Saudi Aramco and ADNOC boosts global oil and gas contracts activity in Q3 2019

MOSCOW (MRC) -- The global oil and gas industry has witnessed a substantial boost from contracts activity in the Middle East, which has resulted in a contract value of USD44.4bn in Q3 2019, according to GlobalData, a leading data and analytics company.

The increase in contract value is primarily attributed to Saudi Aramco’s 34 engineering, procurement and construction (EPC) related contracts (worth over USD18bn) for projects such as the Marjan and Berri field incremental development program in Saudi Arabia, alongside ADNOC’s US$3.6bn contract for the supply of one million metric tons of casing and tubing to support exploration and production activity in United Arab Emirates (UAE). The reported contract value is comparable to the previous quarter, which recorded US$45.5bn in value – despite there being a slight decline in the number of contracts from 1,528 in Q2 2019 to 1,386 in Q3 2019.

The company’s latest report, ‘Q3 2019 Global Oil & Gas Industry Contracts Review’, states that the upstream sector reported 1,035 contracts in Q3 2019, followed by midstream and downstream/petrochemical sector with 255 and 109 contracts, respectively, during the quarter.

North America recorded the most contracts with 489, representing 35% of the total in Q3 2019. This was followed closely by Europe with 471 contracts, accounting for 34% of the total.

Pritam Kad, Oil and Gas Analyst at GlobalData, commented: “Saudi Aramco’s commitment towards enhancing local presence is demonstrated in-line with its’ In-Kingdom Total Value Add (IKTVA) initiative, which is designed to drive domestic value creation. The recent 34 EPC-related contracts, worth over US$18bn, also support this initiative as most of the contract work will be undertaken by local companies/subsidiaries. On the similar note, ADNOC’s US$3.6bn casing and tubing supply contract, awarded during Q3, has the potential to achieve an in-country value of over 50%, which is significant."

Of the total contracts in Q3 2019, 61% were operation and maintenance (O&M) related contracts, followed by multiple-scope contracts such as construction, design and engineering, installation, O&M, and procurement, which accounted for 12%.

Notable contracts awarded by Saudi Aramco during Q3 2019, include multiple EPC-related contracts for the Marjan and Berri field Increment development program. Some of these key contracts were McDermott International and COOEC consortium’s USD3.5bn contract for the EPC and installation (EPCI) of a gas-oil separation plant (GOSP); McDermott International’s USD1.7bn EPCI contract for offshore gas facilities and pipelines; Saipem Onshore’s E&C division’s two EPCI services contracts combined (worth over US$3.5bn) for the development of the land facilities of the Abu Ali Crude expansion, oil and gas separation plant, and Khursaniyah Gas Plant (KGP) facilities; Tecnicas Reunidas’ USD3.36bn EPCI contract for a gas-processing plant and recovery and fractionation facilities; and the L&T Hydrocarbon Engineering (LTHE) and EMAS AMC consortium’s mega contract (worth over USD1bn) for an EPCI of oil facilities, tie-in platforms, production deck modules (wellhead decks), subsea pipelines and subsea cables, as well as the replacement of existing control gears at offshore platforms.

As MRC informed in the late October, The Abu Dhabi National Oil Company (ADNOC), Adani Group (Adani), BASF SE (BASF) and Borealis AG (Borealis) have signed a Memorandum of Understanding (MoU) to engage in a joint feasibility study to further evaluate a collaboration for the establishment of a chemical complex in Mundra, Gujarat, India. The collaboration includes evaluating a joint world-scale propane dehydrogenation (PDH) plant to produce propylene based on propane feedstock to be supplied by ADNOC. Propylene will be partially used as feedstock for a polypropylene (PP) complex, owned by ADNOC and Borealis, based on proprietary state-of-the-art Borealis Borstar technology.

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.

ADNOC is now accelerating this transformation by unveiling its plans to become a leading global downstream player. The new strategy will be supported by ADNOC’s 45 year plus legacy of a unique and open approach to partnerships, built on the UAE’s bedrock values, reliability and attractiveness. ADNOC will again look to create long term downstream partnerships, providing access to the most attractive parts of the energy value chain, to redefine ADNOC’s future growth.
MRC

MOL Group completes Aurora acquisition

MOSCOW (MRC) -- Petrochemicals company MOL Group (Budapest) announced that it acquired 100% of shares in Aurora, a plastics compounder based in Neuenstein, Germany, said Plasticstoday.

