Hanwha Total buys US, Australian condensate to replace Iran oil

MOSCOW (MRC) -- South Korea’s Hanwha Total Petrochemical Co Ltd has increased imports of condensate from the United States and Australia and is seeking more European cargoes to replace Iranian supplies, reported Reuters with reference to two industry sources.

The move is in line with other South Korean refiners that have replaced Iranian oil with similar imports.

The petrochemical producer bought 1 million barrels of U.S. Eagle Ford condensate for November arrival, and it has also stepped up imports from Australia, recently buying Wheatstone condensate for October delivery, the sources said.

The purchases were part of Hanwha Total’s efforts to replace Iranian condensate ahead of renewed sanctions on Iran in November, one of the sources said. The sources declined to be named as they were not authorized to speak to media.

South Korean refiners and petrochemical producers suspended shipments of Iranian crude and condensate in July, halting all shipments for the first time in six years amid U.S. pressure to cut all imports from Iran from November.

South Korea, in turn, increased its condensate imports from Australia and will lift two 650,000-barrel cargoes of North West Shelf (NWS) condensate in August, the highest volume since March 2015, trade flows data on Thomson Reuters Eikon showed.

South Korean companies have also bought NWS condensate loading in September and October, several trade sources said.

South Korean banks have halted payment for Iranian oil ahead of the U.S. sanctions that will take effect from November, although Seoul is still working to get a waiver from Washington to import some oil from Iran, other industry sources said.

Before the suspensions, South Korea had been the largest buyer of Iranian South Pars condensate (SPC) with imports as high as 6 million barrels in June 2017. The condensate, or ultralight oil, is typically processed at refining units known as splitters to extract heavy naphtha for aromatics production.

The loss of Iranian supplies meant Korean buyers had to find and settle for other sources of oil that are not great replacements for SPC as their heavy naphtha yields are lower, trade sources said.

In addition to using substitute condensates, South Korean petrochemical companies, such as Hanwha Total, have also been ramping up imports of cheaper heavy naphtha, they said.

Hanwha Total has been importing an average of 250,000 tonnes of heavy full-range naphtha a month this year versus 150,000 tonnes a month in 2017, traders said.

It paid a USD3-a-tonne premium to Japan quotes on a cost-and-freight (C&F) basis for heavy full-range naphtha on Tuesday, down from this year’s high of nearly USD17 a tonne.

As MRC wrote earlier, in December 2017, Hanwha Total Petrochemical Co Ltd said it plans to spend USD331.29 MM on a new factory in South Korea to increase polyethylene (PE) output by 400 Mtpy by 2019.

Hanwha Group is one of the largest business conglomerate in South Korea. Founded in 1952 as Korea Explosives Inc., the group has grown into a large multi-profile business conglomerate, with diversified holdings stretching from explosives, their original business, to retail to financial services.
MRC

MOSCOW (MRC) -- Aspen Technology, Inc., the asset optimization software company, has announced that Petronas, Malaysia’s fully integrated oil and gas multinational company, has selected aspenONE Engineering, Petroleum Supply Chain and Supply Chain Management software solutions to pursue asset optimization and maximize profitability at the Refinery and Petrochemical Integrated Development (RAPID) facility in Pengerang, Johor, as per Hydrocarbonprocessing.

RAPID and six major associated facilities that comprise the Pengerang Integrated Complex (PIC) are Petronas’ largest downstream investment in Malaysia to date. The operations of the refinery, cracker plant and selected petrochemical facilities in PIC are managed by Petronas Refinery & Petrochemical Corporation.

To achieve operational excellence via asset optimization, PETRONAS has adopted Aspen HYSYS Petroleum Refining, Aspen Plus, Aspen Polymers, Aspen PIMS-AO, Aspen Petroleum Scheduler, Aspen Refinery Multi-Blend Optimizer and Aspen Plant Scheduler software. These solutions maximize margins with better troubleshooting, more robust planning and scheduling, optimized feedstock selection and product blends, improved response and decision-making.

According to Ir. Dr. Colin Wong Hee Huing, Senior Vice President & Chief Executive Officer, Petronas Refinery & Petrochemical Corporation, "The RAPID project will help Petronas produce premium petroleum and specialty chemicals products. Demand for such high-value products is increasing, especially in Asia Pacific. Committed to this vision, we have selected a broad range of asset optimization software solutions across engineering, petroleum supply chain and supply chain management software solutions from AspenTech to increase profitability."

With software solutions that maximize profitability, reduce distribution costs and optimize daily schedules, PETRONAS achieves a sustainable competitive advantage to deliver high returns across the entire asset lifecycle at the RAPID facility, which is expected to be commissioned in 2019.

As MRC informed earlier, Petronas plans to build a C6-based metallocene linear LDPE plant and a low density polyethylene (LDPE)/ethylene vinyl acetate (EVA) swing plant at its greenfield integrated refinery and petrochemical complex in southern Johor state by mid-2019. The proposed metallocene LLDPE will have a capacity of 350,000 tpa, while the LDPE/EVA will have a capacity of about 150,000 tpa. The two plants are part of Petronas' planned Refinery and Petrochemical Integrated Development project in Pengerang at Johor.

