ADNOC's early restart of Ruwais refinery unit may add to Asia gasoline glut

MOSCOW (MRC) -- The earlier-than-expected return of a gasoline-making unit at Abu Dhabi National Oil Company's (ADNOC) Ruwais oil refinery may add to a glut of the fuel in Asia, potentially weighing on prices, while fuel oil supplies could drop, as per Hydrocarbonprocessing.

ADNOC shut the 127,000 barrels-per-day (bpd) residue fluid catalytic cracker (RFCC) in the western section of the 800,000-bpd Ruwais plant in January 2017 after a fire at a linked petrochemical unit. The RFCC mainly processed straight-run fuel oil (SRFO) from the refinery's crude distillation units into higher-value gasoline and diesel fuel.

That unit was not expected to be back online until the first quarter of 2019.

However, an ADNOC spokesman said on Monday, "We expect restoration work to be completed by the end of this year and start-up thereafter."

Market consultants Energy Aspects said in an Oct. 8 note that they expect repairs on the RFCC to be finished by the end of November with full operations restored by February. That would raise gasoline output from the UAE by 50,000 bpd.

"Ruwais's RFCC will join a list of other gasoline-producing units in the region that have returned to service recently following technical problems," said Energy Aspect Analyst Nevyn Nah in the note, referring to recent refinery outages in Saudi Arabia, Oman and India.

"With plenty of Middle Eastern gasoline supplies that were missing over August and September restored, and even more to return, Singapore gasoline time-spreads have collapsed at the front, with even October-November spreads looking shaky," said Nah.

The note also points out that three Long-Range 1 tankers carrying gasoline from Europe are set to arrive in Singapore in November.

The RFCC's outage at the start of last year had prompted ADNOC to temporarily ramp up gasoline imports to plug the supply gap while increasing exports of SRFO.

ADNOC's "gasoline production fell by almost 50,000 bpd in 2017, a fall we expect to be reversed once the RFCC restarts, while straight-run fuel oil (SRFO) exports, which grew by almost 70,000 bpd in 2017, will fall," said Nah.

As MRC informed before, 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.

Magna opens seating plant in Czech Republic to serve BMW in Europe

MOSCOW (MRC) -- Magna International Inc. has opened its second seating business and facility with BMW Group, this one located in Chomutov, Czech Republic, as per Canplastics.

The new plant, which will employ about 300 workers by the end of next year, will be supplying seating systems in various configurations for several BMW models for the European market. With a production area measuring 6,000 square meters, the plant has the capacity to produce more than 360,000 seat sets per year, Magna said in a statement.

Production is expected to start before the end of this year. "This is a big win for our employees as well as our community, where we are making a positive economic impact,” Martin Polivka, general manager of the new Chomutov plant, said in the statement. “Our facility is using the latest technology with special attention given to high flexibility so that we can react quickly to new developments and changing requirements of our customers,"

Magna’s seating group has 16 manufacturing locations in Europe, five of them in the Czech Republic, along with 50 manufacturing locations and six R&D centres around the rest of the world.

Magna is headquartered in Aurora, Ont

Ecuador to tender new fuel, sulfur units at Esmeraldas refinery

MOSCOW (MRC) - Ecuador plans to issue a tender early next year to find a firm willing to build and operate two processing units at its state-run Esmeraldas refinery, an expansion that would reduce the need for imported fuel, according to a document seen by Reuters and the energy minister, as per Hydrocarbonprocessing.

A prior USD2 billion overhaul of the 110,000-barrel-per-day (bpd) refinery by the previous government of President Rafael Correa was insufficient to repair and modernize the Andean country’s largest plant, forcing Petroecuador to plan new maintenance and upgrade projects.

"We have serious problems at Esmeraldas ... we are doing a great effort to maintain the refinery in operation," Ecuador’s minister of Energy and Natural Resources Carlos Perez told Reuters in an interview late on Thursday.

A USD3 million maintenance program is expected to take about 60 days, starting in March. Esmeraldas’ fluid catalytic cracker (FCC) and hydrodesulfurization unit, which are struggling to work properly, will be repaired, the minister said.

Following that program’s completion, Ecuador’s government would award two 20-year contracts to construct new sulfur and fuel processing units under a BOT (build–operate–transfer) model, according to Perez and the document, which details the proposals.

"We have received interest from companies willing to build the fuel unit," Perez said. He did not disclose the names of the interested contractors.

Ecuador has total refining capacity of 175,000 bpd at three refineries. Most of them produce low octane, high sulfur fuels. The project aims to improve the quality and reduce emissions of diesel and gasoline produced at the Esmeraldas refinery.

