Eni looks for Polish shale exit

MOSCOW (MRC) -- Italy’s Eni is set to deal Poland’s fledgling shale gas industry a further blow by joining other large oil players in pulling out, reported Upstreamonline.

The major is set to let its three concessions in the north of the country expire, according to a report in Polish newspaper Pulz Biznesu, citing unidentified sources.

Reuters later reported that Eni has already let two of the licences expire, citing confirmation from Poland's Environment Ministry. The third licence is due to expire in June.

Nobody was immediately available for comment at Eni on Tuesday.

Companies have begun an exodus from Poland amid unclear regulations and mixed well results.

Last year independents Marathon Oil and Talisman Energy followed US supermajor ExxonMobil in quitting the Polish shale arena, which was once seen as Europe's best shale prospect with substantial reserves and a friendly government.

Poland is trying to make its unconventionals market more attractive with a draft law to regulate the exploration for and extraction of shale gas set for approval.

In December, however, Chevron signed a preliminary deal with Poland’s PGNiG that may lead to the joint exploration for shale gas in the south-east of the country. US giant ConocoPhillips also remains in the Polish shale game.
MRC

MOSCOW (MRC) -- Saudi Arabia’s Yanbu National Petrochemical Co (Yansab) posted a 31% slump in fourth-quarter net profit on Monday, citing a shutdown at its plant for the decline, said Gulfbusiness.

The firm made a net profit of SAR442.2 million (USD117.9 million) in the three-month period to Dec. 31, it said in a bourse filing, down from SAR640.8 million during the same period of 2012.

The earnings were well below the average forecast of seven analysts polled by Reuters, who expected a net profit of SAR619.3 million for the quarter. Yansab attributed the fall to the shutdown of its complex and an increase in its Zakat payment. Zakat is a charitable donation which firms in Saudi Arabia are obligated to pay.

Yansab, a subsidiary of Saudi Basic Industries Corp , was forced to shut its petrochemicals complex for three weeks for maintenance at the end of October due to a problem with a water cooling network. It estimated the financial loss from the shutdown, at the time, as SAR160 million.

Full-year profit for 2013 was higher year-on-year. Yansab reported a net profit of SAR2.64 billion, versus SAR2.45 billion in 2012, citing higher prices for its products and lower financing costs.

Yansab produces 400,000 tonnes/year each of high density PE (HDPE), linear low density PE (LLDPE) and polypropylene (PP). Yansab, a joint-stock company, is 51%-owned by petrochemical giant Saudi Basic Industries Corp (SABIC).

MRC

MOSCOW (MRC) -- The Asia-Pacific market is anticipated to be a leader for polyolefins with respect to demand. The region has the presence of most global leaders in polyolefins manufacturing. Polyolefins consumption in the region is estimated to grow at a CAGR of about 6.2% from 2013 to 2018, said International.

The region has a relatively high growth rate as a result of its continuously increasing demand. The demand in the region is mainly due to the increasing appetite for polyolefins in China.

The Middle East, being the second fastest growing polyolefins market world-over, is estimated to grow at a CAGR of 5.5% for the next five years. Middle East is witnessing high industrial growth which hints at an increasing demand for polyolefins for its diverse applications. Saudi Arabia dominates the polyolefins market in the Middle East being a major consumer and the fastest growing country in terms of polyolefins production. Currently, a high share of polyolefins is consumed by the film & sheet industry and the demand for polyolefins through film & sheet industry is expected to grow in next five years at a CAGR of more than 4.7% from 2013 to 2018.

Other Middle East countries are also showing increasing growth in demand for polyolefins. Moreover, polyolefin manufacturers from Middle Eastern countries are putting vigorous efforts for developing a strong base of polyolefins market, with a target of rising polyolefins exports.

MRC

MOSCOW (MRC) -- Formosa Plastics Corp, the nation’s largest producer of polyvinyl chloride, said that it is considering building a factory to make 1.2 million tonnes of ethylene a year in the US state of Louisiana, using shale gas, said Taipeitimes.