The deal reportedly reinforces MOL’s position in sustainable compounding and as a materials supplier to the automotive sector.

A supplier of virgin polymers, MOL said that it is continuously looking for opportunities to extend its petrochemical value chain toward higher added-value products. To achieve this objective, the group is seeking to expand synergies and gain expertise in both virgin-based and recycled plastic compounding. With the acquisition of Aurora, MOL Group said that it is further expanding its product portfolio in engineering plastics and polypropylene recyclate-based compounds and supporting its sustainability goals.

Aurora operates production plants in proximity to automotive manufacturing and plastics conversion clusters located in Germany’s Baden-Wurttemberg region. Moreover, Aurora has a unique closed-loop business model: It collects industrial plastic waste, recycles it and then upgrades the properties of the material into an enhanced plastic that suits the requirements of the car manufacturing industry. By combining MOL Group’s experience and Aurora’s know-how, the long-term objective is to accelerate further market growth while relieving the burden on the environment.

Aurora has production plants located near automotive manufacturing and plastics conversion clusters in Baden-Wurttemberg, Germany.

Compounding and recycling are among the key areas defined in MOL’s 2030 strategy and the automotive industry is a strategic sector, where both MOL and Aurora aim to tap into growing demand for recycled materials.

No financial details of the deal were disclosed.

As MRC informed earlier, in October 2019, Russian oil producer Lukoil and Hungarian energy company MOL are set to sign a settlement deal over contaminated oil.

According to ICIS-MRC Price report, Stavrolen (part of Lukoil), Russia's major polyolefins producer, has resumed its polypropylene (PP) production in Budennovsk after a long scheduled turnaround. The plant's customers said Stavrolen had fully resumed its PP production after the long scheduled maintenance by 15 October. The outage began on 6 September. The start-up of the plant"s high density polyethylene (HDPE) production will take place with a week delay.

MOL Hungarian Oil and Gas PLC is an integrated oil and gas company. The Company produces crude oil, petroleum products, bitumens, lubricants and natural gas. MOL owns and operates refineries, oil and gas pipelines, service stations, and natural gas storage facilities.
MRC

BASF ChemCycling project faces legislative problems due to German environmental law

MOSCOW (MRC) --The prospect of chemical recycling becoming a viable reality is looming on the horizon, but it is not yet a foregone conclusion as it faces some legislative problems, said Bioplasticsnews.

BASF is among the key drivers with its ChemCycling project at its site in Ludwigshafen, Germany. While costs are expected to come down in line with economies of scale as the technology is developed, the use of products made through chemical recycling could not be rolled out throughout Europe.

German environment agency the BMU does not include chemical recycling within its definition of recycling in the Packaging Act (VerpackG), which replaced the German Packaging Ordinance at the beginning of 2019.

The new legislation aims to reduce the impact of waste on the environment, with material recycling pitched at 65% (58.5% of all packaging) rising to 70% (63% of total volume) in 2022.

So for the time being while BASF may be able to break down monomers to reproduce polymers in Ludwigshafen, these products will not be classified as material recycling within Germany.

In September 2019, SIBUR, the largest petrochemical comples in Russia and Eastern Europe, and BASF, Geman petrochemical major, agreed to closely cooperate on sustainable development to share their best practices.

Apart from BASF, SIBUR’s design session was attended by representatives of Unilever, Boston Consulting Group, Renaissance Capital, as well as Razdelniy Sbor, the association for ecology and environmental protection.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (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. Meanwhile, 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.

BASF is the leading chemical company. It produces a wide range of chemicals, for example solvents, amines, resins, glues, electronic-grade chemicals, industrial gases, basic petrochemicals and inorganic chemicals. The most important customers for this segment are the pharmaceutical, construction, textile and automotive industries.
MRC

Air Products signs MOU to establish industrial gas production facilities in Saudi Arabia

MOSCOW (MRC) -- Air Products Qudra and Royal Commission for Jubail and Yanbu signed a Memorandum of Understanding (MOU) to establish world-class industrial gas production facilities and distribution networks in the industrial cities of Royal Commission, according to Kemicalinfo.

