US offshore energy producers brace for Hurricane Zeta impact

MOSCOW (MRC) -- Energy firms and ports along the US Gulf Coast were bracing on Tuesday for another test as Hurricane Zeta, the 11th hurricane of the season, entered the Gulf of Mexico, reported Reuters.

BP, Chevron and Equinor evacuated oil workers and Royal Dutch Shell paused drilling as winds intensified on Monday. Pipeline operator Enbridge evacuated two offshore platforms and on Tuesday plans to remove workers from a Louisiana natural gas processing plant.

Some oil producers were pulling workers for at least the sixth time since June, a process made more difficult by the novel coronavirus pandemic with workers required to be tested for the virus before returning to work.

Zeta was the third named storm this month to hit Mexico's Quintana Roo state, forecasters said, setting a new record for the month. Winds decreased to 70 miles per hour (110 kph) after sweeping across the Yucatan Peninsula but are forecast to rise to 85 mph as its churns over the Gulf of Mexico, the NHC said.

On Monday, it became the 11th hurricane of the Atlantic season, which on average has six.

A hurricane watch was issued for parts of Louisiana to the Mississippi-Alabama border by the U.S. National Hurricane Center (NHC). Zeta could hit the US coast on Wednesday at or near hurricane strength, the NHC said.

Energy ports from Baton Rouge to Pascagoula were operating under advisories warning of the potential for gale force winds. A Louisiana deep water oil export port said it was implementing its inclement weather plan.

Energy producers shut 16%, or 293,656 bpd of oil and 6% of natural gas output, or 162.57 MM cubic feet per day, according to data from the US offshore energy regulator.

US Gulf of Mexico offshore oil production accounts for about 17% of total US crude oil output and 5% of total US dry natural gas production.

Crude futures gained 1% in London trading after falling more than 3% on Monday over fears of rising COVID-19 cases and increased crude supplies.

As MRC informed earlier, Royal Dutch Shell plc. said earlier this month that its petrochemical complex of several billion dollars in Western Pennsylvania is about 70% complete and in the process to enter service in the early 2020s. The plant’s costs are estimated to be USD6-USD10 billion, where ethane will be transformed into plastic feedstock. The facility is equipped to produce 1.5 million metric tons per year (mmty) of ethylene and 1.6 mmty of polyethylene (PE), two important constituents of plastics.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,496,500 tonnes in the first eight months of 2020, up by 5% year on year. Shipments of all ethylene polymers increased, except for linear low desnity polyethylene (LLDPE). At the same time, PP shipments to the Russian market reached 767,2900 tonnes in the eight months of 2020 (calculated using the formula - production minus exports plus imports - and not counting producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.
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MOSCOW (MRC) -- Ecolab reported third-quarter net income down 44% year on year (YOY), to USD246.2 million, on net sales down 6%, to USD3.02 billion. Adjusted earnings totaled USD1.15/share, down 24% YOY but slightly ahead of analysts’ consensus estimate of USD1.13/share, as reported by Refinitiv (New York, New York), said Chemweek.

Volumes declined due to COVID-19 and a less-favorable business mix more than offset cost cuts and higher selling prices. “Third-quarter sales and earnings showed significant improvement from the COVID-19-related lows in the second quarter, principally led by our institutional division, as recovering customer trends along with our new business wins, better customer penetration, and cost efficiency actions drove improved sequential results,” says Ecolab chairman and CEO Douglas Baker. “We expect the improvement to continue in our fourth quarter, though likely at a slower rate as the second COVID-19 wave impacts reopenings."

Global industrial segment sales fell 3% YOY, to USD1.47 billion, while segment operating income was up 18%, to USD293.4 million. Sales were flat in the food and beverage business, but this was offset by declines in other industrial end markets. Higher selling prices, cost cuts, and lower discretionary spending boosted operating income, however.

Global institutional and specialty segment sales were down 22% YOY, to USD896.1 million, while segment operating income fell 71%, to USD82.0 million. Closures and reduced business for restaurants, lodging, and entertainment facilities cut into demand for the segment, more than offsetting higher demand for sanitizing products.

