PE units taken off-stream by FREP

MOSCOW (MRC) -- Fujian Refining & Petrochemical (FREP) has shut its No. 1 & 2 polyethylene (PE) units for a maintenance turnaround, according to Apic-online.

A Polymerupdate source in China informed that the company has commenced turnaround at the units on October 28-30, 2018. The units are expected to remain off-line until end-December, 2018.

Located in Fujian province, China, the No.1 & 2 units have a production capacity of 500,000 mt/year each.

As MRC informed previously, FREP restarted its No.3 polypropylene (PP) plant in Fujian on September 23, following an unplanned outage. The plant was taken off-line on September 18, 2018 owing to a technical issues. Located in Fujian province, China, the No. 3 PP plant has a production capacity of 220,000 mt/year.

The company also operates other two PP plants at the same location with production capacity of 120,000 mt/year and 360,000 mt/year.

FREP is a joint venture between Fujian Petrochemical Co. (50%), ExxonMobil China Petroleum and Petrochemical Co. (25%) and Saudi Aramco Sino Co. (25%). Fujian Petrochemical is a 50:50 JV between Sinopec and the Fujian provincial government.
MRC

MOSCOW (MRC) - The U.S. Environmental Protection Agency will announce plans to propose new rules to significantly decrease emissions of smog-forming nitrogen oxide from diesel-powered heavy-duty trucks, an agency official said, as per Hydrocarbonprocessing.

Industry groups and state environmental officials have urged the EPA to set new nationwide rules as the state of California has been moving forward with plans to set new state emissions limits. California also wants nationwide rules, in part because more than half of all trucks delivering goods in the state are registered in other states.

The EPA said in a statement it had scheduled a formal announcement on Tuesday with industry executives and state environmental officials regarding its "Cleaner Trucks Initiative," but did not immediately disclose details. The effort to impose a new regulatory limit by the EPA comes as the Trump administration has generally touted its efforts to eliminate regulations. But the effort on nitrogen oxide (NOx) is backed by industry, which wants to avoid a patchwork of federal and state standards, the official said.

The official asked not to be identified because the announcement was still pending. In December 2016, the Obama-led EPA said in response to petitions to impose new standards that it acknowledged "a need for additional NOx reductions from on-highway heavy-duty engines, particularly in areas of the country with elevated levels of air pollution" and said it planned to propose new rules that could begin in the 2024 model year.

Local and state air quality and other agencies including New York City, New Hampshire, Rhode Island, Los Angeles, Washington State had petitioned for the rules. Another administration official said Monday the new proposed emissions rules may not be written and announced until 2020.

Nitrogen oxide emissions are linked to significant health impacts and can exacerbate asthma attacks, the EPA has said. The current heavy-duty truck rules for NOx were adopted in 2000 and took effect over the following decade.

In the aftermath of Volkswagen AG's light-duty diesel emissions scandal, in which the German automaker admitted to secretly using software to evade emissions rules, the EPA has taken steps to insure that diesel cars and SUVs are meeting emissions requirements in on-road use.

The new NOx heavy-duty truck rules may also include new tests or other regulatory steps to ensure that vehicles and their engines are complying during real-world driving, the official said.
MRC

MOSCOW (MRC) - Spain plans to propose a ban on sales of petrol, diesel and hybrid cars from 2040, government sources said, joining a string of countries taking aim at polluting vehicles to help cut greenhouse gas emissions, as per Hydrocarbonprocessing.

The plan is included in a draft document for a law on climate change which Socialist Prime Minister Pedro Sanchez's government hopes to present to parliament by the end of the year.

"Some of the most important necessary changes affect transport," the document said. "From 2040, the registration and sale in Spain of passenger cars and light commercial vehicles that directly emit carbon dioxide will not be permitted."

Once finalized, the climate change law will require approval by parliament, where Sanchez holds less than a quarter of the seats. Sanchez has struggled to find support for any major proposals, including next year's budget, in the face of opposition led by the conservative People's Party which dominates the upper and lower houses.

Britain and France have already pledged to ban petrol and diesel cars from 2040, which will mean big changes for the global car industry and put a squeeze on oil producers' profits.

Some British politicians have said London should bring the ban forward to 2032, a more ambitious deadline already adopted by Scotland, while Denmark wants to make the move by 2030. Underlining his green ambitions, Sanchez brought environment and energy together into one ministry, which has since passed measures aimed at reducing electricity prices and favors promoting renewable energy.

Under the current climate change plan, Madrid aims to cut greenhouse gas emissions to at least 20 percent below 1990 levels by 2030. The European Union as a whole aims to reduce emissions by at least 40 percent by 2030.
MRC

MOSCOW (MRC) - Bakken crude prices are set to weaken from already low levels in coming months, with the frigid winter in North Dakota likely to disrupt rail loadings and worsen bottlenecks as production soars, traders and executives said Reuters.

