ADNOC acquires six VLCCs

MOSCOW (MRC) -- ADNOC Logistics & Services (ADNOC L&S), the shipping and maritime logistics arm of Abu Dhabi National Oil Company (ADNOC), announced the acquisition of six Very Large Crude Carriers (VLCCs), according to Hydrocarbonprocessing.

Two VLCCs have already been deployed into the company’s fleet. ADNOC L&S has placed an order for three newbuild vessels with options, which will be delivered in 2022 and 2023, and purchased one additional existing vessel that will be joining its fleet shortly. These vessels are the first crude carriers to join the ADNOC L&S fleet, adding a total cargo capacity of 12 million barrels.

ADNOC L&S, which is currently the largest integrated maritime logistics and shipping company in the GCC, and owner and operator of the largest shipping fleet in the UAE, is pursuing a major fleet expansion program. This will enable the company to provide better service to its global customers, while also supporting ADNOC as it expands its production and refining capacity and grows its new trading operations. ADNOC has established two new trading companies: ADNOC Trading, which is focused on crude oil and started derivatives trading in September 2020; and ADNOC Global Trading (AGT), a joint venture with ENI and OMV that focus on trading of refined products and began operations in December 2020.

Captain Abdulkareem Al Masabi, CEO, ADNOC Logistics and Services said, “The acquisition of these six VLCCs is one of our most significant growth steps to-date. This strategic move allows us to offer new services to our customers and supports ADNOC and its Trading entities to access new global energy markets, while also delivering incremental value and a new revenue stream to our business.”

“Given recent market conditions, we were able to purchase both existing and newbuild vessels at competitive prices. Owning these vessels will deliver cost efficiencies for our business, as opposed to chartering vessels, while also enabling us to provide a more reliable service to customers. These purchases also further reinforce our position as the largest, fully integrated logistics and shipping company in the region, paving the way for the transportation of greater crude volumes to customers across the world.”

The latest purchases by ADNOC L&S reflects the company’s continued focus on modernizing, growing and diversifying its fleet. Built to ADNOC’s specification, the newbuild vessels will be equipped with industry-leading Smart Ship technology. While the specialist manufacturing facilities for this type of VLCC are only available in a limited number of countries, predominantly in Asia, ADNOC L&S secured higher levels of In-Country Value (ICV) for this important contract by ensuring that Project Management and design work for the newbuild vessels is undertaken in the UAE. In addition, a team of young UAE nationals from ADNOC L&S will work closely with the design and project management teams to enhance their knowledge and experience in the design, construction and future maintenance of VLCC vessels.

The six vessels, each with a minimum length of 330 meters (1,082 feet), will have a 300,000 metric tonnes deadweight and the ability to carry nearly two million barrels of crude oil, adding a total of 12 million barrels capacity to the ADNOC L&S fleet. Two VLCCs were delivered in December and are already operational on key ADNOC Trading routes and one additional existing vessel purchased this week will join the fleet shortly.

The establishment of a new VLCC fleet comes as ADNOC progresses its plans to grow its oil production capacity. The company currently has a capacity of over 4 mbopd, which it intends to grow to 5 mbopd by 2030.

ADNOC L&S grew its fleet with 16 deep-sea vessels in 2020. In addition to its new VLCC fleet, the company confirmed the order of five newbuild and one recent second-hand Dual Fuel Very Large Gas Carriers (VLGCs) for AW Shipping, its Joint Venture with Wanhua Chemical Group, and recently announced the purchase of four bulk carriers (3 Ultramax and 1 Handysize).

These orders add to ADNOC L&S’s fleet of 120 owned vessels, which includes deep-sea shipping, offshore support and marine services vessels. The ADNOC L&S international trading fleet transports crude oil, refined products, dry bulk, containerized cargo, LPG and LNG on its owned and chartered vessels, supporting ADNOC’s operations locally and facilitating the shipment of commodities to global markets.

