HPLC aims at 60 MM ton refining capacity by 2030

MOSCOW (MRC) -- India's third biggest crude oil refiner, Hindustan Petroleum Corp. (HPCL), plans to expand its refining capacity to more than 60 MMtpy, or approximately 1.2 MMbpd by 2030, according to a senior company official, reported Hydrocarbonprocessing.

This will help fill the yawning gap between the volume it refines and the volume it markets through its retail outlets, but also help in meeting the burgeoning fuel demand in the country, said HPCL Chairman Mukesh Kumar Surana.

While Hindustan Petroleum, which is largely known as a marketer of fuel products, currently sells 34.20 MMtpy of fuel products through its retail outlets and bulk sales, its refining capacity is only about half that.

According to a 2015 report by the International Energy Agency (IEA), India will require up to 329 MMtpy of oil products by 2030. As of last year India consumed 183 MM tons of fuel products, government data showed.

Analysts have often pointed out the heavy reliance on outside purchase of fuel products as a double-edged sword for the company. While HPCL is not directly exposed to crude oil fluctuations, it misses out on the refining margins that its peers clock.

"We would like to have 60 plus (MM tons) refining capacity by 2030," Surana said.

Separately, a company official said the internal target is to have not more than 15% reliance on outside purchase of fuel by 2030.

A major chunk of this refining capacity is expected to come from a joint venture project for a 60 MM ton proposed refinery in the western state of Maharashtra.

Hindustan Petroleum will own a 25% stake in this JV. India's biggest state-owned refiner Indian Oil and second largest player Bharat Petroleum will hold 50% and 25% stakes respectively.

India's Oil Minister Dharmendra Pradhan said in June that it would also like to bring in a strategic partner in the refinery and Saudi Arabia Oil has shown interest.

To meet the 60 MM ton target, the company will have to set up yet another greenfield refinery, HPCL's director of refineries, B K Namdeo, said.

As MRC wrote previously, Hindustan Petroleum Corp. plans to invest around USD3.8 billion to ramp up its refining capacity by two-thirds this decade, as the country's oil demand soars and to meet cleaner fuel standards.

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) -- Domestic coal-based methanol production is a key factor in India's drive for petrochemical and energy self-sufficiency, a methanol industry official told a conference in New Delhi last week, reported Apic-online.

Demand for domestically-sourced feedstock for petrochemicals production was a major driver of India's coal-based methanol sector development, National Institution for Transforming India or NITI Aayog methanol group chairman V.K. Sarawat told the India Methanol Economy International Seminar in New Delhi Wednesday.

"Methanol-to-olefins and methanol-to-propylene is demand that is anticipated to become a higher growth sector in the future; this demand has risen from 6% from 2011 to 12% in 2016," he said.

India's polyethylene deficit is expected to increase to 3 million mt by 2020 from 2 million mt in 2016 and its 1 million mt/year polypropylene surplus to flip to a slight deficit over the same period, according to data from S&P Global Platts Petrochemical Analytics.

Reducing the environmental impact while increasing energy security in the transport sector was another key reason for ramping up domestic coal for methanol production, he said.

"It is important that we look at (a fuel) which is going to be less polluting and in turn can also be produced from the abundant (coal) reserve India has," Sarawat said.

Methanol is widely used as a transport fuel in the US and in China, where 15-20% of vehicles use methanol directly or as a mix, he added. Up to a third of global methanol demand is from the transport sector; 13% of global methanol requirements are for gasoline blending, 9% goes into MTBE, 9% into DME and 3% into biodiesel in 2015, according to global energy consultant Nexant. Sarawat said enhancing India's energy security required a two-pronged approach: "The creation of a comprehensive roadmap to set up the processes and technologies and a small-scale demonstration project for the conversion of high ash content coal into methanol," he said.

India's low quality, high ash content coal is a challenge that needs to be addressed before India's transition to a methanol-based economy can be realized, he added.

As MRC informed before, in May 2016, Honeywell announced that its Honeywell UOP business broke ground on a new manufacturing capacity outside Shanghai to produce materials used to convert methanol from coal into feedstocks for making plastics, a significant milestone to enable China to meet the growing demand for plastics. When it enters production in 2017, the catalyst production line in Zhangjiagang City in Jiangsu Province will produce state-of-the-art catalysts used in Honeywell UOP’s Advanced Methanol-to-Olefins (MTO) process technology.
MRC

MOSCOW (MRC) -- The first gas carrier to load ethane, JS Ineos Intrepid, at Enterprise Products Partners' new ethane export terminal at Morgan's Point, Texas, is finally fully loaded and departed from Houston in early September after a slow cargo loading process since mid-August, as per TankTerminals.

The Ineos ship is headed to Rafnes, Norway. At presstime, the ship was sailing past Kemah, near Galveston.

Enterprise said near midday on Thursday, 1 September, that Intrepid, loaded with approximately 265,000 barrels of ethane, set sail from the facility this morning en route to the INEOS facility at Rafnes in Norway. The Morgan's Point ethane export facility, which is the largest of its kind in the world, has a design loading capacity of 10,000 barrels per hour.

The company said that the driving force behind development of the terminal is the growing international demand for abundant U.S. ethane from shale plays, which offers the global petrochemical industry a low-cost feedstock option and supply diversification. By providing producers with access to the export market, the Morgan's Point terminal is also facilitating continued development of U.S. energy reserves.

Supply for the new ethane export terminal is sourced from Enterprise's natural gas liquids fractionation and storage complex in Mont Belvieu, Texas, and transported through a new 18-mile, 24-inch diameter pipeline that was completed in February of 2016, Enterprise said. In addition, the Mont Belvieu complex is connected to ethane production from the Marcellus and Utica Shale regions through the ATEX pipeline.

