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Venezuelan petrochemicals arrive in US despite Washington efforts to limit trade

November 29/2021

MOSCOW (MRC) -- Venezuelan petrochemicals produced by joint ventures between state-run chemical firm Pequiven and foreign partners have arrived in the United States, despite Washington's efforts to limit trade with the OPEC oil and gas producer, reported Reuters.

At least two cargoes of methanol, a widely used industrial product whose prices have soared this year, have discharged at Houston area ports since October amid a rapid expansion of the South American country's global sales of petrochemicals and oil byproducts, according to tanker tracking and US customs data.

The shipments represent a new and unreported effort by Venezuela to boost revenues despite US sanctions on its oil industry that cut vital crude exports to the lowest in 77 years.

US sanctions were designed to oust President Nicolas Maduro, whose last election Washington views as a sham. Maduro insists the 2018 vote was free and fair.

Mitsubishi Corp resumed exports of methanol to the United States in 2021 from its Venezuelan joint venture Metor after a suspension of a couple years, a Mitsubishi spokesperson told Reuters. Metor's shareholders include Petroquimica de Venezuela, or Pequiven.

Venezuela's main oil port of Jose was listed as the point of origin on US customs records of one of the two methanol shipments, but both sailed directly from Venezuela, Refinitiv Eikon tracking data showed.

Methanol, produced in Venezuela from natural gas, can be found in everyday products including gasoline, paints, carpeting and plastics. US imports have outweighed exports in recent years, according to IHSMarkit.

On Oct. 7-11, tanker PVT Aurora discharged about 16,900 metric t of Venezuelan methanol in Texas. A portion of the cargo was handled by Intercontinental Terminals Company's (ITC) Deer Park chemicals terminal, according to Refinitiv Eikon data.

A second 20,000-ton cargo of Venezuelan methanol followed a similar route in November on tanker Sakura Advance, which discharged some of its cargo in Houston on Nov. 11-13 and another parcel at South Louisiana Port days later, according to the Eikon data.

Italy's Eni also produces methanol in Venezuela via Supermetanol, its 50:50 venture with Pequiven.

"Eni's affiliate holds a stake in a methanol plant located in Venezuela and deals with the marketing of its equity production in respect of all applicable laws and regulations related to economic and financial sanctions, trade embargoes and similar laws," an Eni spokesperson said.

Pequiven and PDVSA have ramped up exports of petrochemicals and oil byproducts that are not as valuable as crude and until recently had not been a priority, an analysis of internal data from the two companies showed.

US sanctions and warnings to traditional buyers of Venezuelan crudes sharply cut PDVSA's exports in recent years. But shipments of petrochemicals and oil byproducts have climbed, including exports of methanol, sulfur pastilles, urea, natural gasoline, light virgin naphtha and petroleum coke, according to the data. This was confirmed by three people familiar with the matter, who declined to be identified as they were not authorized to speak publicly.

Low prices offered to buyers for the petrochemicals from Venezuela have boosted exports, generating income that has partially been used by some of Pequiven's joint ventures to reopen and revamp production units, the people said.

A more reliable supply of natural gas by PDVSA to Pequiven's complexes also helped boost petrochemical output.

"The plants are in recovery process as proceeds from sales have allowed," one of the people said. "Even the United States is opening its doors to Venezuelan methanol."

From January to October, PDVSA and Pequiven exported about 1.75 MM tons of petrochemicals and byproducts, putting the trade on track this year to double the 1.03 MM tons exported for the whole of 2020, according to the internal data.

Shipments of methanol this year ranged between 20,000 and 60,000 metric t per month, mostly bound for the Netherlands, Spain, Japan and China, according to the data and the three people.

As MRC reported earlier, in April 2021, Origin Materials, Inc., the worlds leading carbon negative materials company, and Mitsubishi Gas Chemical, Inc., a global leader in basic and fine chemicals and advanced materials, announced a partnership to industrialize and manufacture advanced chemicals and materials built on the Origin Materials technology platform.

We also remind that Japan's Mitsubishi Corp will invest 2 trillion yen (USD17.54 B) by 2030 in alternative energies such as renewables and hydrogen to drive its decarbonization efforts and cut emissions.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,868,160 tonnes in the first nine months of 2021, up by 18% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,138,510 tonnes in January-September 2021, up by 30% year on year. Supply of propylene homopolymer (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding statistical copolymers of propylene (PP random copolymers) decreased significantly.
Author:Margaret Volkova
Tags:PP, PE, crude and gaz condensate, petrochemistry, Eni, Venezuela, Italy, USA, Japan.
Category:General News
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