Total to acquire 37% in Indian Adani Gas, sets up gas marketing JV

MOSCOW (MRC) -- French oil major Total will acquire a 37.4% stake in Indian gas company Adani Gas Ltd, and set-up a joint venture for marketing natural gas in India and Bangladesh, reported S&P Global with reference to the company's statement Monday.

The deal underscores the growing LNG markets in South Asia that have attracted interest from global oil majors to commodity trading houses, on the back of rapid industrialization and urbanization.

Adani Gas is one of the four largest distributors of city gas in India of which Adani Group holds 74.8% and of which Total will acquire 37.4%, the statement said.

"To reach a 37.4% shareholding in Adani Gas Limited in accordance with Indian stock market regulations and subject to regulatory approvals, Total will initially launch a tender of offer to public shareholders to acquire up to 25.2% of equity shares before buying the remaining shares from Adani," Total said in a statement.

Total said as part of its strategy to develop new gas markets it was expanding its partnership with the Adani Group, the parent company of Adani Gas. The partnership includes two imports and regasification LNG terminals -- Dhamra in East India and potentially Mundra in the West, it said.

"As part of this partnership, Total will bring its LNG and retail expertise and will supply LNG to Adani Gas Limited. Total and Adani will also establish a joint venture to market LNG in India and Bangladesh," it added.

Adani Gas aims to expand its distribution of gas in the next 10 years through its 38 concessions covering 7.5% of the Indian population and market natural gas to industrial, commercial and domestic customers, targeting 6 million homes as well as through 1,500 retail outlets of natural gas for vehicles, the statement said.

Total said taking into account its divestiture of the Hazira terminal in early 2019, its partnership with Adani represents a net acquisition cost of around $600 million over 2019-2020.

In 2018, Shell had acquired a 26% equity in the Hazira LNG and Port venture in India from Total.

Natural gas is currently 7% of India's energy consumption, but it has grown over the last 3 years by more than 5% per annum, supported by government policy to increase the share to 15% by 2030, and develop domestic use of gas in cities and as fuel for vehicles.

As MRC wrote before, last Wednesday, France's Feyzin refinery was in the process of halting units and the steam cracker is running at reduced rates. Local media reported earlier that the refinery had been halting operations since Monday due to a strike. The company said it regrets the decision by labor unions to call a strike while discussions are ongoing with refinery staff about a planned indefinite closure of a unit due to lower product demand.

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.

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

MOSCOW (MRC) -- Polypropylene (PP) imports into Russia slumped by 5% year on year to 137,200 tonnes in the first nine months of 2019.
The greatest decrease in imports accounted for homopolymer PP, according to MRC DataScope.

September PP imports into the Russian market decreased to 17,000 tonnes from 18,100 tonnes a month earlier, supply of homopolymer PP from Turkmenistan grew. In general, total PP imports into the country decreased to about 137,200 tonnes in January - September compared with 144,700 tonnes year on year. The volume of external purchases for all grades of polymers of propylene decreased, with the exception of PP block copolymers, with the most noticeably reduced imports of homopolymer PP.

Overall, the structure of PP imports by grades looked the following way over the stated period.

September imports of homopolymer PP decreased to 5,000 tonnes against 6,600 tonnes a month earlier, shipments of homopolymer PP raffia from Central Asia decreased several times. Thus, overall imports of homopolymer PP to Russia totalled 43,200 tonnes in the nine months of 2019, compared to 51,800 tonnes a year earlier.

September imports of PP block copolymers in Russia were about 6,000 tonnes against 5,300 tonnes in August on decreased demand for injection moulding PP. Imports of PP block copolymers into Russia reached 43,200 tonnes in January-September 2019, compared to 36,000 tonnes a year earlier.

Imports of stat-propylene copolymers (PP-random) exceeded 3,000 tonnes in September against 2,900 tonnes in August. Total imports of PP random copolymers in Russia were 23,900 tonnes in January - September 2019, compared with 26,900 tonnes year on year.


Russia's imports of other polymers of propylene for the period were about 27,000 tonnes in the first nine months of the year, compared with 30,000 tonnes year on year.

MRC

MOSCOW (MRC) -- Zhong An United Coal Chemical Co has undertaken an unplanned shutdown at its polypropylene (PP) unit, as per Apic-online.

