Ecopet put up for sale by the bank of non-core assets

MOSCOW (MRC) - The Kaliningrad group of companies Ecopet, the largest producer of polyethylene terephthalate (PET) in Russia and Eastern Europe, has been put up for sale by the Bank of non-core assets Trust, Rugrad reports.

The preparation of the transaction is overseen by the Trust Non-core Assets Bank. As follows from the materials posted on the Trust website, the bank is looking for new owners for Ecopet LLC, which owns petrochemical production facilities on the Baltic Highway, and for the infrastructure site of Balttehprom LLC.

According to the CEO of Ecopet and Balttechprom Alexander Anikeev, two Russian and foreign investors have already shown interest in the assets. According to the head, the option with the purchase of the Civil Code by state structures is excluded. Ecopet is now for sale.

Trust Bank must sell our asset within a short time. The state, of course, will not buy. It so happened that the shareholders of Ecopet changed almost every year. The first owner took a loan to build the plant, then something went wrong, and the company transferred to MDM Bank.

After the termination of its activities, we transferred to the financial group "Discovery". When the non-core asset bank of PJSC National Bank Trust was established, it included Ecopet, the Baltic Industrial Park and the Fifth Element plant in Krasnoznamensk, the Royal Gate magazine quoted Alexander Anikeev as saying.

Last October, the chemical laboratory of Ecopet JSC passed the accreditation procedure of a new technology for the production of its products. The approved accreditation area of the Ecopet chemical laboratory includes studies of high viscosity polyethylene terephthalate of the Ekopet trademark, terephthalic acid, isophthalic acid, ethylene glycol, diethylene glycol, sewage, natural water.

According to the ICIS-MRC Price Review, on January 20, 2020, Ecopet stopped the production of PET for scheduled repairs.

The company is based on the territory of the free economic zone of the Kaliningrad region. The plant's total PET production capacities are 220,000 tonnes per year. PET chips are produced under the EcoPet trademark and is used for the production of food packaging and PET bottles.
MRC

Braskem Idesa begins importing ethane from the US

MOSCOW (MRC) -- Braskem says its Braskem Idesa joint venture with the Mexican group Idesa has reached an important milestone with the import of its first ethane from the US, which will be used as feedstock to at the Coatzacoalcos, Mexico, petrochemical complex, as per Chemweek.

Braskem Idesa has spent $4 million on logistics infrastructure and will be able to import up to 12,800 b/d of ethane to the feed the complex. This quantity represents 19% of the company’s 1.05-million metric tons/year steam cracker’s ethane needs.

Braskem said last November that Braskem Idesa is investing in logistics infrastructure to import ethane from the US to increase capacity utilization rate of the Coatzacoalcos steam cracker. The company concluded agreements with Smart Pass, a logistics operator, and with Enestas, a company specializing in cryogenic gas transportation. Smart Pass is responsible for receiving liquid ethane at the docks of the Port of Coatzacoalcos and for unloading it from the vessels in cryogenic tanks. Enestas, meanwhile, transports the ethane by trucks to the petrochemical complex where the ethane will be stored in existing tanks and regasified for use in the production process.

Ethane volumes may eventually reach 25,400 b/d, equivalent to 38% of its annual ethane needs. Braskem Idesa is also assessing the possibility for larger-scale ethane imports and may build a terminal for importing ethane and a pipeline to transport the feedstock to its petrochemical complex.

As MRC informed before, Brazilian petrochemical producer Braskem is no longer pursuing a petrochemical project, which would have included an ethane cracker, in West Virginia, announced the company in April, 2019. And the company has been seeking to sell the land that would have housed the cracker.

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).

Braskem S.A. produces petrochemicals and generates electricity. The Company produces ethylene, propylene, benzene, toluene, xylenes, butadiene, butene, isoprene, dicyclopentediene, MTBE, caprolactam, ammonium sulfate, cyclohexene, polyethylene theraphtalat, polyethylene, and polyvinyl chloride (PVC).
MRC

US renewable fuel credits double since court decision on refinery waivers

MOSCOW (MRC) -- US renewable fuel prices have doubled since a US appeals court in late January ruled that the Trump administration must reconsider three waivers it previously handed out to oil refineries that exempted them from biofuel blending laws, reported Reuters.

Renewable fuel (D6) credits RIN-D6-US for 2019 are trading at around 19 cents each, up from nine cents before the court’s Jan. 24 court decision, traders said. Refiners including Phillips 66 and Valero Energy Corp have actively bought in the market, two traders said.

Prices have steadily risen because the court decision raises the possibility of fewer small-refinery waivers going forward, creating higher demand for the credits, traders said.

Under the US Renewable Fuel Standard, the nation’s oil refineries are required to blend billions of gallons of biofuels such as ethanol into the nation’s fuel pool, or buy credits known as RINs from those that do. But the EPA can waive refiners’ obligations if they prove compliance would cause them financial distress.

