Nigerian Dangote refinery to rely on ports, roads for fuel deliveries

MOSCOW (MRC) -- Africa's largest oil refinery will deliver its fuels to Nigerian consumers via roads and sea ports, and will effectively replace all of Nigeria's fuel imports once fully operational, said Reuters.

The 650,000 barrel-per-day Dangote oil refinery is under construction in Lagos, the biggest city in the most fuel-consuming nation in the region, which absorbed 266,000 barrels of petroleum products per day as of 2015.

Congested ports and dilapidated roads led some to expect that the company would build a pipeline or other method of getting its fuel to consumers.

But Dangote Group Executive Director Devakumar Edwin told an OTL (Oil Trading and Logistics) Expo in Lagos that fuels would go via "shuttle" boats to Nigerian cities Warri and Calabar, and that other deliveries would go in trucks.

The company is itself fixing and expanding one of the current roads to Lekki - an area adjacent to Lagos's financial and business district - Edwin said, while the Lagos state government will build another toll road to aid shipments.

"That's going to reduce a lot of congestion," Edwin said of their plans.

He said the refinery would virtually eliminate fuel imports from other regions, adding "those who are importing today... can buy from our refinery".

Dangote had previously told Reuters that the refinery's mechanical completion was delayed until 2020, though industry sources told Reuters last year that fuel output was unlikely before 2022.

The refinery is also constructing facilities that will allow it to export its diesel, gasoline and other fuels to markets including Europe and Latin America aboard vessels as large as Suezmax tankers.

It is also designed to be able to produce diesel that meets European winter standards, and will be high quality enough to go to any market.

The refinery's startup will be particularly tough on European refineries, which currently supply a large portion of gasoline consumed in West Africa, another Dangote executive speaking at the conference said.

"We can export the product all over the world. So there is no need for us to (blindly) compete with the local production," Edwin said.

The Dangote group is also eyeing ethanol production at its sugar and molasses plant in Adamawa state, and has facilities at the refinery to blend ethanol with fuel if needed.

Edwin said they are also already considering expanding plastics and petrochemical productions at the refinery, which will make polyethylene and polypropylene when it begins production.

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.
MRC

MOSCOW (MRC) -- LyondellBasell, one of the largest plastics, chemicals and refining companies in the world, has announced that it has declared a dividend of USD1.05 per share, as per the company's press release.

The dividend is to be paid Dec. 9, 2019 to shareholders of record Dec. 2, 2019, with an ex-dividend date of Nov. 29, 2019.

As MRC wrote previously, LyondellBasell has recetnly announced that Hyundai Chemical, a joint venture between Hyundai Oilbank and Lotte Chemical, has selected LyondellBasell's Lupotech T process technology for a low-density polyethylene (LDPE) and ethylene vinyl acetate (EVA) copolymers plant to be built in South Korea. The facility, to be built in Daesan, will have 300,000 t/y of capacity. No additional details of the project were available.

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.

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

MOSCOW (MRC) – The Chemical Activity Barometer (CAB), a leading economic indicator created by the American Chemistry Council (ACC), was stable (0.0 percent change) in November on a three-month moving average (3MMA) basis following a 0.3 percent decline in October. On a year-over-year (Y/Y) basis, the barometer was off 0.2 percent (3MMA), said Americanchemistry.

The unadjusted data showed a solid 0.6 percent gain and was driven by increases among all four components. The diffusion index rose to 59 percent in November. The diffusion index marks the number of positive contributors relative to the total number of indicators monitored. The CAB reading for October was revised upward by 0.16 points and that for September by 0.18 points.

“The CAB signals slow gains in U.S. commerce into mid-year 2020,” said Kevin Swift, chief economist at ACC. The CAB has four main components, each consisting of a variety of indicators: 1) production; 2) equity prices; 3) product prices; and 4) inventories and other indicators.

Production-related indicators improved in November. Trends in construction-related resins, pigments and related performance chemistry were slightly positive and suggest slow gains in housing activity. Plastic resins used in packaging and for consumer and institutional applications were mixed, despite strong consumer spending reflecting elevated confidence and solid job and income gains. Performance chemistry eased and U.S. exports were weak. Equity prices rose sharply this month, and product and input prices gained as well. Inventory and other indicators were positive.

The CAB is a leading economic indicator derived from a composite index of chemical industry activity. Due to its early position in the supply chain, chemical industry activity has been found to consistently lead the U.S. economy’s business cycle, and this barometer can be used to determine turning points and likely trends in the broader economy. Month-to-month movements can be volatile, so a three-month moving average of the CAB reading is provided. This provides a more consistent and illustrative picture of national economic trends.

