Traders say U.S. to be big winner of new IMO shipping rules

MOSCOW (MRC) -- The United States is set to be the big winner from new marine fuel rules, trading house Gunvor Group predicted, while rival merchants said the world would not face a shortage of distillates as a result of new rules to cut pollution, as per Reuters.

The UN’s International Maritime Organisation (IMO) has set new rules that will ban ships from using fuels with a sulfur content above 0.5 percent from 2020, compared with 3.5 percent now, unless they are equipped with so-called scrubbers to clean up sulfur emissions.

The industry has been expecting a sharp rise in demand for cleaner distillates, mainly diesel, at the expense of fuel oil that would become largely redundant. Gunvor Group Chief Executive Torbjorn Tornqvist said at the Oil & Money conference in London that the switch would certainly create some chaos at first as storage and logistics must deal with a “cocktail of fuel blends” and that the United States would be the major overall winner.

"Crude differentials will reflect the strong differentials between distillates (diesel) and fuel oil we will see the price of heavy crude fall and light sweet rise," Tornqvist said. Heavy sour crudes yield much more fuel oil than light, sweet oil that have a maximum sulfur content of 0.5 percent, unless a refinery has advanced equipment.

"The big winner in the IMO is actually the United States. They have the most advanced refining system in the world and will take advantage of importing more heavy crude oil and they will export light crude oil that will get a bigger premium," he said. Vitol Chairman Ian Taylor said he did not expect a major glut of high sulfur fuel oil as refiners were adding units.

"So many units have been prepared to reduce it and there’s so little high sulfur fuel left already," Taylor said. Glencore’s head of oil Alex Beard echoed the remarks as scrubbers, add-on units to ship to clean out pollutants, would still allow ships to mop up some fuel oil.

"Distillates will clearly play a very large role in shipping but what is becoming clear is that the world can cope, so it won’t be the crisis that people were thinking a year or two ago," he said. "Our estimate is that by January 2020, something like 25 percent of the world’s high sulfur fuel demand today will be from ships that have scrubbers and that will grow through 2020."
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Huntsman increases production capacity for PU catalysts in Hungary

MOSCOW (MRC) -- Huntsman has announced that its Performance Products division has completed an expansion of speciality amines manufacturing capacity at its facility in Petfurdo, Hungary, as per GV.

According to the company, this expansion increases its existing polyurethane catalyst production capacity globally by over 20 %. The amine catalysts are sold globally under the name Jeffcat and are used, e.g., in the production of foam automobile seats, mattresses, and spray insulation.

"This capacity expansion leverages our strong manufacturing and technology base, which is already one of the widest in-house speciality amines manufacturing capabilities in the industry," said Gwen Fonck, Vice President, Huntsman Performance Products, Europe, Middle East & Africa. "We have consistently improved our capability and extended the product range manufactured at our Petfurdo location over the last ten years."

As MRC informed before, in March 2018, Huntsman Corporation announced the acquisition of Demilec, one of North America’s leading manufacturers and distributors of spray polyurethane foam (SPF) insulation systems for residential and commercial applications, from an affiliate of Sun Capital Partners, Inc.

Huntsman Corporation is a publicly traded global manufacturer and marketer of differentiated and specialty chemicals with 2017 revenues of more than USD8 billion. Its chemical products number in the thousands and are sold worldwide to manufacturers serving a broad and diverse range of consumer and industrial end markets. The company operate more than 75 manufacturing, R&D and operations facilities in approximately 30 countries and employ approximately 10,000 associates within its four distinct business divisions.
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Neste and Air BP collaborate to support sustainable aviation fuel supply chain development

MOSCOW (MRC) -- Neste, the world’s leading renewable products producer, and Air BP, the international aviation fuel products and services supplier, have entered into an agreement to explore opportunities to increase the supply and availability of sustainable aviation fuel for airline customers, as per Hydrocarbonprocessing.

Through this innovative collaboration, Neste’s knowledge and manufacturing solutions for producing and blending renewable jet fuel will be brought together with Air BP’s customer relationships, expertise in developing efficient and effective supply chains, as well as their certification and product quality assurance capabilities. One goal of the cooperation will be complementary efforts to bring a co-branded sustainable aviation fuel to market at airports across Air BP’s global network.

Sustainable aviation fuel is made by blending conventional, fossil-based kerosene with renewable hydrocarbons produced from, for example, recycled cooking oil. It is then certified as "Jet-A1" fuel and can be used in aircraft without requiring any technical modifications. Flying on sustainable aviation fuel reduces crude oil consumption and produces lower lifecycle carbon emissions compared to conventional jet fuel.

"I am very happy to announce our collaboration with Air BP. Working together, we can find the best ways of developing robust supply chains to ensure that renewable jet fuel is more widely accessible. We expect our collaboration will not only be able to provide a solution to better matching supply to increased demand for renewable jet fuel, but also delivers distinct advantages to airlines by significantly decreasing their environmental footprint," says Kaisa Hietala, Neste’s Executive Vice President in Renewable Products business area.

Jon Platt, Air BP Chief Executive Officer added: “We are very pleased that through our collaboration with Neste, an industry leader in this space, we will be able to continue to support our customers with their low carbon ambitions. The aviation industry’s carbon reduction targets can only be achieved with support from across the entire supply chain and, by bringing our experience and expertise together, we are looking to drive change by promoting and securing the supply of sustainable aviation fuel."

