Petronas sells half of polymers biz to Saudi Aramco for USD900m Petronas

MOSCOW (MRC) -- Malaysia’s Petronas Chemicals Group Bhd (PCG) said on Monday it has sold 50% of a polymers unit to Saudi Aramco’s wholly owned subsidiary, Aramco Overseas Holdings Cooperatief U.A. for USD900 million, as per DealStreetAsia.

The sale, which was done at cost, was prompted by the desire to share project risk amid plans for Saudi Aramco to invest USD7 billion into a Petronas oil refinery and petrochemical project in Malaysia’s southern state of Johor.

"The project is still at construction phase and the risk will remain high until project completion in 2019," said PCG, a unit of national oil company Petroliam Nasional Bhd (Petronas) , said in a statement.

The deal follows on from an agreement in February in which Aramco Overseas will take 50% of PRPC Refinery and Cracker from Petronas Refinery and Petrochemical Corporation (PRPC). As part of the polymers deal, Saudi Aramco will supply up to 70% of the crude required by PRPC Refinery and Cracker which will help ensure sustainable feedstock supply for the polymers unit.

PCG said the sale would allow it to cut its capital spending budget, provide it with the financial flexibility to pursue other strategic growth projects and help it pursue future strategic collaborations with Saudi Aramco.

In May, PCG told Reuters that it is looking to grow aggressively in specialty chemicals to meet demand in new regional markets and profit from higher margins. PCG said the sale will not have any material impact on its earnings for the financial year ending December 2017.

As MRC informed before, in early 2017, Petronas said its new USD27 billion refining and petrochemical complex project in the southeast Asian country is on track for start-up in 2019. Thus, Petronas plans to build a C6-based metallocene linear LDPE plant and a low density polyethylene (LDPE)/ethylene vinyl acetate (EVA) swing plant at its greenfield integrated refinery and petrochemical complex in southern Johor state by mid-2019. The proposed metallocene LLDPE will have a capacity of 350,000 tpa, while the LDPE/EVA will have a capacity of about 150,000 tpa. The two plants are part of Petronas' planned Refinery and Petrochemical Integrated Development project in Pengerang at Johor.

Petronas, short for Petroliam Nasional Berhad, is a Malaysian oil and gas company wholly owned by the Government of Malaysia. The Group is engaged in a wide spectrum of petroleum activities, including upstream exploration and production of oil and gas to downstream oil refining; marketing and distribution of petroleum products; trading; gas processing and liquefaction; gas transmission pipeline network operations; marketing of liquefied natural gas; petrochemical manufacturing and marketing; shipping; automotive engineering; and property investment.
MRC

MOSCOW (MRC) — Total petroleum deliveries in August moved up by 1.3% from August 2016 to average 20.5 MMpbd, a report by the America Petroleum Institute (API) said, as per Hydrocarbonprocessing.

Compared with July, total domestic petroleum deliveries, a measure of US petroleum demand, decreased 0.6%. For year-to-date, total domestic petroleum deliveries moved up 1.3% compared to the same period last year.

The overall economy in the US showed gains in August, adding 156,000 jobs, according to the Bureau of Labor Statistics (BLS). The US unemployment rate and the number of unemployed persons increased slightly, up 4.4% and 7.1 MM, respectively.

"Strong economic growth is boosting petroleum demand,” said API Director of Statistics Hazem Arafa. “Meanwhile domestic production remains high allowing consumers and businesses to continue to enjoy relatively low fuel costs. This is a winning combination."

Gasoline deliveries in August were down from the prior month, the prior year, and the prior year to date. Total motor gasoline deliveries, a measure of consumer gasoline demand, decreased 1.5% from August 2016, to average 9.5 MMbpd—but remained the fourth highest deliveries to date. Compared with July, total motor gasoline deliveries decreased 1.5%. For year-to-date, total motor gasoline deliveries decreased 0.3% compared with year-to-date 2016 to the second highest year-to-date level at 9.3 MMbpd. Distillate deliveries in August were up from the prior month, the prior year, and the prior year-to-date to reach the highest August deliveries in 10 yr and the highest deliveries since March. Distillate deliveries averaged 4.1 MMpbd, up 6.5% compared with August 2016, and were up 0.7% compared with July. For year-to-date, distillate deliveries increased 3.2% compared to year-to-date 2016.

