MOSCOW (MRC) -- Shell says it expects improved base and intermediate chemicals margins in the fourth quarter compared with the third quarter of 2020, reported Chemweek.
The company did not give specific estimates for the forecast margins in a trading update for the fourth quarter issued today.
Group post-tax charges of USD3.5-4.5 billion are also expected in the fourth quarter related to “impairments, asset restructuring, and onerous contracts,” Shell says. These include charges related to the previously announced restructuring of its refinery and chemicals portfolio, impairments for some of its upstream assets, and contracts within its integrated gas business, it says.
The utilization rate for its chemicals manufacturing plants in the fourth quarter is now expected to be 77-81%, narrowing slightly from a range of 77-85% given when Shell released its third-quarter results on 29 October. The company has also narrowed slightly its forecast for chemicals sales volumes in the fourth quarter, estimating them at 3.6–3.9 million metric tons.
Shell also expects to report a loss in adjusted earnings in its upstream business for the fourth quarter due to the current price environment, it says. Gross refining margins in its downstream business are expected to improve slightly quarter on quarter, with the forecast utilization rate put at 72–76%, it says.
The company is scheduled to release its financial results for the fourth quarter on 4 February.
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.
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