Curacao seeks USD162 million from PDVSA for refinery operations

MOSCOW (MRC) -- Curacao is pursuing a USD162 million arbitration claim against Venezuela’s state-run PDVSA oil firm over its management of the island’s oil refinery, reported Hydrocarbonprocessing with reference to an executive of Refineria di Korsou.

The Dutch Caribbean island last week seized a PDVSA-owned oil storage terminal in neighboring Bonaire to enforce claims for overdue payments, maintenance costs and environmental damage at RdK, Marcelino de Lannoy, RdK’s interim managing director, said in an interview.

Curacao separately expects a contract with commodities firm Klesch Group to operate the 335,000-barrel-per-day Isla refinery and its storage facilities will be delayed. Klesch is committed to the deal but any agreement may be delayed until May or June because of travel restrictions due to the coronavirus pandemic, de Lannoy said.

Globally, demand for oil and petroleum products have fallen due to the pandemic, slashing prices and profit margins for many refineries. But the sharp price has lifted demand for storage space, including at the island’s Bullenbay oil terminal, with its 17.75 million barrels of storage and blending capacity.

PDVSA ran RdK’s Isla refinery on Curacao for about 34 years through last year. US sanctions against Venezuela led to a halt of operations. PDVSA failed to make lease payments, did not meet take or pay agreements with RdK or fulfill maintenance requirements, de Lannoy said.

Neither PDVSA or the Venezuelan oil ministry immediately responded to requests for comment.

RdK’s claim was filed earlier this month at the International Centre for Dispute Resolution, an arbitration group in New York, de Lannoy said. An ICDR spokesman said the group does not comment on its work.

A Dutch court in Curacao authorized a legal attachment of the Bonaire Petroleum Corp site. De Lannoy said Curacao would seek to auction the site if it wins the arbitration case.

PDVSA and the Venezuelan government have missed billions of dollars in payments to creditors in recent years as the once prosperous OPEC nation’s economy unraveled, putting many of its overseas assets at risk of seizure.

As MRC informed before, in May 2019, Curacao’s state-owned Isla oil refinery received an exemption from US sanctions on PDVSA, the Caribbean island’s government said in a statement. The US Treasury Department slapped sanctions on PDVSA in late January in a bid to force out socialist President Nicolas Maduro, who has overseen a collapse in the OPEC member nation’s economy. The license for the refinery, along with two other related companies, will allow the facility to continue to do business with US companies through Jan. 15, 2020.
MRC

MOSCOW (MRC) -- US monoethylene glycol exports to China and South Korea rose dramatically in January compared to the year-ago month, reported S&P Global with reference to the latest federal data.

US International Trade Commission data showed that China shot up to be the top export market for US MEG having received 86,846 mt, up from 18 mt in January 2018. South Korea received no US MEG in the year-ago month, but was the third-largest US MEG export market in January this year with 20,015 mt received.

However, the coronavirus outbreak hit China and Southeast Asian countries in January and began reaching other regions as well including the US and Europe. MEG prices started falling as demand plunged and widespread petrochemical plants either shut down or cut rates.

Activity in China was seen crawling back from widespread factory and manufacturing shutdowns and slowdowns as workers inched back to their jobs. US workers, by contrast, are increasingly telecommuting when possible as companies order them to work from home amid closed schools and businesses, such as restaurants. Major sports events and conferences have been cancelled throughout March in an effort to prevent crowds from spreading the disease.

US petrochemical plants had yet to show rate cuts, but market sources said such cuts may come if entire shifts are shut down because a worker showed up sick.

US MEG and many other petrochemicals and raw materials still face 25% tariffs imposed by China in August 2018 in response to 25% tariffs imposed on Chinese goods by the US the same month. Some tariffs imposed by both countries in 2019 were reduced as part of a Phase One trade pact reached in January, but 2018 tariffs remain in place.

This week, US President Donald Trump said he saw "no reason" to further lift or reduce tariffs.

China is the largest global consumer of MEG for its vast polyester industry as well as a feedstock for polyethylene terephthalate, a resin used to make plastic beverage bottles and fibers. MEG also is used as a solvent and antifreeze.

Last year China was the fifth-largest export market for US MEG, having received 142,706 mt, up from 79,063 mt in 2018. While flows to China increased year on year in 2019, they rose more to Belgium, South Korea and Turkey. Mexico remained the top export market for US MEG last year, but fell behind China in January this year with 31,320 mt.

As per MRC's ScanPlast report, the estimated consumption of polyethylene terephthalate (PET) in Russia increased in January 2020 by 9% year on year. Totally, Russia recycled 55,390 tonnes of PET chips in January (excluding shipments of Russian material to the countries of the Customs Union). PET chips production in Russian in January 2020 totalled 43,200 tonnes.
MRC

MOSCOW (MRC) -- Indorama Ventures Limited has announced that the company decided to extend the pre-construction period of the PTA-PET plant in Corpus Christi, Texas through the end of 2020, reported Kemicalinfo.

Christi Polymers LLC (CCP), a joint venture among certain subsidiaries of Indorama Ventures Holding, Alpek and Far Eastern Investment (Holding) Limited was created to acquire and complete construction of an integrated PTA-PET plant in Corpus Christi.

Indorama indicated that the current construction estimate is considerably higher than the estimate at the time of completion of the acquisition, primarily due to higher labor costs prevailing in the Gulf Coast region.

The Board of Directors of the CCP, consisting of members of all three JV partners, have agreed to extend the approval of the project through 2020 to optimize project construction efficiency in order to build a competitive PTA-PET asset at the site.