US crude oil production remained above 9.0 MMbpd for the seventh consecutive month. Domestic crude oil production in August decreased from the prior month but was up from the prior year and the prior year-to-date to reach the second highest August output in 45 yr, since 1972. Domestic crude oil production decreased 1.3% from July but was up by 6.8% from August 2016 to average 9.3 MMbpd in August. For year-to-date, crude production increased 2.4% compared with year-to-date 2016, and was the second highest year-to-date level in 44 yr, since 1973.
MRC

MOSCOW (MRC) — Iran has banned the transportation of refined crude oil products by Iranian companies to and from Iraq's Kurdistan region, the semi-official Tasnim news agency said on Friday, after Tehran vowed to stand by Baghdad following the region's vote for independence, as per Reuters.

"A directive by the Road and Transportation Organization has temporarily banned carrying oil products from Iran to Iraq's Kurdistan region and vice versa following the latest developments in that region," Tasnim reported.

Iraq’s Kurds overwhelmingly backed a call for independence in a referendum on Monday, defying neighbouring countries which fear the vote could lead to renewed conflict in the region.

A ban on international flights into Iraq's Kurdish region was being imposed on Friday after the Baghdad government retaliated against the vote.

Almost all foreign airlines suspended flights to Erbil and Sulaimaniya, obeying a notice from the government in Baghdad, which controls Iraqi air space.

Iran, which has its own Kurdish minority, had already halted flights to and from Kurdish regions on Sunday.
MRC

MOSCOW (MRC) — Sales of gasoline-powered cars have overtaken diesel in the first half of this year for the first time since 2009, the European Automobile Manufacturers Association (ACEA) said this week, said Hydrocarbonprocessing.

The shift, following revelations that most diesel cars emit more pollutants on the road than laboratory tests suggested, saw gasoline car sales rise by nearly 10% from the first half of 2016, compared with an approximate 4% drop in diesel car sales in the same period, the group said.

Sales of "alternative" vehicles—hybrid, electric, LPG (liquefied petroleum gas) and natural gas-powered ones—also rose by more than 35% to account for 5.2% of total car sales. The mayors of Paris and Athens have said they plan to ban diesel-engine cars in city centers by 2025 in the wake of the emissions scandal, while France is also making plans to reverse favorable tax treatments for diesel. Some expect other European governments to follow suit.

Even car manufacturing centers Stuttgart and Munich have mulled diesel engine bans. Volkswagen admitted in 2015 to cheating emissions tests.

ACEA, however, cautioned the shift to gasoline engines could make it tougher for Europe to meet CO2 reduction targets. "Policy makers need to be aware that a sudden shift from diesel technology to petrol will lead to an increase in CO2 emissions," ACEA Secretary General Erik Jonnaert said.

Jonnaert also called on governments to do more to usher in "alternative" cars. Sales of hybrid electric vehicles rose by a whopping 58% in the first half of the year, and electric sales rose by 37%, but the groups still account for just 2.6% and 1.3%, respectively, of total car sales.

"More needs to be done to encourage consumers to buy alternatively-powered vehicles, for instance by putting in place the right incentives and deploying recharging infrastructure across the EU," Jonnaert said.
MRC

MOSCOW (MRC) -- Shandong Levima New Material is likely to take its methanol-to-olefin (MTO) plant off-stream for maintenance, as per Apic-online.

A Polymerupdate source in China informed that the company has planned to commence maintenance at its plant in early-October, 2017. The plant is expected to remain off-line for around 6 weeks.

Located in Shandong, China, the MTO plant has an ethylene capacity of 170,000 mt/year and a propylene capacity of 200,000 mt/year.

As MRC informed before, in early March 2017, Honeywell announced that Jiangsu Sailboat Petrochemical Company, Ltd. had started its UOP Advanced MTO unit during a 10-day test to confirm successful operation. It has an annual production capacity of 833,000 mtpy, making it the largest single-train MTO unit in the world.
MRC