CNOOC and Shell joint venture starts production at new petrochemical units in China

MOSCOW (MRC) -- China National Offshore Oil Corporation (CNOOC) and Shell Nanhai B.V. (Shell) have announced the official start-up of the second ethylene cracker at their Nanhai petrochemicals complex in Huizhou, Guangdong Province, China, as per Hydrocarbonprocessing.

Several linked derivative units have also started up and the remaining units will start up progressively over the next few weeks. These new units were constructed by CNOOC and are owned and operated by the existing CNOOC and Shell Petrochemical Company (CSPC) joint venture.

The new ethylene cracker increases ethylene capacity at the complex by around 1.2 million tonnes per year, more than doubling the capacity of the complex, and benefits from a deep integration with adjacent CNOOC refineries. The new facility will also include a styrene monomer and propylene oxide (SMPO) plant, which will be the largest in China when it begins operations.

"The start-up of the new ethylene cracker and derivatives units is a significant milestone for Shell," Graham van’t Hoff, Executive Vice President for Royal Dutch Shell plc’s global Chemicals business, said. "I would like to thank our partner CNOOC for its excellent project delivery. As the largest single-site ethylene complex in China, CSPC is key to Shell Chemicals’ growth ambitions."

He Zhongwen, Chairman and President of CNOOC Oil & Petrochemicals Co. Ltd, said: "The expansion project demonstrates great synergies between CNOOC’s engineering, construction and management capabilities, and Shell’s advanced technologies in chemicals. It has been recognised by the government as a role model for major industrial projects in China. This shows what we can achieve through effective international partnerships. We can now produce more and better chemical products for the growing domestic market."

The new complex utilises Shell’s proprietary OMEGA, SMPO and polyols technologies to produce ethylene oxide, ethylene glycol, propylene oxide and high-quality polyols, as well as advanced technologies for polyolefins, phenol and oxo-alcohols production. It is the first time that Shell’s industry-leading OMEGA and advanced polyols technologies have been applied in China.

With a strong track record of reliable and safe operations, the petrochemicals complex produces olefins and derivative products that are used in a wide range of industrial and consumer products, including household appliances, cars, furniture and computers.

As MRC reported before, in March 2018, Shell EP Middle East Holdings B.V. completed the sale of the entire share capital of Shell Iraq B.V (SIBV), which held its 19.6% stake in the West Qurna 1 oil field, for USD406 million, to a subsidiary of ITOCHU Corporation.

China National Offshore Oil Corporation (CNOOC), the largest offshore oil & gas producer in China. CNOOC businesses cover the main segments of oil & gas exploration and development, engineering & technical services, refining and marketing, natural gas and power generation, and financial services.

Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.

BASF Q1 operating profit gains slightly on basic chemicals, oil

MOSCOW (MRC) -- BASF’s quarterly operating profit edged 2 percent higher, relying again on strong basic petrochemicals and oil businesses to offset a drop in earnings from specialty materials such as vitamins and engineering plastics, as per Reuters.

While first-quarter earnings before interest and tax (EBIT), adjusted for one-offs, of 2.51 billion euros (USD3.01 billion) were in line with market estimates, earnings from more complex and customised products missed expectations.

These businesses, the group’s designated growth drivers, have been squeezed by higher raw materials prices.

BASF has predicted an improvement over the course of the year but Friday’s results could rekindle a debate over its strategy, as the company’s head of technology, Martin Brudermueller, takes over as chief executive later on Friday.

BASF said it was still aiming for an increase of up to 10 percent in group operating profit this year.

On Thursday, it agreed with Solenis to combine their paper and water chemicals businesses, creating an entity with pro-forma sales of 2.4 billion euros (USD2.88 billion).

BASF has embarked on an organisational revamp. It has agreed to spend billions on agricultural seed assets from peer Bayer and it is also planning to merge its oil and gas division with rival DEA and float it on the stock exchange.

KBR wins contract to develop world largest crude oil to chemicals project in Saudi Arabia

MOSCOW (MRC) -- KBR, Inc. has announced that it has been awarded a contract by Saudi Arabian Oil Company (Saudi Aramco) and SABIC as the second Project Management Contractor (PMC) to provide Pre-Front End Engineering Design (Pre-FEED), Front End Engineering Design (FEED) and Program Management Services to develop the world's largest fully integrated Crude Oil to Chemicals (COTC) complex, according to Hydrocarbonprocessing.

The project, which will be located in the Kingdom of Saudi Arabia, will be executed from KBR's Houston, Al-Khobar and Chennai offices and is expected to continue through to the start-up of the facility in 2025.

The COTC complex will be based on advanced refining technologies, innovative process configurations and proven conversion technologies that will create a fully integrated petrochemical complex which maximizes chemicals, further diversifying the petrochemical feedstock mix in the Kingdom.

