US shale boom fuels growth in proppants market

(ICIS) -- The resurgence of oil and gas drilling in the US over the last few years has fuelled tremendous growth in the proppant market, industry experts said on Monday. Proppants are used in the oil and gas industry for hydraulic fracturing (fracking), which is used to extract oil and natural gas from shale formations deep underground. Proppants prop open fissures in shale rock, releasing oil and gas and maximising flow capacity from the reservoir to the wellbore.

While proppants have been used in the oil and gas industry for over 30 years, they have recently surged in popularity because of the current shale boom, said James Ely, the president of petroleum engineering consulting firm Ely & Associates, which is based in Houston, Texas.

Conventional vertical wells only require one fracturing stage, whereas horizontal wells can have up to 14, with each stage using about 300,000 lbs (136 tonnes) of proppants. ⌠Instead of running 200,000 to 300,000 lbs, companies might pump 5m lbs, Ely said.

As long as companies drill horizontally, proppants are going to be in high demand, Ely said.
Several companies have benefitted from the increased demand for proppants, including Momentive Specialty Chemicals, which specialises in the resin-coated variety.

MRC

(ICIS) -- MOL's second-quarter petrochemical operating profit shrank by 38% year on year to forint (Ft) 1bn (USD 5.21m, EUR 3.65m) after it encountered flat margins and rising feedstock prices, the Hungarian oil, gas and petrochemical group said on Tuesday. Its petrochemical operating profit was Ft1.6bn in the second quarter of 2010.

The group's petrochemical sales volumes were up by 22% in the second quarter to 385 KT compared with the second quarter of 2010, but edged down slightly from the 392 KT recorded for the first quarter of this year, MOL added.

Its integrated petrochemical margin of EUR 348/tonne compared with EUR 343/tonne a year ago and the EUR 377/tonne seen in the previous quarter.

MRC

(ICIS) -- Spot prices of butadiene (BD) in Asia may rebound in September or October as supply of the material will tighten, with a number of crackers in Asia and the US due to undergo maintenance during this period, industry sources said on Tuesday.

Some producers expect BD prices to rise above USD 4.000/tonne (EUR 2.760/tonne) towards the fourth quarter, after shedding USD 450/tonne over the past month, they said.

BD prices were last assessed at USD 3.800-3.850/tonne CFR (cost and freight) NE (northeast) Asia in the week ending 12 August, ICIS data showed.

In Asia, Shell's 800 KTa cracker in Bukom Island, Singapore and Formosa Petrochemical Corp's (FPC) 1.2m tonne/year No 3 cracker in Mailiao, Taiwan, are due for turnaround in mid-August.
Shell's Bukom cracker has a 155 KTa BD extraction unit.

MRC

(Reuters) -- Taiwan's Formosa Petrochemical Corp is ready to start up its 540,000 barrels per day (bpd) refinery in stages after it was completely shut following a fire at a secondary unit end July, its spokesman said on Thursday.

But it was not immediately clear when Asia's fifth largest refinery will be able fully to restore its diesel and gasoline exports, estimated at 800 KT a month and 210-240 KT a month respectively. "We are ready for start-up on Aug. 20, but that is subject to government approval," said its spokesman.

"We will first start-up the utilities, followed by units in train one. If everything runs smoothly, we could restart all three trains in the refinery in early September." "But it is not clear when we can restore the gasoline and diesel export volumes."

Formosa operates three crude distillation units (CDUs) of equal capacity of 180,000 bpd but shut the plant for safety reasons after a fire from a propylene-recovery unit damaged some of its surrounding infrastructure including power cables and optic fibres.

MRC

(Plastemart) -- State-owned Indian Oil Corporation's (IOC) Paradip Refinery in Orissa is expected to be completed one year after the pre-decided schedule in Q1-2013. This delay could pose some tax problems for IOC. The seven year income tax holiday for the refining sector ends next year. Refineries commissioning after March 31, 2012 will not be eligible for exclusion from payment of income tax on revenues earned for first seven years of operations. IOC had previously stated that the refinery will start producing fuel by March 2012 when it will commission the primary units like Crude Distillation Unit. Secondary units will be commissioned by July, 2012, and operations stabilised by November 2012.

MRC