New PMMA plant for Novokuibyshevsk - Issue 236 || SANORS-plans to construct large chemical complex - Issue 268 || Russian cracker feedstocks - Issue 268 || Ricoal plans coal based chemical complex in Rostov region - Issue 268 || SIBUR, updated Q1 2013 results - Issue 271 || Nizhnekamskneftekhim, Jan-Jun 2013 - Issue 273 || Ukrainian organic chemicals, Apr-Jun 2013 - Issue 273 || Synthos, Jan-Jun 2013 - Issue 274 || Eastern Petrochemical Company-challenges faced in completion of refinery & cracker - Issue 274 || Nizhnekamskneftekhim-FEED for new cracker - Issue 274 || Tobolsk-Neftekhim, gas fractionating plant - Issue 274 || Russian phenol sales & production, Jan-Jul 2013 - Issue 274 || SIBUR, paraxylene costs - Issue 274 || Alko-Naphtha-PTA - Issue 274 || Polief-PET expansion - Issue 274 || United Petrochemical Company-PET project - Issue 274 || Metafrax, ammonia and urea projects - Issue 274 || Unipetrol-Ineos licence for Innovene HDPE plant - Issue 275 || Russian chemical industry projections 2013 - Issue 275 || Gazprom-Belogorsk gas-chemical & helium project - Issue 275 || Nizhnekamskneftekhim, polyolefin projects - Issue 275 || Russian benzene, Jan-Sep 2013 - Issue 275 || Russian paraxylene-PTA - Issue 275 || Nizhnekamskneftekhim-isoprene rubber - Issue 275 || TVK-butadiene project construction - Issue 275 || Russian investment in the gas-chemical industry - Issue 278 || Vyngapur to become centre for natural & associated gas - Issue 278 || VNKH-loan approved for Nakhokda petrochemical project - Issue 278 || LUKoil-Budyennovsk petrochemical investments - Issue 278 || Russian chemical production 2013 - Issue 278 || Novatek expandsf Purovsky gas condensate plant - Issue 278 || Russian styrene market 2013 - Issue 278 || Russian polycarbonates 2013 - Issue 278 || Russian synthetic rubber production 2013 - Issue 278 || Russian butanols production 2013 - Issue 278 || United Petrochemical Company-epuxy resins - Issue 278 || Russian butanol exports, Jan 2014 - Issue 279 || Stavrolen could be down for a while - Issue 280 || Omsk Kaucuk, fire and stoppage of phenol-acetone production - Issue 280 || Khimprom-MDI project - Issue 280 || Rosneft-Angarsk methanol project - Issue 280 || VNHK Nakhodka - Issue 280 || Vyngapur to become centre for natural & associated gas - Issue 280 || Russian pentanes, Jan-Feb 2014 - Issue 280 || Russian propane, Jan-Feb 2014 - Issue 280 || Grupa Azoty 2013 - Issue 280 || Synthos-Brazil - Issue 281 || Ukraine-financial performance chemcal companies 2013 - Issue 281 || Russian ethylene market, Q1 2014 - Issue 281 || Russian polypropylene, Q1 2014 - Issue 281 || Khimprom Novocheboksarsk project investments - Issue 281 || Crimean Titan, Q1 2014 - Issue 281 || Crimean Soda, Q1 2014 - Issue 281 || Ukrainian chemical market - Issue 281 || Turkmenistan polyolefin project - Issue 281 || Synthos-Q1 2014 - Issue 282 || Grupa Azoty investment projects - Issue 282 || Russian chemical production, Q1 2014 - Issue 282 || Prospects for Irkutsk petrochemical projects after Russian-Chinese gas deal - Issue 282 || Russian PTA import duties - Issue 282 || SIBUR-Sinopec jv for rubber production in China - Issue 282 || KZSK Silicon credit line - Issue 282 || UzIndoramaGasChemical - Issue 282 || Zapsibtransgaz-Gubkinsky - Issue 284 || Azoty-Akron - Issue 284 || Irkutsk Oil Company-Power of Siberia - Issue 284 || VNKH-Nakhodka - Issue 284 || United Petrochemical CompanyAlpek PTA & PET jv - Issue 284 || Gazprom neftekhim Salavat-acrylic project - Issue 284 || Nefis Cosmetics 2013 - Issue 284 || Air Products-new industrial gas project at Rostov - Issue 284 || Khimprom-Novocheboksarsk - Issue 284 || Uzbek petrochemical projects - Issue 284 || Turkmen PVC project - Issue 284 || SIBUR-Kstovo, ethylene expansion - Issue 285 || Russian ethylene and propylene - Issue 285 || Russian synthetic rubber market - Issue 285 || Khimgrad-Kazan expansion plans - Issue 285 ||
 
  

 

 

 

Latest issues of CIREC Monthly News for August 2014 (no 284) and CIS Chemical Industry News (no 44) now available

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Shchekinoazot lays foundations for new methanol project


Naftan PTA project

Poland's chemical production for Q2 2014 updated

VNHK faces major challenges in building refinery/petrochemical complex

Russian chemical & petrochemical production totals for Q1 2014 available on CIREC’s Statistical Database

Poland's chemical production available on CIREC’s Statistical Database

Central European Chemical Industry News.  Contact us if you wish to receive the report regularly

**Russian plant capacity data from 2010 to 2025 is now available on CIREC’s Statistical Database

This unique source shows current product capacity levels by producer for over 40 main chemical products in Russia, showing the changes that can be expected in the next decade.  New projects are added when there is a realistic prosoect of new capacity materialising.

 

Chemical Market & Project News, July 2014

 

Russia/Ukraine

Central & East Europe

Russian chemical trade Q2 2014

TVK reports improved results for Q2 2014

Ukraine-chemical markets 2014

Grupa Azoty, polyamide expansion

Crimean soda ash and titanium dioxide plants

Central European butadiene projects

Kaustik, Volgograd 2013

Grupa Azoty increases turnover in Q2 2014 following consolidation

Russian methanol projects, 2014-2020

PCC Rokita achieves successful bond launch

Prospects for Irkutsk petrochemical projects after Russian-Chinese gas deal

Synthos investing in Brazil, but not in Lotos-Azoty project


web analytics

Russian Petrochemical Monthly Statistics Available on Request from CIREC

By Producer & Volume

NGLS LPGS
Benzene Ethylene
Propylene Methanol
Phenol Styrene
Toluene Orthoxylene
  • Synthos outlines ambitious investment plans up to 2018

  • Slovnaft completes set-up for logistics for new LDPE plant

  • Ciech bought by KI Chemistry, questions remain over Organika-Sarzyna

  • Grupa Azoty Kedzierzyn embarks on coal-fired power project

  • Russian trade deficit in chemicals declines from $6.9 billion to $6.3 billion in Jan-Apr 14

  • Gazprom announces tender for FEED for the Amur gas-chemical complex

  • Irkutsk Oil Company receives approval for gas processing plant at Ust-kut

  • Purovsky-Tobolsk gas liquid pipeline completed, allowing increased in input

  • SIBUR’s overall profits improve in Q1 2014, although petrochemicals were flat

  • Stavrolen aims to restart Budyennovsk cracker by January 2015

  • Kazan silicon project starts construction in June with 2016 set for completion

  • Nizhnekamskneftekhim remains largest methanol consumer in Russia

  • Ukrainian polymer imports decline due to economic difficulties

  • Promsintez increases merchant sales of nitrobenzene in 2013

  • Russian FAS examines domestic soda ash market, pressure for duties?

  • Evonik entering oil field chemicals market in Russia

  • Metafrax sets targets for increases in captive usage of methanol

  • Naftan plans to construct MTBE plant at Novopolotsk

  • Crimean Soda faces uncertain future, Bashkir Soda could buy assets from GDF

  • Russian PVC imports decline 47% IN Jan-May 2014

  • Sberbank and AzMeCo agree financial terms to support further development

  • Ineos signs license agreement for Turkmenistan polyolefin project

     


  • Russian Chemical Company Reviews 2013

    (contact us for details)

    Nizhnekamskneftekhim Kazanorgsintez
    SIBUR Togliattiazot
    Gazprom neftekhim Salavat Metafrax
    Kuibyshevazot Shchekinoazot
    SDS Azot Kemerovo Kaustik Volgograd
    Sayanskkhimplast Bashkir Soda
    Sterlitamak Petrochemical Plant Nefis Cosmetics
    TVEL Galopolymer


 

Russian Petrochemical Prices July 2014

Product/Company      

Benzene

Condition Supply Point Roubles per ton, inc VAT
Severstal FCA Koshta 47,000
Angarsk Polymer Plant FCA Sukhovskaya n/a
West Siberian MK FCA Novokuznetsk 46,600
Novokuznetsk MK FCA Lipetsk 40,710
SIBUR-Kstovo FCA Kstovo Maintenance
Gazprom Neft FCA Kombinatskaya 43,500-44,500
Gazprom neftekhim Salavat FCA Salavat n/a
Ufaneftekhim FCA Zagorodnaya n/a
Uralorgsintez FCA Chaikovsky Maintenance
Kirishinefteorgsintez FCA Kirsihi 42,500-43,500
Chelyabinsk MK FCA Chelyabinsk n/a

Styrene

     
Angarsk Polymer Plant FCA Angarsk n/a
Gazprom neftekhim Salavat FCA Salavat 62,700-63,700
SIBUR-Khimprom FCA Perm 67,000
Plastik (Uzlovaya) FCA Uzlovaya 67,000
Nizhnekamskneftekhim FCA Bikliyan n/a

Methanol

     
Metafrax FCA Gubakha 14,750-15,930
Togliattiazot FCA Togliatti 14,100-16,500
Shchekinoazot (to 500 tons) FCA Kaznacheevka 20,000
Shchekinoazot (500-1000 tons) FCA Kaznacheevka 16,500
Shchekinoazot (1000-5000 tons) FCA Kaznacheevka 14,000
Sibmetakhim FCA Tomsk 13,000-15,000
Azot Novomoskovsk FCA Novomoskovsk 15,694

N-butanol

     
Gazprom neftekhim Salavat FCA Salavat 50,500
SIBUR-Khimprom FCA Perm 53,500
Angarsk Petrochemical FCA Angarsk 42,000
Azot Nevinnomyssk FCA Nevinnomyssk n/a

Isobutanol

     
Gazprom neftekhim Salavat FCA Salavat 50,370
SIBUR-Khimprom FCA Perm 47,500
Angarsk Petrochemical FCA Angarsk 36,000

Toluene

     
Kirsihinefteorgsintez FCA Kirsihi 37,500
Gazprom Neft FCA ???? 34,500
West Siberian MK FCA Novokuznetzk 33,500-34,000
Slavneft-Yanos FCA Yaroslavl 38,000
LUKoil-NNOS FCA Perm Maintenance
Orthoxylene      
Kirsihinefteorgsintez FCA Kirsihi 35,300
Ufaneftekhim FCA Ufa 34,000
Gazprom Neft FCA Omsk 34,500

Phenol

     
Omsk Kaucuk FCA Omsk Maintenance
Kazanorgsintez FCA Kazan 78,500-79,000
Samaraorgsintez FCA Samara 79,060
Ufaorgsintez FCA Ufa 75,000

Acetone

     
Omsk Kaucuk FCA Omsk Maintenance
Kazanorgsintez FCA Kazan 42,480
Samaraorgsintez FCA Samara 42,000
Ufaorgsintez FCA Ufa 42,000

MEG

     
SIBUR-Neftekhim FCA Igumnovo 54,000
Nizhnekamskneftekhim FCA Bikliyan 53,100
Kazanorgsintez FCA Kazan 50,740

PKN Orlen, Jan-Jun 2014

PKN Orlen posted a record quarterly loss in the second quarter after writing down the value of its refinery divisions in Lithuania and the Czech Republic.  Its second-quarter net loss widened to zl 5.2 billion from zl 207 million in 2013 after writing down zl 4.2 billion from the value of its Lietuva unit whilst cutting the value of Unipetrol by zl 711 million.  The Lithuanian unit, which Orlen bought for $2.8 billion in 2006, has continued to post losses partly influenced by the deterioration in sales to the US, its main market, which have slumped on a shale boom in North America.  Lietuva faces a temporary shutdown in late 2014 or early 2015 and the length of the halt will depend on global refining margins. 

PKN Orlen Group Chemical Sales

(unit-kilo tons)

Product

Jan-Jun 14

Jan-Jun 13

Monomers

423

355

Polymers

287

344

Aromatics

201

188

Fertilisers

487

488

Plastics

230

223

PTA

251

271

Other

726

728

Total

2605

2597

Despite the challenging market environment and a drop in downstream margin, PKN Orlen posted an improvement in its EBITDA, to zl 856 million.   It also saw a rise in revenue and maintained total sales volumes largely comparable with those seen in Q2 2013.  

