Petro Rabigh secures USD960-million credit facility to refinance debts, loans

MOSCOW (MRC) -- Rabigh Refining and Petrochemical Company (Petro Rabigh) has announced that it has secured alternative sharia-compliant banking facilities from the Saudi Industrial Development Fund (SIDF) worth SR3.6 billion (USD959 million), said Chemweek.

PetroRabigh is a joint venture between state oil giant Saudi Aramco and Japan's Sumitomo Chemical,
which engages in the development, construction, and operation of an integrated refining and petrochemical complex.

The key Islamic funding facility, which has been guaranteed by a promissory note, will be used for refinancing existing debts with better terms and conditions and repayment period, in addition to settling other loans, which will reflect positively on the company and its shareholders, said Petro Rabigh in its filing to the Saudi bourse Tadawul.

Under the 12-year facility, Petro Rabigh is granted a grace period until May next year.

Petro Rabigh had in September announced three joint revolving loans and facility agreements valued at SR7.5 billion with the key lenders being Saudi Aramco and Sumika Finance Company.

As MRC reported earlier, in December 2020, Sumitomo Chemical and Axens signed a license agreement of ethanol-to-ethylene technology Atol for Sumitomo Chemical’s waste-to-polyolefins project in Japan. In the project, to promote circular economy, Axens’ Atol technology will transform ethanol produced from waste into polymer-grade ethylene that will be polymerized in Sumitomo Chemical’s assets into polyolefin, a key product in the petrochemical industry.

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

According to MRC's DataScope report, PE imports to Russia decreased in January-November 2020 by 17% year on year and reached 569,900 tonnes. High density polyethylene (HDPE) accounted for the greatest reduction in imports. At the same time, PP imports into Russia increased by 21% year on year to about 202,000 tonnes in the first eleven months of 2020. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.
MRC

After pandemic, oil firms even less willing to cover USD3.9 B cost of S.Africas clean fuel plan

MOSCOW (MRC) -- After being hit by the pandemic, oil companies in South Africa are unlikely to upgrade refineries to cut sulfur emissions unless the government allows them to pass the costs on to consumers or offers other support, the South African Petroleum Industry Association (SAPIA), said Hydrocarbonprocessing.

New rules requiring oil refineries in South Africa to cut diesel sulfur levels to 10 parts per million (ppm) had been due to come into effect in 2017 but have been postponed indefinitely due to a disagreement between the government and SAPIA, which represents oil majors, over who will cover the cost. SAPIA has estimated that it would cost USD3.9 billion for all refineries in the country to upgrade to meet the new rules.

"In the current worldwide refining environment … margins are hovering around zero and a large overhang of … product is presently depressing prices," Avhapfani Tshifularo, executive director of SAPIA, told Reuters in response to emailed questions. "Investment in cleaner fuels in the absence of government support is unlikely to occur," he said.

Pump prices are government-regulated in South Africa and Tshifularo said talks with the government on how companies will recover the cost of investment in cleaner fuel are deadlocked. The Department of Energy did not respond to requests for comment. Cutting diesel sulphur levels to 10 ppm would be in line with European rules.

"Future investment will depend on clarity of the regulations guiding … cost recovery," said a spokeswoman for Royal Dutch Shell, which operates South Africa's largest crude refinery, Sapref, in Durban in a 50/50 joint venture with BP . The pandemic, lower oil demand and pressure from investors to cut carbon emissions have forced oil majors to close some refineries around the world that were operating on very slim margins.

In 2006 South Africa, a net importer of petroleum products, banned lead from petrol and limited sulfur dioxide levels in diesel to 500 ppm, a sixfold decrease. Some refiners have reduced levels to 50 ppm. Still, according to the International Council on Clean Transportation, the health impact of exhaust emissions in South Africa has worsened in recent years. In 2015, there were 1,420 premature deaths linked to vehicle exhausts, a 6.5% uptick from 2010, a report by the council in 2019 showed.

In 2019, South Africa refined 70% of its 12.9 billion liters of diesel needs locally. Some refinery owners have suggested they could exit the domestic market, as the high costs of upgrading refineries to meet cleaner fuel specifications and a new carbon tax are among factors that weigh on capital expenditure projects.

Environmentalists say it is unfair to expect consumers to pay for investment in cleaner fuel. "Why should the consumer pay for cleaner fuels when they (oil companies) have made huge profits at the expense of the people living next to the facilities and who have been affected with asthma, cancer and leukaemia for many years?" said Desmond D'Sa, coordinator of the South Durban Community Environmental Alliance. Durban is the hub of South Africa's petrochemical industry.

We remind that the COVID-19 outbreak has led to an unprecedented decline in demand affecting all sections of the Russian economy, which has impacted the demand for petrochemicals in the short-term. However, the pandemic triggered an increase in the demand for polymers in food packaging, and cleaning and hygiene products, according to GlobalData, a leading data and analytics company. With Russian petrochemical companies having the advantage of access to low-cost feedstock, and proximity to demand-rich Asian (primarily China) and European markets for the supply of petrochemical products, these companies appear to be well-positioned to derive full benefits from an improving market environment and global economy post-COVID-19, says GlobalData.

