Tallgrass Energy receives proposal to take company private

MOSCOW (MRC) -- Midstream energy firm Tallgrass Energy said on Tuesday it had received an offer from Blackstone Infrastructure Partners, its partners and affiliates to acquire the shares in the company that they do not already own, said the company.

These shareholders, who together already own about a 44.2% stake in Tallgrass including 23.7 million Class A shares, have made a non-binding preliminary proposal to buy Tallgrass’ remaining Class A shares at USD19.50 per unit, the company said.

The offer represents a 35.9% premium to the company’s last close on Tuesday.

The latest transaction will be valued at USD3.03 billion based on the number of Class A shares of 179.2 million at the end of July 31, as reported in the company’s latest filing.

In January, Blackstone Group LP said it would buy a controlling stake in Tallgrass for USD3.3 billion. Tallgrass said its board intends to form a committee consisting of independent directors to consider the proposal.

Citigroup Inc is the financial adviser and Vinson & Elkins the legal adviser to the midstream energy firm.
MRC

Oil rises as drop in US inventories eases recession worries

MOSCOW (MRC) -- Oil prices rose on Wednesday, with U.S. crude gaining 1% after an inventory report showed US stockpiles fell more than expected, helping ease worries about economic growth due to the Sino-US trade war, reported Reuters.

Brent crude was up by 37 cents, or 0.6%, at USD59.88 a barrel by 0220 GMT. West Texas intermediate crude was up 55 cents, or 1.0%, at USD55.48 a barrel.

US crude stockpiles fell sharply last week as imports dropped, plummeting by 11.1 million barrels, compared with expectations for a 2 million barrel draw, data from industry group, the American Petroleum Institute (API), showed.

The US government's weekly report is due to be released Wednesday morning and if official numbers confirm the API data then it will be the biggest weekly decline in nine weeks.

"The mammoth crude inventory draw has, at least for the time being, put to rest those U.S. recessionary doom and gloom fears that have been hanging over oil markets like a dark cloud," said Stephen Innes, managing partner at Valour Markets.

Still, concerns about global growth amid the raging trade war between the United States and China are likely to cap gains.

US President Donald Trump said on Monday that he believed China was sincere about wanting to reach a deal, while Chinese Vice Premier Liu He said China was willing to resolve the dispute through "calm" negotiations.

On Tuesday, however, concerns about trade resurfaced after China's foreign ministry that it had not heard of any recent telephone call between the United States and China on trade, and said it hopes Washington can stop its wrong actions and create conditions for talks.

Crude oil prices have fallen about 20% from 2019 highs reached in April, partly because of worries that the US-China trade war is hurting the global economy, which could dent demand for oil.

"Global recession risks are higher than at any stage since the (global financial crisis) and the U.S. is not immune," Morgan Stanley said.

China's Commerce Ministry last week said it would impose additional tariffs of 5% or 10% on 5,078 products originating from the United States, including crude oil, agricultural products and small aircraft.

In retaliation, Trump said he was ordering US companies to look at ways to close operations in China and make products in the United States.

As MRC wrote before, in mid-August 2019, Goldman Sachs Group Inc (GS.N) said that fears of the US-China trade war leading to a recession are increasing and that Goldman no longer expects a trade deal between the world’s two largest economies before the 2020 US presidential election.
MRC

Russian market faced a shortage of natural pipe grade PE in H2 August 2019

MOSCOW (MRC) -- High seasonal demand and long-term restrictions on production of pipe grade high density polyethylene (HDPE) at the key producers led to a shortage in the second half of August. Some sellers raised their prices, according to ICIS-MRC Price Report.

Two Russian producers reduced their production of natural pipe grade HDPE in the summer months because of a number of reasons, whereas the demand for polyethylene (PE) is strong due to seasonal factors. On the back of this, supply of material has subsided noticeably in the market by the end of this month, and some sellers increased prices. The situation was aggravated by the fact that there will be long shutdowns for maintenance simultaneously at Russia's two largest HDPE plants - Stavrolen and Kazanorgsintez - in the future.

The key supplier of natural pipe grade HDPE in the Russian market is Gazprom neftekhim Salavat, which shut its production capacities for a one-month turnaround in July. The Bashkir plant finished the scheduled maintnenance works with a grea delay and intends to focus on production of injection moulding polyethylene (PE) from mid-September.

After a long pause in operations, Stavrolen resumed its production of natural pipe grade HDPE in the second half of June, however, production of this PE grade has been discontinued since 12 July due to technical issues. The production of new lots of material is planned in the second half of October after the turnaround.

Kazanorgsintez also reduced its output of natural pipe grade HDPE in July-August 2019 in favour of black PE100, and the Kazan manufacturer intends to start a gradual shutdown of its production capacities for an almost 30-day maintenance on 14 September.

