Sinopec sees widening refining margins

MOSCOW (MRC) -- Top Asian refiner China Petroleum & Chemical Corp. (Sinopec) has posted a better-than-expected 7.5% increase in first-half profit as refining margin at Asia’s biggest refiner widened and production climbed, as per Hydrocarbonprocessing.

Net income was 32.5 billion yuan (USD5.3 billion), or 0.28 yuan a share, in the six months ended June 30 from 30.3 billion yuan, or 0.25 yuan, a year earlier, the Beijing-based company, known as Sinopec, said Friday in a filing to the Shanghai stock exchange. The average of six analyst estimates, compiled by Bloomberg, was a profit of 30 billion yuan.

Sinopec is at the forefront of a China government push to restructure state-controlled companies and allow markets a bigger role in the allocation of resources. The company is seeking to raise 100 billion yuan selling about a third of its retail unit.

"China’s slower economic growth had a negative impact on Sinopec’s fuel-retailing business and it somehow managed to balance the loss by achieving higher margins in refining," said Shi Yan, an analyst at UOB Kay Hian in Shanghai. "Profit should stay flat in the second half unless Sinopec can register major production increase in its shale gas unit."

Operating profit for the refining business rose almost 46 times to 9.7 billion yuan in the period from a year earlier, according to an English earnings statement to the Hong Kong stock exchange.

Shale gas production reached 3.2 million cubic meters a day at Fuling, China’s biggest shale-producing project, in Southwest China’s Chongqing, it said.

As MRC informed before, in November 2013, Sinopec won initial approval last month from China's top economic planner for a plan to build a USD10-billion refinery and petrochemical complex in Shanghai. China, the world's largest net importer of oil, is likely to add 3 million barrels per day, or a quarter of new refining capacity, between 2013 and 2015 to fuel economic growth, industry officials and Chinese media estimate.

Sinopec Corp. is one of the largest scale integrated energy and chemical companies with upstream, midstream and downstream operations. Its refining and ethylene capacity ranks No.2 and No.4 globally. The Company has 30,000 sales and distribution networks of oil products and chemical products, its service stations are now ranked third largest in the world.
MRC

MOSCOW (MRC) -- Production of ethylene and benzene in Russia decreased over the first seven months of 2014 by 12.4% and 6.7%, respectively, year on year, reported MRC analysts.

According to the data published by the Federal State Statistics Service of the Russian Federation, the July output of ethylene and benzene by Russian petrochemical plants totalled 165,000 tonnes and 82,500 tonnes, down by 11.5% and 4.2%, respectively, from June.

The overall prodcution of these petrochemical products in Russia fell from January to July 2014 to 1.4 million tonnes and 660,900 tonnes, respectively, while these figures were 1.582 million tonnes and 708,300 tonnes, respectively, over the same period of 2013.

The main reason for the reduced output of these basic products for the production of polymers was an outage at Stavrolen (an accident at its ethylene production on 26 February, 2014) and a long-term overhaul at SIBUR-Kstovo's ethylene production along with the expansion of the plant's capacitites.

As reported earlier, according to the Federal State Statistics Service of the Russian Federation, the production figure of basic chemicals was 100.6% from January to July 2014 compared to the previous year. In July, this figure dropped to 97.3%.
MRC

MOSCOW (MRC) -- Styrindo Mono Indonesia (SMI) is in plans to shut its No. 2 styrene monomer (SM) plant for maintenance turnaround, as per Apic-online.

A Polymerupdate source in Indonesia informed that the plant is likely to be shut in mid-October 2014. It is expected to remain off-stream for around one month.

Located at Merak in Indonesia, the plant has a production capacity of 250,000 mt/year.

As MRC reported earlier, SMI is also in plans to shut its No.1 SM plant for maintenance turnaround in H2 November 2014. The plant is slated to be shut for around one month. Located in Merak, Indonesia, the plant has a production capacity of 100,000 mt/year.

We also remind that Taiyo Petrochemical is in plans to shut down its SM plant for maintenance in September 2014. The shutdown is expected to remain in force for around 30 days. The plant is currently operating at full production capacity levels. Located at Ube in Japan, the SM plant has a production capacity of 370,000 mt/year.
MRC

MOSCOW (MRC) -- Westlake Chemical Partners LP has announced that Mr. Max Lukens and Mr. Gary Adams have been elected to the company's board of directors of its general partner, Westlake Chemical Partners GP LLC, reported Westlake on its site.

Mr. Lukens has served as a director of Westlake Chemical Corporation since 2004.

Mr. Adams began his career with Union Carbide, advancing through various manufacturing and commercial assignments over a 15 year period. In 1994, he became a partner in CMAI (Chemical Market Associates, Inc.) and was appointed Executive Vice President of CMAI, responsible for the company's largest multi-client practice segments. In 1997, Gary became CMAI's President and led its global operations. In 2011 he joined IHS with the acquisition of CMAI by IHS and became the Chief Advisor for their Chemicals practice.

Mr. Adams currently serves as an independent director on the board of Phillips 66 Partners LP, a master limited partnership formed by Phillips 66 Company and is both the Lead Director and Chair of the Conflicts Committee. He is also serving as an Independent Director for Trecora Resources.

"We are pleased that Gary and Max have been elected to our board. I know that their unique combination of executive and boardroom experience, as well as in-depth knowledge of the oil, gas, chemicals, related upstream and midstream industries and global markets will provide tremendous benefits to the board and organization as a whole", stated James Chao, Chairman of Westlake Chemical Partners.

As MRC informed before, in early May 2014, Westlake Chemical Corporation announced that one of its wholly owned subsidiaries, Westlake Chemical Partners LP, had filed a Registration Statement on Form S-1 with the US Securities and Exchange Commission ("SEC") relating to its proposed initial public offering of common units representing limited partner interests.

Westlake Chemical Partners LP is a limited partnership formed to operate, acquire and develop ethylene production facilities and related assets. It is headquartered in Houston, Texas.
MRC

MOSCOW (MRC) -- Reliance Industries is implementing a new project to source 1.5 million tpy of ethane feedstock from the US to feed its crackers in India, reported Hydrocarbonprocessing with reference to the company's announcement.

"The shale gas industry in North America has grown exponentially in the past five years," Reliance said in a media release. "As a result, ethane has become the dominant feedstock for crackers replacing liquids."

"Reliance’s investments in shale gas and its existing crackers portfolio in India are a natural fit for sourcing ethane from North America and shipping it to India to attain long-term feedstock competitiveness," the company added.

Reliance says it is planning to upgrade its crackers to maximize the cracking of ethane and also to have maximum operational flexibility to optimize feedstocks with complete control of the supply chain.

According to the release, Reliance has already executed storage and capacity agreements for the liquefaction and export of ethane from a North American terminal, which is slated to start operations in the second half of 2016.

To that end, Reliance says it is ordering six very large ethane carriers (VLECs), which will be the largest vessels of their kind ever built. The ships will be deliverd in late 2016, in sync with the radiness of the terminal in North America.

The company is also planning to develop a world-scale receiving and storage facility in India for liquefied ethane, and subsequently a pipeline to deliver ethane to the crackers.

As MRC informed previously, Reliance Industries (RIL) will invest up to USD700 mln in its shale gas venture in the current fiscal and also ramp up spends under the USD13 bln capex programme in the petrochemical and refining business.

Reliance Industries is one of the world's largest producers of polymers. The company's polymer production in 2010-11 (polypropylene, polyethylene and polyvinyl chloride) made 4,094 kilo tonnes.
MRC