Kazakhstan oil exports to China fall by 22% in Jan-July

MOSCOW (MRC) -- Kazakhstan's oil exports to China fell by 22% in January-July from the same period a year ago reflecting a rise in domestic consumption, reported Reuters with reference to data as of late August.

Data from a Kazakh state-owned energy monitor showed the supplies via the Atasu - Alashankou pipeline, the only oil exporting route between the two countries, reached 625,783 tonnes in January - July.

In July, it fell to 37,470 tonnes from 89,925 tonnes in June.

Kazakhstan still plans to increase oil exports to China. It expects to boost oil supplies to its neighbour to 6-7 million tonnes a year from just 1 million tonnes, starting from the second half of 2020.

Kazakh oil exports to China fell to 1.3 million tonnes last year from a peak of 11.8 million tonnes in 2013. This was due to the declining output of oilfields in northwestern and southern Kazakhstan - many of which are operated by Chinese companies.

As MRC informed before, Kazakhstan plans to cut its oil exports by around 2% this year to 71 million tons, its energy ministry told Reuters in March 2019,, mainly at the expense of China, amid a production decline. This is down from 72.5 million tonnes Kazakhstan exported overseas in 2018.
MRC

MEGlobal inaugurates MEG plant in Texas

MOSCOW (MRC) -- MEGlobal inaugurated its 750,000-metric ton/year ethylene glycol (EG) unit at Oyster Creek, Texas on 10 Septmber. The plant is in final start-up stages and expected to produce on-spec product within 30 days, reported Chemweek with reference to officials' statement.

“With a growing global market for EG products, it will provide us with greater flexibility to satisfy our customers’ needs while capitalizing on the US shale gas opportunity,” says Ramesh Ramachandran, president and CEO of Equate, MEGlobal’s parent. Equate is a joint venture between Kuwait Petroleum’s Petrochemical Industries Company (PIC) and Dow, which each own a 42.5% stake. Boubyan Petrochemicals Co. has a 9% ownership and Qurain Petrochemical Industries owns 6%.

The plant, Equate’s first in the United States, has capacity for 700,000 metric tons/year of monoethylene glycol (MEG) and 50,000 metric tons/year of diethylene glycol (DEG). Total investment was USD2 billion, including a capital contribution to Dow that secured ethylene feedstock supply at producer economics.

EG demand continues to grow at more than 5%/year led by polyethylene terephthalate (PET) and polyester fiber, which combined account for roughly 85% of MEG demand.

EG prices have weakened in the past year and US supply has lengthened with new plants starting up this year Lotte and Sasol, which have both recently started separately world scale units at Lake Charles, Louisiana.

"You have to acknowledge recent [margin erosion], but if you look at fundamentals of EG, the end uses are PET bottles and polyester fiber," Ramachandran says. Polyester growth has been 5-7.5%/year and PET also demand remains strong, he adds. "If you believe in GDP growth, polyester demand is going to grow. If you look at the capacity that it's coming on, including ours, it barely keeps up with what the market growth is."

Equate and MEGlobal also have EG production in Alberta, Canada as well as Kuwait. The global production footprint is an advantage given recent trade tensions. US EG exports to China are challenged by 25% tariffs but MEGlobal can export US production to Latin America and India while Canadian and Kuwait product will target China.

MEG is one of the main feedstocks for the production of polyethylene terephthalate (PET).

According to MRC's ScanPlast report, Russia;s estimated PET consumption decreased in July 2019 by 4% year on year. 428,790 tonnes of PET were processed in Russia over January-July 2019. Russia's PET production was 44,430 tonnes in July.

MEGlobal is a world leader in the manufacture and marketing of merchant monoethylene glycol and diethylene glycol (EG). Established in July 2004, the company is a joint venture between The Dow Chemical Company and Petrochemical Industries Company of Kuwait and is headquartered in Dubai, United Arab Emirates. With approximately 200 employees worldwide, MEGlobal serves customers around the world, and has production facilities in Fort Saskatchewan and Prentiss, Alberta, Canada.
MRC

Penoplex resumes GPPS production in Kirishi

MOSCOW (MRC) -- Penoplex, Russia's largest producer of extruded polystyrene foam, began resuming its general purpose polystyrene (GPPS) production at the Kirishi plant on 13 September, the company's sources told MRC on Friday.

They said the company would completely restart production on 14 September and Penoplex would use the first produced lots of XPS boards for the needs of its own production.