In Q2 2014, the downstream division's performance was under pressure from the difficult macroeconomic environment and overhaul shutdowns in Poland.  The EBITDA of zl 612 million before impairment was a combined outcome of a growth in sales of refining and petrochemical products in the Czech Republic, a decline in the Polish market, subdued sales of refining products in Lithuania, and improved fuel yields in the Czech Republic and Lithuania.

In the first half in 2014, Orlen’s downstream division amounted to zl 1,121 million.  The decrease of the model downstream margin on refining and petrochemical products by $2.3/bbl as well as with additional effect of lower margin on butadiene had a negative impact on EBITDA on the division of zl (-) 518 million.  The positive volume effect of the division of zl 79 million was achieved despite the lower total sales volume of the division is the result of increased sales in the Czech Republic due to higher installation availability and increased production capacity after the acquisition of 16.3% stake in Ceska Rafinerska from Shell. 

The impact of higher volumes on the Czech market has compensated lower sales in the markets served by Orlen Lietuva Group and decreased sales volumes in Poland as a result of reduced sales to oil companies and reduced export to eastern markets (Ukrainian conflict).

In the area of petrochemicals the decrease in volumes on the Polish market in the first half of 2014 were partly linked to the shutdown of the PX/PTA complex.  The installation of the PVC and caustic soda plants in the Anwil Group was partially compensated with higher volumes at Spolana due to the improved market conditions and no floods in the Czech Republic this year.

In the first half of 2014 Orlen increased the division’s capital expenditures by zl 1,046 million to zl 1,580 million.  The largest capital expenditure projects were undertaken in the CCGT power plant at Wloclawek, the installation of Catalytic Denitrification and Dedusting and Flue Gas Desulphurization Installation, replacement of pipelines on Hydrocracking plant, construction of reformate tanks on the Composition Department, modernisation of starting collector of Boiler of Power Heating Plant, adaptation of handling tank for storage of hydrocarbon liquid streams of Ethylene Unit.

It also includes the modernisation of furnace of Olefin Unit II, works connected with decrease of acetic acid on PTA Installation as well as projects related to the construction of gas power plant in Wloclawek by PKN Orlen.  Other projects at Wloclawek for the Anwil Group included the construction of loading and package storage installation and modernisation of Freon-cooling system. 

PKN Orlen-strategy 2014 to 2017

PKN Orlen has announced its strategy for 2014–2017 which focuses on securing a strong position in large and promising growth markets and strengthening the value chain, and sustainable development of its upstream operations.   In 2014−2017, PKN Orlen plans to spend zl 10.8 billion on development projects, including zl 6.4 billion in the downstream division (refinery, petrochemicals, and power generation), zl 3.2 billion in the upstream division, and zl 1.2 billion in the retail division.  The planned capital expenditure is consistent with the assumed average annual EBITDA of zl 5.1 billion.

In the power division, construction has been ongoing this year of the CCGT unit at Wloclawek which is planned for launch in Q4 2015.  Orlen upstream is currently working on its 11th exploration well in Melgiew in the Swidnik region.  In search of unconventional hydrocarbon deposits, Orlen upstream plans to drill another horizontal well at Nowy Streczyn in the second half of the year.  

Unipetrol, Jan-Jun 2014

Unipetrol's Petrochemical Sales

(unit-kilo tons)

Product

Jan-Jun 14

Jan-Jun 13

Ethylene

82

68

Propylene

19

17

Benzene

111

96

Urea

0

5

Ammonia

120

95

Butadiene

31

27

HDPE

152

135

PP

135

121

C4

43

42

Total

693

606

 Unipetrol Group posted revenues in the second quarter this year of Kc 32.440 billion, 31% up over the same period in 2013.  The increase was driven principally by higher refining capacity utilisation in Ceska Rafinerska and higher sales volumes across all divisions (refinery, petrochemical, retail).  Overall for the first half of 2014 Unipetrol increased revenues to Kc 61.2 billion from Kc 49.5 billion in 2013.  The increase was driven mainly by operation of higher refining capacity from February upon successful completion of the acquisition of Shell’s stake in Ceská Rafinérská, which boosted refining sales volumes by a wide margin.  Revenues were also positively influenced by a significant increase of petrochemical sales volumes and by weaker Kc vis-à-vis the euro and the USD by 7% and 2% respectively.

Despite the rise in revenues in the second Unipetrol recorded a net loss of Kc 2.682 billion against a loss of Kc 579.4 million in the period January to June last year.  The operational profit for Unipetrol was affected by one-off impairment of refining division assets in the second quarter in 2014.  The company recorded an operational loss Kc 4.171 billion in the first half of 2014 against Kc 688 million last year.  Operating profitability in Q2 this year, excluding one-off impairment, achieved a positive result of Kc 1.044 billion which implies improvement by Kc 381 million compared with Q2 2013.

Unipetrol processed 1.331 million tons in the second quarter, 47% higher than in 2013.  The refinery division recorded an EBITDA f of Kc -4.647 billion in the second quarter, mainly due to one-off impairment of fixed assets and driven by a deteriorated mid-term outlook.  Group sales of refinery products increased to 1.130 million tons (+39%) in Q2, mainly due to the increased share in Ceska Rafinerska and due to uninterrupted production compared to 2Q13.

Refining macro environment was extremely challenging during first half of 2014 as model refining margin achieved worse levels than in 2013 and was even below the lower bound of the long-term range of 2009-2013.  This was driven mainly by very weak diesel spread, with an average of $99/ton in first half of 2014.  No major turnarounds of Unipetrol’s refineries are planned for the remainder of 2014.

 The operational profit in the petrochemical division amounted to Kc 856 million in April to June 2014.  Unipetrol’s unplanned steam-cracker shutdown in May, which lasted 3 days, had a negative impact of Kc 39 million.  The company recorded a sales increase of petrochemical products to 445,000 tons in Q2, up 14% due to higher sales of both olefins and polyolefins.  The results of the division were also positively influenced by favourable GDP dynamics despite a decline in olefin margins by 10%.  Renewable energy charges (OZE) continues to burden the results of petrochemical division.

Unipetrol’s petrochemical division improved its profitability in first half of 2014 to Kc 1,853 million from Kc 1,410 million in 2013.  The improvement was driven by a significant increase of sales volumes by 12% from 792,000 tons in 2013 to 885,000 tons in 2014.  The company was helped by higher utilisation of the steam-cracker and polyolefin units.  Favourable GDP dynamics of the Czech and euro area economy supported sales volumes as well.

The model combined petrochemical margin was €631/ton) in the first half of 2013 vs €638/ton in first half of 2014.  However the model olefin margin declined by 6% from €389/ton in 2013 to €367/ton in the first half of 2014, affecting profitability of steam-cracker products (olefins such as ethylene).  Conversely, the model polyolefin margin increased by 12% from €242/ton in the first half of 2013 to €271/ton in 2014, supporting profitability of polyethylene and polypropylene.  

In the second half of the year the petrochemical division will focus on the reconstruction of the T700 power plant at the Chempark Záluží which is being undertaken partly to meet the demands for the new polyethylene unit.  The PE3 plant is under construction at present.  The reconstruction of the steam-cracker and the reconstruction of pyrolysis furnace BA-103 is planned for the second half of 2014. 

Czech oil transportation

On 25 June 2014, Ceska Rafinerska and the Slovak national pipeline operator Transpetrol signed a pipeline transportation contract that determines new tariffs for crude oil transportation to the Czech Republic through the Slovak branch of the Druzhba Pipeline for the years 2015 and 2016.  Russian Export Blend Crude Oil (REBCO) from is transported through the Druzhba Pipeline to the Litvinov refinery.  The part of the Druzhba Pipeline located on the territory of Slovakia is owned and operated by Transpetrol and thus the contract is important in terms of the Czech Republic’s oil security.

Synthos butadiene project-Brazil

The project to build a factory by Synthos for production of synthetic rubber in the Triunfo Petrochemical Complex in Brazil has been suspended due to uncertainty over butadiene supply.  When establishing the draft of the project earlier this year Synthos imposed a provision whereby if Braskem could guarantee butadiene supply by 30 June the project would be shelved.  Braskem continues to negotiate with Petrobras to provide the guarantees required by Synthos for the project to be resumed.

On 18 July the European Commission granted Synthos Dwory funding from the European Regional Development Fund of approximately zl 589 million to create 162 jobs in the Malopolska.  The funds are being used to support the S-SBR project at Oswiecim and to help create an R&D centre. 

MOL, Jan-Jun 2014

Second-quarter net income of MOL rose 27% to Ft 24.0 billion ($103 million) from the same period in 2013 as costs declined at a faster rate than revenue.  In Q2 2014, MOL Group generated an EBITDA of Ft 95 billion, which was lower than the previous quarter by 9%, mainly attributable to weaker figures in the upstream sector.

Downstream the EBITDA showed improvement compared to the previous quarter. The seasonally higher sales volumes boosted both Refining & Marketing and Retail’s performances. However, a further 12% drop in the diesel crack spread to a 4-year low had serious negative effects on profitability, as gasoil and other middle distillates represent roughly 50% of the product slate.

MOL's Olefin & Polyolefin Sales

(unit-kilo tons)

Product

Jan-Jun 14

Jan-Jun 13

Ethylene

171

168

Propylene

85

86

Product

Jan-Jun 14

Jan-Jun 13

LDPE

44

36

HDPE

85

91

PP

114

91

In the first half of 2014, MOL delivered an EBITDA of Ft 200 billion which is a 22% decrease compared to the same period in 2013.  Downstream CAPEX more than doubled year-on-year and amounted to Ft 63billion mostly driven by the construction of the Butadiene plant and the completion of Slovnaft’s major maintenance activities.  Consolidated revenue fell 7% to Ft 1,238.0 billion during the period.  Total operating costs fell slightly more, by 8%, to Ft 1,205.3 billion.  In tightening external market conditions MOL’s Q2 2014 downstream EBITDA amounted to Ft 29 billion, versus Ft 44 billion in 2013. 

Petrochemicals’ performance was favourably impacted by reduced energy costs and favourable foreign exchange movements, off-setting the decline of the integrated margin by 8%.  As a result the EBITDA for petrochemicals doubled to Ft 8 billion.

Slovnaft, Jan-Jun 2014

In the second quarter this year the Slovnaft Group recorded a net loss of €10 million due mainly to the external environment but also the lower sale of refinery products due to general turnarounds.  Favourable development of raw material prices and further savings on the cost-side had a positive impact on the results.  Slovnaft continued with a strong investment programme, spending €73.4 million in the second quarter against €52.4 million in the same quarter last year.  A significant part of investments in the second quarter this year (€46.6 million) was allocated to production efficiency projects, improvement of operating reliability and production process quality.

Investments in the petrochemical division with higher performance by €16.3 million represent construction of LDPE 4, a new production unit.  Capital expenditures to HSE projects were lower by €3.9 million compared to the same period of the previous year.  The impact is from finished main part of ecological projects from BTX loading into rail tanks.

Slovnaft’s planned turnarounds in the second quarter meant that crude oil processing was reduced and sales of finished products decreased, which was partially compensated by higher sale of inventories.  The completed plant overhaul should allow Slovnaft to operate at full capacity at least for the rest of this year.  

TVK's Sales' Revenues (Ft million)

Exports

Jan-Jun 14

Jan-Jun 13

Olefin

1,545

4,849

LDPE

9,549

56

HDPE

54,802

63,316

PP

25,632

26,929

Domestic

Jan-Jun 14

Jan-Jun 13

Olefin

66,671

66,275

LDPE

5,056

2,414

HDPE

6,026

6,274

PP

26,523

21,551

Total Sales

Jan-Jun 14

Jan-Jun13

Olefin

68,216

71,124

LDPE

14,605

2,470

HDPE

60,828

69,590

PP

52,155

48,480

Total

195,804

191,664

Total sales revenues of refinery products decreased by 28% in Q2 2014, due to lower production in company related to shutdown of production units.  Sales revenues decreased by 25% in the first half whilst costs of raw materials and cost of goods sold decreased by 29% also due to lower processing.

TVK, Jan-Jun 2014

TVK reported a Ft 12.5 billion operating profit for the first half of 2014, Ft 6.5 billion higher than in the same period in over 2013.  TVK’s profit before tax amounted to Ft 11,195 million in the H1 2014, representing a Ft 7,105 million increase.

Factors helping the increase were the favourable exchange rates, decreasing energy prices and non-recurring incomes.  The energy costs went down by Ft 3.1 billion due to the savings on energy prices following the price reduction for natural gas and steam.  Furthermore a one-off Ft 1.6 billion income was received from the insurance compensation for the fire accident at the LDPE-2 unit in 2012 and from the sale of the land, where the synthetic rubber plant will be constructed.  However in the first half of 2013 TVK achieved an income of Ft 327 million from the CO2 quota sale, which did not repeat itself in 2014. 

