SIBUR considering dollar-denominated Eurobond issue

MOSCOW (MRC) -- SIBUR Holding, Russia’s largest integrated petrochemicals company, announces the successful float of five-year Eurobonds worth USD500 million on the Irish Stock Exchange, said the company.

The initial coupon rate, set at 3.75% per annum, decreased to 3.45% per annum during the book-building. Coupon payments will be made every six months. The Company intends to use the funds to continue carrying out its growth strategy and to optimize its credit portfolio.

Goldman Sachs, J.P. Morgan, Gazprombank and Sberbank CIB acted as lead coordinators and book runners, while Banca IMI SpA was the lead manager. The total demand exceeded USD1.3 billion. The Company’s Eurobonds were purchased by global investors, more than half of which were foreign ones (Russia, 41%; Continental Europe, 26%; Asia and MENA, 15%; the UK 11%; the USA, 7%). Moody’s rated the bonds at Baa3, while Fitch gave them a rating of BBB-.

Alexander Petrov, SIBUR’s Managing Director for Economics and Finance and a member of the Company’s Management Board, noted: “Since the Company placed its first Eurobonds back in 2013, SIBUR has undertaken a substantial transformation of its business, implementing large-scale investment projects and forming a solid foundation for long-term sustainable growth. While its business developed, the Company’s indebtedness remained at a comfortable level. I am pleased to announce that we have taken another successful step in public capital markets, and I am grateful to investors who value our business model, which ensures sustainable growth”.

In 2018, SIBUR reported revenue of USD 9.1 billion and EBITDA of USD 3.2 billion. Over the past 10 years, SIBUR has implemented a number of large-scale investment projects worth more than RUB 850 billion. Each year, the Company spends no less than 70% of its EBITDA to finance the investment program, while maintaining a balanced debt burden.

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. Meanwhile, 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.

SIBUR is the leader of the Russian petrochemical industry and one of the largest companies globally in this sector. It has more than 26,000 employees. The Company’s unique vertically integrated business model allows it to create highly competitive products consumed in the chemical, fast moving consumer goods (FMCG), automotive, construction, energy and other industries in 80 countries worldwide.

MRC

MOSCOW (MRC) -- Air Liquide said on Wednesday that it has agreed with Methanex Corp. to supply oxygen, nitrogen and utilities to its upcoming methanol plant expansion project at Geismar, Louisiana, reported Chemweek.

Air Liquide will invest more than USD270 million in two new large air separation units (ASUs) and infrastructure assets connected to its Mississippi River pipeline, and significantly increase its production capacity in the US Gulf Coast region to serve Methanex and its other customers in the industrial basin that encompases Geismar and Baton Rouge.

To support the levels of oxygen and nitrogen needed at Methanex’s third methanol plant at Geismar, as well as other customers along its Mississippi River pipeline system, Air Liquide will build two new ASUs with a capacity of 2,500 metric tons/day of oxygen each - increasing the company’s Mississippi River pipeline’s capacity by more than 25%.

The new ASUs are expected to start production in mid-2022 to support Methanex’s production of methanol.

"Air Liquide’s significant investment to support… Methanex and enhance our infrastructure in the Geismar Basin further demonstrates our global commitment to energy efficiency, our collaborative approach to meeting the needs of customers, and highlights our outlook for the robust growth of industry in the Gulf Coast region of the US," said Michael Graff, executive vice president and executive committee member of Air Liquide.

As MRC informed before, in April 2018, Air Liquide signed a new long-term agreement with LyondellBasell, one of the world’s largest plastics, chemicals and refining companies, to supply oxygen to LyondellBasell’s new large-scale petrochemical plant which will be constructed in Channelview, Texas.

Besides, in July 2019, Air Liquide signed a long-term agreement with Gulf Coast Growth Ventures (GCGV), a 50/50 joint venture between ExxonMobil and SABIC, to supply oxygen and nitrogen from its industrial gas pipeline network to GCGV’s planned ethane cracker facility located near Corpus Christi, in Texas.

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

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.
MRC

MOSCOW (MRC) -- Saudi Arabia's Rabigh Refining and Petrochemical Company, or Petro Rabigh, might face a further curtailment of feedstock supplies, as per the company's press release.

