Pemex fires warehouse workers for oil theft

MOSCOW (MRC) — Mexican state oil company Petroleos Mexicanos (Pemex) said on Tuesday it would rescind contracts held by several workers at a warehouse and distribution center in the central state of Guanajuato as part of a strategy to combat oil theft, said Reuters.

A Pemex official, who spoke on the condition of anonymity, said that four workers were let go for links to oil theft from the center in the city of Salamanca, where Pemex also has a refinery that can process 245,000 bpd of crude.

In its statement, Pemex said it would file criminal complaints against the workers and investigate workers at other sites.

"Without exception, any employee linked to crime will be removed immediately," the company said.

Mexico’s government has estimated that oil theft by criminal groups costs Pemex at least USD1 B a year.

Chengzhi plans second Chinese MTO unit based on Honeywell UOP technology

MOSCOW (MRC) -- Nanjing Chengzhi Yongqing Energy Technology Co., formerly known as Wison Clean Energy, will build a second methanol-to-olefins (MTO) plant in China utilizing Honeywell UOP's MTO technology, reported GV.

The new 600,000 t/y MTO unit, to be built in Nanjing, will produce ethylene and propylene. Cost and schedule for the project were not available.

"Honeywell UOP's MTO technology is a proven and growing process in China, where more than USD 100 billion is expected to be invested in coal-to-chemicals technology in the next five years," said John Gugel, vice president and general manager of UOP's process technology and equipment business.

"This technology has the highest yield of olefins with the lowest consumption of methanol and catalysts, as well as the lowest operating and capital costs of any MTO solution," he added.

Wison Clean Energy started up a 300,000 t/y MTO plant at the Nanjing Chemical Industry Park about four years ago It was the first licensee of the technology.

As MRC wrote previously, in November 2016, China’s Jilin Connell Chemical Industry Co. selected Honeywell UOP’s Advanced methanol-to-olefins (MTO) process to tap domestic coal resources to produce ethylene and propylene. Jilin Connell is the ninth company to license the Honeywell UOP technology, which produces superior yields at lower cost compared to competing technologies. The new plant, scheduled for completion in 2017, will be located in Jilin City in China’s Jilin Province, and will convert domestic sources of methanol into 300 Mtpy of ethylene and propylene. The new plant’s offtake will be supplied to ethylene oxide and propylene oxide manufacturers currently operating in the same industrial park.

Risk premium returns to oil over Iraq fighting, rising US-Iran tensions

MOSCOW (MRC) — A risk premium has returned to oil markets with a vengeance, boosting global price benchmarks as escalating fighting in Iraq threatens supplies while political tensions loom between the United States and Iran, said Reuters.

After months of range-bound trading during which OPEC-led supply cuts supported crude prices but rising US output capped markets, prices have moved up significantly this month just as demand looks stronger than at any point in recent months, especially in China.

Despite some profit taking on Tuesday, Brent crude futures, the international benchmark for oil prices, were still at USD57.79 at 0148 GMT, 2.5% higher than last Friday's settlement—and almost a third above mid-year levels.

US West Texas Intermediate (WTI) crude futures were trading at USD51.76/bbl, down slightly from their last settlement, but still some 2% higher than last Friday, and almost a quarter above mid-June levels. The higher prices came as Iraqi government forces captured the major Kurdish-held oil city of Kirkuk on Monday, responding to a Kurdish independence referendum. There were also reports that Kurds had shut down some 350,000 bpd of production from major fields Bai Hassan and Avana due to security concerns.

"Kirkuk, the main city in the region, produces around 10% of Iraq's total oil output and any (further) disruption could therefore have a significant impact on supply," said William O'Loughlin, investment analyst at Rivkin Securities.

Meanwhile political risk consultancy Eurasia Group said, "Flows will remain vulnerable until an agreement is reached." The escalating fighting in Iraq has spooked markets as it adds to rising tensions between the United States and Iran. Last Friday US President Donald Trump refused to certify Iran's compliance over a nuclear deal, leaving Congress 60 days to decide further action against Tehran.

