Westlake earnings and sales fall on weak pricing

MOSCOW (MRC) -- Westlake Chemical Corporation saw lower profits in the fourth quarter of 2019, hurt by reduced global sales prices for its major products, according to Kemicalinfo.

The chemical maker posted a profit of USD72 million down around 41% from USD123 million it earned in the prior-year quarter.

Decrease in profit was attributed to lower global sales prices for key products due to trade uncertainties and a slower global economic growth.

Sales in the Olefins segment fell around 19% year over year to USD398 million in the reported quarter. Operating income in the segment tumbled roughly 46% to USD49 million. The decline was mainly due to reduced sales prices for major products resulting from higher olefins production and greater impacts from turnaround activity.

The Vinyls segment generated sales of USD1.5 billion, down around 1% year over year. Operating income in the segment was USD68 million, down around 46% year over year. The decline was caused by reduced sales prices for caustic soda and PVC (polyvinyl chloride) resin.

Revenues for full-year 2019 were USD8.12 billion, down around 6% year over year.

Westlake Chemical said that it remains focused on optimizing its operations and lowering its cost position.

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, contrary to seasonal factors, Russian producers of unmixed PVC have maintained a high level of capacity utilisation. Overal PVC output totalled 91,700 tonnes in January 2020, up by 4% year on year,

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

MOSCOW (MRC) -- Oman, the biggest Middle East oil producer outside OPEC, awarded France's Total and Thailand's PTTEP rights to explore and develop non-associated gas deposits in the sultanate, which is ramping up exploration and development of gas resources, reported S&P Global.

Oman's Minister of Oil and Gas Mohammed al-Rumhy signed the exploration and production sharing agreement for Block 12, which spans 9,546 square kilometers in central Oman, the ministry said Wednesday on Twitter.
Total will be operator of the block and hold an 80% stake, with the rest held by PTTEP.

Last year, Italy's Eni and BP Oman won rights to explore for oil and gas in Block 77 and Shell Oman was granted rights to Block 55.

Oman, which currently produces around 3 billion cubic feet of gas/day, is ramping up exploration and undertaking multi-billion dollar projects to monetize gas from the Mabrouk field that was discovered in 2018. Total and Shell are conducting downstream and upstream projects in Mabrouk that could cost more than USD20 billion.

State-run OQ, Total and Shell are partnering in the upstream development of Mabrouk while Shell and Total are separately working on a gas-to-liquids (GTL) plant to be developed by Shell and an LNG bunkering facility to be developed by Total.

The sultanate is also developing its giant Khazzan gas field with the help of BP, which is boosting production from the current 1 Bcf/d to 1.5 Bcf/d by 2021.

As MRC informed earlier, in November 2019, Total disclosed that it was evaluating construction of a new gas cracker at its Deasan, South Korea, joint venture (JV) with Hanwha Chemical.

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

MOSCOW (MRC) -- US oil refiner Phillips 66 said on Wednesday its 2020 capital spending budget could fall as much as 10% below this year’s plans, which include USD300 million for a West Coast marketing campaign, according to Hydrocarbonprocessing.

Executives at the fourth-largest US refiner by capacity said in a presentation to Wall Street analysts that next year’s outlays would range from USD3 billion to USD3.5 billion, compared with the estimated USD3.3 billion to USD3.5 billion this year.

"Phillips 66 has a consistent, proven strategy to create value for shareholders," Chief Executive Greg Garland said in New York. "Our strategic priorities of growth, returns and distributions are supported by a strong foundation of operating excellence and a high-performing organization."

The 2019 capital budget was boosted in part by USD300 million to pay for a retail-fuels joint marketing campaign with an undisclosed partner on the West Coast, executives said. Phillips markets fuels under the Phillips 66 and Union 76 brands.

"The transaction has not yet been finalized," said Phillips 66 spokesman Dennis Nuss. "We can confirm additional details once the transaction is closed."

At the high end of next year’s spending, the company would have "USD1.5 billion to USD2.5 billion for share repurchases, ahead of our expectations of USD1.2 billion," Credit Suisse analysts said in a note on Wednesday. "Another strong dividend increase for 2020 indicated (we expect a 10% hike)."

During the presentation, which was webcast, analysts questioned whether the capital budget fully reflected spending for major oil pipeline and other projects being constructed.

Garland said two major pipelines being developed were financed by shippers. Phillips 66 discloses its financing arrangements to credit rating agencies, he added, saying: "We’re completely transparent."

Phillips 66’s budget will include work on gasoline-producing fluidic catalytic cracking units (FCCU) at its Sweeny, Texas, and Ponca City, Oklahoma, refineries in 2020.