TVK Financial Performance

(million euros)

 

Jan-Jun 14

Jan-Jun 13

Net Sales

650

662

EBITDA

62.1

43.2

Operating Profit/Loss

40.8

20.2

 Polymer production increased by 1.4% in the first half of 2014, while polymer sales went down by 0.3%.  Capacity utilisation increased by 3% to 83% in the first six months in 2014.  This was despite the two week shutdown at the Olefin-1 unit and the planned maintenance shutdowns at the HDPE-2 and PP-4 units carried out in the second quarter of 2014.  In 2013 the LDPE-2 unit had a production shortfall in first half of 2013 due to the fire accident in 2012. 

TVK’s LDPE-2 plant using BASF technology was built in 1991, with a capacity of 65,000 tpa.  The olefin plants convert naphtha, gasoil and liquefied gases purchased from the MOL Group into ethylene and propylene to be processed into polyethylene and polypropylene in the group’s own polymer plants. 

Despite of the delay in the permit procedure for the construction of the butadiene-extraction unit the project is still making good progress, and the planned start of commercial operation is still feasible for May, 2015.  The columns have been delivered and the tank park established.  The test run for the C4/C5 separation unit and railway load/unload unit were finished successfully.

Consolidated net sales amounted to Ft 199,505 million, 2% higher than in the first half of last year, mainly due to the higher quoted prices of polymer products and the weakening of Ft.

TVK achieved 46% of its sales revenues in the first half of 2014 from export sales.  The main export destinations included Italy (18%), Germany (17%), Poland (15%), Slovakia (5%), Austria (5%), Romania (5%), Ukraine (4%), and Czech Republic (4%). 

Production volumes increased by 1.1%, including a 1.4% growth of polymer production volume.  Raw material costs incurred a 3% increase due to the higher volume of purchased petrochemical feedstock consumption and the higher quoted prices.  At the same time, volume of purchased and processed propylene was higher than in the first half of 2013.  In the first half of 2014 TVK carried out successful maintenance turnarounds in Olefin-1, HDPE-2 and PP-4 units, covering the planned technical content and the spending was within the budget.

BorsodChem is TVK’s strategic partner in the ethylene sales in Hungary.  In the first six months of 2014, we supplied them with the contracted volume, according our long term ethylene supply contract.

TVK plans to start butadiene production from its new 130,000 tpa unit from the end of May 2015.  Besides the butadiene production, the MOL Group plans to enter the attractive divisions of the synthetic rubber market, and build a 60,000 tpa synthetic rubber plant at Tiszaujvaros in partnership with JSR, the Japanese synthetic rubber producer.  MOL Group schedules the start of synthetic rubber production from 2017.

Chemicals

Polish Chemical Production (unit-kilo tons)

 Product

Jan-Jul 14

Jan-Jul 13

 Caustic Soda Liquid

166.3

187.9

 Caustic Soda Solid

50.2

48.0

 Soda Ash 

623.0

595.4

 Ethylene

271.4

298.2

 Propylene

195.5

208.5

 Butadiene

34.9

32.5

 Toluene

8.4

10.7

 Phenol

16.5

20.5

 Caprolactam

95.6

93.8

 Acetic Acid

4.6

4.9

 Polyethylene

201.8

212.7

 Polystyrene

41.4

31.1

 EPS

37.5

43.1

 PVC

153.3

182.4

 Polypropylene

138.0

158.5

 Synthetic Rubber

110.7

113.9

 Ammonia (Gaseous)

803.3

769.4

 Ammonia (Liquid)

773.0

772.4

 Pesticides

22.7

13.8

 Nitric Acid

1348.0

1341.0

Nitrogen Fertilisers

1153.0

1100.0

Phosphate Fertilisers

238.9

226.9

Potassium Fertilisers

172.6

186.4

BASF-new facility

BASF officially opened the new facility to produce a modern car exhaust reduction systems such as catalysts and filters at a cost of the investment at around 150 million euros.  The new plant will employ more than 400 people.

Ciech sale-KI Chemistry

The Polish Treasury received around zl 620 million from the sale of its 37.9% stake in Ciech to KI Chemistry.  The Kulczyk Investments Group has bought the stake which overall gives approximately 51.14% of Ciech.  KI Chemistry has committed to supporting the company in its current activity and take action to strengthen financial market situation and the company.  It also pledged to integrate Ciech business with companies from the group which belongs to KI Chemistry. After divestment Ciech’s main production area is soda ash in which it possesses 1.2 million tpa of capacity in Poland and 1.0 million tpa abroad.

 

 

 

RUSSIA

Russian chemical industry performance, Jan-Jun 2014

Russian chemical producers have reported weaker profit results for the first half of 2014, although in many cases revenues have increased.  Declines in profits are attributable to a variety of factors, including global and internal markets and exchange rate factors.  Rising costs for energy and raw materials have served to offset the advantages of high international prices for some products.  Prices for products such as synthetic rubber reflect global weakness particularly from the tyre industry. 

Export activity in 2014 in petrochemicals has been relatively stable by volume.  Declines have been noted this year in phenol, due to the accident at Omsk Kaucuk, and propylene, due to the accident at Stavrolen. 

The share of exports of chemical products total Russian exports in January-June 2014 comprised was 5.0%, down from 5.3% last year.  Compared with January-June last year, the export value of these products declined by 5.4%, whilst the physical volume increased by 11.0%.  The volume of potash fertiliser exports increased by 52.9% in the first half of 2014, plastics and products by 40.2%, methanol by 10.1%, and organic chemical compounds by 8.1%.  Export volumes declined for detergents by 32.3%, products of inorganic chemistry by 12.0%, and rubber and products by 8.3%.

Chemical products accounted for 16.4% of total imports into Russia in the first half of 2014 against 16.8% in the same period last year.  The value of import of chemical products decreased by 6.2% compared with January-June 2013 and by volume by 11.9%.  The volume of inorganic products decreased by 26.0%, pharmaceutical products by 4.9%, plastics and products by 7.6%.  By contrast, import volumes of soap and detergents grew by 2.0%, whilst cosmetics rose by 1.7%.

Russian petrochemical projects

Lukoil studying impact of sanctions

Lukoil retains its investment plans in petrochemicals at present, but is studying the possible effects of sanctions imposed internationally.  In the current political environment it is hard to see the Kremlin taking any measures in the short term that would appease the EU/US block; thus sanctions seem likely to remain in force for the foreseeable future.  Although Putin’s official popularity is at record highs of 87-88%, beyond the subject of Ukraine many people are less impressed with the leadership on a whole range of issues. 

Last year Lukoil announced its intention to invest at Karpatneftekhim in Ukraine, partly to increase the processing of gas feedstock to 35 tons per month and partly to modernise the VCM plant.  Due to the political issues between Russia and Ukraine it is not inconceivable that Lukoil may wish to offload these assets.  Investment projects for Stavrolen are much larger, involving high-pressure gas pipelines, construction of new power plants and gas, and petrochemical production modernisation. 

Currently, the basis is being laid for the new gas processing plant at Budyennovsk, which is being designed to have a capacity of 2 billion cubic metres per annum.  Associated gas will be supplied from the offshore fields in the North Caspian. 

As a result of these investments, Lukoil intends to increase the share of consumption of natural gas liquids in petrochemical production at Budyennovsk by more than 30%.  The project to increase the share of consumption of natural gas liquids will be completed in mid-to late 2015.  Currently, the share of consumption of gas liquids is 20%, with naphtha providing the remaining share. 

Lukoil recently has issued a tender for the construction of the pipeline from Stavrolen to KS George in order to transport gas from the North Caspian Sea to Budyennovsk.  Documentation states that the price should include the cost of equipment, materials, taking into account their transportation, receiving, unloading and storage (except for the cost of pipes), the cost of works, all the costs of supervision and inspection, overheads, all taxes, duties fees, and other expenses necessary for the construction of the facility.

The work is scheduled to begin in September 2014, and completion scheduled for May 2015.  In 2013 Lukoil held a tender for the construction of the onshore section of the pipeline from the North Caspian fields to chemical complex under construction at Budyennovsk.  The capacity of the pipeline is 8 billion cubic metres of associated gas per annum.  The total length of the pipeline is 263.3 km which will transport associated gas from oil fields in the North Caspian to the gas processing plant at Stavrolen. The design capacity of the first stage of the GEA is 2.2 billion cubic metres of gas.  The second phase of capacity up to 6.5 billion cubic metres of gas to be introduced into service until at least 2019.

SIBUR-Kstovo, ethylene expansion

SIBUR Kstovo finished reconstruction of the ethylene plant EP-300, raising capacity to 360,000 tpa.  The completion of the expansion is key to providing ethylene to the new RusVinyl PVC plant.  SIBUR-Kstovo retains the possibility to expand capacity to 430,000 tpa, but this is not expected to take place for some time. 

Production this year has been much lower at Kstovo than normal, partly due to an enforced outage at the start of 2014 and partly because the planned outage starting in May lasted into July.  Production is running well at present and thus the third quarter volumes should reflect a significant improvement. 

Novy Urengoy Gas-Chemical Complex

The gas turbine power plant (CCGT) at Novy Urengoy Gas Chemical Complex (Novy) is to be launched later this year, involving a capacity of 120 MW.  It is assumed that the energy produced by the plant will be sufficient for the operation of gas-chemical complex, if ever completed.  The degree of completion of the project Novy Urengoy Gas Chemical Complex is still only around 60% and the start of the complex is now being predicted at no earlier than 2018. 

Novy Urengoy Gas Chemical Complex is the most well-known unfinished Gazprom project which has staggered on between slow motion and standstill since it was first initiated in 1993.  All the necessary equipment was delivered in the 1990s, but since 1996 due to a lack of funding installation has been continually suspended and restarted.  Aside the fact that the equipment is now outdated and any warranties expired Gazprom seems determined to complete the investment at some stage, when it might be a better case of cutting losses.

United Petrochemical company-olefin project

United Petrochemical company (UPC) has decided to temporary suspend its 1 million tpa ethylene project.  The concern is over the government’s new policy in relation to feedstock duties which could have an impact on naphtha prices.  In effect UPC could find that the cost of raw materials exceeds the cost of olefins.

According to UPC, the export duty on naphtha is currently $347 per ton and the net cost is $422.  In the case of the introduction of tax evasion tax decrease by 5.2 times to $67 per ton, whereas the netback will grow 1.7 times to $703. When reducing the duty on aromatic hydrocarbons from $250 to $59 per ton, benzene will rise in price by 17% to $1,191 and paraxylene by 26% to $832 per ton.

SANORS-completed expansion of gas fractionating unit

SANORS, whose assets were purchased by Rosneft on 30 July, commissioned the Central gas fractionation plant number 3 (TSGFU-3) at the start of August.  After modernization capacity has increased for the gas fractioning unit (TSGFU-3) from 600,000 tpa to 900,000 tpa.  The capacity of the entire complex (TSGFU TSGFU-2-3) now comprises 1.3 million tpa.  The TSGFU-3 is designed for the separation of NGLs with the elaboration of ethane-propane, propane, isobutane, butane, isopentane, pentane fractions.  Total investment in the project for the modernisation of TSGFU-3 was 580 million roubles.

Revenues for SANORS in 2013 amounted to 33.04 billion roubles.  Investments in fixed assets from 2010 to 2013 amounted to 3.65 billion roubles.  SANORS also sees prospects in the production of polyurethanes; emulsion PVC, ABS plastics, products whereby a significant part of consumption in Russia is provided by imports.  The capacity of the entire complex at Novokuibyshevsk could total 2.5 million tpa, if all projects are undertaken.  This includes capacities of 480,000 0tpa of LPG and naphtha and 250,000 tpa of organic chemicals. 

Agreements for the purchase of MMA and PMMA technology have already been signed, in addition to a memorandum for the ethyl acetate process with Johnson Matthey Davy Technology.  If the group does produce PVC it is likely to be microsuspension grade, which is not produced in Russia at present.  However, the market is small, rated at around 27,000 tons per annum.  Also SANORS expects to produce an emulsion PVC, which will need to be imported after the closure of the Khimprom plant at Volgograd or at least until RusVinyl starts production. 

Russian petrochemical producers & markets

Nizhnekamskneftekhim, Jan-Jun 2014

Preliminary results for Nizhnekamskneftekhim for the first half this year showed a reduction of net profit by 38% to 3.733 billion roubles although revenues increased by 10% to 65.52 billion roubles. Cost of sales increased almost 19% from 46.48 to 55.2 billion roubles.  Gross profit for the reporting period decreased by 21% to 10.3 billion roubles. Sales profit fell by 38% from 8.690 to 5.380 billion roubles, and profit before tax by 38% to 4.76 billion roubles.

Production costs increased by 21% in the first half and amounted to 2.3 billion roubles, and administrative expenses by 8% to 2.6 billion roubles.  Nizhnekamskneftekhim has spent 7.2 billion roubles this year on its environmental programme.

