INEOS conducts consultation on the potential closure of Seal Sands ACN Plant

MOSCOW (MRC) -- INEOS has recently announced its intention to consult with employees on the proposed closure of the acrylonitrile (ACN) manufacturing plant at Seal Sands on Teesside, as per the company's press release.

The site which employs 224 people has been in INEOS ownership since 2008. In the event the plant closes, not all of these positions will be at risk of redundancy due to the continuation of other activities at Seal Sands.

Over the past 10 years, INEOS has invested almost EUR200m in the site to try to counter decades of significant under investment. Despite the company’s best efforts and the fact that every penny of profit has been ploughed back into the site to reverse this situation, the company is of the view that nothing more can be done to ensure that operations are both safe and economically viable. It would require another EUR200m just to meet INEOS standards and environmental regulations. The company intends to consult on any viable alternatives to closure.

The ACN process needs careful management and involves handling significant quantities of hazardous material. The company feels that it would not be possible to guarantee the long-term safety of our employees or our neighbours through continued operation of the plant and have thus reluctantly concluded that we should consider the option to close.

Paul Overment, CEO of INEOS Nitriles said, "After considering many options, we feel that we must now consult with employees on the potential closure of the plant. We do so with a heavy heart but there is no escaping the fact that decades of under investment on the site have led us to this point. Manufacturing assets need constant renewal if they are to survive. The last 10 years have proven that it is almost impossible to play catch-up and the lesson for us and other UK manufacturers is that constant reinvestment is vital for long term prosperity."

As MRC informed before, the restart of the ACN plant of INEOS Nitriles in Seal Sands, UK with the capacity of 280,000 mt/year from the planned maintenance, which began on 27 July 2019, was delayed in late September for a second time because of technical issues. The plant was initially expected to restart at the end of August.

ACN is a feedstock for the production of acrylonitrile-butadiene-styrene (ABS).

According to ICIS-MRC Price report, on the back of low Asian prices, August ABS imports to Russia were 3,600 tonnes versus 2,800 tonnes a month earlier and 2,700 tonnes in August 2018. ABS imports to the country did not change year on year in January-August 2019, totalling 21,900 tonnes.
MRC

PP production in Russia dropped by 1.3% in January-September 2019

MOSCOW (MRC) -- Russia's overall production of polypropylene (PP) decreased in the first nine months of 2019 by 1.3% year on year to 1,059,400 tonnes. Three producers out of seven reduced the capacity utilisation, according to MRC ScanPlast.

September PP production in the country decreased to 85,700 tonnes, compared with 119,000 tonnes in August, as four producers shut their capacities for scheduled maintenance works at once. Russia's overall PP production reached 1,059,400 tonnes in January-September 2019, compared to 1,072,900 tonnes a year earlier. Poliom, Stavrolen and SIBUR Tobolsk reduced production volumes.

The structure of PP production by plants looked the following way over the stated period.

SIBUR Tobolsk reduced its capacity utilisation in September, its total production fell to 26,600 tonnes from 32,900 tonnes a month earlier. The Tobolsk plant's total PP production reached 346,500 tonnes in January-September 2019, down by 5% year on year.

Poliom (Omsk) produced 10,100 tonnes of PP last month, compared to 19,500 tonnes in August. Overall, the Omsk plant produced 156,700 tonnes of PP over the stated period, down by 6% year on year.

Nizhnekamskneftekhim produced 18,000 tonnes of propylene polymers in September versus 18,500 tonnes a month earlier. The Nizhnekamsk plant's overall output of polymer exceeded 161,300 tonnes in the first nine months of 2019, compared to 160,700 tonnes a year earlier.

Last month Tomskneftekhim produced 9,500 tonnes of propylene polymers versus 12,500 tonnes in August, the decline in production was a result of a short scheduled turnaround. The Tomsk plant's total PP output reached 108,800 tonnes over the stated period, up 5% year on year.

Ufaorgsintez last month shut its capacity utilisation for 12 days scheduled maintenance works, total polypropylene production had dropped to 6,300 tonnes against 11,500 tonnes in August. The Ufa plant's overall output of polymer reached 96,200 tonnes in January-September 2019, up 2% year on year.

