Chevron Phillips announces management changes

MOSCOW (MRC) -- Chevron Phillips Chemical Company LLC has announced that Mitch Eichelberger has become senior vice president, Polymers and Specialties, effective May 16, 2020, reported BusinessWire.

Eichelberger replaces Dave Morgan, who will retire after more than 40 years with Chevron Phillips Chemical and Phillips Petroleum (now Phillips 66).

"Since our inception, Dave has exemplified the spirit of what it is to be a Chevron Phillips Chemical employee and lived by our tagline - Performance by Design, Caring by Choice," said Mark Lashier president and CEO. "His respect for employees, commitment to diversity and inclusion, and long-term vision have been invaluable to our success. He will be missed by us all, but his legacy remains. Dave has been a driving force in shaping our culture to make it a great place to work and meet the needs of our customers globally."

Eichelberger, currently senior vice president, Corporate Planning and Technology, will continue serving on the company’s Leadership Team as a direct report to Lashier. Eichelberger has nearly 40 years of industry experience and previously held leadership roles that will serve him well in his new position, including vice president, Qatar and vice president, Specialties. He also led the research and technology licensing group and served as polyethylene global business manager.

The company named Steve Prusak, currently general manager, Corporate Planning and Development, to assume the role of senior vice president, Corporate Planning and Technology and become a member of the Leadership Team, reporting directly to Lashier. Prusak has 30 years of industry experience and has held commercial, project and strategy roles during his tenure with the company. Notably, he served as a project director for the company’s U.S. Gulf Coast Petrochemicals Project, which was completed in 2018.

Darren Ercolani, currently general auditor, will also join the Leadership Team and report to Lashier in a newly created role, vice president, Business Transformation. In this position, Ercolani will lead the company’s efforts to innovate business operations and be responsible for championing the company vision for a digital future. As part of this effort, the company’s Information Technology department will also report to him. Ercolani has nearly 30 years of industry experience.

"The changes we are announcing today position Chevron Phillips Chemical to thrive in the global marketplace for years to come. We are embracing digitization and innovation, ensuring that our businesses continue to have seasoned and thoughtful leadership, and delivering on our mission to be the premier chemical company, known as the employer, supplier, neighbor and investment of choice," concluded Lashier.

As MRC informed earlier, 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 557,060 tonnes in the first three month of 2020, up by 7% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments rose because of the increased capacity utilisation at ZapSibNeftekhim. Demand for LDPE subsided. At the same time, PP shipments to the Russian market was 267,630 tonnes in January-March 2020, down 20% year on year. Homopolymer PP and PP block copolymers accounted for the main decrease in imports.

Chevron Phillips Chemical Company LLC is one of the world’s top producers of olefins and polyolefins and a leading supplier of aromatics, alpha olefins, styrenics, specialty chemicals, plastic piping and polymer resins. With approximately 5,000 employees, the LLC and its affiliates own nearly USD17 billion in assets, including 31 manufacturing and research facilities in seven countries. Chevron Phillips Chemical Company LLC is equally owned indirectly by Chevron Corporation and Phillips 66, and is headquartered in The Woodlands, Texas.
MRC

Nan Ya Plastics pushes back start-up of Texas MEG plant to late 2020 or early 2021

MOSCOW (MRC) -- Nan Ya's 800,000 mt/year monoethylene glycol (MEG) plant in Texas is expected to come online by late 2020 or early 2021 rather than the third quarter of 2020, reported S&P Global with reference to a source familiar with company operations.

The company did not respond to a request for comment Friday.

According to Formosa Plastics USA, Nan Ya suspended construction on the project at Formosa's Point Comfort, Texas, complex in March on coronavirus pandemic-related concerns to ensure worker safety and social distancing. The company has not publicly disclosed a new startup timeline.

The facility's startup was originally expected to come in the first half of this year, and later pushed back to Q3.

The latest delay on pandemic concerns came as US supply was seen ample after 1.7 million mt/year of additional MEG capacity came online in 2019.

MEG is used to manufacture downstream polyethylene terephthalate (PET), a resin that makes plastic bottles, as well as polyester fibers and antifreeze.

MEG is one of the main feedstocks for the production of polyethylene terephthalate (PET).

As per MRC's ScanPlast report, March estimated PET consumption in Russia was 65,3700 tonnes, up by 1% year on year. Russia's estimated PET consumption decreased in January-March 2020 by 3% year on year to 175,170 tonnes.

