Gulf Oil Lubricants India inks agreement with S-Oil to produce lubricants in India

MOSCOW (MRC) -- S-Oil will begin its first overseas manufacturing and distribution of lubricants in India, the company said.

According to the South Korean refiner, it has partnered with a local company Gulf Oil Lubricants India to directly manufacture and distribute its premium lubricant product “S-Oil Seven” in the country.

In August, S-Oil began the production of S-Oil Seven at Gulf Oil’s factory located in Chennai on the southeast coast of India and the company will launch the product in the local market starting the fourth quarter.

“S-Oil’s lubricant production in India has been possible thanks to the long-term partnership with Gulf Oil based on mutual growth,” S-Oil CEO Hussain A. Al-Qahtani said.

S-Oil has been exporting lube base oil -- a raw material for lubricants -- to Gulf Oil since 2006. India is the world’s third largest lubricants market.

As MRC reported earlier, S-Oil, South Korean petrochemical major, took off-stream its residue fluid catalytic cracker (RFCC) unit for a turnaround in June, 2020. The company undertook a planned shutdown at the unit by early-July, 2020. The unit remained off-line for about two weeks. Located at Onsan, South Korea, the RFCC unit has a propylene capacity of 705,000 mt/year.

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

According to MRC's ScanPlast report, Russia's overall PE production totalled 1,712,400 tonnes in the first seven months of 2020, up by 58% year on year. Linear low density polyethylene (LLDPE) accounted for the greatest increase in the output. At the same time, overall PP production in Russia increased in January-July 2020 by 24% year on year to 1,063,700 tonne. ZapSibNeftekhim accounted for the main increase in the output.

MRC

MOSCOW (MRC) -- Saudi Aramco has completed its purchase of a 70 per cent stake in petrochemicals company Saudi Basic Industries for USD69.1 billion and extended the payment period by three years to 2028, providing a cushion against weak oil prices, said Chemweek.

The deal values Saudi Basic Industries Corp (SABIC) at 123.39 riyals (USD32.90) per share, 27.5 per cent above the company's share price of 89.40 riyals, as the coronavirus outbreak has hurt demand for petrochemicals products and dented SABIC's shares.

"It is a significant leap forward, which accelerates Aramco's downstream strategy and transforms our company into one of the major global petrochemicals players," Aramco CEO Amin Nasser said in a statement. SABIC is the world's fourth-biggest petrochemicals company.

Aramco and the Saudi state Public Investment Fund (PIF) amended the payment structure for deal, Aramco said in a bourse filing on Wednesday. Following a seller loan provided by the PIF, Aramco will pay instalments and loan charges until 2028, extending a previous 2025 deadline.

The first USD7 billion payment is due on or before Aug. 2, 2020, with the last instalment, a loan charge of USD1 billion, on or before April 7, 2028. The transaction was funded through promissory notes issued to the PIF at the deal's close on Tuesday, Aramco said.

Under a previous agreement, 36 per cent of the purchase price - roughly USD25 billion - would have been paid in cash on completion. A source familiar with the deal, asking not to be named, said the extended payment schedule aimed to enable Aramco to pay dividends to the government.

Some analysts have voiced concerns the oil slump would make it difficult for Aramco to pay the government this year, although its first-quarter dividend was in line with a plan for a USD75 billion 2020 payout. "The entire Aramco-SABIC deal is about managing cash flow, duplicated costs and access to debt markets within the same group," Hasnain Malik, head of equity strategy at Tellimer, said.

He said a guaranteed dividend stream would give short-term protection to Aramco and some minority shareholders, but raised the question of whether the share price reflected long-term risk to the oil price. The deal will inject billions of dollars into the PIF that can finance plans to diversify the largest Arab economy beyond oil exports, including tourism projects and a mega business zone.

Royal Bank of Canada said the new terms, reflecting the weaker macro environment, were clearly an improvement for the buyer, adding that was "not surprising given recent deal renegotiations in the energy space".

