Nord Stream 2 pipelayer Allseas suspends operations on US sanctions

MOSCOW (MRC) -- Switzerland-based Allseas - which has been integral to laying the controversial Nord Stream 2 gas pipeline from Russia to Germany - has suspended pipelaying activity after US President Donald Trump signed new sanctions into law late last Friday, reported S&P Global with reference to the company's statement.

The move by Allseas will certainly mean new delays to the completion of the 55 Bcm/year pipeline, which had originally been scheduled to start operations at the end of 2019.

"In anticipation of the enactment of the National Defense Authorization Act (NDAA), Allseas has suspended its Nord Stream 2 pipelay activities," the company said in a brief statement.

"Allseas will proceed, consistent with the legislation's wind down provision and expect guidance comprising of the necessary regulatory, technical and environmental clarifications from the relevant US authority," it said.

The new sanctions language against Nord Stream 2 is part of the NDAA, which had already been approved by the House of Representatives and the Senate.

It calls for the US State and Treasury departments to submit a report within 60 days that identifies "vessels that engaged in pipe-laying at depths of 100 feet or more below sea level for the construction of the Nord Stream 2 pipeline project, the TurkStream pipeline project or any project that is a successor to either such project." Those ships and identified executives involved with those ships could then face sanctions.

According to cFlow, S&P Global Platts trade flow software, two Switzerland-based Allseas pipelaying ships have been moving in a northeast-southwest direction off the Danish island of Bornholm in the Baltic Sea.

The Pioneering Spirit began laying the Danish part of Nord Stream 2 around November 28 and has tracked some 60% of its route to the border with Germany's Exclusive Economic Zone, according to Platts cFlow.

The Solitaire is around four days behind the Pioneering Spirit, according to cFlow.

According to S&P Global Platts Analytics, Nord Stream 2 would have to seek alternative vessels and contractors to complete the remaining section of pipe in Danish waters if the sanctions are enacted.

"While the most challenging parts of Nord Stream 2 have been laid in water depths of around 200 meters, the remaining section in Danish waters at 90 meters depth remains complicated," it said.

Russian companies operate capable offshore pipe-lay vessels, which have completed projects in challenging Arctic conditions, including the MRTS Defender, which worked on the offshore stretch of the Bovanenkovo-Ukhta pipeline.

Platts Analytics believes MRTS Fortuna could be used to complete Nord Stream 2, but is capable of laying just 1 km/d.

A further obstacle, according to Platts Analytics, is that the Danish permit application states that it is assumed that the vessels used to complete the Danish section will have dynamic positioning capabilities (such as those of the Allseas vessels) which are not present on MRTS Fortuna.

A Russian pipelaying vessel that already has dynamic positioning capabilities, Akademik Cherskiy, could be used, but it would take up to two months to arrive to Danish waters as it is currently stationed in Russia's Far East.

As MRC informed earlier, Gazprom Neft, part of Gazprom, and the Abu Dhabi National Oil Company (ADNOC) have entered into a Framework Agreement on Strategic Cooperation. The companies will explore opportunities for implementing joint projects in the upstream and downstream sectors, as well as in information technologies, artificial intelligence, and other areas.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,724,670 tonnes in the first ten months of 2019, up by 7% year on year. Shipments of all PE grades increased. The estimated PP consumption in the Russian market in January-October 2019 totalled 1,066,520 tonnes, up by 7% year on year. Supply of block copolymers of propylene (PP block copolymer) and homopolymer of propylene (homopolymer PP) increased, demand for statistical copolymers (PP random copolymer) decreased.
MRC

Sinopec Maoming will close HDPE line for turnaround in May

MOSCOW (MRC) - Sinopec Maoming, a subsidiary of one of the world's largest energy and chemical companies - Sinopec, plans to close production of high density polyethylene (HDPE) production line in Guangdong Province (Guangdong, China) on 5 May, 2020 for scheduled maintenances, Polymerupdate reports.

Planned work on this line with a capacity of 400,000 tonnes of HDPE per year will continue until 14 July. In the same numbers, the LDPE line with a capacity of 280,000 tonnes per year will be also closed.

At a site in Guangdong, Sinopec Maoming also runs another LDPE line with a capacity of 120,000 tons per year.

As per MRC's ScanPlast, November HDPE production in Russia grew to 65,500 tonnes, whereas this figure was 45,900 tonnes a month earlier. Low output in October was a result of shutdowns for maintenance at Stavrolen and Kazanorgsintez. Thus, overall HDPE production reached 795,800 tonnes in January-November 2019, compared to 877,600 tonnes a year earlier.

