Chevron gets Ukraine shale OK

MOSCOW (MRC) -- A second regional council in Ukraine on Thursday approved a government draft for a USD10 billion shale gas production-sharing agreement with US supermajor Chevron, clearing the way for it to be signed, said Upstreamonline.

Deputies in Lviv region voted by 66-to-3 in favour of the draft, which calls for shale exploration in the Olesska block in the west of the country. A council in the neighbouring Ivano-Frankivsk region, whose approval was also necessary, backed the deal last month in a 62-to-1 vote with 11 abstentions.

"Now we will submit the documents to the Cabinet of Ministers and then there will be the signature," energy & fuel minister Eduard Stavytsky told the news wire.

Chevron won the auction for the Olesska block in May 2012. The Olesska deal with Chevron will be the second shale agreement in Ukraine, following one signed earlier this year with Anglo-Dutch supermajor Shell for exploration in Yuzivska in the east.

Shale exploration forms part of plans by Ukraine to diversify its energy sources and ease its dependence on costly natural gas imports from Russia. Speaking to the council, Stavytsky said on Thursday that Chevron would spend several years and USD350 million to assess reserves at Olesska which covers 5260 square kilometres.

Total investments including extraction after exploratory drilling could reach USD10 billion, he said. Deputies in both regions had expressed concern over the ecological consequences of hydraulic fracturing.

Stavytsky says the two shale gas projects could provide Ukraine with an additional 11 billion to 16 billion cubic metres of gas in five years' time.

Gas production in Ukraine totals about 20 Bcm, while the country of 46 million people consumes around 50 Bcm every year. Ukraine imports gas from Russia at about USD400 per 1000 cubic metres.

Ukraine has repeatedly said it wants to diversify energy imports and cut supply from Russia having failed to reach a compromise with Moscow on pricing.
MRC

MOSCOW (MRC) - Czech downstream oil group Unipetrol has acquired technology and production rights for a new polyethylene unit and wants to pick a contractor for the project in the first half of 2014, said Reuters.

The company, after posting net losses in 2011 and 2012, laid out plans in June to invest almost USD1 billion over the next five years and make its petrochemical segment the biggest contributor to profit.

"The construction of a new polyethylene unit is a key investment project in our medium-term strategy," Chief Executive Marek Switajewski said in a statement.

"Our first task is to choose a general contractor. We hope to do it in the first half of 2014."

Unipetrol said it signed a licence agreement with chemicals group Ineos for the right to use a production process and technology for the new polyethylene unit, which will help increase utilisation of its petrochemical steam cracker.

As part of its strategy, Unipetrol wants to increase the capacity utilisation of its steam cracker unit by 13% points and increase sales of petrochemical products by 11%, to 1.4 million tonnes, by 2017.

As MRC wrote before, Unipetrol (PKN Orlen's affiliate) expects petrochemicals to become the largest source of revenue for the company in 2013-2017. Unipetrol wants to use the favourable market conditions to reinforce its position on the petrochemical market and optimise its operations.

Unipetrol , a.s. is a group of companies operating in the petrochemical industry in the Czech Republic. In 2005 Unipetrol became a part of the PKN ORLEN Group, the largest oil processor in Central Europe. The UNIPETROL Group is oriented mostly towards oil processing, fuel distribution and petrochemical production. In all of these business areas the Unipetrol Group is among the key players both in the Czech Republic and on the Central European market. The Group ranks among the leading firms in the Czech Republic in terms of its revenues, and employs almost 4,000 people.

MRC

MOSCOW (MRC) -- LyondellBasell and Oiltanking Stolthaven Antwerp today announced that Lyondell Chemie Nederland BV and Oiltanking Stolthaven Antwerp NV have signed a 10-year agreement for the storage and handling of Glacial Acetic Acid (GAA) and Vinyl Acetate Monomer (VAM) in Antwerp, said the company in its press-release.