A Polymerupdate source in China informed that the company halted operations at the unit owing to technical issues on October 6, 2019. The unit is likely to remain off-line for about one week.

Located at Huainan, Anhui province, China, the PP unit has a production capacity of 145,000 mt/year.

As MRC wrote before, Zhong An United Coal Chemical Co restarted its PP unit on August 24, 2019, following an unplanned outage. The plant was shut owing to technical issues on August 10, 2019.

According to MRC's ScanPlast report, Russia's estimated PP consumption was 796,120 tonnes in January-July 2019, up by 11% year on year. Shipments of PP block copolymer and homopolymer PP increased.

Zhongan United Coal Industry Chemical Co. Ltd. mines, processes, manufactures, and distributes coal products. The сompany produces brown coal products, bituminous coal products, hard coal products, coking coal products, and other related products. Zhongan United Coal Industry Chemical markets its products throughout China.
MRC

MOSCOW (MRC) -- U.S. crude stocks rose last week as refineries cut output to the lowest level in nearly two years and production edged higher to a record of 12.6 million barrels per day (bpd), the Energy Information Administration said, as per Hydrocarbonprocessing.

Crude inventories rose by 2.9 million barrels in the last week, compared with analysts’ expectations for an increase of 1.4 million barrels. Production climbed by 200,000 bpd to a record of 12.6 million bpd, the data showed.

Refinery crude runs fell by 361,000 barrels per day (bpd), EIA data showed, while refinery utilization rates fell by 0.7 percentage point to the lowest level since October 2017, the data showed. Oil prices were little changed after briefly extending losses after the release of the data.

"Total crude oil production rose which I think is probably the key point in keeping gains at bay here. Despite rig counts being lower, production is being resilient,” said Tony Headrick, energy market analyst at CHS Hedging.

U.S. energy firms reduced the number of oil rigs for a record 10th month in a row through September as producers follow through on plans to cut spending on new drilling this year.

The drop in refining activity has helped contribute to the build-in oil inventories despite the drop in net imports, said Matt Smith, director of commodity research at ClipperData.

Net U.S. crude imports fell last week by 601,000 bpd while gross exports jumped 534,000 bpd to 3.4 million bpd, the highest since June 21, when exports hit a record 3.8 million bpd. “We are in the depths of fall maintenance but both strong exports and weak imports have helped limit the build,” Smith said.

Gasoline stocks fell by 1.2 million barrels, compared with analysts’ expectations in a Reuters poll for a 257,000-barrel drop. Distillate stockpiles, which include diesel and heating oil, fell by 3.9 million barrels, versus expectations for a 2.1 million barrel drop, the EIA data showed.

Crude stocks at the Cushing, Oklahoma, delivery hub rose by 941,000 barrels, EIA said.
MRC

MOSCOW (MRC) -- Datang International Power Generation, the listed subsidiary of the nation's second largest power producer, China Datang Group, said yesterday it expects its profits to be helped by lower coal prices again this year, said Scmp.

However, analysts said its earnings outlook was uncertain, given a lack of output growth and weak profits from its non-power businesses.

Datang's vice-chairman, Cao Jingshan, said the company could see its average coal cost per unit of output drop by 3 to 5 per cent this year compared to last year. Some rivals have projected a 5 per cent fall.

Last year Datang saw its cost of coal per unit of output fall 3.6 per cent. The cost of coal took up 69.4 per cent of total operating costs in 2012. Those lower fuel costs helped the company more than double net profit to 4.06 billion yuan for last year, it revealed on Monday. Excluding non-recurring gains, pre-tax profit grew 72 per cent from 2011.

As MRC informed earlier, in September 2019, Datang International Duolun Coal Chemical, subsidiary of Datang International, restarted one PP unit 230,000 tonnes/year, whixh was shut in April 2018. Its another PP line resumed production on 1 October.

According to MRC's ScanPlast report, 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.

Datang International Power Generation Co., Ltd. is a power generation company. The principal activities of the Company are power generation and power plant development in the People's Republic of China (PRC). It is also engaged in activities, including the sale of electricity and thermal power, repair and testing of power equipment, power related technical services, coal trading, chemical products manufacturing and selling, coal chemistry, transportation and recycling.
MRC