We also remind that in December 2020, Sibur, Gazprom Neft, and Uzbekneftegaz agreed to cooperate on potential investments in Uzbekistan including a major expansion of Uzbekneftegaz’s existing Shurtan Gas Chemical Complex (SGCC) and the proposed construction of a new gas chemicals facility. The signed cooperation agreement for the projects includes “the creation of a gas chemical complex using methanol-to-olefins (MTO) technology, and the expansion of the production capacity of the Shurtan Gas Chemical Complex”.

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

According to MRC's DataScope report, PE imports to Russia decreased in January-November 2020 by 17% year on year and reached 569,900 tonnes. High density polyethylene (HDPE) accounted for the greatest reduction in imports. At the same time, PP imports into Russia increased by 21% year on year to about 202,000 tonnes in the first eleven months of 2020. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.


MRC

PVC imports to Belarus grew by 39% in Jan-Nov 2020

MOSCOW (MRC) -- Overall imports of unmixed polyvinyl chloride (PVC) into Belarus totalled 49,200 tonnes in the first eleven months of 2020, up by 39% year on year, according to MRC's DataScope report.

According to the statistics committee of the Republic of Belarus, local converters reduced their purchasing of PVC in November 2020 on the back of a seasonal decrease in demand for finished products, total imports were 4,600 tonnes, whereas this figure was 5,800 tonnes a month earlier. Russian resin accounted for the main decrease in procurement.

Thus, imports of unmixed PVC reached 49,200 tonnes in January-November 2020, compared to 35,400 tonnes a year earlier.
Russian producers with the share of about 85% of the Belarusian market were the key suppliers of resin to Belarus over the stated period. Producers from Germany and Ukraine with the share of approximately 8% and 4%, respectively, were the second and third largest suppliers.

MRC

EIA reports draw in US propane/propylene stocks

MOSCOW (MRC) -- US propane and propylene stocks totaled 59.8 million bbl at the end of last week, down 6.2 million bbl, or 9.4%, from the previous week, reported Chemweek with reference to data from the US Energy Information Administration (EIA).

Year-on-year (YOY), stocks were down by 25.8%.

Production decreased by 45,000 b/d to 2.295 million b/d. YOY, it was up 2.6%. Propane and propylene product supplied fell by 225,000 b/d to 1.879 million b/d. YOY, it was up 28.5%.

Exports totaled 1.48 million b/d, up 133,000 b/d from the previous week. YOY, they were up 21%. Imports increased by 25,000 b/d to 174,000 b/d. YOY, they were up 13%.

Propylene is a feedstocks for producing polypropylene (PP).

As MRC informed earlier, PP exports from the US were up 4.2% year on year in the first eleven months of 2020, whereas imports were down 34% year on year over the stated period. Lower imports were mainly due to a sharp drop in imports from Brazil, which supplied large quantities of material in 2019 as a pre-sale of Braskem's new PP plant in La Porte, Texas, which was launched in 2020.

According to MRC's DataScope report, PP imports into Russia increased by 21% year on year to about 202,000 tonnes in the first eleven months of 2020. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.
MRC

SK Advanced to startup new PP plant in South Korea in March

MOSCOW (MRC) -- SK Advanced is planning to start up the new PP plant in Ulsan, South Korea this March 2021 as construction works are nearly completed, reported CommoPlast with reference to market sources.

The PP unit is a joint venture between PolyMirae and SK Advanced, using the “Spheripol” process of LyondellBasell, and have an annual output of 400,000 tons/year.

The unit will be utilizing the propylene output from SK’s 600,000 tons/year propane dehydrogenation (PDH) unit at the same complex. It is expected that SK Advanced would have a smaller propylene allocation for export once the new PP line comes online.

As MRC wrote previously, in October, 2020, Advanced Petrochemical signed an amendment to the partnership agreement between its subsidiary, Advanced Global Investment Co. (AGIC), and SK Gas Petrochemical Pte. Ltd. (SKGP), a unit of SK Gas Co. Ltd.. Under the amendment, an isopropanol (IPA) plant with a capacity of 70,000 tons per annum will be added, along with the Propane Dehydrogenation (PDH) and Polypropylene (PP) plants that were already announced earlier. The company said in a bourse statement that by adding the IPA plant with an estimated cost of SAR 300 million (USD80 million), the total cost of the project for the three factories is currently estimated to be approximately SAR 7.05 billion (USD1.88 billion).

According to MRC's DataScope report, PP imports into Russia increased by 21% year on year to about 202,000 tonnes in the first eleven months of 2020. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.

Advanced Petrochemical Company (before Advanced Polypropylene) is a Saudi Joint Stock Company, established in October 2005. The company was initially launched by National Polypropylene Limited, jointly owned by Mr. Khalifa Al Mulhim, the chief executive officer of Advanced, and Mr. Monther Laheeq, who negotiated all the main deals related to the project, either before or after the establishment of Advanced Petrochemical. Currently, National Polypropylene Limited controls 7.9% of Advanced Petrochemical. Advanced Petrochemical started the construction of its plants in May 2005. The company produces 455,000 tons per year of propylene and 450,000 tons per year of polypropylene from its production facility located in Jubail Industrial City, in the Eastern coast of the Kingdom of Saudi Arabia.
MRC