Profit leaps 80% at SABIC in Q1 as product prices improve

MOSCOW (MRC) -- Net profit at Saudi Basic Industries Corp (SABIC), one of the world's biggest petrochemical producers, jumped 80 percent from a year earlier in the first quarter of 2017 on the back of higher sales prices for its products, said Reuters.

SABIC, which is majority state-owned, made a net profit of 5.24 billion riyals (USD1.40 billion) in the three months to March 31, up from 2.91 billion riyals in the year-earlier period, the company said in a bourse statement on Monday.

That was in line with the forecasts of analysts polled by Reuters, who had on average predicted that SABIC would make a quarterly profit of 5.35 billion riyals.

Gross sales for the first quarter totalled 36.95 billion riyals, up 10 percent from 33.47 billion riyals a year ago.

The company's results are closely tied to oil prices and global economic growth because its products - plastics, fertilisers and metals - are used extensively in construction, agriculture, industry and consumer goods manufacturing.

Like other Saudi companies, SABIC began reporting its results under international IFRS accounting standards this year, so some of its figures for the first quarter of 2016 were restated. Last year, it reported a net profit of 3.41 billion riyals for the quarter.

As MRC informed earlier, ExxonMobil Chemical Company and SABIC each announced the selection of a site in San Patricio County, Texas for potential development of a jointly owned petrochemical complex on the US Gulf Coast.

SABIC ranks among the world's top petrochemical companies, and is among the worldпїЅs market leaders in the production of polyethylene, polypropylene, advanced thermoplastics, glycols, methanol and fertilizers. Sabic manufactures on a global scale in Saudi Arabia, the Americas, Europe and Asia Pacific. The company operates in more than 50 countries across the world with 40,000 employees worldwide.
MRC

MOSCOW (MRC) -- Saudi Arabia is likely to reduce the amount of oil it burns to generate power this summer as the kingdom hikes domestic energy prices and uses more natural gas in power stations, industry sources said, reported Reuters.

Burning less crude at home means the world's top oil exporter may not need to push output to the record high of 10.67 MMbpd reached in July last year, even if the Organization of the Petroleum Exporting Countries and other producers end supply curbs in June.

It may also make the sale of a 5% stake in Saudi Aramco more attractive to investors because the national energy giant will have more crude to export, if needed, and can sell fuel at higher prices to the domestic market.

"Now we are using more and more natural gas, and with the reforms in electricity prices, crude burning will go down," said a Saudi-based industry source. "This summer you will see less crude burning."

As MRC informed before, in June 2016, Saudi Arabian Oil Co. and Saudi Basic Industries Corp. (Sabic) became one step closer to building their first plant to process crude directly into chemicals, cutting out a link in the production chain from hydrocarbons to the finished products that go into plastics and other consumer goods. The state-owned companies signed an agreement to study such a project to be located in Saudi Arabia. A joint venture is possible if the companies decide to move ahead after the study is completed. Oil companies normally refine crude into transportation fuels including gasoline and diesel and leave byproducts such as naphtha to be processed separately into chemicals.
MRC

MOSCOW (MRC) -- State oil giant Saudi Aramco plans to launch its overhauled Muajjiz oil terminal on the Red Sea next year, lifting its total loading and export capacity to as much as 15 MMbpd, said Reuters, citing Saudi officials.

Located on the Red Sea, Muajjiz had been used as an export terminal for Iraqi crude through the Iraqi Pipeline in Saudi Arabia (IPSA), but it has not carried Iraqi crude since Saddam Hussein invaded Kuwait in 1990.

The pipeline was confiscated by Saudi Arabia in 2001 as compensation for debts owed by Baghdad. Saudi Arabia had used the IPSA pipeline to transport gas to power plants in the west of the country for years before test opening it in 2012, giving Riyadh scope to export more of its crude should Iran try to block the Strait of Hormuz.

Saudi's arch-rival has in the past threatened to block the Hormuz shipping channel, through which 40 percent of the world's seaborne oil exports pass, in retaliation for sanctions placed on its crude exports by Western powers in 2012.

Bringing Muajjiz terminal online next year would boost the kingdom's total oil handling capacity to 15 MMbpd from 11.5 MMbpd currently, Mohammed al-Qahtani, Aramco's senior vice president for upstream, told Reuters in an interview at the company's headquarters in Dhahran.

