Amec Foster wins technology contract for gas-to-liquid plant in Uzbekistan

MOSCOW (MRC) -- Amec Foster Wheeler has secured a contract to deliver hydrogen plant technology and design and Terrace Wall steam reformer technologies for Uzbekneftegaz National Holding Company’s OLTIN YO’L GTL (gas-to-liquid) plant in the Kashkadarya Region of Uzbekistan, said Hydrocarbons-technology.

Under the contract secured from Hyundai Engineering, Amec will offer materials supply for a Terrace Wall steam reformer heater at the plant, which is currently under construction. Work to be taken up comprises the basic design engineering for the 37,100 normal cubic metres per hour (Nm?/h) hydrogen unit.

In addition, Amec will provide engineering and procurement for the steam reformer heater, as well as site advisory services.

The company is currently engaged in the engineering phase for the plant's steam reformer, which is expected to be completed in the second quarter of next year.

"This award confirms the impressive performance of Amec Foster Wheeler’s hydrogen technology, as well as the proven advantages of our Terrace Wall steam reformers."

Amec Foster Wheeler technology, consultancy and fired heaters vice-president Andy Hemingway said: “This award confirms the impressive performance of Amec Foster Wheeler’s hydrogen technology, as well as the proven advantages of our Terrace Wall steam reformers.

"The combination of Terrace Wall reformers’ capital cost-competitiveness, energy consumption efficiency, very high reliability and compact ‘footprint’, ideal where space is limited, especially within existing facilities, is a compelling value proposition for our customers."

Through the contract, Amec Foster aims to extend its technology offerings, including its hydrogen production and unique Terrace Wall steam reformer technologies. Hyundai Engineering was appointed as the engineering procurement and construction contractor for Uzbekneftegaz’s gas-to-liquids plant.

China refinery runs at 10-mth low amid inventory glut

MOSCOW (MRC) -- Chinese oil refineries operated in July at their lowest daily rates since September 2016, official data showed on Monday, to ease brimming inventories as state-owned oil giants faced off independents in a retail petrol price war, reported Hydrocarbonprocessing.

China, the world's second-largest oil consumer, processed 45.5 MMt of crude in July, or 10.71 MMbpd, National Bureau of Statistics (NBS) data showed.

This is 0.4% higher than a year ago but down about 500,000 bpd from June.

The drop in China's refinery runs and further indications of ample fuel supplies raised concerns about its oil demand in months ahead, knocking back global crude benchmark Brent on Monday and holding it just over USD52/bbl.

"Runs were slightly below our expectation, as fuel demand growth remained tepid and stocks were brimming," said Harry Liu, a downstream consultant with IHS Markit.

Faced with fierce competition from independent oil processors, who added to the product overhang, the biggest state refiner, Sinopec, lowered its runs in the third quarter after running at hefty rates in the first half of the year, Reuters has reported.

Sinopec also reduced its third-party purchases from the independents from June, leading the smaller operators to scale back production as well, Liu said.

Amid the glut of refined fuel products, Sinopec and state-owned rival PetroChina have been waging a retail price war against the independents known as "teapots" at the nation's petrol stations. The competition for sales started in late March and by June had spread beyond the most heavily oversupplied provinces in the north.

For the first seven months of the year, refinery output was up 2.9% from the same period of 2016 at 320.7 MMt, or 11.04 MMbpd, the NBS data showed.

The data also showed domestic crude oil output fell 2.9% last month versus a year ago to 16.25 MMt, or 3.83 MMbpd. That was down from June at 3.94 MMbpd.

Crude output during January–July was down 4.8% from a year ago to 112.79 MMt, or 3.88 MMbpd.

Natural gas production expanded 14.7% in July from last year to 11.7 Bcm. For the first seven months of 2017, natural gas output gained 8.8% on year to 85.8 Bcm, according to the NBS data.

