Gazprom Neft and Shell launch joint project for development of a major hydrocarbon cluster on Gydan peninsula

MOSCOW (MRC) -- Gazprom Neft and Shell have signed an agreement to establish a joint venture to study and develop the Leskinsky and Pukhutsyayakhsky license blocks on the Gydan Peninsula, said the company.

Following completion, the partners will each have a 50% interest in the capital of the joint venture. The joint venture will be managed by Gazprom Neft and Shell on a parity basis. Closing of the transaction is scheduled for 2020 after the receipt of necessary corporate and regulatory approvals.

The intent of the joint venture is to combine the capabilities and competences of its partners in the exploration of a large promising cluster in the north-eastern part of the Gydan Peninsula. Its assets are characterized by a low degree of geological knowledge and significant remoteness from the transport and oil-and-gas infrastructure.

The Leskinsky license block is located in the Taymyr district of the Krasnoyarsk Krai. It covers an area of over 3,000 square kilometers. Its hydrocarbon resources may exceed 100 million tons of oil equivalent. Adjoining the Leskinsky block, the Pukhutsyayakhsky block, which covers an area over 800 square kilometers, is located in the Tazovsky district of the Yamal-Nenets Autonomous Okrug. Its resources are estimated at around 35 million tons of oil equivalent.

At present, 2D seismic surveys have been completed on both blocks. By the end of 2020, drilling of the first prospecting well will begin in the Leskinsky area. Data obtained from this well will make it possible to refine the geological concept and prepare a future project development plan. At the first stage, Gazprom Neft-GEO will be the operator of exploration works in the Leskinsky and, the Pukhutsyayakhsky blocks.

“Exploration of the Gydan blocks is among Gazprom Neft’s strategic objectives, so changes in the market conditions have not affected our plans. In case of geological success, a new large hydrocarbon province will appear on the peninsula. It is also important for us that we continue the project together with our longstanding partner Shell, with whom we will combine experience and technological expertise to study Gydan and prepare for the development of these new territories."

“Despite the economic uncertainties and pressure on our industry, Russia remains a country of strategic focus for Shell. We welcome the expansion of our cooperation with Gazprom Neft, our reliable and highly professional long-term partner. I look forward to using the winning combination of our two companies’ strengths to make the Gydan exploration project a success."

As MRC informed earlier, Royal Dutch Shell Plc shut the gasoline-producing fluidic catalytic cracker (FCC) at its 318,000 bpd joint-venture Deer Park, Texas, refinery after a fire. How long the 70,000-bpd FCC will be shut was unknown on Sunday, the sources said. Shell spokesman Curtis Smith said on Sunday that all individuals were safe and accounted for at the Shell Deer Park Complex, which includes the refinery and adjoining chemical plant.

Propylene is the main raw material for the production of polypropylene (PP).

According to MRC's ScanPlast, PP suppliy to the Russian market in January - May 2020 rechaed 457,930 tonnes (calculated using the formula production minus exports plus imports). The supply of only stat-copolymers of propylene (PP-random) increased.

The Deer Park refinery is a 50-50 joint venture between Shell and Pemex, Mexico’s national oil company. Shell is the managing partner.
MRC

COVID-19 - News digest as of 21.07.2020

1. Perstorp swings to net profit with positive exchange-rate effects on net debt; sales, EBITDA shrink

MOSCOW (MRC) -- Perstorp has recorded a net profit of 294 million Swedish krona (USD32.66 million) in the second quarter, swinging from a net loss of SKr41 million in the same period of the previous year, said Chemweek. This is mainly due to a large difference in exchange-rate effects on net debt between the two periods. Meanwhile, net sales fell 32% year on year (YOY) to SKr2.08 billion, caused by measures to tackle COVID-19 that drove demand down worldwide and due to lower selling prices linked to falling raw material costs, Perstorp says. EBITDA excluding nonrecurring items decreased by 27% YOY in the second quarter, to SKr265 million, the company says. Despite the weaker quarterly performance, the company was able to partially offset the negative impact of COVID-19 through a positive product mix together with lower fixed costs following strict spending controls.