SIBUR-Neftekhim expands ethylene oxide plant

SIBUR-Neftekhim has completed the construction and installation work on the reconstruction of the production of ethylene oxide and glycols at Dzerzhinsk.  The project will increase the capacity of the plant for the production of ethylene oxide from 264,000 tpa to 300,000 tpa to improve the safety and efficiency of the equipment:  Due to the reconstruction, production will move to a new generation of catalysts, the use of which will be help to increase yield.

The expansion was undertaken during the maintenance shutdown that took place in the first half of 2014.  During the shutdown pumps, mounted cleaning plant natural gas and water. Expanded storage products, commissioned a new central control station and fire.

Kazanorsgintez, Jan-Jun 2014

Preliminary results for Kazanorgsintez in the first half of 2014 indicate a doubling of profit two-fold to 2.83 billion roubles.  Revenues increased by 14,4% to 26.9 billion roubles against 23.5 billion roubles in 2013.  The cost of sales increased by 10.5% to 20.4 billion roubles and the gross profit rose 29% to 6.5 billion roubles.  Revenues from HDPE rose 8% in the first half of 2014, whilst polycarbonate rose by 2%. 

The enterprise emphasize that within six months there was a high demand for the products of CBS, in particular on high-density polyethylene, the production of which Kazanorgsintez increased by 8% during the period. Development of polycarbonate in the company increased by 2%.

Russian Ethylene Production

(unit-kilo tons)  

Producer

Jan-Jun 14

Jan-Jun 13

Angarsk Polymer Plant

111.5

115.4

Kazanorgsintez

258.1

263.0

Stavrolen

53.6

168.2

Nizhnekamskneftekhim

321.9

318.6

SANORS

39.6

40.6

Gazprom N Salavat

165.5

148.4

SIBUR-Kstovo

62.4

107.0

SIBUR-Khimprom

24.6

25.8

Tomskneftekhim

138.5

137.3

Ufaorgsintez

64.8

63.4

Total

1,240.5

1,387.6

Russian ethylene and propylene

Russian ethylene production totalled 1.241 million tons in the first half of 2014 against 1.388 million tons in the same period last year.  The Stavrolen accident at the end of February, which disabled the Budyennovsk plant, is the main cause of the decline this year whilst SIBUR-Kstovo has been down much longer than expected this year due to various technical reasons.  SIBUR-Kstovo has now resumed production and is expected catch up volumes in the second half year, particularly as it completed the expansion the cracker.  The only company to show any sort of increase this year was Gazprom neftekhim Salavat which increased production from 148,400 tons in January to June 2013 to 165,500 tons in the same period this year. 

Stavrolen will be non-operative much longer and Lukoil estimates that the plant could restart by January 2015 after all repairs have been completed.  It is possible that polypropylene production at Budyennovsk could restart at any time based on merchant propylene.  The accident at the end of February was reported to be caused by depressurized aluminium heat exchanger due to the destruction of the corrugated plate heat exchange section. 

Propylene production suffered similarly from the Stavrolen accident, which meant that only 21,900 tons was produced at Budyennovsk in the first half of the year against 65,000 tons in the same period last year.  SIBUR-Kstovo also reduced production from 50,600 tons in January to June 2013 to 33,900 tons in January to June 2014.   

To a large extent the reduced production at Kstovo and Salavat was offset by the rise in production by Polyom at Omsk which produced 90,100 tons in the first half of 2014 against 46,700 tons in the same period last year. 

Cracker feedstocks, Jan-Jul 2014

LPG production in Russia rose in the first half of 2014 to 6.798 million tons from 6.152 million tons in 2013.  SIBUR’s production has risen as a result of investments in West Siberia, whilst Rosneft has increased production partly due to the absorption of TNK-BP assets.  In January to June 2014 Russia produced 3.69 million tons of NGLs against 3.68 million tons in 2013.

For the first half of 2014 shipments of propane to the Russian market amounted to 336,640 tons, which is 8% less than in the comparable period of 2013.  Shipments to petrochemical plants totalled 78,500 tons in January to June 2014 against 86,200 tons in 2013. 

Russian consumers bought 142,100 tons of naphtha in May, 6% more than in April.  In the first five months of this year a total of 744,900 tons of naphtha has been delivered on the domestic market, 17% less than in the same period in 2013. 

The decline in supply due to the reduction of hydrocarbon processing to Stavrolen because of the accident in February 2014. In addition, the Khabarovsk refinery reduced shipments to the Far East SNG terminals due to an increase in captive usage. 

 In July 2014 the volume of Russian natural gas liquids in the domestic market increased by 45% over June to 405,610 tons.  It is also 33% more than in July 2013.  The increase in the supply of gas liquids is mainly due to stops for repairs I  n the last month of Tobolsk-Neftekhim and Surgut Gas Condensate Plant.  SIBUR shipped 106,590 thousand tons (+ 51% compared to June), whilst Surgut Gas Condensate Plant shipped 64,790 tons.

Sales of NGLs for petrochemical production amounted to 170,440 tons in July, which was 1.62 times up on June.  Nizhnekamskneftekhim and SIBUR-Kstovo increased purchases to 87,570 tons (2.3 times higher than June) and 39,380 tons (2.14 times higher) respectively.  However, Tomskneftekhim reduced consumption of natural gas liquids to 35,170 tons, 11% down on June.  For the first seven months of 2014 Russian NGL sales totalled 2.24 million tons, 1% more than in the same period of 2013.  From the total sales 847,800 tons were sold to petrochemical plants, against 975,500 tons last year. 

Russian styrene, Jan-Jul 2014

Domestic merchant sales of benzene totalled 49,300 tons in the first seven months in 2014, 14% down on the same period last year.  In July, shipments of styrene on the Russian market fell by 41% to 6,000 tons, down mainly to the planned outage by Gazprom neftekhim Salavat.  The fall in purchases of styrene on the merchant market this year has been due mainly to lower demand from synthetic rubber producers Voronezhsintezkaucuk and Sterlitamak Petrochemical.  Russian styrene exports totalled 65,500 tons in the period January to June 2014, 4% less than last year. 

Bulk Polymers

Russian polymer duties to be reduced to 6.5%

Though the Eurasian Customs Union Russia, Belarus and Kazakhstan have approved a change in the rates of import duties on a number of large polymers.  The duties come into force from 1 September whereby the rates of import duty will be reduced to 6.5% for polyethylene of high and low pressure, homopolymers and copolymers of propylene, ABS plastics, and PVC suspension.

Previous changes in import duties in the Eurasian Customs Union were introduced from 2 September 2013.  The rate for polyethylene high and low pressure, propylene homopolymers was then set at 9.1%, whilst import duties on copolymers of propylene and ABS plastics were 8.3%, for PVC suspension 10%.

In accordance with the agreements reached within the framework of the WTO, the average tariff on imports to Russia in the past year has been reduced to 7.8% compared with 10% in 2011.  For the polymer industry reduction of import duties was agreed to be held in two stages, the second stage of which requires that duties should be lowered to 6.5%.  The Commission for the Eurasian Customs Union believes that the decline in tariff protection will not bring significant harm to the Russian market.

Russian polyethylene market

Gazprom neftekhim Salavat resumed production of LDPE in August after a planned 30-day outage.  The plant capacity is 45,000 tpa.  Ufaorgsintez stopped production on 15 July for around a 30 day maintenance turnaround.  The plant capacity at Ufa is 120,000 tpa. 

Russian LDPE market 2013

LDPE production totalled 327,800 tons in the first half of 2014, slightly up on 2013.  Tomskneftekhim produced 132,800 tons in January to June against 130,700 tons last year.  Angarsk Polymer Plant increased production to 32,700 tons whilst Gazprom neftekhim Salavat reduced production 3% to 19,300 tons.  Kazanorgsintez reduced production by 8% to 100,100 tons whilst Ufaorgsintez reduced production from 47,400 tons to 47,400 tons. 

In the first six months of this year, Russian LDPE exports increased by 23% to 102,800 tons versus 83,700 tons.  Tomskneftekhim and Angarsk Polymer Plant exported 48,900 tons and 30,600 tons respectively against 52,000 tons and 13,000 tons respectively.  The leading countries for Russian LDPE exports include China (57,400 tons), Ukraine (12,800 tons), Kazakhstan (8,200 tons), Lithuania (5,900 tons) and Belgium (5,500 tons).

The Russian LDPE market showed a 3% fall in 2013 against 2012.  Production increased 2% to 667,000 tons, with Tomskneftekhim producing the largest volume of 253,000 tons.  Both imports and exports both fell.  Despite large-scale production Russia maintains a deficit of high-tech materials, which domestic producers cannot produce and processors have to buy raw materials abroad.  Belarus exported 54,280 tons into Russia in 2013, 17% down on 2012.  Russian consumers demand for Belarusian polyethylene is positive as its properties meet domestic requirements and the price is generally lower.

Russian polypropylene market

Nizhnekamskneftekhim plans to increase production of propylene block copolymers to over 10,000 tons in August.  The increase is due to increased demand for unique brands and systematic movement enterprises to reduce production of homopolymers.

Deliveries propylene homopolymers decreased by 38%, to 20 thousand tons. This corresponds to 29% of total imports in 2014 (-6% compared to six months 2013th). And if for homopolymers Russian power companies can meet the existing demand (two new plants in Omsk and Tobolsk focused on the issue of homo-PP), by the copolymer makes the Russian market is still on import (mostly it unique properties of the brand).

Nearly all Russian producers are engaged in bringing new grades of polypropylene on to the market.  However, it is impossible to completely abandon imports as there are special high grades that are not produced in the country.

Imports of random copolymers of propylene decreased by 51% to 3.2 million tons (equivalent to 5% of total imports of PP, -2% relative to the first half of 2013. The share units accounted for 16% of total imports, the same as in the six months 2013. In this block shipments decreased by 23%, to 11,000 tons.

Despite the efforts of domestic producers to expand the assortment of vintage Russian processors copolymers are still dependent on imports of this type of polypropylene. If the segments such as nonwovens, films, moulded polypropylene products imported successfully replace high-quality domestic analogues, then pipe manufacturers, compounders and other high-tech products is no such possibility.

Even the most optimistic forecasts of prices after commissioning of large plants such as Tobolsk-Polymer and Polyom did not materialize.  Cost raffia, the need for which Russian factories can meet almost constantly growing. Carrying out repairs in the summer months will only aggravate the now celebrated on the deficit and would further increase the prices of PP.

Rusvinyl construction completed

At the end of July RusVinyl announced completion of construction work at Kstovo for the production of PVC.   Start-up operations are being prepared for a trial run, with production targeted for the autumn.  The capacity of the complex includes 300,000 tpa of suspension grade PVC, 30,000 tpa of emulsion grade PVC, and 225,000 tpa of caustic soda. 

The new plant will focus heavily on the domestic market, which has been faced by undersupply in recent years.  The share of imports of PVC into Russia from 2007 to 2011 increased from 27% to over 50% and has remained at that level since then.  Aside the US imports have come from China produced through a catalyst containing mercury.  . 

PVC processing

Investment in the purchase of equipment for processing of PVC from Russian companies decreased by 24% in the first half in 2014.  From the beginning, the cost of buying the equipment for processing PVC totalled $58 million versus $76.6 million in 2013. 

The Russian government is ready to pay subsidies to producers of plastic products in order to stimulate investment.  In 2015 168.5 million roubles has been allocated for these purposes and for 2016 179 million roubles. 

Russian polycarbonate, Jan-Jul 2014

Some processors fear supply disruptions for European raw materials due to the tense political situation.  Kazanorgsintez is targeting import substitution and promotion of the domestic market by cutting exports.  However, the capacity of 65,000 tpa means that the company will be unable to provide material for the extrusion division, which takes consumption for Russia up 80-90,000 tpa.  In the first seven months this year Russian imports of polycarbonate (PC) sheet extrusion from South Korea increased by 37% to 700 tons.  Kazanorgsintez started its annual shutdown on 17 July and aims to restart on 20 August. 

PTA/PET & Fibre Chain

Russian PET, Jan-Jun 2014

Russian PET production was unchanged in the first half of 2014 to 218,000 tons, whilst exports fell 32% to 9,000 tons.  Russian PET consumption increased by 12% in the first half of 2014 to 346,000 tons.  PET consumption is growing, despite the stagnation in the beer industry where production in the first half of the year decreased by 6.4%.  At the same time the production of mineral water in Russia increased by 4.1%.  

Growing market demand this year has been met by increasing imports; the share of imported PET consumption increased by 7% against the first half of 2013 and amounted to 37%.  By volume imports totalled 128,000 tons in the first half of the year, 40% up on 2013.

Russian PTA duties

The Customs Union, consisting of Russia, Belarus and Kazakhstan has decided to abolish import duty rates for PTA.  The import duty of 0% for PTA will operate from 2 September 2014 to 31 December 2015 inclusive, coming down from 5%.  The sole producer of PTA in Russia is Polief with a capacity of 250,000 tpa.  The only other project under design and construction at present is the jv between Alpek of Mexico and United Petrochemical company at Ufa. 

