Adnoc seeks opportunities to strengthen downstream portfolio in India

MOSCOW (MRC) -- Abu Dhabi National Oil Company (ADNOC), UAE’s biggest energy producer, is seeking Indian companies for partnership in its ambitious USD 45 billion downstream petrochemical expansion plans, said Chemweek.

ADNOC CEO Sultan Ahmed Al Jaber, during a virtual session Prime Minister Narendra Modi had with global energy chief executives on Monday evening, sought opportunities to strengthen the UAE-India energy relationships, a company statement said. Speaking at the roundtable, Al Jaber said India has always been and will always remain one of the UAE’s closest friends and one of its most important trading partners.

Strategic ties between the two nations, he said, have strengthened in recent years, particularly in the field of energy. Indian companies are present in UAE oilfield concession, he said referring to ONGC Videsh Ltd and its partners in 2018 acquiring a 10 per cent in a large offshore oilfield for USD 600 million. This was the first time any Indian company set foot in the oil-rich Emirate. “As we continue to work together, I see significant new opportunities for enhanced partnerships, particularly across our downstream portfolio. As you know, we have launched an ambitious plan to expand our chemicals, petrochemicals, derivatives and industrial base in Abu Dhabi and I look forward to exploring partnerships with even more Indian companies across our hydrocarbon value chain,” Al Jaber said.

ADNOC in 2018 unveiled plans to invest USD 45 billion with partners to develop its local downstream activities, including the expansion of its Ruwais refinery and petrochemical capacity in the industrial hub. The company has courted international investors to expand its oil and gas production and monetise its assets. “India’s remarkable growth as an economic power has cemented its place as one of the world’s largest energy consumers.

“In fact, it represents the second biggest market for ADNOC. This is a position we hope to build on, in line with the huge expansion of India’s ambitions for growth,” Al Jaber said. ADNOC, he said, is ready to meet India’s growing demand across the full portfolio of products. He added ADNOC is proud to be a key supplier to India’s Strategic Petroleum Reserves and is keen to expand the commercial scale and scope of this strategic reserves partnership.
ADNOC was the first foreign company to hire space at the underground crude oil storage India has built as an insurance against supply and price disruptions.

"In the past two years, ADNOC has enhanced its strategic energy links with India a key growth market for crude, refined and petrochemical products. In addition to its partnership in the strategic reserves program, ADNOC is also a stakeholder in one of India’s largest refinery and petrochemical projects, to be constructed on India’s west coast,” he said.

ADNOC along with Saudi Aramco have together taken a 50 per cent interest in the massive 60 million tonnes a year refinery-cum-petrochemical complex planned on Maharashtra coast at a cost of USD 44 billion. Concluding his remarks, Al Jaber said he believes both countries have only scratched the surface of the opportunities that could benefit both India and the UAE in the energy sector, the statement said.

As MRC informed earlier, ADNOC Onshore, a subsidiary of ADNOC, awarded the three contracts which will see the procurement and construction of flowlines and wellhead installations across several onshore oil fields in the Emirate of Abu Dhabi. The contracts also include the engineering, procurement, and construction (EPC) of a new bypass system to provide critical backup for the existing crude receiving stations at the Jebel Dhanna and Fujairah export terminals.

Ethylene and propylene are feedstocks for producing polyethylene (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.

MRC

MOSCOW (MRC) -- Merck will invest 20 million euros (USD23.6 million) in and around Pyeongtaek, Gyeonggi Province, to increase its organic light-emitting diode manufacturing capabilities, the company said.

The 20 million euros will be used to establish a modular production system for an additional OLED sublimation purification facility, and expand its OLED manufacturing facility in the neighboring county of Poseung-eup. OLED sublimation purification is a key step that ensures top-level OLED quality and lifespan. An increase in such production capacity will prepare Merck for a rise in demand in the OLED market. Bigger manufacturing capacity will reinforce Merck’s role as a supplier of high purity OLED materials to Asia‘s panel makers, Merck forecasts.

“We are proud to announce a new investment of 20 million euros to produce the most advanced OLED materials here at Pyeongtaek to ensure fast delivery to our Korean customers,” said Kai Beckmann, member of the executive board of Merck and CEO of Performance Materials. “We are well aware that OLED materials have been defined as key materials by the Korean government. Likewise, Merck wants to increase Korea’s competitiveness in the display industry. We see our investment as a contribution to creating an agile supply chain for our customers in Korea,” Beckmann said.

Gyeonggi Province is an ideal location for Merck’s investment, said Kim Woo-kyu, managing director of Merck Korea, because of its proximity to Merck‘s major customers. Gyeonggi is well-positioned for innovative production as well as having excellent human resources, small and medium-sized enterprises and universities, Kim said.