MRC

PP imports to Belarus decreased by 2.5% in January-May

MOSCOW (MRC) - Imports of polypropylene (PP) into Belarus decreased to about 44,500 tonnes in first five months of this year, down 2.5% year on year, compared to the same period of 2019. The greatest increase in demand accounted for homopolymer PP, according to MRC DataScope.

May PP imports in Belarus was about 8,300 tonnes, while in April it exceeded 9,200 tonnes. Total PP imports into the country reached 44,500 tonnes in January - May, compared with 45,700 tonnes year on year. The demand for homopolymer PP increased, but demand for propylene copolymers decreased.

The structure of PP imports by grades looked the following way over the stated period.

May imports of homopolymer PP reached 6,600 tonnes versus 6,200 tonnes a month earlier, purchasing of homopolymer PP rose in Russia under the pressure of seasonal factors. Overall imports of homopolymer PP reached 32,100 tonnes in the first five months of 2020, up by 5.2% year on year.

May imports of propylene copolymers to Belarus were 1,800 tonnes versus 3,000 tonnes a month earlier, local companies reduced their procurement of injection moulding block-copolymers of propylene (PP block copolymer) from Russian producers. Thus, overall imports of propylene copolymers reached 12,400 tonnes in January-May, down by 18% year on year.


MRC

PVC imports to Belarus remained the same year on year in January-May 2020

MOSCOW (MRC) -- Overall imports of unmixed polyvinyl chloride (PVC) into Belarus totalled about 15,600 tonnes in the first five months of 2020, which corresponds to the same figure a year earlier, according to MRC's DataScope report.

According to the Statistical Committee of the Republic of Belarus, local converters increased their purchasing of PVC in May 2020 on a stronger demand for finished products, overall imports totalled 2,800 tonnes versus 2,600 tonnes a month earlier. Thus, imports of unmixed PVC into the country reached 15,600 tonnes in January-May 2020, which corresponds to the last year's figure.

Russian producers with the share of about 83% of the Belarusian market were the key suppliers of resin to Belarus over the stated period.
Producers from Germany and Ukraine were the second and third largest suppliers, respectively.


MRC

Shell shuts gasoline-producing FCC after fire

MOSCOW (MRC) -- Royal Dutch Shell Plc shut the gasoline-producing fluidic catalytic cracker (FCC) at its 318,000 bpd joint-venture Deer Park, Texas, refinery after a fire, sources familiar with plant operations said Reuters.

How long the 70,000-bpd FCC will be shut was unknown on Sunday, the sources said. Shell spokesman Curtis Smith said on Sunday that all individuals were safe and accounted for at the Shell Deer Park Complex, which includes the refinery and adjoining chemical plant.

"We responded to a small fire and leak at one of the units at our Deer Park Manufacturing Complex,” Smith said. “The fire is extinguished, all individuals are safe and accounted for and our operations team is working to stop the leak and safely repair the unit."

The Deer Park FCC outage will tighten supply when gasoline consumption is close to last year’s levels. U.S. finished gasoline consumption has recovered since April, when it was down by 48% from a year ago, to 6% of the 2019 level of 8.6 million bpd for the second week of July, according to the U.S. Energy Information Administration.

The FCC uses a catalyst under high heat and pressure to convert gas oil into gasoline.

Propylene is the main raw material for the production of polypropylene (PP).

According to MRC's ScanPlast, PP suppliy to the Russian market in January - May 2020 rechaed 457,930 tonnes (calculated using the formula production minus exports plus imports). The supply of only stat-copolymers of propylene (PP-random) increased.

The Deer Park refinery is a 50-50 joint venture between Shell and Pemex, Mexico’s national oil company. Shell is the managing partner.
MRC