Platts restricts Qatari-loading crude in pricing process

MOSCOW (MRC) — Oil pricing agency S&P Global Platts said it will not automatically include Qatari-loading crude in its Middle East benchmark after Saudi Arabia and some other Arab states cut ties with Doha, a move that disrupted traditional shipping routes, said Reuters.

Saudi Arabia, the United Arab Emirates, Egypt and Bahrain said on Monday they would sever all ties including transport links with Qatar, escalating past diplomatic disagreements.

Within hours, the UAE barred all vessels coming to or from Qatar using its anchorage point off Fujairah, a popular location for bunkering, where vessels take on fuel of their own.

Platts' move is unlikely to have a significant impact on the broader oil market because Qatar is one of the smaller producers in the Organization of the Petroleum Exporting Countries. Any disruption to Qatar's liquefied natural gas exports, an area in which it is a major world player, could hit global prices, but there is no indication so far of that happening.

Al-Shaheen crude from Qatar usually loads onto supertankers together with other Gulf-based grades, meaning flexibility of movement is critical to transporting oil out of the region. "It is typical in the Gulf to co-load VLCCs (very large crude carriers) in combinations that include crude oil from Kuwait, Saudi Arabia, Qatar, UAE and Oman," S&P Global Platts said in a note to subscribers.

"As such, restrictions on vessels calling into Qatar and associated uncertainty could impact the inherent value of crude loading from Qatar, including al-Shaheen," it said. Riyadh issued a similar shipping ban. Trading sources say cargoes of al-Shaheen usually load onto VLCCs in Saudi Arabia before sailing to Asia.

Trades, bids and offers for Qatar's al-Shaheen grade, a medium sour crude, have been included in Platts' assessment of its Dubai price benchmark, which underpins the vast majority of oil trades in Asia, since January 2016.

The Dubai benchmark is backed by Dubai and Oman crude, Abu Dhabi's Upper Zakum and Murban grades, as well as al-Shaheen. "Qatar-loading al-Shaheen may not be nominated in the Platts Dubai Markets on Close process without mutual agreement between buyer and seller," the company said in an emailed statement.

"Since its introduction as a deliverable into the Dubai basket in January 2016, al-Shaheen has performed well. This review is to ensure that the Dubai benchmark is not negatively impacted by the current uncertainties surrounding Qatar’s relations with its Gulf neighbours."

Buyers and sellers could mutually agree to alternate loadings of al-Shaheen cargoes, but sellers should not impose this, Platts said.

Sellers in the Platts trading window were previously allowed to deliver, without buyers’ consent, any of the five crude grades that make up the Dubai benchmark.

Platts said it would continue to assess and publish independent values for other Qatari-loading crudes during the review. It added that the process would not immediately impact existing nominations for cargoes loading in June and July against trades previously reported in the Platts pricing process, known as the market-on-close.

The company, a unit of S&P Global Inc, produces a number of benchmark prices for the crude oil market, including dated Brent.

Shell Geismar chemicals expansion project on track to be worlds largest alpha olefins producer

MOSCOSW (MRC) — Shell Chemical LP (Shell) is making good progress on the main construction of its fourth linear alpha olefins (AO) unit at its chemicals manufacturing site in Geismar, Louisiana. The 425-metric Mtpy (thousands of tonnes per year) capacity increase will make Shell’s Geismar site the largest AO producer in the world, said the company on its website.

"This is one of Shell’s largest chemicals investments in the US," said Graham van’t Hoff, Executive Vice President for Royal Dutch Shell Plc’s global Chemicals business. "We are on track to begin commercial production by the end of 2018."

Shell started main site construction in January 2016, after taking a final investment decision (FID) in November 2015, and has safely placed large process equipment like reactors, columns and vessels, and pre-assembled modules that will form the core of the new AO unit.

More than 1,000 hours have been spent on engineering and planning in the last 6 mos. The project is now taking delivery of more than 600 large pieces of equipment. Two large ramps, each able to sustain 250-tonne loads, have been placed side-by-side to load and unload heavy equipment.

Shell has also finished building a cooling tower for the new AO unit, as well as two new storage areas, one for rail and one for the AO unit’s high-purity butene.

Shell will supply advantaged ethylene feedstock from the nearby Norco and Deer Park sites, which allows the site to respond to market conditions. The new capacity brings the total AO production at Shell’s Geismar site to more than 1.3 metric MMtpy.

The project work is employing approximately 1,500 construction workers, and the total number of permanent employees will increase to around 700 when completed.

It was written earlier, in March 2016, Shell Chemical brake ground on a USD 717-million linear alpha olefins (LAO) project in Geismar, LA, that will result in "the world’s largest single-site production" of LAO.

Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.

Nuberg awarded EPC contract for caustic soda plant project in Egypt

MOSCOW (MRC) -- Egyptian Petrochemicals Company has selected the Noida-based Nuberg Engineering Ltd, an EPC (engineering, procurement & construction) company for specialty chemicals, as a single-point solution company, from concept to commissioning, for caustic soda-chlorine plant in Alexandria, Egypt, as per Pastemart.

