Saudi Arabia considering long-term investments worth USD100 billion in India

MOSCOW (MRC) -- Saudi Arabia, the world’s biggest oil exporter, is looking at investing USD100 billion in India in areas of petrochemicals, infrastructure and mining among others, considering the country’s growth potential, said Elevenmyanmar.

Saudi Ambassador Dr Saud bin Mohammed Al Sati has said India is an attractive investment destination for Saudi Arabia and it is eyeing long-term partnerships with New Delhi in key sectors such as oil, gas and mining.

"Saudi Arabia is looking at making investments in India potentially worth USD100 billion in the areas of energy, refining, petrochemicals, infrastructure, agriculture, minerals and mining," Al Sati told PTI in an interview.

He said Saudi Arabia’s biggest oil giant Aramco’s proposed partnership with Reliance Industries Ltd reflected the strategic nature of the growing energy ties between the two countries.

The envoy said investing in India’s value chain from oil supply, marketing, refining to petrochemicals and lubricants is a key part of Aramco’s global downstream strategy.

"In this backdrop, Saudi Aramco’s proposed investments in India’s energy sector such as the USD44 billion West Coast refinery and petrochemical project in Maharashtra and long term partnership with Reliance represent strategic milestones in our bilateral relationship," he said.

The envoy said the vision 2030 of Crown Prince Mohammed bin Salman will also result in significant expansion of business between India and Saudi Arabia in diverse sectors.

Under vision 2030, Saudi Arabia plans to diversify its economy while reducing its economic dependence on petroleum products.

Saudi Arabia is a key pillar of India’s energy security, being a source of 17 per cent or more of crude oil and 32 per cent of LPG requirements of India.

The envoy said more than 40 opportunities for joint collaboration and investments across various sectors have been identified between India and Saudi Arabia in 2019, adding the current bilateral trade of USD34 billion will undoubtedly continue to increase.

As MRC informed earlier, Saudi Aramco, which temporarily lost half of its oil production following the September 14 attacks on two key oil facilities, is running its local refineries at full capacity and is forging ahead with plans to start up new refineries. The company is also starting up a joint venture refinery in Malaysia next year. According to Aramco's bond prospectus released in April, the refining and petrochemical joint venture with Petronas - the Malaysian national oil company - collectively known as PRefChem, was supposed to start this year.

The PRefChem joint venture includes a 300,000 b/d refinery, an integrated steam cracker with capacity to produce 1.3 million mt of ethylene located in Johor, Malaysia. Aramco was supposed to provide a significant portion of PRefChem's crude supply under a long-term supply agreement. Jazan and PrefChem will help Aramco reach a gross refining capacity of 5.6 million b/d, it said in the prospectus. The company currently owns and has stakes in four refineries abroad with a total refining capacity exceeding 2 million b/d.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,436,390 tonnes in the first eight months of 2019, up by 9% year on year. Shipments of all PE grades increased. At the same time, the PP consumption in the Russian market was 909,260 tonnes in January-August 2019, up by 10% year on year. Shipments of PP block copolymer and homopolymer PP increased.

Saudi Aramco is an integrated oil and chemicals company, a global leader in hydrocarbon production, refining processes and distribution, as well as one of the largest global oil exporters. It manages proven reserves of crude oil and condensate estimated at 261.1bn barrels, and produces 9.54 million bbl daily. Headquartered in Dhahran, Saudi Arabia, the company employs over 61,000 staff in 77 countries.
MRC

Saudi Aramco record IPO starts November 17, offer size pending

MOSCOW (MRC) -- Saudi Aramco will allow investors to start bidding for shares in the world’s most-profitable company from November 17, reported Bloomberg.

It left potential buyers in the dark about the size of the stake it plans to sell and the pricing range.

The Saudi stock exchange rules prohibits the oil giant from listing additional shares for six months after the start of trading, according to its more than 650-page prospectus. Also, the Saudi government, the company’s sole owner, won’t offer any additional shares during the 12-month period after listing, but retains the right to sell to foreign governments or investors affiliated with foreign governments.

Saudi Arabia is pulling out all the stops to ensure the success of the IPO after Crown Prince Mohammed bin Salman finally decided to offer shares in the world’s largest oil producer. The kingdom cut taxes on Aramco for a third time, revealed incentives for investors not to sell shares and is considering boosting dividends further.

While the prospectus includes Aramco’s profits for the first nine months and details of the company’s operations, it doesn’t include any indication of what valuation the government hopes to achieve. Price guidance for the share sale is expected next week, but people familiar with the deal have told Bloomberg that Crown Prince Mohammed bin Salman would be satisfied with a valuation of between USD1.6 trillion and USd1.8 trillion.

