SIBUR Holding Board of Directors creates Sustainable Development Committee

MOSCOW (MRC) -- SIBUR Holding decided to establish a Sustainable Development Committee of the Board of Directors, said the company.

The Committee will be responsible for: taking part in shaping and implementing the Company’s 2025 Sustainable Development Strategy and publicly promoting ethical, transparent and sustainable business practices; and monitoring that the Company’s activities are conducted in a responsible and sustainable manner.

The Committee will coordinate the management of sustainable development risks and opportunities, enhance SIBUR's business reputation, investment appeal and relationships with stakeholders, and indicate that the Company puts a special focus on sustainability and recognises its strategic importance.

Establishing a designated committee of the Board of Directors is the best practice among international leaders in sustainability. The Committee will contribute to improving the efficiency of the Company's activities in this area and advise the Board of Directors on the matters of sustainable development.

In 2019, the Board of Directors of SIBUR Holding adopted the 2025 Sustainable Development Strategy.

As MRC informed earlier,SIBUR has completed the start-up and commissioning work at key production facilities at ZapSibNeftekhim (ZapSib), its flagship petrochemical complex at Tobolsk. ZapSib in the first quarter of 2020 produced 115,000 metric tons of PP and 259,000 metric tons of PE, part of which is en route to clients and was not reflected in the sales volumes for the reporting period. Sales of PP grew by 87.3% to 243,000 metric tons and of PE by more than 100% to 132,000 metric tons. In January 2020, Sibur completed construction of its new thermoplastic elastomers production facility at Voronezh and launched trial production.

Ethylene and propylene are feedstocks for producing PE and 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) -- Japanese refiners have received "larger than expected cuts" in their June-loading term crude supply from OPEC producers, keeping them balanced amid plummeting domestic demand due to the coronavirus pandemic, the newly appointed president of the Petroleum Association of Japan said, as per S&P Global.

The refiners, however, are mulling the possibility of seeking spot barrels when there is supply shortage from the domestic demand recovery in the coming months, Tsutomu Sugimori told a press conference via webcast.

"We cannot disclose degrees of informed supply cuts," said Sugimori, who is president of JXTG Holdings, the parent of the largest Japanese refiner JXTG Nippon Oil & Energy. "It was larger than expected either way."

Saudi Aramco has informed at least one Japanese refiner that it will reduce the refiner's June-loading crude allocations by 20%-40%, with the cuts being made across grades, with larger cuts in heavier grades.

"Considering the domestic demand, which has shrank significantly, we are confident to operate normally with the basis of the current OPEC supply cut for now," said Sugimori.

"However, there is a possibility of facing [supply] shortage considering the domestic demand to recover," Sugimori said. "In such case, we will balance it out from procuring spot cargoes from around the world."

As MRC informed earlier, Japanese oil refiner Idemitsu Kosan expects Japan’s demand for oil products to fall by about 20% in the April-June quarter from a year earlier as measures to curb the coronavirus pandemic reduce jet fuel and gasoline use.

Ethylene and propylene are feedstocks for producing PE and 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) -- Hengyuan Refining Company Bhd said that a tank storing crude oil had caught fire at its refinery on the Malaysian west coast, reported Reuters.

Preliminary investigations show the fire at the Port Dickson refinery was due to a lightning strike, the company said in a statement.

"The damages sustained from the fire incident are restricted to one crude tank area," the company said.

The fire affected a 10,000-litre capacity oil tank, Malaysian state news agency Bernama reported, citing fire and rescue department officials. Firefighting operations were ongoing, it said.

Hengyuan is a subsidiary of China’s Shandong Hengyuan Petrochemical Co. The refinery at Port Dickson has a capacity of 156,000 barrels per day (bpd).

We remind that, as MRC wrote before, in mid-March 2020, Malaysia's Pengerang Refining and Petrochemical (PRefChem), a 50:50 JV between Petronas and Saudi Aramco, took its naphtha cracker in Johor off-stream after an explostion and fire at the site. The cracker has an annual capacity of 1.2 million tons/year of ethylene and 600,000 tons/year of propylene. Thus, the explosion occurred at PRefChem complex at roughly 10.50 PM on 15 March 2020, which killed five people. The initial report confirmed that the incident took place at the 300,000 barrel per day refinery unit.

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.
MRC

MOSCOW (MRC) -- Reliance Industries Limited announced fall in petrochemical earnings for full-year 2019-20 due to lower margins and weak demand in the last quarter due to COVID –19 pandemic, according to Kemicalinfo.

4Q FY20 revenue from the Petrochemicals segment decreased by 24.1% Y-o-Y to Rs 32,206 crore (USD4.3 billion) due to lower price realizations along with disruptions in local and regional markets.

Petrochemicals segment EBIT was at Rs 4,553 crore (USD0.6 billion), down 42.8% Y-o-Y, with significant decline in margins. The impact of lower product margins was mitigated to some extent by optimizing feedstock mix during the quarter.

Full-Year: FY20 revenue from the Petrochemicals segment decreased by 15.6% to Rs 145,264 crore (USD19.2 billion) due to lower price realizations with weaker demand in well-supplied markets.

Petrochemicals segment EBIT was at Rs 25,547 crore (USD3.4 billion), down 21.1% as compared to previous year, due to lower margins in key products - Paraxylene, MEG, PET, polypropylene and polyethylene.

Reliance Industries Ltd (RIL) earlier said its board has approved hiving off its USD75 billion worth oil-to-chemicals business into a separate division to enable the sale of 20% stake in the unit to Saudi Aramco.

“RIL Board approved a Scheme of Arrangement for transfer of O2C Undertaking of the company to Reliance O2C Ltd as a going concern on slump sale basis for a lump sum consideration equal to the income tax net worth of the O2C Undertaking as on the appointed date of the Scheme”, the company said in its fourth-quarter earnings statement.

The hiving off will be subject to the approval of the National Company Law Tribunal. After the approval, the oil-to-chemical (O2C) business will become a separate vertical with independent balance sheet.

O2C undertaking of the company comprises entire oil-to-chemicals business of the company consisting of refining, petrochemicals, fuel retail and aviation fuel (majority interest only) and bulk wholesale marketing businesses together with its assets and liabilities.

In August last year, RIL announced initial agreements to sell a 20% stake in the oil-to-chemical business to Saudi Aramco for an asking of USD15 billion. The deal covers all of Reliance’s refining and petrochemicals assets as well as the remainder of stake the firm has in fuel retailing business after selling 49% to BP Plc of UK for Rs 7,000 crore (USD924.2 million).

As MRC informed previously, in late April 2020, it became known that Saudi Aramco’s plan to buy USD15-billion stake in Reliance Industries hydrocarbon business may not go through due to the rising risk of collapsing oil prices, US-based brokerage Bernstein has warned. The unique combination of excess crude oil global supply, 30% drop in demand due to coronavirus crisis and continuous price fall weighed heavily on Aramco’s investment plans.

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.

Reliance Industries is one of the world's largest producers of polymers. Thus, the company produces among others polypropylene, polyethylene and polyvinyl chloride.
MRC

1. Refiners pin hopes on gasoline for post-lockdown demand recovery

MOSCOW (MRC) -- Global oil refiners, battling weak profit margins, are pinning their hopes on a recovery in gasoline demand as coronavirus lockdowns start to ease in many countries around the world, reported Reuters. Gasoline was one of fuels the hardest hit by the lockdowns as restrictions on mobility cut demand for the motor fuel by more than 50% in several regions. “Even a slight uptick in gasoline demand will provide support to overall margins,” a source at a trading firm said.



MRC