China refiners curb fuel output after massive new plants stoke glut

MOSCOW (MRC) -- China’s fuel producers are making extended curbs to their output in the third quarter after supply from mammoth new refineries stoked an already-sizeable glut, potentially dragging on crude oil demand from the world’s biggest importer of the commodity, said Hydracarbonprocessing.

Private refiner Hengli Petrochemical (600346.SS) ramped up its 400,000-barrels per day (bpd) plant in northeast China to full capacity in May, while Zhejiang Petrochemical began trial runs around the same time at a similar-sized refinery on the east coast.

In the wake of that wave of fresh supply and amid slowing local demand for fuels such as gasoline and diesel, refiners are cutting their crude processing, or throughput, industry sources and analysts said. That drop should sap their appetite for crude imports, pulling down on international oil prices LCOc1 that have already been hit by fears over a slowing global economy.

The swollen surplus of fuel products could also send China’s fuel exports surging to new highs and further pinch Asian refining profits.

“For markets that are already consumed with fears about a global recession ... headline numbers of oil demand growth slowing alongside talk of run cuts seem to reinforce a bearish narrative,” said Michal Meidan, a London-based analyst at Energy Aspects.

Small-scale refiners known as ‘teapots’, mainly located in Shandong province, are coming under most pressure to make fresh output cuts, analysts said, extending curbs many of them made in May and June.

Teapots have been seen as a bellwether for China’s oil demand since 2015 when they became first-time crude oil importers. They now make up a fifth of the nation’s total crude imports.

Dongming Petrochemical Group, the province’s largest independent refinery, is closing its 240,000-bpd plant this week for two months of maintenance in the wake of “poor margins”, according to a company source.

That comes after plants were losing 300-350 yuan (USD44-$51) on each TON of crude oil they processed in June, their largest such loss in nearly four years, said Shi Linlin, an analyst at consultancy JLC, and analyst Wang Zhao at Sublime China Information, another consultancy in the province.

Seven plants in Shandong - including Dongming - with total crude processing capacity of 470,000 bpd will be offline in July for overhauls, JLC estimates. That’s equivalent to a throughput cut of 14 million barrels of crude in July alone, or nearly 4 percent of the country’s processing levels in May.

Meanwhile, two major coastal plants run by Sinopec Corp (0386.HK), Asia’s largest refiner, are planning to trim throughput by nearly 2%, or roughly 10,400 barrels per day, in July-September from the second quarter, plant sources said.

That comes after these two plants were hit by refining losses in June for the first time this year. Sinopec did not respond to a request for comment.

All refinery sources declined to be named as they were not authorized to speak to the media.

API updates fire prevention and safety recommended practice for refineries

MOSCOW (MRC) -- The American Petroleum Institute (API) published an updated standard to address fire prevention and improve safety across the downstream segment of the industry, said Hydrocarbonprocessing.

RP 2001, Fire Protection in Refineries, includes important revisions on hazard analysis, new ways to improve the design of refineries to help prevent fires, and new information on managing the potential environmental impact of firefighting foams and marine firefighting. API convened experts across the natural gas and oil industry, and collaborated with important stakeholders, including the National Fire Protection Association (NFPA) and the United States Coast Guard on important updates made to this safety standard.

"API experts used state of the art information and key recommendations from NFPA, EPA, OSHA, and the U.S. Coast Guard to develop the new edition of Fire Protection in Refineries. Implementation of RP 2001 will advance the safety of downstream facilities’ operations, and safeguard the environment and surrounding communities," said Debra Phillips, Vice President, API’s Global Industry Services.

"API RP 2001, Fire Protection in Refineries, is consistent with Chevron’s approach, which gives considerable attention to fire prevention practices and is not just about fire extinguishment. Implementation of the concepts within this document by corporate and field personnel will make their facilities safer for their workforce and neighbors as well as help protect their assets," said Tim Blackford, Team Lead - Process Safety Engineering at Chevron Energy Technology Company.