Merck has been growing its high purity OLED manufacturing prowess in Asia in response to new form factors such as foldable and rollable displays. The company has a history of OLED research of over three decades, becoming one of the pioneers of OLED material technologies.

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.

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.

Headquartered in Darmstadt, Germany, Merck opened an OLED application center in Pyeongtaek, Korea, in 2015. Merck Korea now has 11 operation sites and some 1,200 employees and operates businesses in functional materials, health care and life sciences. The functional materials business encompasses advance materials for information technology products such as displays and semiconductors. It also includes cosmetics and paints for automobiles.
Its health care business involves pharmaceuticals and medical devices for treatments of cancer, multiple sclerosis and infertility. The life sciences business deals in an extensive portfolio of over 300,000 products used for protein research, cell biology, antibodies, water purification and microbiome tests.
MRC

MOSCOW (MRC) -- South Korea’s S-Oil Corp said on Wednesday refining margins are expected to improve in the fourth quarter, supported by increased demand for kerosene and diesel ahead of the winter season, said Reuters.

“However, the rebound would be limited due to re-spread of COVID-19,” said the country’s third-largest refiner, whose main shareholder is Saudi Aramco, in an earnings statement. It had conducted an unplanned maintenance for its No. 2 residue fluid catalytic cracker, with 76,000 barrels per day (bpd) capacity, impacted by a typhoon in September, the company said in a conference call.

Sources had previously told Reuters the unit’s outage following typhoon Haishen had briefly lifted petrol margins. Opportunity cost lost by the shutdown was about 20 billion won, an executive said. The company plans to maintain run rate of around 80% for petrochemicals in the current quarter, while staying at the near-maximum level for the refining sector.

S-Oil expects its capital expenditure in 2021 to be at or below this year’s level as the company cannot predict its performance next year. S-Oil reported an operating loss of 9.3 billion won (USD8.25 million) for the third quarter, compared with a 231 billion won profit a year earlier but improving from a 164 billion won loss in the second quarter due to gradual demand recovery.

This was its third consecutive quarter of operating loss. Inventory-related gain was 133 billion won in July-September quarter, compared with a loss of 171 billion won in the previous quarter, it said. The company said it operated its 669,000 bpd CDUs in the southeastern city of Ulsan at 90.7% capacity on average in the July-September period, down from 99.8% in the second quarter. Shares of S-Oil were trading down 0.4% as of 0238 GMT, while the wider market was trading 0.2% lower.

As MRC informed earlier, on 4 October 4, S-Oil resumed propylene production at its Catcracking Unit N2 in Onsan (Onsan, South Korea). This plant with a capacity of 705,000 tonnes of propylene per year was closed on 7 September this year due to Typhoon Haishen (Super Typhoon Haishen).

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.
MRC

MOSCOW (MRC) -- Imports of polyethylene (PE) into Russia fell by 15% year on year to 475,100 tonnes in January-September 2020. High density polyethylene (HDPE) accounted for the greatest decrease in imports, according to MRC's DataScope report.

September PE imports dropped to 46,100 tonnes from 49,500 tonnes a month earlier, with low density polyethylene (LDPE) accounting for the main decrease in imports. Overall imports of ethylene polymers totalled 475,100 tonnes in the first nine months of 2020, compared to 562,100 tonnes a year earlier. Shipments of LDPE and other ethylene copolymers increased, whereas imports of other grades of ethylene polymers decreased.

The structure of PE imports to Russia by grades looked the following way over the stated period.

September HDPE imports were 18,600 tonnes, which corresponds to the figure a month earlier. Overall imports of this PE grade totalled 202,500 tonnes in January-September 2020, down by 27% year on year. The largest decrease in supplies was due to film and pipe HDPE.

Last month's LDPE imports fell to 8,900 tonnes from 11,400 tonnes in August. Overall LDPE imports to Russia reached 83,300 tonnes in the first nine months of 2020, up by 8% year on year.

September linear low density polyethylene (LLDPE) imports reached 10,700 tonnes versus 11,300 tonnes a month earlier, local films producers reduces their purchases from the USA. Overall LLDPE imports totalled 118,300 tonnes in the first nine months of 2020, down by 13% year on year.

Last month's imports of other ethylene polymers, including ethylene-vinyl-acetate (EVA), were 7,900 tonnes, compared to 8,100 tonnes in August. Overall imports of other ethylene polymers reached 71,100 tonnes over the stated period versus 70,600 tonnes a year earlier.