Sinopec corp. is one of the world's largest integrated energy and chemical companies. Business Sinopec Corp. includes oil and gas exploration, production and transportation of oil and gas, oil refining, petrochemical production, production of mineral fertilizers and other chemical products. In terms of refining capacity, Sinopec Corp. ranks second in the world, in terms of ethylene capacity - fourth.

MRC

Zhejiang Petrochemical plans to build a new line of ACN and MMA in eastern China

MOSCOW (MRC) - Zhejiang Petrochemical, a private Chinese company, plans to build a new line of acrylonitrile (ACN) and methyl methacrylate (MMA) in its petrochemical complex, which is located on an island near Zhoushan in eastern China, Polymerupdate reports.

These plants with a capacity of 260,000 tonnes of ACN and 90,000 tonnes of MMA per year will be built as part of the second phase of the project in Zhoushan. As part of the first phase of the project, the company intends to launch an ACN line with a capacity of 260,000 tonnes per year in the first quarter of 2020.

In addition, a cracking unit with a capacity of 1.4 mln tonnes of ethylene per year and plants for the production of aromatic substances with a total capacity of 5.2 mln tonnes per year will be located on this site. The company at the new petrochemical complex Zhoushan at the end of last year already began test production at the refinery with a capacity of 400 barrels per day.

Acrylonitrile is one of the main raw materials for the production of ABS.

As per ICIS-MRC Price Report, November ABS imports were 3,300 tonnes versus 3,500 tonnes a month earlier and 4,100 tonnes in November 2018. Overall ABS imports slightly decreased year on year in the first eleven months of 2019 to 31,300 tonnes.

Private company Zhejiang Petrochemical is building a new petrochemical complex in eastern China. 51% of the company is owned by the majority shareholder of Rongsheng Petrochemical. Other shareholders are the Chinese Juhua Group and Tongkun Group.
MRC

Ukraine increased import of injection moulding PET chips from Lithuania by 41% in January-November

MOSCOW (MRC) - Imports of injection moulding PET chips from Lithuania by Neo Group grew by 41% in eleven months of this year and amounted to 42,300 tonnes, according to MRC DataScope report.
This figure was 28,400 tonnes in January-November 2018. November imports of PET from Lithuania to Ukraine increased more than three times in comparison with the same period last year and amounted to 5,700 tonnes compared to 1,600 tonnes, the October import volume amounted to 5,200 tonnes.

The total volume of Lithuanian PET imports to the country increased to 31% in January-November 2019 against 22% in January-November last year. The main buyers of Lithuanian bottled PET were Coca-Cola Beverages Ukraine Limited and Retal.
MRC

Celanese reserves USD88 million related to European Commission ethylene cartel investigation

MOSCOW (MRC) -- Celanese Corporation, a global chemical and specialty materials company, reserves USD88 million related to European Commission ethylene cartel investigation, said the company on its site.

In May 2017, Celanese Corporation learned that the European Commission had opened a competition law investigation involving certain subsidiaries of Celanese with respect to certain past ethylene purchases.

Based on information recently learned from the European Commission regarding its investigation, Celanese recorded a reserve of USD88 million in the fourth quarter of 2019. Celanese is continuing to cooperate with the European Commission.

As MRC reported before, Celanese Corporation experienced an emergency incident at approximately 12:00 noon Central time on Saturday, Sept. 21, at the Celanese Clear Lake facility in Pasadena, Texas. On-site emergency personnel extinguished the fire quickly, and appropriate regulatory and first responder agencies were notified and mobilized at the scene to support the incident. Celanese unit operations include acetic acid and monomer vinyl acetate (VAM) with a capacity of 450,000 per year are down. The Fairway methanol unit is also idle.

VAM is the main feedstock for the production of ethylene-vinyl-acetate (EVA).

According to MRC's DataScope report, November EVA imports to Russia dropped by 8,9% year on year to 3,440 tonnes from 3,780 tonnes in November 2018, and overall imports of this grade of ethylene copolymer into the Russian Federation decreased in January-November 2019 by 18,9% year on year to 35,95 tonnes (44,330 tonnes in the first eleven months of 2018).

Celanese Corporation is a global technology leader in the production of differentiated chemistry solutions and specialty materials used in most major industries and consumer applications. Based in Dallas, Celanese employs approximately 7,700 employees worldwide and had 2018 net sales of USD7.2 billion.
MRC