Unipetrol posts net profit CZK 3.1 billion in 2Q 2016

MOSCOW (MRC) -- In Q2 of 2016 the company Unipetrol recorded operational profit of CZK 4.58 bn and net profit of CZK 3.1 bn, said the company in its press release.

The revenues decreased (-37% y/y) on the level of CZK 20.55 bn, due to lower crude oil prices and lower petrochemical products sales. The operational results of the company Unipetrol were affected by the limited production due to steam cracker extraordinary situation from 13 August 2015 as well as planned turnaround at Litvinov chemical complex from March to April and also unplanned Kralupy refinery shutdown since mid-May. The financial results of the company were positively affected by received payments for steam cracker accident insurance claim of CZK 3.9 bn, higher refinery sales and higher sales of retail segment y/y.

In the downstream segment that combines refinery and petrochemical parts, the company recorded EBITDA LIFO of CZK 4.398 bn in 2Q16. Segment results were positively affected by received payments for steam cracker accident insurance claim of CZK 3.9 bn, higher sales of refinery products and also the positive effect of inventory revaluation. On the other hand the results of the segment were negatively affected by lower refining margins and significantly lower sales volumes of petrochemical products y/y, due to steam cracker extraordinary situation from 13 August 2015.

In the refinery part of the downstream segment, the company recorded higher sales of refinery products +4% y/y to 1.515 mt, thanks to sales of petrochemical feedstock and trading activities. The volume of crude oil processed in Q2 was on the level of 998 kt, the refining utilization ratio declined from 95% to 46% y/y. This was caused by limited production capacities in refineries in Kralupy and Litvinov.

The results of petrochemical part of downstream segment remains significantly affected by the extraordinary event at the steam cracker unit. The sales volumes of petrochemical products decreased to 227 kt (-49% y/y). The company finishes repairment works and plans to start gradually relaunching of the steam cracker unit from August. The standard operation of the steam cracker is expected in October 2016.

Unipetrol commenced the construction of new polyethylene unit PE3 at the beginning of June. Once put into operation, the unit will be among the most advanced production facilities of its kind in Europe. It is the largest investment in the history of the Czech petrochemical industry in the amount of CZK 8.5 billion.

The company Unipetrol RPA concluded a share purchase contract with the company Anwil, under which it acquired a 100% shareholding in the company Spolana. Acquisition of Spolana will enable the Unipetrol Group to better plan and optimise the production function, prepare for planned commissioning of the PE3 installation in the future and to make it more resilient to external conditions.

Unipetrol is 63%-owned by Poland’s state-controlled PKN Orlen petrochemicals and oil group.
MRC

MOSCOW (MRC) -- Forced to shut its USD54 B Gorgon LNG export plant twice in its first five months, Chevron Corp. now faces calls from union officials for a probe into the site's safety, said Hydrocarbonprocessing.

Chevron denies there have been any safety breaches at the plant but is under pressure to resolve problems that have limited exports to just two cargoes since starting operations in March. The Australian Manufacturing Workers' Union (AMWU) has told Reuters it has formally requested access to the site. A failed weld on a valve casing called a trunnion caused the gas leak that forced the plant to close on July 1, he said.

"The AMWU wants to know why it failed, and what checks were carried out to ensure it met Australian standards," McCartney said. Chevron called the leak "minor", although it did evacuate some workers. On Wednesday the company said it expected to resume production shortly.

"Chevron Australia is in discussions with the AMWU to visit the site as part of usual union engagement with its members," a spokeswoman said, adding that there had been no safety breaches at the plant.

Chevron, which is counting on Gorgon to help it become an LNG leader in Asia, reported its first shutdown in April and was forced to shut again following a gas leak on July 1.

According to information provided by one engineer at the plant, liquid propane in the refrigerant circuit flooded into a section of pipeline meant to handle gases only.

Metal debris inside the piping was propelled along at speed, damaging equipment and producing "very loud clunking noises" which prompted operators to initiate emergency shutdown procedures, according to one worker and corroborated by AMWU's McCartney.

Chevron said the problem occurred in the propane refrigerant circuit where natural gas is cooled into a liquid but declined to provide further details.

As MRC informed earlier, a USD36.8bn expansion of the Tengiz oilfield in Kazakhstan, the largest investment by private sector oil companies this decade, has been given the go-ahead by Chevron of the US, bucking the trend of delays and cancellations resulting from the slump in crude prices since mid-2014.
MRC

MOSCOW (MRC) -- Mexico's state-owned oil company Pemex said Wednesday that a power outage at its second biggest refinery briefly interrupted production, said Hydrocarbonprocessing.

The Tula refinery, which can process up to 315 Mbpd, was taken offline for around 30 minutes, according to a Pemex spokesperson who declined to be named citing company policy.

In a statement Pemex said the principal services of the refinery, located in central Hidalgo state, were operating normally and that it did not see production being affected.

As MRC informed earlier, in April 2016, a massive explosion rocked Pemex in the Gulf state of Veracruz on Wednesday, killing at least three people, injuring dozens more, and pumping a cloud of noxious chemicals into the sky. Three people had died in the blast and as many as 45 were injured.

Pemex, Mexican Petroleum, is a Mexican state-owned petroleum company. Pemex has a total asset worth of USD415.75 billion, and is the world's second largest non-publicly listed company by total market value, and Latin America's second largest enterprise by annual revenue as of 2009. Company produces such polymers, as polyethylene, polypropylene, polystyrene.
MRC

MOSCOW (MRC) -- Samsung Heavy Industries expects to receive an order this year from Eni to build a floating LNG platform to process huge gas reserves in Mozambique, a spokesman said on Thursday, a sign a long-delayed project is moving ahead, said Reuters.

Samsung Heavy is in exclusive talks with Eni as part of a consortium with France's Technip and Japan's JGC in a project worth around USD5.4 B. Samsung's share would be worth USD2.5 B, the spokesman said.

"We expect the order in the second half of this year," a Samsung Heavy spokesman said on Thursday. Mozambique made one of the biggest gas finds in a decade in 2010, offering the opportunity to transform one of the world's poorest countries into a major LNG exporter.

Eni is due to build offshore processing units while US firm Anadarko is planning a vast onshore development. But the projects have faced uncertainty and investors are keenly awaiting long-delayed final investment decisions.

Samsung's announcement opens the door for ENI to make its final call this year, which would make Anadarko's development more likely to proceed, industry sources said. The projects could unlock as much as USD30 B of investment.

Mozambique is mired in a deep debt crisis and gas investment is the most likely escape route after donors shunned the southern African country for hiding billions of dollars of state borrowing.

As MRC informed earlier, South Korean conglomerate Lotte Group will acquire Samsung Group's chemical businesses for more than 3 trillion won (USD2.63 billion). Lotte Group affiliate Lotte Chemical Corp will acquire various assets, including a 31% stake in Samsung Fine Chemicals and 90% of Samsung SDI Co Ltd's chemicals business.
MRC

MOSCOW (MRC) - Production of PET in Russia increased by 7% in the first six months of the year, compared to the same period a year earlier, according to MRC ScanPlast.

The total volume of PET chips production at four Russian plants reached 268,000 tonnes in January-June. Companies have continued to follow the policy of import substitution. The production growth was achieved by increasing the capacity utilisation at Alco-Naphtha (Kaliningrad).
Alco-Naphtha increased PET chips production by 28% in the first six months of the year, compared with the same time a year earlier. SIBUR Group plants and Senege in general have been working at the previous level of loading during the first six months of the year.

June PET production at the facilities of Russian companies was 46,800 tonnes. The total loading capacity of the sector amounted to around 92% in June.

MRC