MEGlobal announces ACP for February 2020

MOSCOW (MRC) -- MEGlobal announced that its Asian Contract Price (ACP) for monoethylene glycol (MEG) will be USD740/MT CFR Asian main ports for arrival February 2020, said the company.

The February 2020 ACP reflects the short term supply/demand situation in the Asian market.

As it was written earlier, MEGlobal's Asian Contract Price (ACP) for monoethylene glycol (MEG) was settled at USD720/MT CFR Asian main ports for arrival in January 2020.

As per MRC ScanPlast, imports of PET chips into Russia increased by 13% in eleven months of this year compared to the same time a year ago and reached 130,800 tonnes compared to 116,100 tonnes (excluding supplies from Belarus over the past two months). Russia's PET imports almost doubled to 12,300 tonnes in November against 6,300 tonnes in October; last November, material imports amounted to 8,200 tonnes. The share of Chinese material was 78% (9,600 tonnes) in November versus 92% (5,800 tonnes) a month earlier.

MEGlobal is a fully integrated supplier of monoethylene glycol (MEG) and diethylene glycol (DEG), collectively known as ethylene glycol (EG).
MRC

MOSCOW (MRC) -- Venezuelan state oil company PDVSA’s contract to operate Curacao’s 335,000-barrel-per-day Isla refinery ended on Dec. 31, despite an earlier agreement to extend the contract by the end of 2019, reported Reuters with reference to the Caribbean island’s authorities.

Earlier last month, the two parties reached a deal for PDVSA to remain for up to a year as state refining company Refineria de Koursou (RdK) continued to search for a new operator. But in the last week of December RdK and industrial commodities conglomerate Klesch Group finalized a deal to take over the refinery.

Prime Minister Eugene Rhuggenaath said PDVSA had not agreed to Curacao’s proposals that it continue to operate the refinery for three to six months, rather than one year.

"There will be no transition with PDVSA," Rhuggenaath told reporters late on Sunday night. "We have not received a reasonable proposal from PDVSA."

PDVSA did not immediately respond to a request for comment.

Isla’s managing director Marcelino de Lannoy said RdK would take over operations at the refinery for at least six months until Klesch can take charge.

As MRC informed before, in May 2019, Curacao’s state-owned Isla oil refinery received an exemption from US sanctions on PDVSA, the Caribbean island’s government said in a statement. The US Treasury Department slapped sanctions on PDVSA in late January in a bid to force out socialist President Nicolas Maduro, who has overseen a collapse in the OPEC member nation’s economy. The license for the refinery, along with two other related companies, will allow the facility to continue to do business with US companies through Jan. 15, 2020.
MRC

MOSCOW (MRC) -- DFC Inc., a producer of synthetic resins for coatings, said it will advance into the Russian market, said Businesswire.

"We will try for a successful advance into Russia, a rapidly emerging market for synthetic resins for coatings".

DFC produces alkyd resins, acrylic resins, polyester resins, amino resins, curing agents and self-healing resins, among synthetic resins for coatings.

Synthetic resins for coatings are used in construction, automobiles, ships, pre-coated metals, plastic, and wood. By the type of resin, they are classified into alkyd resins, acrylic resins, and polyester resins.

In 2018, the size of the Asian Pacific coatings market was $68.4 billion, about 45 percent of the global coatings market, according to Coatings World. A report released in Korea found that the acrylic market accounted for as high as about 33 percent of the total coatings market in 2016. Russia grew the fastest in 2018 (131.23%) from a year earlier among countries that imported HS Code 3906 products including acrylic resin from Korea.

"We will try for a successful advance into Russia, a rapidly emerging market for synthetic resins for coatings," a DFC official said.

As MRC informed earlier, Russia's output of chemical products dropped by 3.2% in November 2019 month on month.
However, production of basic chemicals increased by 3.6% in the first eleven months of 2019, according to Rosstat's data. According to the Federal State Statistics Service of the Russian Federation, the largest increase in production volumes on an annualized basis accounted for mineral fertilizers and polymers in primary form. Last month, 255,000 tonnes of ethylene were produced versus 210,000 tonnes in October; by November, Russian producers had completed all their scheduled works. Thus, 2,721,000 tonnes of this olefin were produced in January-November 2019, up by 0.3% year on year.

Established in 2003, DFC filed patents through its R&D center for scratch-free, photo-curable self-healing coating and scratch-resistant and self-restorable self-healing resin. It has been developing new products under agreements with national R&D institutes and developing highly functional eco-friendly coating materials in cooperation with technical colleges.
MRC

MOSCOW (MRC) -- Spain’s Repsol pledged to reduce net carbon emissions from its operations and most of its products to zero by 2050 and absorb a 4.8 billion euro (USD5.3 billion) hit to the value of its oil and gas assets in the process, according to Hydrocarbonprocessing.

Describing the move as an industry first, Repsol said it wanted to lead a wider transition to renewable energy, in line with the goals of the 2015 Paris Agreement to avert catastrophic climate change.

Repsol announced its target as delegates opened a United Nations climate summit in Madrid aimed at injecting fresh impetus into the accord, which enters a crucial implementation phase next year.

Oil and gas producers are coming under increasing pressure from shareholders and environmental activists to reduce their role in fuelling climate change, and investors have poured money into funds that take account of companies’ green credentials.

Repsol’s pledge makes it an outlier relative to larger energy companies, which are still investing in developing oil and gas fields that are incompatible with the Paris goals, according to financial think-tank Carbon Tracker.

