Poland refiner buys another crude oil shipment from US‍​

MOSCOW (MRC) — Poland’s second-largest oil refiner Grupa Lotos has bought a second crude oil shipment from the United States as part of a plan to reduce its reliance on Russian oil supplies, as per Reuters.

The state-run refiner said it is waiting on a tanker carrying 650,000 bbl of oil, equivalent to around 80,000 t, which has already departed from Freeport in Texas.
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MOSCOW (MRC) — Steeper Energy, a Danish-Canadian clean-fuel company, is partnering with Silva Green Fuel, a Norwegian-Swedish JV, to construct a EUR 50.6 MM (DKK 377 MM) industrial scale demonstration plant at a former pulp mill located in Tofte, Norway leading to a future commercial scale project, as per Hydrocarbonprocessing.

Steeper will license its proprietary Hydrofaction technology to Silva, who will build the facility over the next 18 mos. The demonstration plant will use woody residues as feedstock that are converted to renewable crude oil and, in turn, will be upgraded to renewable diesel, jet or marine fuel.

Steeper’s Hydrofaction technology was selected by Silva after an exhaustive due diligence review of some 40 other technologies. Hydrofaction harnesses water brought to super-critical conditions, to cost effectively convert biomass to high-value liquid biofuels.

The partnership between Silva Green Fuel and Steeper will confirm engineering data and design protocols to de-risk future commercial scale facilities planned to be built by Silva and will be offered by Steeper globally to other biofuel project developers.

Silva is a joint venture between Norway’s Statkraft, a leading company in hydropower internationally and Europe's largest generator of renewable energy, and Sweden’s Sodra, a cooperative of 50,000 forest owners with extensive forestry operations and a leading producer of paper pulp, sawn timber and bioenergy.

With global trade growth, heavy and long-haul transport sector emissions are increasing, and low-carbon options for road diesel, marine and jet biofuels will help meet carbon reduction targets.

Steeper’s biofuel easily integrates into existing petroleum infrastructure and is physically comparable to fossil fuels. Hydrofaction utilizes many other feedstocks, including organic wastes, agricultural residues, and animal manure.

Steeper is entertaining partnerships with biomass aggregators or energy producers to develop similar commercial-scale projects, and is grateful to the European Commission’s Horizon 2020 SME program for financial support.
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MOSCOW (MRC) — Honeywell released a new study showing industrial companies are not moving quickly to adopt cyber security measures to protect their data and operations, even as attacks have increased around the globe, as per Hydrocarbonprocessing.

The survey—Putting Industrial Cyber Security at the Top of the CEO Agenda—was conducted by LNS Research and sponsored by Honeywell. It polled 130 strategic decision makers from industrial companies about their approach to the Industrial Internet of Things (IIoT), and their use of industrial cyber security technologies and practices. Among the findings were: More than half of respondents reported working in an industrial facility that already has had a cyber security breach. 45% of the responding companies still do not have an accountable enterprise leader for cyber security. Only 37% are monitoring for suspicious behavior.

Although many companies are conducting regular risk assessments, 20% are not doing them at all.
The study suggests these three immediate actions for any industrial organization to capture the value of the new technologies: Making industrial cyber security part of digital transformation strategies; Driving best practice adoption across people, processes and technology, from access controls to risk monitoring, and tap external cyber expertise to fill gaps Focusing on empowering leaders and building an organizational structure that breaks down the silos between IT and OT.

LNS Research is a global leader in research and advisory for digital transformation of industry, delivering technology insights for business executives. Its analysts focus on identifying the metrics, leadership, business process, and technology capabilities effecting change.
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MOSCOW (MRC) -- South Korean refiner GS Caltex Corp has bought a rare cargo of Cold Lake crude, the company’s first purchase in more than two decades of this Canadian oil grade, reported Reuters with reference to a company spokesman's statement on Monday.

The second-largest refiner in South Korea bought 300,000 bbl of the heavy sour crude for delivery in the second half of February, he said.

The refiner is trying out a small volume of the oil, which has a quality similar to that of Iraq’s Basra Heavy crude, a person familiar with the matter said, speaking on condition of anonymity because he wasn’t authorized speak to media.

About 300,000 barrels of Cold Lake were loaded onto Panamax Selecao on Dec. 13 at Vancouver for delivery to an unspecified destination, trade flows data on Thomson Reuters Eikon showed.

One trading source said the arbitrage window might have briefly opened when the discount between US West Texas Intermediate crude and Brent futures stretched as wide as USD7/bbl last week on a disruption in Forties crude supply.