The project envisions setting up a turnkey project having production capacity of 228 tonnes per day (TPD) with a provision to expand it to 342 TPD in future. The plant will be based on new generation state-of-the-art bipolar membrane cell technology (Bi-Chlor) from Ineos Technologies, UK, which is widely used by caustic soda manufacturers for its best in class power consumption, longevity, low capex/opex and environmental considerations.

The plant will produce caustic soda, chlorine, hydrogen and other chlorine derivatives. Chlorine produced will be used as a raw material in existing EDC (ethylene dichloride) & VCM (vinyl chloride monomer) plant for PVC (polyvinyl chloride) production.

"We are thankful to Egyptian Petrochemicals Company for entrusting our turnkey project engineering capabilities and our EPC services and solutions for its caustic soda plant. We are excited to partner with Ineos Technologies once again, strengthening our relationship with them even further," commented A K Tyagi, managing director, Nuberg. Chemist Gaber A Hassan, chairman, Egyptian Petrochemicals Company, said, "The caustic soda plant is of great importance to our company in specific and to the petrochemical sector in general. I would like to highlight that this project is among the chain of projects that will be executed by our company in near and far future to promote the petrochemical field in Egypt. I would like to congratulate Nuberg on being awarded this order and I am confident that Nuberg has the experience and the expertise to execute an excellent plant in cooperation with the licensor Ineos Technologies."

Role of Ineos Technologies will be of process licensor and will supply technology know-how and state-of-the-art electrolyser commissioning services. Caustic soda produced in the plant will be supplied mostly to the markets of Europe, Asia and Africa. Caustic soda has applications in various industries such as hydrocarbons, paper, chemicals and soaps & detergents industry. Nuberg's scope of services includes basic & detailed engineering, supply, civil and equipment installation, commissioning of plant and start-up for new bipolar electrolyser as a turnkey project.

As MRC reported earlier, in April 2017, Bechtel, a company in engineering, procurement, and construction, announced that the company had been awarded two contracts by Carbon Holdings of Egypt: one to provide project management services for the Tahrir Petrochemicals Complex at Ain Sokhna, Egypt, and one to build two new polypropylene units at an adjacent site.

Arkema files antitrust complaint against Honeywell on refrigerants

MOSCOW (MRC) -- Honeywell International Inc. was targeted by an antitrust complaint from Arkema SA, which alleges the U.S. company prevents fair competition for the only car-coolant chemical that currently meets new European Union standards on greenhouse-gas emissions, said Bloomberg.

Arkema filed the complaint with the EU’s antitrust authority seeking a "fair, reasonable and non-discriminatory license to Honeywell’s patents" for 1234yf, a refrigerant used in car air-conditioning systems, according to a statement on Friday. Honeywell’s practices harm consumers, car makers and the environment "as the entire car industry is moving to worldwide deployment of 1234yf."

Honeywell has already been the subject of a stalled EU probe into the refrigerant. Three years ago, the European Commission told Honeywell and Chemours Co., then owned by DuPont Co., that they might have unfairly limited supplies of the chemical. Arkema had filed a complaint in that investigation that it says it has now withdrawn.

Honeywell said the new complaint is "without merit" and appears to restate issues regulators decided not to pursue several years ago. The company "remains convinced that it acts in full compliance with EU competition rules." It has invested nearly USD1 billion to bring the coolant to market, it said in an emailed statement.

The refrigerant for car air-conditioning systems was expected to be a cash cow for Honeywell as it replaces ozone-depleting alternatives in new vehicles sold in the 28-nation bloc. EU industry officials clashed with Germany after Daimler AG refused to use the product for safety reasons.

New EU rules mandating the use of more climate-friendly chemicals for air-conditioning entered into force at the start of this year.


Polymir shut LDPE production for overhaul

MOSCOW (MRC) -- Polymir, part of JSC "Naftan", shut down its production of low density polyethylene (LDPE) for a scheduled turnaround, reported MRC analysts.

The company's customers said Polymir took off-stream its LDPE production for the scheduled maintenance on June 3. The maintenance will be carried out in two stages, some of the production capacities will be launched already on 17 June, the rest of the capacities will remain shut until the end of the month. The plant's production capacity is 130,000 tonnes/year.

As reported earlier, an outbreak of gas-air mixture with the further flare combustion of outgoing products took place at workshop No. 104 on 18 June 2016. The fire damaged technological equipment at the ethylene unit, and some of the capacities have been idle since then. The plant’s representatives said the ethylene unit will not be fully restored this year.

Polymir (part of Naftan) is Belarus" largest petrochemical company, producing a wide range of chemical products, such as low density polyethylene (LDPE), acrylic fibers, products of organic synthesis, hydrocarbon fractions, etc. The plant"s annual LDPE production capacity is 130,000 tonnes. Polymir was founded in 1968. The producer uses technologies of the largest foreign companies from Great Britain, Japan, Germany, Italy (Courtaulds, Asahi Chemical Co. Ltd, Kanematsu Gosho, SNIA BPD, etc.), as well as the development of scientific research institutes and design institutes of the CIS countries.