Rosneft and Pertamina to sign framework deal on Indonesian refinery

MOSCOW (MRC) -- Russia's Rosneft and Indonesia's Pertamina will sign a framework deal this week on an oil refinery in Indonesia, a Kremlin aide said on Tuesday, in what could be a first Russian foray into a region dominated by OPEC producers from the Gulf, reported Reuters.

Russian presidential aide Yuri Ushakov, who announced the news, did not elaborate.

The deal is expected to be signed in the Russian Black Sea resort of Sochi on the sidelines of a conference there.

Pertamina has been looking for a development partner for the $12-billion Tuban refinery project.

Apart from Rosneft, it has held talks on the project with Saudi Arabian national oil giant Saudi Aramco, China's Sinopec Corp., Kuwait Petroleum International and a consortium involving Thailand's PTT Global Chemical and Thai Oil, Pertamina refineries director Rachmad Hardadi said last month.

Last year, Indonesia rejoined the Organization of the Petroleum Exporting Countries (OPEC) as it sought to boost cooperation with the oil cartel and possibly source more crude from Saudi Arabia.

Russia has for years been muscling in on Asian markets where Saudi Arabia was once the unchallenged dominant supplier. Riyadh is retaliating in Moscow's backyard, Europe, with aggressive price discounting.

Rosneft's head, Igor Sechin, has been a staunch proponent of Russia's independent energy policy. He told Reuters last week that internal differences were killing OPEC, and that its ability to influence the markets had all but evaporated.

Last month, Rosneft said it had discussed Pertamina's possible participation as a shareholder in its upstream projects in Russia. Both companies have also considered Rosneft's possible participation in downstream projects in Indonesia.

Sechin has said Rosneft is interested in creating a regional energy hub in Indonesia, according to a company statement.

Indonesia's fuel output has been hit by a lack of investment in its refining sector since the last refinery was completed in 1994. Pertamina currently has 1 MMbpd in refining capacity, which it plans to raise to 2.3 MMbpd through upgrades and additional plants.

The new Tuban refinery, which will eventually be integrated with the TPPI petrochemical refinery that Pertamina took over in late 2015, will have a crude processing capacity of 300,000 bpd and is targeted for completion in 2021.

Indonesia consumes more oil than it produces despite rejoining OPEC. The country consumes 1.6 MMbpd and produces around 0.85 MMbpd, according to a BP statistical review.

We remind that, as MRC informed previously, in June 2015, Rosneft and BP signed several agreements strengthening the long term strategic relationship between the two companies, at the St. Petersburg International Economic Forum.

Rosneft became Russia's largest publicly traded oil company in March 2013 after the USD55 billion takeover of TNK-BP, which was Russia’s third-largest oil producer at the time.
MRC

MOSCOW (MRC) -- Integrated Refinery and Petrochemical Co (IRPC), a PTT Plc subsidiary, is in plans to shut its high density polyethylene (HDPE) plant for a maintenance turnaround, as per Apic-online.

A Polymerupdate source in Thailand informed that the plant is likely to be taken off-stream in November, 2016. It is expected to remain shut for around 4 weeks.

Located at Map Ta Phut in Rayong Thailand, the plant has a production capacity of 300,000 mt/year.

As MRC informed previously, IRPC took off-stream its polypropylene (PP) plant in Thailand for a maintenance turnaround in the second half of January 2016. The plant remained shut for around 10 days. Located in Rayong province of Thailand, the PP plant has a production capacity of 300,000 mt/year.

PTT Global Chemical is a leading player in the petrochemical industry and owns several petrochemical facilities with a combined capacity of 8.45 million tonnes a year.
MRC

MOSCOW (MRC) -- Solvay and Eastman Chemical Company have signed a definitive agreement to end their cellulose acetate production joint venture Primester with Solvay acquiring Eastman’s 50% stake in the U.S.-based plant and becoming its sole owner, said Solvay on its site.

"After our partnership of 25 years, this agreement allows Solvay to continue securing the most economical long term supply of cellulose acetate flake for its own tow business in Germany, Brazil and Russia, while adapting capacity to demand," said Philippe Rosier, President of Solvay Global Business Unit Acetow.