As MRC informed before, Sinopec group, parent of Sinopec Corp, will invest USD29.05 billion to upgrade four refining bases between 2016 and 2020 to produce higher-quality fuels. Sinopec's upgrades come as China, the world's second-biggest oil consumer, is embracing more stringent fuel standards in its battle against pollution and suffering an overall glut in refining capacity. After the upgrades, the total refining capacity of the four refining sites will reach 130 MMtpy, or 2.6 MMbpd, while ethylene capacity will reach 9 MMtpy, Sinopec said.

Sinopec Corp. is one of the largest scale integrated energy and chemical company with upstream, midstream and downstream operations. Its principal business includes: exploring, developing, producing and trading crude oil and natural gas; producing, storing, transporting and distributing and marketing petroleum products, petrochemical products, synthetic fiber, fertilizer and other chemical products. Its refining capacity and ethylene capacity rank No.2 and No.4 globally. Sinopec listed in Hong Kong, New York, London and Shanghai in August 2001. Sinopec Group, the parent company of Sinopec Corp., is ranked the 5th in Fortune Global 500 in 2012.

Sadara commissions last plant of its Saudi petchem complex

MOSCOW (MRC) -- Saudi-based Sadara Chemical Co has commissioned the last plant at its petrochemicals complex in Jubail, reported Reuters with reference to Saudi Aramco's statement.

The toluene diisocyanate (TDI) unit began production this week while the dinitro toluene (DNT) and toluene diamine (TDA) started operations in April, Aramco said.

TDI is mainly used in the production of flexible polyurethane foam for furniture, mattresses and car seats.

It has also other industrial uses, such as coatings, adhesives, sealants, specialty foams among others.

Sadara has been announcing the start up of new plants in its complex, which it says is the world's largest petrochemical facility to be built in a single phase. It started the region's first mixed-feed cracker last year.

The Sadara complex is made of 26 integrated facilities in Jubail, eastern Saudi Arabia and has the capacity to produce more than 3 MMt of products per year.

Many products are produced in the kingdom for the first time, including isocyanates as the world's largest oil exporter moves downstream.

Sadara will transform the kingdom "from a consumer and importer to a global exporter," the statement quoted Saudi energy minister Khalid al-Falih as saying.

"Sadara's slate of high-value chemicals, including many firsts for the Kingdom and the region, will create the quality performance, value-added and plastics products that support a higher living standard around the world, especially in the emerging Asia Pacific and Middle Eastern markets that will drive two-thirds of global petrochemical demand over the next decade."

As MRC wrote before, in late December 2016, Saudi Arabia's Sadara Basic Services, fully owned by Sadara Chemical Co , started the planned maintenance of a mixed-feed cracker at its parent company's petrochemical complex in Jubail. The shutdown of the facility is expected to last six weeks, with the company's three polyethylene trains also shut during the period as Sadara completes improvements to their reliability and scheduled maintenance.

Sadara Chemical is a USD20 billion petrochemical joint venture between national oil giant Saudi Aramco and Dow Chemical .

PVC production in Russia rose 26% in the first seven months of 2017

MOSCOW (MRC) -- Russia's overall production of unmixed polyvinyl chloride (PVC) grew in the first seven months of 2017 by 26% year on year, totalling 530,800 tonnes. All plants, except for Bashkir Soda Company, increased their output of resin, according to MRC's ScanPlast report.

July production of unmixed PVC in Russia dropped to 63,100 tonnes from 81,200 tonnes a month earlier, SayanskKhimplast and Bashkir Soda Company reduced their output because of scheduled shutdowns for maintenance. Overall PVC production reached 530,800 tonnes in January-July 2017, compared to 421,100 tonnes a year earlier. Only three plants out of four increased their output, and this year's high level of production growth was caused by the long forced outage at SayanskKhimPlast in February-July 2016.

The structure of PVC production by plants looked the following way over the stated period.

