Lukoil commissions new production complex at Volgograd refinery

MOSCOW (MRC) -- Presidential Plenipotentiary Envoy to the Southern Federal District Vladimir Ustinov, Russian Minister of Energy Nikolai Shulginov, Governor of the Volgograd region Andrei Bocharov and President of Lukoil Vagit Alekperov took part in the opening of a high-viscosity index oils production complex at the Volgograd refinery, according to Hydrocarbonprocessing.

The production facility includes a de-asphalting unit and a fractionation unit for unconverted oil. The construction of the complex started in October 2018. This project is a part of Lukoil's program to upgrade its lubricants production assets. Implementation of the program will provide consumers with efficient high-tech products that hold up to the best international standards.

Use of advanced high viscosity base stocks renders possible production of engine oils suitable for modern industrial vehicles and cargo trucks that function in rough environments and cold weather. Another major advantage of these oils is their increased oxidation resistance, which provides for longer drain periods. Lukoil's cumulative investment in the new facility amounts to 10 billion roubles.

The company also continues construction of the second stage of the solar power plant (SPP) with installed capacity of 20 MW at the Volgograd refinery. Its launch, set for 2021, will increase the SPP total capacity up to 30 MW.

Commissioning of the second stage of the SPP will also provide additional 24 million kWh of green energy per year, which is equal to an annual reduction of CO2 emissions by 12 thousand tons.

"Today we are here to launch a unique production facility, and it is not just about equipment, it is about people. Over 4 thousand employees work here. Therefore, this launch affects not only production, but also social sphere. I have been to the Volgograd refinery a number of times and each time I see changes, I see something new. Congratulations on opening the new complex and thank you for everything you do," said Vladimir Ustinov, Presidential Plenipotentiary Envoy to the Southern Federal District.

"Lukoil is a leader in modernization of refineries. Between 2011 and 2020, the company invested over 163 billion roubles under four-way agreements. Ten secondary processing units were commissioned at Lukiol refineries. This year, an isomerization unit is set for launch at the refinery located in the city of Kstovo, Nizhny Novgorod region. All this enabled Lukoil to become the first Russian company that produces only fuels compliant with class 5 environmental standards," said Nikolai Shulginov, Russian Minister of Energy.

"Lukoil is a strategic partner of the Volgograd region. The company carries out many large-scale investment projects and honours its commitments. With the opening of the new complex, the Volgograd region and the whole of Russia will receive products that hold up to world's highest standards, and this will directly support import substitution. The launch of the project will also decrease energy demand, lessen environmental load and improve quality of the products," noted Andrei Bocharov, Governor of the Volgograd region.

?"The Volgograd refinery is one of the most efficient in Russia. Over the years, Lukoil invested 172 billion roubles in its modernization, thus increasing depth of refining to 96.7%. Nowadays, despite the pandemic, we carry on with selected investment projects to further enhance the product range of our refineries. For example, this year we plan to commission a delayed coking unit at our Nizhny Novgorod refinery," noted Vagit Alekperov, President of Lukoil.

As MRC informed earlier, Russian energy major Lukoil (Moscow) is studying several potential petrochemical projects in Russia and Bulgaria, with investment decisions expected to be made on two of them in 2021.

Thus, Lukoil announced an investment decision in June, 2019, to proceed with a 500,000-metric tons/year polypropylene (PP) plant at its Kstovo refinery. In September this year it selected Lummus Technology’s Novolen PP technology and basic design engineering for the facility’s production unit. Kstovo is one of Lukoil’s largest crude refineries in Russia with a throughput of 17 million metric tons/year, with the company recently adding a catalytic cracking unit that almost doubled the refinery’s production of propylene feedstock to 300,000 metric tons/year.

At Budennovsk in Russia’s far south west, the company’s Stavrolen petchems complex currently has the capacity to produce 350,000 metric tons/year of ethylene, 300,000 metric tons of polyethylene (PE), 120,000 metric tons/year of PP, and 80,000 metric tons of benzene. Lukoil has for several years been considering construction of a new gas chemicals plant at Stavrolen to crack more ethane extracted from associated petroleum gas produced by its oil and gas fields in the north of the Caspian Sea. The potential new plant would raise Stavrolen’s ethylene and PE output to around 600,000 metric tons/year each, and increase PP production to 200,000 metric tons/year.

Ethylene and propylene are feedstocks for producing PE and 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.