NPP Neftekhimiya (Kapotnya) produced 12,400 tonnes last month, compared to 13,000 tonnes in August. The plant's overall PP output reached 108,600 tonnes over the stated period, up by 10% year on year.

Stavrolen (LUKOIL) last month shut its capacity utilisation for 39 days scheduled maintenance works, total polypropylene production had dropped to 2,700 tonnes against 11,100 tonnes in August. The Budennovsk plant's overall output of propylene polymers increased in the nine months of 2019 to 78,600 tonnes from 74,100 tonnes a year earlier.


MRC

BP profits slump 40% on weaker oil prices, but beat forecasts

MOSCOW (MRC) -- BP posted a sharp drop in third-quarter profit, hurt by weaker oil prices and lower production, but still beat expectations even as it took a one-off charge of USD2.6 billion linked to large asset sales, said Reuters.

London-based BP said third-quarter underlying replacement cost profit, the company’s definition of net income, fell 40% from the year earlier period to USD2.3 billion. That exceeded a forecast of USD1.73 billion in a company-provided survey of analysts and compared to USD2.81 billion in the second quarter of 2019.

The drop will not come as a surprise to investors after BP indicated earlier this month that it would take a non-cash charge of USD2 billion to USD3 billion in the quarter as it gets closer to disposing of assets worth USD10 billion by the end of 2019, a year ahead of schedule.

The USD2.6 billion charge nevertheless pushed the firm to its first quarterly net loss, of USD700 million, since the second quarter of 2016.

Although profit came under pressure, cashflow, seen as the main measure of BP’s underlying performance, was unchanged from a year earlier at USD6.1 billion.

Oil and gas production, excluding its share from its 19.75% stake in Russia’s Rosneft, was down 2.5% from a year earlier at 2.568 million barrels of oil equivalent per day as a result of maintenance at several high-margin fields and a two-week disruption to production in the U.S. Gulf of Mexico from Hurricane Barry.

A 17% drop in oil prices in the third quarter from a year earlier also weighed heavily on profits of other energy companies including Italy’s Eni and Norway’s Equinor.

BP earlier this month announced Dudley will retire next year following a tumultuous decade at the helm of the company. He will be succeeded by 49-year-old Bernard Looney, BP’s head of upstream.

As MRC reported earlier, BP Plc is expected to resume operation at its small gasoline-producing fluidic catalytic cracking unit (FCCU) at its 430,000 barrel-per-day (bpd) Whiting, Indiana, refinery in late October after about a month of the overhaul. The company began a planned overhaul of the small FCCU on 19 September.

PTA is used to produce polyethylene terephthalate (PET), which is used in the manufacturing of plastic bottles, films, packaging containers, in the textile and food industries.

According to MRC's DataScope report, Chinese bottle grade PET deliveries to Russia increased 34% in the first eight months of 2019 to 95,600 tonnes. China accounted for 90% of the total imports, compared to 85% a year earlier.
August imports of material from China decreased by 41% to 7,600 tonnes from 12,800 tonnes in July. Jiangsu Sanfangxiang, Yisheng, Wankai and Sinopec were the leading Chinese suppliersof material to the Russian market.

BP is one of the world's leading international oil and gas companies, providing its customers with fuel for transportation, energy for heat and light, retail services and petrochemicals products for everyday items.
MRC

BP interested to invest in ADNOC new petrochemical, gas projects

MOSCOW (MRC) -- BP is interested to participate in Abu Dhabi National Oil Co.'s new gas and petrochemical projects in the UAE, reported S&P Global with reference to the British company's UAE country manager.

"We see the dynamics of the gas and we like to be part of that solution .. or producing more gas, growing the gas business in Abu Dhabi through ADNOC," Salem bin Ashoor told S&P Global Platts on the sidelines of the Middle East ExecutivePetroleum Conference in Abu Dhabi.

BP has a 10% stake in ADNOC LNG, the sole producer of the fuel in the UAE. Other shareholders besides ADNOC's 70% share are Mitsui & Co (15%), and France's Total (5%).

