Milazzo oil refinery shuts crude unit due to bad weather

MOSCOW (MRC) -Italy’s 200,000 barrel per day Milazzo oil refinery shut one of its two crude distillation units as bad weather prevented oil tankers from reaching the port, a spokesman for the refinery said, as per Reuters.

“There are no technical problems,” the spokesman said, adding the unit could be restarted on Friday if the weather improves.

The refinery is operated through a joint venture between Eni and Kuwait Petroleum Italy.

Alpek joint-venture completes acquisition of the Corpus Christi Project

MOSCOW (MRC) – Alpek, S.A.B. de C.V. announced that Corpus Christi Polymers LLC, has successfully completed the previously announced acquisition of the Corpus Christi Project from M&G USA Corp. and its affiliated debtors (“M&G”) for an aggregate amount of U.S. D1.199 billion in cash and other capital contributions, said Hydrocarbonprocessing.

The Corpus Christi Project assets include the integrated PTA-PET plant under construction in Corpus Christi, Texas, certain M&G intellectual property, and a desalination/boiler plant providing water and steam to the site.

When completed, the Corpus Christi plant is expected to have a nominal capacity of 1.1 million and 1.3 million metric tons per year of PET and PTA, respectively.

Following the acquisition of the Corpus Christi Project, and pursuant to the terms of CC Polymers (JV):

• Alpek, Indorama, and Far Eastern will provide resources to CC Polymers to complete the project in the most efficient and cost effective way. A timeline and estimated investment for the project’s completion will be provided at a later stage.

• Alpek, Indorama and Far Eastern will each have the right to receive one third of the capacity of PTA and PET produced at the Corpus Christi Project upon completion. Also, each party will independently procure its raw materials and will independently sell and distribute their corresponding PTA and PET, among other rights and obligations.

Alpek made total contributions of U.S. D266 million in cash and U.S. D133 million non-cash for the closing of the transaction. Alpek’s non-cash contribution is associated to a portion of its secured claim with M&G, arising under the Corpus Christi Capacity Reservation Agreement (“2L Claim”). Alpek will also obtain U.S.D67 million in cash for the remainder of its 2L Claim, subject to certain conditions.

Changes in marine fuel sulfur limits will put temporary upward pressure on diesel margins

MOSCOW (MRC) -- Beginning January 1, 2020, the International Maritime Organization’s (IMO) new regulations limit the sulfur content in marine fuels used by ocean-going vessels to 0.5% by volume, a reduction from the previous limit of 3.5%, said Hydrocarbonprocessing.

The change in fuel specification is expected to put upward pressure on diesel margins and modest upward pressure on crude oil prices in late 2019 and early 2020. EIA’s analysis indicates that the price effects that result from implementing this new standard will be most acute in 2020 and will diminish over time.

Residual oil—the long-chain hydrocarbons remaining after lighter and shorter hydrocarbons such as gasoline and diesel have been separated from crude oil—currently comprises the largest component of marine fuels used by large ocean-going vessels, also known as bunker fuel. Marine vessels account for about 4% of global oil demand.

Removing sulfur from residual oils or upgrading them to more valuable lighter products such as diesel and gasoline can be an expensive and capital-intensive process. Refineries have two options with regard to residual oils: invest in more downstream units to upgrade residual oils into more valuable products or process lighter and sweeter crude oils in order to minimize the production of residual oils and the sulfur content therein.

EIA forecasts that the implementation of the new IMO fuel specification will widen discounts between light-sweet crude oil and heavy-sour crude oil, while also widening the price spreads between high- and low-sulfur petroleum products. In the January STEO forecast, Brent crude oil spot prices increase from an average of $61 per barrel (b) in 2019 to USD65/b in 2020 with about USD2.50/b of this increase being attributable to higher demand for light-sweet crude oils priced off of Brent.

The expected increased premium on low sulfur fuels will likely mean higher diesel fuel refining margins, which EIA forecasts will increase from an average of 43 cents per gallon (gal) in 2018 to 48 cents/gal in 2019 and 65 cents/gal in 2020. Motor gasoline margins averaged 28 cents/gal in 2018 and are expected to increase slightly to an average of 29 cents/gal in 2019 and 33 cents/gal in 2020.

As refiners maximize production of diesel fuel, distillate fuel refinery yields are forecast to increase from an average of 29.5% in 2018 to 29.9 % in 2019 and 31.5% in 2020, while motor gasoline yields fall from an average of 46.9% in 2018 to averages of 46.5% in 2019 and 45.6% in 2020. Residual fuel yields decrease from an average of 2.4% in 2018 to an average of 2.2% in 2020. Refinery runs are expected to increase from an average of 17.2 million barrels per day (b/d) in 2018 to a record level of 17.9 million b/d on average in 2020, so small changes in refinery yields can have large implications for the volumes of petroleum products produced.