MRC

MOSCOW (MRC) -- BASF has announced third-quarter results in line with the preliminary figures it published on 9 October, said the company.

The company swung to a net loss of EUR2.1 billion (USD2.5 billion), compared with a net profit of EUR911 million in the prior-year quarter, on impairments totaling EUR2.8 billion due to the impacts of COVID-19 and restructuring, as previously reported. BASF group sales of EUR13.8 billion were down 5% year on year (YOY).

BASF also confirmed that third-quarter EBIT before special items (operating profit) rose sharply compared with the previous quarter, to €581 million, up by EUR355 million and beating analysts’ consensus estimate by 47%. On a YOY basis, EBIT before special items dropped 45%, due mainly to a much lower contribution from the chemicals segment.

The big sequential improvement in EBIT before special items “was mainly driven by good business development in September,” says Martin Brudermuller, chairman of BASF. EBIT including special items was minus EUR2.6 billion, swinging from EUR1.3 billion in the year-earlier quarter due to the impairments. EBITDA before special items decreased by 22% YOY to EUR1.5 billion and EBITDA dropped 54% to EUR1 billion.

The YOY decline in sales was mainly driven by negative currency effects in all segments, but especially in the agricultural solutions and surface technologies segments. Revenue fell 27% YOY in the chemicals segment due mainly to an unplanned outage at the steam cracker at Port Arthur, Texas. Higher price levels overall, primarily due to higher precious metal prices in the surface technologies segment—where sales increased 25% YOY—had an offsetting effect. Portfolio effects, especially in the materials segment from the acquisition of Solvay’s nylon business, also had a positive impact on sales. Sales of the materials business decreased 8% YOY and revenue from industrial solutions dropped 13%. BASF’s third-quarter group sales increased sequentially and were EUR1.1 billion higher than in the previous quarter.

EBIT before special items dropped in the nutrition and care segment, and materials and agricultural solutions segments. The industrial solutions and surface technologies segments posted slight decreases. Sales at BASF companies based in Europe declined by 12% YOY, primarily due to lower volumes, especially in the materials and Other segments. Compared with the prior-year quarter, sales in North America declined by 6%. This was mainly driven by lower volumes, especially in chemicals due to the cracker outage at Port Arthur. BASF’s sales in APAC improved 10% YOY. This was largely attributable to higher volumes in almost all segments. In the region South America, Africa, Middle East, sales were down 9% YOY on negative currency effects in all segments, especially agricultural solutions.

BASF notes that in the third quarter, the global industrial economy recovered from the sharp downturn in the second quarter. However, global production levels were still about 3% lower than in the prior-year quarter. The automotive industry, which was particularly strongly affected by production closures in the second quarter, was still down about 2% from the prior-year period. Demand for durable consumer goods picked up with demand for consumables such as food and care products, some of which saw stronger demand as a result of the pandemic, gradually returning to normal. However, “following the dynamic recovery effects in the third quarter, momentum is expected to slow in the remaining months of the year,” BASF says.

BASF expects in full-year 2020 a 5% decline in worldwide GDP and in industrial production, as well as a 2.5% decrease in worldwide chemical production. BASF’s forecast assumes that severe restrictions on economic activity to contain the pandemic, such as lockdowns, are not reintroduced.

The company anticipates another sequential improvement in its EBIT before special items in the fourth quarter. BASF, meanwhile, has reconfirmed its full-year forecast, made on 9 October, of a slight decline in sales to EUR57-58 billion, mainly due to weaker demand as a consequence of COVID-19. BASF also anticipates a big decrease in 2020 EBIT before special items to EUR3.0-3.3 billion. As well as weaker demand, the company expects pressure on margins to continue, especially for basic chemicals, which will be partially offset by fixed-cost savings.

As MRC informed earlier, ASF is planning to restart its 300,000-metric ton/year toluene diisocyanate (TDI) plant in Ludwigshafen, Germany, by the end of October. The company declared force majeure on 31 August after experiencing technical problems.

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.

BASF-YPC Company Limited (BASF-YPC) is a 50-50 joint venture between BASF and Sinopec, founded in 2000, with a total investment of approximately USD5.5 billion. The integrated petrochemical site produces about three million tons of high-quality chemicals and polymers for the Chinese market annually. The products serve the rapid-growing demand in multiple industries, including agriculture, construction, electronics, pharmaceutical, hygiene, automotive and chemical manufacturing. All BASF-YPC plants are interconnected in order to use products, by-products and energy in the most efficient way, to save cost and to minimize the environmental impact. BASF-YPC posted sales of approximately CNY 19.6 billion in 2019 and employed 1,942 people as of the end of the year.
MRC