Nord Stream 2 appeals EU court dismissal of discrimination argument

MOSCOW (MRC) -- Nord Stream 2 filed an appeal to the EU Court of Justice against the EU General Court's dismissal in May of the pipeline company's attempt to annul European law on pipelines from non-EU countries, reported S&P Global with reference to a spokesman for the company's statement July 28.

In July 2019, the Gazprom-owned company, which is building a 55 Bcm/year natural gas pipeline from Russia to Germany, brought an action before the EU General Court, requesting the amended EU Gas Directive be annulled due to infringement of European rules on equal treatment and proportionality.

On May 20, the court dismissed the lawsuit as inadmissible on procedural grounds.

"Nord Stream 2 does not share the procedural arguments of the court and maintains that the amendment of the Gas Directive constitutes an unlawful discrimination," a spokesman for Nord Stream 2 told S&P Global Platts.

Nord Stream 2 had hoped to bring the pipeline online by the end of 2019, but first permitting issues in Denmark and now US sanctions have delayed completion of the project.

The pipeline is seen as crucial to Russian plans to scale down use of the Ukrainian transit corridor from 2021 for supply of its gas to Europe.

"We want the General Court to review the content of our complaint," the spokesman said.

The next step would see the EU filing a rejoinder to Nord Stream 2's appeal, he said. A decision on the admissibility of the action by the EU Court of Justice would then be expected within the next 12 months.

On July 20, the developer said investments needed to complete the pipeline could be blocked if the US imposed sanctions on companies involved in the project.

Five European energy companies - France's Engie, Austria's OMV, Anglo-Dutch Shell, and Germany's Uniper and Wintershall Dea - have co-financed the project, each committing to pay Eur950 million (USD1.114 billion).

As MRC reported earlier, Denmark approved a request from the developer of the Nord Stream 2 gas pipeline from Russia to Germany for permission to lay the line in Danish waters using ships with anchors on July 6, 2020.

We remind that Gazprom neftekhim Salavat shut down its dioctyl phthalate (DOP) production for a scheduled maintenance. Market participants and a plant"s representative said Gazprom neftekhim Salavat took off-stream its DOP production for a long scheduled turnaround. The outage began on 12 May and lasted for about 30 day.

According to MRC's DataScope report, imports of suspension polyvinyl chloride (SPVC) into Russia totalled 13,800 tonnes in the first half of 2020, up by 5% year on year, whereas exports grew by 7% year on year.
MRC

MOSCOW (MRC) -- Pemex aims to increase crude and gas production during the second half of 2020 as it pushes forward with its strategy of early production at exploratory wells and the commitments to production cuts with OPEC expire, reported S&P Global.

Pemex will increase crude production by 95,300 b/d by the end of the year as it incorporates 20 new exploration wells, management said July 28 during the company´s Q2 conference call. Eighteen of the new projects contain crude only and two more will also produce natural gas.

The firm already started production in 15 new wells in the first half of the year, which the company has identified as priority to reach its production goal of 2.4 million b/d by 2024. The wells have so far produced 83,000 b/d of crude, Alberto Velazquez, CFO said.

Drilling at these priority fields will increase the firm´s 2020 capex to USD7.8 billion from USD4.9 billion in 2019, Velazquez said.

Total hydrocarbons production in the second quarter was 2.359 million boe/d, a slight year-over-year decrease mainly explained by lower associated gas. Crude production remained unchanged at 1.673 million b/d between April and June.

"The steady production is explained by higher production in offshore fields, mainly at Xanab, which increased production by 30,000 b/d to 82,000 b/d," Velazquez said.

Pemex called Q2 production a "favorable achievement" considering a 100,000 b/d output reduction Mexico committed to as part of an April deal with OPEC+ members that expires in July. The firm also mentioned bad weather had caused the shutdown of operations during seven days in June.

Total gas production of 3.604 Bcf, was 52 MMcf ,or 0.9%, lower year over year as associated gas decreased by 118 MMcf due to the shutting of wells as part of the OPEC+ agreement. Non-associated gas increased by 9%, or 85 MMcf, Pemex said in its report to the Mexican Stock Exchange.

The number of wells in operation decreased 9% to 6,789, Pemex said.

Pemex reported a net loss of USD1.9 billion in the quarter, hit by lower revenues and lower crude prices. Total revenues dropped 51% to USD7.9 billion on the back of local sales that were 54% lower year over year and lower exports. The price of the Mexican export mix during the quarter was 60% lower at USD23.84, Pemex said in its filing.

