McDermott lands EPC contract for delayed coker unit for LUKOIL refinery

MOSCOW (MRC) -- McDermott International, Inc. announced it has been awarded a significant contract by LUKOIL NizhegorodNefteorgSyntez, a subsidiary of JSC LUKOIL, for the engineering, procurement and construction (EPC) of the Delayed Coker Unit for the Deep Conversion Complex planned to be built in Kstovo, Russia, as per Hydrocarbonprocessing.

This award follows a 2016 award to Chevron Lummus Global (CLG), McDermott's joint venture with Chevron, for its delayed coking technology, and highlights the significance of pull through opportunities that McDermott's Lummus Technology business offers other parts of the organization. In October 2017, McDermott was awarded a detailed engineering, procurement and long lead supply award contract for the project.

"Our ability to provide integrated, end-to-end solutions, from our industry-leading refining technology to a highly efficient project delivery model, has been a deciding factor in securing this win," said Tareq Kawash, McDermott's Senior Vice President for Europe, Africa, Russia and Caspian. "This is also significant for McDermott because it is the company's first downstream EPC project in the Russian Federation."

The contract will be reflected in McDermott's third quarter 2018 backlog.

We remind that, as MRC reported earlier, in February 2017, The Antimonopoly Committee of Ukraine gave permission for the purchase of a 75% stake in Lukoil Chemical B.V. (Netherlands), which owns 100% of LLC "Karpatneftekhim" (Kalush, Ivano-Frankivsk region).

Lukoil is one of the leading vertically integrated oil company in Russia. The main activities of the company include operations for exploration and production of oil and gas, production and sale of petroleum products. Lukoil is the second largest private oil Company worldwide by proven hydrocarbon reserves. In Lukoil structure includes one of the largest Russian and Ukrainian petrochemical industries Stavrolen and Karpatneftekhim.
MRC

Akzo Nobel's quarterly core profit rises 8%, revenue slips

MOSCOW (MRC) -- Dutch paints and coatings maker Akzo Nobel reported weaker-than-expected revenues , said CNBC.

The company reported a net revenue of 2.33 billion euros (USD2.69 billion), missing Reuters expectations of 2.48 billion euros.

Meanwhile, Akzo Nobel's third-quarter core profit rose 8 percent to 243 million euros, underpinned by higher prices and costs savings.

"I'm encouraged by what we achieved, despite challenging market conditions, including higher raw material costs and adverse foreign currencies," Thierry Vanlancker, CEO of Akzo Nobel, said in a statement.

"Completing the sale of our Specialty Chemicals business was a key milestone in the long and proud history of AkzoNobel as we take the next step in our transformation," he added.

Earlier this year, Akzo Nobel sold its Specialty Chemicals division for 10 billion euros to Carlyle Group after it rejected an unwanted takeover offer from U.S. rival PPG Industries in 2017.

In September 2018, Akzo Nobel acquired Xylazel S.A., a 100% subsidiary of Pharma Mar S.A. With this acquisition AkzoNobel strengthens its business and becomes a leader in the decorative paints market in Spain. It also means the company is now the leader in the country's woodcare segment and has strengthened its position in metal care. The transaction marks the 45-year anniversary of AkzoNobel on the Spanish market.

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

Covestro to build new world-scale MDI plant in Texas

MOSCOW (MRC) -- German polymer supplier Covestro AG has announced plans to build a new production unit for methylene diphenyl diisocyanate (MDI) at its existing site in Baytown, Texas, said Canplastics.

The project, which is expected to cost approximately USD1.72 billion, is the largest single investment in the company’s history, Covestro said in a statement.

The new unit will have total capacity of 500 kilotons of MDI per year. It’s expected to start production in 2024, at which time Covestro will close an older, less efficient MDI unit with production capacity of 90 kilotons.

MDI is used in the manufacture of polyurethanes.

"Demand for innovative MDI materials will continue to grow for the foreseeable future and likewise promises attractive capacity utilization rates,” Covestro CEO Markus Steilemann said in the statement. “We have already announced a significant increase in capital expenditures; now it’s time to put it into action. With the new MDI train in Baytown, we will further strengthen our global leading position in polyurethanes."

The global MDI market is expected to grow by about five per cent per year, Covestro said, with key market drivers including the substitution of materials that do not perform as well and do not have a good sustainability profile as well as global megatrends, such as increasing demand for energy-efficient insulation solutions.

Covestro is the former Bayer MaterialScience.
MRC

Asia oil deficit to widen by 2025 - Total

MOSCOW (MRC) - Asia’s oil deficit will widen to 35 million barrels per day (bpd) by 2025, up about 30 percent from the current 27 million bpd, amplifying global trade flow imbalances, a senior executive at French oil and energy group Total said, as per Hydrocarbonprocessing.

At the same time, Europe’s imports will be stable at 10 million bpd, while exports from North America and the Middle East will increase, said Thomas Waymel, the company’s president of trading and shipping.

The United States will export shale oil, but its refineries will continue to import medium and heavy sour grades, Waymel said during the Asia Pacific Petroleum Conference (APPEC) in Singapore.

Regulatory changes like IMO 2020, which will cap sulphur content in ship fuel, will be another driver for growth and changing trade flows, he said.

"The fuel oil flows will be reduced. At the same time, the shipping industry will need distillates ... so Europe and Singapore will attract more distillates," Waymel said.

New trade flows might emerge for high sulphur fuel oil either in coker capacity or power plants switching back from coal or gas to high sulphur fuel oil.

Light sweet crude will be more in demand, while heavy sour grades will need to be processed by complex refineries, he said.

"Regulatory changes will dramatically affect an increase in flows of both crude and products. It should also have positive impact on freight rates which is finally good news for ship owners," he said.
MRC

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.
MRC