Saudi Arabia to restore oil output fully by end of September

MOSCOW (MRC) -- Saudi Arabia will restore its lost oil production by the end of September and has managed to recover supplies to customers to the levels they were at prior to weekend attacks on its facilities by drawing from its huge oil inventories, as per Hydrocarbonprocessing.

Energy Minister Prince Abdulaziz bin Salman said on Tuesday that average oil production in September and October would be 9.89 million barrels per day and that the world's top oil exporter would ensure full oil supply commitments to its customers this month.

"Over the past two days we have contained the damage and restored more than half of the production that was down as a result of the terrorist attack," Prince Abdulaziz told a news conference in the Red Sea city of Jeddah.

He said the kingdom would achieve 11 million bpd capacity by end of September and 12 million bpd by end of November.

"Oil supplies will be returned to the market as they were before 3:43 a.m. Saturday," he said, adding that state oil giant Aramco had emerged "like a phoenix from the ashes" after the attack.

He was referring to attacks on Saturday on state-owned oil company Saudi Aramco's plants in Abqaiq and Khurais, including the world's largest oil processing facility, which shut down 5.7 million barrels per day, which is more than half of Saudi Arabia's production, or 5% of global output.

Aramco's Chief Executive Amin Nasser said the company, which is preparing for an initial public offering (IPO), was still in the process of estimating repair work but that it was "not that significant," given the company's size.

"We should be at our production (level) before the attacks on our facility by the end of September," Nasser told the same news conference.

Aramco had put out 10 fires in the span of seven hours after the "huge" assault, Nasser said.

He said the company was in the process of bringing back oil refining to full capacity and that there were enough crude products to supply the local markets. Aramco's crude oil inventories are more than 60 million barrels, he said.

Speaking at the same news conference, Aramco's Chairman Yasser al-Rumayyan, said Aramco's IPO would be ready within the coming 12 months and that the kingdom was committed to the listing.

Rumayyan said the IPO would "continue as it is" despite weekend attacks and that timing would depend on market conditions.

Prince Abdulaziz said Riyadh did not yet know who carried out the strikes or why, adding Saudi Arabia would keep its role as a secure supplier of global markets. He said stricter measures needed to be taken to prevent further attacks, but did not elaborate.

The foreign ministry has said that preliminary investigations indicated Iranian weapons were used in the assault, which authorities initially said involved drones.

As MRC reported before, a number of Saudi Arabia's companies, such as Tasnee, Sadara, Advanced Petrochemical and Saudi Kayan, announced a curtailment of feedstock to their petrochemical plants, including polyethylene (PE) and polypropylene (PP) facilities, by an average of 30-50% due to the attacks on key Saudi Aramco facilities on Saturday.

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) - ZapSibNeftekhim, owned by SIBUR, has launched a pyrogas compressor, which resulted in flaring, Fedpress reports citing the SIBUR press service.

The company said that ZapSibNeftekhim began to launch pyrogas compressor from 12 September. This process can be accompanied by short-term intense combustion in a pyrolysis flare unit. As part of the commissioning, a test start-up of the compressor was carried out in May; last week a start-up was carried out on raw materials for running equipment on process media. The final stage of commissioning is the launch of equipment in accordance with the working scheme.

According to the press service, for the safe course of the process of setting up the equipment, the pyrolysis flare unit operates. Torch burning is necessary to prevent contingencies at work.

“In the process of burning, industrial gases are converted into carbon dioxide and water, and to prevent soot formation, water vapor is supplied to the flare. We measure the level of carbon monoxide, nitrogen dioxide, sulfur dioxide, dust. All indicators are within normal limits, " said SIBUR.

It was noted earlier that SIBUR completed the construction of its largest project, the ZapSibNeftekhim petrochemical complex in April, and began commissioning it. It is planned to bring the plant to full capacity after 2021.

The ZapSibNeftekhim project is expected to add 2m tonnes of polymers – 1.5m tonnes/year of PE and 500,000 tonnes/year of polypropylene - 2m tonnes of olefins and 100,000 tonnes/year of C4. The cracker at the site is in the process of being commissioned.

The project budget for the construction of the Zapsibneftekhim petrochemical plant in 2018–2020 will amount to USD2.7 bn.

It was also reported that SIBUR could conduct an IPO after the launch of ZapSibNeftekhim and aimed at doubling the company's business.

In September, the Director General of SIBUR, Mikhail Karisalov, said that SIBUR intends to complete the commissioning and start up ZapSibNeftekhim early next year.

OAO SIBUR Holding is the largest petrochemical company in Russia and Eastern Europe with full coverage of the industry cycle from gas processing, production of monomers, plastics and synthetic rubbers to plastics processing.
MRC

MOSCOW (MRC) -- Despite attacks on Saudi Arabian oil facilities, Poland’s PKN Orlen says oil supplies to its refineries are secure due to its diversified sourcing and it does not expect near-term fuel prices in Poland will rise, reported Hydrocarbonprocessing.

State-run PKN, whose Plock refinery crude used to be sourced almost exclusively from Russia, started to diversify its buying a few years ago aiming to reduce its reliance on Russian supply.

