Honeywell awarded contract by Dangote Oil for critical equipment, technology licensing and design service

MOSCOW (MRC) -- UOP LLC, a division of Honeywell International Inc. has won a contract from Dangote Oil Refinery Company Ltd. for critical equipment, technology licensing and design services for a world-scale integrated refinery and petrochemical plant, as per Plastemart.

When completed, the integrated complex in Lekki, near the capital of Lagos in Nigeria, will be the largest single-train refinery in the world. Included in the agreement is proprietary specialist equipment required for UOP LLC's licensed RFCC, Unicracking, CCR Platforming, Penex and Butamer processes, which provide superior performance and economics, as well as high-quality packaged equipment for faster, more reliable construction than field-built plants.
The proprietary specialist equipment includes catalyst regeneration and dryer regeneration control systems, high-performance column trays, and heat exchanger tubes. The high-quality packaged equipment includes a modular CCR unit, catalyst coolers, a Third-Stage Separator System for the RFCC unit - which upgrades heavy oil - and two pressure swing adsorption (PSA) units to purify hydrogen.

"Nigeria has the second-largest proven oil reserves in Africa - more than 37 billion barrels - but currently imports most of its refined products because it has limited domestic refining capacity," said Mike Millard, vice president and general manager of UOP LLC's Process Technology & Equipment business. "This new refinery will help Nigeria meet its own growing demand for fuels and petrochemicals while raising the profitability of the nation's crude oil."

The Lekki facility will be the largest single-train refinery in the world producing Euro-V quality gasoline and diesel as well as jet fuel meeting international aviation specifications along with world-scale quantities of polypropylene, a primary component used in plastics and packaging. The plant's RFCC unit will be the largest in the world. According to the U.S. Energy Information Administration, Nigeria in 2015 produced 2.3 mln bpd of petroleum and other liquids, about 2 mln of which was exported. That same year, Nigeria relied on imports of refined fuels to meet more than 70% of its domestic needs.

As MRC informed earlier, in March 2017, Honeywell announced that Jiangsu Sailboat Petrochemical Company, Ltd. had started its UOP Advanced Methanol-to-Olefins (MTO) unit during a 10-day test to confirm successful operation. When the full unit goes on line, it will have an annual production capacity of 833,000 mtpy, making it the largest single-train MTO unit in the world.

Honeywell UOP's Advanced MTO process combines the UOP/Hydro MTO process and the Total/UOP Olefin Cracking Process to significantly increase yields and feedstock efficiency. The process converts methanol from coal and natural gas into ethylene and propylene. At the heart of the technology are UOP's proprietary catalysts, which make it possible to efficiently adjust the ratio of propylene and ethylene produced so operators can most effectively meet demand for those products.
MRC

MOSCOW (MRC) -- BASF, the world's largest chemicals maker, said its focus would be on boosting profitability at its chemicals and crop protection businesses as the contribution to earnings from oil and gas, hurt by low crude oil prices, diminishes further, said the company.

The company, whose products include catalytic converters, vitamins, foam chemicals and engineering plastics, would continue to buy businesses and sell non-core activities to boost growth and earnings stability, Chief Executive Kurt Bock told shareholders at the group's annual general meeting on Friday.

"Traditionally, the Oil & Gas segment has accounted for around 25% of EBIT before depreciation and amortization, but in 2016 this figure was just 15%," Bock said.

"It is therefore even more important to improve the profitability of our chemicals and crop protection businesses year after year. In recent years, we have managed to do this by an average of around 5 percent annually," he added.

Bock said the Wintershall oil and gas unit, a subsidiary since 1969, remained a core activity, however. "We cannot see at all at the moment that oil and gas would not be a good part of the portfolio," Bock said.

Much of last year's decline in group sales by about 13 B euros to $63 B was due to a transfer of BASF's gas trading and storage business to Gazprom.

That was part of an asset swap under which BASF took a bigger stake in some of Gazprom's Siberian gas fields that will not start production until next year.

Bock said he will still look at takeover targets for BASF's crop protection unit, even though asset prices had increased "dramatically" over the past few years.

Rival Bayer said this week it would sell its Liberty herbicide and Liberty Link-branded seeds businesses to win antitrust approval for its acquisition of Monsanto, the biggest chunk of expected asset sales worth about USD2.5 B.

BASF is seen as a suitor, after missing out on antitrust-related selloffs by prospective merger partners DuPont and Dow chemical.
MRC

MOSCOW (MRC) - Imports of suspension polyvinyl chloride (SPVC) into Russia reached about 11,800 tonnes in the first four months of the year, down 7% year on year. PVC exports from the country also decreased, according to MRC DataScope report.

