ExxonMobil and Papua New Guinea should return to LNG negotiating table

MOSCOW (MRC) -- Exxon Mobil Corp and the Papua New Guinea government must return to the negotiating table so that a USD13 billion expansion of gas production can proceed, reported Reuters with reference to the head of French oil major Total, a partner in the plan.

The plan, which would double liquefied natural gas (LNG) exports from the South Pacific nation, hinges on agreements to develop two new gas fields, but PNG walked away from talks with Exxon on one of those fields last week.

The other agreement, with Total, was sealed last September. It is intended that gas from the two fields would be processed at an expansion of the existing Exxon-operated PNG LNG plant in Port Moresby.

"Our project is joint with that of Exxon," Total CEO Patrick Pouyanne told reporters after Total reported full-year results on Thursday. “There is a need for an agreement and the PNG government is aware of that.

"We have an agreement; they need to find an agreement. All of that needs negotiation, I don’t think negotiations should be done through media."

LNG expansion is crucial for the impoverished nation, but the government has said that Exxon refused to budge on the financial terms for the P’nyang field and failed to come up with an offer it could accept.

Exxon has expressed disappointment at the breakdown of talks but has said it hopes to work towards an outcome that would be beneficial to all stakeholders.

The company’s press representative in PNG and the Prime Minister’s office had no immediate response to Pouyanne’s comments when contacted outside business hours on Thursday.

"Fundamentally, the two projects are good. Fundamentally, PNG wants the projects to go ahead, now it is a question of negotiation," Pouyanne added.

"I’m convinced they’ll reach an agreement. It is a question of patience."

Total beat profit forecasts on Thursday by keeping net adjusted profit for the fourth quarter steady at USD3.2 billion, lifting shares in the French energy major.

As MRC wrote previously, in late September 2019, ExxonMobil Corp shut its 369,024 barrel-per-day (bpd) crude oil refinery in Beaumont, Texas because of flooding from Tropical Storm Imelda. The company also operates a cracker with a capacity of 830,000 mt of ethylene and 195,000 mt of proplyelen per year, low density polyethylene (LDPE) plant with a capacity of 236,000 mt per year and linear low density polyethylene (LLDPE) plant with a capacity of 727,000 tonnes per year in Beaumont.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,093,260 tonnes in 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments rose from both domestic producers and foreign suppliers. The estimated PP consumption in the Russian market was 1,260,400 tonnes in January-December 2019, up by 4% year on year. Supply of almost all grades of propylene polymers increased, except for statistical copolymers of propylene (PP random copolymers).

ExxonMobil is the largest non-government owned company in the energy industry and produces about 3% of the world's oil and about 2% of the world's energy.
MRC

MOSCOW (MRC) -- Asia's polypropylene (PP) market declined on the week in northeast and southeast Asia due to sluggish demand on the back of the coronavirus outbreak, reported S&P Global.

Chinese inventories rose to around 1.175 million mt amid the lack of downstream demand, market sources said.

More Chinese traders are looking for new export outlets to clear out cargoes at the port.

Demand for medical-use polymers, such as non-woven PP, was expected to increase due to the outbreak, market sources said.

As MRC wrote before, Zhejiang Shaoxing Sanyuan Petrochemical took off-stream one of its polypropylene (PP) plants in China last week because of logistical issues. Located in Zhejiang Province, this plant's annual production capacity is 300,000/mt yr.

Many downstream PP plants in China were heard to have reduced their operating rates or shut down as they were not able to transport their products to the customers due to the closure of major roads in eastern China due to coronavirus.

According to MRC's ScanPlast report, the estimated PP consumption in the Russian market was 1,260,400 tonnes in January-December 2019, up by 4% year on year. Supply of almost all grades of propylene polymers increased, except for statistical copolymers of propylene (PP random copolymers).
MRC

MOSCOW (MRC) -- Huizhou MMA Co, has taken off-stream its methyl methacrylate (MMA) plant for an unspecified reason, according to Apic-online.

A Polymerupdate source in China informed that, the company halted operations at the plant in early-February, 2020. The plant is expected to remain off-line for around one month.

Located at Huizhou, China, the plant has a production capacity of 90,000 mt/year.

We remind that, as MRC reported earlier, Roehm has planned to take off-stream its MMA plant in June 2020. The company is likely to start turnaround at the plant on June 5, 2020. The plant is expected to remain under maintenance for about 10 days. Located in Wesseling, Germany, the plant has a production capacity of 95,000 mt/year.

The principal application, consuming approximately 75% of the MMA, is the manufacture of polymethyl methacrylate acrylic plastics (PMMA). Methyl methacrylate is also used for the production of the co-polymer methyl methacrylate-butadiene-styrene (MBS), used as a modifier for polyvinyl chloride (PVC).

According to MRC's DataScope report, exports of suspension polyvinyl chloride (SPVC) from Russia totalled 193,700 tonnes in 2019, up by 11% year on year. Imports increased more significantly - by 217% year on year - to 50,900 tonnes.
MRC

MOSCOW (MRC) -- Air Liquide's full-year net profit rose amid stronger sales and at its gas and services unit, said French producer.

"Assuming no major change in the environment and the international health situation is under control, Air Liquide is confident in its ability to further increase its operating margin and to deliver net profit growth in 2020, at constant exchange rates," the company said in a statement.

