Ufaorgsintez resumed production of part of its LDPE capacities

MOSCOW (MRC) - Ufaorgsintez (UOS, Bashneft’s petrochemical asset) has resumed operation of part of its low density polyethylene (LDPE) production facilities after stopping for scheduled maintenance works, according to ICIS-MRC Price Report.

The plant's customers said Ufaorgsintez had partly resumed its LDPE production after the long scheduled maintenance by 28 September. The outage of the second line of polyethylene facilities began on 25 August.

The first line of LDPE production facilities (108th polyethylene - PE) started scheduled maintenance from 12 September along with the production of polypropylene.

Ufaorgsintez's overall LDPE and PP production capacities are 90,000 and 120,000 tonnes per year, respectively.
It is also worth noting that the resumption of the work of the first line LDPE capacities and polypropylene production is planned from 10 October.

PJSC Ufaorgsintez produces phenol, acetone, synthetic ethylene-propylene rubber, high and low pressure polyethylene, polypropylene, more than 30 types of petrochemical products and over 25 consumer products.
MRC

MOSCOW (MRC) -- Fuel ethanol production capacity in the United States totaled 17.3 billion gallons per year (gal/y), or 1.1 MM barrels per day (MMbpd), as of January 2020, according Hydrocarbonprocessing.

Nameplate capacity of operable ethanol plants increased by 3%—470 MM gal/y—between January 2019 and January 2020. The annual U.S. Fuel Ethanol Plant Production Capacity Report shows EIA’s most up-to-date data of U.S. fuel ethanol industry capacity by plant. EIA uses industry trade journals to track fuel ethanol market conditions. To ensure the quality of its data, EIA staff contacts plants that report production capacities to EIA that are inconsistent with those published in other sources.

Most U.S. fuel ethanol production capacity is located in the Midwest region (Petroleum Administration for Defense District, or PADD, 2). Total nameplate capacity in the Midwest totaled 15.9 billion gal/y (1.0 MMbpd) at the beginning of 2020, an increase of 3% between January 2019 and January 2020. Of the top 13 fuel ethanol-producing states, 12 are located in the Midwest. The three states with the most ethanol production capacity—Iowa, Nebraska, and Illinois—contain half of the nation’s total.

U.S. production of fuel ethanol reached 15.8 billion gallons (1.03 MMbpd) in 2019, the fourth consecutive year that production of fuel ethanol was more than 1 MMbpd. Although fuel ethanol production capacity increased year over year as of January 2020, fuel ethanol production has declined more recently. U.S. fuel ethanol production fell significantly in late March and in April 2020, driven by significant reductions in motor gasoline demand as a result of responses to the 2019 novel coronavirus disease (COVID-19). Because almost all finished motor gasoline sold in the United States is blended with 10% ethanol (E10), the drop in gasoline demand has driven similar decreases in fuel ethanol demand and, correspondingly, fuel ethanol production.

In the September 2020 Short-Term Energy Outlook (STEO), EIA expects U.S. production of fuel ethanol to average 0.90 MMbpd in 2020, which is 13% lower than 2019 levels. Fuel ethanol production reached a low of 0.56 MMbpd in April 2020 when demand dropped because of COVID-19 mitigation efforts. EIA forecasts that fuel ethanol production will average 0.98 MMbpd in December 2020.

To meet the increased demand for hand sanitizers as a result of COVID-19 concerns, some fuel ethanol plants are now producing industrial alcohol. The ethanol data reported to EIA on Form EIA-819, Monthly Oxygenates Report, are for fuel ethanol and only include barrels intended for motor fuel applications, such as blending to produce gasoline. Any ethanol intended for non-fuel use, such as to produce hand sanitizers, is not reported to EIA.

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) -- SIBUR announces senior appointments aimed at developing the Company's management and strengthening the executive team in key business areas, said the company.

Pavel Lyakhovich, ex-Head of Plastics, Elastomers and Organic Synthesis Division, has been appointed Head of Basic Polymers Division. Mr Lyakhovich will continue to supervise BIAXPLEN, SIBUR Holding’s subsidiary specialising in BOPP film production, as well as lead polymer recycling projects and oversee the implementation of the New Operating Model. Seeking to upgrade the Company’s organisational structure, business processes, employees’ powers and competencies, as well as corporate culture, the New Operating Model will help align SIBUR’s development efforts with the best global practices.

Alexander Petrov, former Managing Director for Economics and Finance, will take over the reins of the Plastics, Elastomers and Organic Synthesis Division. Mr Petrov will also oversee SIBUR’s procurement activities.
Peter O'Brien, an independent director and Chair of the Audit Committee since 2018, will join SIBUR’s management team as Managing Director for Economics and Finance.

As Executive Director, Sergey Komyshan will continue to oversee the expanding petrochemical business and will be responsible for marketing, sales, business innovation and development.

Dmitry Konov, Chairman of the Management Board at SIBUR Holding: "Changes to SIBUR's management team are in line with the senior leadership rotation programme. The ramp-up of ZapSibNeftekhim to design capacity, the launch of Amur GCC, the Company's new flagship project and a number of other polymer initiatives are the key drivers behind the long-term business growth and higher resilience of SIBUR. This is the reason why we decided to strengthen the petrochemical line by appointing Sergey Komyshan as its head. We are confident that the rotation contributes to expanding the expertise of our key managers, improving the Company's operational efficiency. Pavel Lyakhovich and Alexander Petrov have the necessary leadership skills, experience, and understanding of the Company to take our petrochemical business to a whole new level. In his new role, Mr Petrov will make use of his expert knowledge to facilitate synergies between the production and operations, on the one hand, and finance, on the other hand.

As SIBUR’s director, Peter O'Brien has a good understanding of our business and development strategy. Having held senior positions at leading international and Russian industrial and financial companies, Mr O'Brien has gained a wealth of expertise that will be invaluable given the globalisation of SIBUR’s operations."

As it was written earlier, a construction site in the Amur Region saw the sinking of the first test pile in the foundation of Amur Gas Chemical Complex, a facility set to become one of the world’s largest and most advanced basic polymer producers. The Amur GCC project envisages construction of a basic polymer production facility with a total capacity of 2.7 mtpa (2.3 mtpa of polyethylene and 400 ktpa of polypropylene). The facility will feature a unique and the world's largest cracking unit for the first-stage processing of incoming feedstock.

SIBUR is the leader of the Russian petrochemical industry and one of the largest companies globally in this sector, with more than 23,000 employees. The Company’s unique vertically integrated business model allows it to create highly competitive products consumed in the chemical, fast moving consumer goods (FMCG), automotive, construction, energy and other industries in 80 countries worldwide.
MRC

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