Unplanned outage reported at PP unit of PetroChina Daqing

MOSCOW (MRC) -- PetroChina DaQing Refining & Chemical has shut its polypropylene (PP) unit for an unplanned maintenance work, as per Apic-online.

A Polymerupdate source in China informed that the company has halted operations at the unit on January 22, 2019. The unit is likely to resume production in end-January, 2019.

Located in Daqing, China, the plant PP unit with production capacity of 300,000 mt/year.

As MRC reported earlier, PetroChina has nearly doubled the amount of Russian crude being processed at its refinery in Dalian, the company’s biggest, since January 2018, as a new supply agreement has come into effect. The Dalian Petrochemical Corp, located in the northeast port city of Dalian, is expected to process 13 million tonnes, or 260,000 bpd of Russian pipeline crude this year, up by about 85 to 90 percent from last year’s level. Dalian has the capacity to process about 410,000 bpd of crude. The increase follows an agreement worked out between the Russian and Chinese governments under which Russia’s top oil producer Rosneft will supply 30 million tonnes of ESPO Blend crude to PetroChina in 2018, or about 600,000 bpd. That would represent an increase of 50 percent over 2017 volumes. The additional oil sent to Dalian is about 120,000 bpd and will make up the bulk of the Russian increases.

PetroChina Company Limited, is a Chinese oil and gas company and is the listed arm of state-owned China National Petroleum Corporation, headquartered in Dongcheng District, Beijing. It is China's biggest oil producer.

HDPE production in Russia grew by 7% in 2018

MOSCOW (MRC)--Production of high density polyethylene (HDPE) in Russia increased by 7% in 2018 year on year and reaching about 960,800 tonnes, with only two producers from four ones increased their output, according to MRC’s ScanPlast report.

December HDPE production in Russia grew to 83,2 00 tonnes, whereas this figure was about 81,700 tonnes a month earlier. All producers increased PE production. Russia’s overall HDPE production reached 960,8 tonnes in January-December 2018, compared to 898,000 tonnes a year earlier. Stavrolen and Gazprom neftekhim Salavat raised their capacity utilisation significantly, whereas Nizhnekamskneftekhim, which for several years has been systematically reducing the production of HDPE in favor of linear polyethylene (LDLP).

Structure of PE production over the reported period looked as follows.

Kazanorgsintez increased HDPE production in December to 47,000 tonnes compared with 45,800 tonnes in November. Overall, the Kazan manufacturer produced 505,100 tonnes of HDPE in 2018, down 0.5%year on year.

Stavrolen’s December HDPE production decreased to 26,900 tonnes from 25,600 tonnes a month earlier. Stavrolen produced 293,600 tonnes of HDPE in January-December 2018, up 26% year on year. Such a high level of output was a result of a lack of prolonged preventive maintenances in 2018.

Gazprom neftekhim Salavat (Gazprom) increased capacity utilization in December, producing about 9,200 tonnes of HDPE in December, compared with 8,200 tonnes in November. The Salavat manufacturer produced over 118,200 tonnes in 2018, up 28% year on year. The high 2018 output was caused as in the case of Stavrolen, by the absence of prolonged preventive maintenances this year.

During the period under review, Nizhnekamskneftekhim only in April-May and the end of September-November produced HDPE. Thus, in less than five months of operation, the Nizhnekamsk manufacturer has produced only 43,900 tonnes of HDPE against 65,600 tonnes a year earlier.


USW and Shell make progress in refinery talks

MOSCOW (MRC) - The United Steelworkers union (USW) has made progress on some issues in contract talks with Shell Oil Co, which is the lead negotiator for U.S. refinery and chemical plant owners, said Hydrocarbonprocessing.

Many tough issues remain to be resolved at the bargaining table, the sources said. The sources declined to identify on which issues progress has been made or which remain to be resolved between the union negotiating on behalf of 30,000 refinery, chemical plant and pipeline workers and Shell Oil, the U.S. arm of Royal Dutch Shell Plc.

