Shell boosts production for chemicals customers in Asia with new investments at Singapore site

MOSCOW (MRC) -- Shell announced new investments at its Singapore site that will add to its portfolio of world-class manufacturing facilities and boost its chemicals footprint in Asia. The company has taken a final investment decision to build new petrochemicals production units on Jurong Island to supply customers in the region, said Shell.

The new investments include a high-purity ethylene oxide (HPEO) purification column with an initial capacity of 140,000 tonnes per annum (tpa) and two world-scale ethoxylation units with a combined capacity of 140,000 tpa. These will add to Shell’s existing capacities for HPEO (65,000 tpa) and alcohol ethoxylates (40,000 tpa) from the company’s 2010 acquisition of its partner’s shares in Ethylene Glycols (Singapore) Private Limited. The new investments also include associated facilities, such as product tanks and a HPEO pipeline grid. The pipelines will deliver HPEO to new and potential "over-the-fence" customers, some of whom have already signed up with Shell and are building facilities nearby.

Official groundbreaking took place today for these new plants, as well as for the upgrading of Shell’s polyols production facility, announced in February 2013.

Graham van’t Hoff said, "The demand for alcohol ethoxylates in Asia is expected to increase at approximately 6-7% annually over the next five years. The key driver for this is the move by consumers from laundry powder and soap bars to liquid detergent and liquid soaps, especially in major markets like China, India and South-east Asia. Shell is one of a few global suppliers of HPEO and alcohol ethoxylates - we are expanding to meet the growing needs of our existing and new customers."

HPEO, derived from ethylene oxide (EO), is used in a wide range of household and industrial applications. Its largest outlet is the ethoxylation industry, which processes HPEO and alcohol into alcohol ethoxylates. These are key ingredients for a variety of products, such as detergents and personal care items like shampoo and body wash. Feedstock for the new HPEO plant will come from Shell’s world-class ethylene oxide/mono-ethylene glycol plant on Shell Jurong Island, which is integrated with the company’s ethylene cracker through to its largest fully-owned refinery on Pulau Bukom.

Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.
MRC

MOSCOW (MRC) - In the first quarter of the year, imports of PVC exceeded 30,000 tonnes, up by half year-on-year, according to MRC DataScope.

Such a significant increase in imports was due to the outage at Karpatneftekhim (Lukoil group) - the domestic PVC producer.

In March, imports of suspension PVC (SPVC) to Ukraine rose to 11,700 tonnes. As expected, last month, American resin accounted for the main increase in PVC imports. In March, supply of North American suspension PVC rose to the level of 7,200 tonnes from 3,800 tonnes in February.

Amid low export PVC prices in the USA in November-December, Ukrainian companies were actively purchasing inexpensive raw materials in anticipation of a seasonal increase in demand for finished products made of PVC.

In March, a high level of export PVC prices in Europe and large purchases from the USA led to a decrease in shipments of the European polymer. In March, imports of suspension polyvinyl chloride from Europe amounted to 4,600 tonnes from 5,100 tonnes in February.

The Ukrainian SPVC maker Karpatneftekhim (Lukoil group) has been idle since September 2012. The outage of the plant was a forced one and due to the adverse economic and business performance of the producer. The Ukrainian government and Lukoil are in the process of signing a memorandum on the creation of favourable conditions for the resumption of production at Karpatneftekhim. Meantime, while the local producer is shut down, imports of PVC will grow.

MRC

MOSCOW (MRC) - The U.S. Chemical Safety Board issued an urgent recommendation to Chevron Corp on Monday to check for ongoing damage to pipes and equipment at its six U.S. refineries to prevent another explosion like the Aug. 6 pipeline blast at the company's San Francisco Bay area refinery, said Cnbc.

The Safety Board, in an interim report issued Monday, said Chevron had set aside six recommendations over 10 years to increase inspection or replace the line with upgraded pipe as the refinery saw signs of the walls were thinning due to corrosion from increasing sulfur content in the increasingly diverse crude oil grades the refinery was running.

The pipeline's walls, originally a third of an inch thick, had thinned significantly in the years prior to the Aug. 6 explosion, the board said.

"The average wall thickness near the rupture location was approximately 40 percent thinner than a dime (the thinnest American coin)," the CSB wrote in the interim report. Chevron had not yet responded to requests for comment in time for this story.

