Shell agree to sell stake in QCLNG

MOSCOW (MRC) -- Shell has agreed to sell a 26.25% stake in Australia's Queensland Curtis LNG (QCLNG) Common Facilities to US-based fund manager Global Infrastructure Partners for USD2.5bn, said the company.

This decision is consistent with Shell’s strategy of selling non-core assets in order to further high-grade and simplify Shell’s portfolio. The sale will contribute to Shell’s expected divestment proceeds, without impact on people or the operations of the QCLNG venture, and aligns Shell’s interest in the Common Facilities with its 73.75% interest in the overall QCLNG venture.

Due to the advantages it offers as a complement to renewable energy and as the cleanest burning hydrocarbon, natural gas is a core component of Shell’s strategy to provide more and cleaner energy solutions. Global LNG demand is expected to outpace total demand for energy and the QCLNG venture is crucial in helping Shell meet the world’s growing energy needs.

The transaction is subject to regulatory approval in Australia and customary conditions. It is expected to complete in the first half of 2021.

As MRC informed previously, Royal Dutch Shell plc. said in November 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 1,760,950 tonnes in the first ten months of 2020, up by 3% year on year. Only high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments increased. At the same time, PP shipments to the Russian market reached 978,870 tonnes in January-October 2020 (calculated using the formula: production minus exports plus imports minus producers' inventories as of 1 January, 2020). Supply of exclusively of PP random copolymer increased.

Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.

MRC

Output of chemical products in Russia grew by 6.6% in Jan-Nov 2020

MOSCOW (MRC) -- Russia's output of chemical products rose in November 2020 by 9.5% year on year. At the same time, production of basic chemicals increased in the first eleven months of 2020 by 6.6% year on year, 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-November 2020 output.

November production of benzene grew to 120,000 tonnes from 106,000 tonnes a month earlier due to higher capacity utilisation of several producers. Overall output of this product reached 1,236,600 tonnes over the stated period, down by 2.2% year on year.

November production of sodium hydroxide (caustic soda) were 111,000 tonnes (100% of the basic substance) versus 108,000 tonnes a month earlier. Overall output of caustic soda totalled 1,165,600 tonnes in the first eleven months of 2020, down by 1.3% year on year.

2,106,000 tonnes of mineral fertilizers (in terms of 100% nutrients) were produced in November versus 2,014,000 tonnes a month earlier. Overall, Russian plants produced slightly over 22,600,000 tonnes of fertilizers in January-November 2020, up by 3.9% year on year.

Last month's production of polymers in primary form rose to 896,000 tonnes from 852,000 tonnes in October. Overall output of polymers in primary form totalled 9,240,000 tonnes over the stated period, up by 17.1% year on year.
MRC

Ukrainian PE imports down by 1% in Jan-Nov 2020

MOSCOW (MRC) -- Overall polyethylene (PE) imports into the Ukrainian market exceeded 245,000 tonnes in the first eleven months of 2020, down by 1% year on year. Imports of all grades of ethylene polymers decreased, with high density polyethylene (HDPE) being the exception, according to MRC's DataScope report.

Last month's PE imports to Ukraine were slightly less than 20,200 tonnes versus 20,700 tonnes in October, local companies reduced their purchases of low density polyethylene (LDPE). Thus, overall PE imports exceeded 245,000 tonnes in January-November 2020, compared to 248,400 tonnes a year earlier. Imports of all grades of ethylene polymers decreased, with the exception for HDPE, demand for which grew in some consumption sectors.

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


Last month's HDPE imports were 7,700 tonnes, compared to 7,500 tonnes in October, Ukrainian companies increased their purchases of pipe grade PE. Overall HDPE imports totalled 88,600 tonnes in the first eleven months of 2020 versus 87,600 tonnes a year earlier.

November LDPE imports were 5,900 tonnes versus 6,400 tonnes a month earlier. Overall LDPE imports reached 73,200 tonnes over the stated period, compared to 73,800 tonnes a year earlier.

Last month's imports of linear low density polyethylene (LLDPE) were 5,600 tonnes, compared to 5,900 tonnes in October, shipments of Middle Eastern film grae LLDPE decreased. Overall LLDPE imports reached 70,800 tonnes in January-November 2020, compared to 75,600 tonnes a year earlier.

Imports of other PE grades, including ethylene-vinyl-acetate (EVA), totalled 12,500 tonnes over the stated period, compared to 11,400 tonnes a year earlier.

MRC

Portugal Galp to shut Matosinhos refinery, focus on larger Sines

MOSCOW (MRC) - Portugal's oil and gas company Galp will fully cease processing hydrocarbons at the smaller of its two refineries, in Matosinhos near Porto, from next year due to the impact of the COVID-19 pandemic and the regulatory environment, Reuters said.

Instead, it will concentrate its downstream operations and their future development at the 220,000-barrels-per-day Sines refinery equipped with deep conversion units.

Production at Matosinhos, with a 100,000 bpd capacity, has been suspended since Oct. 10. The book value of the Matosinhos assets to be decommissioned is around 200 million euros (USD244 million), Galp said, expecting annual fixed costs and capital expenditure to drop by about 90 million euros as a result.

It said it would maintain the import, storage and distribution facilities there and that fuel supply in Portugal would not be affected.

Traditionally a refiner, Galp has joined the world of big oil over the past decade thanks to its stakes in various major offshore oil and gas fields in Brazil.