As MRC informed earlier, Pemex is advancing a refinery rehabilitation program that will enable it to process 1.2 million b/d of crude oil by the end of 2020 and evaluating a reconfiguration of its petrochemical facility at Cangrejera, Mexico, into what would be its eighth refinery.

We also remind that in 2016, Pemex shut its steam cracker at its Cangrejera complex for maintenance on February 15. The cracker was idle for about 14 days. The conducted repairs at the cracker were a part of planned maintenance.

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

According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.

Pemex, Mexican Petroleum, is a Mexican state-owned petroleum company. Pemex has a total asset worth of USD415.75 billion, and is the world's second largest non-publicly listed company by total market value, and Latin America's second largest enterprise by annual revenue as of 2009. Company produces such polymers, as polyethylene (PE), polypropylene (PP), polystyrene (PS).
MRC

MOSCOW (MRC) -- Linde has announced it will start construction of the world's first hydrogen refueling station for passenger trains at Bremervorde, Germany, in September, reported Chemweek.

This follows the successful 18-month trial of the world's first two hydrogen trains in the region, which was completed earlier this year.

Linde will build and operate the hydrogen filling station, which is expected to start service in early 2022. The station will fuel 14 hydrogen-powered passenger trains, which will be supplied by Alstom to the regional rail traffic provider, LNVG, and will use the network of regional railway company EVB. The hydrogen refueling station will have a capacity of around 1,600 kilograms of hydrogen/day, making it one of the largest hydrogen stations in terms of nameplate capacity ever built. It will be constructed with scope for future onsite hydrogen generation using electrolysis.

"We are excited to play a key role in this world-leading, innovative project. We have long known that hydrogen as a fuel has the potential to make a significant contribution to decarbonization. Establishing hydrogen as a zero-emission and efficient fuel for trains will bring tremendous benefits for the environment," says David Burns, head of clean hydrogen at Linde.

"The construction of the hydrogen filling station in Bremervorde creates the basis for the regular operation of our emission-free hydrogen trains in the EVB network," says Jorg Nikutta, general manager of Alstom Transport Deutschland. "We are delighted that Linde, as an experienced hydrogen supplier, is now also taking over the refueling of the series trains following the successful trial operation."

The project is co-funded by the German Federal Ministry of Transport and Digital Infrastructure within the scope of the National Innovation Program Hydrogen and Fuel Cell Technology.

As MRC informed before, in February 2020, Linde PLC received a contract to provide technology for PJSC Sibur Holding’s cracker at Amur gas chemical complex (GCC). GCC is an integrated 1.5 million tons per year polyethylene and polypropylene production complex to be built near Svobodny in Russia’s far-east Amur region. The contract was awarded to Linde under a consortium with Sibur subsidiary and project contractor NIPIgazpererabotka (Nipigaz). As per the agreement, Linde will deliver engineering, procurement, and site services based on its proprietary technology for the GCC’s cracker.

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

According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.
MRC

MOSCOW (MRC) -- Hanwha Solutions (Seoul), formerly Hanwha Chemical Corp., has submitted a bid to acquire a 50% stake in Sasol’s USD12.8 billion Lake Charles, Louisiana petrochemical complex, according to Chemweek with reference to several reports in the Korean press.

Sasol announced a few months ago that it is seeking partners for the nearly completed project as part of the company’s asset disposal plan to reduce debt. The stake would raise USD1.7-3.4 billion, according to The Korea Herald.

Business Korea says Hanwha Solutions participated in a tender for the Lake Charles stake on 24 July. Hanwha took part in the tender by forming a consortium with Daishin Private Equity.The lead manager of the sale is the Bank of America. Other Korean companies, including LG Chem, have also shown an interest in acquiring a stake in the project, Business Korea says. According to reports in June, several international companies expressed an interest in acquiring a stake. They include, Ineos, CP Chem, LyondellBasell and ExxonMobil. Sasol said at the time that its “expanded asset-disposal process has yielded good interest from strong contenders.”

Sasol announced in March that it was reviewing a variety of actions to address the challenges created by the impact of COVID-19 and the recent decline in oil and chemical prices. “A package of measures have been developed that are intended to reposition the company over the following 24 months. One of these measures will be our existing asset-disposal program… This includes the potential for exploring partnering options at Sasol’s…US-based chemicals business,” Sasol said.