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 2,220,640 tonnes in 2020, up by 2% year on year. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, polypropylene (PP) shipments to the Russian market reached 1 240,000 tonnes in 2020 (calculated using the formula: production, minus exports, plus imports, excluding producers' inventories as of 1 January, 2020). Supply of exclusively PP random copolymer increased.
MRC

Agilyx and ExxonMobil form JV to supply plastics recycling industry

MOSCOW (MRC) -- Agilyx Corporation (AGLX), a wholly owned subsidiary of Agilyx AS (Euronext Growth (Oslo): “AGLX”) and a leader in advanced recycling technology, established Cyclyx International LLC., on January 1, 2021, said Hydrocarbonprocessing.

ExxonMobil joined Agilyx to become a founding member of the joint venture which is focused on helping increase plastic waste recycling. Cyclyx will aggregate and pre-process plastic waste to meet the technical requirements of a wide range of recycling processes while ensuring reliable supply of feedstock to its customers. Cyclyx aims to transform the current supply chain and help accelerate the growth of the advanced recycling industry by connecting companies looking for plastic waste solutions with customers engaged in recycling initiatives.

The joint venture combines Agilyx’s expertise in plastic waste conversion with ExxonMobil’s technology expertise and large-scale petrochemical manufacturing network. As part of the agreement, Cyclyx will help supply plastic waste feedstocks for ExxonMobil’s advanced recycling projects. Advanced recycling involves breaking down plastic waste to its molecular building blocks which are then used in the process of making virgin-quality plastic and other valuable products.

"This is a significant milestone for Agilyx and Cyclyx, as it marks the beginning of an entirely new approach to plastic waste recovery,” said Tim Stedman, chief executive officer at Agilyx. “Our mission at Agilyx is clear – to help solve the issue of plastic waste."

“This joint venture represents an entirely new proposition about the way we handle plastic waste,” said Joe Vaillancourt, newly appointed chief executive officer of Cyclyx. “The Cyclyx business model brings tangible solutions, turning plastic waste into valuable new products. Leveraging Agilyx’s expertise in plastics recycling and the scale of partners like ExxonMobil, we aim to create a lasting and impactful change."

"We see Cyclyx as helping to fill an important missing link in the plastics recycling value chain that is needed for advanced recycling solutions to scale,” said Karen McKee, President of ExxonMobil Chemical Company. “We share society’s concern about plastic waste, and our new joint venture is an important step in our efforts to develop advanced recycling technologies and approaches to help meet demand for certified circular polymers."

ExxonMobil holds a 25 percent equity interest in Cyclyx with Agilyx owning the remaining 75 percent. In addition to supplying plastic waste to Agilyx’s customers and ExxonMobil, Cyclyx also aims to supply other customers with feedstock solutions for a wide range of recycling initiatives.

Cyclyx invites other companies to join as members, connecting waste producers with advanced and mechanical recyclers through innovative supply chains. Members could include retailers, brand owners, waste management companies, petrochemical companies, municipalities and others looking for solutions to address plastic waste in the environment.

As MRC informed before, earlier this week, ExxonMobil Corp said it will close its 72-year-old Altona refinery in Australia, the country’s smallest, and convert it to a fuel import terminal as refiners struggle with low demand.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,220,640 tonnes in 2020, up by 2% year on year. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased.

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

Indorama reports lower profit despite higher volume

MOSCOW (MRC) -- Thailand-listed Indorama Ventures Ltd (Ltd) expects demand recovery for its products to continue this year after it swung to a net profit of Thai baht (Bt) 1.61bn ($54m) in the fourth quarter of 2020, said Chemweek.

Fourth-quarter earnings were driven by stronger production volumes and contributions from its polyethylene terephthalate (PET) business. IVL's overall production rose by 21% year on year to 3.48m tonnes in the fourth quarter. Core EBITDA at its combined PET business rose by 31% year on year to USD177m in October-December 2020.

In 2021, the uptrend in crude oil prices is expected to positively impact its PET premiums this year and result in positive inventory valuation gains, IVL said in a statement. "We see robust demand for PET and tightness in the market, which will be positive for spreads across our value chain of paraxylene (PX), purified terephthalic acid (PTA) and monoethylene glycol (MEG)," the company said.