ADNOC is planning to become self-sufficient in gas production and eventually export gas as it expands its production of the commodity. It has awarded stakes to international oil companies to help develop its gas deposits and boost output.

ADNOC LNG, which used to supply solely Japan until last year, is currently selling in spot markets and is looking formore customers, bin Ashoor said.

"In the last two years ADNOC LNG tried or changed their operating model to be more flexible to spot cargoes and that is a big shift," he said. One company in Japan is buying the LNG from ADNOC LNG at a different quantity, he said, decliningto be more specific.

ADNOC is spending USD45 billion with partners to boost its refining and petrochemical capacities at the industrial hub of Ruwais, west of the capital of Abu Dhabi.

State-owned companies are transforming themselves - not just to survive, but to thrive. Many NOCs are opening up, diversifying, driving a new wave of downstream development and trading businesses to reach new markets and evolve beyond just national champions.

BP is also interested in participating in petrochemical projects in Ruwais, bin Ashoor said.

"The change of concept of bringing more players into the downstream is significant," he said. "You can see the transition in ADNOC's mindset."

BP is evaluating participation in ADNOC's second oil and gas licensing round which was launched this year following its first ever round for six oil and gas blocks, he said.

Bids for the second round are due by the end of November, ADNOC's head of upstream, Abdulmunim Saif Al Kindy said in May.

Abu Dhabi's five blocks open for bidding - three of which are offshore and two onshore - are known as Offshore Block 3, Offshore Block 4, Offshore Block 5, Onshore Block 5 and Onshore Block 2, with the latter offering two separate licensingopportunities for conventional and unconventional oil and gas, respectively. In total, the five blocks comprise an area ofapproximately 34,000 km2.

"Definitely if there is a good size opportunity but also commercially rewarding (in the licensing round), we will be more than happy to do more in Abu Dhabi," bin Ashoor said.

As MRC informed earlier, BP Plc is expected to resume operation at its small gasoline-producing fluidic catalytic cracking unit (FCCU) at its 430,000 barrel-per-day (bpd) Whiting, Indiana, refinery in late October after about a month of the overhaul. The company began a planned overhaul of the small FCCU on 19 September, 2019.

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.

BP is one of the world's leading international oil and gas companies, providing its customers with fuel for transportation, energy for heat and light, retail services and petrochemicals products for everyday items.
MRC

Explosion at Chinese Yanchang Petroleum kills 5

MOSCOW (MRC) -- An explosion at an oil drilling plant owned by China’s government-backed Shaanxi Yanchang Petroleum Group has left five dead, five injured, while three are missing, reported Reuters with reference to a local county government's statement on Monday.

The accident occurred after the plant, Qilicun, started testing a new thermal technology to increase output on Sunday evening, according to the statement.

The plant, located 40 kilometres east of Yan’an city in northwestern province Shaanxi, is one of the oldest in China.

In 2017, Qilicun produced 385,500 tonnes of crude oil.

"Injured people have been taken to the hospital and their life signs are stable. Rescue work is continuing and the reason for the accident remains under investigation," the government said in its statement.

Yanchang could not be reached for comment. It was unclear if production had been halted at the plant.

As MRC wrote previously, Yanchang Petroleum Yan An Energy and Chemical has recently restarted its Methanol to olefin (MTO) plant following a maintenance turnaround. Thus, the company completed turnaround at the plant on October 14, 2019. The plant was shut for maintenance on August 28, 2019.

The company also operates petrochemical plants at the same site. Thus, located at Shaanxi in China, the polypropylene (PP) low density polyethylene (LDPE) & linear low density polyethylene (LLDPE) units has a production capacity of 300,000 mt/year each.

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.

Shaanxi Yanchang Petroleum (Group) Corp. Ltd.(abbreviated as Yanchang Petroleum Group), directly attached to Shaanxi People’s Provincial Government, is one of the four qualified enterprises for oil and gas exploration in China. In 1905, Yanchang Petroleum Factory was established; in 1907, drilled the first oil well in mainland China; in 1998 and 2005, two great restructurings were undertaken, resulting in integration and reorganization of Shaanxi YanchangPetroleum (Group) Co. Ltd. and in 2012, it ranked No.89 among top 500 Chinese companies.
MRC