In a filing to the Saudi Stock Exchange or Tadawul, the company said that "based on the latest developments, the supply of ethane will be reduced by 20%".

Earlier this week, Petro Rabigh said it sees ethane gas supply cut by 8% and crude oil by 12.5%.

At present, the company is evaluating the final impact, any significant developments will be disclosed later.

As repported earlier, 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, representing about half of the company's production capacity.

Petro Rabigh has a refinery in Rabigh with a crude processing capacity of 400,000 b/d. The company also has an ethane cracker which is able to produce 1.6 million mt/year of ethylene. Its downstream units can produce 600,000 mt/year of monoethylene glycol and 1.06 million mt/year of polyethylene.

Saudi Aramco supplies ethane and crude oil to Petro Rabigh and also owns a 37.5% stake in the company. Japan's Sumitomo Chemical owns another 37.5% stake in Petro Rabigh.

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

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.

PetroRabigh, a joint venture between Saudi Aramco and Japan's Sumitomo Chemical, has an annual output capacity of 18 million tonnes of refined products and 2.4 million tonnes of petrochemicals.
MRC

MOSCOW (MRC) - Exports deliveries of injection moulded PET chips from China to the Russian market increased by 34% in January-August, according to MRC DataScope survey.

Thus, exports of bottled PET from China to Russia in eight months increased by 34% to 95,600 tonnes. The share of exports of PET from China increased to 90% against 85% in the same period last year.
Imports of Chinese PET to Russia in August decreased by 41% to 7,600 tonnes against 12,800 tonnes in July. The leading Chinese suppliers to the Russian market were producers Jiangsu Sanfangxiang, Yisheng, Wankai and Sinopec.

As it was earlier said, supply of imported material in July decreased by 7% compared to July 2018 and amounted to 15,580 tonnes of PET.
Imports of PET to Russia increased to 117,840 tonnes in seven months of 2019, up 19% year on year.
MRC

MOSCOW (MRC) -- Shutdown of the Abqaiq and Khurais crude oil processing facilities in Saudi Arabia has not only taken 5.7 MMb/d of crude oil production offline - about 7% of global production - but has also cut deeply into the country's supply of petrochemical feedstocks, as per Chemweek.

The ethylene chain, particularly polyethylene (PE) and ethylene glycol (EG), will be most affected, according to analysts at IHS Markit.

The two facilities, owned by Saudi Aramco, were attacked by drones or missiles early on 14 September and subsequently shut down to limit damage.

"Shale has created a sense that there is security - we have too much supply, that there’s abundance, and so on," says Roger Diwan, vice president/financial services at IHS Markit. "We have lost that. It’s back to risk. We need to think of oil in the age of drones and missiles, and that any facility can be hit in the Middle East….We have basically no facilities in the Middle East that are safe now. Abqaiq was a very well-defended piece of infrastructure, and it’s gone."

Multiple Saudi chemical producers have already reported sharp cutbacks in feedstock supply, including Sadara (16%), Yansab (30%), Saudi Kayan (50%), Tasnee (41%), and Sipchem (40%).

"It's a little uncertain on the prioritization of where the feedstocks will go, in terms of how much to chemicals versus meeting other domestic needs," says Dewey Johnson, vice president/base chemicals market research at IHS Markit. “If you pro-rate the production outage at 50%, and said at the moment that 50% of Saudi capacity is hampered, the largest impacts would be in ethylene, polyethylene, and ethylene glycol."

Saudi Arabia has 18 million metric tons/year (MMt/y) of ethylene production capacity, or about 10% of the global total, Johnson noted. "Ethylene is only a few percentage points away from being balanced to tight," notes Johnson. "So how much of that capacity is available or taken off line is critically important."

Saudi Arabia is likewise a major producer of ethylene derivatives, with about 6% of the world's capacity to produce PE, and 16% of the world's capacity to produce EG, key feedstock for polyethylene terephthalate (PET), used to make polyester and PET resin. The country's influence on the global market for these derivatives is further amplified by its export position. In 2018, Saudi Arabia supplied nearly 8% of the world's PE requirements and a whopping 23% of its EG requirements.

The country holds 5% of global propylene production capacity and, downstream, about 9% of the world's polypropylene (PP) capacity. It also accounts for about 5% of global methanol capacity.

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.
MRC