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

Sinopec SABIC Tianjin Petrochemical shuts SM plant for maintenance

MOSCOW (MRC) -- Sinopec SABIC Tianjin Petrochemical Co. (SSTPC), a 50-50 joint venture of Sinopec and SABIC, has taken off-stream its styrene monomer (SM) plant, according to Apic-online.

A Polymerupdate source in China informed that, the company has undertaken a planned shutdown at the plant on May 7, 2020. The plant is slated to remain under maintenance for about 7-8 weeks.

Located at Tianjin, China, the SM plant has a production capacity of 35,000 tonnes/year.

As MRC reported earlier, SSTPC also shut its naphtha cracker in Tianjin on 1 May 2020 for routine maintenance work. The cracker is expected to remain off-line until early July 2020. The naphtha cracker is designed to produce 1 million tons/year of ethylene, which supplies several local buyers in the Tianjin area. Besides, the company is also planning to expand its cracker capacity to 1.3 million tons/year in 2021.

SM is the main feedstock for the production of polystyrene (PS).

According to MRC's ScanPlast report, March 2020 estimated consumption of PS and styrene plastics dropped by 2% year on year, totalling 42,130 tonnes. The estimated consumption totalled 121,880 tonnes in the first three months of 2020, down by 2% year on year. Overall, Russian plants produced 42,790 tonnes in March 2020. Overall output of high impact polystyrene (HIPS) and general purpose polystyrene (GPPS) totalled 32,100 tonnes in March 2020. 98,390 tonnes of HIPS and GPPS were produced in January-March 2020. The decrease in Russian plants' output was 3%.

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.

Saudi Basic Industries Corporation (Sabic) ranks among the world"s top petrochemical companies. The company is among the world"s market leaders in the production of polyethylene, polypropylene and other advanced thermoplastics, glycols, methanol and fertilizers.
MRC

Sabic net loss widens on lower prices, demand amid COVID-19

MOSCOW (MRC) -- Sabic (Riyadh) has announced its financial results for the first quarter, reporting a net loss of 950 million Saudi riyals (USD250 million), according to Chemweek.

This compares with a net profit of SR3.41 billion in the year-earlier quarter and a net loss of SR790 million in the fourth quarter of 2019. The net loss is mainly attributed to lower average selling prices and to impairment provisions in certain capital and financial assets amounting to SR1.1 billion, including the suspension of production of Ultem polyetherimide polymers at Sabic’s Cartagena, Spain, site.

EBITDA was down 44% to SR5.7 billion, and income from operations was 92% lower at SR480 million. Revenue contracted 18% to SR30.83 billion. Some nonrecurring charges, a challenging product-pricing environment, and lower demand underpinned by the coronavirus disease 2019 (COVID-19) hurt first-quarter results, the company says.

Announcing the results in Riyadh today, CEO Yousef al-Benyan says the situation is difficult. "Product prices remain challenged with no improvement in the supply/demand balance for key products in the first quarter of 2020 compared to the previous quarter. This was further aggravated by COVID-19 becoming a global pandemic and the significant decline in Brent price towards the end of the quarter."

Sabic has decided to cut its capital expenditure (capex), Benyan says. "Sabic is committed to capital discipline and maintaining a strong balance sheet and has suspended all capex, except nondiscretionary capex for safe and reliable operations and late-stage projects. We are confident in the resilience and strength of our operations and supply chain, and opportunities [that] exist for long-term growth."

Benyan says in the earnings briefing that Saudi Aramco has committed to complete the acquisition of a controlling stake in Sabic by the second quarter and he does not see anything that changes this timeline. Separately, Sabic purchased additional shares in Clariant, increasing its stake to 31.5% from 24.9%. The transaction is pending regulatory approvals. Sabic says the investment is part of the company’s growth strategy in specialties and is designed to support its aim of achieving a leadership position among global specialty players.

In its outlook for 2020, Sabic says the global GDP growth rate is expected to be negative, primarily due to the impact of COVID-19. “While we have seen some improvement in business activity in China, a deterioration in other parts of the world, influenced by lockdowns, will impact demand and market sentiment in the second quarter of 2020 and potentially later in the year. This, along with an oversupply in our key products, will put further pressure on product prices and margins,” Sabic says.

Sabic has also provided details of performance by reporting segments. Petrochemicals and specialties, the company’s largest segment, reported a 94% drop in income from operations to SR330 million compared with the first quarter of 2019. EBITDA was down 44% to SR5.07 billion and revenue 18% lower at SR26.59 billion. The agri-nutrients segment reported a 38% drop in income from operations to SR360 million, with EBITDA down 28% to SR560 million and revenue 19% lower at SR1.47 billion.

