Neste picks Singapore for new biofuel refinery

MOSCOW (MRC) -- Neste's Board of Directors has decided that Neste's additional production capacity for renewable diesel, renewable aviation fuel and raw materials for various biochemical uses will be located in Singapore, according to Hydrocarbonprocessing.

The decision initiates technical design of the new production line, with the aim of a final investment decision by the end of 2018. If the project proceeds as planned, production at the new production line will begin by 2022.

The new production line will extend Neste's current capacity in the Singapore refinery by one million tons. The growth project includes an enhanced pre-treatment unit in preparation for the use of increasingly poor-quality waste materials.

Neste currently has a renewable diesel production capacity of 2.6 MMt. Of this total, more than 1 MMt is produced in Singapore, the same amount in Rotterdam and the rest in Porvoo, Finland. By eliminating bottlenecks, this total capacity will be increased to 3 MMt by 2020. In addition to producing renewable diesel, the refineries are able to produce renewable aviation fuel and raw materials for various biochemical uses.

As MRC informed before, in April 2017, technology, engineering and project management company Neste Jacobs and refinery and petrochemical group Unipetrol have signed an agreement for Neste Jacobs to perform a comprehensive energy efficiency study of Unipetrol's Litvinov oil refinery in Czech Republic,
MRC

MOSCOW (MRC) -- State refiner Bharat Petroleum Corp has written to the oil ministry for integration with GAIL (India) Ltd and Oil India Ltd as option 1 and 2, said oil minister Dharmendra Pradhan on Wednesday, reported Reuters.

The government has not taken any decision in this regard, Pradhan told lawmakers in a written reply.

India wants to build bigger oil companies to better compete with global oil giants and withstand oil price volatility through integration of state-run oil firms.

The government has approved sale of its 51.1% stake in refiner Hindustan Petroleum Corp to oil producer Oil and Natural Gas Corp.

As MRC wrote previously, India's state-owned gas utility company GAIL India plans to import ethane from countries including the US, for its upcoming USD5 billion joint-venture Andhra Pradesh petrochemical plant. GAIL is seeking 1.3 million mt/year of ethane for 15 years for its JV ethane cracker with India's Hindustan Petroleum Corp Ltd (HPCL), located on the east coast of India beginning 2022, the company said in February 2016.
MRC

MOSCOW (MRC) -- Around 170 guests attended the official inauguration of the new polyethylene (PE) coating plant at the consumer board mill in Beihai, China, as per the company's press-release.

Stora Enso has invested EUR 31 million in the PE coating plant, following its establishment in the Guangxi region in China as a response to increasing demand on the market. The plant has an annual capacity of 80 000 tonnes of PE coated products. PE coated board is suitable for products that require barrier against moisture, such as paper cups and food service packaging.

"We are delighted to announce the official opening of the PE coating line at the Stora Enso consumer board mill in Beihai, China. This is yet another important milestone to support our customers in meeting growing consumer demand for high-quality, safe and renewable consumer board packaging in China and the Asia Pacific region," says Karl-Henrik Sundstrom, CEO of Stora Enso.

The PE coating plant will enhance Stora Enso’s strategy for profitable growth as well as the company’s competitiveness by enabling short lead-times and full quality control for PE coated prime Food Service Board (FSB). It will also further enhance Stora Enso’s transformation into a global renewable materials growth company.

Stora Enso is a leading provider of renewable solutions in packaging, biomaterials, wooden constructions and paper on global markets. Our aim is to replace fossil-based materials by innovating and developing new products and services based on wood and other renewable materials. We employ some 25 000 people in more than 35 countries, and our sales in 2016 were EUR 9.8 billion.
MRC

MOSCOW (MRC) — A global deal to cut oil production could be extended beyond 2018, Pavel Fedorov, first vice-president of Russia's largest oil producer Rosneft said on Monday, presenting the company's strategy through to 2022, as per Reuters.

The Organization of the Petroleum Exporting Countries and other large oil producers led by Russia agreed last month to extend the deal to curb output until the end of 2018 with a possibility of reviewing it in June. "On the whole ... this OPEC agreement obviously will affect our short-term targets, all the more so I don't rule out it could be extended," Fedorov said.

The new strategy announced in the Black Sea resort of Sochi, not far from the place Rosneft started drilling its first exploration off shore well, envisages that Rosneft will focus on value creation at its existing assets, a company official said on Monday. According to the company's official, the new strategy will add as much as 420 B roubles to the free cash flow, including 180 B from upstream segment.

The new financial plan is based on average oil price of USD47/bbl. Fedorov said that production of liquids, which usually means crude oil and gas condensate, was seen reaching 250 MMt by 2022 from slightly below that level in 2019.

Rosneft, in which BP owns a 19.75% stake, has been actively amassing assets at home and abroad. Last year it bought Russian oil producer Bashneft for 330 B roubles (USD5.6 B), while earlier this year the company jointly with partners closed their USD12.9 B purchase of Indian refiner Essar Oil.

Igor Sechin, Chief Executive Officer and close ally of Russian President Vladimir Putin, said on Monday the company had started exploration drilling at a Black Sea deposit. Rosneft has plans to jointly develop the Val Shatskogo (Shatsky Ridge) oilfield with Italy's Eni.

Fedorov also said the company's total investments were seen at 950 B roubles (USD16.2 B) in 2018 and rising further to over 1 T roubles in 2019, not taking into account Rosneft's stakes in its joint ventures
MRC

MOSCOW (MRC) — Japanese refiners Idemitsu Kosan and Showa Shell Sekiyu will combine management of their key businesses, an Idemitsu spokesman said on Tuesday, pursuing a merger bitterly opposed by a core investor—Idemitsu's founding family, as per Reuters.

Japan's second- and fourth-biggest refiners will form an office next spring with a staff of about 300 to manage crude oil purchases, refining and sales, seeking to cut costs by 30 B yen (USD266 MM) over 3 yr, Idemitsu spokesman Akitaka Yoshino said, confirming a Nikkei newspaper report.

The cost-cut target was raised from a forecast of at least 25 B yen when the companies said they would start integrating operations. A spokeswoman at Showa Shell confirmed the plans. About two-and-a-half years after Idemitsu announced it was buying nearly a third of Showa Shell as part of a takeover, the companies are still trying to complete the marriage while Japan's refining market goes through the biggest shakeup in its history.

This week the family of Idemitsu's founder said it had raised its stake in Idemitsu in the clan's latest gambit to halt the merger plans, after having their holdings diluted by a new share sale earlier this year. "The merger with Showa Shell is the best option for us. Our policy won't change," Idemitsu chief executive officer Takashi Tsukioka said in an interview in the Nikkei. Company spokesman Yoshino confirmed the comments.

"Our No.1 wish is to try to gain understanding from the founding family on the creation of 30 B yen of cost synergies, but we have not gained their understanding yet," Yoshino said. A spokeswoman for the family said it could not immediately comment.

In a rare public corporate battle, the founding family and the Idemitsu board have been in dispute through court and shareholder actions. The family, led by Shosuke Idemitsu, has said Idemitsu and Shell are too different for any merger to work, while the board says the combination is necessary to compete in Japan's shrinking oil products market.

JXTG Holdings, the dominant player in a country where a falling population is using ever more efficient vehicles, was formed this April out of the merger of JX and TonenGeneral, with government encouragement. Idemitsu shares were 3% higher by the morning close of trading, while Showa Shell was up 1.1%. JXTG shares were up 2.2% and the Nikkei 225 average was down slightly.
MRC