Net profit at the industrial-gas supplier AI, -0.19% rose to 2.24 billion euros (USD2.45 billion) from EUR2.11 billion a year earlier, the company said.

Revenue for the year increased to EUR21.92 billion from EUR21.01 billion, Air Liquide said. Analysts had forecast net profit of EUR2.23 billion on revenue of EUR22.08, according to a consensus compiled by FactSet.

“Overall, and despite the expected global economic slowdown observed in the fourth quarter, the group delivered robust results,” the company said.

The increase was partly driven by the gas and services and global markets and technologies segments. The acquisition of Tech Air in the first quarter and the disposal of Fujian Shenyuan in September contributed positively as well, the company said.

Air Liquide said it will propose a dividend of EUR2.70 a share at the next annual general meeting.

As MRC informed earlier, Air Liquide has signed three new long-term contracts, which include the construction and operation of a new nitrogen removal unit (NRU), in the Antwerp Basin with German chemical company BASF.

As MRC wrote earlier, BASF, the world's petrochemical major, has restarted its No. 1 steam cracker following a maintenance turnaorund. Thus, the company resumed operations at the plant on September 30, 2019. The plant was shut for maintenance in mid-August, 2019. Located at Ludwigshafen in Germany, the No. 1 cracker has an ethylene production capacity of 235,000 mt/year and a propylene production capacity of 125,000 mt/year.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,904,410 tonnes in the first eleven months of 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments increased from both domestic producers and foreign suppliers. The PP consumption in the Russian market was 1,161,830 tonnes in January-November 2019, up by 7% year on year. Deliveries of all grades of propylene polymers increased, with the homopolymer PP segment accounting for the largest increase.
MRC

MOSCOW (MRC) -- Energy traders Unipec and Vitol have won a tender to supply Bangladesh Petroleum Corp (BPC) with up to 1.06 million tons of oil products in the first half of 2020 after placing the lowest offers, as per Hydrocarbonprocessing.

State-owned BPC is seeking 760,000-880,000 tons of gasoil with a sulfur content of 500 parts per million, 110,000 tons of jet fuel, 40,000 tons of 180-centistoke high-sulfur fuel oil and 30,000 tons of 95-octane gasoline.

“Unipec and Vitol have won the tender as they came up with the lowest bids,” a senior BPC official said.

The oil products are due for delivery from Jan. 1 to June 30, the tender document showed. Six traders competed for the tender, another BPC official said.

Unipec - a trading arm of Chinese state major Sinopec - placed the lowest offer for up to 450,000 tons of gasoil and 60,000 tons of jet fuel at premiums to Middle East quotes of USD2.33 and USD3.32 a barrel on a cost-and-freight basis respectively, the official said.

The Asian unit of trading house Vitol submitted the lowest offers for the remaining oil products, which included up to 430,000 tons of gasoil, 50,000 tons of jet fuel, 40,000 tons of fuel oil and 30,000 tons of gasoline.

Vitol offered a premium of USD2.20 a barrel for gasoil, USD3.30 a barrel for jet fuel, USD24.98 a tonne for fuel oil and USD5.43 a barrel for gasoline. BPC had also awarded Unipec and Vitol a similar import tender to supply nearly 1.35 million tons of oil products in the second half of 2019.

A shortfall in supplies of natural gas has forced the South Asian country to burn oil, a costlier option, to generate electricity. BPC resumed issuing tenders for long-term contracts in 2016 as part of efforts to buy at cheaper rates after a 15-year hiatus, during which it negotiated directly with suppliers of fuel products.

Currently, BPC has term contracts with eight companies for refined oil product imports. Suppliers for Bangladesh’s middle distillates contracts include Kuwait Petroleum Corp, Malaysia’s Petronas, Emirates National Oil Company, Thailand’s PTT, Indonesia’s Bumi Siak Pusako, PetroChina and Unipec.

Bangladesh has also signed a 15-year deal with India’s Numaligarh refinery to supply diesel, its first long-term contract with any Indian supplier, in which 60,000 tons will be imported in 2020. Bangladesh typically imports about 3.5 million tons of diesel and 2.5 million tons of fuel oil annually, making it one of the top 10 importers for those fuels in Asia.

BPC also buys 700,000 tons of Murban crude from Abu Dhabi National Oil Co annually and another 700,000 tons of Arab Light from Saudi Aramco for its only refinery.

As MRC informed earlier, Thailand’s PTT Global Chemical Public Co Ltd still has plans to shut two crackers at its petrochemical complex in Map Ta Phut in January 2020. The company might take two of its naphtha/mixed feed crackers offline for 35-40 days while there are no planned maintenances at other cracker units. The number 1 and number 2 cracker have a combined capacity of 915,000 tons of ethylene per annum. Thus, cracker No. 1 with a capacity of 515,000 tonnes of ethylene and 310,000 tonnes of propylene per year is scheduled to be shut for 40-day maintenance in late January, 2020, whereas cracker No. 2 with a capacity of 400,000 tonnes of ethylene and 50,000 tonnes of propylene per year is to be taken off-steam for 35-day turnaround in mid-January, 2020.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,093,260 tonnes in 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments rose from both domestic producers and foreign suppliers. The estimated PP consumption in the Russian market was 1,260,400 tonnes in January-December 2019, up by 4% year on year. Supply of almost all grades of propylene polymers increased, except for statistical copolymers of propylene (PP random copolymers).
MRC