Enterprise Q3 earnings rise

MOSCOW (MRC) -- Enterprise Products’ Q3 adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) rose slightly year on year, “despite another challenging quarter for the US energy industry” amid the ongoing coronavirus (Covid-19) pandemic, said th company.

The performance of the company’s marketing, storage, natural gas liquids (NGL) fractionation, NGL pipeline, petrochemical pipeline and Permian gathering and processing businesses largely offset the impact of lower margins, volumes and earnings from natural gas gathering and processing assets in the Rockies, South Texas and the Haynesville. Notably, Enterprise’s petrochemical services segment reported a USD124m sequential improvement in gross operating margin, from a challenging Q2, the company said.

Enterprise Products Partners L.P. EPD stock increased nearly 2% since the partnership reported third-quarter results on Oct 28, wherein earnings met estimates. It has narrowed 2020 growth capital investment projections, while reducing the budget for 2021 and 2022.

It reported third-quarter 2020 adjusted earnings per limited partner unit of 48 cents, in line with the Zacks Consensus Estimate. The bottom line, moreover, improved from the year-ago quarter’s 46 cents per unit.

Revenues declined to USD6,922 million from USD7,964.1 million in the prior-year quarter. However, the top line beat the consensus estimate of USD6,529 million.

Increased transportation volumes in Petrochemical & Refined Products Services, and higher fee-based volumes from the Permian Basin at the partnership’s gas processing plants aided the bottom line. The positives were partially offset by lower natural gas pipeline transportation volumes, and crude oil transportation and marine terminal volumes.

As MRC reported earlier, Enterprise Products Partners LP (EPP), through one of its affiliates, has entered a long-term agreement with Marubeni Corp. of Japan, under which Marubeni will offtake polymer-grade propylene (PGP) produced from a second propane dehydrogenation plant (PDH 2) currently under construction at EPP’s operations in Mont Belvieu, Tex., for supply to global customers. Concluded on June 16, the PGP offtake agreement is part of a long-term collaboration between EPP and Marubeni that also includes the export of liquefied ethylene, the first 25-million lb vessel of which loaded and sailed from EPP and Navigator Holdings Ltd.’s 50-50 joint venture marine terminal at Morgan’s Point, Tex., in early January, EPP and Marubeni said on June 30.

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.

Enterprise Products Partners L.P. is an American midstream natural gas and crude oil pipeline company with headquarters in Houston, Texas. It acquired GulfTerra in September 2004. The company ranked No. 105 in the 2018 Fortune 500 list of the largest United States corporations by total revenue.
MRC

MOSCOW (MRC) -- Shenhua Xinjiang Mining Co (part of Shenhua Group) has unexpectedly shut its low density polyethylene (LDPE) due to technical glitches on its pipeline, reported CommoPlast with reference to market sources.

Thus , the company's LDPE plant, based in Xinjiang, China and with the capacity of 300,000 tons/year, was taken off-stream on 11 November, 2020, an is expected to remain off-line for seven days.

As MRC wrote before, last year, the company conducted scheduled maintenance works at this plant from 16 August to 24 September.

According to MRC's ScanPlast report, September estimated LDPE consumption in Russia fell to 23,930 tonnes from 47,610 tonnes a month earlier. Russian producers reduced their domestic LDPE shipments due to shutdowns for maintenance at production capacities in Ufa, Tomsk and Kazan. Russia's estimated LDPE consumption totalled about 406,500 tonnes in January-September 2020, which virtually corresponded to the last year's figure.

Shenhua Group Corporation Limited was a Chinese state-owned mining and energy company. Shenhua Group was founded in October 1995 under the auspices of the State Council of the People's Republic of China. It was the largest coal-producing company in China.
MRC

1. Idemitsu chemical business swings to loss on lower margin

MOSCOW (MRC) -- Japanese oil refiner Idemitsu Kosan expects higher gasoline and diesel exports in the October-March half of its financial year as its run rates are likely to recover to 85%-89% from 70% in the first half, said Chemweek. But Idemitsu also expects a weak market for petroleum products in Asia to continue over the six-month period, Munehiro Sekine, general manager of investor relations for Idemitsu, told a news conference. Idemitsu forecast its annual domestic fuel sales in the year to March 31 to fall 13.1% from a year earlier to 35.26 million kilolitres, hit by collapsed demand from the COVID-19 crisis.


MOSCOW (MRC) -- Japanese oil firm Cosmo Energy Holdings on Thursday cut its net profit estimate for the year to March 31 by 41%, blaming a hefty appraisal loss on its crude inventories and slumping prices of petrochemicals, reported Reuters. It now forecasts an annual net profit of 8.5 billion yen (USD80 million), down from its May prediction of 14.5 billion yen. "Our sales of key fuels, mainly gasoline, have steadily recovered from the COVID-19 crisis, but petrochemicals markets have deteriorated more than we had anticipated," Takayuki Uematsu, Cosmo's senior executive officer, told a news conference.




MRC

MOSCOW (MRC) -- Rosneft cut its third-quarter upstream operating costs by 3.4% on the quarter to USD2.8/b of oil equivalent, as liquids output continued to slide due to constraints under the OPEC+ agreement and implications from the coronavirus pandemic, the company reported Nov. 13 in its financial results, reported S&P Global.

Rosneft's Q3 liquids production was down 16.2% on the year and 2.1% on the quarter to 48.51 million mt, or 3.91 million b/d, as the company was allowed to produce more in April, when the new OPEC+ deal was not yet in force.

