Saudi Aramco signs agreement to establish engineering, procurement, construction, and installation facility

MOSCOW (MRC) -- Saudi Aramco has signed a land lease agreement with McDermott Arabia Company, Ltd., a subsidiary of McDermott International, Inc. to grant McDermott a lease to establish a fabrication facility located within the King Salman International Complex for Maritime Industries in Ras Al-Khair, Saudi Arabia. This is pursuant to a Memorandum of Understanding signed between Saudi Aramco and McDermott, as per Hydrocarbonprocessing.

The new facility will be used for large scale fabrication of offshore platforms and onshore/offshore modules. To further enhance project execution capabilities in Saudi Arabia, McDermott will also expand its in-country engineering and procurement offices, as well as establish a new marine base in the Eastern Province to support the installation of offshore platforms, subsea pipelines and cables, skids, and associated structures and assemblies.

“This facility will serve as a major Engineering, Procurement, Construction, and Installation (EPCI) hub for not only the Kingdom, but for the GCC region,” said Ahmad Al Sa'adi, Saudi Aramco Senior Vice President of Technical Services.

“Having this facility with International Maritime Industries (IMI) in the King Salman International Complex for Maritime Industries offers an integrated portfolio of maritime products and services” said Mohammad Al Assaf, Saudi Aramco Vice President of New Business Development. “The localization of these capabilities will contribute to diversifying the economy, create almost 7,000 jobs, and achieve a target of 60% Saudization by 2030,” Al Assaf added.

The new facility in Ras Al Khair will be located near the Jubail Industrial City on the Kingdom’s east coast. It will cover an area of approximately 1,150,000m2 and will utilize cutting edge technologies to ensure world class standards in safety, quality and efficiency.

“Expanding our fabrication capacity in Saudi Arabia demonstrates McDermott’s commitment to the Kingdom’s Vision 2030 objectives,” said David Dickson, McDermott’s President and CEO.

“We will establish a world class fabrication facility that enables us to better serve the needs of Saudi Aramco and other customers in Saudi Arabia and across the region,” added Linh Austin, McDermott Senior Vice President, Middle East and North Africa.

At peak production, the facility will have a throughput capacity in excess of 60,000 metric tons per year. It will localize expertise in multiple disciplines related to the industry and is expected to create a significant number of direct and indirect job opportunities in the Kingdom. Apprenticeship and training programs will also be provided to ensure that a sufficient number of qualified nationals of the Kingdom are available for hire to meet the in-Kingdom content requirements. The facility is expected to be operational by 2022.

As MRC informed earlier, Saudi Aramco said it has agreed to buy a 70% stake in Saudi Basic Industries Corp (SABIC) from Saudi Arabia's sovereign wealth fund for USD69.1 billion, in a deal which the world's top oil producer called "historic". SABIC and Aramco said in a statement the agreed purchase price is 123.39 riyals per share, a slight discount from SABIC's closing price on Wednesday.

Saudi Aramco, officially the Saudi Arabian Oil Company, is a Saudi Arabian national oil and natural gas company based in Dhahran, Saudi Arabia. Saudi Aramco"s value has been estimated at up to USD10 trillion in the Financial Times, making it the world"s most valuable company. Saudi Aramco has both the largest proven crude oil reserves, at more than 260 billion barrels, and largest daily oil production.
MRC

LyondellBasell preparing to boost production at Houston refinery

MOSCOW (MRC) -- Lyondell Basell Industries is preparing to raise production at its 263,776-barrel-per-day (bpd) refinery after receiving a crude shipment and having sulfur hauled away on barges, reported Reuters with reference to sources.

Lyondell cut production at its Houston refinery by at least 14% at the Houston refinery on Monday because it could not ship out sulfur on barges while the upper Houston Ship Channel was closed by a chemical spill, the sources said.

The crude shipment to the refinery was received in Texas City, Texas, at the south end of ship channel, which is unaffected by the spill. The crude will be sent by pipeline to the refinery, the sources said. Sulfur has been hauled away on barges on Wednesday.

The company was awaiting another crude shipment before boosting production, the sources said.

As MRC wrote previously, in September 2016, LyondellBasell selected its La Porte, Texas, manufacturing complex as the site for a new high density polyethylene (HDPE) plant. The plant will be the first commercial plant to employ LyondellBasell's new proprietary Hyperzone PE technology and will have an annual capacity of 1.1 billion pounds (500,000 metric tons). Construction began in early 2017 with start-up planned for 2019.

LyondellBasell is one of the world's largest plastics, chemical and refining companies. The company manufactures products at 57 sites in 18 countries. LyondellBasell products and technologies are used to make items that improve the quality of life for people around the world including packaging, electronics, automotive parts, home furnishings, construction materials and biofuels. LyondellBasell sells products into approximately 100 countries and is the world's largest licensor of polyolefin technologies.
MRC

98% of European plastics production covered by Operation Clean Sweep

MOSCOW (MRC) -- Operation Clean Sweep (OCS), the international program designed to prevent plastic pellets, flakes, and powder from being lost from factory floors and winding up in lakes and oceans, is being successfully embraced by European plastics processors, a new study shows, said Canplastics.

