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Oil refiner issues USD140M green bond to fund new capacity

October 11/2019

MOSCOW (MRC) -- Oil refiner Jiangsu Eastern Shenghong Co. has issued a green bond worth 1 billion yuan (USD140.60 million) to fund a petrochemical complex, the latest Chinese company to use clean financing to develop polluting fossil fuels, reported Hydrocarbonprocessing.

The non-public offer is the largest single green corporate bond issued by a privately owned firm in China and will pay a 6% annual interest rate, the company said in a statement to the Shenzhen Stock Exchange.

Chinese coal, oil and gas producers are allowed to use green financing to pay for clean technology and efficiency upgrades, but regulators have been under pressure to bring Chinas rules closer in line with international standards that ban such kinds of funding.

Green financing allows firms to gain access to funds from a growing number of investors now unwilling to support unsustainable and polluting industries.

However, the proceeds of Shenghongs bond will be used to fund an oil refinery capable of processing 16 million tonnes per year of crude used as a feedstock for a petrochemical plant due to start operations in 2021, the official Peoples Daily said, citing a company official on Wednesday.

The plants green credentials derive from its energy efficiency, which will exceed national standards, the paper said.

Chinas private refiners have spent heavily to build new giant petrochemical complexes amid a push by Beijing to boost high-value added chemical production.

Another independent oil refiner, Rongsheng Petrochemical, tried to issue a green bond of up to 4 billion yuan that had secured approval from the securities regulator but scrapped that plan in June citing market volatility.

China issued USD21.8 billion in green bonds in the first half of 2019, up 62% on the year, but less than half was aligned with international standards, according to the Climate Bonds Initiative, which promotes green bond standards.

According to a review of financial data, Chinese financial institutions provided at least $1 billion in green financing to coal-related projects in the first six months.

The Shanxi Luan Group, one of Chinas biggest coal firms, was allowed to issue a 3 billion yuan green bond in June, with the proceeds earmarked for a project aimed at generating power from high-sulfur coal.

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.
Author:Margaret Volkova
Tags:PP, PE, crude and gaz condensate, PP block copolymer, homopolymer PP, propylene, ethylene, petrochemistry, Shenghong Petrochemical, China, Russia.
Category:General News
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