese oil demand will have halved.

JXTG is the result of a takeover by JX Holdings of TonenGeneral in 2017 and controls roughly half the market for gasoline and other oil products in Japan. Idemitsu Kosan, the country’s second-biggest refiner, completed the purchase of Showa Shell Sekiyu in April, 2018, after a fractious drawn-out process.
MRC