Fired Saudi oil chief and former chairman of Aramco returns as investment minister in cabinet shuffle

MOSCOW (MRC) -- Former Saudi energy minister Khalid al-Falih has been appointed minister of a newly created investment ministry, according to a royal decree, reported Chemweek with reference to the Saudi Press Agency's statement on Tuesday.

He takes on a key new portfolio as the country tries to attract more foreign investors. The new ministry replaces the Saudi Arabian General Investment Authority (SAGIA).

Falih was removed last year from his posts as energy minister and Saudi Aramco chairman in the lead-up to Aramco’s initial public offering. Saudi Arabia's King Salman appointed his son Abdulaziz as energy minister in September to replace Falih, who had held the post since 2017.

Attracting investors to Saudi Arabia is a key part of Crown Prince Mohammad bin Salman’s (MBS) economic transformation plan, which calls for the country’s diversification from a near total reliance on crude oil and building new industries. SAGIA has struggled in the last few years to attract investors.

Other royal orders created new ministries for tourism and sports and replaced the kingdom’s minister of media with Majid Al-Qasabi, on an acting basis. Al-Qasabi is a close adviser to MBS.

As MRC informed previously, in October 2019, McDermott International announced that it had been awarded a contract by Saudi Aramco and Total Raffinage Chimie (Total) for their joint venture (JV) Amiral steam cracker project at Jubail, Saudi Arabia. Amiral is a JV in which Aramco holds 62.5% and Total the rest. The plant, designed to produce 1.5 million metric tons/year (MMt/y) of ethylene, will be one of the world's largest mixed-feed crackers.

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

Sasol to start up its new LDPE plant in H2 2020 after damages caused by fire in January

MOSCOW (MRC) -- South African petrochemical producer Sasol said Monday its low density polyethylene (LDPE) unit is expected to be completed in the second half of 2020, delayed from its previous plan to start up the cracker and LDPE plant by the end of 2019, reported S&P Global.

On 13 January, an explosion and fire damaged part of Sasol's 420,000 mt/year LDPE plant as it was coming online, as MRC informed earlier. The unit was shut at the time.

The cracker and LDPE plant are part of the new Lake Charles Chemical Project, or LCCP, and among one of the 13 new LDPE plants that emerged through 2017 to 2019.

Sasol's LCCP is 99% completed and operating with 80% production capacity in use, the company said in their interim financial results on Monday.

The company projected the LCCP would cost USD8.9 billion in 2014, but now is expected to cost an additional 43.8% at an estimated USD12.8 billion due to technical complications.

Sasol saw a 73% drop in earnings per share during the second half of 2019 amid delays with the project.

"The financial results were impacted mostly by a weak macroeconomic environment, which resulted in lower margins, and the LCCP being in a ramp-up phase," Sasol said.

The LLCP's linear low-density polyethylene (LLDPE), ethylene oxide and ethylene glycol units are producing at targeted levels, while the ETO unit achieved "beneficial operation" at the end of January, the company said.

As MRC wrote before, Sasol announced that its world-scale US ethane cracker with the capacity of 1.5 mln tonnes per year reached beneficial operation on 27 August 2019. Sasol’s new cracker, the heart of its Lake Charles Chemicals Project (LCCP), is the third and most significant of the seven LCCP facilities to come online and will provide feedstock to our six new derivative units at the company's Lake Charles multi-asset site.

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).

Sasol is an international integrated chemicals and energy company that leverages technologies and the expertise of our 31 270 people working in 32 countries. The company develops and commercialises technologies, and builds and operates world-scale facilities to produce a range of high-value product stream, including liquid fuels, petrochemicals and low-carbon electricity.
MRC

Fire causes partial shutdown at Marathon California refinery

MOSCOW (MRC) -- A portion of Marathon Petroleum Corp’s 363,000 barrel-per-day Carson refinery in California has been shut following a fire, reported Reuters with reference to the company's statement on Wednesday.

The fire, which began on Tuesday, has been contained and is under control, Marathon said in a statement, noting that no injuries were reported.The Los Angeles County Sheriff’s Department tweeted earlier on Wednesday that the refinery perimeter has been secured and that it did not anticipate the need to evacuate area residents.

"An explosion preceded fire in a cooling tower at the Marathon Refinery," the department tweeted. "Marathon personnel (are) keeping flames in check via fixed ground monitors while they work to depressurize the system. Los Angeles County Fire Department is assisting."

