Japanese refiners load first Iran oil cargo since US sanctions

MOSCOW (MRC) - Japanese refiners have loaded Iranian oil onto a tanker, resuming imports after halting purchases because of sanctions by the United States, a spokesman for a Japanese refinery and an Iranian official said Reuters.

Japan is the last of the four biggest Iranian oil buyers in Asia to resume imports after receiving a waiver from U.S. sanctions on crude imports that started in November. China and India maintained their imports after November while South Korea halted imports for four months, resuming them over the weekend.

Iran is the fourth-largest oil producer among the members of the Organization of the Petroleum Exporting Countries. "After China, South Korea, India and Turkey, Japan also started the process of importing Iranian oil," Abdolnaser Hemmati, the governor of the Central Bank of Iran, said according to the state news agency IRNA.

Japanese refiner Fuji Oil Co lifted a cargo of Iranian crude oil over the weekend, a company spokesman said. The very large crude carrier (VLCC) Kisogawa loaded about 2 million barrels of Iranian oil on Sunday and is expected to reach Japan on Feb. 9, according to the Fuji spokesman and Refinitiv Eikon data. Fuji Oil owns about half of the oil onboard, while Showa Shell Sekiyu KK owns the remainder, the Fuji spokesman said.

"It took a while for us to resume imports of Iranian oil," he said, adding that the biggest hurdle was to get banks to agree to handle payments to Iran. A Showa Shell spokesman declined to comment on specific deals, adding that it has an option to resume Iran oil imports if all conditions are met.

Still, the Iranian exports to Japan, the world's fourth-biggest oil import, may be short-lived as two buyers based in Japan said they may not be able to continue after annual tanker insurance backed by the Japanese government expires in March.

"We have already bought oil in case we can't take Iranian cargoes for March loading," one of the buyers said. Iran's oil exports have fallen sharply since U.S. President Donald Trump said in May 2018 the United States would withdraw from a pact curtailing Iran's disputed nuclear programme and reimpose sanctions on Tehran.

Japan stopped oil imports from Iran in November when the sanctions came into effect. Iranian oil accounted for 5.3 percent of Japan's total crude imports in 2017.

However, waivers were granted to Iran's biggest oil clients - Japan, China, India, South Korea, Taiwan, Italy, Greece and Turkey - which allow them to import some oil for another 180 days. On Saturday, South Korea received its first Iranian oil cargo in four months.
MRC

MOSCOW (MRC) -- Hanwha Total Petrochemical is in plans to shut its Deasan cracker for maintenance and debottlenecking exercise, as per Apic-online.

A Polymerupdate source in South Korea informed that the company is expected to start maintenance along with the capacity expansion at the cracker in end-March, 2019. The cracker is expected to complete turnaround and expansion process in 40-45 days.

Following the expansion, the ethylene capacity will be increased by 310,000 MT and propylene capacity will be increased by 120,000 MT.

Located at Daesan in South Korea, currently the cracker has an ethylene capacity of 1.09 million mt/year and propylene capacity of 640,000 mt/year.

As MRC reported earlier, Hanwha Total Petrochemical is investing approximately USD500m to further expand its Daesan integrated refining and petrochemical complex in South Korea. The company operates as a 50/50 joint venture (JV) between Total and Hanwha. The planned investment is expected to increase annual polypropylene capacity by almost 60% to 1.1 million tonnes and ethylene capacity by 10% to 1.5 million tonnes by the end of 2020.
MRC

MOSCOW (MRC) -- Karpatneftekhim (Kalush, Ivano-Frankivsk region), Ukraine's largest petrochemical plant,
stopped the production of high density polyethylene (HDPE) due to a fire on the olefin complex. The polyvinyl chloride (PVC) production continues, according to ICIS-MRC Price Report.

The company's customers said the Ukrainian producer, after a fire in the ethylene production pipeline, was forced to almost immediately suspend the production of HDPE. While the production of PVC continues, but with reduced capacity utilisation. The exact dates of the outage have not been announced yet.

Further operation mode of Karpatneftekhim will be determined not earlier than next week, when the audit of the effects of the fire on the equipment will be completed. As previously reported, a fire broke out on the evening of 12 January.

Pyrogaz was burning in the open area of the plant; a 15-meter column of flame was visible above the plant. Fire at the Karpatneftekhim plant was localized on 12 Januarfy at 23.48.

Karpatneftekhim is one of the largest enterprises of Ukraine's petrochemical complex. Currently, the plant can produce annually 300,000 tonnes of PVC, 200,000 tonnes of caustic soda, about 180,000 tonnes of chlorine, as well as 250,000 tonnes of ethylene and 100,000 tonnes of polyethylene.
MRC

MOSCOW (MRC) - Ecuador’s President Lenin Moreno asked the country’s prosecutor to probe USD4.9 billion (3.9 billion pounds) of oil-related infrastructure projects, alleging that the OPEC nation’s money was looted during the decade-long tenure of his leftist predecessor, said Reuters.

Moreno said there were massive cost overruns, operational failings and non-transparent bidding processes at the five projects built during Rafael Correa’s presidency, including a USD2.2 billion upgrade to the Esmeraldas refinery."Nearly $5 billion of Ecuadoreans’ money, when it should have cost half that,” Moreno said in a national broadcast. “This theft of public funds cannot go unpunished."

Moreno took office in May 2017 after earning Correa’s endorsement during the campaign, but the two later fell out over Moreno’s market-friendly policies.

Last year, Moreno asked a United Nations unit to conduct a technical and economic review of the five projects undertaken by the previous administration.

Correa has denied allegations of corruption in his administration, calling them a political smear campaign. He lives in Belgium and has not returned to Ecuador since a judge last year ordered that he be jailed as part of a case involving the kidnapping of a lawmaker, in which he denies involvement.

The other projects Moreno mentioned included a natural gas liquefaction plant, a seaport, a fuel distribution centre, a pipeline and a partly-built refinery that has run out of financing after receiving some USD1.5 billion in investment.
mrcplast.com

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.
MRC