Praxair starts up Daesan VPSA plants to supply oxygen to Hyundai Oilbank

MOSCOW (MRC) -- Praxair has started up three of four new vacuum pressure swing adsorption (VPSA) units at the Daesan petrochemical complex in South Korea, which were built to supply oxygen to Hyundai Oilbank, as per Apic-online.

The companies entered into a long-term contract last year, under which Praxair agreed to build, own and operate the VPSA plants to supply a combined 750 t/d of oxygen to Hyundai. The fourth unit is scheduled to start up early next year.

Hyundai has a 520,000-b/d refinery in South Korea, where it produces gasoline and propylene. The oxygen is being used in Hyundai's residue fluid catalytic cracking process.

Praxair was the first to develop VPSA technology and has more than 250 VPSA plants worldwide.

As MRC reported earlier, in September 2016, Praxair, Inc. announced it had signed a long-term contract to supply industrial gases to Hyundai Oilbank (Hyundai), a leading oil refining company in South Korea.

Praxair, Inc., a Fortune 300 company with 2016 sales of USD11 billion, is a leading industrial gas company in North and South America and one of the largest worldwide. The company produces, sells and distributes atmospheric, process and specialty gases, and high-performance surface coatings. Praxair products, services and technologies are making our planet more productive by bringing efficiency and environmental benefits to a wide variety of industries, including aerospace, chemicals, food and beverage, electronics, energy, healthcare, manufacturing, primary metals and many others.

Oil prices near 2-yr highs as supply cuts bite

MOSCOW (MRC) — Oil prices steadied on Tuesday after a week of gains as the prospect of increasing US exports dampened bullish sentiment that has driven Brent to more than 2-yr highs above USD60/bbl, said Reuters.

Iraq's move to increase oil exports from its southern ports by 220,000 bpd to 3.45 MMbpd to make up for supply disruptions from its northern Kirkuk fields also weighed on prices, traders said. Benchmark Brent was down 10 cents at $60.80/bbl by 1050 GMT, not far off July 2015-highs reached earlier this week, and up around 37% since their 2017 lows last June.

US light crude was 10 cents lower at USD54.05, still near its highest since February and also not far off its highest for more than two years. Traders and brokers said investors were adjusting positions after price rises of around 5% in October. Despite generally upbeat sentiment, some analysts also warned the market was overbought, having risen too far, too fast.

"US shale output could keep a lid on prices over the medium to long-term," said Shane Chanel, equities and derivatives adviser at ASR Wealth Advisers. US light crude has been trading at a discount of around USD6.70 to Brent making it attractive to refiners.

US crude production has risen almost 13% since mid-2016 to 9.5 MMbpd. "The large differential has opened the door on regional arbitrage, driving a spike in US crude exports over recent weeks," BMI Research said in a note.

Despite Tuesday's price dip, sentiment remained positive, fueled by a pledge by the Organization of the Petroleum Exporting Countries, Russia and other exporters to hold back about 1.8 MMbpd in oil production to tighten markets.

While the actual cuts aren't quite as high as the target, analysts say overall compliance has been strong. "The OPEC deal compliance has been very firm, with rates averaging 86% since January," according to Bank of America Merrill Lynch.

The pact runs to March 2018, but Saudi Arabia and Russia have voiced support to extend the agreement. OPEC is scheduled to meet officially at its headquarters in Vienna, Austria, on Nov. 30.

"The fear of oversupply could easily turn to a fear of undersupply if inventories keep declining like they have been and demand continues to grow," said William O'Loughlin, investment analyst at Rivkin Securities.

Singapore revokes Transocean Oils bunker fuel supply license

MOSCOW (MRC) -- Singapore's Maritime and Port Authority (MPA) said on Monday it had revoked Transocean Oil's bunker fuel supply license in the Port of Singapore, effective immediately, said Hydrocarbonprocessing.

MPA said it had conducted checks on Transocean in March and April as part its efforts to ensure the integrity of bunkering operations at the port and found "falsifications of records and discrepancies in the stock movement logbooks on board the bunker tankers" operated by the company.

Transocean Oil, which was formed in 2003 and operates a fleet of thirteen bunkering barges, according to its website, was not immediately available to comment.

It sold a monthly average of around 200,000 t of bunker fuel in 2013.

Nigeria supports OPEC cut extension under ‘the right terms’

MOSCOW (MRC) — Nigeria supports an extension of a deal between OPEC, Russia and other non-members to cut oil supply until the end of 2018 "as long as the right terms are on the table" regarding its own participation, its oil minister said, said Reuters.