That approach helped PKN keep Plock running when deliveries of Russian oil via the Druzhba pipeline were suspended in April due to contamination.

PKN Orlen has a long-term deal with Saudi Aramco on deliveries of 300,000 tonnes of crude per month.

It was also supposed to receive up to 800,000 tonnes of crude oil from Saudi Aramco Products Trading company in six spot deliveries between May and October.

"We are in constant contact with Saudi Aramco. Supplies to the Orlen Group refineries are secured," the PKN press office said in an-email sent to Reuters on Monday evening, noting it receives oil from various sources.

"The next oil transport will be delivered from Nigeria at the end of September. We will soon inform you about further deliveries from other directions," PKN said.

The Plock refinery receives around 1.4 million tonnes of crude per month, 700,000 tonnes of which comes from non-Russian sources, including 300,000 tonnes from Saudi Arabia. In total, PKN’s refineries - in Poland, the Czech Republic and Lithuania - receive 30% of their crude oil from outside Russia.

"We are constantly monitoring the situation on the oil markets, also in the context of recent events in Saudi Arabia. However, it is too early to clearly state to what extent they will translate into the oil market in the coming months," PKN said.

"The current information does not constitute a risk of changes in the structure of fuel supply on the Polish market and should not affect prices in the near future".

Saudi Arabia is the world’s biggest oil exporter and the attack on state-owned producer Saudi Aramco’s crude processing facilities at Abqaiq and Khurais has cut output by 5.7 million barrels per day. The company has not given a timeline for the resumption of full output.

As MRC wrote previously, in H1 September 2019, Honeywell announced that PKN ORLEN had licensed the UOP MaxEne process, which can increase production of ethylene and aromatics and improve the flexibility of gasoline production. The project, for the PKN ORLEN facility in Plock, Poland, currently is in the basic engineering stage. Honeywell UOP, a leading provider of technologies for the oil and gas industry, first commercialized the UOP MaxEne process in 2013. The process enables refiners and petrochemical producers to direct molecules within the naphtha feed to the processes that deliver the greatest value and improve yields of fuels and petrochemicals.

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.

PKN ORLEN would be the first refining and petrochemicals company in Europe to use the Honeywell UOP MaxEne technology for molecule management of a naphtha stream to produce high-quality products including olefins, aromatics and gasoline.
MRC

MOSCOW (MRC) - Export deliveries of injection moulded PET chips from the Lithuanian company Neo Group to Ukraine in January-August increased by 3% compared to the same period last year and amounted to 24,400 tonnes against 23,600 tonnes year on year, according to MRC DataScope.

At the same time, August imports of Lithuanian PET into the country more than doubled - from 2,300 tonnes to 4,900 tonnes. Deliveries of Lithuanian PET in August accounted for 45% from total imports against a share of 16% in July and 26% in August last year.

The main buyers of Lithuanian bottled PET were Coca-Cola Beverages Ukraine Limited and Retal.

The company increased supplies of material to Ukraine, despite the force majeure, announced in July of this year.

It was earlier reported that the Lithuanian Neo Group, one of the largest European producers of polyethylene terephthalate (PET), announced force majeure circumstances on 10 July on the supply of PET from a plant in the city of Klaipeda (Lithuania) due to technical problems on the back of the shortage of purified terephthalic acid (PTA) - to a new PET line at this site. Force majeure at this plant with a total capacity of three lines of 480,000 tonnes/year (160,000 tonnes/year each) is still in force. The lines operate at reduced loading.

Closed Joint Stock Company (CJSC) "Neo Group" is one of the largest producers of polyethylene terephthalate (PET) chips in Europe.
The company's enterprises are located in Lithuania, not far from Klaipeda seaport. The total production capacity of the plants is 320,000 tonnes/year, which is 12% of the quantity of PET produced in Europe. Neo Group CJSC is a part of Retal Industries Group, the leader in the production of PET preforms.

MRC

MOSCOW (MRC) - Import deliveries of injection moulded PET chips to Ukraine decreased by 2% in January-August compared to the same period last year and amounted to 102,200 tonnes, according to MRC DataScope.

Russia's imports of injection moulding PET chips in January-August last year amounted to 104,700 tonnes.

August imports of injection moulding PET chips to the country decreased by a quarter and amounted to 10,900 tonnes against 14,700 tonnes a month earlier. In August of the previous year, shipments of PET chips were 14,600 tonnes.

It was earlier reported, that price of Chinese PET from traders in the domestic market of Ukraine remained stable last week, despite the continuing trend of strengthening the hryvnya against the dollar. So, the prices of Chinese PET in Ukraine last week remained in the range of hryvnyas (UAH) 33,000-33,500/tonne, CPT Kiev, including VAT.

At the same time, the export price of Chinese PET last week was still in the range of USD900-920/tonne, CIF Odessa, excluding VAT.
Prices of Belarusian PET for delivery to Ukraine also remained at the level of the previous week in the range of UAH31,500-32,000/tonne CPT Kiev, including VAT.

MRC