Phillips 66 third-quarter earnings fall 49%

MOSCOW (MRC) -- Phillips 66 announces third-quarter 2019 earnings of USD712 million, compared with USD1.4 billion in the second quarter of 2019. Excluding special items of USD690 million in the third quarter, primarily impairments related to the company's investment in DCP Midstream, LLC, adjusted earnings were USD1.4 billion, compared with second-quarter adjusted earnings of USD1.4 billion, said the company.

In its chemicals segment, which reflects Phillips 66’s equity investment in Chevron Phillips Chemical (CPChem), Q3 pre-tax income fell to USD227m from USD275m in Q2 due to a USD42m reduction to equity earnings from a lower-of-cost-or-market inventory adjustment.

CPChem’s olefins and polyolefins (O&P) business contributed USD251m of adjusted pre-tax income in Q3, compared with USD260m in Q2. The USD9m decrease mainly reflects lower margins, partially offset by higher sales volumes. Global O&P utilisation was 97% in Q3.

CPChem’s specialties, aromatics and styrenics (SA&S) business contributed Q3 adjusted pre-tax income of $36m, in line with Q2. In Q3 2018, total chemical segment earnings were USD263m. The company did not comment on the year-on-year decline.

Phillips 66 noted that in chemicals, CPChem and Qatar Petroleum are jointly pursuing a petrochemical project on the US Gulf Coast – the "US Gulf Coast II Petrochemical Project" – which is expected to include a 2m tonne/year ethylene cracker and two high-density polyethylene (HDPE) units, each with capacity of 1m tonnes/year. A final investment decision is expected no later than 2021, with targeted startup in 2024.

CPChem and Qatar Petroleum are also pursuing the development of a petrochemicals project in Qatar with a 1.9m tonne/year ethylene cracker and two high-density polyethylene derivative units with a combined capacity of 1.7m tonne/year. Pending final investment decision, the Qatar project is expected to startup in late 2025, Phillips 66 said.

As MRC informed earlier, US-based Phillips 66 remains open to developing another ethane cracker for its Chevron Phillips Chemical (CP Chem) joint venture, the refiner's CEO said in March 2018.

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.
MRC

MOSCOW (MRC) -- Valero Energy Corp shut the small crude distillation unit (CDU) at its 335,000 barrel-per-day (bpd) Port Arthur, Texas, refinery, reported Reuters with reference to sources.

The 75,000-bpd AVU 147 CDU was shut to repair a heat exchanger, the sources said.

As MRC wrote previously, Valero Energy Corp restarted the small CDU at its 335,000 barrel-per-day Port Arthur, Texas, refinery after repairing a valve on 25 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.
MRC

MOSCOW (MRC) -- Overall imports of acrylonitrile-butadiene-styrene (ABS) to the Belarusian market rose in the first eight months of 2019 by 5% year on year to 4,600 tonnes, according to MRC's DataScope report.

This figure was 4,400 tonnes in January-August 2018.

Shipments of Russian material to Belarus fell in the first eight months of 2019 by 29% year on year.

August ABS imports to Belarus decreased by 26% year on year.

Thus, imports of material into the country were 533 tonnes over the stated period versus 720 tonnes in August 2018.

South Korea with an import share of 49% (260 tonnes) and Russia with 32% of the total imports (138 tonnes) were the key ABS suppliers to the Republic of Belarus in August.

At the same time, imports of Russian material into Belarus slumped in August by 62% year on year.

MRC

MOSCOW (MRC) -- Overall imports of general purpose polystyrene (GPPS) and high impact polystyrene (HIPS) to Belarus rose in the first eight months of 2019 by 13% year on year to 25,400 tonnes, according to MRC's DataScope report.

This figure was 22,400 tonnes in January-August 2018.

GPPS and HIPS imports from Russia into the country accounted for 81% of the total imports in the first eight months of 2019 or 20,600 tonnes, up by 2,800 tonnes year on year.

Imports of material to the Belarusian market grew in August by 20% year on year to 3,600 tonnes from 3,000 tonnes a year earlier. August GPPS and HIPS shipments into the country rose by 7% from July 2019 (3,300 tonnes).