Russian polyamide, Jan-Jun 2014

Polyamide imports dropped 20% in the first half of 2014 to 6,200 tons.  The main types of imported polyamide include PA6, PA66, PA 6.66 and polyamide resins.  Their share in the external supply in the current year is 48%, 18%, 16% and 9% respectively.  Most of the PA 66 is processed in the automotive industry, as well as in the furniture industry.  Polyamide-6 accounted for 1,300 tons in January to June 2014.

Production totalled 71,000 tons in the first half of 2014, 9% up on last year.  Export of polyamide (PA6) from Russia decreased by 22% in the first half of 2014 to 51,300 tons.  The main consumers of Russian PA 6 are based in China, India and Turkey, whilst the only company exporting is Kuibyshevazot with a capacity of 150,000 tpa. 

In the first half of the Russian market of polyamide 6 (PA 6) amounted to 21,000 tons, unchanged from last year.  Besides domestic production other suppliers include BASF, DSM Engineering Plastics, and Lanxess.  Imported nylon 6 is used for the manufacture of sausage casings (54%) and multi-layer barrier films for food packaging (43%).

Kurskkhimvolokno, part of Kuibyshevazot, launched five lines on 22 July with a total capacity of 9,000 tpa.  The new lines include three new moulding machines provided by Trützschler.  Commissioning of the new equipment will increase the production of high technical fabrics by 130% to 990 tons per month.

Kuibyshevazot-new cord fabric plant

Kuibyshevazot has inaugurated a new unit for the production of high heat-set (soaked) cord fabric.  The product is used as a reinforcing material in the production of tyres.  Benninger Zell from Germany supplied the equipment for the project where capacity is up to 30 million metres per annum.  The new unit is part of Kuibyshevazot’s strategic programme to increase processing of caprolactam.

Aromatics & derivatives

Russian Benzene Production

(unit-kilo tons)

Producer

Jan-Jun 14

Jan-Jun 13

Altay-Koks

0.0

5.4

Angarsk Polymer Plant

47.4

46.5

Chelyabinsk MK

6.1

7.1

Gazprom Neft

51.9

63.6

Stavrolen

12.7

11.9

LUKoil-Perm

18.0

24.2

Magnitogorsk MK

31.9

31.6

Nizhnekamskneftekhim

101.1

102.1

Novolipetsk MK

11.7

19.3

Gazprom n Salavat

74.8

72.6

Severstal

17.3

18.7

SIBUR-Kstovo

11.7

37.5

Slavneft-Yanos

30.9

27.1

Surgutneftegaz

35.0

30.0

Ryazan Refinery

13.4

15.9

Ufaneftekhim

37.7

42.2

Ural Steel

4.4

2.6

Uralorgsintez

40.2

34.0

Zapsib

29.9

29.0

SANORS

16.2

0.0

Total

592.3

621.3

Russian benzene, Jan-Jul 2014

After hardly importing any benzene from Ukraine in the first half of this year Russia imported 1,952 tons in July from Yasinovsky Coke, all of which was bought by Kuibyshevazot.   In the first half of 2014 benzene supply has been difficult on the Russian market in terms of shortages and the subsequent increase in prices.  Production from petrochemical and refinery plants declined 4% in the first half of 2014 to 557,900 tons, due largely to the forced stoppage at Stavrolen at the end of February. 

Other factors included an extended outage at SIBUR-Kstovo which only restarted in July after expecting originally to restart in early June.  On the other hand Kirishinefteorgsintez increased production of benzene by 16% and Uralorgsintez by 19%.  In June, the Russian production of benzene for synthesis and nitration totalled 84,400 tons. 

Exports of benzene from petrochemical and refinery plants were not undertaken in July after volumes of 2,000 tons were exported in June and May.  The main exporter was Kirishinefteorgsintez which increased exports 1.5 times over May.  The other exporter in May was Slavneft-Yanos with 658 tons.  Exports from petrochemical and refinery plants totalled 14,234 tons in the first seven months the year. 

The benzene market has not only been tightened by production problems at petrochemical plants this year but also increased demand.  In the second half of 2013 Nizhnekamskneftekhim resumed purchases of benzene in the domestic market due to increasing requirements for the production of polystyrene.  Currently Nizhnekamskneftekhim is buying around 5,000 tons per month on the open market.  In the first seven months in 2014 Nizhnekamskneftekhim purchased 21,118 tons on the open market. 

Besides rising demand and lower supply, benzene exports have risen this year.  Despite the lack of product in the country, domestic processors have found it difficult to compete with the offer of foreign consumers due to the attractiveness of foreign prices.  At the same time consumers such as Kuibyshevazot, the largest Russian importer of raw materials, have found it difficult to purchase from Ukraine until recently   Only the Kazakh company ArselorMittalTemirtau has been a regular supplier this year to the Russian market.  In June Kuibyshevazot resumed purchases of benzene from Ukraine, but the position is unstable. 

Exports of benzene from coal based producers totalled 31,695 tons in the period January to July 2014, against only 19,000 tons in the same period last year.  Coal based producers tend to sell benzene on the domestic market to manufacturers of explosives and for further processing, but rarely sell to petrochemical producers.

For derivatives styrene has been the main product where consumption has risen this year in Russia; caprolactam has been static whilst phenol has been affected by the extended outage at Omsk Kaucuk. 

Russian toluene, Jan-Jul 2014

The first half of 2014 production of toluene in Russia totalled 142,200 tons, 10% less than in the corresponding period last year. 

Sales of toluene by rail in the Russian market amounted to 14,400 tons in July, 26% more than June but similar to July 2013.  Slavneft-Yaroslavnefteorgsintez supplied 30% in July (4,380 tons), Lukoil-Permnefteorgsintez 23% (3,300 tons), Gazprom Neft 21% (3,030 tons), Kirishinefteorgsintez 18% (2,540 tons), Severstal 5% (650 tons), West Siberian MK 2% (340 tons), and Novolipetsk Steel 1% (150 tons).

Paint manufacturers increased toluene purchases in July by 90% over June to 3,740 tons which comprised 26% of total deliveries for the month.  Manufacturers of lubricants and additives for motor fuels reduced purchases of toluene by 40% to 2,140 tons whilst manufacturers of industrial explosives increased volumes of raw materials purchased by 5% to 1,110 tons.  For the period January to July 2014 domestic sales of toluene totalled 82,900 tons which was 8% up on 2013. 

Russian orthoxylene, Jan-May 2014

Russian orthoxylene exports totalled 32,300 tons in the first half of 2014, 79% more than the same period in 2013.

Sales in the domestic market amounted to 14,560 tons in July, 6% less than in June.  Gazprom-Neft at Omsk supplied 36% or 5,240 tons), Kirishinefteorgsintez 30% or 4,410 tons, and Ufaneftekhim 22% or 3,180 tons.  Kamteks-Khimprom purchased 5,920 tons of orthoxylene in July, which was 41% of consumption, whilst Gazprom neftekhim Salavat bought 1,070 tons.  The paint producers reduced purchases by 32% against June to 1,830 tons.  Manufacturers of fuel, agrochemical, pharmaceutical and other products bought 4,370 tons of orthoxylene (30% of gross supply), and 34% more than in the previous month.  Another 1,360 tons (9%) was shipped to trading companies.  From January to July 2014 orthoxylene sales on the domestic market amounted to 92,500 tons, 16% more than in the same period in 2013.

Kuibyshevazot, Jan-Jun 2014

Kuibyshevazot reduced its net profit by 21% in the first half of 2014 against the same period last year, totalling 1.42 billion roubles.  The company's revenue for the period increased slightly from 14.22 to 14.96 billion roubles. The cost of sales amounted to 11.410 billion roubles against 10.250 billion roubles a year earlier.  Gross profit decreased by 8.5% to 3.54 billion roubles.  Exchange rate factors are extremely influential for Kuibyshevazot. 

About 60% of the proceeds from sales of foreign currency flows, mainly in US dollars, while 99% of operating costs are denominated in roubles.  Production costs for the first half rose more than doubled to 1.26 billion roubles.

Polyamide revenues rose in the first half of 2014 to 5.273 billion roubles from 3.991 billion roubles in the same period in 2013, with the product’s share in total company revenues rising from 28.07% to 35.26%.  Sales by volume increased by 9,700 tons which was 11.8% higher.  At the same time caprolactam sales declined by 3,400 tons in the period January to June 2014, whilst revenues dropped to 1.857 billion roubles against 1.959 billion roubles in 2013.  Caprolactam’s share in total company revenues declined to 12.42% in 2014 against 13.78% last year. 

Kuibyshevazot has approved the transaction for the jv Linde Nitrogen Togliatti (Kuibyshevazot and the German Linde Group for the production of ammonia and hydrogen using Sberbank for bank guarantees.  The size of bank guarantee is 250 million roubles.  In another agreement the IFC is providing Kuibyshevazot with $150 million in debt financing to support its expansion and modernisation, in order to make the company more competitive. 

Russian Phenol Sales by Producer

(unit-kilo tons)

Producer

Jan-Jul 14

Jan-Jul 13

Omsk Kaucuk

10.9

33.3

Samaraorgsintez

30.6

22.0

Kazanorgsintez

6.1

5.8

Ufaorgsintez

20.5

13.2

Neftekhimya

0.0

0.2

Sterlitamak NPZ

0.0

0.1

LUKoil-VNPZ

0.0

0.1

Total

68.1

74.5

Russian phenol, Jan-Jul 2014

Phenol supply in Russia remains tight, there is no news at this stage regarding the restart of Omsk Kaucuk but this will probably not take place until the fourth quarter.  In June, Russian producers of phenol stopped deliveries of products to foreign markets and only exported a small volume in July.  Domestic sales have dropped slightly in the period January to July 2014 to 68,100 tons from 74,500 tons in the same period last year. 

The domestic customer base is fairly diversified, the largest buyer in the first seven months this year was Kuibyshevazot accounting for around 18% of purchases.  Other important consumers include resin producers Uralkhimplast and MetaDynea.  Shchekinoazot is also a major buyer, using it in the production of phenol-formaldehyde resins.  Due to shortages on the domestic market Shchekinoazot has imported 1,448 tons of phenol from Borealis this year.  For the whole of 2013 Borealis imported 2,151 tons of phenol into the Russian market. 

Synthetic Rubber

Russian C4s, Jan-Jul 2014

Nizhnekamskneftekhim imported 6,900 tons of C4s in the first half of 2014, 1.9 times higher than in 2013.  In June Nizhnekamskneftekhim imported 2,000 tons from France.  Omsk Kaucuk cut imports by 45% to 846 tons.  For the first half of 2014 Russian C4 imports totalled 43,000 tons, 42% more than in 2013.  The outage at Stavrolen has helped caused the deficit this year.

In July the trend continued with Nizhnekamskneftekhim importing 11,336 tons from Turkey, nearly twice the total imported in the first half of the year.  The only other two consumers in July were Omsk Kaucuk and Togliattikaucuk.  For the first seven months of 2014 sales on the domestic market, from domestic producers and imports, totalled 216,700 tons against 214,500 tons last year.  Imports accounted for 8% of purchases in the period January to July 2014. 

Rosneft-Pirelli deal not affected by sanctions

Rosneft’s shareholding stake in Pirelli does not violate US sanctions and thus will be allowed to continue.  Rosneft bought a non-majority stake this year in Pirelli.  The deal does not violate regulations of the US Treasury in regard to the presence of Rosneft in the shareholder structure of the company.  Rosneft and Pirelli also intend to create a jv for the production of synthetic rubber at Nakhodka as part of the project Eastern Petrochemical Company and are also considering the production of chloroprene rubber in Armenia.

SIBUR-thermoplastic elastomers

Following the expansion of thermoplastic elastomer (TEP) capacity at Voronezh last year SIBUR is able to provide more support to the producers of polymer bitumen binders (PBB) and the road construction projects.  SIBUR's production capacity of TEP was increased to 85,000 tpa last year and can now meet all the needs of the internal market.

Nizhnekamskneftekhim

In July 2014 representatives of Bridgestone and Continental visited Nizhnekamskneftekhim’s butyl rubber and synthetic rubber plant. 

Russian synthetic rubber market

Russian exports of synthetic rubber have shown declines over the past couple of years as the global tyre industry has suffered from lower demand.  Revenues from exports totalled $932.1 million in the first half of 2014 against $1273.5 million in the same period in 2013 and $1449.7 million in 2012.  A large part of the decline in revenues is attributable to commodity rubbers such as SBR. 

In terms of current global trends prices have recently been resisting a decline in feedstock costs as European and Chinese producers have reduced operating rates amid weak demand and a switch to cheap natural rubber.  Thus prices are not expected to go down for the time being, even though the FOB Rotterdam butadiene price dropped $5/ton from the start of August to $1,240/ton.  The CFR China butadiene price benchmark dropped $55/ton in August to $1,505/ton.  Asian SBR producers are suffering negative margins as they typically need a $550-600/ton margin to break even.