U.S. oil producers ramped up production in the nation’s third-largest oilpatch, boosting crude output to a record 1.3 million barrels per day (bpd) in October, overwhelming pipelines and rail cars. The region’s pipeline capacity is just 1.25 million bpd, per market intelligence firm Genscape, forcing producers in North Dakota to rely on less efficient rail, which could face difficulties operating in the winter. In addition, nearby Canadian producers also grappling with bottlenecks are pushing more oil into the United States, worsening the constraints.

Bakken crude traded at a record $20-per-barrel discount to U.S. crude futures WTC-BAK last week, and last traded at a USD13.50-per-barrel discount on Friday. Refinery maintenance exacerbated the discounts but as work wraps up, prices could find some support, company executives said.

Discounts on Bakken oil are nothing new, due to capacity constraints that forced refiners to rely on rail. The startup of Energy Transfer’s Dakota Access pipeline in 2017 changed that, but record production is straining capacity again.

“That basin is flush with barrels and there’s no way out,” Rick Hessling, senior vice president at U.S. refiner Marathon Petroleum Corp, said in an earnings call last week, adding that winter will make rail loadings more difficult. “We kind of see that as a perfect storm. Dakota Access pipeline was full in October, according to Genscape’s latest data, while one of the other major lines had an 85 percent utilization rate.

North Dakota’s crude production typically is not affected enough to lift prices the winter, but rail operations face severe challenges in the frigid weather, said John Zanner, crude analyst at RBN Energy.

“Winter weather makes crude-by-rail operations much more difficult. You have stuff freeze up, especially in North Dakota,” Zanner said. Energy Transfer LP (ET.N) plans to expand the Dakota Access pipeline system to as much as 570,000 bpd from about 525,000 bpd currently.

New pipeline and refining projects have been announced, but takeaway capacity will remain tight in the near-term as they get completed, analysts said. That is more apparent after a judge halted construction on the Keystone XL pipeline from Canada, potentially adding to a supply glut.

Several Canadian producers have already announced production cuts due to bottlenecks, but that is not enough. “We’re going to need curtailment and higher rail capacity,” one trader at a merchant said.
MRC

MOSCOW (MRC) -- The Abu Dhabi National Oil Company (ADNOC) has agreed, in principle, to extend to 2040 its gas supply agreement with ADNOC LNG, in coordination with ADNOC LNG’s joint venture partners, Mitsui, BP and Total, as per Hydrocarbonprocessing.

The new gas supply agreement is scheduled to take effect from April 1, 2019, replacing an existing agreement, due to expire on March 31, 2019.

The extension announcement follows the Abu Dhabi’s Supreme Petroleum Council (SPC) approval of ADNOC’s new integrated gas strategy that will sustain LNG production to 2040 and allow ADNOC to seize incremental LNG and gas-to-chemicals growth opportunities where they arise from the UAE’s dynamic demand/supply position and evolving energy mix.

Abdulaziz Alhajri, Director of ADNOC’s Downstream Directorate, said: "The LNG market is projected to grow at a robust pace, fueled by demand from Asia and developing countries who want access to a clean and affordable source of energy. With over four decades of experience in the LNG market, ADNOC LNG is well-positioned to leverage this opportunity and is now modernizing its commercial approach to transition from a single-customer to a multi-customer business that includes a number of global utilities as well as portfolio players and traders."

As it moves to diversify its customer portfolio, ADNOC LNG has signed seven term contracts for the supply of more than 4.2 million tons per annum (mmtpa) of liquefied natural gas (LNG).

The contracts, which cover the supply of LNG on a mid-term basis starting April 2019, have been signed with various international well-established LNG buyers, including Japan’s JERA Co., which announced, in August, it plans to purchase up to 8 cargoes per annum of LNG from ADNOC LNG, for a period of three years, starting in April 2019.

Meanwhile, discussions continue with other potential customers as ADNOC seeks to capitalize on the forecasted mid- to long-term demand for energy, particularly in the growth markets of Asia.

ADNOC was the first LNG exporter in the Middle East and has been a reliable supplier of gas to global markets for over 40 years. Abu Dhabi’s strategic geographical location gives ADNOC advantaged access to growth markets in the Middle East and Asia, which are expected to drive significant gas demand in the near- and long-term future. Historically, ADNOC has sold the majority of its LNG to Japanese customers, through ADNOC LNG.

LNG is the fastest-growing hydrocarbon with a growth rate of 4 percent per annum, twice that of natural gas. Global LNG demand is expected to exceed 500 million tons per annum by 2035, up from nearly 300 million tons per annum in 2017.

As MRC reported earlier, in November 2018, Saudi Aramco and ADNOC signed a framework agreement to explore opportunities for collaboration in the Natural Gas and Liquefied Natural Gas (LNG) sector. The cooperation brings together two of the world’s leading energy producers from the Arabian Gulf to jointly work together in an area of strategic importance for both companies as they seek to boost revenues from the natural gas and LNG business segments.
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