Indorama mentioned that it did not plan to make any additional cash contribution during the year 2020. During this period, the site will be properly maintained for the smooth restart of the construction.

The completion of the project is expected to be in 2023.

As MRC reported previously, in February 2019, IVL commenced production of purified terephthalic acid (PTA) and polyethylene terephthalate (PET) at plants it acquired from Artlant PTA in Portugal and EIPET in Egypt. IVL completed the acquisition of the 700,000-t/y PTA facility, located at the Sines industrial complex, in Late 2017. Value of the transaction, which included all equipment, surface rights and employment contracts, was not disclosed.

As per MRC's ScanPlast report, the estimated consumption of polyethylene terephthalate (PET) in Russia increased in January 2020 by 9% year on year. Totally, Russia recycled 55,390 tonnes of PET chips in January (excluding shipments of Russian material to the countries of the Customs Union). PET chips production in Russian in January 2020 totalled 43,200 tonnes.

Indorama Ventures Public Company Limited, listed in Thailand, is one of the world's leading petrochemicals producers, a global manufacturing footprint with 59 sites in 20 countries across Africa, Asia, Europe and North America. The company's portfolio is comprises necessities and high value-added (HVA) categories of polymers, fibers, and packaging. Indorama Ventures has approx. 15,000 employees worldwide and consolidated revenue of USD 8.4 billion in 2017. The company is listed in the Dow Jones Sustainability Index (DJSI).
MRC

MOSCOW (MRC) -- Exxon Mobil is likely to delay the greenlighting of its USD30 billion liquefied natural gas (LNG) project in Mozambique as the coronavirus disrupts early works and a depressed gas market makes investors wary, six sources told Reuters.

Top US oil and gas company Exxon said on Tuesday it was evaluating "significant" cuts to capital spending and operating expenses. Energy firms worldwide have slashed spending this month as oil prices plummeted to 18-year lows after global travel curbs and reduced economic activity destroyed demand.

The coronavirus pandemic is forcing delays to projects worldwide. Qatar, the world's largest producer of liquefied natural gas (LNG), is delaying a big expansion in which Exxon is a major partner.

The Rovuma LNG project, which will produce from a deepwater block off Mozambique containing more than 85 trillion cubic feet of natural gas, was expected to get the go-ahead in the first half of 2020.

But three sources familiar with the project told Reuters that Exxon's partners want to push back a final investment decision (FID).

A further three sources said the pandemic is disrupting work on the project to such a degree that FID before the second half is unlikely.

Any delay would leave Exxon's project further behind rival Total, which took FID last June on its neighbouring project.

Exxon might be left with no choice.

"COVID-19 is affecting guys going into Mozambique, it's affecting Chinese and Korean financiers, and clearly you've had the arse drop out of the oil market," said a source with knowledge of the project.

The pandemic is causing delays to the financing needed for the project, the source added.

Rovuma LNG is managed by Mozambique Rovuma Venture, a joint venture owned 35.7% each by Exxon and Eni ENI.MI with the remaining stake of 28.6% held by China National Petroleum Corporation (CNPC).

Another source with knowledge of internal discussions said with the energy outlook uncertain and LNG supplies set to rise sharply by 2025, some of the project partners want to "cool Exxon's heels" and delay.

Exxon spokesman Todd Spitler declined to discuss whether partners are seeking to push back the FID. "This is a complex project that will be developed over several years," he said.

China's CNPC did not respond to Reuters' request for comment and Eni declined to comment.

Mozambique's state oil firm ENH, Galp Energia GALP.LS and KOGAS, which each have 10% stakes in the project, either did not provide a comment or referred Reuters to Exxon.

Exxon has already committed to USD500 million in initial investment, and FID is the next stage in funding based on which banks can extend lines of credit.

But early works are being disrupted by coronavirus travel restrictions. International workers travel regularly to the project site on the Afungi peninsula in Cabo Delgado province, where they live cheek-by-jowl and share a canteen for six- or eight-week stints.

Many hail from countries that have been hit hard by the coronavirus and have put in place travel restrictions. Mozambique has imposed a 14-day quarantine for those entering the country.

That has left key personnel unable to reach the site.

"It seems as though they are electing to postpone some of the early stage works and contracts for now," another source familiar with the matter said. "I doubt we can expect their FID before the end of 2020."

Exxon's Spitler said employees' health and safety was a priority and declined to comment on the day-to-day details of its operations.

As MRC informed before, in September 2019, ExxonMobil announced plans to spend GBP140 million over the next two years in an additional investment program at its Fife ethylene plant, which has a capacity of more than 800,000 t/y.

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) -- Overall imports of general purpose polystyrene (GPPS) and high impact polystyrene (HIPS) to Russia rose in January-February 2020 by 39% year on year to 8,100 tonnes, according to MRC's DataScope report.

This figure was at 5,800 tonnes in January-February 2019.

At the same time, last month's GPPS and HIPS imports to the Russian market grew by 28% to 3,800 tonnes from 2,900 tonnes in February 2019. Imports of material into the country were 4,300 tonnes in January 2020.

GPPS imports to Russia grew in January-February 2020 by 71% year on year, totalling 5,600 tonnes.

Russian companies increased their imports of material by 66% last month: from 1,600 tonnes in February 2019 to 2,600 tonnes, imports were 3,000 tonnes a month earlier.

HIPS imports have continued to decline since September 2019. They were 1,200 tonnes in February 2020 versus 1,400 tonnes a month earlier and 1,300 tonnes in February 2019. However, imports remained virtually unchanged year on year in the first two months of 2020, totalling 2,500 tonnes.

European material of Styrolution and Versalis accounted for about 90% of HIPS and GPPS shipments.

MRC