At the 265,000-barrel-per-day (bpd) Sweeny refinery south of Houston, Phillips 66 plans to continue modernizing the two FCCUs. Work at the 207,000-bpd Ponca City refinery in northern Oklahoma will focus on improving the yield from the FCCUs.

Also for 2020, the company is planning projects to produce diesel fuels from renewable resources at the 120,200-bpd Rodeo, California, refinery in the San Francisco Bay area and at the 221,000-bpd Humber, England, refinery.

As MRC reported earlier, Phillips 66 took the gasoline-making FCCU at its Bayway refinery in Linden, New Jersey, offline at midnight EST last Thursday due to a leak. There was no timeline for the restart.

We remind that 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

MOSCOW (MRC) -- Overall high density polyethylene (HDPE) imports into Belarus decreased in 2019 by 24% year on year, reaching 68,500 tonnes. The main increase in supplies accounted on the Ukrainian producer, according to MRC's DataScope report.

According to the National Bureau of Statistics of Belarus, PE imports to Belarus rose slightly in December 2019 to 6,600 tonnes from 6,300 tonnes a month earlier. Overall HDPE imports totalled 68,500 tonnes in 2019 versus 55,500 tonnes a year earlier. Such an increase in imports was partially caused by the further resale of PE to Russia.

The key suppliers of HDPE remained producers from Russia, the total volume of imports exceeded 24,200 tonnes against 30,200 tonnes a year earlier. The second largest supplier was the Ukrainian producer, the total supply amounted to slightly more than 24,100 tonnes against 12,200 tonnes a year earlier. The third largest producer from Saudi Arabia with a key position - pipe polyethylene.

Overall Middle Eastern HDPE imports totalled 6,500 tonnes in 2019 versus 4,100 tonnes a year earlier. It is also worth noting that over the past year, more than 20,400 tonnes of HDPE were reimported from Belarus against 10,000 tonnes a year earlier.
MRC

MOscow (MRC) -- Burckhardt Compression is cooperating with GRZ Technologies, a spin-off of Laboratory of Materials for Renewable Energy from EPFL Lausanne, Switzerland, to develop a new hydrogen compression technology, said Hydrocarbonprocessing.

It will be deployed in hydrogen fuel stations, hydrogen energy storage systems and other applications and will make use of thermal active metal hydrides. Hydrogen is a promising energy carrier that offers carbon-neutral energy for industry and mobility.

The Static Hydrogen Compressor from Burckhardt Compression operates without moving parts but with thermal active metal hydrides. The Static Hydrogen Compressor is based on the GRZ’s HYCO laboratory scale metal hydrides compression solution that is already in use for small amounts of hydrogen. Burckhardt Compression will scale up the solution for the new, strongly developing market of hydrogen re-fueling stations and hydrogen energy storage systems. These compressors operate with metal hydrides and will be designed for high-pressure solutions of 200, 350 and 700 bar.

The noise and vibration-free compressor is hermetically sealed from the environment and therefore operates without any gas leakage and can be used in sensitive areas. As the compressor is also completely oil-free, it can be used for hydrogen energy storage purposes too. Furthermore, thanks to its minimal moving parts design, this new compressor technology will be low maintenance.

“The increasing demand for gases like hydrogen as a carbon-neutral energy source creates promising market opportunities for Burckhardt Compression. We are therefore monitoring and exploring these developments very closely and initiating research activities in the relevant areas of application at such an early stage,” says Marcel Pawlicek, CEO Burckhardt Compression.

As MRC infromed earlier, Saudi Aramco and Air Products inaugurated the first hydrogen fueling station in Saudi Arabia at Air Products’ new Technology Center in the Dhahran Techno Valley Science Park. The pilot station will fuel an initial fleet of six Toyota Mirai fuel cell electric vehicles with high-purity compressed hydrogen.

Aramco and Total launched their USD5-billion Amiral JV project in October 2018. The steam cracker will be fed with a mixture of 50% ethane and refinery off-gases. It will supply ethylene to a downstream 1 MMt/y polyethylene manufacturing complex and other petrochemical products. The project aims to fully exploit operational synergies with the adjacent refinery, owned by Satorp, another JV between Aramco and Total. Third-party investors, including Daelim and Ineos, will locate plants at the value park adjacent to Amiral with a combined investment of USD4 billion. A final investment decision is expected in 2021.

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).

Saudi Aramco is an integrated oil and chemicals company, a global leader in hydrocarbon production, refining processes and distribution, as well as one of the largest global oil exporters. It manages proven reserves of crude oil and condensate estimated at 261.1bn barrels, and produces 9.54 million bbl daily. Headquartered in Dhahran, Saudi Arabia, the company employs over 61,000 staff in 77 countries.
MRC