RusVinyl (joint venture of SIBUR and SolVin) produced 24,700 tonnes of PVC in July, with 2,200 tonnes accounting for emulsion polyvinyl chloride (EPVC), compared to 25,400 tonnes a month earlier. Thus, RusVinyl's overall production of resin reached 180,500 tonnes in the first seven months of 2017 versus 180,100 tonnes a year earlier.

SayanskKhimPlast shut down its production capacities for a 30-day turnaround on 24 July. Thus, the plant's overall output reached 19,700 tonnes for the incomplete July, compared to 26,700 tonnes a month earlier. SayanskKhimPlast managed to produce 156,000 tonnes of resin over the stated period versus 42,800 tonnes a year earlier (the low output in 2016 was caused by the forced long outage from mid-February to July).

Bashkir Soda Company also shut down its production capacities for a two-week maintenance last month (the outage began on 15 July), the plant's PVC output fell to 10,800 tonnes from 21,600 tonnes in July. The Bashkir plant's PVC production totalled 140,700 tonnes in the first seven months of 2017, compared to 148,700 tonnes a year earlier.

Kaustik (Volgograd) slightly increased its production last month, the plant's suspension PVC (SPVC) output slightly exceeded 7,900 tonnes versus 7,300 tonnes in June. The plant's overall production of resin reached 53,600 tonnes over the stated period, compared to 49,400 tonnes a year earlier.


Oil prices slip on Chinese demand concerns, rising US activity

MOSCOW (MRC) -- Oil prices fell on Monday as a slowdown in Chinese refining raised concerns about demand in the world's second-biggest consumer, while an increase in US drilling capacity could deepen a global supply glut, reported Reuters.

Chinese refineries processed 10.71 MMbpd in July, National Bureau of Statistics data showed, down around 500,000 bpd from June and the lowest rate since September 2016.

Analysts said the drop was steeper than expected, exacerbating concerns that a glut of refined fuel products could weaken Chinese demand for oil.

Global benchmark Brent crude futures were at USD51.74/bbl at 1134 GMT, down 36 cents from Friday's close. They touched a low of USD51.61 earlier in the session.

US West Texas Intermediate crude futures were trading at USD48.51, down 31 cents.

Investors were also cautious after data published by oil services firm Baker Hughes on Friday showed explorers increased US oil drilling capacity for the second time in three weeks, extending a 15-month recovery.

The rising rig count hints at sustained output growth just as the world's major oil producers, excluding the United States, try to stem oversupply by trimming production.

Efforts by the Organization of the Petroleum Exporting Countries and other oil producers to limit output have helped prop up prices above USD50/bbl.

Breaching this threshold has meant more money managers are betting on further gains in Brent, with the latest ICE exchange data showing investors last week raised net long holdings of the commodity by the highest amount this year.

This contrasts with more bearish bets placed in the US market, where investors cut net long US crude positions last week, according to the US Commodity Futures Trading Commission.

Oversupply has been exacerbated by rising production in OPEC member Libya, which is exempt from a global deal to cut output and has been trying to regain its pre-war production levels.

"The recovery in Libyan production has been the single largest factor driving global supply growth in the last few months," oil analysts at Panmure Gordon wrote.

Libya's National Oil Corp (NOC) said on Monday it was investigating security violations at its biggest oilfield, Sharara.

Sharara has been producing around 270,000 bpd but the NOC did not specify whether the violations had affected output.

Workers at the country's Zueitina export terminal have also threatened to block a tanker due to dock on Saturday unless demands for salary and overtime payments are met.

As MRC informed before, on 25 July 2017, oil rose by more than 2% on Tuesday after Saudi Arabia vowed to reduce exports from next month and OPEC called on members to boost compliance with agreed output cuts to help curb oversupply and support flagging crude prices. At a meeting in the Russian city of St. Petersburg on 24 July, the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC producers discussed extending their deal to cut output by 1.8 MMbpd beyond March 2018, if necessary.