He said there is growing agreement among other members of the Organization of the Petroleum Exporting Countries to extend the deal. "There isn't any reason to change what is a winning formula," oil minister Emmanuel Ibe Kachikwu told Reuters, adding "there is a consensus to extend. The issue will be the duration."

Nigeria itself, however, is exempt from the deal. OPEC, along with Russia and nine other producers agreed to cut oil output by about 1.8 MMbpd until March 2018 in an attempt to ease a global excess that weighed on prices.

The group will meet in Vienna later this month to discuss whether to extend that deal. Nigeria's output has rebounded since its exemption, granted last year after militant attacks that cut its output to close to 1 MMbpd, but Kachikwu said the recovery is ongoing.

"We'll be looking for a number that enables us to contribute ... it's in the range of 1.8 MMbpd to 1.9 MMbpd, preferably closer to 1.9," he said of the production cap. While there have not been any significant attacks on the nation's oil infrastructure since January, the peace is on shaky ground.

On Friday, the Niger Delta Avengers, the group that led the bulk of the 2016 attacks, said it had ended its ceasefire. Kachikwu described the 1.8 MMbpd–1.9 MMbpd figure as "the sort of number where we can tolerate the cuts, and yet be able to survive as a nation."

Nigeria's total output reached 2.03 MMbpd in October, but the ministry said only about 1.67 MMbpd of that total is crude oil. The remainder is condensates, an ultra-light oil that is exempt from its potential cap.

Kachikwu said the nation is producing around 300,000 bpd–350,000 bpd of condensates, and that OPEC is now tracking that figure.

"Historically, Nigeria hasn't been serious in terms of identifying its condensate volumes. But that's one of the things that we're getting more efficient at doing," Kachikwu said.

Formosa Petrochemical offers 2018 jet fuel and diesel term

MOSCOW (MRC) -- Taiwan’s Formosa Petrochemical Corp has offered a total of 3.3 MMbbl of jet fuel and diesel for 2018 term contracts, reported Reuters with reference to tender documents.

It is the first North Asian refiner to kick off term negotiations, which could set the precedent for other term contracts in the region, traders said.

The company has offered four cargoes of jet fuel of 300,000 bbl each for loading over Jan. 1, 2018 to Dec. 31, 2018, the documents showed.

It has also offered three cargoes of 300,000 bbl each of 10 parts per million (ppm) sulfur diesel for loading in the second, third and fourth quarters of next year.

Formosa offered four cargoes of 300,000 bbl each of 500 ppm sulfur gasoil for next year.

The tenders close on Nov. 9, with bids to remain valid until Nov. 24.

Formosa has also changed the pricing basis for the diesel cargoes, which will be priced off Platts’ 10 ppm sulfur diesel prices instead of the current 500 ppm sulfur prices, according to the documents.

The jet fuel volumes being offered are similar to those in 2017, but the diesel volumes for both 10 ppm and 500 ppm have been reduced.

Formosa finalized its 10 ppm sulfur diesel term contract for January-December 2017 with Winson Oil at a premium of 55 cents a barrel to Singapore quotes, about 20% lower than the 2016 term premium of 70 cents.

It also finalized its jet fuel and 500 ppm sulfur gasoil term contracts, also with Winson Oil, at parity to Singapore quotes.

As MRC informed before, Taiwan's Formosa Petrochemical Corp. had planned maintenance at its 540 Mbpd Mailiao refinery in March, September and November 2017. Formosa is one of the largest oil products exporters in Asia, so any major supply cuts from the refiner would likely support margins. The refiner is planning to shut a 180 Mbpd crude distillation unit (CDU) and two residue desulfurizer units (RDS) with a capacity of 80 Mbpd each at some stage during the maintenance periods. It is also planning to close a delayed coker unit and a vacuum distillation unit during the maintenance

Formosa Petrochemical is involved primarily in the business of refining crude oil, selling refined petroleum products and producing and selling olefins (including ethylene, propylene, butadiene and BTX) from its naphtha cracking operations. Formosa Petrochemical is also the largest olefins producer in Taiwan and its olefins products are mostly sold to companies within the Formosa Group. Among the company's chemical products are paraxylene (PX), phenyl ethylene, acetone and pure terephthalic acid (PTA). The company's plastic products include acrylonitrile butadiene styrene (ABS) resins, polystyrene (PS), polypropylene (PP) and panlite (PC).