China becomes world second largest LNG importer behind Japan

MOSCOW (MRC) -- China surpassed South Korea to become the world’s second-largest importer of liquefied natural gas (LNG) in 2017, according to data from IHS Markit and official Chinese government statistics, as per Hydrocarbonprocessing.

Chinese imports of LNG averaged 5 billion cubic feet per day (Bcf/d) in 2017, exceeded only by Japanese imports of 11 Bcf/d. Imports of LNG by China, driven by government policies designed to reduce air pollution, increased by 1.6 Bcf/d (46%) in 2017, with monthly imports reaching 7.8 Bcf/d in December.

China’s imports of natural gas have grown to meet increasing domestic natural gas consumption, which has been primarily driven by environmental policies to transition away from coal-fired electricity generation. The Chinese government has also implemented policies to convert several million residential households in China’s northern provinces, which traditionally rely on coal heating in the winter, to use natural gas-fired boilers instead.

Natural gas storage capacity in China is relatively limited, estimated at just 3% of total natural gas consumption. China’s seasonal peak demand is met primarily by natural gas imports, either by pipeline from Central Asia or by shipments of LNG. Despite increases in China’s domestic production and in pipeline imports in 2017, natural gas shortages in northern China led to record levels of LNG imports during the 2017 winter. Overall, natural gas imports accounted for 40% of China’s 2017 natural gas supply, and LNG made up more than half of those imports.

China has 17 LNG import terminals at 14 ports along its coastline, with a combined regasification capacity of 7.4 Bcf/d. Annual utilization rates at LNG import terminals averaged about 50% from 2013 through 2016, but the rate increased to 69% in 2017. Colder-than-normal winter weather increased natural gas demand and led LNG import terminals in the northern and central coastal regions of China to exceed nameplate capacity by 30% and 20%, respectively, in December 2017.

EIA expects natural gas consumption in China to continue to increase - driven by economics and environmental policies - and imports and increasing domestic production will be used to meet growing demand. China’s LNG import capacity is expected to reach 11.2 Bcf/d by 2021, once capacity expansions at existing terminals and new terminals currently under construction are completed. EIA also expects China’s imports of natural gas by pipeline to increase, especially as the Power of Siberia pipeline from Russia comes online by the end of 2019.

U.S. LNG exports to China increased significantly last year, from 17.2 Bcf in 2016 to 103 Bcf in 2017. China accounted for nearly 15% of U.S. LNG exports in 2017, behind only Mexico and South Korea. In November 2017, the United States and China signed several preliminary agreements for U.S. LNG exports to China, including exports from Sabine Pass on the Gulf Coast of Louisiana, the fully approved Delfin LNG offshore export project off Louisiana’s coast, and the proposed Alaska LNG project. In February 2018, Cheniere Energy and the China National Petroleum Corporation signed two long-term contracts for LNG from Sabine Pass and new LNG facility under construction near Corpus Christi, Texas.
MRC

MOSCOW (MRC) - Russia remained the top crude oil supplier to China in January, data showed, beginning 2018 on a strong note after the start-up of an expanded trans-Siberia pipeline and as Beijing released more crude import quotas to independent refiners, as per Reuters.

Russian supplies came in at 5.67 million tonnes, or 1.34 MMbpd, up 23.4 percent from a year earlier, data from the Chinese General Administration of Customs showed. The January number compared with 1.194 Mbpd in December.

Last month, data showed Russia notched up its second year as China's largest supplier in 2017, surpassing Saudi Arabia - OPEC's top exporter - by some 150 Mbpd.

The strong Russian exports to the world's largest crude oil buyer came as a second East Siberia-Pacific Ocean (ESPO) pipeline started commercial operation in January. In a reshuffle of the pack, Angola ranked second with 4.68 million tonnes, or 1.1 MMbpd, of crude in January, down 5.4 percent from a year earlier.

China imported 4.45 million tonnes, or 1.05 MMbpd, of crude from Iraq, up 28 percent from a year ago. Saudi Arabia supplied 4.29 million tonnes, or 1.01 MMbpd, to China in January. That was down 15 percent from the same year-ago rate and compared with 1.11 MMbpd in December.

Even so, exports from the kingdom are expected to rise to record levels this year as Saudi Aramco ramps up supplies to Chinese state oil firm CNOOC, as well as the Huajin refinery owned by defence giant NORINCO.

China's total crude oil imports last month soared 20 percent from the same month a year earlier to a record rate of 9.57 million barrels per day, beating the previous peak of 9.17 MMbpd.

Customs data also showed China's oil imports from the United States soared to 2.01 million tonnes last month, or roughly 472,508 bpd. That compares with just 257,861 tonnes a year ago.