The Environmental Protection Agency under President Donald Trump has roughly quadrupled the number of waivers handed out to small refiners, angering the biofuel industry, which claims the exemptions hurt demand for corn-based ethanol. The oil industry rebuts that and says the obligations are too pricey.

According to the court’s decision, the EPA overstepped its authority to grant waivers in the past for HollyFrontier’s (HFC.N) Woods Cross and Cheyenne refiners and CVR Energy’s Wynnewood refinery because the refineries had not received exemptions in the previous year.

Market participants are awaiting clarity on how the EPA will address the court’s ruling. The court vacated the EPA orders granting the exemptions to the three refineries and sent the issue back to the EPA for further action.

Biomass-based (D4) credits RIN-D4-US for 2019 have also risen since the ruling, to 55 cents each from 45 cents each, traders said.

As MRC wrote before, 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 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

Gazprombank to start projects in Azerbaijan

MOSCOW (MRC) -- Russia's Gazprombank plans to implement a number of projects in Azerbaijan, which it considers one of the key countries for cooperation, the bank's Vice President Denis Kamyshev has told Russian media, said Menafn.

Kaymyshev said that Gozprombank has business interests with other CIS countries. He noted that Gazprombank has outlined positive dynamics in the bank's relations with Azerbaijan's business, as well as with various local authorities.

Kamyshev added that as a significant share in both Russia's and Azerbaijan's economy is occupied by the petrochemical industry. He added that the infrastructure is an essential part of the Azerbaijani economy.

'Part of it required a radical modernization, and it was important not to miss the moment. The Azerbaijani leadership understood this. We knew that SOCAR is a very demanding partner with whom it is necessary to be as frank and involved in the process as possible, he said.

Kamyshev noted that Gazprombank is engaged in a large project in Azerbaijan to build factories for the production of polypropylene and high density polyethylene. The production site is located in the Sumgait Chemical Industrial Park, 30 km from Baku.

'The project is called SOCAR Polymer. The total cost is about USD800 million. The first plant was commissioned in July 2019. This is a major breakthrough for the country's economy, and a very interesting experience for us, Kamyshev emphasized.

He said that the bank has now launched the second large project in Azerbaijan - the construction of the SOCAR GPC gas processing and petrochemical complex, where Gazprombank acts as a financial consultant. He noted that the project's budget is about USD4 billion.

Kamyshev stressed that the bank intends to actively cooperate with local financial organizations during the implementation of projects in Azerbaijan.

'We have signed a cooperation agreement with two major Azerbaijani banks - PASHA Bank and the International Bank of Azerbaijan. We agreed on joint financing of investment projects in Azerbaijan in such priority areas as the petrochemical and oil and gas refining industries, agriculture, transport and logistics, communications and telecommunications, including with the use of factoring and leasing tools, he said.

In addition, the bank intends to offer a number of innovative hallmark products for sale in Azerbaijan.

As MRC informed earlier, SOCAR Polymer plans to reach the design load for low-pressure polyethylene (HDPE) no earlier than 2023. In 2019, SOCAR Polymer is expected to produce 48.2 thousand tons of low-pressure polyethylene and 110 thousand tons of polypropylene. In 2020, these indicators will amount to 97.4 and 140 thousand tons, respectively. In 2023, the company is expected to be able to reach its design targets and produce 120 thousand tons of polyethylene and 170 thousand tons of polypropylene. Thus, the production of HDPE relative to 2019 will grow by 2.5 times, polypropylene - by 54%.

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

OPEC+ panel calls for more oil cuts on coronavirus impact

MOSCOW (MRC) -- An OPEC, non-OPEC technical panel has recommended extending a current oil supply cut pact until the end of 2020 and more output reductions due to the impact of the coronavirus on oil demand, reported Reuters with reference to Algeria’s oil minister's statement.

Mohamed Arkab, who currently holds the presidency of the Organization of the Petroleum Exporting Countries (OPEC), also said that the OPEC+ Joint Technical Committee, known as the JTC, has recommended that "an additional reduction in production be made until the end of the second quarter of 2020".

The JTC which advises OPEC and its allies, a group known as OPEC+, concluded its meeting on Thursday.

"The coronavirus epidemic has a negative impact on economic activities, especially on the transport, tourism and industry, in China particularly, and also increasingly in the Asian region and gradually in the world," Arkab said.

As MRC informed previously, BP has recently said the deadly coronavirus outbreak could cut global oil demand growth by 40 per cent this year, putting pressure on Opec producers and Russia to curb supplies to keep prices in check.

We also remind that in September 2019, six world's major petrochemical companies in Flanders, Belgium, North Rhine-Westphalia, Germany, and the Netherlands (Trilateral Region) announced the creation of a consortium to jointly investigate how naphtha or gas steam crackers could be operated using renewable electricity instead of fossil fuels. The Cracker of the Future consortium, which includes BASF, Borealis, BP, LyondellBasell, SABIC and Total, aims to produce base chemicals while also significantly reducing carbon emissions. The companies agreed to invest in R&D and knowledge sharing as they assess the possibility of transitioning their base chemical production to renewable electricity.

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