Heavy crude produced in Canada is trading close to its deepest discount in four years as pipeline constraints pushed western Canadian crude inventories to record highs.

GS Caltex operates a 790,000-bpd refinery in Yeosu. The refiner is equally owned by GS Energy Corp, a unit of GS Holdings, and US oil major Chevron Corp.

Another South Korean refiner Hyundai Oilbank Corp has also expressed interest in purchasing Canadian crude.
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MOSCOW (MRC) -- Inter Pipeline Ltd. has announced that its board of directors has authorized the construction of a world-scale integrated propane dehydrogenation (PDH) and polypropylene (PP) plant, as per Hydrocarbonprocessing.

The facilities, collectively referred to as the Heartland Petrochemical Complex, are estimated to cost USD3.5 B in aggregate and will be located in Strathcona County, Alberta near Inter Pipeline’s Redwater Olefinic Fractionator.

The Heartland Petrochemical Complex will be designed to convert locally sourced, low-cost propane into 525 Mtpy of polypropylene, a high value, easy to transport plastic used in the manufacturing of a wide range of finished products. Construction of the complex will continue in early 2018 with completion scheduled for late 2021.

The PDH facility will be designed to convert approximately 22,000 bpd of propane into 525 Mtpy of polymer grade propylene. Propane feedstock for the PDH plant will be sourced from Inter Pipeline’s Redwater Olefinic Fractionator as well as several other third-party fractionators in the region.

Detailed engineering for the plant was awarded to Fluor Corporation in 2013 and is now approximately 85 percent complete. Inter Pipeline has also completed early civil work at the site in preparation for facility construction activities in early 2018.

The integrated PP plant will utilize propylene from the PDH plant to produce 525 Mt of polypropylene per year. Linde Engineering was awarded the front-end engineering design contract for this facility in 2017, and work is currently approximately 70% complete. Construction of this component of the complex is scheduled to begin in the second half of 2018.

Other construction activities associated with the project include product storage facilities and rail loading assets to facilitate the transport of polypropylene pellets to various North American markets.

Inter Pipeline is conducting a two phase contracting process to underpin this investment. Phase 1, which has been completed, resulted in Inter Pipeline securing certain take-or-pay contracts with an average term of 9 yr. Phase 2 contracting will commence in early 2018 with the objective of securing between 70% and 85% of total petrochemical processing capacity under take-or-pay contracts over the next 4 yr.

Inter Pipeline intends to utilize the remaining uncontracted plant processing capacity for its own commercial purposes.

The take-or-pay agreements are structured to provide a fixed return on capital payment to Inter Pipeline, plus a recovery of variable and fixed operating and transportation costs. Inter Pipeline has no exposure to propane or polypropylene commodity price fluctuations under these agreements.

When contracting is complete and the complex is in operation, Inter Pipeline expects to earn approximately $450 MM to USD500 MM per year in long-term average annual EBITDA. This represents a strong return on invested capital and is expected to be accretive to forecast funds from operations per share.

Inter Pipeline will also benefit from $200 MM of royalty credits received from the Government of Alberta’s Petrochemical Diversification Program. The credits were provided in support of the construction of the propane dehydrogenation plant and will be monetized over a three-year period once the complex is operational.

Funding for this petrochemical facility is expected to be provided through a combination of debt and equity financing sources. At present, Inter Pipeline's financial position is supported by a strong balance sheet, investment grade credit ratings and excellent access to capital markets.

Inter Pipeline anticipates that capital commitments over the next four years will be met through a combination of capacity available under an existing $1.5 B committed credit facility, undistributed cash flow from operations, the periodic issuance of new term debt, hybrid debt securities and proceeds from existing dividend re-investment programs. Inter Pipeline does not expect the need for material, underwritten equity offerings to finance its funding obligations.

We remind that, as MRC wrote before, in H2 of October, 2017, TransCanada Corp said it expected to take a CUSD1 B charge in the current quarter after deciding to abandon its Energy East and Eastern Mainline pipeline projects, after intense scrutiny by Canada's energy regulator. The termination comes after the National Energy Board (NEB) expanded the scope of its review of Energy East in August, saying it would consider the pipeline's indirect greenhouse gas contributions. Energy East's importance has somewhat diminished for TransCanada since US President Donald Trump this year signed an order reviving the company's Keystone XL pipeline, which would run from Alberta's oil sands to US refineries.

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