The shortage of natural pipe grade HDPE in the second half of August did not cause a stir in the market, most converters managed to meet their needs for material. Consumers partially switched to purchasing 273-83 grade HDPE and other similar in characteristics analogues. Nevertheless, a price rise could not be avoided.

Small quantities of Salavat natural pipe grade HDPE were sold at Rb106,000-108,000/tonne CPT Moscow, including VAT, last week. Some sellers' offer prices for the Kazan similar material reached Rb110,500/tonne CPT Moscow, including VAT, but there was no information about deals done at such prices.
MRC

Rosneft looks at raising bet on India ahead of Modi’s Russia visit

MOSCOW (MRC) -- Russian oil major Rosneft appears to be raising its bet on India ahead of Prime Minister Narendra Modi’s September 4 visit to Vladivostok as the chief guest at this year’s Eastern Economic Forum, a business conference aimed at promoting investments in the Far East region of Russia, according to EnergyWorld.

Oil minister Dharmendra Pradhan is arriving in Moscow on Thursday for discussing new areas of co-operation in the oil and gas sector with his Russian counterpart Alexander Novak. This will be the third ministerial-level interaction with the Russian establishment ahead of Modi’s visit.

External affairs minister S Jaishankar arrived in Moscow on Tuesday. Commerce minister Piyush Goyal was in Vladivostok earlier this month at the head of a delegation, including four chief ministers. These visits are laying the ground work for dovetailing bilateral trade and investments into the time-tested strategic ties between the two countries.

"Oil and gas remain one of the key areas of co-operation. Both sides now want to take the relationship to a new level. Rosneft has very good working relationship and is comfortable working with state-run companies. Rosneft now wants India to participate in a big project," one official source told TOI without identifying the project.

Indian state-run oil companies have invested billions of dollars in Russia’s oil and gas fields in the country’s Far East. In a big-ticket reverse flow, a Rosneft-led consortium acquired Essar Energy’s Vadinar refinery in a USD13 billion deal in 2017.

Pradhan wants to expand the Indian footprint in Russia’s exploration and production sector. He will also want to see Russian companies invest in the massive expansion in gas distribution networks in 400 cities across India. Talks have been going on between the two sides for an Oil India Ltd-led consortium of Indian public sector undertakings investing in the Vankor Cluster field. That deal has been hanging fire.

As MRC informed before, Russian oil giant Rosneft said its refinery plant in Ryazan stopped a primary crude processing unit to carry out planned maintenance on March 17. The plant remained closed until March 31, according to the energy ministry's statement.

Rosneft became Russia's largest publicly traded oil company in March 2013 after the USD55 billion takeover of TNK-BP, which was Russia’s third-largest oil producer at the time.
MRC

Dow Chemical likley to keep its cracker in Argentina offline for entire Q3

MOSCOW (MRC) -- Dow Chemical's Bahia Blanca complex suffered an explosion in a cracker No. 2. Since then, operations have been stopped in the plant, as per Pastemart.

Dow Chemical's Bahia Blanca petrochemical complex in Argentina will likely remain offline for the entire third quarter. Late in the second quarter, there was a significant countrywide power outage in Argentina, which also spread to neighboring countries. The power outage abruptly shut down the ethylene operations.

Teams on the ground are assessing the damage and beginning repairs. The company estimates that the facility will be offline for at least the entire third quarter and is expected to impact company results by approximately USD100 mln.

According to sources, Dow Chemical Bahia Blanca complex has two crackers - cracker 1 with installed capacity of 275,000 mt/year and cracker 2 with installed capacity of 455,000 mt/year. The complex has six production plants: two for ethylene and four focused in polyethylene (HDPE, LDPE, LLDPE and EPE). The company does not disclose specific ethylene and polyethylene production data.

As MRC informed earlier, as part of the company’s current slate of low capital intensity, high-return incremental growth investments, Dow has recently announced it will retrofit proprietary fluidized catalytic dehydrogenation (FCDh) technology into one of its mixed-feed crackers in Plaquemine, Louisiana, to produce on-purpose propylene. The retrofit will enable Dow to continue to meet growing demand for its businesses serving consumer, infrastructure and packaging end-markets, while also remaining within its stated near-term capital expenditure targets.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polyprolypele (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption was 1,081,100 tonnes in the first half of 2019, up by 8% year on year. Deliveries of all PE grades increased. Meanwhile, the estimated consumption of PP in the Russian market totalled 694,210 tonnes in January-June 2019, up by 14% year on year. The supply of propylene block copolymers (PP-block) and propylene homopolymers (PP-homo) increased.

The Dow Chemical Company is an American multinational chemical corporation. Dow is a large producer of plastics, including polystyrene, polyurethane, polyethylene, polypropylene, and synthetic rubber.
MRC