Following the transaction, Eastman will provide the long-term supply of basic utilities and raw materials to the plant, based in Kingsport, Tennessee. Closing should occur in Q2-2016, subject to customary regulatory approvals.

Eastman will continue to supply certain services, utilities and raw materials to Primester for Solvay’s operation of the former joint venture assets. The sale is subject to satisfaction of customary closing conditions and is expected to close in second quarter 2016. Terms of the sale were not disclosed.

As MRC informed earlier, Solvay has signed a definitive agreement with Brazilian chemical group Unipar Carbocloro to sell its 70.59% stake in Solvay Indupa.

Solvay S.A. is a Belgian chemical company founded in 1863, with its head office in Neder-Over-Heembeek, Brussels, Belgium. The company has diversified into two major sectors of activity: chemicals and plastics. Solvay supplies over 1500 products across 35 brands of high-performance polymers - fluoropolymers, fluoroelastomers, fluorinated fluids, semi-aromatic polyamides, sulfone polymers, aromatic ultra polymers, high-barrier polymers and cross-linked high-performance compounds.
MRC

MOSCOW (MRC) -- France's Technip announced an all-stock merger with U.S. rival FMC Technologies to create an oil services group with combined revenue of USD20 billion, said Reuters.

The transaction is expected to deliver annual pretax savings of at least USD400 million as of 2019 and boost earnings per share significantly, the companies said in a statement on Thursday. "We have complementary skills, technologies and capabilities," Technip Chairman and Chief Executive Thierry Pilenko said. "Together, TechnipFMC can add more value across Subsea, Surface and Onshore/Offshore, enabling us to accelerate our growth."

Lower energy prices are driving consolidation in the oil services sector as companies seek savings to boost profits amid an oil supply glut that has been weighing on exploration and production.

Reuters reported in December that Technip had held talks with FMC.

Under the terms of the deal, each Technip share will be converted into two shares of TechnipFMC, and each FMC Technologies share will be exchanged for one share of TechnipFMC, with each company's shareholders owning close to 50 percent of the combined company.

Pilenko will serve as executive chairman of TechnipFMC, while FMC Technologies’ President and Chief Operating Officer Doug Pferdehirt will be CEO, the companies said. The transaction is expected to close early in 2017.

Last year, the two companies formed a joint venture, Forsys Subsea, aimed at reducing the cost of subsea oilfield exploration, a sector that has been badly hurt by the drop in the price of oil.

Technip has a market value of about USD6.2 billion, compared with USD6.5 billion for FMC Technologies. Technip has annual revenue of USD13.5 billion, more than double that of FMC Technologies.

As MRC informed earlier, Technip has been awarded by Tecnicas Reunidas a significant contract to supply three hydrogen reformers as part of the hydrogen production facility at Petronas’ refinery and petrochemical integrated development (RAPID) project located in the state of Johor, Malaysia.
MRC

MOSCOW (MRC) - Imports of polyethylene terephthalate (PET) into Russia increased to 32,300 tonnes in the first four months of the year, up 28% year on year, according to MRC DataScope.

Imports of injection moulding PET chips occurred for 82% from total deliveries into the country over the reported period. Total imports of injection moulding PET chips in to Russia were 26,700 tonnes in January-April 2016, which is up 18% year on year.

It should be noted that imports of amorphous PET chips have significantly grown in the first four months of the year. Russia's imports of amorphous PET chips increased to 2,500 tonnes in Jan-April 2016, up three times compared with the same time a year earlier.
Imports of recycled PET flakes into the country also grew noticeably. External deliveries of them increased to 3,000 tonnes, up 67% year on year. The growth of APET and recycled PET purchases was a result of stronger demand from producers of polyester fibres and tire cords.
The only importer of APET in to Russia continued to be Sibur-Volzhsky.

It worth noting that Sinopec increased deliveries of bottle grade PET in April. Russia's imports of bottle grade PET by Sinopec production were 1,600 tonnes in April compared with 900 tonnes in March.
At the same time, imports PET from Jiangsu Sanfangxiang fell substantially. April imports of PET by Jiangsu Sanfangxiang production were 500 tonnes compared with about 4,000 tonnes in March.


MRC