This plant with a capacity of 50,000 tonnes of GPPS per year was shut for maintenance on 5 August 2019 and was supposed to return to operation on schedule - on 5 September, according to ICIS-MRC Price report. However, the company was forced to postpone the restart of production due to the lack of feedstock - styrene monomer (SM).

As reported earlier, the first lots of feedstock had already begun to arrive at the plant in the first week of September, therefore, an approximate deadline for launching the Kirishi plant's polystyrene (PS) production was then scheduled for September 15-18.

As also reported previously, there was an acute shortage of material, including GPPS, in the Russian PS market in late August, which was partially caused by the outage at the Kirishi plant.

Penoplex is a large Russian producer of polymer-based building and decorative materials. The company began its activity in 1998 with the launch of Russia's first line for the production of heat-insulating materials from extruded polystyrene foam under the PENOPLEX trademark. The company has eight production sites, seven of which are located in Russia and one - in the Republic of Kazakhstan (Almaty region), with a total production capacity of 4 million cubic metres.
MRC

Advanced Petrochemical runs Jubail PDH, PP units at lower rates due to oil attack

MOSCOW (MRC) -- Saudi Arabia's Advanced Petrochemical Company is running its 500,000 mt/year propane dehydrogenation unit and a polypropylene unit of 450,000 mt/year, at its Jubail complex at 40% capacity, due to the Saudi oil attack that happened on Saturday which reduced the company's supply of feedstock, reported S&P Global with reference to the company's statement Monday.

The company is currently working to evaluate the financial impact, according to the statement.

Drone attacks on Saudi Aramco's Abqaiq processing facility and the Khurais field on Saturday morning have led to production cuts of around 5.7 million b/d or half of the company's production capacity, according to the kingdom's Minister of Energy, Prince Abdulaziz bin Salman.

Advanced Petrochemical accounts for about 5% of the Middle East's propylene and PP capacities.

As MRC informed earlier, on 29 January 2015, Advanced Petrochemical Company announced the signing of long-term off-take agreements for the sale of PP with Mitsubishi Corporation of Japan (150,000 metric ton per annum) and Domo Investment Group of Belgium (100,000 metric ton per annum), to be effective from January 1, 2019 for a period of ten years after the expiry of the previous off-take agreements.

According to MRC's ScanPlast report, the estimated PP consumption in the Russian market was 796,120 tonnes in January-July 2019, up by 11% year on year. Shipments of PP block copolymer and homopolymer PP increased.

Advanced Petrochemical Company (before Advanced Polypropylene) is a Saudi Joint Stock Company, established in October 2005. The company was initially launched by National Polypropylene Limited, jointly owned by Mr. Khalifa Al Mulhim, the chief executive officer of Advanced, and Mr. Monther Laheeq, who negotiated all the main deals related to the project, either before or after the establishment of Advanced Petrochemical. Currently, National Polypropylene Limited controls 7.9% of Advanced Petrochemical. Advanced Petrochemical started the construction of its plants in May 2005. The company produces 455,000 tons per year of propylene and 450,000 tons per year of polypropylene from its production facility located in Jubail Industrial City, in the Eastern coast of the Kingdom of Saudi Arabia.
MRC

Kayan Petrochemical cut operational rates after Saudi Aramco attacks

MOSCOW (MRC) -- Three Saudi petrochemical producers announced a serious reduction in feedstock supplies in the wake of drone attacks on Saudi Arabia’s largest oil processing plants on the night of September 14, reported NCT.

Thus, Kayan Petrochemical’s feedstock supplies to its plants have been halved due to the attack, the company said in a news release.

The Saudi company owns a 350,000 tons/year polypropylene (PP) unit, as well as low density polyethylene (LDPE) and high density polyethylene (HDPE) plants each with 300,000 tons/year capacity.

As MRC informed before, in February 2015, Saudi Arabia’s Oil Ministry allocated an additional 10m cbf/d (2.8m cbm) of ethane to Saudi Kayan Petrochemical Co (Al Jubail / Saudi Arabia) to enable an expansion of capacity at its Al Jubail complex. Thus, the company has widened its ethylene production by 93,000 t/y and its ethylene oxide capacity by 61,000 t/y since the second quarter of 2017.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,255,800 tonnes in the first seven months of 2019, up by 9% year on year. Shipments of all PE grades increased. At the same time, the estimated PP consumption in the Russian market was 796,120 tonnes in January-July 2019, up by 11% year on year. Shipments of PP block copolymer and homopolymer PP increased.

Saudi Kayan Petrochemical Company is a manufacturing affiliate of the Saudi Basic Industries Corporation (Sabic).
MRC