Moreover, higher freight costs from Asia to Europe and Americas increases the landed cost (import parity) into these net importing western countries, and IVL stand to benefit from being a domestic producer in these markets, it said. "Overall, we anticipate volumes growth to meet robust demand," the company said. In its integrated oxides and derivatives business, further recovery in monoethylene glycol (MEG) demand is expected this year, IVL said.

"We expect IVL to post solid Q1 earnings driven by higher PET spreads in both Asia and the west, healthy production volume, and continuing improvement in fiber and integrated oxides and derivatives units," said Naphat Chantaraserekul, analyst at Thai brokerage Krungsri Securities. The improvement at its oxides unit will be driven by methyl tertiary butyl ether (MTBE) as demand is recovering after lockdown in South America, its key export market, he added.

Higher crude oil price is improving the MEG benchmark price and the US shale gas advantage, widening MEG spreads, it said. Crack margins have also recovered since the fourth quarter of last year, driven by strong derivatives demand and higher crude oil prices, the company noted. The company said that its construction of an integrated PET/PTA plant at Corpus Christi in Texas, US is expected to be completed in 2024. The plant is expected to produce 367,000 tonnes/year of PET and 433,000 tonnes/year of PTA.

As per MRC, Indorama Ventures (Bangkok, Thailand) has opened a recycling facility at Verdun, France and expanded two recently acquired facilities at Bielsko-Biala and Leczyca in Poland. The company says that 10 billion post-consumer polyethylene terephthalate (PET) plastic bottles from across Europe will be recycled every year by 2023 in its new and expanded facilities in France and Poland.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,220,640 tonnes in 2020, up by 2% year on year. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, polypropylene (PP) shipments to the Russian market reached 1 240,000 tonnes in 2020 (calculated using the formula: production, minus exports, plus imports, excluding producers' inventories as of 1 January, 2020). Supply of exclusively PP random copolymer increased.
MRC

Rompetrol reports loss for petchems business despite higher volumes

MOSCOW (MRC) -- Rompetrol Rafinare (Navodari, Romania) reports a net loss of $37.3 million for its petrochemicals business for the full year 2020, narrowing from a loss of USD48.4 million the previous year, on sales that fell USD24.0 million to USD149.2 million, according to Chemweek.

Figures for the fourth quarter were not available. EBITDA for the year was negative at USD26.3 million, a slight improvement on 2019’s EBITDA loss of USD29.1 million.

The net loss comes despite a year-on-year (YOY) rise in Rompetrol’s production volumes of polymers and ethylene, it says. Total production of polymers was 143,000 metric tons in 2020, up 13% compared with the prior year, due mainly to an improved operating schedule for the company’s low-density polyethylene (LDPE) plant, it says. Total processed polypropylene (PP) volumes fell YOY to 117,000 metric tons from 153,000 metric tons in 2019, while total ethylene production volumes rose in 2020 to 66,000 metric tons from 38,000 metric tons the previous year. Total product sales volumes was 160,000 metric tons for the year, down slightly on 2019.

Rompetrol reported a group net loss for the year of USD220.1 million, widening from a loss of USD48.9 million in 2019, on sales that declined to USD3.46 billion from USD5.19 billion a year earlier. The loss was largely due to the impact of the COVID-19 pandemic on its refining business, which reported a net loss of $203.6 million, compared with a loss of USD16.9 million in 2019.

As MRC informed earlier, the petrochemical activities of Romanian Rompetrol Group have been integrated in the refinery arm since November, 2013, in a move designed to cut costs and increase the overall efficiency of the group’s operations. "The integration of the two companies represents the continuation of Rompetrol Group’s strategy to concentrate the production activity in a single activity", said then Rompetrol in a statement.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,220,640 tonnes in 2020, up by 2% year on year. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, polypropylene (PP) shipments to the Russian market reached 1 240,000 tonnes in 2020 (calculated using the formula: production, minus exports, plus imports, excluding producers' inventories as of 1 January, 2020). Supply of exclusively PP random copolymer increased.