Global healthcare and life sciences segment sales were up 33% YOY, to USD321.5 million, while segment operating income increased 84%, to USD65.7 million. The COVID-19 pandemic led to strong volume gains across the segment.

Other segment sales declined 12% YOY, to USD283.7 million, while segment operating income was down 13%, to USD44.7 million. Lower volumes more than offset cost saving and lower discretionary spending.

As MRC informed earlier, European Commission has recently presented its 2030 climate target plan, in which it sets out a program to reduce EU greenhouse gas (GHG) emissions by at least 55% by 2030, compared with 1990, despite a call from the European Parliament in September for GHG emissions to be reduced 60% by 2030. The raised target puts the EU on a balanced pathway to reaching climate neutrality by 2050 and underlines the EU's continued global leadership in this area, ahead of the next UN climate conference (COP26).

As MRC informed earlier, in October, 2020, the European Commission adopted the EU's chemicals strategy for sustainability, describing it as the first step towards a zero-pollution ambition for a toxic-free environment announced in the European Green Deal.

We remind that Russia's output of chemical products rose in September 2020 by 6.7% year on year. At the same time, production of basic chemicals increased by 6.1% year on year in the first nine months of 2020, according to Rosstat's data. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the January-September output. Last month's production of primary polymers decreased to 852,000 tonnes from 888,000 tonnes in August due to shutdowns in Tomsk, Ufa and Kazan. Overall output of polymers in primary form totalled 7,480,000 tonnes over the stated period, up by 16.4% year on year.
MRC

MOSCOW (MRC) -- Elkem (Oslo, Norway) has recorded net losses of 97.0 million Norwegian krone (USD10.5 million) in the third quarter compared with net profits of NKr220 million in the same period of 2019, said Chemweek.

The result is due to financial expenses of NKr157 million including net interest expenses, losses linked to negative currency effects, and other financial expenses, the company says.

Revenue increased 6% year on year (YOY), to NKr5.89 billion driven mainly by the company's silicones division and explained by higher sales volumes and the integration of Polysil, Elkem says. All divisions reported higher YOY sales volumes despite the challenging market conditions, the company says. However, EBITDA and EBIT fell by 20% and 65%, to NKr512 million and NKr99 million, respectively, due to low selling prices and lower sales of specialty products, Elkem says.

Silicon product sales increased almost 1% YOY, to NKr2.67 billion on 6% higher volumes. The business's EBITDA declined 25% YOY, to NKr124 million. Sales of Elkem’s carbon solutions business grew 5% YOY, to NKr452 million, on volumes almost 7% higher. Carbon solutions’ EBITDA went up 56% YOY, to NKr111 million.

The company says there are signs of recovery, but that the market outlook is still characterized by uncertainty. “Silicones demand in China is expected to remain stable, but the price development is uncertain as construction markets are entering low season. Silicones demand outside of China shows signs of recovery,” Elkem says. The market for carbon products is expected to remain stable, the company says.

To address the ongoing economic uncertainty caused by COVID-19, Elkem says it is working to accelerate cost reductions, optimize investments, and leverage on strong market positions.

As MRC informed earlier, Elkem (Oslo, Norway) says it has received 10.0 million Norwegian kroner (USD1.1 million) in financial support from Enova (Trondheim, Norway), a state enterprise owned by the Norwegian Ministry of Climate and Environment, to fund initial planning for a potential large-scale battery materials plant in Norway.

We remind that Russia's output of chemical products rose in September 2020 by 6.7% year on year. At the same time, production of basic chemicals increased by 6.1% year on year in the first nine months of 2020, according to Rosstat's data. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the January-September output. Last month's production of primary polymers decreased to 852,000 tonnes from 888,000 tonnes in August due to shutdowns in Tomsk, Ufa and Kazan. Overall output of polymers in primary form totalled 7,480,000 tonnes over the stated period, up by 16.4% year on year.