Lukoil is one of the leading vertically integrated oil companies in Russia. The main activities of the company include exploration and production of oil and gas, production and sale of petroleum products. Lukoil is the second largest privately-owned oil company in the world in terms of proven hydrocarbon reserves. Lukoil's production capacities include polyethylene polypropylene. The structure of Lukoil includes one of the largest petrochemical plant in Russia - Stavrolen.
MRC

ExxonMobil chemical earnings up on higher margins

MOSCOW (MRC) -- ExxonMobil reports that its chemical segment turned in fourth-quarter 2020 earnings of USD691 million, up from a loss of USD355 million in the year-ago quarter and the best quarterly result since 2018, reported Chemweek.

ExxonMobil says the contribution from margins totaled USD790 million; lower expenses, USD340 million; and higher volumes, USD30 million. These were offset by USD110 in various costs, including a last-in/first-out (LIFO) inventory adjustment. Prime product sales totaled 6.643 million metric tons, up 1.1% year-over-year (YOY) from 6.569 million metric tons.

US chemical earnings totaled USD461 million, up from a USD2 million loss in the year-ago quarter on higher margins and lower expenses. Non-US earnings totaled USD230 million, up from a loss of USD353 million on higher margins and lower expenses, offset by USD71 million in LIFO inventory impact.

Compared to the third-quarter of 2020, chemical earnings increased 4.5% from USD661 million. Prime product sales were essentially even. US earnings increased 29% from USD357 million on higher margins. Non-US results declined 24% from USD304 million as higher margins were offset by higher maintenance expenses, LIFO impact, and a non-cash inventory valuation.

ExxonMobil as a whole reported a fourth-quarter loss of USD20.1 billion, mainly the result of nearly USD19 billion in impairment charges in the upstream segment, versus profit of USD5.7 billion in the year-ago quarter. Revenue totaled USD46.5 billion, down 31% YOY from USD67.2 billion. The upstream segment reported a loss of USD16.8 billion, down from the year-ago quarter’s profit of USD68 million. Downstream reported a loss of USD1.2 billion, down from the year-ago quarter’s profit of USD898 million.

As MRC informed earlier, last year, Exxon Mobil Corp announced it will lay off about 1,900 employees in the United States as the COVID-19 pandemic batters energy demand and prices.

We remind that ExxonMobil has undertaken a planned shutdown at its cracker in Singapore. The company halted operations at the cracker for maintenance on September 14, 2020. The cracker was expected to remain off-line till end-October, 2020. Located at Jurong Island, Singapore, the cracker has an ethylene production capacity of 1 million mt/year and a propylene production capacity of 450,000 mt/year.

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.

ExxonMobil is the largest non-government owned company in the energy industry and produces about 3% of the world"s oil and about 2% of the world"s energy.
MRC

Wacker projects swing to profit in 2020, lower sales due to COVID-19 impact on volumes

MOSCOW (MRC) -- Wacker expects to post a net income of EUR200m in 2020, swinging from a net loss of EUR630m in 2019 on improved operational earnings, the German specialty chemicals firm said.

The company's earnings before income and taxes (EBIT) in 2019 were weighed by an impairment charge of EUR760m on the carrying amount of its polysilicon production facilities. Due to the coronavirus pandemic’s effects, the company’s sales contracted sharply in the second quarter, the company said in a statement.

The company's earnings regained some ground in the third and fourth quarters of last year, supported mainly by robust construction and polysilicon demand, but did not fully make up for the sales slump in the second quarter, it said. "Wacker's sales trend was slowed not only by somewhat lower volumes year over year, but also by price changes and exchange-rate effects," it said.

Volume declines amid the pandemic were especially strong in silicones for the automotive and textile segments, the company said. "Construction demand, on the other hand, remained comparatively stable, while business was very robust for products used in medical, health and hygiene applications," it added.

As per MRC, Wacker Chemie will cut 1,000 jobs by the end of 2022 to save costs and prepare for a “harsher competitive environment”. Munich-based chemical group Wacker Chemie AG has begun its “Shaping the Future” restructuring plan by announcing 1,000 jobs will be lost by the end of 2022 as it aims to save EUR250 million per year. The company announced around 800 posts will be culled at German sites with administrative staff and people working in indirect and non-operational roles those at risk.

Wacker Chemie AG is a worldwide operating company in the chemical business, founded 1914. The company is controlled by the Wacker-family holding more than 50 percent of the shares. The corporation is operating more than 25 production sites in Europe, Asia, and the Americas. The product range includes silicone rubbers, polymer products like ethylene vinyl acetate redispersible polymer powder, chemical materials, polysilicon and wafers for semiconductor industry.