The company did not disclose how much it might invest because it needs to conduct further studies to evaluate the project, Formosa Plastics chairman Lee Chih-tsuen said in a speech to the company’s employees in Greater Kaohsiung.

Lee made the statement a day after Louisiana Governor Bobby Jindal visited the company’s headquarters in Taipei.
"The governor called on us to invest not only in Texas, but also in Louisiana, because the tax rate in the state is the same as in Texas, while gas prices in Louisiana are actually lower," Lee said.

To utilize shale gas in the US, the company is planning to invest USD3 billion in Texas to set up a facility that would produce 2 million cubic meters of gas annually, 1.2 million tonnes of ethylene, 600,000 tonnes of propylene and 400,000 tonnes of high-density polyethylene, Lee said. He added that the project is expected to be completed in the first quarter of 2017.

The company plans to process ethylene and propylene in the US instead of shipping these products to Asia, because of the high cost of transporting them.

Ethylene production in the Middle East accounts for about 17% of global ethylene production, and the percentage is not likely to be more than 20% in the future because there is not a lot of cheap gas to use in the region, he added.

Formosa Petrochemical is involved primarily in the business of refining crude oil, selling refined petroleum products and producing and selling olefins (including ethylene, propylene, butadiene and BTX) from its naphtha cracking operations. Formosa Petrochemical is also the largest olefins producer in Taiwan and its olefins products are mostly sold to companies within the Formosa Group. Among the company"s chemical products are paraxylene (PX), phenyl ethylene, acetone and pure terephthalic acid (PTA). The company"s plastic products include acrylonitrile butadiene styrene (ABS) resins, polystyrene (PS), polypropylene (PP) and panlite (PC).
MRC

MOSCOW (MRC) - Russia's imports of polyvinyl chloride PVC fell to 367,000 tonne in 2013 compared with 411,000 tonnes in 2012 on increased domestic production and weaker demand from profiled mouldings producers, according to MRC DataScope report.

PVC imports are expected to be cut further in the current year because of a gloomy demand for finished products made of PVC and oncoming launch of new capacities of RusVinyl in Nizhny Novgorod region.

Last year was quite difficult for the Russian PVC market. Excess imports in the first half of the year led to a serious oversupplied market, with record highs in March and April exceeding 54,000 tonnes. As a consequence, competition between importers and producers has tightened due to the weak demand.
The situation changed in the second half of the year on the back of devaluation of the rouble against the dollar. Rise of the dollar and lower PVC prices in the domestic market made many converters refrain from imports and focus only on the Russian resin. Traders also cut their purchases of imported PVC.

As a consequence, imports of resin to Russia decreased in September - December 2013 to the level of 2010. Although Russia had to reduce import duties on large volumes polymers to 6.5% by 2015 in the framework of WTO, import duties on SPVC remained at 10%, whereas import duties on other polymers, such as polyolefins, were reduced to 9.1%. The question remains open whether the duties will be reduced in September 2014.

European PV producers reduced their supplies to Russia in 2013 to 10% from the total Russia's PVC imports to 36,500 tonnes. Imports of US resin also reduced to 179,200 tonnes in 2013, from 193,400 tonnes in 2012. Only Chinese producers managed to increase its presence in the Russian market last year. Imports of Chinese acetylene PVC increased by 42% to 136,300 tonnes in 2013.

Russia's imports of PVC is expected to be cut further in 2014. Seasonally weak demand and and the volatility of the rouble against the dollar will put pressure on the market in the first half of the year. In the second half of this year PVC imports will be affected by the oncoming launch of RusVinyl - joint venture of SIBUR and Solvin with an annual SPVC capacity of 300,000 tonnes. According to unofficial information the production to be launched in July 2014. Imports volumes will be largely depend on the data of the launch of new Rusvinyl.

MRC