The union is seeking a pay increase of 8 percent a year for each year of a three-year agreement that would take effect when the current contract expires on Feb. 1. Shell has not identified any of its proposals in the first negotiations since a strike in 2015 when more than 7,000 workers walked off their jobs for several weeks.

Monday’s message comes after the United Steelworkers said on Friday it had rejected a proposal from Shell for an automatic extension of negotiations when the contract expires.

In addition to the pay increase for workers, who on average earn USD40 an hour after four years on the job, the USW has said it is seeking improved standards to prevent fatigue as well as additional health and safety representatives, including at small plants.

The union also hopes to gain greater protection for pipeline workers traveling to remote locations and performing high-risk work.

Shell has been the lead company in contract talks for U.S. union-represented refinery workers since 1997.

U.S. sanctions on Venezuela would reroute crude, leave refiners short

MOSCOW (MRC) - Potential U.S. sanctions on Venezuela’s crude oil exports would cut off the nation from Gulf Coast refiners that are among its biggest customers, likely forcing it to send more crude to China, India or other Asian countries, traders said, as per Hydrocarbonprocessing.

U.S. refineries that depend on Venezuela’s heavy crude would have even more trouble securing supplies as Canadian and Mexican crudes are often not as discounted and are limited in availability. The United States is considering moves to cripple Venezuela’s oil shipments, which account for nearly all of the country’s exports, in response to the reelection of President Nicolas Maduro that was widely viewed as a sham.

Washington has recognized opposition leader Juan Guaido as Venezuela’s president as protests against Maduro erupted across the country. It is also considering sanctions on oil deliveries, a move it has until now resisted, energy company sources told Reuters.

Venezuela, on average, exported about 500,000 barrels of crude a day to the United States in 2018, according to U.S. Energy Department data. Those shipments fell in November to an estimated 358,000 barrels per day, however, according to a report by Caracas-based consultancy Gas Energy Latin America seen by Reuters. The U.S. share of its exports has declined in recent years with more shipments going to Russia and China.

Those deliveries are being made largely through oil-for-debt repayment structures as output from state-run oil company Petroleos de Venezuela, S.A., known as PDVSA, has slumped to near 70-year lows in a nationwide economic crisis. Venezuela’s output has been cut in half since 2016 to less than 1.2 million bpd, according to figures from OPEC secondary sources.

Shipments to the United States account for about 75 percent of the cash Venezuela gets for crude shipments, according to a Barclays research note published last week. In the wake of sanctions, the country could seek additional deals with Turkey, India or other Asian nations, one trader of Venezuelan crude said. Gas Energy’s report said India was the second-largest importer of Venezuelan crude in November.

“It will be costly for Venezuela but eventually they’ll be able to sell that oil to Asia at a discount. There will be a period in the middle in which they have difficulty selling those barrels,” said Francisco Monaldi, fellow in Latin American Energy Policy at the Baker Institute for Public Policy at Rice University in Houston.

Though the United States produces nearly 12 million barrels of oil a day, complex Gulf Coast refineries need heavier crude grades to produce diesel and other high-margin products, and cannot simply sub in light crude.

Prices of heavier U.S. grades like Mars Sour, an offshore medium U.S. crude, and Heavy Louisiana Sweet crude have risen as buyers scramble for supply. Mars traded at a $6.90 premium to U.S. crude on Wednesday, a five-year high, according to Refinitiv Eikon data, as bidders came into the market to secure supplies through the second quarter, traders said.

“It would make a tight market even tighter. If it happens, it would be an unambiguous headwind for refiners already struggling to find supplies,” said Bob McNally, president of Rapidan Energy Group, an energy consultancy in Bethesda, Maryland.