Private equity firm Kohlberg buys healthcare packaging supplier Nelipak

MOSCOW (MRC) -- Nelipak Corp., a supplier of rigid packaging for the medical device and pharmaceutical industries, has been acquired by Kohlberg & Co. LLC, a private equity firm headquartered in Mount Kisco, N.Y.? cjj,oftn Canplastics.

Nelipak was sold to Kohlberg & Co. by Wisconsin-based investment firm Mason Wells; the terms of the deal have not been disclosed.

Nelipak, headquartered in Cranston, R.I, manufactures thermoformed medical trays and blisters, pharmaceutical handling trays, surgical procedure trays and lidding materials. The company’s products are primarily designed for Class II and Class III medical devices, which are high-value, implantable devices.

It will continue operating with Nelipak Healthcare Packaging as its name. In addition to its Rhode Island facility, Nelipak’s six other facilities are located in Arizona, Pennsylvania, the Netherlands, Ireland, Puerto Rico and Costa Rica.

"We are proud of our efforts to help transform Nelipak from a corporate division within Sealed Air Corp. to a leading global healthcare packaging company,” Jay Radtke, senior managing director of Mason Wells, said in a statement. “Back in 2013, the company was primarily European-focused. Over the last six years, we have hired a world-class management team led by CEO Mike Kelly, launched the Nelipak Healthcare Packaging brand, completed three acquisitions to significantly increase Nelipak’s U.S. market presence and built a global ‘one team, one Nelipak’ culture that has really resonated with customers."

Tekni-Plex purchases Italian healthcare packaging manufacturer Lameplast

MOSCOW (MRC) -- U.S.-based packaging and tubing supplier Tekni-Plex Inc. continues its buying spree with the purchase of Italian healthcare packaging company Lameplast SpA from Milan-based private equity firm Aksia Group for an undisclosed amount, said Canplastics.

Headquartered in Rovereto sul Secchia near Modena, the company is described as a leading Italian manufacturer of plastic single/multi-dose containers for pharmaceutical, diagnostic, medical device, veterinary and cosmetic applications, with an emphasis on ophthalmic, vaccine, vaginal and rectal applications. “Lameplast is also known for its injection molding, blow molding and injection blow molding expertise which enables it to produce custom packaging solutions for demanding applications,” Tekni-Plex said in a July 2 press release.

"We continue to drive our strategy by growing our business organically and through mergers and acquisitions (M&A),” Paul Young, Tekni-Plex’s president and CEO, said in the press release. “We have specifically focused on expanding our healthcare packaging offerings, with M&A in product or technology adjacencies. Lameplast brings Tekni-Plex specific expertise in unit and multi-dose packaging that was not part of our portfolio previously. We will now be able to offer a rigid packaging solution for prescription and over-the-counter medications and vaccines, in addition to our Tekni-Films flexible packaging options."

The acquisition adds approximately 130 more employees to Tekni-Plex’s 3,000-strong global workforce; Lameplast general manager Luca Iulli will continue to oversee the operation.

The company’s quality management system is ISO 15378 and ISO 9001 certified. Lameplast is also a CE-mark holder for Class I medical devices, which indicates compliance with applicable European Union (EU) regulations and enables the commercialization of products in the 32 EU countries. Production is carried out in Class ISO 7 (Class 10,000) and ISO 8 (Class 100,000) controlled contamination environments according to ISO 14644-1.

Lameplast is the twelfth acquisition that Wayne, Pa.-based Tekni-Plex has made in the past five years. Tekni-Plex supplies products for such end markets as medical, pharmaceutical, food, beverage, personal care, household, and industrial.

PP plant brought on-stream by JG Summit

MOSCOW (MRC) -- JG Summit Petrochemical has restarted its polypropylene (PP) plant following a maintenance turnaround, as per Apic-online.

A Polymerupdate source in the Philippines informed that the company has resumed operations at its plant on July 1, 2019. The plant was shut for maintenance in early-June, 2019.

Located in Batangas City, the Philippines, the plant has a production capacity of 190,000 mt/year.

As MRC wrote before, in November 2017, JG Summit Olefins Corp. awarded an engineering, procurement and construction contract to Posco Engineering & Construction to expand an existing naphtha cracker and build a hydrogenation unit in Simlong, Batangas, Philippines.