Rompetrol, the only producer of PP and PE in Romania, is majority owned by Kazakhstan’s KMG International Group with a 54.63% shareholding, with the Romanian government owning the remaining 44.7%.
MRC

BASF earnings, sales soar on higher volumes, prices

MOSCOW (MRC) -- BASF has posted a strong rise in its fourth-quarter earnings and sales, beating consensus and in line with preliminary figures released earlier this month, and is forecasting a significant rebound in annual earnings and sales for 2021, said Chemweek.

Net profit soared in the quarter to EUR1.06 billion (USD1.29 billion) from €150 million in the prior-year period, with sales rising 8% year on year (YOY) to EUR15.91 billion. EBIT before special items was EURE1.11 billion, up 32% YOY and also beating analysts’ consensus estimates, with the rise due primarily to significantly increased earnings in the materials, chemicals, and industrial solutions segments on higher volumes and prices, it says. EBIT before special items in BASF’s materials segment rose to €489 million from EUR80 million a year earlier, chemicals segment EBIT increased 97% YOY to EUR227 million, and industrial solutions EBIT grew 85% YOY to EUR200 million.

For 2021, BASF says it expects full-year sales to grow to between EUR61.0-64.0 billion, up from EUR59.15 billion in 2020, with EBIT before special items for the year forecast at between EUR4.1-5.0 billion, increasing from €3.56 billion in 2020. The year-ahead earnings outlook is lower than consensus of EUR5.0 billion but “potentially conservative,” according to Bernstein Research (London, UK). The sales outlook is slightly ahead of consensus, it says. “Encouragingly, January volume development also looks to be positive,” it adds.

“BASF was able to close out the year on a strong note,” says BASF chairman Martin Brudermuller. The company’s overall sales volumes rose 7% YOY in the fourth quarter, with growth seen in all regions. “In Greater China, we continued to see double-digit volumes growth. Sales volumes rose in almost all segments in the final quarter of the year,” he says. For some commodity product lines, such as isocyanates, BASF was able to significantly expand margins, he adds. Prices increased by 7%, driven mainly by the surface technologies, agricultural solutions, and materials segments, according to Brudermuller.

BASF says it expects the global economy to recover in 2021 but that “uncertainty about future developments remains exceptionally high.” The company’s outlook for this year assumes growth in customer industries, “especially the automotive industry,” says Brudermuller. The global economy is expected to see significant growth of 4.3% compared with 2020, with worldwide chemical production expected to grow 4.4% in 2021, “well above the prior-year level,” he says. Global chemical production declined 0.4% in 2020, according to BASF.

For the period 2021-2025, BASF says it plans capital expenditure (capex) of EUR22.9 billion in total, with APAC accounting for 41% of the investments, mostly in China, and Europe 39%. BASF plans capex of EUR3.6 billion overall in 2021, a rise of 15% over 2020, it says.

BASF's carbon dioxide (CO2) emissions are expected to stabilize at between 20.5-21.5 million metric tons in 2021, according to the company.

As MRC wrote before, late last week, BASF said it was restarting one of its steam crackers at its Ludwigshafen complex in Germany after operations were halted last Wednesday due to a technical issue. The naphtha cracker produces ethylene and propylene, and is one of two crackers on the site. One has a production capacity of 420,000 metric tons/year, with the other’s capacity at 240,000 metric tons/year, according to IHS Markit data.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,220,640 tonnes in 2020, up by 2% year on year. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, polypropylene (PP) shipments to the Russian market reached 1 240,000 tonnes in 2020 (calculated using the formula: production, minus exports, plus imports, excluding producers' inventories as of 1 January, 2020).

BASF is the leading chemical company. It produces a wide range of chemicals, for example solvents, amines, resins, glues, electronic-grade chemicals, industrial gases, basic petrochemicals and inorganic chemicals. The most important customers for this segment are the pharmaceutical, construction, textile and automotive industries.
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