Traders said the United States may need to sell oil from the U.S. Strategic Petroleum Reserve to cover supply shortfalls as additional shipments are secured via Canada or Mexico. Sanctions could also include U.S. exports of petroleum products to Venezuela, used for blending with Venezuelan heavy crude.

Clariant, ExxonMobil and Renewable Energy Group to advance cellulosic biofuel research

MOSCOW (MRC) -- Clariant, a world leader in specialty chemicals, has announced that it has signed a joint research agreement with ExxonMobil and Renewable Energy Group (REG) to evaluate the potential use of cellulosic sugars from sources such as agricultural waste and residues to produce biofuel, which has the potential to play a role in reducing greenhouse gas emissions, as per Hydrocarbonprocessing.

The new partnership expands a previously announced agreement for joint research between ExxonMobil and REG, in which the companies successfully validated the ability of REG Life Sciences bio-conversion technology to convert sugars from cellulosic biomass into biodiesel through a single-step process.

The new agreement with Clariant allows ExxonMobil and REG to further optimize REG’s bio-conversion process using previously tested and benchmarked cellulosic sugars created through Clariant’s sunliquid process. The companies’ ultimate objective is to combine Clariant’s and REG’s processes into a seamless cellulosic biomass-to-biodiesel technology.

"Over the past three years, our work with REG has led to important advances in genetically improving REG’s proprietary microbes for a beneficial use in facilitating the conversion of cellulosic sugars into biodiesel," said Vijay Swarup, vice president of research and development at ExxonMobil Research and Engineering Company. "Applying Clariant’s expertise and knowledge will help us better understand and advance a key stage in the overall cellulosic conversion process, and hopefully lead to the development of scalable biodiesel technology."

Clariant is a leading company offering integrated technologies and solutions for converting agricultural residues such as wheat straw, rice straw, corn stover and sugar cane bagasse. Clariant‘s sunliquid process features chemical-free pretreatment, the integrated production of feedstock and process-specific enzymes and thus high yields of fermentable C5 and C6 sugars. Clariant will conduct trials at its pre-commercial plant in Straubing, Germany using different types of cellulosic feedstock that will be converted into sugars for conversion by REG and ExxonMobil into high-quality, low-carbon biodiesel.

"We are committed to innovation and R&D, together with a focus on sustainability, as main pillars of Clariant’s strategy. Our sunliquid technology platform is a key outcome of this commitment. We are proud that two strong allies in the biofuels industry have selected Clariant as their partner and are excited to work with them on further leveraging this unique technology for converting cellulosic biomass to fuels and chemicals, including biodiesel," said Christian Kohlpaintner, member of Clariant's executive committee.

REG Life Sciences technology has proven its broad applicability to industries as diverse as flavor and fragrance, specialty chemicals and transportation fuels. Through its partnership with ExxonMobil, REG has developed proprietary technology that utilizes industrial microbes to convert complex cellulosic sugars into low-carbon biodiesel in a one-step fermentation process.

"ExxonMobil has been an exceptional partner in developing this promising technology. We are delighted to be able to add Clariant to the team with its market leading sunliquid technology. We believe we have assembled a dream team for conversion of cellulosic biomass to low carbon biofuels and are excited about the promise of this collaboration,” said Eric Bowen, vice president of REG Life Sciences."

The partners will also work on a conceptual engineering study to validate the feasibility of the integrated process comprising the technologies of all parties.

As MRC informed before, in December 2017, Clariant announced that it had been 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.

We also remind that in October 2017, ExxonMobil Chemical Company commenced production on the first of two new 650,000 tons-per-year high-performance polyethylene (PE) lines at its plastics plant in Mont Belvieu, Texas. The full project, part of the company’s multi-billion dollar expansion project in the Baytown area and ExxonMobil’s broader Growing the Gulf expansion initiative, will increase the plant’s polyethylene capacity by approximately 1.3 million tons per year.

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.

ExxonMobil is the largest non-government owned company in the energy industry and produces about 3% of the world's oil and about 2% of the world's energy.