The rupture occurred late on the evening of Aug. 6 as firefighters were seeking the source of a leak on the pipe, which carried gasoil away from the refinery's 245,000 barrel per day (bpd) crude distillation unit.

The pipeline rupture released a huge vapor cloud seen from miles away before igniting two minutes later. The blaze created an even larger plume of black smoke over the area. More than 15,000 San Francisco Bay area residents sought medical treatment in the weeks after the blaze for respiratory problems.

The gasoil in the pipeline was at or above the temperature at which it will ignite in the presence of oxygen when the Aug. 6 rupture occurred, the CSB said.

Eighteen workers safely escaped the vapor cloud. One worker was caught in a fire truck when the cloud ignited, but was protected by his full-body firefighting gear and was able to escape from the blaze. The fire took five hours to bring under control.

Also on Monday, the CSB, which is solely an investigative body and has no enforcement or regulatory powers, recommended Chevron report leading and lagging safety indicators at its two California refineries to federal, state and local regulatory agencies.

The board also called upon the state of California to establish a multi-agency process safety program "to improve the public accountability, transparency, and performance of chemical accident prevention and mechanical integrity programs."

The CSB also recommended that the City of Richmond and Contra Costa County strengthen process safety programs over refineries under their jurisdiction. There are four refineries in Contra Costa County.

The board recommended that federal, state and local worker safety and environmental protection agencies conduct joint inspections of refineries and chemical plants. It also recommended those agencies participate in the new safety regulation program recommended for California.

Chevron said repairs to the CDU were completed in late March and the refinery plans to restart the unit in April. The refinery has been producing motor fuels at 50% of capacity due to the CDU's shutdown.
MRC

MOSCOW (MRC) -- Russian producers continue to play bearish in the high-density polyethylene market. This week there were a lot of rumours about a price increase starting from next week by Rb1,500-3,000/tonne, according to ICIS-MRC Price report.

In April, the demand for low-density polyethylene (LDPE) rose after the disastrous January-March. However, LDPE supply in the market is still sufficient. Yet, despite all these factors, some Russian producers are going to raise prices further. The situation becomes even more tense with the upcoming outages for maintenance at LDPE production of major Russian producers.

Thus, Kazanorgsyntez will shut its LDPE production for a four-week turnaround from 18 April. Ufaorgsintez plans to stop its LDPE production in mid-May for a two-week maintenance.

Last week the price range for low-density polyethylene was quite wide. Deals for LDPE 158 were concluded in the range of Rb57,000-60,000/tonne, CPT Moscow, including VAT. Deals for LDPE for the production of shrinkable film were made in the range of Rb61,000-63,500/tonne, CPT Moscow, including VAT. Consumer activity is low in the market with the only exception being LDPE 153.

A surge of consumer activity in the LDPE market is expected in the last week of April, when many converters will be traditionally forming additional inventories of raw materials in anticipation of long May holidays. According to some market participants, it is in this period that LDPE prices will be at their top.
MRC

MOSCOW (MRC) - By mid-April, many Russian companies had managed to get a reduction in polyolefins prices by EUR20-60/tonne, despite the desire of European producers to limit the decline in April's export prices to the CIS markets, according ICIS-MRC Price report.

The April contract price of ethylene and propylene in Europe was agreed by EUR50-60/tonne lower than the March level. However, many European makers were planning to limit the April decline in polyethylene and polypropylene prices by the level of EUR20-30/tonne, explaining it by the fact that in March, they were not able to fully transfer the rising feedstock cost to polymers prices.

By mid-April, the European polyethylene prices had dropped by EUR40-60/tonne from March. Deals for high-density polyethylene (HDPE) were concluded in the range of EUR1,170-1,230/tonne, FCA.

Polypropylene prices fell on average by EUR20-40/tonne compared to the price level of mid-March. Last week deals for propylene homopolymer (homopolymer PP) were stricken in the range of EUR1,150-1,200/tonne, FCA. Deals for copolymers of propylene were made in the range of EUR1,220-1,280/tonne, FCA.

Some market participants expect a further decline in polyolefins prices in Europe in May, citing an on-going decrease in oil quotations and the current strengthening of the euro against the dollar.
MRC