"This lack of clarity in the prospectus shouldn’t alarm us as it’s a book building exercise and let’s be clear Saudi will do whatever it takes to make this IPO successful because so much hinges on it," Nasser Saidi, president of Nasser Saidi & Associates said in an interview on Bloomberg TV on Sunday. "This is part of an overall privatization program, which has often been delayed so now we’re getting to the beginning of that program."

Analysts from 16 banks have offered a valuation on the company, ranging in estimates from USD1.1 trillion at the bottom right up to USD2.5 trillion. The midpoint was USD1.75 trillion, according to people who’ve reviewed all the research.

Aramco earned net income of USD68.2 billion in the first nine months compared with USD83.1 billion a year ago. Revenue slipped to USD217 billion from USD233 billion.

As MRC informed earlier, last week, Saudi Aramco approached Malaysian state energy company Petronas to participate in Aramco’s IPO, Petronas said, as the Middle Eastern oil giant seeks cornerstone investors for the listing.

Besides, we remind that Saudi Aramco, which temporarily lost half of its oil production following the September 14 attacks on two key oil facilities, is running its local refineries at full capacity and is forging ahead with plans to start up new refineries. The company is also starting up a joint venture refinery in Malaysia next year. According to Aramco's bond prospectus released in April, the refining and petrochemical joint venture with Petronas - the Malaysian national oil company - collectively known as PRefChem, was supposed to start this year.

The PRefChem joint venture includes a 300,000 b/d refinery, an integrated steam cracker with capacity to produce 1.3 million mt of ethylene located in Johor, Malaysia. Aramco was supposed to provide a significant portion of PRefChem's crude supply under a long-term supply agreement. Jazan and PrefChem will help Aramco reach a gross refining capacity of 5.6 million b/d, it said in the prospectus. The company currently owns and has stakes in four refineries abroad with a total refining capacity exceeding 2 million b/d.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,589,580 tonnes in the first nine months of 2019, up by 7% year on year. Shipments of all PE grades increased. The estimated PP consumption in the Russian market was 976,790 tonnes in January-September 2019, up by 4% year on year. Shipments of PP block copolymer and homopolymer PP increased.

Saudi Aramco is an integrated oil and chemicals company, a global leader in hydrocarbon production, refining processes and distribution, as well as one of the largest global oil exporters. It manages proven reserves of crude oil and condensate estimated at 261.1bn barrels, and produces 9.54 million bbl daily. Headquartered in Dhahran, Saudi Arabia, the company employs over 61,000 staff in 77 countries.
MRC

Asia set to lead global EO capacity additions by 2023

MOSCOW (MRC) -- Asia is set to lead the global ethylene oxide (EO) industry capacity growth from planned and announced projects between 2019 and 2023, contributing around 58% of the global growth by 2023, says GlobalData, a data and analytics company.

The company’s report,"‘Global Ethylene Oxide (EO) Industry Outlook to 2023 – Capacity and Capital Expenditure Forecasts with Details of All Active and Planned Plants’, reveals that Asia is expected to have a new-build and expansion EO capacity of 3.86 million tonnes per annum (mtpa) from 17 planned and announced projects. Of these, 11 are planned projects and the remaining are announced projects.

Dayanand Kharade, Oil and Gas Analyst at GlobalData, says: “"Jiaxing Sanjiang Petrochemical Company Jiaxing Ethylene Oxide Plant 6’, ‘PETRONAS Pengerang Ethylene Oxide Plant’, and ‘Lotte Chemical Corporation Cilegon Ethylene Oxide Plant’ are the few major new-build and expansion projects in Asia, which together will account for around 1.74 mtpa of the region’s capacity."

GlobalData identified North America as the second highest region in terms of capacity additions in the global EO industry. The region will add a new-build and expansion capacity of 1.49 mtpa from five planned and announced projects.

The major capacity additions will be from an announced project, ‘Gulf Coast Growth Ventures (GCGV) San Patricio Ethylene Oxide Plant’, with a capacity of 0.79 mtpa. It is expected to start operations in 2022.

The Middle East stands third, with new-build EO capacity of 0.82 mtpa by 2023. The entire capacity addition will be from the planned projects, "Jubail United Petrochemical Company Al-Jubail Ethylene Oxide Plant 3’, ‘Persian Gulf Petrochemical Andimeshk Ethylene Oxide Plant’ and ‘Ibne Sina Petrochemical Company Hamadan Ethylene Oxide Plant".