A Repsol spokesman said the new target covers 95% of the emissions released by the use of products it sells, which are complex to account for and have become a key issue for shareholders.

These emissions - known as Scope 3 - are typically around six times larger than the combined emissions produced by oil companies’ own operations and power supply needs, according to Reuters calculations.

Basing asset values on prospects for oil and gas prices in line with the Paris Agreement would bring a post-tax impairment charge of 4.8 billion euros in 2019, but that will not affect cash flow or shareholder remuneration, the company said.

Companies aiming to achieve "net-zero" usually balance emissions from their operations by investing in technology that can store carbon, or in natural sinks such as forests.

Repsol said it could reach at least 70% of its goal using technology that was already developed or nearly mature, and then would implement carbon capture, use and storage to raise that figure, and turn to natural sinks if necessary.

"We are convinced that we must set more ambitious objectives to fight climate change," Chief Executive Josu Jon Imaz said in a statement.

Giving extra impetus to its new goals, Repsol will link at least 40% of managers’ long-term variable pay to its emissions reduction targets.

It will also increase its targets for low-carbon generation capacity to a total 7.5 gigawatts in Spain and beyond by 2025, double its production of biofuels from vegetable oils, and start producing green hydrogen in its refining business.

As MRC reported earlier, in the last week of September 2019, Spain’s Repsol resumed operations at its cracker in Sines, Portugal. The news was not directly confirmed by the company while it was not clear as of the time of press whether or not Repsol lifted a force majeure at the site. The company had declared the force majeure on the output from its cracker due to a technical glitch in early September. The cracker has a production capacity of 410,000 tons/year of ethylene and 215,000 tons/year of propylene. The company also owns a butadiene unit with a production capacity of 45,000 tons/year at the same site.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,904,410 tonnes in the first eleven months of 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments increased from both domestic producers and foreign suppliers. The PP consumption in the Russian market was 1,161,830 tonnes in January-November 2019, up by 7% year on year. Deliveries of all grades of propylene polymers increased, with the homopolymer PP segment accounting for the largest increase.

Repsol S.A is an integrated Spanish oil and gas company with operations in 28 countries. The bulk of its assets are located in Spain.
MRC

MOSCOW (MRC) -- Saudi Arabia, the world’s biggest oil exporter, may cut the prices of its light crude grades sold to Asia in February on signs of slowing demand ahead of the region’s peak refinery maintenance season, reported Reuters with reference to six trade sources' statement.

The official selling price (OSP) of flagship Arab Light crude in February could fall by 20-30 cents a barrel, four of six respondents in a Reuters survey said. State oil company Saudi Aramco raised the Arab Light OSP to the highest in six years in January, the fourth month of increases.

Aramco may cut the OSP as the price structure for Middle East crude benchmark Dubai indicated falling crude demand in February as cargoes loading that month are likely to arrive when Asian refineries begin shutting for maintenance in March, the sources said.

The average backwardation between the first and third month cash Dubai price so far this month narrowed by 15 cents from the previous month, Reuters data showed. In a backwardated market prompt prices are higher than those in future months.

The OSPs are also likely to drop as the gross product worth, which measures the value of a crude in terms of the fuels it yields after refining, for Saudi oil grades are lower than last month because of falling refining margins, one of the respondents said.

"Refining margins are under pressure," he said.

Arab Extra Light may see a bigger price cut in February after naphtha cracks weakened this month, the sources said.

However, firm demand for January-loading cargoes and rebounding fuel oil margins will support the OSPs for heavier Saudi oil, they said.

Most of the survey respondents expect the February OSP for Arab Medium to remain unchanged or drop slightly while the view was split between an expected price hike and price cut for Arab Heavy.

Supplies of these grades could remain tight as demand from new Chinese refineries will continue to rise in 2020 even as Saudi Arabia and Kuwait are working on resuming output from their joint production in the Neutral Zone between them.Saudi crude OSPs are usually released around the fifth of each month, and set the trend for Iranian, Kuwaiti and Iraqi prices, affecting more than 12 million barrels per day (bpd) of crude bound for Asia.

Saudi Aramco sets its crude prices based on recommendations from customers and after calculating the change in the value of its oil over the past month, based on yields and product prices.

Saudi Aramco officials as a matter of policy do not comment on the kingdom’s monthly OSPs.

As MRC wrote before, Saudi Aramco, which temporarily lost half of its oil production following the September 14 attacks on two key oil facilities, has been running its local refineries at full capacity since November 2019 and is forging ahead with plans to start up new refineries. The company is also starting up a joint venture refinery in Malaysia in 2020. According to Aramco's bond prospectus released in April, the refining and petrochemical joint venture with Petronas - the Malaysian national oil company - collectively known as PRefChem, was supposed to start this year.

The PRefChem joint venture includes a 300,000 b/d refinery, an integrated steam cracker with capacity to produce 1.3 million mt of ethylene located in Johor, Malaysia. Aramco was supposed to provide a significant portion of PRefChem's crude supply under a long-term supply agreement. Jazan and PrefChem will help Aramco reach a gross refining capacity of 5.6 million b/d, it said in the prospectus. The company currently owns and has stakes in four refineries abroad with a total refining capacity exceeding 2 million b/d.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polyprolypele (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,904,410 tonnes in the first eleven months of 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments increased from both domestic producers and foreign suppliers. The PP consumption in the Russian market was 1,161,830 tonnes in January-November 2019, up by 7% year on year. Deliveries of all grades of propylene polymers increased, with the homopolymer PP segment accounting for the largest increase.

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