Petronas, short for Petroliam Nasional Berhad, is a Malaysian oil and gas company wholly owned by the Government of Malaysia. The Group is engaged in a wide spectrum of petroleum activities, including upstream exploration and production of oil and gas to downstream oil refining; marketing and distribution of petroleum products; trading; gas processing and liquefaction; gas transmission pipeline network operations; marketing of liquefied natural gas; petrochemical manufacturing and marketing; shipping; automotive engineering; and property investment.
MRC

MOSCOW (MRC) -- Debro Inc. announced a new partnership with AkzoNobel – Performance Additives. Effective Sept. 1, 2018, Debro will represent AkzoNobel – Performance Additives ELOTEX and Bermocollrange of products in Central and Eastern Canada, as per Coatingsworld.

These technologies will cater to a variety of applications, including adhesives, construction products, paints, specialty coatings and drilling fluids.

"AkzoNobel – Performance Additives brings to Debro best-in-class re-dispersible polymers and a broad range of cellulose ethers backed by strong technical and lab support,” Debro CEO and President Bill Heise said. “The determination and persistence of AkzoNobel – Performance Additives to support technically are crucial in enabling Debro’s technical sales force to continually provide our customer base with the highest level of problem-solving customer service and capabilities. “From our first meeting with the AkzoNobel – Performance Additive team, it was clear that we had an opportunity to represent a market-leading principal that would provide quality offerings, ethical solutions and innovative technologies whose goals were complementary to Debro’s".

"Our Performance Additives business has had a strong presence in Canada, so when we began the process of selecting a new distribution partner a major criterion was to find a technically savvy firm whose industry knowledge, reputation and level of service capabilities would complement and be closely aligned with our strategic vision," said Steven Grant, commercial manager, North America – Performance Additives Ethylene and Sulfur Derivatives.

As MRC informed earlier, in August 2018, AkzoNobel has opened a new coatings production facility in Kenya.

Akzo Nobel N.V., trading as AkzoNobel, is a Dutch multinational, active in the fields of decorative paints, performance coatings and specialty chemicals. Headquartered in Amsterdam, the company has activities in more than 80 countries, and employs approximately 55,000 people.
MRC

MOSCOW (MRC) -- State-owned Abu Dhabi National Oil Co (ADNOC) is in advanced talks with more than one potential buyer, including Italy’s ENI, as it prepares to sell minority stakes in its refining business, reported Reuters with reference to two sources familiar with the matter.

ADNOC began a wide-ranging shake-up in 2016 to tackle competition from new producers such as US shale firms. It listed 10 percent of its fuel distribution business last year and aims to expand its downstream business abroad.

The company also started a sale process for a stake in its USD20 billion refining business, which the sources said it was likely to split between two or more parties.

One said that ADNOC would favor companies it already has partnerships with, including ENI and Austrian oil and gas group OMV.

OMV works with ADNOC on a number of projects, including a 40-year agreement for a 20 percent stake in the SARB and Umm Lulu offshore oil concession. ENI has a 10 percent stake in its Umm Shaif and Nasr offshore oil concession and a 5 percent stake in Lower Zakum.

"This strategy would give ADNOC the chance to bring in these companies’ money and expertise without having a dominant partner," the source said.

A second round of offers is expected to be presented as soon as next week, when the Gulf returns from a religious holiday, both sources said.

"ADNOC ...is exploring multiple opportunities that span ADNOC’s entire value chain," an ADNOC spokesman said.

"To date we have received significant interest from the market, (from both) new and existing partners. We will update the market in due course," he added.

ADNOC also has partnerships with France’s Total and PetroChina, among others.

An ENI spokesman said the company does not comment on market rumours. OMV was not immediately available to comment.

ENI, the biggest foreign oil producer in Africa, is looking to build its presence in the Middle East to diversify risk and take advantage of business opportunities in the oil-rich region.

One of the sources said it is using US investment bank Morgan Stanley to help with the offer for ADNOC’s stake.

Morgan Stanley declined to comment.

As MRC wrote previously, in May 2018, ADNOC unveiled plans to invest AED 165 billion (USD45 billion) alongside partners, over the next five years, to become a leading global downstream player, enabling it to further stretch the value of every barrel it produces to the benefit of ADNOC, its partners and the UAE.
MRC

MOSCOW (MRC) --Japan’s Maruzen Petrochemical, a subsidiary of Cosmo Energy Holdings, said it would replace naphtha cracking furnaces at its 525,000 tonnes-per-year naphtha cracker in 2020 for an undisclosed sum, reported Reuters.

Two new bigger furnaces will be installed during a planned maintenance shutdown in around May-June 2020, a company spokesman said.

The company will halt operations of six of 20 existing furnaces, two of which will be scrapped, he said. Four others will be fired up during a maintenance shutdown of other furnaces to minimize the impact to production, he added.

The move will result in no change in the cracker’s annual ethylene output capacity of 525,000 tonnes, he said.

The company has awarded the project to Japan’s Toyo Engineering Corp.

As MRC informed previously, in early March 2015, Maruzen Petrochemical Co shut down its naphtha cracker in Chiba for a one-week maintenance due to a mechanical issue.
MRC