Article: Petronas: Defers $20 Billion Petrochemical Plant Decision to 2014

Petronas’ hesitation over proposed Johor plant is part of a string of delays causing uncertainty around Malaysian petrochemical industry.

Malaysia’s Petroliam Nasional Bhd. has deferred for another three quarters a decision to proceed with what the government describes as one of the country’s most important oil-and-gas projects.

A decision about building the $20 billion petrochemical complex in the southern state of Johor has been deferred until the first quarter of 2014, Petronas Chief Operating Officer Wan Zulkiflee Wan Ariffin said on Wednesday. He didn’t give a reason. It had been scheduled to announce if it will go ahead by next month. Petronas is currently conducting a new “front-end engineering design study,” Mr. Zulkiflee told a news conference.

German chemical giant BASF SE in January pulled out of a joint venture to build a refinery at the Refinery and Petrochemical Integrated Development, or Rapid, because it couldn’t agree undisclosed terms and conditions with Petronas. Germany’s Evonik Industries AG has replaced BASF.

Separately, Mr. Zulkiflee said petrochemical arm Petronas Chemicals Group Bhd. (5183.KU) will decide on the future of a $500 million investment with BASF to build an aroma ingredients plant by end of this year.

By Jason Ng – Fox Business

The full article is visible via the link below – Pankaj Oswal


Article: Deloitte: Shale gas, oil potential increasingly apparent

Recent statements from Deloitte’s Vice President and other key representatives about the bright future of gas and oil from shale have put the technology front and centre in the minds of investors and will only benefit the industry.  Deloitte’s comments follow an industry survey by the financial services company last year.

Oil and gas production from tight shale formations clearly is a long-term phenomenon and not a short-term trend, Deloitte LLP officials told reporters. The financial services company found growing confidence in unconventional energy resources in an industry survey it conducted last year, said John England, a vice-chairman and leader of its oil and gas practice.

“Huge investments are flowing into this sector from previously unheard from sources,” he said on May 21 during Deloitte’s 2013 Washington Energy Conference at nearby National Harbor, Md. “It’s a reason so many foreign companies have come into the US. Investment recently has flowed to midstream infrastructure, but there’s still strong interest upstream.”

More natural gas liquids are being recovered along with the shale gas, and that’s attracting investments too, he observed. “It’s interesting that we’re having this debate about authorizing more [LNG] exports when we’re already export significant amounts of NGLs,” England said.

Growing tight oil development also is generating more investments, he continued. “Even in the Eagle Ford and Bakken formations, recovery rates are still quite low so there’s a real technology opportunity,” he said.

Joseph A. Stanislaw, Deloitte’s independent senior energy and sustainability advisor, said the whole global energy equation is changing because of what North America is doing with shales. “This new fossil energy abundance could benefit alternatives if we use it not as an end, but a means,” he suggested.

Landowners’ property rights are the biggest single advantage, according to Stanislaw. “The future is going to be determined by governments and companies both,” he said. “But the industry will need to operate safely and minimize environmental impacts if it expects to keep its license to operate.”

Peter J. Robertson, Deloitte’s independent senior advisor for oil and gas, agreed foreign countries face shale oil and gas development obstacles which aren’t present in North America. “Their governments would do back-flips to have this potential, while several of ours are curiously putting up obstacles,” he said. “I expect US tight shale producers and service companies to work more overseas sooner than anticipated, however.”

By Nick Snow – Oil & Gas Journal

The full article is visible via the link below – Pankaj Oswal

Phosphate price fall jeopardises IPL Queensland Plant

Incitec Pivot’s Di-Ammonium Phosphate (DAP) plant in north-west Queensland, south of Mt Isa, is in serious jeopardy as the plant recorded a 90% fall in earnings across the half-year period.

The price of DAP has fallen by USD$62 per tonne and this has placed a strain on fertiliser producing companies and operations.

Analysts have suggested that Indian and US markets are the source of price fall, but that the high Australian dollar and transport costs and times have had a negative impact.

IPL exported 693,000 tonnes of fertiliser in the last year, but negative market conditions have pushed estimated earnings down from $40 million to just $5.2 million.

It will be interesting to see how IPL weathers the storm over the plant

A comprehensive article, containing audio, is visible via the link below. – by Pankaj Oswal

Article: Iran to account for 41% of Middle East petrochemicals: Official

Government support for the petrochemical industry will see Iran account for 41% of all production in the Middle East by 2020.  Petrochemicals are a hot growth area globally and governments across the board are seeking to prop up the space and become leading markets for the product.  With investment from a range of private and public places it should embolden activity around petrochemical production.