The aviation industry has set ambitious targets to mitigate greenhouse gas emissions from air transportation, including carbon-neutral growth from 2020 and beyond, and a 50 percent reduction of net aviation carbon emissions by 2050. Currently, sustainable aviation fuel offers the only viable alternative to fossil liquid fuels for powering commercial aircraft. Collaborations between forward-thinking companies like Neste and Air BP will be needed to enable the aviation industry to continue to connect the world, but do so with reduced greenhouse gas emissions.

Both companies have already demonstrated their leadership in this area. Neste’s MY Renewable Jet Fuel ™ has proven its technical capability in thousands of commercial flights. It can be easily adopted by airlines without the need for additional investments in new jet engines or segregated fuel distribution systems. It is produced from renewable and sustainable raw materials, thus significantly reducing greenhouse gas emissions over the life-cycle.

Air BP has supplied BP biojet in the Nordics since 2014 at around 10 airports, including Oslo where they were the first to supply sustainable aviation fuel through the existing airport fuelling infrastructure, in an earlier collaboration with Neste and other key Norwegian and industry stakeholders.
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Rain Carbon receives petroleum coke import exemption from Supreme Court of India

MOSCOW (MRC) -- Rain Carbon Inc., a leading global producer of carbon-based products, today announced that the company will resume shipments of petroleum coke to its Vizag calcining facility in Visakhapatnam, India, as per Hydrocarbonprocessing.

This follows an October 9 ruling by the Supreme Court of India that exempts calciners from the nation's recent ban on the importation of petroleum coke for use as fuel, which was enacted as part of the country's effort to reduce industrial emissions.

Rain Carbon uses green petroleum coke (GPC) as its primary feedstock in the production of calcined petroleum coke (CPC), which is an essential raw material in the anodes required during the electrolytic process of aluminum production. The company also imports CPC for blending at its Vizag facility. Under the Supreme Court's ruling, India's calcining industry will be permitted to import up to 1.4 million metric tons of GPC annually; the ruling also permits India's aluminum industry to use up to 500,000 tons of imported CPC per year.

"We thank the honorable Supreme Court of India for its expeditious and positive ruling on our petition, which will enable our Vizag facility to continue to support India's growing aluminum industry, which relies on our CPC in their production processes," said Rain Carbon President Gerry Sweeney. "As an industry leader in environmental best practices, Rain Carbon understands and supports India's desire to reduce emissions and industrial pollution."

The industrial processes at Rain Carbon's calcining facilities in India and the United States "are designed to reduce emissions," Sweeney explained. "At our Vizag plant, for example, our scrubbers remove in excess of 98% of the sulfur dioxide before exhaust gases are released into the atmosphere. In addition, our co-generation facility at the plant transforms waste heat from our calcining process into clean electricity that is sold to industrial customers over the local power grid, displacing an equivalent amount of fossil fuel-fired electricity."

Sweeney said the two-and-a-half month import ban will have a negative impact on the third- and fourth-quarter financial performance of Rain Carbon and its parent company, Rain Industries Ltd.
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US crude stocks rise as refining slows, gasoline builds unexpectedly

MOSCOW (MRC) -- US crude oil stockpiles rose last week for the third consecutive weekly build as refineries continued to reduce output for seasonal maintenance, while gasoline inventories grew unexpectedly, reported Reuters with reference to the Energy Information Administration.

Crude inventories rose 6 million barrels in the week to Oct. 5, compared with analysts’ expectations for an increase of 2.6 million barrels. The build was in part due to a 2.4 million-barrel increase in stocks at the Cushing, Oklahoma, delivery hub for U.S. crude futures.

Net US crude imports fell last week by 1.4 million barrels per day to 4.8 million bpd, the lowest rate since at least 2001 when the EIA began tracking the data. Weekly figures like this are volatile, however.

The stock build fed recent selling in the oil market, which has also been happening in tandem with a broader sell-off across global equity and bond markets. U.S. crude futures dropped 2.5 percent to USD71.26 a barrel, while Brent crude was off 2.7 percent to USD80.88 a barrel.

Refinery crude runs fell by 352,000 barrels per day, EIA data showed.

Refinery utilization rates fell by 1.6 percentage points to 88.8 percent of nationwide capacity, led by a slowing in activity in the Midwest, where utilization fell to 73.3 percent of capacity, the lowest since EIA started tracking that data by region in 2010.

"The steep decline in refinery run rates helped to produce the inventory gain," said John Kilduff, a partner at Again Capital Management in New York.

Several major refineries in the Midwest, including BP Plc’s facilities in Whiting, Indiana, and HollyFrontier Corp’s plant in El Dorado, Kansas, are currently undergoing maintenance.

Gasoline stocks rose by 1 million barrels, compared with expectations in a Reuters poll for a fall of 42,000 barrels.

Gasoline futures were down 3.2 percent to USD1.9557 a gallon, in part due to an increase in East Coast stocks, which have risen to 70.6 million barrels, compared with 58.2 million barrels at this time a year ago.

"Gasoline is leading the market down as continued high levels of imports into the East Coast have led to inventory levels that are 20 percent higher than this time last year," said Andrew Lipow, president of Lipow Oil Associates in Houston.

Distillate stockpiles, which include diesel and heating oil, fell by 2.7 million barrels, versus expectations for a 2 million-barrel drop, the EIA data showed.
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