Flint Hills shuts Houston propane dehydrogenation plant ahead of turnaround

MOSCOW (MRC) -- US petrochemical producer Flint Hills Resources shut its propane dehydrogenation plant in Houston, Texas, ahead of a seven-day planned turnaround, as per Plastemart with reference to market sources in Platts.

A company spokeswoman was not immediately available to confirm the shutdown or provide details on its expected duration.

The 545,000 mt/year plant was last restarted on April 18 after a similar planned outage that started on April 11, according to S&P Global Platts records.

As MRC informed before, in 2014, Flint Hills Resources, LLC announced it was moving forward with a significant expansion of its chemicals business with the completion of its acquisition of PetroLogistics LP and its general partner, PetroLogistics GP LLC.

Flint Hills Resources, through its subsidiaries, is a leading refining, biofuels and chemicals company. Its subsidiaries market products such as gasoline, diesel, jet fuel, ethanol, biodiesel, olefins, polymers and intermediate chemicals, as well as base oils and asphalt.

PP producers bank on Asian automotive demand to guard against heavy competition

MOSCOW (MRC) -- Producers are moving toward polypropylene impact copolymers and other higher value PP for automotive applications, banking on rising automobile demand in Asia to lift profits, as the market for commodity grade PP homopolymers becomes increasingly competitive, reported Plastemart.

Japan's Mitsui Chemicals and Prime Polymer, in which Mitsui Chemicals has a 65% stake, announced plans to raise its global PP compound capacity by 5% to 1.05 mln tpa by fiscal 2017 (April 2017-March 2018) in response to growing demand from the automotive sector, in a joint press release earlier this month. Production capacity in Asia, excluding Japan, is expected to increase 5.7% to 280,000 tpa while in North America, capacity is set to expand by 7.3% to 440,000 tpa, according to the release.

Saudi Basic Industries Corp.'s executive vice president of polymers Abdulrahman Al-Fageeh said: "We have shifted some of our portfolio in our local production (from homopolymer to copolymer) here in Sinopec Sabic Tianjin Petrochemical (SSTPC) to cope with (China's automotive) demand." SSTPC is a 50:50 joint venture between Sabic and Sinopec with a nameplate capacity of 450,000 m tpa of PP and 600,000 m tpa of polyethylene.

In Southeast Asia, PP demand from the automotive sector remains a bright spot, said Thailand's IRPC in April during the Chinaplas 2016 conference. IRPC has invested heavily in a 100,000 m tpa PP plant at Rayong using compounding technology licensed from Japan Polypropylene Corporation, or JPP, suitable for automobile bumpers and instrument panels, company sources said. The plant is expected to start up in end-2017. Thailand is a key PP exporter to China. China's automobile demand is expected to grow by 1.4 mln units in 2016, or up 7% year on year, to around 21.4 mln units, according to Scotiabank's 2016 Global Auto Report, outpacing demand growth rate of 4% to 33.6 million units across Asia this year.

So far, growth in China's automobile sales has broadly been in line with Scotiabank's forecast. Between January and April, sales in China grew 6.1% year on year to 8.7 mln units, according to China Association of Automobile Manufacturers (CAAM).

Chinese production grew by 5.7% to 8.8 million units over the same period, roughly in balance with demand. Revenue figures provided more evidence of demand growth in 2016, with sales for the first four months rising 7% to about USD181 billion from the same period last year, according to latest data from China's National Bureau of Statistics.

As MRC informed before, the global PP market is expected to reach USD170 bln in 2022, as per a report by Reportbuyer. Growth of key end-use industries such as packaging and automotive in Asia Pacific is expected to drive the global polypropylene market the forecast period. In addition, increasing construction spending particularly in emerging markets of China, India and Indonesia is also expected to have a positive influence on the market growth. Volatile propylene prices on account of constantly fluctuating crude oil prices are expected to remain a key challenge for market participants.

PVC prices continued upward trend in Russia in June

MOSCOW (MRC) -- Negotiations over June prices of Russian polyvinyl chloride (PVC) finished this week. Producers managed to achive a further price increase of Rb1,000-1,500/tonne, according to ICIS-MRC Price report.

Negotiations over June prices of Russian suspension PVC (SPVC) for the domestic market started last week, but some producers were in no hurry to discuss deals. Negotiations had virtually been fully completed by the end of this week, producers achieved the price rise of Rb1,000-1,500/tonne from May.

Angarsk polymer plant has postponed the launch of its ethylene production for, at least, a month after the forced shutdown in mid-February because of the equipment failure. As a result, the start-up of PVC production at SayanskKhimplast is delayd for the same period (the plant is totally dependent on ethylene supply from Angarsk Polymer Plant, and was also forced to take off-stream its production capacities). Thus, the Sayansk plant will not begin producing resin until July, whereas previously, it was assumed that this would happen in the second half of June.

The outage at SayanskKhimplast, Russia's second-largest PVC producer, did not lead to an acute shortage in the market. This factor was partially offset by weak demand for resin and higher imports. But, nevertheless, there has been still tight supply of PVC supply in some segments, particularly, of resin with constant K = 70, since April. The shutdown at the Sayansk plant was one of the reasons for the further price increases.

Negotiations over June contract PVC prices with constant K = 64/67 were held in the range of Rb73,500-77,000/tonne CT Moscow, including VAT. Negotiations over resin with K = 70 were held in the range of Rb75,500-78,000/tonne CPT Moscow, including VAT.