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

According to MRC's ScanPlast report, Russia's overall PE production totalled 1,712,400 tonnes in the first seven months of 2020, up by 58% year on year. Linear low density polyethylene (LLDPE) accounted for the greatest increase in the output. At the same time, overall PP production in Russia increased in January-July 2020 by 24% year on year to 1,063,700 tonne. ZapSibNeftekhim accounted for the main increase in the output.
MRC

MOSCOW (MRC) -- A fire at Philippines JG Summit Petrochemical's Batangas complex on Sept. 26 did not have any impact on the olefins production units, company sources told S&P Global.

The company plans to restart its naphtha-fed steam cracker later in the week ending Oct. 3. The company's cracker and polymer units were undamaged by the fire that occurred at an effluent containment area of the complex, the sources said.

"The polymer units are running; while, the expected restart of the cracker is within the week," said a company source, adding that the fire occurred near the pier area and did not spread to the main manufacturing sites.

"The cracker was shut for a short while for other reasons even before the fire, and the fire has no relation to cracker operations," said another company source.

JG Summit plans to run the cracker at full capacity after the restart, the first source said. Asia's steam crackers have mostly been operating at full or close to full capacity to capitalize on positive olefin margins.

The spread between CFR Northeast Asia ethylene and feedstock CFR Japan naphtha physical assessments widened USD3.75/mt week on week and USD120.50/mt, or 35.77%, since Sept. 1, to a 13-month high of USD457.375/mt at the Asian market close on Sept. 28, Platts data showed.

The spread was last higher on Aug. 12, 2019, at USD458.50/mt. Since Sept. 3, the spread had risen above the typical breakeven spread of USD350/mt, as per market sources and Platts data. It has remained above integrated producers' breakeven spread of around USD250/mt since May 12.

The company's naphtha-fed steam cracker at Batangas can produce 216,000 mt/year of pyrolysis gasoline, or pygas; 320,000 mt/year of ethylene, 190,000 mt/year of propylene; and 110,000 mt/year of mixed C4.

At the Batangas complex, JG Summit has new projects in the pipeline to expand its olefins capacity and produce aromatics. The company plans to complete a 250,000 mt/year high density polyethylene plant by the fourth quarter of 2021. In addition to the new HDPE plant at Batangas, the capacity of an existing polypropylene plant at the same site will be upgraded to 300,000 mt/year from 190,000 mt/year. There are currently two existing HDPE /linear low density polyethylene swing plants at Batangas with a combined nameplate capacity of 320,000 mt/year.

Construction of the company's maiden benzene-toluene-xylenes unit had been delayed due to the spread of COVID-19 in the Philippines, as the works were initially planned to be completed by June, but is now planned for the first quarter of 2021.

However, broadly, fundamentals on the aromatics markets were still mixed. Lower run rate in some refineries in the region was described to be lending some support by slowing the previous supply overhang.

As MRC informed earlier, a fire struck the plant of the JG Summit Petrochemicals Group, a Gokongwei company, in Barangay Simlong in Batangas City on Saturday night, according to the Batangas City Fire Station. It was the police that informed firefighters about the blaze, which started at around 10 p.m. One person was reported injured, according to Col. Rex Malimban.

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

According to MRC's ScanPlast report, Russia's overall PE production totalled 1,712,400 tonnes in the first seven months of 2020, up by 58% year on year. Linear low density polyethylene (LLDPE) accounted for the greatest increase in the output. At the same time, overall PP production in Russia increased in January-July 2020 by 24% year on year to 1,063,700 tonne. ZapSibNeftekhim accounted for the main increase in the output.

JG Summit's BTX unit would have a production capacity of 126,000 mt/year of benzene, 76,000 mt/year of toluene, 46,000 mt/year of mixed xylenes, 29,000 mt/year of non-aromatics with some 21,000 mt/year materials of mixed aromatics, including C9+, all derived using the pygas feedstock produced from the existing steam cracker.
The Batangas PE facility is a joint venture between JG Summit Holdings and Marubeni Corp.
MRC

MOSCOW (MRC) -- U.S. oil refiners are starting to make progress towards eliminating excess stocks of middle distillates by restraining crude processing and switching equipment to maximize gasoline production, said Hydrocarbonprocessing.

U.S. distillate fuel oil inventories stood at 176 MM barrels at the end of last week, which was 37 million barrels or 21% above the five-year seasonal average. In absolute terms, stocks are unchanged from early June, when they were also 176 MM barrels. But the surplus over the five-year average has shrunk from 42 MM barrels, or 29%.