The MOU sets preliminary framework details for Air Products Qudra to

- establish a hydrogen fueling economy in the Kingdom,
- achieve higher values for off-gases,
- introduce new technologies to convert low-value feedstocks into high-value products,
- establish a helium recovery network, and
- expand the carbon-dioxide capture and re-use economy in the Kingdom of Saudi Arabia.

Seifi Ghasemi, Chairman, President and Chief Executive Officer for Air Products, said, "It is an honor to collaborate with the Royal Commission to explore the business case to invest, build, own and operate world-scale, transformative industrial gas facilities at Jubail and further support the creation of a world-leading downstream sector in Saudi Arabia."

Mohammad A. Abunayyan, Chairman of Vision Invest & Qudra Energy, said, "We are pleased about the collaboration with the Royal Commission for Jubail and Yanbu as Air Products Qudra strives to deliver world-class industrial gas infrastructure to Jubail and Yanbu."

Dr. Samir Serhan, Chairman of Air Products Qudra and Executive Vice President for Air Products, said, "We have already started the plan to kick off our Phase 1 investments to build world-scale industrial gas production units and distribution networks in Jubail. We look forward to bringing our full suite of capabilities to these projects and supporting essential sustainable energy production in these Industrial Cities."

The MOU supports Royal Commission’s strategy to promote direct investments, diversify and enhance the Kingdom’s economy, improve the services to its clients to help improve their business performance, and maximize localization within the Kingdom of Saudi Arabia.

As MRC wrote earlier, in December 2014, SIBUR-Khimprom (a subsidiary of SIBUR Holding) and Air Products entered into an agreement to build a new air separation unit in Perm and to supply the facility with locally produced gases. The unit came on-stream in 2016. After the commissioning Air Products will supply industrial gases for SIBUR-Khimprom over the next 20 years.

Besides, we remind that in September 2019, SIBUR, the largest petrochemical comples in Russia and Eastern Europe, and BASF, Geman petrochemical major, agreed to closely cooperate on sustainable development to share their best practices.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polyprolypele (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,589,580 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

Huntsman Chairman, President, and CEO to become New Officer of American Chemistry Council

MOSCOW (MRC) -- The American Chemistry Council (ACC) announced at its board of directors meeting that Huntsman Chairman, President and CEO Peter Huntsman will become the Council’s newest board officer, effective January 1, 2020, said Americanchemistry.

"Innovation and sustainability remain at the forefront of a thriving U.S. chemical industry,” said incoming ACC President and CEO Chris Jahn. “Peter Huntsman represents one of the world’s most highly diversified chemical products companies serving a broad range of end use markets. He knows first-hand the importance of a regulatory framework that bolsters the confidence of our value chain that our members’ products are safe for their intended use. His leadership will help to ensure ACC continues to articulate the industry’s view and commitment to a more circular economy and distinguishes the industry as a constructive partner in that evolution," he added.

"Peter’s insight, experience and guidance will strengthen ACC’s position as the leading voice for the industry as we continue to promote the role of American chemistry in a global manufacturing future,” said Chemours CEO Mark Vergnano, incoming Chairman of the Board.

Following formal approval by the board of directors, Huntsman will first assume the role of Vice Chairman of the Board and chair of the Council’s Board Finance, Audit and Membership Committee. He’ll serve in this capacity for one year, followed by a one year term each as Chairman of the Executive Committee and Chairman of the Board. Huntsman was first elected to ACC’s board of directors in February 2017.

As MRC informed earlier, the Chemical Activity Barometer (CAB), a leading economic indicator created by the American Chemistry Council (ACC), fell 0.4 percent in October on a three-month moving average (3MMA) basis following stable activity during the third quarter. On a year-over-year (Y/Y) basis, the barometer was off 0.5 percent (3MMA).

As MRC informed earlier, Russia's output of products from polymers rose in September by 5.2% year on year. However, this figure increased by 1.7% year on year in the first nine months of 2019. According to the Russian Federal State Statistics Service, September production of unreinforced and non-combined films was slightly over 107,300 tonnes, compared to 110,000 tonnes a month earlier. Output of films products grew in January-September 2019 by 9.1% year on year to 893,000 tonnes.
MRC