Indian refiners trim exports as domestic demand continues to surge

MOSCOW (MRC) -- In a world awash with diesel supplies, there’s no place like home right now for India’s refinery tycoons as accelerating economic growth and government policy changes stoke local fuel demand, said Hydrocarbonprocessing.

Essar Oil, controlled by the billionaire brothers Shashi and Ravi Ruia, predicts a rapid recent domestic expansion in industrial and automotive consumption will continue. Reliance Industries, run by India’s richest man Mukesh Ambani, moderated some exports as the fastest gross domestic product growth among major economies spurs purchases in the South Asian nation.

Indian purchases are emerging as a bright spot and providing the nation’s refiners with a buffer against a darkening export outlook. Diesel globally may swing into oversupply this year and prices are set to decline, according to BMI Research. Low crude costs, a flood of Chinese shipments and uneven world economic growth are weighing on that market.

Prime Minister Narendra Modi’s government scrapped diesel-price controls in 2014, making retail sales more viable for private-sector refiners. Officials have also increased infrastructure outlays and are trying to revive industry.

Essar and Reliance control about 4% of the retail market for diesel and gasoline, state-run Bharat Petroleum Corp. estimates. Two other state-run companies -- Indian Oil Corp. and Hindustan Petroleum Corp. -- along with Bharat Petroleum account for the rest. That signals the competition private-sector companies face, as well as the scope to grab market share.

Tushar Pania, a spokesman for Reliance Industries, declined to comment. The company cut petroleum product exports by more than 6% in the first nine months of 2015, according to Bloomberg News calculations based on earnings statements.

Reliance is the operator of the world’s biggest oil-refinery complex, and the stock has climbed about 23% in the past year. That compares with an 11% drop in the benchmark S&P BSE Sensex index. Essar Oil, India’s second-largest non-state refiner, is delisting from Indian stock exchanges.

Aside from cars and trucks, diesel’s uses range from irrigation pumps to factories and railway engines -- and growth of more than 7% in Asia’s No. 3 economy is boosting such demand.

As MRC informed earlier, Reliance Industries Ltd. (RIL) last spring put into operation two plants in Dahej, Gujarat, India. The first is a polyethylene terephthalate (PET) resin plant, which consists of two lines with a combined manufacturing capacity of 650 KTA. The plant has been built with Invista technology for continuous polymerization and Buhler AG technology for solid state polymerization.
MRC

MOSCOW (MRC) -- A greenfield petrochemical complex will be set up jointly by HPCL & Gail in Andhra Pradesh, giving a fillip to the plastic processing industry in the state, according Ananth Kumar, Minister for Chemicals and Fertilisers, as per Business-standard.

"On behalf of the centre, I am making in-principle announcement that HPCL and Gail together would establish a greenfield petrochemical complex in Andhra Pradesh. This will also bring huge downstream investment opportunities to the state apart from refinery and cracker units," said Ananth Kumar during the closing ceremony of the three-day CII Partnership Summit in Visakhapatnam on January 12, 2016.

The project is in addition to the ongoing brownfield expansion of HPCL refinery at Visakhapatnam, and would be set up at a different location in the state, the minister said. Establishment of a new petrochemical complex is estimated to require additional investment of more than Rs 25,000 crore. Last year, the AP government had requested the Centre to establish a greenfield petrochemical complex near Machilipatnam in Krishna district.

In addition to the petrochemical complex, Ananth Kumar also announced several projects, including a manufacturing cluster for medical devices and National Institute of Pharmaceutical Education and Research (Niper) in Andhra Pradesh.

The AP medical devices manufacturing park, which is expected to attract Rs 20,000 crore, will be second such facility in the country after Gujarat. While Niper will be set up in Visakhapatnam with an investment of Rs 600 crore, the Central Institute of Plastics Engineering & Technology (Cipet) centre at Vijayawada will be upgraded.

Hindustan Petroleum Corporation Limited (HPCL) is an Indian state-owned oil and natural gas company with its headquarters at Mumbai, Maharashtra and with Navratna status. HPCL has about 25% marketing share in India among PSUs and a strong marketing infrastructure. The Government of India owns 51.11% shares in HPCL and others are distributed amongst financial institutes, public and other investors.
MRC

MOSCOW (MRC) -- Taiwan’s state-owned CPC Corp has restarted its No. 6 cracker on January 13 after being shut for a minor turnaround the previous day, a company source told TPS Wednesday.

It is also operating its No. 3 cracker at 100% and the No. 4 cracker is slated to restart on Jan 31, the source added.

All its crackers in Linyuan have a combined capacity of 1.08 million mt/year of ethylene as well as 500,000 mt/year of propylene.

The RFCC unit has a nameplate capacity of 450,000 mt/year of propylene.

We remind that, as MRC reported earlier, at present CPC Corp. is in negotiations with an unidentified Indonesian firm regarding the purchase and relocation of CPC's Kaohsiung, Taiwan, naphtha cracker to Indonesia.

CPC Corporation, Taiwan, is engaged in the exploration, production, refining, procurement, transportation, storage, and marketing of oil and gas. The company provides fuel oil, including automotive unleaded gasoline and diesel fuel, low-sulfur fuel oil, marine distillate fuels, marine residual fuels, and aviation fuel; petrochemicals, such as ethylene, propylene, butadiene, benzene, para-xylene, and ortho-xylene; liquefied petroleum gas products comprising liquefied petroleum gas, propane, butane, and a propane/butane mixture; lubricants, motor oil, industrial oil, grease, and marilube oil; SNC products, including petroleum ether, naphtha, toluene, xylene, crude octene, methyl alcohol, normal paraffin, viscosity-graded asphalt cement, and sulfur; and natural gas.
MRC

MOSCOW (MRC) -- Production from a 50,000 tonne-per-year polyacetal plant at an affiliate of Saudi Basic Industries Corp (SABIC) will start by early 2017, said Reuters, citing a SABIC official.

Saleh al-Zahrani, senior manager polyacetal, was speaking at an industry event in Dubai.

Construction work on the plant had begun in April 2014, and production had been originally scheduled to commence by the fourth quarter of 2016. SABIC previously said that the financial impact of the project would be disclosed after the launch of commercial operations.

The project National Methanol Co., also known as Ibn Sina, is 50-percent owned by SABIC, one of the world's largest chemical companies, while Celanese Corp and an affiliate of Duke Energy Corp each have a 25 percent stake.

As MRC informed earlier, Sabic projects its 2016 costs to rise by 5%. The company expects higher costs to make an immediate impact starting from its first quarter 2016 financial results.

Saudi Basic Industries Corporation (Sabic) ranks among the worldпїЅs top petrochemical companies. The company is among the worldпїЅs market leaders in the production of polyethylene, polypropylene and other advanced thermoplastics, glycols, methanol and fertilizers.

MRC

MOSCOW (MRC) -- Kazanorgsintez, the only polycarbonate (PC) producer in the CIS countries, still intends to put the work for the domestic market in its priority, according to MRC ScanPlast report.

To date, the rouble exchange rate is still making imported material unaffordable to small and medium-sized converters that constitute the main segment of PC granules consumers. Thus, the last year's imports of PC granules slumped by almost 40% to about 22,000 tonnes, as per our estimates.

Given the level of devaluation in Russia, it is quite logical to expect a further fall in imports and an increase in consumption of Russian PC. However, Kazanorgsintez's limited production capacity (6,000 tonnes per month) is the problem. The market will still be in need of imports during a seasonal surge in demand.

The plant's representatives said Kazanorgsintez plans to produce the maximum possible volume of PC in 2016 and to provide converters with high quality material at market prices.
MRC