Petronas president and CEO Wan Zulkiflee to step down end of the month

MOSCOW (MRC) -- Sarawak People’s Aspiration Party (Aspirasi) today said the recent resignation of Tan Sri Wan Zulkiflee Wan Ariffin as chief executive officer of Petroliam Nasional Berhad (Petronas) should have happened a long time ago, said Chemweek.

Its president Lina Soo said he was a reason for Petronas not willing to pay the 5 per cent state sales (SST) imposed on the import of petroleum products in Sarawak.

"He had said in public that Sarawak had no legal competence to demand the sales tax and had also opposed demands from Sarawak and neighbouring Sabah for bigger royalty payments," Soo said when asked by Malay Mail to comment on the resignation of Wan Zulkiflee as Petronas chief executive officer recently.

It was reported that Wan Zulkiflee resigned after a disagreement with Prime Minister Tan Sri Muhyiddin Yassin over a plan to pay USD470 million (RM2 billion) in sales tax to Sarawak.

Petronas had been fighting Sarawak’s demand for the sales tax in court before the two parties announced a settlement last month — although Sarawak later said it would continue its legal action until an agreement is final.

Soo said it is ludicrous that Petronas had no qualms paying a royalty, dividends, corporate tax and extending cash bailouts to the federal government during its 44 years’ of existence, but refused to pay higher oil royalty and SST to Sarawak.

As MRC wrote before, in early May, 2020, Petronas Chemicals (Kuala Lumpur), Malaysia’s leading petrochemicals player, reported a drop in first-quarter sales and earnings citing the coronavirus disease 2019 (COVID-19) pandemic. The sharp decline in petrochemical product prices following the outbreak of COVID-19, the deepening industry downcycle as crude oil prices collapsed due to the OPEC+ fallout, and the recessionary global economic outlook have hurt results, the company says.

We remind that PRefChem, owned by Petronas and Saudi Aramco (50:50), received commercial ethylene and propylene at its new cracker in Pengerang (Malaysia,) on 13 September, 2019.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 721,290 tonnes in the firs four month of 2020, up by 4% year on year. Low density polyethylene (LDPE) and linear low density polyethylene (LLDPE) shipments grew partially because of the increased capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market totalled 347,440 tonnes in January-April 2020 (calculated by the formula production minus export plus import). Supply exclusively of PP random copolymer increased.

Petronas, short for Petroliam Nasional Berhad, is a Malaysian oil and gas company wholly owned by the Government of Malaysia. The Group is engaged in a wide spectrum of petroleum activities, including upstream exploration and production of oil and gas to downstream oil refining; marketing and distribution of petroleum products; trading; gas processing and liquefaction; gas transmission pipeline network operations; marketing of liquefied natural gas; petrochemical manufacturing and marketing; shipping; automotive engineering; and property investment.
MRC

MOSCOW (MRC) -- Hengli Petrochemical's new No. 5 purified terephthalic acid (PTA) line located on Changxing Island, Dalian City, Liaoning Province, China, is expected to come online in end-June or early-July, reported S&P Global.

The new line's production capacity will be 2.5 million tonnes per year.

As MRC reported earlier, Hengli Petrochemical (Dalian) Co. reached full rate at its No. 4 PTA line in Dalian City in mid-March, 2020. The 2.5-million-t/y PTA line, which came online in January 2020, utilizes Invista's P8 PTA technology. The line also produces benzoic acid, using Invista's RP2PR technology.

PTA is used to produce polyethylene terephthalate (PET), which is used in the manufacturing of plastic bottles, films, packaging containers, in the textile and food industries.

As per MRC's ScanPlast report, April total estimated PET consumption in Russia virtually did not change year on year, totalling 60,840 tonnes (in April 2019 - 60,980 tonnes). 235,160 tonnes of PET chips were processed in Russia in January-April 2020.

Hengli Petrochemical Co., Ltd. manufactures chemical fibers. The Company researches, produces, and sells polyester filament and chips for consumer and industry products. Hengli Petrochemical markets it products worldwide.
MRC

MOSCOW (MRC) -- Zhejiang Petrochemical Co Ltd is on track to start their new acrylonitrile (ACN) plant plant this week, reported S&P Global.