There are indications though that synthetic rubber supplies in Asia are tight due to lower plant operations but at the same time this has created excess butadiene supply.  Overall though there is no upturn expected near-term due to a range of supply/demand factors.  Russian and European SBR producers have lowered operating rates in the first half of the year as global demand dropped off.  Some tyre manufacturers have switched as much synthetic rubber capacity as they could to cheaper natural rubber, and this has impacted on the demand for synthetic rubber.

Global capacity for SBR stands at 5.5 million tpa, of which 82% is produced through emulsion polymerisation and 18% through the solution method about 18%.  The largest number of producers using the emulsion method is located in Europe (30.8%) and Asia (37.9%).  For the production of rubber solution in North America comprised 38.8% and Asia 30.2%.

Russian carbon black market 2013

Russian Carbon Black Market

(unit-kilo tons)

 

2013

2012

Production

765.9

729.8

Exports

517.2

449.8

Imports

5.4

5.1

Market Balance

254.1

285.1

 Russian carbon black production increased 5% in 2013 to 766,000 tons.  The only companies to show higher production were Yaroslavl Carbon Black (+15%) and Volgograd ZTU (+13%).  Reductions elsewhere were partly due to a decline in demand in the main consuming sectors as the consumption of tyres in Russia decreased in both the primary and secondary markets. 

The market for 2013 dropped 11% to 254,000 tons.  Due to low demand virtually all suppliers increased their exports and in total Russian exports totalled 517,300 tons for 2013 which was 15% up over 2012.  An increase in purchases of imported carbon black was recorded by Nokian Tyres (14 times up), and Yokohama R. item Z. (74%)

Methanol & Ammonia

Russian methanol, Jan-Jul 2014

Russian methanol production in June dropped 10% against May to 299,000 tons.  Tomet’s maintenance shutdown was the main cause of the drop.  Metafrax is concerned, as with other methanol Russian producers, that sanctions could affect business with European partners although there is no sign at the moment of that happening. 

Tomet has signed a contract with RM Rail Ruzkhimmash for the delivery of ammonia and methanol.  Delivery includes 244 carriages for transporting ammonia and urea formaldehyde concentrate, and 30 wagons for the transportation of methanol under a contract with Tomet.  Products will be shipped before the end of this year.

Akron, Jan-Jun 2014

Akron increased production of primary commodity production by 6.2% to 3.28 million tons in the first half of 2014.  Production of fertilisers increased by 3.7%, amounting to 2.75 million tons.  Ammonia fell 0.3% to 952,100 tons and urea rose 4.9% to

In the first half of 2014 saw the most active demand was recorded from consumers in Europe, the U and CIS.  By mid-year the main buyers were from Latin America and India.

Akron recorded a net loss for the first half of 2014 of 863.5 million roubles against a net profit of 141.770 million in January to June 2014.  The financial result was influenced by the revaluation of investments at market value, the effect of which was minus 1.99 billion roubles, as well as a foreign exchange loss of 1.06 billion roubles. 

The company's revenue has remained unchanged at 17.180 billion roubles.  The gross margin decreased from 8.21 billion roubles to 7.49 billion roubles, whilst the sales profit fell by 10.5% to 5.13 billion roubles.  The loss before tax amounted to 937.31 million roubles against earnings in 2013 to 343.03 million roubles.

Akron plans in 2014 to invest $400 million in the development of three strategic projects, as well as maintaining current operations.  The most important project involves the construction of the ammonia-4 unit at Novgorod with a capacity of 700,000 tpa.  Investment in the project has already exceeded $150 million, accounting for a third of the total project budget.

Fosagro Production (unit-kilo tons)

Product

Jan-Jun 14

Jan-Jun 13

Ammonia

575.1

521.2

Urea

448.5

459.6

Phosphate fertilisers

2,378.4

2,305.6

Nitrogen fertilisers

374.8

675.2

Ammonium nitrate

157.8

182.3

Aluminium fluoride

14.4

14.1

Phosphoric acid

945.2

874.8

Sulphuric acid

1,103.4

2,187.3

Sodium Tripolyphospahe

64.1

60.0

Evrokhim-Kingisepp

Evrokhim could begin construction of an ammonia plant at Kingisepp in the second half of 2014, the cost of which is estimated at $900 million.  The group is close to sign a contract in the next few months.  Earlier it was reported that the capacity of the plant will be between 700,000 and 1 million tpa of ammonia per annum.  The construction process could take between three to four years.

Russian formaldehyde market

In October last year the Sverdlov plant launched a new unit for formaldehyde, with a capacity of 10,000 tpa, and a unit for urea-formaldehyde concentrate with a capacity of 5,000 tpa.  In November, the company began to supply urea-formaldehyde concentrate to Ukrainian consumers.

Sibmetakhim halted production of formaldehyde and urea-formaldehyde resins in January for plant reconstruction.  The project involves the reconstruction of the plant for urea-formaldehyde resins with a capacity of 75,000 tpa, urea-formaldehyde concentrate with a capacity of 85,000 tpa and low methanol formaldehyde 55% with a capacity of 120,000 tpa.  The costs associated with reconstruction have been estimated at 167.6 million roubles, and the project is expected to be completed in late 2015.  Sibmetakhim accounts for about 7% of the gross production of formaldehyde and about 3-5% of urea-formaldehyde resins. 

MetaDynea-investments in formaldehyde and resins

MetaDynea (a subsidiary of Metafrax) attracted a revolving credit line from Sberbank up to 300 million roubles.  Funds will be used for ongoing operations, including working capital.  MetaDynea hopes this year to start construction of a new installation for formaldehyde and a parallel project to increase the production of synthetic resins.  This will increase urea-formaldehyde resin capacity by 100,000 tpa.  MetaDynea manufactures synthetic resins used in the chemical, woodworking, engineering, automotive, tire and other industries. The total design capacity of the two plants is 450,000 tpa. 

Commissioning of the plants is scheduled for the first half of 2016.  By this time, the production capacity of formaldehyde for the Metafrax group will increase by 300,000 tpa of formaldehyde.  In 2012 Metafrax produced 308,000 tons.  The reason for investment in formaldehyde capacity is to meet the demand from new potential customers in Russia, including Kronospan at Ufa. 

Urea project at Ust Luga to be moved

The urea project planned by ICT near the port of Ust Luga could be moved to another location in the Leningrad region.  In November 2013 the government of the Leningrad region and Baltic urea plant signed an agreement for the construction of a urea plant near the port of Ust-Luga.  The company planned to complete the plant for the production of ammonia and urea by 2017.  

The plant's capacity was originally set out at 350,000 tpa of ammonia and 1.2 million tpa of urea.  Investment in the construction of the plant was estimated at $1.5 billion.  East is also planning to build in the commercial seaport of Ust-Luga terminal for general cargo and fertiliser capacity of more than 4 million tpa. 

Rosneft-Angarsk methanol project

Angarskneftehimproekt (included in Rosneft) has announced a tender for the execution of engineering research on the construction of a plant for methanol for Angarsk petrochemical company.  The maximum price of the tender is estimated at 3.72 million roubles, including VAT.  Currently under review committee submitted bids. Summarizing procurement held on 28 March 2014.

The total capacity of raw material methanol synthesis unit will be levelled to 30,000 cubic metres of synthesis gas per hour. The complex will include methanol storage tanks of four product tanks with a capacity of 1,000 cubic metres each as well as the pump for pumping methanol.  One of the factors behind the methanol project is that Rosneft has accumulated large surpluses of gas in the past three years.  Angarsk Petrochemical company recently began the final stage of construction of the MTBE plant, involving a capacity of 120,000 tpa. 

Angarsk Petrochemical company started methanol production in April 1954, and produced 47,400 tons in 2013.  As part of Rosneft’s investment plan to modernise the chemical plant work began in 2013 on designing a new installation with a capacity of 100,000 tpa. 

Organic Chemicals

Russian butanols, Jan-Jul 2014

Export volumes of butanol from Russia in June 2014 amounted to 15,800 tons, 3.9 times more than in May and more than five times higher than in June 2013.  Normal butanol exports comprised 71% in June 2014.  China accounted for 64% of exports shipments, followed by Finland with 27%.  Russian butanol exports totalled 4,000 tons in May, four times less than in April this year, and 3.2 times lower than in May 2013.  Normal butanols comprised 42% of export shipments.  China accounted for 74% of the 4,000 tons, followed by Turkey with 15%.  The reduction in shipments to foreign markets was due to the low demand for butanols in the Asian market.  Gazprom neftekhim Salavat reduced shipments 7.5 times in comparison to April to only 500 tons.  Angarsk Petrochemical company reduced export volumes by 5.3 times to 1,800 tons, whilst SIBUR-Khimprom reduced by 34% to 1,700 tons.  From January to May 2014, exports of butanols from Russia totalled 39,500 tons which is 2.1 times less than in 2013.  The share of n-butanol was 49% and isobutanol 51%.

Russian Butanol Production

(unit-kilo tons) 

N-Butanol

Producer

Jan-Jun 14

Jan-Jun 13

Angarsk Petrochemical

17.8

18.2

Evrokhim

7.8

7.4

Gazprom n Salavat

23.9

41.1

SIBUR-Khimprom

13.2

12.7

Total

62.6

79.3

Isobutanol

Producer

Jan-Jun 14

Jan-Jun 13

Angarsk Petrochemical

8.9

9.6

Gazprom n Salavat

13.4

15.3

SIBUR-Khimprom

22.8

23.2

Total

45.0

48.0

Gazprom neftekhim Salavat exported 7,300 tons in June against 500 tons in May, whilst Angarsk Petrochemical increased exports 4.1 times to 7,400 tons.  Only SIBUR-Khimprom reduced product sales in foreign markets by 45% to 900 tons.  In the first half of 2014 Russian butanol exports totalled 55,300 tons, 37% less than in the same period in 2013.  The share of n-butanol was 55% and isobutanol 45%.

Russian 2-EH market, Jan-Jun 2014

Russian production of 2-ethylhexanol (2-EH) totalled 53,800 tons in the first half of 2014, against 43,500 tons in the same period last year. 

Russian DOP, Jan-Jul 2014

DOP exports from Russia totalled 914 tons in the first half of 2014, 2.5 times more than the same period last year.  Growth in exports was due to increased production of DOP.

Russian phthalic anhydride, Jan-Jul 2014

In June, exports of phthalic anhydride from Russia amounted to 5,620 tons which is 7% less than in May.  India was the main destination for Russian exports in June, accounting for 40% of shipments, followed by China with 18% and Finland 10%.  For the first half of 2014 Russian exports of phthalic anhydride totalled 36,790 tons, 8% less than the same period last year.

NIOST-new catalyst for butanols

Recently NIOST selected a new catalyst that will increase the production of butanol by 5%, and reduce processing of raw materials 20%. NIOST is a research centre of SIBUR, specialising in the development of new technological solutions.  It also belongs to the special economic zone in Tomsk.  NIOST together with specialists of SIBUR-Khimprom have applied technical improvements to oxo alcohol technology.  This will help to increase capacity by around 5,000 tpa. 

Russian pentaerythitol market, Jan-Jun 2014

Metafrax produced 10,890 tons of pentaerythritol in the first half of the year, 8% less than in the same period in 2013.  In the second half of May, demand started to increase in the pentaerythritol alkyd paints market, and a minor deficit occurred.  Prices have risen subsequently.

Instead of an increase in imports this year the reverse has taken place.  A significant reduction in the volume of imports of pentaerythritol in Russia this year has taken place due in part to exchange rate factors.  The largest trader of pentaerythritol imported into Russia, GC United Trading System (ETC), completely stopped purchasing pentaerythritol abroad for economic reasons.  Moreover, in the second half of March this year the only sole producer in Russia Metafrax and GK ETC signed a distribution agreement. 

Levels of consumption in the Russian market in the last few years have shown a downward trend, due mainly to the reductions in demand from the alkyd paint manufacturers.  However, at the end of May in Russia there was a shortage of pentaerythritol due primarily to the reduction in imports.  Part of the deficit is attributable to higher than expected demand and part is attributable to lower production between January to April by Metafrax which was trying to avoid accumulation of too much inventory.  However, in May Metafrax increased production of pentaerythritol in order to clear the deficit. 

Neonols, produced in Russia only by Nizhnekamskneftekhim, are balanced. 

Russia imported 1,580 tons of acetic acid in the first four months in 2014, 77% down on the same period in 2013.  The reduction of imports was due to the instability of supply at the Severodonetsk plant in east Ukraine, which provides the bulk of imports into Russia. 

In February acetic acid imports amounted to 262 tons, 2.5 times more than in January.  The main consumers of imported acid in February were of Blitz (128 tons) and Pischepromprodukt (134 tons).  For two months, the volume of import of acetic acid in Russia amounted to 366 tons, which is 13 times less than in the same period of 2013.