The market situation was aggravated by a temporary outage for maintenance at Kaustik (Volgograd). The plant shut down its capacities for a scheduled turnaround on 16 May, PVC production is planned to be resumed on 6 June. The plant's annual production capacity is 90,000 tonnes.

New Petrobras CEO vows turnaround without government bailout

MOSCOW (MRC) -- Pedro Parente, the new CEO of Brazil's state-owned oil company Petrobras, has kicked off his first day by vowing change as he attacked the way the company has been run, noting corruption, heavy debt and government control of fuel prices, reported Reuters.

He said Petrobras must cut its nearly USD130B of debt on its own.

"Some say to get out of this grave situation the federal government must capitalize the company. I don't like this because it tosses the problem on the back of the taxpayer," Parente said

A bailout would also dilute existing shareholders and weaken the credit of the government, he said.

In a forceful and wide-ranging address to employees, Parente promised independence from political interference, calling the company's recent history of soaring debt and rampant corruption "absurd."

Parente, 63, a former Petrobras chairman and CEO of the Brazil unit of commodities trading giant Bunge Ltd, was appointed CEO of Petrobras last month by Brazil's interim president, Michel Temer.

Petrobras accumulated billions of dollars in refining unit losses in recent years, causing debt to balloon, because the government, in an effort to control inflation, refused to let it raise gasoline, diesel and propane prices when world prices were high.

Parente urged Congress to pass bills ending Petrobras' legal obligation to operate all oil exploration and production in the Subsalt Polygon, an offshore district near Rio de Janeiro where giant oil discoveries have been made in the last decade.

The law, he said, hurts the government and Petrobras by either forcing the company to finance investment it cannot pay for or prompting the government to forgo oil development because Petrobras cannot afford it.

Paying down debt and ramping up output will be the top priorities, Parente said, adding that the sale on non-core assets will be key to debt cuts. He said he has not been in the company long enough to say what assets will be on the block.

He said the company will prepare a strategic plan to meet his goals within 120 days.

As MRC wrote previously, Brazil's state-controlled oil producer Petrobras is seeking to sell its 5.8 billion Brazilian real (USD1.4 billion) stake in petrochemical producer Braskem SA. Petroleo Brasileiro SA (Petrobras) has hired Brazilian bank Banco Bradesco SA as a financial adviser and has started to pitch the sale to foreign investors. Petrobras owns a 36 percent stake in Braskem, Latin America's largest petrochemical producer. The sale would help Petrobras meet its target of selling USD15.1 billion worth of assets in 2015-16, a key part of its plan to cut debt as oil prices plunge to 12-year lows.

Headquartered in Rio de Janeiro, Petrobras is an integrated energy firm. Petrobras' activities include exploration, exploitation and production of oil from reservoir wells, shale and other rocks as well as refining, processing, trade and transport of oil and oil products, natural gas and other fluid hydrocarbons, in addition to other energy-related activities.

Petronas and JX Nippon Oil & Energy Sign Sales & Purchase Agreement for PL9SB

MOSCOW (MRC) -- Petronas and JX Nippon Oil & Energy have signed an agreement for the sale and purchase of equity in Petronas LNG 9 Sdn Bhd, a wholly-owned subsidiary of Petronas, reported Apic-online.

Under the agreement, JX NOE will acquire a 10% in-terest in PL9SB, which owns the ninth liquefied natural gas (LNG) liquefaction train within the Petronas LNG complex in Bintulu, Sarawak, Malaysia.

The 3.6-million-t/y state-of-the-art train, expected to begin commercial operations in the first quarter of 2017, will increase capacity at the Petronas LNG complex to 30-million t/y.

The partnership aims to expand the LNG business even further and ensure a reliable supply of energy for their customers. A marketing support agreement was also signed.

As MRC informed earlier, in December 2015, Petronas awarded the Johor port operatorship for its Refinery and Petrochemicals Integrated Development (RAPID) project to Johor Port Bhd (JPB). As the port operator, JPB will manage the operations and logistics functions at the material offloading facility (MOLF) for Petronas’ Refinery and Petrochemicals Integrated Development (RAPID) project in Pengerang.

Petronas plans to build a C6-based metallocene linear LDPE plant and a low density polyethylene (LDPE)/ethylene vinyl acetate (EVA) swing plant at its greenfield integrated refinery and petrochemical complex in southern Johor state by mid-2019. The proposed metallocene LLDPE will have a capacity of 350,000 tpa, while the LDPE/EVA will have a capacity of about 150,000 tpa. The two plants are part of Petronas' planned Refinery and Petrochemical Integrated Development project in Pengerang at Johor. RAPID includes a 300,000 bpd refinery and a petrochemical complex with a 3 million tpa steam cracker, and is expected to come onstream in mid-2019. The petrochemical complex will have the capacity to produce 7.7 million tpa of petrochemical products.

Petronas, short for Petroliam Nasional Berhad, is a Malaysian oil and gas company wholly owned by the Government of Malaysia. The Group is engaged in a wide spectrum of petroleum activities, including upstream exploration and production of oil and gas to downstream oil refining; marketing and distribution of petroleum products; trading; gas processing and liquefaction; gas transmission pipeline network operations; marketing of liquefied natural gas; petrochemical manufacturing and marketing; shipping; automotive engineering; and property investment.

The Nippon Oil Corporation, or NOC or Shin-Nisseki is a Japanese petroleum company. Its businesses include the exploration, importation, and refining of crude oil; the manufacture and sale of petroleum products, including olefines (ethylene, propylene) and aromatics.