Azerbaijan H1 2017 oil exports via Turkey pipeline fall 12% yr/yr

MOSCOW (MRC) — Azeri oil exports through the Baku-Tbilisi-Ceyhan (BTC) pipeline via Georgia and Turkey fell 11.8% year on year in the first half of 2017 to 13.174 MMt from 14.930 MMt in the same period last year, state energy company SOCAR.

Oil exports through the BTC in 2016 totaled 28.86 MMt, up 1.3%. Azerbaijan exports oil via the pipeline from the Azeri, Chirag and Guneshli (ACG) oil fields operated by BP.

It also exports oil via Russia, through the Baku-Novorossiisk pipeline and via Georgia by rail and through the Baku-Supsa pipeline.

Oil from Kazakhstan and Turkmenistan is also exported through the BTC.

Saudi Arabia tightens its grip on Japan, its biggest Asian oil market

MOSCOW (MRC)— Saudi Arabia has boosted its market share in Japan, the world's top oil exporter's biggest Asian market, by selling more light crude to the country as a way to offset revenue lost implementing OPEC's production cuts, said Reuters.

Middle East crude sellers consider Japan, the world's fourth-largest oil importer, a premium market since its refiners will pay more to secure supply than other Asian buyers. Saudi Arabia raises revenue by boosting sales of more expensive light crude since it cut its supply of so-called heavy crude to comply with the agreement between the Organization of the Petroleum Exporting Countries (OPEC) and some non-OPEC producers to reduce output.

Japan's imports of Saudi crude between January and June reached 1.3 MMbpd, 7.7% higher than a year ago, making it Japan's biggest supplier, according to trade flows data on Thomson Reuters Eikon.

The increase was mainly in Arab Extra Light as state oil giant Saudi Aramco offered extra cargoes on top of contracted volumes to Japanese buyers, two Japanese refining sources said. They declined to be named due to company policies.

Imports of Arab Extra Light and Arab Light were 160,000 bpd higher through May at 1.03 MMbpd, said Virendra Chauhan, Singapore-based analyst at consultancy Energy Aspects.

Saudi Arabia "clearly sees Asia as its backyard and as a center of growth and long-term source of demand. As such, it does not want to give up too much market share here," he said. Saudi Aramco did not respond to an e-mail from Reuters seeking comment.

Japan's spending on oil through May this year surged 73% from the same time a year ago to USD33.64 B as global oil prices rose and imports climbed, data from the Ministry of Finance shows.

Saudi imports came at the expense of Iran, whose imports dropped 20% in the first half of 2017, and Kuwait and the United Arab Emirates, which fell by 8% and 5% respectively.

Saudi crude exports to its second- and third-largest Asian buyers—China and South Korea—were little changed in the first half of 2017 from a year ago, the trade flow data showed.

Exports to India and Taiwan dropped 3% and 13% respectively, the data on Eikon showed. Trade sources said this was because Saudi Aramco was unable to supply more heavy crude.

"People are asking for more (heavy crude) but the Saudis can't give because of the OPEC cuts," said a Gulf oil source who requested anonymity because of the sensitivity of the topic.

Denka Singapore to shut PS plant in Singapore for maintenance

MOSCOW (MRC) -- Denka Singapore is in plans to take off-stream a polystyrene (PS) plant for maintenance turnaround, as per Apic-online.

A Polymerupdate source in Singapore informed that the company is expected to shut the plant in October 2017. The plant is likely to remain under maintenance for around one month.

Located on Jurong Island, Singapore, the plant has a production capacity of 200,000 mt/year.

We remind that, as MRC informed before, Grand Pacific Petrochemical Corp (GPPC) conducted a scheduled turnaround at its No. 2 styrene monomer (SM) plant in Taiwan from in mid-February 2017 to 9 April 2017. Located at Tashe in Taiwan, the No. 2 SM plant has a production capacity of 130,000 mt/year.

Uhde GmbH starts developing 2 PDH plants

MOSCOW (MRC) -- Germany’s Uhde GmbH has commenced the development of two propane dehydrogenation (PDH) plants in the cities of Mahshahr in Khuzestan Province and Asalouyeh, Bushehr Province, said Financialtribune.

According to NIPNA, the National Petrochemical Company’s official news service, the PDH plant in Mahshahr Petrochemical Special Economic Zone, named Salman Farsi Petrochemical Complex, has made 15% physical progress.

The plant, aimed at producing 450,000 tons of polypropylene from propane as feedstock, has received licensing from Uhde GmbH. The German company also participates in engineering, procurement and operation of the project.

Propane dehydrogenation is a step in the production of propylene from propane. Propylene is the second most important starting product in the petrochemical industry after ethylene. It is the raw material for plastic polypropylene, a component that is mainly used in the automotive, textile and packaging industries.