As MRC informed earlier, Galp Energia temporarily suspended fuel production at its smallest oil refinery at Matosinhos due to unstable national and international markets shaken by the coronavirus pandemic.

As MRC informed previously, global oil demand may have already peaked, according to BP's latest long-term energy outlook, as the COVID-19 pandemic kicks the world economy onto a weaker growth trajectory and accelerates the shift to cleaner fuels.

Earlier this year, BP said the deadly coronavirus outbreak could cut global oil demand growth by 40% in 2020, putting pressure on Opec producers and Russia to curb supplies to keep prices in check.

And in September 2019, six world's major petrochemical companies in Flanders, Belgium, North Rhine-Westphalia, Germany, and the Netherlands (Trilateral Region) announced the creation of a consortium to jointly investigate how naphtha or gas steam crackers could be operated using renewable electricity instead of fossil fuels. The Cracker of the Future consortium, which includes BASF, Borealis, BP, LyondellBasell, SABIC and Total, aims to produce base chemicals while also significantly reducing carbon emissions. The companies agreed to invest in R&D and knowledge sharing as they assess the possibility of transitioning their base chemical production to renewable electricity.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,760,950 tonnes in the first ten months of 2020, up by 3% year on year. Only high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments increased. At the same time, PP shipments to the Russian market reached 978,870 tonnes in January-October 2020 (calculated using the formula: production minus exports plus imports minus producers' inventories as of 1 January, 2020). Supply of exclusively of PP random copolymer increased.
MRC

ADNOC awards Eni, PTTEP concession amid plans to hit 5 mil b/d capacity by 2030

MOSCOW (MRC) -- Abu Dhabi National Oil Co, the UAE's biggest energy producer, has awarded Italy's Eni and Thailand's PTTEP an exploration concession amid plans to boost oil production capacity by 25% to 5 million b/d by 2030, reported S&P Global.

The Eni-PTTEP consortium won rights to look for oil and gas in Offshore Block 3, the second award in ADNOC's second bidding round, the company said in a statement Dec. 21. Occidental Petroleum won the first concession in the second bidding round, which was launched in 2019.

PTTEP and Eni will hold 100% in the exploration phase with investments up to Dirham 1.51 billion (US412 million), which include exploration and appraisal drilling, and a participation fee to explore for and appraise oil and gas opportunities. Eni will be the operator in the exploration phase for the block that spans an 11,660 sq km area.

"Following successful commercial discovery during the exploration phase, Eni and PTTEP will, together, have the right to a production concession to develop and produce such commercial discoveries," ADNOC said.

"New 3D seismic data has been acquired for a part of the block, which, combined with its proximity to the existing onshore oil and gas fields, suggests the concession area has promising potential."

Together, Eni and PTTEP will have the right to a production concession to develop and produce commercial discoveries following the exploration phase. ADNOC has the option to hold a 60% stake in the production phase of the 35-year concession, which starts with commencement of the exploration phase.

In January 2019, a consortium led by Eni and PTTEP won two offshore blocks in Abu Dhabi's first competitive bid round. They continue to explore for oil and gas in the area located northwest of Abu Dhabi city.

Eni and PTTEP will also participate technically and financially in ADNOC's "mega" 3-D seismic survey that will "capture high-resolution 3D images of the complex geology at ultra-deep locations below the surface and will be used to identify potential hydrocarbon reservoirs," the company added.

ADNOC is ramping up exploration for oil and gas as it seeks to boost its gas output and increase oil production capacity by 25% to 5 million b/d by 2030.

Abu Dhabi, the oil-rich emirate in the seven-member UAE federation, is forging ahead with expanding its hydrocarbons sector in the face of the coronavirus pandemic, by also announcing a plan for ADNOC to spend Dirham 448 billion (USD122 billion) over the next five years.

The new award follows the announcement from Abu Dhabi's Supreme Petroleum Council - its highest energy decision making body - about the discovery of recoverable unconventional oil resources estimated at 22 billion stock tank barrels, or STB, and an increase in conventional oil reserves of 2 billion stock tank barrels, boosting the UAE's conventional reserves to 107 billion STB.

In the second round, Abu Dhabi's five blocks that were opened for bidding - three of which are offshore and two onshore - are known as Offshore Block 3, Offshore Block 4, Offshore Block 5, Onshore Block 5 and Onshore Block 2, with the latter offering two separate licensing opportunities for conventional and unconventional oil and gas, respectively.

In total, the five blocks comprise an area of about 34,000 sq km.

ADNOC's first bid round, which concluded in March 2019, awarded Onshore Block 1 to Bharat Petroleum Corp. and Indian Oil Corp. Onshore Block 3 was awarded in a concession to Occidental Petroleum, and Onshore Block 4 was awarded to INPEX Corp.

As MRC reported previously, in early May, 2020, Abu Dhabi National Oil Company (ADNOC) began a gradual restart of its Ruwais oil refinery complex after a scheduled maintenance shutdown. The Ruwais complex, which has capacity of 835,000 barrels per day, was shut down early this year, the ADNOC spokesman said.

And in late July 2019, ADNOC said its Ruwais refinery west cracker was offline for maintenance.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,760,950 tonnes in the first ten months of 2020, up by 3% year on year. Only high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments increased. At the same time, PP shipments to the Russian market reached 978,870 tonnes in January-October 2020 (calculated using the formula: production minus exports plus imports minus producers' inventories as of 1 January, 2020). Supply of exclusively of PP random copolymer increased.
MRC