S.Korea S-Oil sees stronger refining margins on diesel demand

MOSCOW (MRC) - S-Oil Corp, South Korea’s third-biggest refiner by capacity, said that refining margins are expected to improve in 2019, boosted by growing diesel demand, said Reuters.

The refiner, whose main shareholder is Saudi Aramco, said in an earnings statement that global supply increase is limited as new crude distillation units (CDUs) are expected to come online in the fourth quarter of the year.

“The margin will gain notable momentum in the second half through soaring demand for diesel ahead of International Marine Organization’s (IMO) 2020 sulfur cap regulation,” according to the refiner’s earnings statement.

Asia’s benchmark Singapore refining margins DUB-SIN-REF, or profits of processing a barrel of Dubai crude into refined products, are now at their lowest levels since August 2013 of USD1.53 a barrel, dragged down by weak gasoline cracks on excess supplies.

Gasoline cracks have been under pressure of slowing fuel consumption and increasing global gasoline supplies, with Asian gasoline margins in the Singapore GL92-SIN-CRK sitting around at minus $2 per barrel on Monday, the lowest level since 2011.

Low refining margins weighed on the company’s fourth-quarter business. The company posted an operating loss of 292 billion won (USD261.37 million) in the fourth quarter ended December, compared with an operating profit of 369 billion won from a year earlier.

Ko Gwang-cheol, head of the company’s investor relations department, said on a call with analysts that refining margins were expected to rebound in 2019 as “supply glut will be eased,” on the back of limited supply increase.

The refiner, which has 669,000 bpd refining capacity, said it plans to shut down a 250,000 barrel per day (bpd) No.3 crude distillation unit (CDU) and 89,000-bpd condensate fractionation unit (CFU) in 2019 for maintenance.

The refiner’s No.3 CDU and CFU maintenance will take place in March for 30 days, Ko said, adding that maintenance for its 73,000-bpd gasoline-making residue fluidized catalytic cracker (RFCC) is scheduled in the second half of the year.

Shares of S-Oil ended 0.4 percent weaker on Monday, while the broader market was 0.02 percent lower.
MRC

Saudi Aramco in deal with Axens, TechnipFMC on crude to chemicals technology

MOSCOW (MRC) -- Saudi Aramco, through its wholly-owned subsidiary Saudi Aramco Technologies, signed a Joint Development and Collaboration Agreement (JDCA) with Axens and TechnipFMC to accelerate the development and commercialization of the company’s Catalytic Crude to Chemicals (CC2C™) technology, said Hydrocarbonprocessing.

CC2C™ technology has the potential to significantly increase the efficiency and yield of chemicals production, converting more than 60% of a barrel of crude oil into chemicals. The agreement aims to achieve commercial readiness for the CC2C™ technology by 2021.

The CC2C™ technology converts crude oil directly to chemicals which will eliminate several energy-intensive processes and create high-value product streams that produce larger quantities of chemicals while generating less emissions.

“This is another milestone in the company’s effort to develop groundbreaking technology that maximizes the value of each barrel of crude oil,” said Amin H. Nasser, Chief Executive Officer of Saudi Aramco. “Oil will become increasingly more important as a feedstock in the production of petrochemicals. Saudi Aramco is leveraging its position as the world’s oil powerhouse to capitalize on the strong growth potential for chemicals globally. Through the strategic partnership with Axens and TechnipFMC, we advance cutting-edge technology to meet the increasing demand for petrochemicals, and support our efforts to build a global chemicals business.”

Jean Sentenac, Axens’s Chairman and CEO, said: “It is an honor and a pleasure to partner with Saudi Aramco and TechnipFMC to develop technology for the future. According to the IEA, an additional 4 Mbpd of crude oil will have to be converted into petrochemicals by 2035 to meet the demand. This is a unique opportunity to create this next generation technology that will be of great interest to the market for converting crude oil into petrochemicals.”

Stan Knez, President, Process Technology at TechnipFMC, said: “TechnipFMC’s solid position in FCC technologies, as well as down flow catalytic cracking experience, will provide a strong foundation for this joint development. The CC2C™ technology will be an innovative approach for producing a full range of petrochemicals using crude oil as the feedstock. We are pleased to be teaming with Saudi Aramco and Axens in the effort to commercialize this process quickly and expand our technology portfolio.”

The innovative CC2C™ technology builds on the success of the proven high-severity fluid catalytic cracking (HS-FCC™) technology, which Saudi Aramco co-developed with King Fahd University of Petroleum & Minerals (KFUPM) and JXTG Nippon Oil & Energy, to directly convert crude oil to high value chemicals.

Saudi Aramco, Axens, and TechnipFMC are all members of the HS-FCC™ technology Alliance. Axens and TechnipFMC are also the exclusive licensors of HS-FCC™ technology and two of the leading providers of technology and infrastructure for the energy industry.
MRC

BASF is combining digitalization and IT expertise in a single division

MOSCOW (MRC) -- BASF, the wold's petrochemical major, is combining digitalization and IT expertise in a single division, as per the company's press release.