"We understand the strategic importance of the long term investment that Saudi Aramco and SABIC are undertaking in this project and the pivotal role that KBR will have in the overall success of this important program," said Stuart Bradie, KBR President and CEO. "We are excited to have the opportunity to continue our proud legacy in the Kingdom of Saudi Arabia to deliver such 'giga-projects'."

"Given the rapidly changing economic environment we are faced with today, it has never been more important to create meaningful jobs for the growing Saudi population," said Jay Ibrahim, President of KBR Europe, Middle East, Africa and Asia-Pacific. "Through this contract, we will continue our commitment to meeting the objectives of both the In Kingdom local content and Vision 2030 programs."

This award reinforces KBR's position as a market leader in the hydrocarbons industry with a long track record of delivering across all phases of refining and petrochemical mega-projects.

As MRC informed previously, in February 2018, KBR Inc (KBR) was awarded both a license and engineering (LBED) and a proprietary equipment supply contract by Cangzhou Dahua New Materials Co Ltd (CDNM) to build a new polycarbonate plant in Cangzhou City, China. Under the terms of the two contracts, KBR will provide its proprietary PCMAX technology, basic engineering design package and proprietary equipment supply for a 100,000 metric tonnes per annum single train plant in Cangzhou. CDNM intends to expand annual production at a later stage to 200,000 metric tonnes.

Borealis Q1 profit down 23%

MOSCOW (MRC) -- Borealis, a leading provider of innovative solutions in the fields of polyolefins and base chemicals, announces a net profit of EUR 240 million for the first quarter of 2018, compared to EUR 313 million in the same quarter of 2017, as per the company's press release.

The strong result came in despite a full Borouge 2 turnaround and was driven by lower but still healthy European integrated polyolefin margins and a solid profit contribution from Borouge. The contribution from Base Chemicals improved compared to the first quarter of 2017, despite a continuing difficult fertilizer market environment.

Net debt increased by EUR 559 million in the first quarter, largely due to the payment of a EUR 700 million dividend to Borealis shareholders. Despite the increase in net debt, Borealis financial position remains strong, with a gearing of 23% at the end of the first quarter 2018.

Total S.A. (“Total”), Borealis AG (“Borealis”) and NOVA Chemicals Corporation (“NOVA Chemicals”) signed definitive agreements to form a joint venture in petrochemicals on the U.S. Gulf Coast. The joint venture – in which Total will own 50% and Novealis Holdings LLC, a joint venture between Borealis and NOVA Chemicals, will own the remaining 50% – will commence subject to customary closing conditions, including receipt of regulatory approvals.

Borealis and United Chemical Company LLP (UCC) signed a Joint Development Agreement (JDA) for the development of a world-scale polyethylene project, integrated with an ethane cracker, in the Republic of Kazakhstan. The signing of the JDA comes after the successful conclusion of a pre-feasibility study. The project will now move into the feasibility study phase, which is expected to run until Q1 2019. The scope of the JDA will include the construction of an ethane cracker and 2 Borstar® PE units, with a total capacity of 1.250 ktpa and with a pre-investment in the cracker for future expansion. The final investment decision on the project is expected to be taken in 2020 and start-up would be scheduled for 2025.

A Memorandum of Understanding (MoU) was also signed to investigate a potential cooperation in regards to a 500 ktpa polypropylene project that is currently being implemented by the Samruk-Kazyna Sovereign Wealth Fund. In addition, a government support agreement between the Government of the Republic of Kazakhstan and the Government of the United Arab Emirates was signed.

ExxonMobil says PNG LNG plant back to normal production rates

MOSCOW (MRC) - ExxonMobil said that it has restarted the second liquefied natural gas (LNG) train at its Papua New Guinea liquefied natural gas plant, adding that the plant was operating at normal production rates, reported Reuters.

Exxon said in a statement it expected the facility to reach full capacity in May and confirmed that exports of LNG have resumed.

"Production has been gradually increasing since the Hides gas conditioning plant and one train at the PNG LNG plant restarted earlier this month," Australia's Santos, which owns a 13.5 percent stake in the operations, said in a separate release.

The PNG LNG plant, which Exxon operates and in which it has a 33.2 percent stake, was shut down in the wake of a deadly earthquake in Papua New Guinea's energy-rich interior on Feb. 26.

In mid-April, the company announced that it had resumed production at the facility a fortnight ahead of schedule.

As MRC informed before, in October 2017, ExxonMobil Chemical Company announced that it had commenced production on the first of two new 650,000 tons-per-year high-performance polyethylene (PE) lines at its plastics plant in Mont Belvieu, Texas.

ExxonMobil is the largest non-government owned company in the energy industry and produces about 3% of the world's oil and about 2% of the world's energy.