Kazakhstani CPC crude loadings surge to record high in March

MOSCOW (MRC) -- Loadings of Kazakhstan's CPC crude grade spiked to a record-high 1.65 million b/d in March propelled by production from the giant Tengiz and Kashagan fields, reported S&P Global with reference to the pipeline's operator's statement.

Now CPC is a light crude that loads in the Russian port of Novorossiisk on the Black Sea, however, 90% of the crude comes by pipeline from landlocked Kazakhstan's oil fields in and around the Caspian Sea.

Loadings in March were 150,000 b/d higher than the previous record set in June last year, on a barrels-per-day basis, according to the statement late-Wednesday from the Caspian Pipeline Consortium.

The surge means Kazakhstan has been contributing to massive oversupply in global markets, which has been reflected in particularly steep discounting for the grade.

CPC is typically shipped to customers in Asia and is viewed as having similar refining characteristics to Saudi Arabia's Arab Extra Light. Saudi Aramco has priced that grade at a discount of $8.10/b to ICE Brent in April.

The jump in loadings implies big increases in production from Kazakhstan's two largest fields: Tengiz and Kashagan. The two fields accounted for 723,000 b/d and 471,000 b/d of the March loadings according to the statement, although this does not necessarily correspond to wellhead production, and overall CPC loadings in February were a tepid 1.33 million b/d.

Tengiz, which is operated by a Chevron-led consortium, remains Kazakhstan's pre-eminent crude oil source. The field currently has a nameplate capacity of 600,000 b/d, but produced nearly 650,000 b/d last year, and is undergoing a major expansion project that should lift output to 900,000 b/d in around 2023.

Kashagan, operated by a seven-company international consortium, also appears to be performing strongly, despite periodic reports of glitches. The field came on stream in 2016 after major issues involving leaking pipelines and cost overruns.

In a statement this week, Richard Howe, managing director of North Caspian Operating Company, which runs Kashagan, said production was running as normal and "overall production reliability remains high."

As regards COVID-19, he said NCOC was well prepared and taking preventive measures, no cases of infection had been recorded, and there were no plans to lay off staff in response to low oil prices.

"In general, Kashagan will have a production life of decades. It should be viewed from a long-term perspective rather than in the context of the shorter-term economic climate," Howe said.

As MRC informed before, in January 2020, Kazakhstan suspended its oil exports to China after organic chlorides contamination was found in crude supplied by a Kazakh producer less than a year after the "dirty oil" crisis in neighboring Russia.

We also remind that South Korea's LG Chem said in January 2016, it had decided to drop a plan to jointly build a USD4.2-billion petrochemical complex in Kazakhstan, citing a prolonged slump in oil prices and a sharp increase in facility investments. In 2011, the chemical company said it would construct the complex near the western Kazakh city of Atyrau as part of a 50-50 joint venture with two Kazakh companies. The plan involved building ethylene and polyethylene plants with annual capacities of 840,000 tonnes and 800,000 tonnes, respectively. The project was announced in 2013.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 383,760 tonnes in the first two month of 2020, up by 14% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments increased due to the increased capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market were 192,760 tonnes in January-February 2020, down by 6% year on year. Homopolymer PP accounted for the main decrease in imports.
MRC

MOSCOW (MRC) -- Overall imports of acrylonitrile-butadiene-styrene (ABS) to the Ukrainian market rose in the first two month of 2020 by 67% year on year, according to MRC's DataScope report.

Thus, imports of material into Ukraine totalled 990 tonnes over the stated period. This figure was at 590 tonnes in January-February 2019.

February ABS imports into the country grew by 10% to 5200 tonnes from 470 tonnes in January. This figure was at 340 tonnes in February 2019.

South Korea is the largest ABS supplier into the region. The share of Korean material in the total shipments fell in January-February 2020 to 38% (380 tonnes) year on year from 56% a year earlier (330 tonnes), with Lotte's shipments being at 220 tonnes and LG Chem's imports - at 150 tonnes.

Deliveries of Austrian material to the region grew by two and a half times to 220 tonnes with a share of 22% in the total imports.

MRC

MOSCOW (MRC) -- Overall imports of acrylonitrile-butadiene-styrene (ABS) to the Russian market increased in the first two months of 2020 by 8% year on year to 4,800 tonnes, according to MRC's DataScope report.

This figure was at 4,500 tonnes in January-February 2019.

South Korean companies LG Chem and Lotte Advanced accounted for about 50% of the country's ABS imports.

Styrolution and Trinseo shipped the bulk of European ABS. The share of their shipments is 23% of the total imports.

February imports of material in the Russian Federation rose by 48% year on year to 2,500 tonnes from 2,700 tonnes a year earlier. Imports were 2,300 tonnes in January 2020.
MRC

MOSCOW (MRC) -- Sinopec Zhenhai Refining and Chemical, part of Sinopec Group, has planned to take its No. 3 Polypropylene (PP) unit off-stream in April 2020, according to Apic-online.

A Polymerupdate source in China informed that the company is likely to start maintenance at the unit on April 9, 2020. The unit is expected to remain under maintenance for about one week.

Located at Ningbo, China, the No. 3 PP unit has a production capacity of 350,000 mt/year.

As MRC reported earlier, Sinopec Corp is set to launch a new USD5.7 billion refining and petrochemical complex in the south of the country in second-quarter 2020 using crude oil from Kuwait as a key feedstock. The project being developed by Asia’s top refiner, a 200,000 barrels-per-day (bpd) plant in Zhanjiang, a coastal city in Guangdong province, will become the third greenfield refinery-petrochemical complex to be built in China within a space of two years.

According to MRC's ScanPlast report, PP shipments to the Russian market were 192,760 tonnes in January-February 2020, down by 6% year on year. Homopolymer PP accounted for the main decrease in imports.

China Petrochemical Corporation (Sinopec Group) is a super-large petroleum and petrochemical enterprise group established in July 1998 on the basis of the former China Petrochemical Corporation. Sinopec Group"s key business activities include the exploration and production of oil and natural gas, petrochemicals and other chemical products, oil refining.
MRC

MOSCOW (MRC) -- Belarus plans to supply its oil refineries with at least 1 million tons of crude oil in April, reported Reuters with reference to the RIA news agency, which cited Belarus state oil company Belneftekhim.

Russia, the main supplier of oil to Belarus, has yet to restart deliveries in full, which have been suspended since the start of the year due to a pricing row.

The goal is to reach two million tons of crude oil supply, Belneftekhim said.

In late January 2020, as MRC wrote before, the country's Naftan refinery received 80,000 mt of Norwegian oil to test out new routes and compare losses with the current price of Russian oil.

Lukashenko said in mid-December 2019 that Russia had agreed in principle to supply 20-22 Bcm of gas and 24 million-25 million mt of oil in 2020 to Belarus.

According to ICIS-MRC Price report, lower capacity utilisation at Polymir (part of Naftan) in January 2020 did not affect the balance of the local low density polyethylene (LDPE) market, there was no shortage of polyethylene (PE). Local companies partially compensated for the absence of domestic PE by higher shipments from Russia.

Polymir (part of Naftan) is Belarus' largest petrochemical company, producing a wide range of chemical products, such as LDPE, acrylic fibers, products of organic synthesis, hydrocarbon fractions, etc. Polymir was founded in 1968. The producer uses technologies of the largest foreign companies from Great Britain, Japan, Germany, Italy (Courtaulds, Asahi Chemical Co. Ltd, Kanematsu Gosho, SNIA BPD, etc.), as well as the developments of scientific research institutes and design institutes of the CIS countries. The plant"s annual production capacity is 130,000 tonnes.
MRC