Digitalization is a key element of BASF’s new corporate strategy. The company has been addressing this topic for many years with great success.

Since 2015, cross-divisional teams have explored the opportunities for the intelligent use of data and digital technologies, tested them in pilot projects and rolled them out in the company. Work in research and development has also been supported by digital solutions, with the Quriosity supercomputer being a main driver in this area. In order to pool all these activities and bring the experts from digitalization and IT closer together, BASF established the new Digitalization & Information Services functional division on January 1, 2019.

The division is headed by Christoph Wegner (49), who will also serve as Chief Digital Officer (CDO) at BASF.

"Over the last few years, we have shown how to implement digitalization in a chemical company," Wegner explained. "Now, the new organization will help lend more assertiveness to the topic. We will support the digital activities at BASF and drive them forward more quickly than before in collaboration with the colleagues from the different business units, functions and research and development units. We are pursuing a clear goal with this approach: We want to introduce new digital solutions which provide our customers with clear added value."

As MRC informed before, in December 2016, AkzoNobel finalized the acquisition of BASF’s global Industrial Coatings business, which supplies a range of products for industries including construction, domestic appliances, wind energy and commercial transport, strengthening its position as the global number one supplier in coil coatings.

BASF is the leading chemical company. It produces a wide range of chemicals, for example solvents, amines, resins, glues, electronic-grade chemicals, industrial gases, basic petrochemicals and inorganic chemicals. The most important customers for this segment are the pharmaceutical, construction, textile and automotive industries.
MRC

PET unit to be brought on-stream by Jiangyin Chengxing

MOSCOW (MRC) -- Jiangyin Chengxing Industrial Groups is likely to restart a polyethylene terephthalate (PET) plant, as per Apic-online.

A Polymerupdate source in China informed that the plant is expected to be brought on-stream following a maintenance turnaround in mid-February, 2019. The plant was shut on December 27, 2018 for maintenance.

Located at Jiangyin, Jiangsu province in China, the plant has a production capacity of 600,000 mt/year.

We remind that, as MRC reported earlier, Indorama shut its PET plant for a maintenance turnaround in November 2018 for a period of around two weeks. The exact date of the shutdown could not be ascertained. Located at Lop Buri, Thailand, the PET plant has a production capacity of 180,000 mt/year.
MRC

Chevron to buy Texas refinery from Brazil's Petrobras

MOSCOW (MRC) - Chevron Corp has agreed to buy a Texas oil refinery with a troubled past and space to handle a coming flow of shale from its West Texas operations, two sources familiar with negotiations said Hydrocarbonprocessing.

The U.S. oil major is expected to disclose the deal to acquire a 112,000 barrel-per-day (bpd) refinery in Pasadena, Texas, this quarter, the sources said. The plant is operated by Pasadena Refining System Inc, a Texas-based unit of Brazil’s state-run oil firm Petroleo Brasileiro SA.

Chevron spokesman Braden Reddall declined to comment on Monday. Carlos Monteiro, a spokesman for Petrobras in Rio de Janeiro, said any communications on an agreement would be disclosed to the market.

A deeply indebted Petrobras put the plant on the market in early 2018 after sinking more than USD1.18 billion into it since it acquired its first stake in the operation in 2006.

Chevron and Petrobras’ negotiations were delayed in part by Brazil’s presidential election and pipeline operator Kinder Morgan Inc dropping out of talks to operate a terminal at the site as a joint venture, the sources said.

Kinder Morgan spokeswoman Lexey Long declined to comment.

Petrobras has been looking to divest $21 billion in assets to reduce its debt load amid a series of corruption scandals including allegations bribes were paid to executives as a result of the 2006 purchase of the Pasadena plant.

The rapid expansion of U.S. shale production from the Permian Basin of West Texas and New Mexico has stirred demand for new U.S. refining capacity and crude-export facilities. Oil output has soared to an estimated 3.8 million bpd this month, from 1.48 million five years ago.

Chevron, which reported a 150,000 bpd increase in shale production in the third quarter, has said it wants a second Gulf Coast facility to handle that crude and better supply its retail gasoline network. The plant produces mostly gasoline and distillates such as diesel.

The refinery covers 192 acres on the Houston Ship Channel and the purchase includes another 274 acres of terminal and other cleared land available for expansion. The site has storage tanks that can hold 5.1 million barrels and a marine terminal for exports.

The plant’s 300-strong workforce is represented by the United Steelworkers union, and would become Chevron employees once the deal is completed.

There are several small U.S. refineries on the market. Husky Energy Inc earlier this month began marketing a 12,000-bpd refinery in Prince George, British Columbia.

Royal Dutch Shell recently began accepting bids for its 75,000-bpd Sarnia, Ontario, refinery, according to people familiar with the matter. Delta Air Lines Inc last September began marketing a stake in its 185,000-bpd Trainer, Pennsylvania, refinery.

In November, CVR Energy Inc said it may buy out the public holders of its refining unit, CVR Refining GP, which operates refineries in Kansas and Oklahoma. That decision would unwind a partnership making a future sale easier.
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