During the previous round of sanctions against Iran, some 1 MMbpd of oil was cut from global markets. With ongoing supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC) further tightening the market, analysts were revising upward their crude price forecasts for the rest of the year and into 2018.

"We see Brent averaging USD54 this quarter and $52.50/bbl in 1H18, compared with our previous forecasts of USD50 and USD49.50/bbl, respectively," Bank of America Merrill Lynch said. "We also adjust WTI to average USD49 this quarter, relative to our previous forecast of USD47/bbl."

The US bank said that its "revised global oil supply and demand forecasts point to a sizeable deficit in 2017 of 230 Mbpd." The bank said there was further upside potential to its outlook.

"Upside risks to our projections include geopolitics and a much tighter-than-expected refining capacity environment."

Wood wins multi-million dollar oil refinery contract with Total

MOSCOW (MRC) -- Wood has been awarded a new multi-million dollar contract by Total, supporting their Lindsey Oil Refinery located in North Killinghome, Lincolnshire, UK, as per Hydrocarbonprocessing.

The 5-yr contract is to provide onshore maintenance services and includes the option to be extended up to 2 yr.

Robin Watson, chief executive of Wood said: "We are strategically focused on leveraging our proven offshore track record of strong service, to broaden our downstream footprint in the UK; and this contract win achieves this."

The new contract will commence on 1 January 2018.

It builds on Wood’s support of Total’s assets across the globe, including their UK offshore portfolio. In 2015, the company secured a 5-yr contract to deliver engineering, procurement, construction and commissioning services to four of Total’s offshore assets and two onshore facilities in the UK continental shelf; the Alywn, Dunbar, Elgin and Franklin platforms, St Fergus Gas Terminal and Shetland Gas Plant (SGP).

As MRC informed before, in March 2016, The National Petrochemical Company (NPC) of Iran and France-based Total signed an memorandum of understanding (MoU) to build a petrochemical complex in Iran.

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.

Bangladesh set to sign 15-yr gasoil import deal with India

MOSCOW (MRC) -- Bangladesh Petroleum Corp (BPC) is set to sign a 15-yr deal with Indian oil refiner Bharat Petroleum Corp Ltd (BPCL) to import gasoil to meet the country's energy demand, two company officials with the direct knowledge of the matter said, as per Reuters.

The sales and purchase agreement is expected to be signed on Oct. 22 during Indian Foreign Minister Sushma Swaraj’s visit to the capital of Dhaka, the BPC officials said. The deal will be the country’s first long-term agreement with any Indian supplier.

BPCL will supply up to 250,000 t of gasoil each year from its majority owned Numaligarh refinery for the first three years of the deal to the BPC's northern fuel depot via a 79 mi pipeline, which will be built by India, they said.

"The volume will be increased in line with our demand," said one of the officials, adding the deal would come into effect when the pipeline is built.

Numaligarh refinery is already supplying a small volume to the state-owned BPC for the country's northern region. The refinery, located in the eastern Indian state of Assam, will supply around 22,000 t of gasoil with a sulfur content of 500 parts per million (ppm) between October and December by railroad, the officials said.

BPC will pay a premium of USD5.50/bbl over Middle East quotes under the 15-yr deal, up from the current premiums of USD2.20/bbl for gasoil cargoes it receives by tanker through the country's southeastern port of Chittagong, said one of the officials.

"This is cost-effective because there is no additional transport cost as the supply is being unloaded in our depot in the northern part," the BPC official said. BPC received its first batch this month under the three-month agreement and its fourth since 2016 amid warming ties between the two neighboring countries.

Bangladesh typically ships in around 3.2 MMt of diesel and 2.5 MMt of fuel oil annually. Sellers include Kuwait Petroleum Corp, Malaysia's Petroliam Nasional Berhad, Emirates National Oil Company, Philippines National Oil Co, Vietnam's Petrolimex, Thailand's PTT, Indonesia's Bumi Siak Pusako and Zhenhua Oil.