Ethylene is a feedstock for producing polyethylene (PE).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,589,580 tonnes in the first nine months of 2019, up by 7% year on year. Shipments of all PE grades increased.
MRC

Repsol buys Equinor Eagle Ford shale stake for ISD325 million

MOCOW (MRC) -- Spain's Repsol has agreed to buy Equinor's equity position in US Eagle Ford shale basin for USD325 million in a deal giving it 100% control and operatorship of the shale assets, reported S&P Global with reference to the companies' statement late Thursday.

Under the deal, Repsol said it will acquire 69,000 net acres and 34,000 b/d of oil equivalent production taking its total output at Eagle Ford to 54,000 boe/d.

"The added stake in this asset will allow improvements in operations and synergies, and progress in the achievement of strategic goals associated to portfolio upgrading, profitable growth and increased returns," Repsol said in a statement.

Equinor entered the Eagle Ford asset in 2010 through a joint acquisition with Talisman Energy, which is now owned by Repsol. In 2015, Equinor increased its interest in the joint asset from 50% to 63% and assumed full operatorship.

In a separate agreement, Equinor said that Repsol will acquire a 20% non-operated interest in the Monument prospect that Equinor is drilling in the Northwest Walker Ridge area in the Gulf of Mexico.

Equinor said it plans to commence drilling the well before the end of the year.

As MRC wrote previously, Repsol has recently signed a collaboration agreement to license ethylene-vinyl acetate (EVA), ethylene butyl acrylate (EBA) copolymer and low-density polyethylene (LDPE) production technology with American engineering company Engineers & Constructors International (ECI), depository of the high-pressure technology originally developed and licensed by Imperial Chemical Industries (ICI) through its UK subsidiary, Simon Carves Engineering, Ltd. Under this agreement, Repsol is the operational partner that provides product knowledge, applications and operating support (training, technical services, operating procedures, etc.).

Besides, we remind that Repsol will shut down its cracker in Tarragona (Spain) for maintenance in the fourth quarter of 2019. The turnaround at this steam cracker, which produces 702,000 mt/year of ethylene and 372,000 mt/year of propylene, was pushed back from Q3 2019. The exact dates of maintenance works are not disclosed.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,589,580 tonnes in the first nine months of 2019, up by 7% year on year. Shipments of all PE grades increased. The estimated PP consumption in the Russian market was 976,790 tonnes in January-September 2019, up by 4% year on year. Shipments of PP block copolymer and homopolymer PP increased.

Repsol S.A is an integrated Spanish oil and gas company with operations in 28 countries. The bulk of its assets are located in Spain.

Total aims to avoid fuel shortage as strike escalates

MOSCOW (MRC) -- French energy major Total said it was taking measures to avoid fuel and other products shortages after striking workers blocked distribution from its 110,000 barrels-per-day Feyzin refinery, reported Reuters.

CGT union workers at the refinery near the city of Lyon have been on strike since early October over potential job cuts, prompting a halt in production. On Friday, the workers decided to block distribution from the refinery.

"Total is making every effort to ensure that the strike affecting the Feyzin platform does not have any impact on the supply of its customers in the Lyon region," the company said in a statement.

It added that there were no planned job cuts but it intends to halt a heavy fuels production unit by 2021 due to falling demand for the product.

It said the ongoing strike had led to the shutdown of nearly all refining units and only the steam cracker was operating at minimum capacity.

As MRC informed earlier, Total has disclosed that it is evaluating construction of a new gas cracker at its Deasan, South Korea, joint venture (JV) with Hanwha Chemical.

Total is also developing a USD1.4-billion propane dehydrogenation and PP complex at Arzew, Algeria, in partnership with Algeria’s state-owned oil company Sonatrach. The facilities will be designed to produce 600,000 metric tons/year each of propylene and PP. The project is in FEED phase with FID due in 2021.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,589,580 tonnes in the first nine months of 2019, up by 7% year on year. Shipments of all PE grades increased. The estimated PP consumption in the Russian market was 976,790 tonnes in January-September 2019, up by 4% year on year. Shipments of PP block copolymer and homopolymer PP increased.

Total S.A. is a French multinational oil and gas company and one of the six "Supermajor" oil companies in the world with business in Europe, the United States, the Middle East and Asia. The company's petrochemical products cover two main groups: base chemicals and the consumer polymers (polyethylene, polypropylene and polystyrene) that are derived from them.
MRC