Russian Chemical Production (unit-kilo tons)

Product

Jan-Jul 14

Jan-Jul 13

Caustic Soda

520.2

532.0

Soda Ash

1,448.0

1,469.0

Ethylene

1,425.0

1,582.0

Propylene

848.2

768.7

Benzene

666.5

708.3

Xylenes

317.9

311.3

Styrene

369.6

414.9

Phenol

149.5

165.4

Ammonia

9,000.0

8,500.0

Nitrogen Fertilisers

5,100.0

4,910.0

Phosphate Fertilisers

1,800.0

1,852.0

Potash Fertilisers

4,900.0

3,845.0

Plastics in Bulk

3,662.0

3,526.0

Polyethylene

950.0

1,076.0

Polystyrene

318.5

265.4

PVC

394.7

397.9

Polypropylene

588.5

485.2

Polyamide

84.1

77.9

Synthetic Rubber

751.4

872.0

Other Products

Bor-boron chemicals, Primorsk Kray, new products

Mining and Chemical company Bor in the Primorsk Krai in the Russian Far East is considering expanding the product range and create enriched production of various kinds of ores mined.  According to the company, the first phase of the project is planned to focus on ores containing gold and silver.  Currently, about 90% of productions of boron containing raw materials by Bor are exported.  Developing the domestic market has been hampered by import competition. 

The plant is located at Dalnegorsk based on the borax mine.  The company produces a combination of products including boric acid in various grades, boric anhydride and calcium borate.  In the first five months in 2014 Bor produced 34,800 tons, including 34,614 tons of boric acid and 186 tons of calcium borate.  Last year the company produced 21,900 tons in the first five months. 

The main application of boron products is the production of special types of glass, glass, enamels, glazes, ceramic (borax technical, boric anhydride, boric acid, calcium borate).  In agriculture, technical drill is used for the production of fertilisers, herbicides, insecticides.  In addition, boron products are used in the production of detergents (sodium perborate, borax technical) and medicine (boric acid, borax, food). Nitride and boron carbide are used for production of semiconductor materials and abrasives, superhard refractory alloys as neutron absorbers in nuclear reactors.

Boron is used in the manufacture of permanent magnets; electrical transformers in personal stereos and iPods for CDs; scanning devices.  A promising area involves the production of amorphous iron-boron alloys used for manufacturing transformer cores.

The geographical location of Dalnegorsk Ore Dock, causes economic efficiency of maritime transport in the Asia-Pacific region.  On this basis, the company's management, defining strategic development of mining and chemical plant, one of the priorities considers expansion port Ore Dock.  Port expansion will increase the volume of processed products to 600,000 tpa, of which 300,000 tpa would be its own products and 300,000 tpa from merchant. 

Bor is an enterprise with a full technological cycle of production, including extraction, refining and chemical processing of boron and carbonate materials.  The source of boron products are the datolite Dalnegorsk ore deposits. 

The production of boric acid based on the decomposition of datolite concentrate sulphuric acid followed by reaction chambers by circulating the leaching of boric acid solutions.  Sulphuric acid is produced from imported elemental sulphur by a short circuit by a double con-timing and double absorption.  The plant capacity is 240,000 tpa.  Sulphuric acid is mainly used for the production of boric acid, and the remainder is sold on the merchant market. 

Production of calcium borate is based on the interaction of lime with circulating solution of boric acid.  Preparation of boric anhydride is carried out by melting boric acid in the tank furnace continuously acting direct heating at 1000-1200 C.  Dry granulation boric anhydride melt occurs on roll granulators.

There are an increasing number of Chinese companies on the Russian market offering boric anhydride, zinc borate and other boron compounds.  Most of the production of Bor is sold through trading houses in Japan and China at wholesale prices which are lower than the market price.  Direct sales to end-users would correct the current situation and strengthen the financial position of the company.

In 2013, the company aimed to produce 91,625 tons but only ended up producing 72,936 tons of boron products.  The reason for the fall in sales caused by the next stage of the global economic crisis.  Reducing the demand for boric acid on major consumers attracted to a reduction of volumes of realization. In order to maintain its share of the global market, the company was forced to reduce prices.

Khimgrad-Kazan

The plans of the Khimgrad industrial zone at Kazan include an increase in residents to 300 by 2016.  At present the number is 230.  Khimgrad is Russia's largest technopolis for small and medium businesses, with plans to process 31,900 tons of petrochemicals against 28,100 tons in 2013.  Petrochemical raw materials used include polypropylene, polyethylene, rubber, neonol, triethanolamine, acetone, to mention a few.  The largest residents in Khimgrad: include NIIneftepromkhim, Danaflex-Nano, Gerobplast, Gazplast, Unipack, and Kazan Plant of Chemicals.  The main suppliers of raw materials for the residents Khimgrad include Nizhnekamskneftekhim, Kazanorgsintez and Nefis Cosmetics.  As one of the main residents, NiiNeftekhimprom produces reagents for a wide range of applications.  For 2013, the production of reagents totalled 18.466 tons, 3% higher than in 2012 (17,929 tons).

Waterfall Pro

Waterfall Pro, a subsidiary of the holding Megapolis Group, has postponed its BOPP project in the Rostov region due to financial problems.  The first phase of the project involving a unit 30,000 tpa was intended to be completed by the start of 2015, with a second phase envisaging an increase to 60,000 tpa.  The project has been postponed indefinitely.  Last year Megapolis signed a preliminary agreement for polypropylene supplies with SIBUR to ensure supply of raw materials at the time of start-up.  The Waterfall project would have increased Russian BOPP capacity to 264,000 tpa.  Market consumption for Russia was estimated at 135,000 tons in 2013, by adding new capacity would have required

Plastik-Syzran

Nizhny Novgorod group Auto component plans to purchase nearly 100% of the shares in Plastik at Syzran.  The Federal Antimonopoly Service (FAS) has approved the impending deal.  Autocomponent is going to buy a site for Syzran upgrades to expand the range and markets.

Plastik is involved in the production of plastics and synthetic resins.  The company was registered in 1993 on the basis of the Syzran plastics factory built in 1965 which concentrated on the production of components for spacecrafts and components for automobiles.  These days the plant produces interior parts for cars and the main customers include Avtovaz which accounted for 45% of revenues in 2012.

The main consumer of Plastik Avtovaz is gradually moving away from the existing lines and models and will continue to put more stringent requirements for suppliers of automotive components.  The market of automotive components in Russia is growing more rapidly than car market 20-30% per annum; in particular, because of the foreign companies require localisation. 

Khimprom-Volgograd

The draft reorganisation of Khimprom at Volgograd involves investments of $25 billion to find a new direction after the expected closure of the main facilities by 2015.  Khimprom’s debt is worth about 10 billion roubles and still rising.  The company was recognised as bankrupt in November 2012.  More than 85% of the assets of the enterprise are controlled by Rostec and the bank Petrocommerce.  Khimprom is the sole Russian producer of PVC emulsion, producing 17,200 tons of PVC.

Nefis Cosmetics

New projects for Nefis Cosmetics include the production of high quality shampoos and hair care products, with the capacity of the new unit designed to produce 22,000 tpa.  Other projects planned include the increase in capacity for the production of ZHMS to 12,000 tons per month and an increase in the production capacity of liquid detergent to 150,000 tpa.  The production facilities of Nefis Cosmetics are located in the centre of Kazan in close proximity to the Kaban Lake, which means that the company is required to conduct a stringent environmental policy. 

Biochim-ethanol production

Biochim at Tambov is one of the major producers of ethanol in Russia based on fermented materials.  The main competitors of the company in terms of production of rectified ethyl alcohol and denatured alcohol include Neftekhimya in the Krasnodar region, Don in the Tula region, KIBIH at Kirov, and the Voronezh yeast plant.  Biochim is the only company in Russia producing industrially based rectified ethyl alcohol from food raw alcohol, absolute, absolute and denatured.  Annual design capacity includes 819,000 dal (93.8%) of rectified ethyl alcohol from food raw materials.  Main customers include manufacturers of perfumes, cosmetics, household chemicals, pharmaceutical and medical organizations, defence, aircraft, institutes, laboratories, etc.

Mercury to be phased out by 2025 in Russian chlorine prodcution

Russia plans to eliminate the use of mercury by 2020 in accordance with international requirements, according to a government decree.  By 2018 Russia will have to cease production of acetaldehyde using mercury as a catalyst, and by 2025 chlor-alkali production.

The Russian chlorine sector also faces the need to address the reduction of energy consumption, environmental improvements and a high degree of wear of equipment (70%).  This requires the modernisation of the sector as a whole.  As a result of wear and tear, only nine of the twenty seven plants operating in the 1990s are now working.  Overall investments needed to modernise the chlor-alkali industry of the country have been estimated in the range of $1.6 billion, thus representing the size of the challenge. 

Russian companies in 2013 produced 1.027 million tons of caustic soda of which 161,200 tons was exported.  Consumption of caustic soda in Russia is estimated at 919,600 tons in 2013 against 972,810 tons in 2012.  Imports comprised 52,700 tons last year, rising 18,000 tons.  The share of Sayanskkhimplast in Russian caustic soda production was 19% against 17% in 2012.  Sayanskkhimplast may now be surpassed by the new RusVinyl complex which includes a capacity of 225,000 tpa for the production of caustic soda. 

For the first half of 2014 imports of caustic soda in Russia have been gradually rising, mainly from China which accounted for 90% of volumes.  This trend may see some reversal in the second half of the year.  Russian production totalled 520,200 tons in the first six months in 2014 against 532,000 tons in the same period last year. 

Russian Soda Ash Market (unit-kilo tons)

 

H1 14

H1 13

2013

2012

Production

1248.2

1235.8

2418.9

2812.7

Exports

194.6

240.2

469.2

579.3

Imports

150.7

295.5

573.3

431.1

Market Balance

1204.3

1291.1

2523.0

2664.5

Russian soda ash market, Jan-Jun 2014

Russian soda ash production rose slightly in the first half of 2014 over 2017, but market consumption dropped.  The largest Russian producer is Bashkir Soda company (BSC) which has allocated 2.7 billion roubles for investment over 2014.  Already the company has commissioned equipment for separating filtering distilled liquid, which means that soda ash can be produced with virtually no waste.  New equipment was supplied by Andritz at a cost of 600 million roubles.  BSC will also provide its subsidiary Berezniki Soda Plant (BSZ) with a loan of 70 million roubles, over a period of five years. 

Belarus

Belarussian petrochemicals

Naftan is planning to build a plant for the production of MTBE at Novopolotsk.  Naftan currently purchases MTBE from Russia, including producers Omsk Kaucuk, Sterlitamak Petrochemical and Ektos-Volga.

Naftan and Mozyr refineries have stopped production from mid-August for planned overhaul, according to mid/late September.  The Naftan outage does not affect the polyethylene producer Polimir which stopped production for two weeks for scheduled maintenance in late May-early June 2014.  

Azot Grodno Production (unit-kilo tons)

Product

Jan-Jun 14

Jan-Jun 13

Methanol

40.1

37.3

Caprolactam

64.8

56.7

Polyamide primary

43.0

30.1

Polyamide filled

5.2

4.3

Ammonia

553.7

462.8

Urea

539.3

426.0

Fertilisers

407.0

334.6

Belarus increased benzene production by 29% in June to 11.400 tons.  This brought total production to 68,500 tons for the first six months in 2014, 4% less than in 2013.  Grodno Azot produced 64,900 tons of caprolactam in the period January to June 2014, 5% less than the same period last year.

In the first five months in 2014 Belarussian exports of phthalic anhydride to Russia totalled 422 tons against 3,100 tons in the same period last year.  The main Russian consumers include Russian Paint and Kazan State Treasury Powder Mill. 

For January to May 2014 Belarus imported 33,400 tons of polypropylene against 32,700 tons in the same period last year. 

The sole Belarusian LDPE producer Polymir, part of Naftan), resumed production in June after a two-week stop for routine repairs.  Plant capacity is 65,000 tpa from total polyethylene capacity of 130,000 tpa.  In the first five months of 2014 production of LDPE by Polimir dropped 11% to 53,700 tons.  Imports totalled 5,500 tons in this period, 10% less than in 2013.  LDPE capacity of Polimir is 130,000 tpa. 

For the first five months of 2014 Polimir exported 37,300 tons of LDPE, 1% less than in 2013.  The main market for Belarusian products, as in 2013, remains Russia, where it was shipped 23,000 tons in the first five months although it was 12% less than last year.  Belarus increased LDPE exports to Ukraine in the period January to May this year by 43% to 830 tons.  The growth in demand from Ukrainian consumers for Belarusian LDPE has due to the political situation which means if possible Ukraine will buy from non-Russian sources if possible.  Demand for LDPE from Belarus is expected to grow in both Russia and Ukraine over the next few months. 

