Idemitsu, Showa Shell to combine crude loading programs

MOSCOW (MRC) — Japanese oil refiners Idemitsu Kosan and Showa Shell Sekiyu have started work to integrate the so-called loading programs through which they purchase crude, Idemitsu's CEO said, said Hydrocarbonprocessing.

The two companies expect to finish this loading integration in the second-half of 2018, Idemitsu CEO Takashi Tsukioka told reporters on the sidelines of an industry event to mark the New Year.

Idemitsu said last month that it and Showa Shell would combine management of their key businesses, pursuing a merger bitterly opposed by a core investor—Idemitsu's founding family.

Japan's second- and fourth-biggest refiners by sales aim to win over Idemitsu's founding family by showing successful examples of "synergies" between the two companies, Tsukioka said.

He added that Idemitsu was "not considering taking forceful measures for integration without gaining the founding family's understanding."

Surplus low-cost feedstocks continue to attract petchem projects

MOSCOW (MRC) -- The burst of major petrochemical capital projects in the U.S. and around the world in the past few years is potentially entering a second wave, as per Hydrocarbonprocessing.

The main driver is continued access to low cost feedstocks, according to Tom Pickett, Vice-President of Ethylene Technology in TechnipFMC’s Process Technology business, who addressed today’s monthly roundtable luncheon hosted by the Rice Global Engineering & Construction Forum.

"Even though there has been a slight pause in the number of large new petrochemical projects, the same attractive business drivers exist,” Pickett said. “We anticipate that announcements of these large capital projects will continue."

Pickett attributed the increase in supplies of petrochemical feedstocks to advances in upstream drilling and production technologies, namely horizontal drilling and hydraulic fracturing. Just as technology led the way upstream, he said that technological advancements would be crucial as licensors and engineering and construction (E&C) companies seek ways to reduce capital costs and streamline project execution schedules for petrochemical megaprojects.

Tom Pickett, Vice-President of Ethylene Technology in TechnipFMC’s Process Technology business
“During this slower period, E&C companies need to examine methods and approaches to capital projects, looking for ways to improve schedules, lower costs, and improve project economics for customers,” Pickett said. “Companies willing to invest in technology, whether design or project execution techniques, will reap the rewards."

About Tom Pickett: For more than 35 years, Tom has worked in the olefins related petrochemicals industry, gaining extensive domestic and international experience. Currently he is part of TechnipFMC’s Process Technology business unit in Houston, with responsibility for licensing, technology development and strategic planning. He is active in AIChE’s Ethylene Producers’ Committee and is a registered professional engineer in the state of Texas. Tom holds a bachelor’s degree in chemical engineering from Texas A&M University.

India plans to raise refining capacity by 77 percent by 2030

MOSCOW (MRC) - Refiners in India, the world’s third-biggest oil consumer and importer, have drawn up plans to raise their capacity by 77 percent to about 8.8 MMbpd by 2030 to meet the country’s rising fuel demand, as per Hydrocarbonprocessing.

India’s refining expansion plan will ensure the nation’s surplus production of diesel and gasoline will last till 2035, according to a report prepared and released by the Ministry of Petroleum and Natural Gas.

India is emerging as one of the key global drivers for refined fuels consumption as its economic expansion and rising industrial activity yields infrastructure improvements and increased energy access for commercial and retail consumers.

If current patterns of use continue, India’s fuel demand could rise to as much as 335 million tonnes by 2030, and 472 million tonnes by 2040, from about 194 million tonnes last year, the oil ministry’s report says.

On the basis of expansion plans submitted by refiners to the government, gasoline production will remain in surplus up to 2035, turning into a deficit in 2040, according to the report. A spokesman for the oil ministry declined to discuss the report further when contacted by phone.

Diesel will remain in surplus until about 2035, beyond which domestic demand will overtake supply, the report said. The report also forecast a growth of 5 percent or more each year in India’s gasoline, diesel and jet fuel demand to 2030.

The report recommended the refiners set up petrochemical projects and cut production of petcoke and fuel oil.

Polish Plock refinery, eyeing sulphur rules, to install visbreaking unit

MOSCOW (MRC) -- Poland's PKN Orlen is building a clean fuels upgrading unit at its 330,000 barrel bpd Plock refinery this year, as oil companies across Europe prepare for stricter environmental rules on shipping from 2020, reported Reuters.

The unit, a visbreaker, helps cut output of sulfur-rich fuel oil in favour of more valuable cleaner products such as distillates.

A spokesman said the company is investing USD176 million with completion expected by the end of 2020.

PKN Orlen has said the visbreaker will enable an additional product yield of 1,200 tonnes per day
From 2020, the International Maritime Organization (IMO) will slash the amount of sulfur that can be emitted from ships, which is expected to cut demand for fuel oil and has created a serious challenge for refiners.

Companies including ExxonMobil and Total have invested in refinery upgrades to produce lower sulfur fuels in advance of the new shipping rules, and also tighter limits worldwide on sulfur in automotive fuels.

As MRC informed before, in early May 2016, PKN ORLEN signed a contract with Saudi Aramco for the supply of ca. 200 thousand tonnes of crude oil monthly to its refineries. The contract was effective from May 1st to December 31st 2016, with an option of automatic renewal for successive years. The oil will be processed by all PKN ORLEN's refineries in Poland, the Czech Republic and Lithuania.

PKN Orlen is a major Polish oil refiner and petrol retailer. The company is a significant European publicly traded firm with major operations in Poland, Czech Republic, Germany, and the Baltic States.

Iraq signs agreement to build oil refinery near Kirkuk

MOSCOW (MRC) -- Iraq has signed an agreement to build a 70,000-Mbpd oil refinery near the northern city of Kirkuk, the oil ministry said on Thursday, reported Reuters.

The agreement was signed with Ranya International, a company based in the semi-autonomous Kurdistan region, north and east of Kirkuk, which would be an investor in the refinery, the ministry said in a statement.

The plant would produce high octane gasoline for cars and other petroleum products, it said, without giving details about the cost or further information about Ranya International.

Iraq, OPEC’s second largest oil producer, wants to build new refineries as its oil processing capacity was severely curtailed by damage to its largest plant in Baiji, north of Baghdad, when it was captured by Islamic State militants in 2014.

Baiji was retaken by Iraqi forces in 2015 and it should be brought back on line partially this year. Iraq now relies on the Doura refinery, in Baghdad, and Shuaiba, in southern Iraq.

The Kirkuk project follows the announcement in January of plans for four other refineries to be built in the port of Fao on the Gulf, the southern region of Nasiriya, the western Anbar province and Qayara near the northern city of Mosul.