Refiners have stabilized bloated distillate stocks over the summer and into early autumn, a time when they would normally be rising, accumulated as a by-product of driving-season gasoline production plans.

Refinery processes and equipment have been reconfigured to maximize production of gasoline and minimize output of mid-distillates such as fuel oil and jet kerosene. Last week, refiners produced 1.77 times as much gasoline as distillate fuel oil and jet fuel combined, one of the highest gasoline ratios for a quarter of a century.

Gasoline-distillate ratios have only approached similar levels a few times, including 2010, 2005 and 1998, when distillate stocks were also far above normal. Even more importantly, refiners have trimmed total crude processing to reduce the production and supply of all fuels (in effect cutting everything to bring distillate stocks under control).

U.S. refiners held crude processing 16% below the five-year average last week and by the same proportion over the last four weeks as a whole. By comparison, the total volume of petroleum products supplied to the domestic market, a proxy for actual consumption, was 10% below the five-year average last week and 13% below average for the last four weeks.

The result is that distillate production has been reduced in line with consumption, while gasoline has been under-supplied for months, leading to a sustained drawdown in stocks. Gasoline stocks have fallen by 36 million barrels since late April, when they were 12% above the five-year average, and are now less than 1% above average.

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

According to MRC's ScanPlast report, Russia's overall PE production totalled 1,712,400 tonnes in the first seven months of 2020, up by 58% year on year. Linear low density polyethylene (LLDPE) accounted for the greatest increase in the output. At the same time, overall PP production in Russia increased in January-July 2020 by 24% year on year to 1,063,700 tonne. ZapSibNeftekhim accounted for the main increase in the output.
MRC

MOSCOW (MRC) -- Merck KGaA says that Stefan Oschmann, the company’s chairman and CEO since 2016, will hand over his responsibilities to Belen Garijo on 1 May 2021, said Chemweek.

Garijo has been appointed Merck’s new chair and CEO by the company’s board of partners. Garijo is currently vice chair of Merck’s board and deputy CEO, as well as CEO of the company’s healthcare business. Oschmann will leave the company as planned after 10 years on the board, five of them as chairman and CEO, to turn to other tasks, the company says.

Johannes Baillou, chairman of Merck's board of partners, says that Garijo “has done excellent work in transforming our healthcare business sector. Belen Garijo and Stefan Oschmann have been collaborating closely and trustfully for many years. This will ensure a seamless transition and continuity in corporate management,” he says.

Peter Guenter will join the Merck board, effective 1 January at the latest, the company says. He will assume board responsibility for the healthcare business sector and be located at Merck's Darmstadt, Germany, headquarters. Matthias Heinzel will also join the company’s board, effective 1 April 2021 at the latest, Merck says. He will assume board responsibility for Merck’s life science business sector and be located at Burlington, Massachusetts, and Darmstadt.

Kai Beckmann and Marcus Kuhnert will remain board members, Merck says.

As MRC wrote previously, Merck KGaA has announced the opening its M Lab Collaboration Center in Shanghai, China. Merck Innovation Hub, the first in China, started in late 2019, with the company announcing a 100 million renminbi (USD14 million) seed fund injected into the China Innovation Hub.

We remind that Merck celebrated the opening of its new packaging center at the science and technology company’s headquarters in Darmstadt, Germany, in October, 2018. The new 161,458-square-foot facility is dedicated to the packaging and shipping of Merck’s current portfolio of pharma medicines in more than 90 countries and help meet increasing patient needs for flagship medicines Glucophage, Concor and Euthyrox in the areas of diabetes, cardiovascular diseases and thyroid disorders respectively. It will also provide capacity for potential future pharma products currently in clinical development such as evobrutinib in the area of neurology-immunology or tepotinib in the area of oncology.

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

According to MRC's ScanPlast report, Russia's overall PE production totalled 1,712,400 tonnes in the first seven months of 2020, up by 58% year on year. Linear low density polyethylene (LLDPE) accounted for the greatest increase in the output. At the same time, overall PP production in Russia increased in January-July 2020 by 24% year on year to 1,063,700 tonne. ZapSibNeftekhim accounted for the main increase in the output.
MRC