BPCL to invest Rs. 4,800 crore in a propylene derivative plant

MOSCOW (MRC) -- Bharat Petroleum Corporation plans to invest Rs. 4,800 crore in the propylene derivative petrochemical project in Kochi, which was earlier planned as a joint venture, as per Plastemart.

Environmental clearance for the project is expected in about a couple of months, after which BPCL will choose its technology partner. BPCL has identified six technology partners for the project.

The BPCL Board had already given its approval for the investment subject to environmental approval. Cost of the integrated refinery expansion and petrochemical project is Rs. 25,000 crore and is the single largest investment in Kerala.

Propylene for the project will be sourced from the expanded refinery. The capacity of the refinery is being raised from 9.5 mln tpa to 15.5 mln tons.

As MRC wrote before, in October 2014, expansion by BPCL’s Kochi refinery was 60% complete, and scheduled for completion in December 2015.

Bharat Petroleum Corporation Limited (BPCL) is an Indian state-controlled oil and gas company headquartered in Mumbai, India. Bharat Petroleum owns refineries at Mumbai, Maharashtra and Kochi, Kerala (Kochi Refineries) with a capacity of 12 and 9.5 million metric tonnes per year.

Multitude of investments by petrochemical companies in the Port of Antwerp

MOSCOW (MRC) -- Port of Antwerp, in 2014, saw several leading energy companies announce record levels of investment. Both ExxonMobil and TOTAL will be making huge strategic investments in Antwerp, said Portofrotterdam.

US oil giant ExxonMobil announced a USD1 bln investment in its refinery. The company started to build a Delayed Coker Unit in October for converting heavy, high-sulphur oil residues into cleaner oil products and to produce transport fuel such as diesel and fuel oil for the maritime industry. French energy company TOTAL also made the decision to invest 1 bln euro in a modernisation programme for its Antwerp production plant. Antwerp is the company’s largest refining and petrochemical platform in Europe.

One of the investment projects, named OPTARA, is a new refining complex intended primarily for converting heavy fuel oil into desulphurised diesel and domestic heating oil with ultra-low sulphur content, in response to the shift in demand towards more environmentally-friendly products. The new plant is due to begin operations in 2016. BASF Antwerp has also started up a new extraction plant for butadiene. The Antwerp plant, which will have an annual production capacity of 155,000 tonnes, is the second BASF butadiene extraction plant in Europe after its headquarters in Ludwigshaven.

Evonik Industries chose Antwerp to build the first commercial plant in the world to produce AQUAVI® Met-Met, an innovative feedstuff additive specially developed for aquaculture of shrimps and other crustaceans. In addition, the company is building a 100,000 ton 1-butene production plant and expanding its methyl tertiary-butyl ether (MTBE) production capacity by up to 150,000 tons.

American industrial gas company Praxair is building its second air separation plant and extending its pipeline system in the Port of Antwerp. Thanks to this investment, Praxair will be able to increase its supply of oxygen and nitrogen to companies in the port.

French industrial gas company Air Liquide is investing some 50 million euro, doubling its carbon monoxide (CO) production capacity in the Port. The CO will be supplied to BASF, which uses the carbon monoxide for its methylene diphenyl diisocyanate (MDI) production. MDI is an important precursor for making polyurethane (PU), a plastic that can be supplied in various forms and has many applications, being used in freezers, refrigerators, the car industry and for varnishes, shoes, leisure articles amongst other things.

Russian PP output exceeded 1 mln tonnes in 2014

MOSCOW (MRC) - The total volume of polypropylene (PP) production in Russia exceeded 1 mln tonnes in 2014, up 20% year on year. The main increase in production volumes occurred for Tobolsk-Polymer (SIBUR) and Poliom (Titan Group), according to MRC ScanPlast.

December PP production in the country dropped to 96,600 tonnes, compared to 105,000 tonnes in November, mainly because of the lower capacity utilisation at Tobolsk-Polymer. Total PP production in Russia was 1.035 mln tonnes in 2014, compared with 861,000 tonnes in 2013. A big contribution to the growth of production made new plants in Omsk and Tobolsk, which were launched in 2013. The structure of PP production in 2014 looked as follows.

The largest producer of polypropylene in Russia - Tobolsk-Polymer launched its PP production in a test mode in May 2013. The plant was officially opened in September 2013. Production is based on INEOS technology with annual capacity of 500,000/tonnes. The producer's PP production in 2014 exceeded 263,000 tonnes.

Poliom launched its 180,000 tonnes/year PP production in February 2013. In the middle of 2014 the plant's capacity was expanded to 210,000 tonnes/year. The producer kept its PP output in December 2014 at the level of November.
Total PP production at Poliom exceeded 168,000 tonnes in 2014. |

Nizhnekamskneftekhim (TAIF) in December increased its PP output, having produced 18,300 tonnes compared to 17,300 tonnes in November. Total PP production of the producer reached 213,200 tonnes in January - December 2014, up 2% year on year.

Tomskneftekhim (SIBUR) in December produced a little less than 11,000 of PP, down 4% from the November level.
Total PP production at the plant was about 126,800 tonnes in 2014, compared with 127,600 tonnes in 2013.