As MRC wrote before, Sinopec SABIC Tianjin Petrochemical Co. (SSTPC), a 50-50 joint venture of Sinopec and Sabic, has shut its naphtha cracker in Tianjin on 1 May 2020 for routine maintenance work. The cracker is expected to remain off-line until early July 2020. The naphtha cracker is designed to produce 1 million tons/year of ethylene, which supplies several local buyers in the Tianjin area. Besides, the company is also planning to expand its cracker capacity to 1.3 million tons/year 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 557,060 tonnes in the first three month of 2020, up by 7% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments rose because of the increased capacity utilisation at ZapSibNeftekhim. Demand for LDPE subsided. At the same time, PP shipments to the Russian market was 267,630 tonnes in January-March 2020, down 20% year on year. Homopolymer PP and PP block copolymers accounted for the main decrease in imports.

Saudi Basic Industries Corporation (Sabic) ranks among the world"s top petrochemical companies. The company is among the world"s market leaders in the production of polyethylene, polypropylene and other advanced thermoplastics, glycols, methanol and fertilizers.
MRC

OMV sees hope for oil price recovery in second half

MOSCOW (MRC) -- Austrian energy group OMV sees hope for a recovery in oil prices in the second half of 2020 helped by increased fuel demand and output cuts by producers such as Saudi Arabia, reported Reuters with reference to its chief executive's statement.

The spread of the coronavirus has knocked global demand and weighed on crude prices and oil companies’ profits.

But the willingness of producers such as Saudi Arabia and Norway to drastically cut output shows oil prices have a chance to return to a reasonable level, OMV CEO Rainer Seele said.

"We therefore expect the oil price to gradually recover in the second half and to average USD40 for the year," Seele said in an interview with Reuters.

Gasoline and diesel consumption in Austria halved in April, but was back at 60% after all shops were allowed to reopen in early May and has hit 65% in the past few days, he said.

Austria was one of the first countries in Europe to close shops and restaurants and urge people to stay at home, but has also been early to ease lockdown measures.

OMV is curbing its oil production in the United Arab Emirates and in Norway to meet agreed quotas but it does not expect any production shutdowns, Seele said.

"I also do not see any major production interruptions in our refinery business."

OMV benefited from the fact that it has transferred its European refineries from predominantly fuel refineries to jet fuel and petchem units, allowing it to shift production from low-demand kerosene to sought-after plastics.

In particular, demand for polymers used to produce protective gear and sterile packaging has risen significantly.

"As a result, OMV has an above-average capacity utilisation of more than 80% in Europe," Seele said.

Rivals including BP and Total are currently operating refineries at 60-70%.

Confronted with investor criticism of doing less than rivals to limit global warming, Seele said he will announce concrete climate targets this summer.

To cover its energy consumption, OMV would rely to a large extent on renewable sources in the future.

"But we won’t build up (renewable energy) as a business unit, instead we will move towards high value chemical products and recycling."

Seele said he plans to decide on the sale of OMV’s nearly 300 German filling stations by year-end after more than 20 parties expressed interest.

A decision on its pre-coronavirus crisis proposed 2019 dividend of 2.00 euros per share will be made in the second half of the year.

"Once we have seen the second quarter and have an idea regarding the third quarter, then the management board will meet again and discuss."

As MRC informed earlier, Austria’s OMV AG is in talks to buy a USD4.68 billion stake in Borealis AG, a potentially record-breaking acquisition that would shift the state-controlled energy company’s focus to petrochemicals. Taking over the maker of polyolefins, base chemicals, and fertilizer would accelerate Chief Executive Office Rainer Seele’s move toward higher-value, lower-emission oil products. That rebalancing could be further amplified if OMV helps fund the purchase by selling some upstream oil assets or gas pipelines. OMV may buy a 39% stake in the affiliate from Abu Dhabi’s Mubadala Investment Co., it said in a statement in early March 2020. That would increase its holding in Borealis to 75%, while Mubadala would maintain a 25% stake. The emirate’s wealth fund also owns a quarter of OMV and is discussing joint investments in Abu Dhabi and Asia.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 557,060 tonnes in the first three month of 2020, up by 7% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments rose because of the increased capacity utilisation at ZapSibNeftekhim. Demand for LDPE subsided. At the same time, PP shipments to the Russian market was 267,630 tonnes in January-March 2020, down 20% year on year. Homopolymer PP and PP block copolymers accounted for the main decrease in imports.
MRC