An Iranian deputy oil minister says the country will account for 41 percent of petrochemical production in the Middle East within seven years.

Abdolhossein Bayat, who is also the managing director of National Petrochemical Company (NPC), made the remarks at the opening ceremony of the 10th International Petrochemical Forum in Tehran on Monday.

The Iranian official said that Iran plans to establish 33 new petrochemical complexes, part of which will be constructed along the shores of the Sea of Oman and Chabahar Free Zone.

Other projects will be implemented in the country’s new development areas of Lavan in the Persian Gulf, Sarakhs in the northeastern parts of the country and southern Iranian port cities of Mahshahr and Assaluyeh, he added.

He further said that upon the implementation of underway projects, Iran’s installed petrochemical production capacity will increase to 100 million tons per annum by the end of the country’s Fifth Five-Year Economic Development Plan in 2015.

Bayat said Iran’s installed petrochemical production output reached about 51 million tons in the last two years.

On Sunday, Director for Planning and Development at the NPC Ramezan Oladi said Iran currently represents about a quarter of the Middle East’s petrochemical products.

Oladi said that Iran has a roughly 25-percent-share of the petrochemicals in the Middle East, and is planning to increase it to 38 percent by 2015.

He said petrochemical products accounted for 37.5 percent of the country’s non-oil exports and 47 percent of industrial exports in the year to March 2013.

Iran reaped USD 12 billion from exporting petrochemicals in the last Iranian calendar year which ended on March 20, 2013.

Nearly 60 countries, mainly from South and Southeast Asia, imported Iran’s petrochemical products in the previous Iranian calendar year.

The Islamic Republic is determined to become the biggest petrochemical producer in the Middle East.

Iran has significantly expanded the range and volume of its petrochemical production over the past few years, and the NPC has become the second largest producer and exporter of petrochemicals in the Middle East after Saudi Arabia.

The full article is visible via the link below – by Pankaj Oswal

Article: Egypt hikes Suez Canal toll for oil, petrochemical tankers by 5%

The political and economic turmoil in Egypt has caused the Government to raise Suez Canal fees for oil and petrochemical shipments.  The attached article analyses the move and its consequences in detail.

DUBAI (ICIS)–Egypt’s Suez Canal Authority (SCA) has raised toll fees by 5% for oil tankers and  vessels carrying petrochemicals, while a smaller increase of 2% will apply to container ships and car carriers, a spokesperson of the government agency said on Friday.

The new fees took effect May 1 as the Egyptian government seeks ways to boost revenue and prevent a currency crisis. Last year, Egypt had increased tolls on the waterway by 3%.

“The increase in toll is in place and we feel the hike is not that big to the point that would make shippers leave the Suez Canal,” said SCA spokesman Tarek Hassanein.

The canal, which links the Mediterranean Sea and the Gulf of Suez, is the quickest sea route between Asia and Europe, saving an average 15 days on a voyage.

Prior to the implementation of this year’s toll increase, the International Chamber of Shipping had warned that added expense might cause financially strapped ship operators to seek alternate routes.

“The decision to raise fees was based on several recent studies conducted by the SCA on marine traffic and toll revenues,” Hassanein said.

The waterway is one of the Egypt’s main sources of foreign currency revenues, along with tourism, oil and gas exports, and remittances from expatriates.
Suez Canal revenues have become more important because the country’s foreign currency reserves have shrunk to $13.5bn (€10.4bn) currently, from $36bn on the eve of the 25 January Revolution.

Egypt received $398.5m in revenues from the Suez Canal in March.

In 2012, the number of container ships using the canal fell 12% to 6,332. A total of 17,225 ships of all types travelled the link last year, according to a latest data by SCA.

Meanwhile, freight rates for the Middle East and North Africa (MENA) region-to-Asia route declined in the past few weeks as spot trading activities have been subdued given an underlying weakness in demand for chemical cargoes, shipping sources said.

In an attempt to encourage purchases of chemicals, shipowners have indicated willingness to fix cargoes at lower costs, they said.

On Friday, freight rates for a 10,000-tonne vessel from the Middle East to China are at $49-53/tonne, while those for same-sized vessel heading to India from the Middle East are at $30-33/tonne.

Shipping activities, however, may see a slight improvement towards July, before the Muslim fasting month of Ramadan. Demand for chemical and crude products from MENA to India, Pakistan and southeast Asia typically picks up ahead of Ramadan.

The full article is visible via the link below – by Pankaj Oswal