In a filing with the state pollution regulator, the refinery reported an "electrical/mechanical malfunction."

As MRC wrote previously, the gasoline-producing unit at Marathon Petroleum Corp’s 585,000-barrel-per-day (bpd) Galveston Bay Refinery in Texas City, Texas, remained shut for six weeks for repairs in late Juney-early August 2019. The 140,000-bpd gasoline-producing Fluidic Catalytic Cracking Unit 3 (FCCU 3) was shut on June 29 2019 to repair a leak. The refinery’s 65,000 bpd reformer, called Ultraformer 4, was also shut down.

Propylene is the main feedstock for the production of polypropylene (PP).

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

Westlake starts up expanded PVC capacitiies in US and Germany

MOSCOW (MRC) -- Westlake Chemical has started up expanded PVC capacities in Louisiana and Germany, reported NCT with reference to the company's statement during an earnings call.

CEO Albert Chao stated that expansion will add 750 million pounds of PVC (340,194 tons/year) production to its Burghausen and Gendorf sites in Germany, as well as its Geismar site in Louisiana, the US.

Westlake also announced that it has increased its stakes in the LACC ethylene joint venture with Lotte Chemical in October 2019 to 46.8% from the previous 35%.

As MRC wrote earlier, Westlake Chemical Corporation saw lower profits in the fourth quarter of 2019, hurt by reduced global sales prices for its major products. The chemical maker posted a profit of USD72 million down around 41% from USD123 million it earned in the prior-year quarter. 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 resin. Revenues for full-year 2019 were USD8.12 billion, down around 6% year over year.

According to MRC's ScanPlast report, contrary to seasonal factors, Russian producers of unmixed PVC have maintained a high level of capacity utilisation. Russia's overal PVC output totalled 91,700 tonnes in January 2020, up by 4% year on year. January production of unmixed PVC was 91,700 tonnes versus 87,760 tonnes in January 2019 and 81,400 tonnes in December 2019. Thus, despite relatively weak demand for resin from the domestic market, the average capacity utilisation exceeded 95% last month. Russia's overall PVC production reached 975,000 tonnes in 2019, compared to 958,600 tonnes a year earlier.

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

Formosa conducts maintenance at PVC and VCM plants in Texas

MOSCOW (MRC) -- Formosa Plastics USA is conducting maintenance works at its 798,000 mt/year polyvinyl chloride (PVC) plant and an upstream 753,000 mt/year vinyl chloride monomer (VCM) unit at its Point Comfort, Texas complex in February, reported S&P Global with reference to a source familiar with the company operations.

A company spokesman did not immediately respond to a request for comment.

The company originally planned to conduct those turnarounds in the fourth quarter of this year, but pushed the work to early 2020. The maintenance works are expected to finish in H2 March 2020.

Market participants said the company was boosting its PVC stocks ahead of the work to ensure contract customers remain supplied as usual, as is typical in the lead-up to a turnaround. However, market sources expected export volume availability to be limited in February.

As MRC informed before, Formosa has recently started up its new 1.5 million tons/year cracker in Point Comfort, Texas. The company has been ramping up the operating rates of the cracker.

According to MRC's ScanPlast report, contrary to seasonal factors, Russian producers of unmixed PVC have maintained a high level of capacity utilisation. Russia's overal PVC output totalled 91,700 tonnes in January 2020, up by 4% year on year. January production of unmixed PVC was 91,700 tonnes versus 87,760 tonnes in January 2019 and 81,400 tonnes in December 2019. Thus, despite relatively weak demand for resin from the domestic market, the average capacity utilisation exceeded 95% last month. Russia's overall PVC production reached 975,000 tonnes in 2019, compared to 958,600 tonnes a year earlier.

Formosa Petrochemical is involved primarily in the business of refining crude oil, selling refined petroleum products and producing and selling olefins (including ethylene, propylene, butadiene and BTX) from its naphtha cracking operations. Formosa Petrochemical is also the largest olefins producer in Taiwan and its olefins products are mostly sold to companies within the Formosa Group. Among the company's chemical products are paraxylene (PX), phenyl ethylene, acetone and pure terephthalic acid (PTA). The company"s plastic products include acrylonitrile butadiene styrene (ABS) resins, polystyrene (PS), polypropylene (PP) and panlite (PC).
MRC