Hengyi pushes back Brunei refinery start-up to Q2 2019

MOSCOW (MRC) -- The start-up a refinery-petrochemical project in Brunei by China’s Hengyi Industries International Pte Ltd will likely be delayed by a few months to the second quarter of next year, reported Reuters with reference to four industry sources.

The project, at Brunei’s Muara Besar island and which includes a 175,000-barrels-per-day (bpd) refinery, was expected to be mechanically completed by end-2018, with operations slated for the first quarter of next year.

Construction is now expected to be finished by the first quarter of 2019, with the first crude oil cargo to be delivered to the plant at the end of that period, one of the sources said.

Reasons for the delay were not immediately clear, but new refineries often face start-up delays.

Trial runs at the crude distillation unit (CDU) will start around April-May and operation could begin in the second or third quarter of next year, the source said.

Hengyi Industries International plans to import Middle East crude for the refinery’s first cargo, although this will largely depend on economics at the time of importing, the source said.

The company is the trading arm of privately-run Chinese company Hengyi Group, which is a major synthetic fiber producer in China and owns Shenzhen-listed Hengyi Petrochemical.

The Brunei refinery-petrochemical project will produce gasoline, diesel and jet fuel, the sources said. It will not produce any fuel oil for export.

Hengyi Petrochemical did not respond to a request for comment.

The Brunei complex also houses an aromatics plant that will make 1.5 million tonnes per year (tpy) of paraxylene and 400,000 tpy of benzene.

The refinery plans to export oil products to customers in Asia, but it will also have to compete with other new refining projects in the region, including the USD27 billion Refinery and Petrochemical Integrated Development (RAPID) complex in Malaysia, which is jointly owned by Malaysia’s Petronas and Saudi Aramco.

RAPID is also aiming for start-up next year.

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.

Air Products earnings, sales up in Q4

MOSCOW (MRC) -- Air Products reported GAAP net income from continuing operations of USD1.5 billion and GAAP diluted EPS from continuing operations of USD6.59, both up 28 percent, for its fiscal year ended September 30, 2018, said the company.

For the year, on a non-GAAP basis, record adjusted diluted EPS from continuing operations of USD7.45 was up 18 percent, the fourth consecutive year of double-digit annual growth.

Full-year sales of USD8.9 billion increased nine percent on six percent higher volumes, one percent higher pricing and two percent favorable currency. Volumes were higher across all three regions, partially offset by lower activity from the Jazan project; excluding Jazan, volumes for the year were up 10 percent. The higher pricing was driven by the China and Europe merchant businesses.

Adjusted EBITDA of USD3.1 billion for the year increased 11 percent, led by strong volume growth, positive pricing, currency and equity affiliate income, partially offset by higher costs. Record adjusted EBITDA margin of 34.9 percent for the year increased 70 basis points.

Midwest propane inventories enter winter higher than previous five-year average

MOSCOW (MRC) -- Propane inventories (including propylene produced at refineries) in the Midwest United States had been lower than the previous five-year average for much of 2018, but in recent weeks, net additions to inventories increased Midwest propane to levels higher than the previous five-year average, said Hydrocarbonprocessing.

For the week ending October 19, propane inventories in the Midwest, or Petroleum Administration for Defense District (PADD) 2, were 27.8 million barrels, or 792,000 barrels higher than the previous five-year average.

The Midwest accounts for about 21% of propane consumption in the United States and typically holds about 30% of U.S. propane inventories. The Midwest has the highest percentage of homes heated by propane in the United States. In addition to being used for space heating, propane is used as a feedstock for petrochemical plants and for drying agricultural crops before storage.

On Wednesdays during the winter heating season (October through March), EIA releases the Weekly Propane Market Update, which includes sub-PADD breakouts of propane inventories at refineries, terminals, and natural gas plants. These inventory values exclude any propane already in the pipeline distribution network. EIA only tracks propane inventories in the primary supply chain, so propane inventories held at many local storage and distribution terminals are not included in EIA’s data. Inventories of propane in Kansas and Michigan, the two Midwest states with the largest propane inventories, were both slightly higher than the previous five-year average as of October 19.

Petrobras earnings soar on oil price rise, weaker currency

MOSCOW (MRC) -- Brazil’s state-controlled oil company Petroleo Brasileiro SA reported a surge in third-quarter net profit, helped by a pick-up in oil prices and the weakening of the real currency, said Reuters.

Petrobras made a net profit of 6.644 billion reais (USD1.78 billion), well above the 266 million reais it posted a year earlier. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) rose to 29.856 billion reais from 19.223 billion in the same period last year.

Petrobras said its growing share of the domestic diesel market also contributed to the strong earnings, as a diesel subsidy program put in place in June to quell a truckers’ strike over rising fuel costs hit the company’s competitors.

Petrobras said it received 1.6 billion reais from the government as part of the second phase of the subsidy program, which is set to end in December.

Golar LNG looks to Nigeria to expand power footprint

MOSCOW (MRC) - Golar LNG said on Monday it was in talks with Nigerian authorities about setting up a power project that could use one of its vessels to import liquefied natural gas (LNG), as per Hydrocarbonprocessing.

The company wants to expand beyond its core LNG shipping and terminals business and owns half of the USD1.7 billion Sergipe power plant project in Brazil, in which it will also provide a floating storage and regasification unit (FSRU) to take delivery of LNG.

Golar's Chief Commercial Officer Robert Carter said the company was looking into a "fully integrated gas and power project" in the state of Lagos. "We're in discussions with Nigerian authorities. We're trying to develop a terminal there that could include the utilisation of domestic LNG supplies," Carter told Reuters after local media reported the potential talks.

LNG-to-power projects tend to comprise an LNG import terminal such as an FSRU vessel; infrastructure such as pipelines for the regasified gas; and a power plant which uses the gas as feedstock to produce electricity.

Nigeria is a massive oil and gas producer, with a large LNG export terminal, but still needs to import fuels for vehicles and suffers power shortages due to poor infrastructure and chaotic governance of its energy sector.

Golar has a fleet of 16 LNG carriers and eight FSRUs but has said it plans to expand into the broader LNG business by operating production facilities at the upstream end and participating in power projects at the downstream end.

"We don't invest in a project where there isn't a Golar flag, so to speak," Carter said when asked whether Golar would provide an FSRU for the Nigerian project. "We're talking about a Golar solution."

On the Sergipe project, Golar owns 50 percent of the company operating a 1,500 megawatt power plant and associated infrastructure and will provide an FSRU. It said on Monday the project is on track to start operations in January 2020.

All of Golar's FSRUs, which can also be used as conventional LNG carriers, are currently in use aside from the Golar Tundra which is being used in the spot LNG market.