Omsk Carbon-Mogilev project

Omsktekhuglerod has started construction of a carbon black plant at Mogilev.  The planned capacity of the plant is 120,000 tpa which is expected to be completed in 2017.  Production from the plant is intended for sale in Belarus and the EU.  The group of companies Omsk Carbon Group includes two factories for the production of carbon black at Volgograd and Omsk, with 110,000 tpa and 250,000 tpa capacities respectively. 

Crimea

Crimean Soda

Also in 2013, Crimean Soda Plant invested more than 5 million hryvnia in opening the North Baksan field, which aims to provide its own raw materials base for limestone.  Ukraine consumes around 25,000 tpa of sodium bicarbonate. 

Development of North-Baksan deposit will allow Crimean Soda Plant opportunity to reduce the cost price of soda ash by 10-15%.  Running a cogeneration power plant will allow him to abandon the acquisition of electricity and transfer of the equipment from steam to electricity, providing energy needs by 90% and reducing the consumption of natural gas by 11%.  In addition, in 2013 Crimean Soda Plant commissioned the production of sodium bicarbonate.

For sodium bicarbonate Crimean Soda invested $30 million in 2013, leading to an increase in capacity from 20,000 tpa to 48,000 tpa. 

Ukraine

Ukrainian market overview

The Ukrainian government has drafted a law that paves the way for the privatisation of hundreds of state-owned companies previously considered strategic.  Should the new list pass through the Rada (parliament), it might pave the way for a new round of massive privatisation in Ukraine.  Carrying out the process in a transparent and competitive way would provide a significant boost to the state budget in the coming years, and to the overall financial position.

Ukrainian Chemical Production

(unit-kilo tons)

Product

Jan-Jun 14

Jan-Jun 13

Ammonia

1,780

694.0

Benzene

48.0

58.9

Carbon Black

30.9

30.3

Methanol

46.5

70.8

Soda Ash

257

275.0

Sodium Bicarbonate

7.8

0.0

Titanium Dioxide

35.9

63.9

Urea

572.7

393.9

Radical measures are required to stimulate an economy which is deteriorating rapidly; many sectors are suffering from a lack of demand and cash-flow.  Chemical production in Ukraine fell by 20.8% in the first six months in 2014, due mainly to the combined effects of fighting in the east of the country and the loss of two chemical companies in the Crimea.  The largest chemical enterprises in Lugansk and Donetsk regions ceased production of ammonia and nitrogen fertilisers coupled with the loss of Crimean Titan and Crimean Soda. 

The Odessa Portside Plant is expected to be privatised as part of the mass privatisation.  The main advantage of the Odessa Portside Plant includes the transhipment facilities for receiving and handling ammonia in sea-going vessels.  The Cabinet of Ministers included Odessa Port Plant in the list of enterprises to be privatized in 2014.  Kyiv expects to receive around $600 million for the asset.  Plant facilities include ammonia and urea production of 900,000 tpa and 660,000 tpa respectively, and capacity for handling 4.3 million tpa of ammonia.  This is the fourth attempt to privatize the IPF, the last time he tried to sell in 2009, but the auction was cancelled due to low prices offered by the winner.

Production of synthetic ammonia  in June amounted to 153,000 tons, down 59.8% against June 2013 and 40% less than May 2014.  In the first six months, Ukraine has reduced the production of ammonia compared by 37.1% to 1.781 million tons. 

Sumykhimprom, Jan-Jun 2014

During the first half of 2014 Sumyhimprom reduced production of mineral fertilizers by 21.4% to 66,900 tons, although sales increased by 4.7%, to 83,700 tons. Titanium dioxide production fell by 20.3% to 9,400 tons and sales by 27.1% to 7,400 tons.  The net income for Sumyhimprom in January-June this year decreased by 11% to 741.7 million hryvnia.  The gross profit for the first half amounted to 33.3 million hryvnia compared to a loss of 8.6 million hryvnia for January to June 2013.  Sumyhimprom produces 35% of complex and superphosphate fertilisers in Ukraine.  Through privatisation bidders may be offered a 92.75% stake.  The State Property Fund of Ukraine suspended trading in shares in Sumyhimprom in June.

Ukrainian Benzene Market

(unit-kilo tons)

 

2013

2012

Production

100.7

80.2

Domestic Sales

9.3

27.7

Exports

63.4

51.5

Imports

1.5

20.4

Domestic Consumption

10.8

48.1

Ukrainian benzene, Jan-Jun 2014

Benzene production in Ukraine declined 21% in June to 8,100 tons.  Zarya at Rubeznoye stopped production after producing 1,900 tons in May.  Yasinovsky Coke reduced production in June by 7% to 3,400 tons.  For the first half of 2014 benzene production in Ukraine totalled 48,000 tons which was 10% up on last year.  Overall, it appears that the domestic benzene market in Ukraine has declined to small-scale purchases and that export activity will represent the most important part of sales for benzene producers. 

Ukrainian oxo-alcohols, Jan-Jun 2014

Phthalic anhydride imports totalled 3,380 tons in the first half this year, 28% down against 2013.  DOP imports totalled 2,279 tons which is 8% up on 2013.  The main Ukrainian buyers for DOP include Padana Chemical Compounds and Galich-cable.  The main domestic producer Polikem restarted production in July but the other producer Lizinvest remains idle due to the instability in the Lugansk region. 

Ukrainian methanol, Jan-Jul 2014

The enforced downtime at Azot’s Severdonetsk methanol plant, due to the ongoing chaos in eastern Ukraine, means that methanol imports into Ukraine have increased in recent months.  In June imports rose six times over May to 2,200 tons, of which 1,800 tons came from Russia and most of the remainder from Belarus.  Prices have been rising, in June the average for imports was $470 per ton DAF border Ukraine against $430 per ton in May.  Russian methanol is imported at lower prices than from Belarus, ranging at $450 from Russia and $580 from Belarus. 

Almost 70% of methanol imported to Ukraine in June went to domestic gas companies, buying 1,500 tons.  Resin company KarpatSmol bought 490 tons of Russian methanol, increasing purchases by 80% over May, and Azon-2 increased purchases three-fold to 160 tons.  Shchekinoazot is the main Russian company selling methanol on the Ukrainian market, and expects to continue shipping product whilst the Severdonetsk plant remains idle. 

Kremenchug Carbon Black Plant

Kremenchug Carbon Black Plant increased production by 25.22% in the first six months in 2014 to 30,998 tons.  Last year the plant produced 52,353 tons of carbon black, 12.8% down on 2012.  In the second quarter the Kremenchug Carbon Black Plant reduced production volumes against the first quarter by 200 tons to 15,398 tons.  The plant produces 10 brands of carbon black, the relevant standards of the USA ASTMD 1765, used in the tyre and rubber industry, as well as in paint production. 

New soda ash plant for Ukraine?

Ukrainian Soda Ash Market (unit-kilo tons)

 

2013

2012

Production

551.8

653

Exports

316.2

350.3

Imports

35.9

18.7

Market Balance

271.5

321.4

Due to the Russian annexation of Crimea Ukraine’s sole working soda ash plant has been effectively lost.  As a result in the near future Ukrainian consumers will be forced to import soda ash.  In response to this scenario NIOCHIM at Kharkiv has proposed that Ukraine builds a new soda ash plant at Slavyansk where there is a raw material base for carbonate and chloride raw materials.  Another major argument is the ability to attract qualified personnel from the recently closed Lisichansk soda plant.  The proposed capacity for the new plant is 400,000 tpa.

Ukrainian soda ash market

In 2013, the Ukrainian market of soda ash shrunk by 16%. Reduced consumption of domestic products and imports-increased. In 2014, soda ash consumption is expected to decline due to weak economic performance.  Imports rose last year from Poland, Bulgaria, and Romania.  The largest consumers of imported soda ash included Zorya (40% of total imports), and Vetropak Gostomelsky glass (16%), Weighting Material Plant (7%), Kostopolsky Glassware Factory (6%), Volnogorsk glass (5%), etc.

Caucasus-Central Asia

Mangistau methanol project

Kazakhstan plans to construct plants for the production of methanol and liquefied natural gas in the Mangistau region, the name of the company being Kazakhstan Methanol Limited.  The cost of the plant is estimated at around $700 million and will be located at Kuryk.  Agreements have been signed with Malaysian partners for the project. 

UzKorGasChemical-Lotte Chemical

Lotte Chemical aims to earn considerable annual sales revenue from the Uzbek gas-chemical plant complex UzKorGasChemical which is to be operational by the end of 2015.  By the fourth quarter in 2015, the Surgil chemicals project in Uzbekistan is expected to be completed and after 2016, the plants could bring in more than 1 trillion won in sales revenue.  The company is currently building the large-scale chemical complex jointly with Uzbekneftegaz at a cost of $4 billion.  Based on the gas produced locally, the partners will produce 390,000 tpa of HDPE and 80,000 tpa of polypropylene. 

UzKorGasChemical was founded by Uzbek and Korean companies in May 2008 to develop, finance, construct and exploitation of integrated gas and oil processing project in Ustyurt region of Uzbekistan. Uzbekneftegaz owns 50% stake in the joint venture, while Uz-Kor Gas Chemical Investment holds 50% share. Korea Gas Corporation (KOGAS), Honam Petrochemical and STX Energy are Korean founders of the venture.

UzKorGasChemical selected 90 hectares for the construction of the complex near Akchalak Kyrkkyz and 115 km from Surgil field.  The gas-chemical complex is being designed to produce 3.2 billion cubic metres of gas per annum, of which 3 billion cubic metres will be used by UzKorGasChemical.  The complex gas will be processed with the production of ethane, liquefied gases and marketable natural gas (3.8 billion cubic metres), from which ethane and LPG will be sent for pyrolysis. There will also be guided and gas condensate in the amount of 162,000 tpa.  Contracts have been placed with Lotte Chemical, Samsung C & T Corp and Uzbekneftegaz. 

Uzbekneftegaz-chemical projects

In 2015, Uzbekneftegaz is planning to organize production of polycarbonate, polystyrene and ABS with a total cost of $700 million. Its planned capacity will be 70,000 tpa.  The project is developed by S-Oil (South Korea) and Mitsubishi (Japan).  Furthermore, Uzbekneftegaz, IRED (South Korea) and CNPC (China) are working over a project for the production of butanediol from gas and methanol. The project design plan should be completed by the end of 2014. The project cost is estimated at $400 million and envisages the production of spandex on the base of Uzkimyosanoat.

Azerbaijan

In the first half 2004 Azerkhimya produced 24,200 tons of propylene monomer, 6% more than in the same period in 2013.  Since the beginning of this year Azerbaijan produced 10,900 tons of C4, 27% less than in 2013. 

Turkmenistan ammonia project

Turkmenkhimiya is close to starting new plants at Mary for 400,000 tpa of ammonia and 640,000 tpa of urea.  The project has been designed by Japanese companies Kawasaki Plant Systems, and Sojitz Corporation, whilst construction has been carried out by the Turkish company Ronesans.  The complex belongs to the state concern Turkmenkhimiya.

Turkmenistan is close to completion and launch of its urea and ammonia complex at Mary in Turkmenistan.  Commissioning of the plant is scheduled for June this year. This project will produce 640,000 tpa of urea, and will create more than 850 new jobs.  To meet the needs of agricultural industry of Turkmenistan the state concern Turkmenkhimiya signed a contract with a consortium of foreign companies to undertake the project, include Kawasaki Plant Systems and Sojitz Corporation.  The construction has been carried out by the Turkish company Ronesans. 

This project supplements the polyolefin investment plan where Toyo Engineering Corporation has entered into a contract with Turkmengaz in tandem with Hyundai Engineering for the construction of a planned Kiyanly complex.  This project includes the production of ethylene, HDPE and polypropylene from natural gas produced on the coast of the Caspian Sea.  The production capacity of the new complex could provisionally be designed to produce 81,000 tpa of polypropylene and 386,000 tpa of polyethylene. 

Construction of the facility is designed to diversify the usage of natural gas reserves, as well as large-scale plans to diversify the national fuel and energy complex.  Turkmenistan’s natural gas reserves are estimated to be fourth in the world after Russia, Iran and Qatar.  However, the possibilities of export of Turkmen natural gas are severely limited due to the capacity of the pipeline system and thus the government has embarked on a strategy of diversification and adding value.

Navoiazot-nitric acid

Navoiazot has announced a tender for modernisation of production capacities for of nitric acid with the starting price of $185 million.  According to the tender terms, the project should be completed within 36 months.

The project will be financed from the company’s own resources, a loan of Fund for Reconstruction and Development of Uzbekistan, loans of foreign banks, as well as loans of the contractor. The tender proposals will be accepted till 12 September.  The tender results will be announced in the end of 2014.   The reconstruction will help to increase production of non-concentrated nitric acid by 1.4 times to 500,000 tpa.

 

 

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