MRC

MOSCOW (MRC) -- India's Nayara Energy Ltd, part-owned by Russian oil major Rosneft, halved its oil imports in September from the previous month, reported Hydrocarbonprocessing with reference to data from the shipping industry and sources, ahead of a major maintenance shutdown at its 400,000 bpd Vadinar refinery in western Gujarat state from early October.

During September the refiner received 187,100 bpd oil, a decline of about 20% from a year earlier, the data showed. Nayara's overall imports in the first three quarters of 2020 averaged about 325,500 bpd, fell by 13.4% from a year earlier period, as the refiner had cut crude processing due to a decline in fuel demand, the data showed. The sources declined to be identified as they were not authorized to speak with the media.

As MRC informed previously, in January, 2020, Thyssenkrupp Industrial Solutions (India) signed a contract with Nayara Energy, under which it will provide project management consultancy (PMC) services for Nayara's new petrochemical project to be built at the site of Nayara's 20-million-t/y Vadinar refinery in India. The USD850-million project, which will mark Nayara's entry into the petrochemical sector, includes a 450,000-t/y propylene recovery unit, a 450,000-t/y Unipol polypropylene (PP) plant, a 200,000-t/y methyl tertiary butyl ether unit and associated off-sites and utility facilities. PCN earlier said the project was expected to be completed in 2022.

Prropylene is the main feedstock for the production of PP.

According to MRC's ScanPlast report, PP shipments to the Russian market reached 767,2900 tonnes in the eight months of 2020 (calculated using the formula - production minus exports plus imports - and not counting producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.
MRC

MOSCOW (MRC) -- Sipchem, one of the largest companies in the petrochemical sector in Saudi Arabia, posted a quarterly net profit in Q3, the first in the last four quarters, aided by improvement in product prices and a recovery in demand post easing lockdowns, said Chemweek.

However, Q3 earnings missed analyst’s forecast and market expectations despite a strong beat in the topline, according to Al Rajhi Capital Research.

While details are not fully known, it is suspected that this could have been because of marketing revenues and mostly similar extent of costs as gross profit came broadly in line with estimates.

Methanol prices are up on a sustainable recovery trend, up by ~11% q-o-q in Q3, on the back of tight supply due to unexpected production outages in Southeast Asia and the Middle East along with an improvement in demand, mainly from the MTO (made to order) and pharmaceutical sectors).

Methanol prices continue to maintain its upward trend in Q4 so far, rising ~14% q-o-q, indicating an improving the Methanol market fundamentals. However, the stock price has already gained ~30% since March, and consensus estimates do not factor material improvement in earnings.

While the company’s announcement of a share repurchase programme may have improved sentiments, it may lead to no dividends for 2020.

As MRC informed earlier, Sadara Chemical Company (Sadara) and Sahara International Petrochemical Company (Sipchem) have partnered to supply high-quality ethanol which is required for the manufacturing of hand sanitisers. The ethanol has been provided to local manufacturers free of charge to enable them to produce much-needed hand sanitisers, which in turn were donated to the Ministry of Health for distribution to the healthcare industry throughout the Kingdom of Saudi Arabia to combat the spread of the Covid-19 pandemic.

We remind that Russia's output of chemical products rose in September 2020 by 6.7% year on year. At the same time, production of basic chemicals increased by 6.1% year on year in the first nine months of 2020, according to Rosstat's data. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the January-September output. Last month's production of primary polymers decreased to 852,000 tonnes from 888,000 tonnes in August due to shutdowns in Tomsk, Ufa and Kazan. Overall output of polymers in primary form totalled 7,480,000 tonnes over the stated period, up by 16.4% year on year.

Established in 1999, Saudi International Petrochemical Company (Sipchem) manufactures and markets methanol, butanediol, tetrahydrofuran, acetic acid, acetic anhydride, vinyl acetate monomer. Besides, it has launched several down-stream projects to manufacture ethylene vinyl acetate, low density polyethylene, ethyl acetate, butyl acetate, cross linkable polyethylene, and semi conductive compound that are scheduled to start in 2013.
MRC