The plant in Mahshahr is expected to be completed by 2020 and will provide feedstock for nearby petrochemical complexes, including Rejal, Marun and Navid-Zar Chimi.

Uhde GmbH, based in Dortmund, Germany, is part of German industrial conglomerate Thyssenkrupp AG.

In cooperation with Japan’s Mitsui, Uhde has provided the technical know-how to build a similar PDH plant in Asalouyeh with the same output capacity.

Uhde is reportedly collaborating with South Korea’s Daelim Corporation on the engineering aspect of the project.

The PDH plant in Asalouyeh is slated to become operational in two to three years. It is planned to receive 650,000 tons of propane annually from South Pars Gas Field.

According to recent reports, Iran’s polypropylene production capacity has reached nearly 1 million tons per year, which is expected to double during the country’s sixth five-year economic development plan (2017-22).

In addition, Jam Petrochemical Company has recently conducted negotiations with a multinational company, Honeywell UOP, over the construction of a PDH unit, which would produce 550,000 tons of polypropylene per annum.

Honeywell UOP, formerly known as UOP LLC, is involved in developing and delivering technology to the petroleum refining, gas processing, petrochemical production and major manufacturing industries.

Saudi Aramco and Total study mixed feed cracker

MOSCOW (MRC) -- Saudi Aramco and France's Total are considering building a mixed-feed cracker and derivatives in Jubail, near their joint refining complex, reported Hydrocarbonprocessing with reference to industry sources.

The cracker is expected to have a capacity of 1.5 MMtpy, said a source familiar with the plans, who described them as at an initial stage.

The feedstock would partially come from SATORP, the existing Aramco-Total joint refining venture, and from Sadara, a joint venture between Aramco and Dow Chemical, also in Jubail.

Sadara operates a mixed-feed cracker, the first in Saudi Arabia.

The idea of the cracker has been raised before. In 2010, an executive from Total Petrochemicals, a unit of Total, said it could be the largest possible, typically 1,500 KTA of ethylene and 500 KTA of propylene, plus derivatives.

"It is a greenfield project, they have launched the bidding for the feasibility study," said one of the sources, adding the study did not include a refinery expansion.

He estimated the cost of the project known as Amiral to be around USD3 B, while another source said the cost of the cracker and other downstream units was expected to be around USD5 B.

Despite having massive natural gas reserves, Saudi Arabia is short of gas supplies as the majority of its gas reserves are associated with oil, said energy consultant Sadad al-Husseini, a former senior executive at Aramco. Saudi Arabia is currently restricting oil output as part of an international agreement.

"There remains of course the potential for more gas discoveries as the kingdom's shale gas exploration program gathers momentum," he said, adding the availability of ethane would be key to the overall economics of the project.

Saudi Aramco plans to double its gas production in a decade, including shale that will add around 2 Bcf–3 Bcf to the mix.

But the kingdom is encouraging the petrochemicals industry to include more liquid feedstock to diversify and become less vulnerable to price fluctuations.

For instance, Aramco plans to develop a project with Saudi Basic Industries Corp (SABIC) with a new technology that converts crude oil to chemicals by limiting extensive refining.

A second source said SATORP had issued a tender for pre-feed engineering and design to upgrade its production of aromatics, with an award of that contract seen by the Q2 2019.

Saudi Aramco declined to comment, while a spokeswoman for Total said the company was still interested in developing petrochemicals units downstream of SATORP's refinery, which already produces some petrochemicals products: paraxylene, benzene and propylene.

"It is consistent with our strategy of investing in our major integrated refining and chemicals platform and capitalizing on advantaged feedstock," the Total spokeswoman said, adding: "the main issue is the gas feedstock allocation."

The two companies have already been operating the 400,000 barrels per day SATORP refinery integrated with petrochemical production and have considered expanding petrochemicals output for several years.

In 2015, Total said partners would need to solve the issue of obtaining natural gas supplies before moving on to detailed studies of the project.

In February last year, a Total executive said the two companies were considering expanding the refining capacity of the project by 10%.

Saudi Aramco owns 62.5% of SATORP and Total 37.5%.

Saudi Aramco is an integrated oil and chemicals company, a global leader in hydrocarbon production, refining processes and distribution, as well as one of the largest global oil exporters. It manages proven reserves of crude oil and condensate estimated at 261.1bn barrels, and produces 9.54 million bbl daily. Headquartered in Dhahran, Saudi Arabia, the company employs over 61,000 staff in 77 countries.

Total S.A. is a French multinational oil and gas company and one of the six "Supermajor" oil companies in the world with business in Europe, the United States, the Middle East and Asia. The company's petrochemical products cover two main groups: base chemicals and the consumer polymers (polyethylene, polypropylene and polystyrene) that are derived from them.