August 2019 imports of Russian material into Belarus increased by 22% year on year to 2,900 tonnes from 2,400 tonnes a year earlier, July 2019 shipments were 2,800 tonnes.

MRC

MOSCOW (MRC) -- LyondellBasell (LBI) has announced that Ulsan PP Co., Ltd., a joint venture between PolyMirae Company Ltd, a 50-50 partnership of LyondellBasell and Daelim, and SK Advanced broke ground in the southeastern port city of Ulsan, South Korea, as per LBI's press release.

This new plant will utilize LyondellBasell’s world leading fifth generation Spheripol technology and is expected to begin production in May 2021. With its 400 kiloton annual capacity, the facility will be one of the largest polypropylene plants of its kind in Asia.

"Joint ventures are an important part of our growth strategy to reach the global market," said Ken Lane, executive vice president of Global Olefins & Polyolefins (O&P) at LyondellBasell. "With the combined advantages of LyondellBasell, Daelim and SK Advanced, this new joint venture will be able to provide competitive and differentiated polypropylene products that help advance fuel efficient vehicles, flexible packaging solutions, clean water and high-quality hygiene to serve the rapidly growing markets in Asia."

The Ulsan PP plant will leverage a vertically integrated value chain of SK, converting propane supplied by SK Gas to propylene by SK Advanced and finally to polypropylene with LyondellBasell’s leading Spheripol PP process technology. Through this integrated value chain approach, the companies will enhance the stable supply of raw materials, operational efficiency and responsiveness to market changes.

PolyMirae will offtake all polypropylene produced by Ulsan PP which will be sold to customers in South Korea through PolyMirae and exported throughout Asia through LyondellBasell and Daelim, utilizing their superior market knowledge and expertise.

As MRC informed before, in September 2019, LyondellBasell sarted up a new, fifth production line at its polypropylene compounding plant in Knapsack, Germany capable of producing 25 kt/yr. With this, capacity of the Knapsack facility is over 200 kt/yr, making the site "the world’s largest polypropylene compounding facility".

According to MRC's ScanPlast report, 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.

Ulsan PP Co., Ltd. is a joint venture between PolyMirae and SK Advanced. Established in November 2018, the company is headquartered in the new port of Hwangseong-dong, Namsan-gu, Ulsan, South Korea.

PolyMirae is a 50-50 joint venture between Daelim and LyondellBasell, both of which are well respected companies worldwide, and is a leading polypropylene production company in Korea. With Daelim's outstanding accumulated on-site operational experience and LyondellBasell's core technologies and worldwide sales network, PolyMirae was founded on September 1st 2000 in order to produce and supply the best polypropylene in Asia.

Daelim Industrial is a construction and petrochemical company that is a part of the Daelim Group hailing from South Korea. Daelim builds petrochemical, refinery and power plants in more than 36 countries. With headquarters in Seoul, South Korea, Daelim completed more than 600 engineering and construction projects around the world, as well as operates manufacturing facilities in South Korea. Founded in 1939, Daelim has approximately 7,000 employees worldwide. Revenues for 2018 is USD10 billion.

SK Advanced is a joint venture between Korea’s SK Gas, Saudi Arabia’s APC and Kuwait’s PIC, a subsidiary of Kuwait’s state-run oil company, Kuwait Petroleum Company (KPC). SK Advanced won the Industrial Peace Prize of Ulsan city for its efforts to maintain an accident-free workplace and build excellent labor-management relations since 2016.
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LyondellBasell is one of the largest plastics, chemicals and refining companies in the world. Driven by its 13,000 employees around the globe, LyondellBasell produces materials and products that are key to advancing solutions to modern challenges like enhancing food safety through lightweight and flexible packaging, protecting the purity of water supplies through stronger and more versatile pipes, and improving the safety, comfort and fuel efficiency of many of the cars and trucks on the road. LyondellBasell sells products into approximately 100 countries and is the world's largest licensor of polyolefin technologies.
MRC