Based in Zhejiang, China, this plant is able to produce 260,000 tons/year of ACN. Initially, the company planned to begin operations at this production in early May, but then postponed the start to the second half of May. Zhejiang Petrochemical last announced mid-June to be the start.

As MRC informed earlier, Zhejiang Petrochemical Co Ltd started up its ethylene cracker in late December 2019 and its polyolefin plants in late December 2019-January 2020.

Market sources reported then that one of its polypropylene (PP) plant with capacity of 450,000 tons/year started up by 30 December 2019, followed by another line with same capacity by 15 January 2020.

Meanwhile its 450,000 tons/year of linear low density polyethylene (LLDPE) and 300,000 tons/year of high density polyethylene (HDPE) were launched around similar time with PP plants.

ACN is the main feedstock for the production of acrylonitrile-butadiene-styrene (ABS).

According to MRC's DataScope report, overall ABS imports to the Russian market increased in the first four months of 2020 by 5% year on year to 10,900 tonnes. This figure was at 10,400 tonnes in January-April 2019. April imports of material to the Russian Federation rose by 5% to 3,300 tonnes from 3,100 tonnes a year earlier. March ABS imports into the country were 2,800 tonnes.
MRC

MOSCOW (MRC) -- Chroma Color Corp., (McHenry, Illinois), a leading specialty color and additive concentrate supplier owned by Arsenal Capital Partners, has acquired Epolin Chemicals (Newark, New Jersey), a company that specializes in near-infrared absorbing dyes and thermoplastic compounds, said Chemweek.

Epolin serves customers developing groundbreaking products in sensors, security inks, light filters, touchscreens, night vision products, and eyewear. Epolin will operate as an independent subsidiary of Chroma Color and continue to maintain and invest in its strong customer and supplier relationships.

“This acquisition of Epolin will contribute significantly to Chroma Color’s leadership in the colorants and additives industry,” says Tom Bolger, CEO of Chroma. Greg Amato, Epolin CEO, adds, “Of the many advantages Epolin customers will enjoy as a result of this transaction is access to Chroma Color’s extensive product development, testing, and validation capabilities. Epolin’s customers can now be served by Chroma Color’s ongoing R&D efforts to deliver new solutions for the markets that both Epolin and Chroma Color serve."

Genesis Capital acted as the investment banking advisor to Chroma Color, and Grace Matthews provided advisory services to Arsenal Capital Partners. The law firm of Benesch, Friedlander, Coplan & Aronoff acted a legal counsel to Chroma Color. BDA Partners acted as the investment banking advisor to Epolin.

As MRC imformed earlier, Russia's output of chemical products rose by 4.4% year on year in May 2020 . Thus, production of basic chemicals increased year on year by 5.4% in the first five months of 2020. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the output in January-May. Production of benzene was 110,000 tonnes in May 2020, which equalled the figure a month earlier. Overall output of this product reached 615,000 tonnes over the stated period, up by 1.7% year on year.
MRC

MOSCOW (MRC) -- Sasol still has the last remaining unit to come online at its Lake Charles Chemicals Project (LCCP) - the low density polyethylene (LDPE) plant. This is on track for beneficial operations by the end of September 2020, said the producer on its site.

As MRC reported earlier, Sasol has taken its newly constructed LDPE plant in Lake Charles off-stream following an explosion and fire occurred on 13 January 2020. The unit was under trial operation at the time of the incident and has yet to reach on-spec cargoes.

The LDPE plant has an annual capacity of 420,000 tons/year.

Meanwhile, other units at the same site including the ethane cracker and the linear low density polyethylene (LLDPE) lines were not affected by the fire and continued operating at the normal rates.

We remind that Sasol's 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 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.

According to MRC's ScanPlast report, April estimated LDPE consumption in Russia decreased to 52,270 tonnes from 55,160 tonnes a month earlier. Kazanorgsintez reduced its capacity utilisation. Russia's estimated LDPE consumption rose to 191,000 tonnes in January-April 2020, up by 5% year on year. Russian producers raised their production significantly, and LDPE imports also increased.

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