Oiltanking Stolthaven will invest in new stainless steel storage capacity and rail loading infrastructure at Antwerp.

GAA is one of the world's most essential intermediate chemicals. It is used to manufacture VAM, purified terephthalic acid, acetic anhydride, monochloroacetic acid and acetate esters. VAM is a chemical building block used to manufacture a wide variety of industrial and consumer products such as polyvinyl acetate for paints, adhesives and coatings. Polyvinyl alcohol is also used to make adhesives, coatings and water soluble packaging films. Polyvinyl acetals are used to produce insulation for magnetic wire, interlayers for safety glass, wash primers and coatings. Other related applications of ethylene vinyl acetate copolymers include flexible films, coatings, adhesives, moldings and insulation and packaging.

LyondellBasell is a global supplier of GAA and VAM. Its customers are served by a global storage and distribution network that spans North America, Europe and Asia.

As MRC wrote earlier, LyondellBasell has permanently shuttered one of its HDPE production lines at its German site in Wesseling – a step it said it would achieve in Q3. The line, which had a capacity of 100,000 t/y, was the smallest and least efficient at the production site.

LyondellBasell is one of the world's largest plastics, chemical and refining companies and a member of the S&P 500. LyondellBasell products and technologies are used to make items that improve the quality of life for people around the world including packaging, electronics, automotive parts, home furnishings, construction materials and biofuels.

Oiltanking Stolthaven Antwerp NV is a 50/50 joint venture company between Oiltanking GmbH and Stolthaven Terminals BV, a subsidiary of Stolt Nielsen Transportation Group. Oiltanking GmbH is a subsidiary of Marquard & Bahls AG, Germany, a leading petroleum company, privately owned. Oiltanking is the second largest independent tank storage provider for petroleum products, chemicals and gases worldwide.

MRC

MOSCOW (MRC) -- The period of anti-dumping investigation regarding polyvinyl chloride (PVC) imports to Ukraine from the United States was extended yesterday at a meeting of the Interdepartmental Commission on International Trade, said MRC analysts.

The meeting of the Interdepartmental Commission on International Trade, which examined issues regarding the protection of national producers in relation to unfair imports to Ukraine, was held yesterday, on 3 October. One of the issues was determining the fact of dumping by US suspension polyvinyl chloride (SPVC) producers and introduction of anti-dumping duties.

It was decided at the meeting to investigate more thoroughly certain factors, with regard of which, the period of investigation was extended up to 16 months, starting from 3 October.

As reported earlier, Karpatneftekhim (part of Lukoil), the largest Ukrainian petrochemical plant and the only PVC producer in the country, turned to Department of Economic Development with a request to conduct an anti-dumping investigation concerning PVC imports from the USA.

According to MRC data, the overall PVC imports to Ukraine from the USA totalled 34,500 tonnes in 2012. This index rose to 44,100 tonnes in the first eight months of 2013.
MRC

MOSCOW (MRC) - European producers decreased prices of polypropylene (PP) for deliveries for the CIS markets on the back of falling feedstock costs. Thus, the price of European PP for October delivery was announced down by EUR40-80/tonne from the level of September, according to ICIS-MRC Price Report.

October contract price of propylene in Europe was agreed down by EUR40/tonne from the September level. Because of the price cuts of the feedstock European producers had to reduce PP prices for October.

The negotiation on October European PP prices for CIS markets began this week. Some market participants said that the deals for homopolymer PP were heard n the range of EUR1,180-1,280/tonne FCA.

Deals for block copolymers of propylene (PP-block) were at EUR1,280-1,320/tonne FCA. Market participants have been slow to contract PP, on the back of the September situation when some producers cut prices for homopolymer PP to EUR1 ,210-1, 240/tonne FCA, while in the beginning of the month prices were announced at EUR1,250-1,270/tonne FCA.

Current strengthening of the Euro against major world currencies (the growth of the euro partly offset the falling PP prices) also limits the number of deals for European PP by companies from the CIS countries.

MRC