Page 17 - DMEA Week 43 2020

DMEA PETROCHEMICALS DMEA

SABIC swings back to profit in Q3

SAUDI ARABIA SAUDI petrochemicals giant SABIC returned to allow us to meet the challenges facing the
to profit in the three months ending September global economy, while our business and opera-
The company booked 30, following a string of three straight quarterly tional performance continued to demonstrate
three straight quarterly losses, thanks to the reversal of impairment resilience.”
losses before. charges. Looking forward, SABIC warned that there
The world’s fourth-biggest petrochemi- was still a global oversupply of its key products
cals manufacturer achieved a 47% jump in and that this would weigh down on prices and
net income to SAR1.09bn ($291mn), up from weaken its margins for the foreseeable future.
SAR740mn a year earlier. Besides the reversal of The petrochemicals sector, like other industries,
SAR690mn in asset impairments, the company’s must adapt to a “new normal,” al-Benyan said.
stronger performance came from higher prices The improved result will be welcomed by
and increased production and sales volumes for Saudi Aramco, which became SABIC’s parent
some products. in June after closing the purchase of a 70% stake
Revenues were still down 11% year on year in the company from Saudi wealth fund PIF for
at SAR29.3bn, although this represented a 19% almost $70bn. Aramco will pay for the shares in
recovery quarter on quarter. EBITDA came to instalments dating all the way to 2028.
SAR5.67bn, marking a 26% decline y/y but a Global demand for petrochemicals is begin-
62% gain q/q. ning to pick up again from lows experienced
“The third quarter of 2020 benefited from earlier this year. But the market is still over-
an improvement in economic activity and an supplied, prompting some operators to scale
increase in oil prices, which translated into back investment plans. Aramco and SABIC
higher product prices,” SABIC CEO Yousef announced earlier this month they were con-
al-Benyan said in a statement. “During this time, sidering downsizing a $20bn oil-to-chemicals
the strength of our global supply chain continued plant in Yanbu.™

LNG

Egypt’s Idku LNG plant prepares

to load first cargo since July

EGYPT EGYPT’S Idku LNG plant is gearing up to load discovered offshore and several have already
its first cargo for export since July, Reuters has entered production.
The plant has shipped reported citing data provided by Kpler. National gas output rose 12.4% year on year
out only seven cargoes The Cape Ann LNG tanker arrived at Idku to a record 7.2bn cubic feet (around 9.3bn cubic
totalling 0.45mn tonnes on October 26 and is expected to carry the ter- metres) per day in the 12 months ending June 30,
this year. minal’s first export cargo since three months according to Egypt’s petroleum ministry. How-
ago, according to Kpler. The July shipment was ever, weak global gas prices have discouraged the
the first since late March, when Egypt halted export of supplies.
exports in response to the collapse in global LNG Egypt’s only other LNG terminal at Damietta
prices triggered by the coronavirus (COVID-19) has been idle since 2012, back when the coun-
pandemic. try lacked the gas supply to keep it running. Its
The 7.2mn tonne per year (tpy) Idku plant has restart was anticipated sooner, but has been com-
shipped out only seven cargoes totalling 0.45mn plicated by a legal dispute over compensation
tonnes of LNG this year, Kpler estimates, ver- due to the operators after the plant was closed.
sus 57 cargoes of some 3.66mn tonnes in size in Damietta LNG is operated by Union Fenosa
2019. Royal Dutch Shell operates the first and Gas (UFG), a 50:50 joint venture between Eni
second Idku trains with stakes of 35.5% and 38% and Spain’s Naturgy. Under a February deal to
respectively. Other partners include Malaysia’s resume operations, UFG’s 80% share in Dami-
Petronas, France’s Engie and Egypt’s two main etta was to be divided between Eni and EGAS.
state oil and gas companies, EGAS and EGPC. This would have left Eni with 50%, EGAS with
Egypt now enjoys surplus gas supply follow- 40% and EGPC with 10%. However, EGAS
ing the 2017 launch of the giant Zohr field in the revealed in early April that the agreement had
Mediterranean, led by Italy’s Eni. Since Zohr’s fallen through, amid uncertainties created by the
start-up, a number of other gas fields have been pandemic. ™

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