Sri Lanka minister says Sinopec to start work on refinery by June

The world's largest refiner, China's Sinopec, plans to start work on a refinery in Sri Lanka by June, the power minister said, advancing a project earmarked as the biggest investment in the crisis-hit island nation, said Hydrocarbonprocessing.

Sri Lanka is looking to attract investment in the battle to stabilize its economy and return to growth following a financial crisis caused by a severe shortfall of dollars in 2022 that led the economy to contract 2.3% last year.

Officials of Sinopec Overseas Investment Holding are visiting Colombo for talks with Sri Lankan authorities. "The officials indicated that the management of Sinopec has decided to double the capacity of the refinery from the original proposal," the minister, Kanchana Wijesekera, wrote on social media platform X.

"They intend to sign the agreements for the project and commence work by June 2024." Sri Lanka's cabinet approved the project in November, an investment that Wijesekera has earlier tagged at USD4.5 billion.

China is Sri Lanka's biggest two-way lender, with its companies building highways, sea and air ports and other infrastructure on the island off India's southern coast. The investment by Sinopec, one of the largest producers of petrochemicals, is part of an effort to expand beyond China, in which it has acquired refinery assets in Saudi Arabia and petrochemicals production in Russia.

Iran built Sri Lanka's only refinery at Sapugaskanda in the western region in 1969. It can process 38,000 barrels of crude a day.

We remind, Sinopec Engineering (Group) Co. Ltd. has reported CNY/RMB 34.6 billion ($4.8 billion) in revenue from petrochemical contracts for 2023, up 9.5 percent against 2022. The company, majority-owned by the state’s China Petrochemical Corp. (Sinopec Group), attributed the growth to domestic projects including an ethylene production facility of Exxon Mobil Corp., an ethylene co-venture between Sinopec and Ineos, and the second phase of Sinopec’s Zhenhai Base refining and chemical complex.

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Lummus Technology, a global provider of process technologies and value-driven energy solutions, announced that SABIC Fujian Petrochemical Co., Ltd.'s grassroots complex in Fujian Province, China, will leverage Lummus' ethylene and co-monomer technologies, said Hydrocarbonprocessing.

SABIC Fujian Petrochemicals Co., Ltd. is a joint venture between SABIC Industrial Investment Company (wholly owned by SABIC) and Fujian Fuhua Gulei Petrochemical Co., Ltd. (holding by Fujian Energy and Petrochemical Group). Formed in 2022, SABIC Fujian Petrochemicals Co., Ltd. is a 51:49 joint venture, with SABIC being the majority owner. On January 22, 2024, SABIC announced the final investment decision for the SABIC Fujian Petrochemical Complex (Sino-Saudi Gulei Ethylene Complex Project) and plans to begin construction this year and expects to complete construction in 2026. The complex is the largest single investment joint venture project with foreign investment in Fujian Province to date.

"We commend and congratulate SABIC Fujian Petrochemicals Co., Ltd. for making this critical investment decision and look forward to helping them reach many more milestones," said Leon de Bruyn, President and Chief Executive Officer of Lummus Technology. "This project highlights Lummus' unique capability to integrate our solutions during customers' investment and operating cycles, lowering costs, reducing energy consumption, enhancing reliability and yield, and optimizing operations."

Lummus' scope for the project includes technology license and basic design engineering for up to 1800 KTA ethylene/1020 KTA propylene MFSC unit, a 60 KTA butene-1 unit and BTX products. Lummus will also supply its proprietary heater equipment and CDModules.

Lummus is the world's leading licensor of ethylene technology, having licensed more than 200 ethylene plants around the world, accounting for approximately 45 percent of global ethylene capacity. Lummus has also completed over 250 ethylene grassroots, revamp and expansion design projects, more than any competing technology licensor.

We remind, Saudi chemical manufacturer Sabic signed a memorandum of understanding with Pashupati Group, an India-based mechanical and chemical recycler of PET and polyolefins. The companies will explore, evaluate, and develop local business opportunities for recycling waste plastics in India, including the potential development of a pyrolysis plant to provide Sabic with feedstock for its circular polymers.

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Chemours Co, opens new tab on Wednesday reported a smaller loss for the fourth quarter and announced revisions to certain past financial results following an internal review into accounting issues, said Reuters.