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

Some producers raise February PVC prices in Russia, others roll over January prices

MOSCOW (MRC) -- Global record high prices for suspension polyvinyl chloride (SPVC) proportionally affected prices of polymer in Russia. Domestic producers announced a roll-over and slight price hike for February shipments, despite lower export prices in China, according to ICIS-MRC Price report.

In the second half of 2020, global PVC prices reached record levels over the past 10 years due to a shortage. In January 2021, the situation did not change dramatically, although prices still went down in some regions. A similar situation was registered in the Russian market. Some Russian producers intend to achieve another price increase of Rb2,000-3,000/tonne for February shipments.

In the second half of last year, Russian producers reduced their export PVC sales, and there was no growth in exports this year either. However, Russian producers virtually did not have excessive quantities of resin during the same period of time, and sellers quickly allocated their quotas for February deliveries.

Last year's imports of suspension fell by 20% to 40,800 tonnes. Despite record high prices of Russian PVC, there has been virtually no import alternative for local converters since October 2020. And in fact, the opportunity to resume import supplies of resin appeared only in mid-January.

Thus, Chinese producers similarly reduced their export prices under the pressure of the downward trend of domestic prices for acetylene PVC. Prices dropped by up to USD900/tonne DAP China border. At the same time, complex logistics did not allow to talk about the prompt increase in shipments from China.

The absence of an operational alternative and limited warehouse stocks of Russian producers did not allow to talk about the possibility of price cuts for February deliveries. Moreover, some producers were considering the possibility of raising prices by Rb2,000/tonne and higher partially because of the weakening of the rouble against the dollar.

Negotiations over February shipments of Russian PVC began on Tuesday, deliveries of Russian resin with K64/67 were discussed in the range of Rb112,000-115,000/tonne CPT Moscow, including VAT, for quantities of less than 500 tonnes versus Rb110,000-115,000/tonne CPT Moscow, including VAT.
MRC

PP production in Russia grew 31% in 2020

MOSCOW (MRC) - Production of polypropylene (PP) in Russia increased to about 1,883 mln tonnes in 2020, up 31% compared to 2019.
The main increase in production volumes was provided by ZapSibNeftekhim, as per MRC ScanPlast.

December PP production in the country exceeded 184,700 tonnes, compared with 169,1000 tonnes in November; several producers increased their capacity utilisation. Russia's overall PP production reached 1.883,000 mln tonnes in 2020, compared to 1.441,500 mln tonnes a year earlier. Six out of eight producers increased their capacity utilisation, two producers decreased production volumes.

The structure of PP production by plants looked the following way over the stated period.

SIBUR Tobolsk increased its capacity utilisation in December, the plant's PP production dropped to 51,400 tonnes that month versus 49,200 tonnes a month earlier. Tobolsk-Polymer's PP production reached 505,100 tonnes in 2020, up 8% year on year.

ZapSibNeftekhim produced about 47,600 tonnes of polypropylene in December compared with 40,000 tonnes in November. Overall sales of PP totalled 444,600 tonnes over the stated period.

Poliom increased capacity utilisation to almost 100% in December, and, as a result, produced about 18,700 tonnes of polypropylene, while a month earlier the volume of production did not exceed 15,000 tonnes. The Omsk plant's PP production totalled about 184,200 tonnes over the stated period, down by 14% year on year.
Nizhnekamskneftekhim produced a little more then 19,000 tonnes of propylene polymers in December versus 18,000 tonnes a month earlier.
The Nizhnekamsk plant's overall output of polymer reached 219,700 tonnes in the twelve months of 2020, compared to 211,700 tonnes a year earlier.

Tomskneftekhim produced about 12,800 tonnes of polypropylene in December compared with 12,400 tonnes in November. Total PP production by the producer increased to 148,300 tonnes in January-December 2020, up 1% year on year.

December PP production at Ufaorgsintez was about 11,500 tonnes from 11,300 tonnes a month earlier. The Ufa plant's overall output of polymer reached 120,300 tonnes in January-December 2020, down 6% year on year.

Neftekhimiya (Kapotnya) last month produced about 13,000 tonnes of PP in December, compared with 12,500 tonnes in November. The producer's PP output in 2016 reached 149,800 tonnes, up 9% year on year.

Stavrolen decreased capacity utilisation in December and produced about 10,700 tonnes of propylene polymers versus 10,800 tonnes a month earlier. The Budenovsk plant's overall output of propylene polymers increased in 2020 to 111,000 tonnes from 105,200 tonnes a year earlier.


MRC