Because of the numerous and diverse set of decision makers involved in complying with the regulations and the global nature of the regulation, significant uncertainty exists regarding the forecast outcomes of the regulation. EIA’s This Week in Petroleum article published tomorrow afternoon will go into more detail on EIA’s outlook for how the new sulfur specifications will affect crude oil and petroleum product markets through the end of 2020. On Thursday, January 24, EIA will release its Annual Energy Outlook 2019 with projections through 2050, which will reflect the long-term implications of the new sulfur requirements.

Clariant and Saudi Kayan to evaluate alkoxylates joint venture

MOSCOW (MRC) -- Clariant, a world leader in specialty chemicals, has announced that it has signed a Memorandum of Understanding (MoU) with Saudi Kayan, a Saudi joint stock company leading in the field of chemicals, polymers and specialty products, as per the company's press release.

As defined by the MoU, both parties have agreed to evaluate the formation of a joint venture with the aim of establishing a manufacturing facility for alkoxylates. This facility is planned to combine Clariant’s alkoxylates production technology with Saudi Kayan’s raw materials and would therefore be based within Saudi Kayan’s Petrochemical Company complex in Jubail Industrial City, Saudi Arabia.

Alkoxylates are a downstream product of ethylene oxide and are used in a variety of specialty applications in Clariant’s home care, personal care and industrial applications segments.

Saudi Kayan is an affiliate of Saudi Basic Industries Corporation (SABIC). SABIC is also Clariant’s largest strategic anchor shareholder with a 24.99% stake. This MoU between Clariant and Saudi Kayan is a part of the further evaluation of additional collaborative businesses opportunities between Clariant and SABIC, as previously communicated by both parties.

As MRC wrote before, in March 2017, Clariant was awarded a contract by Dongguan Grand Resource Science & Technology Co. Ltd. to develop a new propane dehydrogenation unit in cooperation with CB&I. The project includes the license and engineering design of the unit, which is to be built in Dongguan City, Guangdong Province, China. The Dongguan plant will be one of the largest single-train dehydrogenation units in the world. Clariant's technology partner CB&I will base the plant's design on its Catofin catalytic dehydrogenation technology, which uses Clariant's tailor-made Catofin catalyst and Heat Generating Material (HGM).

Clariant AG is a Swiss chemical company and a world leader in the production of specialty chemicals for the textile, printing, mining and metallurgical industries. It is engaged in processing crude oil products in pigments, plastics and paints.

Honeywell technology selected for largest petrochemicals project in China

MOSCOW (MRC) -- Honeywell has announced that Zhejiang Petrochemical Co. Ltd. (ZPC) will use a range of process technology from Honeywell UOP, the world's leading licensor of refining and petrochemical process technology, for the second phase of an integrated refining and petrochemical complex in Zhoushan, Zhejiang Province, as per Hydrocarbonprocessing.

The complex is one of several new large industrial sites that are part of China's current national economic development plan.

In the first phase of the project announced in 2017, ZPC selected Honeywell UOP technologies for hydroprocessing and heavy oil upgrading, and to make aromatics for plastic resins, films and fibers that are the basis for millions of products.

For this second phase of the project, Honeywell UOP will supply a wide range of technology licenses, engineering design, key equipment, and state-of-the-art catalysts and adsorbents, more than doubling the plant's aromatics capacity. In addition, the Honeywell Experion Process Knowledge System will provide process controls and automation systems for the complex.

"This second phase of the complex by itself will process 20 million tons per year of crude oil and produce another six million tons per year of aromatics when completed," said Bryan Glover, vice president and general manager, Process Technology and Equipment, at Honeywell UOP. "It will be the largest crude-to-chemicals complex in the world, with more than 50 percent of the crude converting to petrochemicals. Due to its sheer scale, the complex will help China move closer to achieving self-sufficiency in paraxylene while serving as a major new source of propylene, jet fuel and more."

The second phase of the project will include:

- a two-train LD Parex aromatics complex - including the UOP Sulfolane, Isomar and Tatoray processes - for the production of 4.8 million metric tons per year of paraxylene, a primary ingredient in plastics;
- a refining section with three Honeywell UOP Unicracking™ process units to convert vacuum gas oil and distillate into petrochemical feedstock,
- two Continuous Catalyst Regeneration (CCR) Platforming units to produce aromatics and blend stocks for making high-octane fuels, and a reverse Butamer unit to produce normal butane.

Honeywell Experion Distributed Control Systems designed and configured especially for Honeywell UOP processes
Honeywell UOP is the world's leading licensor of process technology for the production of aromatics. As of 2018, UOP licensed more than 100 complexes and more than 700 individual process units for the production of aromatics, including more than 300 CCR Platforming process units, 158 Sulfolane units, 85 Butamer units, 80 Isomar units, 58 Tatoray units, 100 Parex units worldwide.

As MRC wrote before, BASF has opened a state-of-the-art control room equipped with Honeywell Experion technology at its waste incineration complex in Ludwigshafen, Germany. The control room was officially inaugurated on November 28, 2017.