The additional capacity from Muajjiz, which will be integrated into the Yanbu crude oil terminal, will accommodate the increased volumes of fuel oil and supplies of Arabian Heavy crude oil to the Yasref, Jazan, and Jiddah local refineries.

The move will boost Aramco's ability to meet its commitments to customers and maintain its export capability from the kingdom's west coast.

"Restoring operations at al-Muajjiz will offer Saudi Aramco more flexibility in terms of its crude oil and product sales, and traffic configuration out of the Red Sea without affecting its intense operations out of the Arabian Gulf, which are largely dedicated to the Asian markets," said Sadad al-Husseini, a former Aramco senior executive and now an energy consultant.

Saudi Arabia has three primary oil export terminals, including the port of Ras Tanura on the Gulf, with an average capacity of around 3.4 MMbpd and which handles most of Saudi Arabia's exports, according to the US Energy Information Administration (EIA).

The Ras al-Ju'aymah facility on the Gulf has an average handling capacity of about 3 MMbpd and can accommodate the largest oil tankers for crude loadings.

The Yanbu terminal on the Red Sea, from which most of the remaining volumes are exported, has an average handling capacity of 1.3 MMbpd.

As MRC informed earlier, Saudi Arabian Oil Co. and Saudi Basic Industries Corp. are one step closer to building their first plant to process crude directly into chemicals, cutting out a link in the production chain from hydrocarbons to the finished products that go into plastics and other consumer goods.

Saudi Aramco is an integrated oil and chemicals company, a global leader in hydrocarbon production, refining processes and distribution, as well as one of the largest global oil exporters. It manages proven reserves of crude oil and condensate estimated at 261.1bn barrels, and produces 9.54 million bbl daily. Headquartered in Dhahran, Saudi Arabia, the company employs over 61,000 staff in 77 countries.
MRC

MOSCOW (MRC) -- Westlake Chemical Partners LP reported Q1 EPS of USD0.35, USD0.08 worse than the analyst estimate of USD0.43, said Reuters.

Revenue for the quarter came in at USD277.45 million versus the consensus estimate of USD339.88 million.

Westlake Chemical -Olefins segment reported income from operations of USD179.8 million in q1 of 2017, an increase of USD30.6 million compared to USD149.2 million in Q1 of 2016.

Westlake Chemical Corp- Vinyls segment reported income from operations of USD71.4 million in Q1 of 2017, an increase of USD9.3 million

Westlake Chemical Corp- "We also remain focused on our integration activities and are on track to capture significant synergies in 2017".

As MRC informed earlier, in September 2016, Westlake Chemical Corp. completed its previously announced acquisition of Axiall Corp., Atlanta, to become the third-largest chloralkali producer and the second-largest polyvinyl chloride (PVC) producer in North America.

Westlake Chemical Corporation is a U.S. manufacturer and supplier of petrochemicals and polymers, headquartered in Houston, Texas. The range of company's products includes ethylene, polyethylene, styrene, propylene, caustics, polyvinyl chloride and plastic products. Westlake is one of the major ethylene producers in the US and its Calvert City operation is a large integrated PVC site.
MRC

MOSCOW (MRC) -- In the export trades of Turkmenistan's State Commodity and Raw Materials Exchange, large quantities of polypropylene (PP) were sold for the second time in a month. This time, 25,000 tonnes of PP were sold, according to ICIS-MRC Price report.

On 28 April, Turkmenbashi Gas Processing Plant's second large lot of PP was sold in the export trades of the State Commodity and Raw Materials Exchange of Turkmenistan. 25,000 tonnes of polymer to be shipped within 11 months were put up for auction in the trades at the starting price of USD960/tonne FCA/FOB port of Turkmenbashi.

Demand for PP in the stock exchange was weak because of long delivery time. Only 13,500 tones of polymer out of 25,000 tonnes put up for auction were bought out in the trades. Russian companies purchased about 9,000 tonnes.

As reported earlier, on 14 April, Turkmenbashi Gas Processing Plant's 20,000 tonnes of PP were also put up for auction in the export trades of the State Commodity and Raw Materials Exchange of Turkmenistan. The put up for action PP was aimed for shipment within 9 months at the starting price of USD960/tonne FCA/FOB port of Turkmenbashi. All PP quantities were bought out in the trades.

Thus, about 33,500 tonnes of PP were sold in the export trades of Turkmenistan's State Commodity and Raw Materials Exchange at USD960/tonne FCA/FOB port of Turkmenbashi for the whole April.
MRC