April imports of SPVC increased to 7,000 tonnes against 1,600 tonnes a month earlier, a significant decline in export prices in China led to an increase in the volume of purchases of acetylene resin. In general, total SPVC imports into the country reached 11,800 tonnes in January - April compared with 12,700 tonnes year on year. The key external suppliers of PVC over this period traditionally were Chinese producers.

April imports of Chinese acetylene PVC grew to 6,700 tonnes, compared with 1,200 tonnes in March. Chinese producers significantly decreased export prices over the last two months, while rouble has strengthened against the dollar rate. These factors led to an increase in imports of PVC in the period under review to 10,700 tonnes (an increase of 15% from 2016).

It is also worth noting that given the strengthening the rouble exchange rate and safeguard actions from some countries (Ukraine banned the import of resin from RusVinyl and Kaustik Volgograd since April), Russian producers reduced PVC exports further.

April Russia's PVC exports (excluding supplies to Belarus, and Kazakhstan) decreased to 2,200 tonnes against 5,700 tonnes a month earlier.
Thus, SPVC exports from Russia during the period under review were about 28,100 tonnes, down 2% year on year.


MRC

MOSCOW (MRC) -- Japanese oil refiners Idemitsu Kosan Co Ltd and Showa Shell Sekiyu KK said on Tuesday that they have signed a deal to form a business alliance ahead of Idemitsu's stalled merger with Showa Shell, said Japantimes.

Under the deal, the companies will cooperate more closely on crude purchases and transportation as well as production plans, they said in a statement.

Idemitsu Kosan completed the purchase of just under a third of Showa Shell last December, but the goal of a full merger of the two companies has been delayed due to opposition from Idemitsu's founding family.

The founding family and related parties, which together hold a stake of a little over one-third of Idemitsu shares, are opposed to the merger and have pledged to block the deal if a vote is held.

Idemitsu Kosan Director Susumu Nibuya said the company would continue to talk to Idemitsu's founding family but added the company still had no timetable for winning approval from them. In the statement on the deal, the two companies said that the closer cooperation will result in annual cost savings of at least $220 MM within three years from April 2017.

Nibuya said the fight to win cost reductions is to compete effectively against other refiners such as JXTG Holdings, which was formed in April from the merger of JX Holdings and TonenGeneral Sekiyu and has a domestic gasoline market share of more than 50 percent.

"Over the past 10 yr, the amount that domestic oil product demand has fallen is equivalent to what we and Idemitsu Kosan sell domestically, and demand is expected to fall by another 20% to 30% by 2030," Showa Shell Corporate Executive Officer Hiroshi Watanabe told reporters.

The oil refining industry has high fixed costs, so it is difficult to respond to such a challenge on an individual company basis, Watanabe said.

"Japan's oil companies have only about half the profit margins of those in South Korea, and it's crucial to strengthen profitability quickly," he said.
MRC

MOSCOW (MRC) -- Qatar Petroleum (QP) has announced agreements to supply additional quantities of ethane to a number of subsidiaries of Industries Qatar (IQ) and Mesaieed Petrochemical Holding Company (MPHC), reported Plastemart.

This move is aimed at supporting Qatar’s petrochemical industry. The agreements for additional ethane volumes were signed with each of QAPCO, Q-Chem 1, Q-Chem 2, and Qatofin.

The total additional ethane volumes that will be supplied to the four companies will be approximately one thousand metric tons per day which equates to an increase of approximately 10% compared to the base quantities. The new agreements are designed to enable these companies to reach the maximum capacity of their respective facilities, thus raising their efficiency and improving profitability.

Saad Sherida Al Kaabi (pictured), President and CEO of QP, said "This important step was driven by Qatar Petroleum’s keenness to maximize benefit from our natural resources, especially in the vital petrochemical sector". "It also comes in support of Qatar’s national industry and the important role it plays in boosting the growth and development of our national economy," he said.

As MRC wrote before, in 2015 QP, as part of a restructuring program, announced plans to withdraw from the joint venture Long Son petrochemical complex in Vietnam. Located in Ba Ria-Vung Tau province, the complex, with an estimated cost of USD4.5-billion, involves a 1.4-million-t/y olefins cracker to feed downstream production of 2.7-million t/y of polyethylene and polypropylene. Operations are expected to begin in 2018.

Qatar Petroleum is an integrated national oil corporation responsible for the sustainable development of the oil and gas industry in the State of Qatar. Its activities encompass the entire spectrum of the oil and gas value chain locally, regionally, and internationally, and include the exploration, production, processing, marketing and sales of oil and gas, liquefied natural gas (LNG), natural gas liquids (NGL), gas to liquids (GTL) products, refined products, petrochemicals, fertilisers, steel and aluminium.