The Lake Charles complex is based on a 1.54-million metric tons/year ethane cracker that started production last year. The ethylene will be used in six downstream plants on site to produce ethylene oxide, ethylene glycol, ethoxylates, and low-density and linear low-density polyethylene, as well as Ziegler and Guerbet alcohols. About 10% of the ethylene will be surplus to requirement and sold on the merchant market as well as supply Sasol’s share of its high-density polyethylene joint venture (JV) with Ineos in Texas. The 50/50 JV is designed to produce 470,000 metric tons/year.

Sasol says that the last remaining production unit to come online at the Lake Charles complex is a low-density polyethylene (LDPE) plant, which is now scheduled to start production in October this year. The 420,000-metric tons/year LDPE plant was damaged during a fire in January 2020.

As MRC reported earlier, Sasol's world-scale US ethane cracker with the capacity of 1.5 mln tonnes per year reached beneficial operation on 27 August 2019. SasolпїЅs 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.

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

According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.

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

MOSCOW (MRC) -- The oil complex settled lower July 23 as demand outlook came under pressure amid growing economic uncertainty following a weak US jobs report, according to S&P Global.

NYMEX September WTI settled 83 cents lower at USD41.07/b and ICE September Brent was down 98 cents on the day at USD43.31/b.

Oil futures, which were already trending off overnight highs, turned lower ahead of US trading after US Labor Department data showed initial unemployment claims climbed to 1.416 million in the week ended July 18.

"The recovery appears to be stalling as jobless claims rose for the first time since March and as continuing claims remain elevated," OANDA senior market analyst Edward Moya said. "The economy does not seem to be on sound footing anymore and with high uncertainty with the direction of the coronavirus, businesses will likely struggle to justify hirings."

NYMEX August RBOB settled 2.42 cents lower at USD1.2586/gal and August ULSD was down 1.66 cents at USD1.2541/gal.

"We had that big EU package earlier this week but there is still a lot of uncertainty about what (the US) is going to do," Tradition Energy analyst Gene McGillian said. "As we get close to the end of the CARES package, if there isn't anything to be done, worries about how the economy will perform in the second half of the year could bring some more selling out of the woodwork."

On July 21, EU leaders announced a Eur750 billion (USD869.71 billion) stimulus package aimed at offsetting the economic impact of the coronavirus crisis. But there is little clarity regarding what action, if any, Congress will take to address the expiration later this month of a federally-funded USD600 weekly unemployment stipend.

US President Donald Trump has pushed for any relief package to include a payroll tax cut. However, the idea faces opposition from both Congressional Republicans and Democrats.

US Treasury Secretary Steven Mnuchin said July 23 that a Republican plan to extend enhanced unemployment benefits would be based on a 70% wage replace scheme, according to media reports.

On July 22, media reports suggested that Senate Republicans were considering extending the benefit package through December, but at a reduced rate of $100 per week.

Meanwhile, the US oil and gas rig count rose by six on the week to 294, rig data provider Enverus said July 23, marking the second consecutive week of increases after more than four months of steep contraction amid pandemic-induced low crude prices and the decimation of global oil demand.

The WTI forward structure turned more bearish. While the contango in front-month versus second-month futures was steady at 14 cents/b, it opened to USD1.51/b for the front-month versus year-ahead contract, out from USD1.19/b on July 22.

As MRC informed previously, global oil consumption cut by up to a third in Q1 2020. What happens next in the oil market depends on how quickly and completely the global economy emerges from lockdown, and whether the recessionary hit lingers through the rest of this year and into 2021.

Earlier this year, BP said the deadly coronavirus outbreak could cut global oil demand growth by 40 per cent in 2020, putting pressure on Opec producers and Russia to curb supplies to keep prices in check.

And in September 2019, six world's major petrochemical companies in Flanders, Belgium, North Rhine-Westphalia, Germany, and the Netherlands (Trilateral Region) announced the creation of a consortium to jointly investigate how naphtha or gas steam crackers could be operated using renewable electricity instead of fossil fuels. The Cracker of the Future consortium, which includes BASF, Borealis, BP, LyondellBasell, SABIC and Total, aims to produce base chemicals while also significantly reducing carbon emissions. The companies agreed to invest in R&D and knowledge sharing as they assess the possibility of transitioning their base chemical production to renewable electricity.

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

According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.
MRC