Rosneft CEO Igor Sechin lauded the company's ability "to work successfully in difficult conditions of crude oil output restrictions and relatively low hydrocarbon prices."

"Significant achievements of the third quarter include a reduction of upstream operating costs to US2.8/boe and a decrease in interest costs by 24% in USD terms year on year," he said in a release.

Rosneft's overall liquids output in January-September amounted to 4.19 million b/d, down 10.3% on the year, it said.

The company continued to restrain production without well suspension to retain the ability of prompt output increase, if needed.

As a result, Rosneft managed to quickly increase oil production by over 6% in August, when OPEC+ cuts were eased to 7.7 million b/d.

Rosneft's Q3 gas production constituted 14.96 Bcm, down 8.2% on the year and 1.3% on the quarter, also affected by decline in demand caused by the coronavirus pandemic.

The company's total Q3 hydrocarbon output amounted to 4.9 million boe/d, down 14.7% on the year and 3% on the quarter.

Rosneft's Q3 refining throughput increased by 6.1% on the quarter to 25.5 million mt in accordance with Russia's pledge to direct output increase to the domestic market.

However, refining volumes were still down 15.3% on the year due to lower demand for petroleum products and low refining margin due to the pandemic.

In addition, Rosneft started drafting a "carbon management" plan through 2035, which will help the company to transition to the low-carbon economy, manage climate risks and meet future energy demand.

"The plan implementation will be instrumental in strengthening Rosneft's leading position in the global energy market in the context of the energy transition process and the maximum monetization of the company's proven reserves," it said.

As MRC wrote previously, Russian state oil company Rosneft's decision to cease operations in Venezuela and sell its assets there to a Russian government-owned company was a "maneuver" made in reaction to collapsing oil prices, a US State Department official said earlier this year.

We remind that Angarsk Polymers Plant (part of Rosneft) has resumed its low density polyethylene (LDPE) production after a scheduled turnaround. The plant"s customers said Angarsk Polymers Plant brought on-stream its LDPE production on 31 July after the scheduled maintenance. The outage started on 22 June and lasted for more than one month. The plant"s annual production capacity is about 75,000 tonnes.

According to MRC's ScanPlast report, September estimated LDPE consumption in Russia fell to 23,930 tonnes from 47,610 tonnes a month earlier. Russian producers reduced their domestic LDPE shipments due to shutdowns for maintenance at production capacities in Ufa, Tomsk and Kazan. Russia's estimated LDPE consumption totalled about 406,500 tonnes in January-September 2020, which virtually corresponded to the last year's figure.

Rosneft became Russia's largest publicly traded oil company in March 2013 after the USD55 billion takeover of TNK-BP, which was Russia’s third-largest oil producer at the time.
MRC

MOSCOW (MRC) -- Germany's chemical industry association VCI (Frankfurt) says that after setbacks in the first half of the year caused by COVID-19, Germany’s chemical-pharmaceutical industry rebounded in the third quarter with a sequential increase of 1.9% in production and 2.8% in sales, reported Chemweek.

Producer prices also edged up 0.5% compared with the previous quarter, and the number of employees in the industry remained stable at about 464,000, VCI says. However, on a year-on-year (YOY) basis the figures were below the levels of 2019.

Chemical-pharmaceutical production declined 1.7% YOY but compared with the previous quarter, chemical production alone went up 4.9% driven by higher demand, VCI says. Average capacity utilization rose sequentially, from 77.5% to 81.6%, so operating rates were back to almost normal in the third quarter, VCI says.

Industry sales increased sequentially by 2.8%, to EUR43.8 billion (USD51.6 billion), with sales to domestic and foreign customers going up by 3.5% and 2.5%, respectively, VCI says. It adds that there was positive development especially in business with European customers. Nevertheless, sales to foreign customers were 8% lower YOY, and sales overall were 7.5% down YOY.

Germany-based chemical companies' selling prices were 2.6% lower YOY in the third quarter in line with weak oil prices and soft demand caused by COVID-19, VCI says. Crude prices went up by about 36% sequentially, but were almost 30% lower YOY, VCI says. The price of naphtha also increased sequentially by 50%, but remained 25% cheaper YOY.

VCI notes that the global economic crisis is far from over and with a second wave of infections building up, the industry’s optimism has been replaced by concern about the future, resulting in a deteriorated outlook for 2020. VCI continues to expect a production decline in the chemical-pharmaceutical industry of 3% for 2020. Prices are expected to be 2% lower, helping drive sales down 6% to €186.4 billion, VCI says.

Germany’s chemical-pharmaceutical industry faces a difficult fourth quarter, with COVID-19 threatening the industry’s recovery, VCI says. “Business and society are required to reduce the risk of infection through effective measures and correct behavior. The federal government must prevent permanent economic damage,” says Christian Kullmann, VCI president and chairman of Evonik Industries.

As MRC informed before, BASF has recetnly broken ground on a new cathode active materials production plant. The plant in Schwarzheide, Germany is scheduled to come online in 2022, creating 150 new jobs and will enable the supply of around 400,000 full electric vehicles a year. This new site will complement BASF’s multi-step investment plan in the European battery materials market, using precursors from the company’s previously announced plant in Harjavalta, Finland. The German government are putting €175m towards the project which is part of the Important Project of Common European Interest (IPCEI) approved by the European Commission in December 2019, under the EU State aid rule

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. September 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