China Petroleum signs 20-year contract to get LNG shipped from Louisiana; Braskem taps U.S. lawyers over former Pemex CEO’s testimony; Braskem-Idesa to expand ethane import capacity; Argentina’s Pampa Energia sales see 49% on-year increase
China Petroleum & Chemical signs 20-year contract to get LNG shipped from Louisiana
Venture Global LNG announced in November 2021 a two-decade contract to sell to Sinopec (China Petroleum & Chemical Corp.) four million tonnes/year of LNG from its Plaquemines facility currently under construction in Louisiana.
“In addition, UNIPEC, a Sinopec subsidiary, has agreed to purchase 3.5 million tonnes of LNG from Venture Global's Calcasieu Pass LNG facility for a shorter duration,” it said.
The agreement is the largest single LNG supply deal ever signed by a U.S. company and will double imports of U.S. LNG to China,” according to the Nov.4 press release.
Mike Sabel, Venture Global’s CEO, said China needs LNG as the Asian country switches from coal into cleaner alternatives. Sabel, a founder of Venture Global, was previously vice president of a financial company. Sinopec is the world's largest oil refiner and second largest chemical company.
Venture Global announced on April 2021 that the Zachry Group along with KBR were going to execute the Phase 1 of the engineering, procurement and construction for Plaquemines.
The companies “will integrate highly modularized, owner-furnished equipment” for the 10 million tonnes/year nameplate Plaquemines facility, Venture said at the time. The equipment was identical to systems installed at Venture’s Calcasieu Pass project, Venture said.
Venture Global is targeting over 50 million tonnes/year of LNG production capacity in Louisiana.
The LNG contract was reached at a time of high demand for LNG and some supply issues worldwide.
Braskem taps U.S. lawyers over former Pemex CEO’s testimony
Braskem said on Nov. 9 in page 22 of its third quarter 2021 earnings release that it has hired a U.S. law firm to investigate media reports about testimony involving Braskem’s owners by a former Mexican state oil Pemex CEO who as of late November 2021 was jailed while waiting a corruption trial in Mexico.
The law firm will look into “allegations of undue payments” originally published in the media in Mexico related to the testimony by the former CEO of PEMEX to the Office of the Attorney General of Mexico as part of a corruption trial, the company said.
“The investigation is ongoing, and the company is, at the moment, unable to estimate the scheduled date of its conclusion or its outcome and/or possible impacts, if any, on its quarterly information, and it has not identified, to date, matters that could affect or require disclosure in the quarterly information,” it said.
Emilio Lozoya was CEO of Pemex between December 2012 and February 2016. He was extradited from Spain to Mexico in mid-2020 and faces charges in Mexico related to receiving illegal funds. Mexican media following the case have reported that his testimony has incriminated other former high-ranking Mexican officials.
In early November he was ordered to prison while awaiting trial. Lozoya had avoid prison since his mid-2020 extradition, according to local reports.
“If the investigation finds evidence to support any of the allegations, such findings could affect the company's business, reputation, financial condition, controls and operating results, as well as the liquidity and price of the securities issued by it,” Braskem said.
Mexican media refer to the case by the name Odebrecht, which was the official name of Braskem’s owner until December when it was changed to Novonor.
Braskem reached in late September an accord with Mexico related to ethane supplies and prices with an adjustment of terms.
The U.S. law firm has had “experience in similar cases,” Braskem added.
In December 2016 the company and its equity owner Odebrecht pled guilty in the U.S. and agreed to pay a fine of at least $3.5 billion for what the U.S. Department of Justice then described as the "largest foreign bribery case in history." The case was related to payments in exchange for favorable contract terms in several countries that did not include Mexico.
Braskem Idesa reported in 2020 it carried out an internal investigation and didn't find any wrongdoing. The terms of an ethane contract in controversy were the result of public bidding, the company had said at the time.
Braskem-Idesa to expand ethane import capacity
The company also said that in September its ethane import volume into the Nanchital, Veracruz ethylene/polyethylene complex that it owns in a venture and operates reached a record high of 22,400 barrels per day.
Braskem said it plans to incorporate additional unloading stations to expand to 35,000 barrels/day of ethane import capacity.
Braskem Idesa, the Braskem-led venture that owns the complex, needs to import ethane from Mexico to complement local production because Mexican output has declined over the past several years. The plant was built with the intention to operate with Mexican ethane.
However, since its 2016 startup it has not been able to run consistently at rates close to full capacity. The construction of the import terminal has served to bypass the ethane production problems in Mexico, that in turn are related to a trend of reduced hydrocarbon production in Mexico over the past two decades.
The ethylene and polyethylene complex in Veracruz, which has over one million tonnes/year capacity of polyethylene, worked at 68% capacity in the third quarter, an increase of ten percentage points from the second quarter, Braskem said.
Argentina’s Pampa Energia sees sales rise 49% on-year
Pampa Energia, an independent company that operates in Argentina’s electricity and gas industries, said on Nov. 10 that its third quarter 2021 sales rose 49% on-year to $435 million “due to the rise in prices of oil, gas and petrochemical products” as well as a volume increase.
Pampa Energia’s downstream assets include two chemical plants.
The sales posted under Pampa do not include revenue from the affiliates Greenwind (eolic), OldelVal (oil pipelines), Refinor (refinery), CTBSA (gas-fired power generator), Transener (power transmission) and TGS (gas transportation), where its ownership accounted for US$115 million.
The Puerto General San Martin plant, built in 1966, was the first petrochemical complex in South America. It has capacity for 50,000 tonnes/year of LPG, 155,000 tonnes/year of aromatics, 290,000 tonnes/year of gasoline and refined products, 160,000 tonnes/year of styrene, 55,000 tonnes/year of synthetic rubber, 180,000 tonnes/year of ethylbenzene and 31,000 tonnes/year of ethylene. The company also owns the Zarate polystyrene plant at another site. That plant has 65,000 tonnes/year capacity.
Besides petrochemical production, Pampa Energia refines and retails fuels. It is also involved in the midstream and upstream.
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