Ufaorgsintez in December decreased PP production to 9,800 tonnes, compared with 11,000 tonnes in November.
The producer's PP output grew to 121,500 tonnes in 2014, up 5% year on year. Neftekhimia (SIBUR) increased its PP output to 7,800 tonnes in December, from 2,200 tonnes in November because of the scheduled maintenance works. The producer reduced PP production in 2014 to 100,500 tonnes, down 17% year on year because of the scheduled shutdown October - November. |

Stavrolen (LUKOIL) shut its PP production because of the emergency shutdown in February 2014; the producer resumed PP production in October. The producer's PP output over the operational period was a little more than 42,000 tonnes.

Total to cut capital spending by 10% amid oil price rout

MOSCOW (MRC) -- Total, the French oil and gas giant, plans to reduce group-wide capital spending by 10% this year and speed up billions of dollars in asset disposals, under an accelerated cost-cutting plan led by new chief executive Patrick Pouyanne, reported The Financial Times.

The move comes as thousands more job cuts were announced in the energy industry on Tuesday, with Baker Hughes, the oilfield services provider being acquired by Halliburton in a USD26.8bn deal, saying that it would lay off 7,000 employees.

Global crude prices have tumbled nearly 60 per cent since June to trade at less than USD49 a barrel, as a result of weaker growth in demand for oil, booming US shale production and Opec’s decision in November not to cut output.

In a Financial Times interview, Mr Pouyanne - appointed to the top role at Total after the death last year of Christophe de Margerie in a Moscow plane crash - said the majors, the world’s biggest energy companies, could emerge as "the winners" from the market turmoil because they have greater flexibility to respond by using strong balance sheets to borrow more while interest rates were at historic lows.

Total, he said, would first make deeper and swifter cuts to this year’s spending. These would include cuts to exploration and development in the UK region of the North Sea, Canada’s oil sands and mature fields in west African states such as Gabon and Congo.

The group is also looking at imposing a group-wide hiring freeze for 2015. Capital spending is now expected to fall USD2bn-USD3bn from last year’s total of USD26bn.

Patrick Pouyanne looks to offload some projects but stresses 'nobody will be fired'.

Mr Pouyanne said Total would press ahead with a restructuring of lossmaking refineries in Europe. "We have some assets on which we may need to make some efforts," he said. "We have three assets, one of them being in the UK, but we have some in France."

Regarding France, a restructuring plan will be presented in the spring, but Mr Pouyanne confirmed that it "will include capacity reductions" at refineries.

"When you have a plant losing more than EUR100m a year, it’s not sustainable. And it is my duty to find solutions. We are losing money and it doesn’t work."

As MRC wrote previously, in late December 2014, Total Petrochemical permanently shut down production of high density polyethylene (HDPE) with a capacity of 70,000 tonnes in Antwerp, Belgium.

Total S.A. is a French multinational oil and gas company and one of the six "Supermajor" oil companies in the world with business in Europe, the United States, the Middle East and Asia. The company's petrochemical products cover two main groups: base chemicals and the consumer polymers (polyethylene, polypropylene and polystyrene) that are derived from them.

Moodys downgrades 8 Russian non-financial corporates

MOSCOW (MRC) -- Moody's downgrades ratings of 8 non-financial corporations, including Rosneft, Gazprom Neft, Lukoil, Russian Railways, reported the agency.

Moody's Investors Service has downgraded the ratings of Rosneft, Gazprom Neft and 6 other non-financial corporations and their subsidiaries after downgrading Russia's sovereign rating, which it announced in a statement.

In particular, Moody's downgraded to Baa3 from Baa2 the ratings of the following companies: Rosneft and its subsidiaries Rosneft Finance SA, Rosneft International Finance Limited and Rosneft International Holdings Limited; Gazprom Neft and its subsidiary GPN Capital S.A., the Federal Passenger Company, Lukoil and its subsidiary LUKOIL International Finance, MMC Norilsk Nickel and its subsidiary MMC Finance Ltd., Russian Railways and its subsidiary RZD Capital Plc.

All these ratings have been placed under review for further possible downgrade.

The rating action followed Moody's decision to downgrade Russia's sovereign ratings to Baa3 from Baa2 on January 16, 2015.

Rosneft became Russia's largest publicly traded oil company in March 2013 after the USD55 billion takeover of TNK-BP, which was Russia’s third-largest oil producer at the time.

Lukoil is one of the world's biggest vertically integrated companies for production of crude oil & gas, and their refining into petroleum products and petrochemicals. The company is a leader on Russian and international markets in its core business, which accounts for over 20% of Russian oil production and 18% of the total Russian oil refining. Lukoil also controls two of the largest petrochemical plants in Russia and Ukraine: Stavrolen and Karpatneftekhim.

Gazprom Neft, is the fourth largest oil producer in Russia and ranked third according to refining throughput. It is a subsidiary of Gazprom, which owns about 96% of its shares. The company is registered and headquartered in St. Petersburg after central offices were relocated from Moscow in 2011.