In 2017, U.S. shipments, which benefited from OPEC-led supply cuts, averaged about 153 Mbpd.
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January total PP production in Russia went up to 131,300 tonnes from 125,700 tonnes and 127,400 tonnes in January and December 2017, respectively. Only two producers out of seven showed the absence of growth in their output, with NPP "Neftekhimiya" accounting for the largest increase in production. Russia's overall PP production exceeded 1,400,000 tonnes last year.

The structure of PP production by plants looked the following way over the stated period.

SIBUR Tobolsk, Russia's largest PP producer, manufactured 47,700 tonnes last month versus 46,400 tonnes and 46,700 in January and December 2017, respectively. Overall PP production at the Tobolsk plant exceeded 510,500 tonnes last year.

Omsk Poliom (part of Titan Group) virtually maintained the last year's capacity utilisation, the plant's January PP output was 18,500 tonnes, compared to 18,500 tonnes and 18,400 tonnes in January and December 2017, respectively. The Omsk plant's overall output was 205,300 tonnes in 2017.

Nizhnekamskneftekhim reduced its capacity utilisation last month, the plant's January output of propylene polymers was 18,300 tonnes, compared to 18,700 tonnes and 17,500 tonnes in January and December 2017, respectively. The Nizhnekamsk plant's total production of polymer reached 210,800 tonnes in 2017.

Tomskneftekhim increased its capacity utilisation in January, with 12,700 tonnes of propylene polymers being produced last month versus 12,000 tonnes and 12,900 tonnes in January and December 2017, respectively. Last year's PP production at the Tomsk plant reached 141,500 tonnes.

Ufaorgsintez's PP output was 11,600 tonnes last month, compared to 10,800 tonnes and 11,000 tonnes in January and December 2017, respectively. The Ufa plant's production of polymer rose to 124,500 tonnes in 2017.

NPP "Neftekhimiya" increased its capacity utilisation in January, the plant's total output was 12,300 tonnes versus 9,600 tonnes and 12,300 tonnes in January and December 2017, respectively. The plant's overall production reached 107,100 tonnes last year.

Stavrolen (part of Lukoil) operated with the increased capacity utilisation last month, the plant's January output of propylene polymers was 10,200 tonnes, compared to 9,500 tonnes and 8,700 tonnes in January and December 2017, respectively. The Budenovsk plant's overall production of propylene polymers reached 101,000 tonnes last year.

MRC

MOSCOW (MRC) -- The global polyurethane (PU) market is projected to reach USD 56.76 billion by 2021 at a CAGR of 5.6 %, reported GV with reference to a study from Markets and Markets.

The growing middle class with increasing disposable incomes as well as the rising urbanisation supplemented by investments in infrastructure are said to be the main drivers of the global PU market. PU flexible foam is estimated to remain the largest product segment till 2021. Beddings, automotive interiors and footwear are said to be the main applications for flexible foams. A major driver in the flexible foam market is the use of memory foam in bedding.

Driven by the growing automotive industry, the Asia-Pacific region is forecast to remain the largest PU market in terms of value and volume.

The study is titled: "Polyurethane Market by Raw Material (MDI, TDI, Polyols), Product (Coatings, Adhesives & Sealants, Flexible & Rigid Foams, Elastomers), End User (Building & Construction, Automotive & Transportation, Bedding & Furniture) – Global Forecast to 2021".
MRC

MOSCOW (MRC) -- State oil company Saudi Aramco has signed a preliminary deal to invest in India's planned 1.2 MMbpd West Coast refinery, as per Hydrocarbonprocessing.

Falih said Aramco was also looking at buying stakes in existing major refiners and expansion projects in India. He did not specify the size of stake Aramco will take in the west coast refinery, but added: "the more the better."

Saudi Aramco has signed a preliminary deal to invest in India's planned 1.2 MMbpd West Coast refinery.
"Agreements have been already signed that allows discussions to start on the configuration of the (west coast) refinery, on design basis and pre-feasibility studies," he said. "One is the greenfield west coast refinery, which is already public, but there are discussions with expansions as well as buying stake into major existing refinery assets. All of these are illustrated commitments by the Kingdom and the company to be not only a supplier but an investor in India at an unmatched scale," he added.

According to Al-Falih, "India is open for partnership, open for business, we welcome that, we welcome Prime Minister (Narendra) Modi's pro-business environment, we believe in it, we believe its here to stay and have told Aramco team to assign zero political and regulatory risk to India and treat it as part of Saudi Arabia."

India aims to expand its refining capacity by 77 percent to about 8.8 MMbpd by 2030. Falih said Saudi Arabia would also sign oil supply deals as part of the agreement to buy stakes in Indian refineries, a strategy the kingdom has adopted to expand its market share in Asia and fend off rivals.

Last year, Saudi Arabia pledged billions of dollars of investments in projects in Indonesia and Malaysia to secure long-term oil supply deals.
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