Ecuador for a long time has planned a new refinery in Manabi, on the Pacific coast, but the company originally chosen to build it along with Petroecuador, Venezuela’s financially strapped PDVSA, was unable to provide all the funds, causing delays.

Correa’s government was in talks with Japan’s Mitsubishi for building the fuel plant, but the parties did not reach an agreement. South Korea’s SK Engineering and Construction and Australia’s Worley Parsons in 2013 won contracts to upgrade and revamp some of Esmeraldas’ processing units.

The new fuel unit is expected to require up to USD1 billion in investment, and the sulfur plant would cost about USD200,000, Perez said.

Saudi to meet Indian oil demand, absorb supply shocks

MOSCOW (MRC) -- Saudi Arabia is committed to meeting India’s rising oil demand and is the "shock absorber" for supply disruptions in the oil market, Energy Minister Khalid al-Falih said, reported Reuters.

India, the world’s third-biggest oil importer, is grappling with a combination of rising oil prices and falling local currency. Retail prices for gasoline and diesel fuel in India are at record highs and the government has cut its excise tax on fuel to ease some of the pain for consumers.

While there are many factors that could influence global oil prices, Saudi Arabia and other major producers will continue to act to cushion the market from oil price shocks, Falih said at the IHS CERA conference.

"We could have another (round of) unanticipated disruptions that we have seen in Nigeria, Libya, Venezuela. And we have seen sanctions on Iran. These supply disruptions need a shock absorber and the shock absorber to a large extent has been Saudi Arabia," he said.

"We have invested tens of billions of dollars to build spare capacity of 2-3 million barrels per day over years," he added.

Saudi Arabia has the capacity to produce 12 million bpd and is currently producing 10.7 million bpd, Falih said, adding that production will rise further next month.

Falih said oil prices would "easily be at the three digit range had it not been for the extra effort the kingdom has done over many years by investing in capacity and then unleashing that capacity, delivering barrels over last few months, reversing inventory drawdown."

Brent crude prices LCOc1 were trading 80 cents a barrels higher at USD81.23 by 1157 GMT.

Prices hit a four-year high of USD86.74 a barrel earlier this month as the market grapples with the expected loss of Iranian exports due to US sanctions.

Falih said he told India’s Prime Minister Narendra Modi and Petroleum Minister Dharmendra Pradhan that Saudi Arabia is committed to meeting its growing oil demand.

State oil company Saudi Aramco plans to supply Indian buyers with an additional 4 million barrels of crude oil in November, several sources familiar with the matter said last week.

Falih also said Saudi Arabia wants to invest in Indian downstream projects and strategic oil storage.

"Saudi Aramco’s desire is to invest in consumer-facing segments such as retail fuels and petrochemicals, building an integrated downstream business in India as well as our commitment to invest in strategic storage," Falih said.

India plans to build two strategic storage facilities to hold 6.5 million tonnes of oil costing around 110 billion Rupees (USD1.6 billion) through a joint partnership between an Indian state firm and private company.

Falih also said Saudi Basic Industries Corp (SABIC) is keen to invest in India’s chemicals sector.

Saudi Aramco has an initial pact to take a 25 percent stake in the planned 1.2 million bpd West Coast refinery.

As MRC wrote before, in early October 2018, India set up a panel of officials to suggest ways to settle land acquisition issues for a planned USD44 billion refinery on the west coast. Saudi Aramco and ADNOC will hold a 25 percent stake in the planned 1.2 million barrel per day refinery and petrochemical project while a consortium of Indian refiners led by IOC will together hold the remainder.

Yeosu HDPE units to be shut by LG Chem

MOSCOW (MRC) -- LG Chem is in plans to take a No.1 & No. 2 high density polyethylene (HDPE) units off-stream for a maintenance turnaround, as per Apic-online.

A Polymerupdate source in South Korea informed that the company has schedule to start turnaround at the units in end-October 2018. The planned shutdow is expected to remain in force until end-November 2018.

Located at Yeosu in South Korea, the No. 1 & 2 HDPE units have a production capacity of 200,000 mt/year each.

As MRC informed before, Seoul's LG Chem is planning to spend USD2.4-billion to expand its naphtha cracking center (NCC) and polyolefin (PO) plant in Yeosu, South Korea. The project, which will expand the NCC and PO facility by 800,000 t/y each, is expected to be completed in the second half of 2021.

LG Chem Ltd., often referred to as LG Chemical, is the largest Korean chemical company and is headquartered in Seoul, South Korea. According to ICIS report, it is 15th biggest chemical company in the world in 2011. It has eight domestic factories and global network of 29 business locations in 15 countries. LG Chem is a manufacturer, supplier, and exporter of petrochemical goods, IT&E Materials and Energy Solutions.