Following the release of its first Operation Clean Sweep report in 2017, industry association PlasticsEurope made the OCS program a top priority in 2018, setting new targets for its members as part of its Plastics 2030 Voluntary Commitment.

"The number of OCS signatories doubled in Europe in 2018, reaching up to more than 500 companies handling plastics pellets,” Karl-H. Foerster, PlasticsEurope’s executive director, said in a statement. “More than 98% of the total European plastics production have now signed up to OCS."

PlasticsEurope is also strengthening its collaboration with the entire plastics value chain. The group announced that 250 new companies signed the pledge in 2018.

"The plastics industry remains fully committed to implementing solutions to end plastic waste in the environment. Working with the value chain for the implementation of OCS is an essential part of our 2030 Voluntary Commitment. Our aim is to drive best practices in pellet management and strive towards zero pellet loss,” Foerster said, “PlasticsEurope’s objectives for 2019 are to actively contribute to global industry efforts. Together with the plastics value chain, its aim is to develop an OCS certification scheme and continue to support the implementation of the OCS program as a way to deliver its voluntary commitment."

PlasticsEurope’s full report is available at this link. Operation Clean Sweep (OCS) is a stewardship program of the U.S.-based Plastics Industry Association and the American Chemistry Council’s Plastics Division. The Canadian Plastics Industry Association is the Canadian licensee of OCS and promotes the program to the Canadian plastics value chain.
MRC

Engel optimistic despite clouds on the horizon

MOSCOW (MRC) -- While visiting the Schwertberg headquarters of injection moulding machinery producer Engel Austria on 7 March, Plastics News Europe discussed company results and the market situation for injection moulding machinery with Engel chief sales officer (CSO) Dr Christoph Steger, as per Plasticsnewseurope.

According to Steger, Engel will exceed 2017 results by several percent in 2018, adding “It will be positive, but we see a significant degree of global weakening, although it varies from one industry to another".

Global statistics show incoming orders for machinery producers significantly below last year, but that has not yet worked through to delivery times, which are still as long as three to six months depending on machines sizes.

"My personal opinion is that we will settle down at around the 2015 volume - if there are no more bad omens. The present high tensions between the US and China affect sentiment throughout the world, by leading to reluctance to make investments," Steger noted.

Additionally, Steger sees a potential source of further negative impacts to the world economy in the Middle East. "I am not only speaking about Iran with a Damocles sword hanging above it, more about potential proxy wars that could impact the global economic development," he added.

There are several activities in Latin America recycling fishing nets into palettes, and in Europe “it is interesting that for example Werner & Mertz's Frosch cleaner brand is being promoted with cradle-to-cradle packaging features. The main challenge though is to be active everyday, looking at what can be done differently with design for recycling and how to handle multilayer plastics packaging".

"Plastics are being demonised, despite everyone being confronted by the advantages of plastics packaging. There will be huge changes in the future. The circular economy is now in focus, so we have to ask ourselves: What can we do about it as a machine producer? We have a responsibility to be involved, and pro-actively, by working together on common solutions with our customers and their customers, in order to support society".
MRC

Oil traders wait to assess impact of IMO regulations

MOSCOW (MRC) -- If oil traders and consumers are worried about the impact of new maritime fuel regulations from the start of next year, they have not yet started to mark up prices for low-sulfur middle distillate fuels, said Hydrocarbonprocessing.

Under new rules agreed by the International Maritime Organization (IMO), ships will be forced to switch to using low-sulfur fuels rather than high-sulfur residual fuel oil, or fit scrubbers to remove sulfur dioxide emissions. Refiners have been gearing up to increase the production of IMO-compliant shipping fuels, and many ship owners have installed or plan to fit scrubber units to enable them to continue using cheaper residual fuel oil.

There is considerable uncertainty about exactly how vessel owners will comply with the new regulations and how much extra low-sulfur fuel the refiners will manage to produce. But the forthcoming regulations are expected to increase consumption of middle distillates and cause that segment of the oil market to tighten significantly.

Ships will be competing for the same low-sulfur middle distillates used as diesel, jet fuel and heating oil by road hauliers, railroads, airlines and farmers as well as many homes, offices and factories.

As a result, some analysts are forecasting a severe shortage of middle distillates, causing prices to spike, while others see a more limited impact. The effect of the IMO regulations even merited its own section in the U.S. government's annual "Economic Report of the President" prepared by the Council of Economic Advisors (CEA) and published earlier this month.

"Global bunker fuel represents about 5 percent of total oil demand" and the reported warned "fuel switching by ships in 2020 may cause significant disruptions in specific product markets."

The CEA predicted a shortage of 200,000-600,000 barrels per day in compliant fuels which "will likely trigger higher prices, though estimates of price shocks to fuels including diesel, gasoline and jet fuel vary substantially".
MRC