We remind that, Russia's output of chemical products rose in October 2019 by 5.4% month on month.
However, production of basic chemicals increased by 3.9% in the first ten months of 2019. According to the Federal State Statistics Service of the Russian Federation, the largest increase in production volumes on an annualized basis accounted for mineral fertilizers and polymers in primary form. Thus, 210 ,000 tonnes of ethylene were produced in October, compared to 200,000 tonnes a month earlier. Limited production was a result of scheduled shutdowns of several large producers in September-October.
MRC

MOSCOW (MRC) -- Daelim Industrial Co. said in a regulatory filing that it will sign a contract to buy out Cariflex, a chemical business unit of U.S. Kraton Corp, its first overseas acquisition, said Pulsenews.

Cariflex is a global leader in isoprene rubber latex.

The deal is worth 618.2 billion won (USD530 million), over 10 percent of the South Korean construction and petrochemical firm’s equity capital as of last year, and it includes the division’s production facility in Brazil, proprietary technology, business concession and production, research and marketing workforce.

Daelim Industrial will set up a subsidiary in the U.S. to realize the transaction.

Daelim Industrial, the No.-3 builder in South Korea in terms of building capacity, said and the planned business combination will allow it to provide customers with a wider range of innovative products while adding the ability to serve the medical and other high-end markets.

Shares of Daelim finished Thursday 1.5 percent lower at 91,300 won.

As MRC informed earlier, Daelim Industrial Co., a major construction firm in South Korea, said Wednesday it has won a 535.4 billion won (USD462 million) order to build a petrochemical plant in South Korea. Under the deal with Hyundai Chemical Co., Daelim Industrial will build the heavy-feed petrochemical complex in Daesan, some 120 kilometers south of Seoul. The builder aims to complete the project by June 2021. The plant will be able to produce 250,000 tons of polypropylene (PP) as well as 600,000 tons of polyethylene (PE) a year, according to the company.

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.

Daelim Industrial is the No.-3 builder in South Korea in terms of building capacity.
MRC

MOSCOW (MRC) -- Westlake Chemical Corporation saw lower profits in the third quarter of 2019, hurt by reduced sales prices for its major products, as per the company's press release.

The chemical maker posted a profit of USD158 million or USD1.22 per share for the quarter, down around 49% from USD308 million or USD2.35 it earned in the year-ago quarter. However, earnings topped the Zacks Consensus Estimate of USD1.02.

Sales fell roughly 8% year over year to USD2,066 million. The figure also missed the Zacks Consensus Estimate of USD2,131.4 million.

Lower global sales prices for key products due to trade uncertainties and a slower global economic growth were, in part, masked by reduced ethane feedstock and fuel costs.

Sales in the Olefins segment fell 17% year over year to USD448 million in the quarter. Operating income in the segment tumbled roughly 43% to USD92 million. The decline was mainly due to reduced sales prices for major products resulting from higher olefins production.

The Vinyls segment generated sales of USD1,618 million, down around 6% year over year. Operating income in the segment was USD153 million, down around 39% year over year. The decline was caused by reduced sales prices for caustic soda and PVC (polyvinyl chloride) resin.

Westlake Chemical ended the quarter with cash and cash equivalents of USD1,437 million, up around 82% year over year. Long-term debt was USD3,424 million, up 28% year over year.

Westlake Chemical noted that it is facing challenges from a difficult pricing environment due to slower global growth as a result of trade tensions. Amid this backdrop, the company remains focused on controlling costs and investing in a number of initiatives globally which it expects to boost long-term value for shareholders.

Shares of Westlake Chemical have lost 6.2% in a year’s time compared with the industry’s 15.9% decline.

In February 2018, as MRC informed before, Westlake Chemical announced plans to expand its capacities for the production of PVC and VCM at three of its chemical facilities. Two of the plants are located in Germany (Burghausen, Gendorf) and one is located in Geismar, Louisiana. The expansions in Burghausen and Geismar are expected to be completed in 2019. The Gendorf expansions are expected to be completed in 2020 and 2021.

According to MRC's ScanPlast report, Russia's overall PVC production reached 809,000 tonnes in the first ten months of 2019, up by 3% year on year. At the same time, not all Russian producers raised their output.

Westlake Chemical Corporation is an international manufacturer and supplier of petrochemicals, polymers and building products with headquarters in Houston, Texas. The company's range of products includes: ethylene, polyethylene, styrene, propylene, chlor-alkali and derivative products, PVC suspension and specialty resins, PVC Compounds, and PVC building products including siding, pipe, fittings and specialty components, windows, fence, deck and film.
MRC