OPIS notes that Intrepid will now carry double honors of being the first ship to export ethane out of Marcus Hook near Philadelphia in March as well as the first ship to export ethane out of the new Morgan's Point terminal on the Gulf Coast soon.

The cargo loading has been slow due to expected operational and logistics issues related to a facility startup.

Intrepid, which has a 15,000-ton or 27,500-cubic-meter capacity, is considered a relatively small LPG tanker. A ship of that cargo size should be fully loaded within one to two days, sources said.

Intrepid is no stranger to a slight ethane cargo delay. Earlier this year, the ship faced similar delay at Sunoco Logistics' Marcus Hook for its first ethane export out of Philadelphia. The Marcus Hook complex was said to have started commissioning its ethane export facilities late 2015, but the first ethane export cargo only left in March.

Prior to Intrepid, Ineos had planned in late July to send JS Ineos Insight, a similarly sized ship as Intrepid, from Norway to the Gulf Coast to load at Morgan's Point around Aug. 2.

However, Insight never made it to Texas for the first ethane loading at the new terminal, possibly because Enterprise was not ready to load cargo at that time.

Both Insight and Intrepid are owned by Ineos, and they are two of the eight LPG tankers the company built to deliver shale gas from the U.S. to Europe.

As MRC reported earlier, in December 2015, Chinese shipbuilder JHW Engineering & Contracting secured a contract to build four INEOS MAX liquefied ethane/ethylene carriers for Evergas, a Denmark-based owner and operator of gas carriers. Under the terms of the contract, JHW will build four 32,000m INEOS MAX vessels at a selected shipyard in China. The new carriers will feature dual fuel propulsion flexibility that includes liquefied natural gas (LNG) and ethane, besides ballast water treatment system. The carriers will have increased cargo capacity of about 10% when compared to the Dragon series 27,500m class gas carriers currently owned by the operator.

INEOS Group Limited is a privately owned multinational chemicals company consisting of 15 standalone business units, headquartered in Rolle, Switzerland and with its registered office in Lyndhurst, United Kingdom. It is the fourth largest chemicals company in the world measured by revenues (after BASF, Dow Chemical and LyondellBasell) and the largest privately owned company in the United Kingdom.
MRC

MOSCOW (MRC) -- US shale gas-based methanol projects may face delays or cancellations due to falling margins, Mark Berggren of Methanol Market Services Asia said during the India Methanol Economy International Seminar in New Delhi, India, reported Apic-online.

US methanol cash margins peaked at USD300/mt in the fourth quarter of 2013, but has since fallen to less than USD50/mt in September, according to MMSA data. "But when margins are low, it's very hard to justify new construction," Berggren said.

Poor methanol price expectations in the US has blunted interest in new startups.

"Three projects are likely to get the green light to go ahead; the rest of the [proposed projects] all have their own individual issues, and I wouldn't expect them to be commercially active in the next five years," he said.

There are currently 15 projects planned on the US Gulf Coast, according to MMSA.

Plants expected to be completed within the next five years include Natgasoline in Beaumont, Texas, with a nameplate capacity of 1.7 million mt/year; Yuhuang Chemical in St. James Parish, Louisiana, also with a capacity of 1.7 million mt/year; and the Big Lake Fuels project in Lake Charles, Louisiana, with a capacity of 1.4 million mt/year.

The remaining plants may not come to fruition "unless some big consumer in India or elsewhere were to help one of these projects out," Berggren said. "They need (customers with) firm consumption."

A potential source of demand could be China, he said.

"China is incredibly the world's largest producer and the world's largest importer of methanol. It cannot get enough of this product," Berggren said, adding that the global shipborne methanol trade had reached more than 25 million mt/year in 2015. He only expects this figure to increase going forward.

As MRC informed previously, in October 2015, Mitsui & Co. announced that Fairway Methanol LLC, a 50-50 joint venture between Mitsui and US-based chemicals company Celanese, had commenced production of methanol at its planned annual production capacity of 1.3 million tons. In addition to access to reliable supplies of affordable gas feedstocks thanks to the US shale revolution, project officials also expect to benefit from the use of existing infrastructure belonging to Celanese situated in Pasadena, Texas.
MRC

MOSCOW (MRC) -- A multimillion-dollar expansion for injection molded plastic packaging at two sites in Germany will significantly increase production and improve energy efficiency, Sonoco Products Co. said.

The project valued at USD9 million (8 million euros) involves two sites in Zwenkau, Germany. Hartsville, S.C.-based Sonoco has added 25 workers, from 75 to 100, as part of the expansion. "The sites Zwenkau I and II were already among the most modern and efficient plants in our industry," said Sean Cairns, general manager of Sonoco Consumer Products Europe, in a news release. "With the current investments we will further extend this lead and react to the rapidly increasing demand for modern plastic packaging in the food market."

Sonoco makes rigid plastic packaging with in-mold labeling technology at the sites. The company also makes lids for rigid paper containers.

The site known as Zwenkau II previously was used to provide additional capacity to help out when production demand increased. But now the site is operating on a continual basis. Improvements include resin supplied automatically and directly to production lines. Sonoco also constructed additional office space and a high-bay warehouse.

Sonoco Europe is headquartered in Hockenheim, Germany, and is a unit of Hartsville-based Sonoco Products.

As MRC informed earlier, Australian packaging company Amcor Ltd said it will buy a plastic container manufacturing business from U.S.-based Sonoco Products Co (SON.N) for USD280 million.

Sonoco Plastics is a leading manufacturer of monolayer and multilayer blow-molded bottles and jars, thermoformed cups and trays and engineered molded and extruded containers, spools and trays, with 25 plastics operations in the United States, Canada, Mexico, Ireland, Netherlands and Germany.
MRC