The internal review revealed earlier this month that its senior executives had manipulated some vendor payments and collections of receivables in the fourth quarter of 2023, in part to meet free cash flow targets tied to their incentives.

Chemours said on Wednesday the review identified "material weaknesses" in its internal control over financial reporting and resulted in revisions of its balance sheet as of Dec. 31, 2022, and its cash flow statements for 2021 and 2022.

It also led to "immaterial revisions" to financial statements for March, June and September, 2023. The review did not result in any misstatements of the company's financial statements or disclosures.

Shares of the chemical company fell 8% in trading after the bell. Chemours had earlier said its preliminary results would not be impacted by the internal review and later appointed chemical industry veteran Denise Dignam as CEO.
It reported a net loss of $18 million, or 12 cents per share, for the three months ended Dec. 31, compared with a loss of $97 million, or 65 cents per share, a year earlier, helped by lower costs.

The twice-delayed results came a month after the company placed its top three executives, including CEO Mark Newman, on administrative leave and said it was looking into potential "material weaknesses" in its financial reporting.
Chemical companies have been trying to reduce costs to combat low demand and destocking trends in the past year that were driven by weaker-than-expected growth in China and across major economies.

Separately, Chemours said it expected first-quarter net sales to be flat to down sequentially and capital expenditures of about USD100 million.

It also expects a 10% sequential decline in net sales for the Titanium Technologies segment owing to seasonally weak demand for titanium, and a sequential 10% decline in the Advanced Performance Materials unit's net sales due to softness in certain end markets.

We remind, Chemours, a global chemistry company with leading market positions in Titanium Technologies, Thermal & Specialized Solutions, and Advanced Performance Materials, announced that the U.S. Department of Energy (DOE), under the Bipartisan Infrastructure Law, selected two of its applications for grants totaling USD60 million.

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China imported 15,700 tonnes of petroleum products from Azerbaijan in January-February 2024, Interfax has calculated based on data from the General Customs Administration of the People's Republic of China, as per Interfax.

The entire volume of products was delivered in February. Supplies are estimated at approximately USD6.8 million in value terms.

The administration has not provided data for the same period last year.

Meantime, the administration said that China exported around 2,600 tonnes of jet fuel to Azerbaijan in January-February 2024, an increase of 10.9% year-on-year by approximately USD2.4 million, growth of 1.7 %.

We remind, Gazprom is sticking to its goal of achieving 100% of the technically possible level of network gasification by 2030, and is actively working with the regions via five-year programs, Deputy Chairman of the Board of Gazprom Oleg Aksyutin said in an article in the company's corporate magazine.

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Russia's plastic pipe market could grow to more than 1 million tonnes in 2025, Polyplastic Group operations director Kirill Trusov forecast, said Interfax.

"We crossed the threshold of 850,000 tonnes for the whole plastic pipe market in 2023 and we have a very good chance of crossing 900,000 tonnes in 2024. And in 2025, I'm confident, the market in Russia will certainly, through joint efforts, already break through the threshold of 1 million tonnes. And we further hope that it will not just break through, but also firm up there, not decreasing anymore," Trusov said at a conference on plastic pipe systems.

The market totaled 793,000 tonnes in 2022, with interior systems making up 18% and exterior networks 82%, and grew to 866,000 tonnes (17% and 83%, respectively) in 2023, according to Trusov's presentation. It is forecast to grow to 934,000 tonnes in 2024 (16% and 84%, respectively).

"If you look at consumption, why we're growing, again, there are no surprises. The foundation is cold water supply and a little water disposal. However, if we're talking about the growth leader, gas is leading by far, growing by 150% in five years, and now makes up a very substantial, stable part of our market," Trusov said.

Polyplastic Group is the largest manufacturer of plastic pipes for external water supply and wastewater disposal, gas distribution and heating networks. The group includes pipe plants in Russia, Belarus and Kazakhstan with combined capacity of about 750,000 tonnes.

The group's sales grew to over 90 billion rubles in 2023 from 77 billion rubles a year earlier, and its production rose 9% to 283,000 tonnes. The group aims to increase sales to 105 billion-110 billion rubles in 2024.

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