Major petrochemical companies form Cracker of the Future Consortium and sign R&D agreement

MOSCOW (MRC) -- Six world's major petrochemical companies in Flanders, Belgium, North Rhine-Westphalia, Germany, and the Netherlands (Trilateral Region) have announced the creation of a consortium to jointly investigate how naphtha or gas steam crackers could be operated using renewable electricity instead of fossil fuels, as per Borealis' press release.

The Cracker of the Future consortium, which includes BASF, Borealis, BP, LyondellBasell, SABIC and Total, aims to produce base chemicals while also significantly reducing carbon emissions. The companies have agreed to invest in R&D and knowledge sharing as they assess the possibility of transitioning their base chemical production to renewable electricity.

Base chemicals, which include ethylene, propylene, butadiene and BTX (benzene, toluene, xylenes), are produced in steam crackers and mainly transformed into plastics. These are used for lightweight components in vehicles, improving passenger safety and comfort and reducing fuel and emissions. Plastic packaging saves and preserves food from field to table. Overall, polymers make a major contribution to resource and energy efficiency and positively impact society.

Polymers will always be needed, especially in emerging, renewable energy-related technologies, where they are crucial, for instance for wind turbines, solar panels and batteries. The chemical industry has been at the forefront of those innovations and will continue to deliver solutions for a more sustainable future.

Steam crackers represent the principal opportunity for reducing the industry’s greenhouse gas emissions. One option currently under consideration is to electrically heat the cracking furnaces, rather than rely on fossil fuels.

Using electricity produced from renewable sources would significantly reduce cracker emissions. The key challenges in developing electricity-based cracker technology are ensuring that the chosen emissions reduction solution is technologically and economically feasible compared to the current process; that it fits into a future low-carbon value chain; and that it can be implemented in time to meet policy targets. Assuming these challenges are met, developing and implementing electricity-based cracker technology will help the sector maintain sustainable operations while reducing the carbon footprint of its products.

Following the signature of the agreement, the members of the consortium have begun exploring and screening technical options. If a potential technical solution is identified, the parties will determine whether to pursue joint development project(s), including R&D activities that could include a demonstrator for proof of concept in the case of base chemicals.

The collaboration is a direct result of the Trilateral Strategy for the Chemical Industry drawn up by the North Rhine-Westphalian, Flemish and Dutch ministries of economic affairs and the industry associations VCI (Germany), Essenscia (Belgium) and VNCI (Netherlands) to boost the sustainability of the chemical sector. The Trilateral Strategy to "become the world'?s engine for the transition towards a sustainable and competitive chemical industry cluster" was presented to the European Commission in late 2017. Three tables have been set up to elaborate strategy: Energy, Infrastructure and Innovation.

The Innovation Table has three key success factors: technical innovations to enable the energy and feedstock transition, digital transformation to enhance competitiveness, and framework conditions to enhance innovation through cross-border cooperation.

The trilateral region of the Netherlands, North Rhine-Westphalia and Flanders was a logical choice as a European starting point, since the combined region is the largest chemical cluster in the world with annual revenue of EUR180 billion and 350,000 jobs.

The six members of the Cracker of the Future Consortium, chaired by the Brightlands Chemelot Campus (Geleen, the Netherlands), aim to create innovative value propositions in developing sustainable technologies together in line with competition law.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polyprolypele (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,255,800 tonnes in the first seven months of 2019, up by 9% year on year. Shipments of all PE grades increased. At the same time, the estimated PP consumption in the Russian market was 796,120 tonnes in January-July 2019, up by 11% year on year. Shipments of PP block copolymer and homopolymer PP increased.

Versalis shut Dunkirk cracker after fire

MOSCOW (MRC) -- Italy’s Versalis (part of Eni) took its cracker in Dunkirk, France offline due to a fire which broke out at the company’s petrochemical plant, as per NCT with reference to market sources.

It is not yet known how long the unit will remain shut while the company could not be reached for comments at the time of press.

Local media sources also reported that the fire was brought under control with no reported injuries and the company is currently assessing the required repairs.

The cracker has a production capacity of 380,000 tons/year of ethylene and 95,000 tons/year of propylene.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polyprolypele (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,255,800 tonnes in the first seven months of 2019, up by 9% year on year. Shipments of all PE grades increased. At the same time, the estimated PP consumption in the Russian market was 796,120 tonnes in January-July 2019, up by 11% year on year. Shipments of PP block copolymer and homopolymer PP increased.

Eni is an Italian multinational oil and gas company headquartered in Rome. It has operations in in 79 countries, and is currently Italy's largest industrial company with a market capitalization of 68 billion euros (USD 90 billion), as of August 14, 2013. The Italian government owns a 30.3% golden share in the company, 3.93% held through the state Treasury and 26.37% held through the Cassa depositi e prestiti. Another 39.40% of the shares are held by BNP Paribas.

Shaanxi Yulin Engery resumed operations at its PP plant in China after turnaround

MOSCOW (MRC) -- Shaanxi Yulin Energy & Chemical has restarted its polypropylene (PP) unis following a maintenance turnaround, according to Apic-online.

A Polymerupdate source in China informed the company resumed operations at the plant on September 4, 2019. The unit was shut for maintenance on August 20, 2019.

Located at Shaanxi province of China, the PP unit has a production capacity of 330,000 mt/year.

As MRC wrote before, the company conducted an unplanned turnaround at this plant owing to mechanical issues from 17 to 21 July, 2018.

According to MRC's ScanPlast report, the estimated PP consumption in the Russian market was 796,120 tonnes in January-July 2019, up by 11% year on year. Shipments of PP block copolymer and homopolymer PP increased.

Coal Shaanxi Yulin Energy and Chemical Co., Ltd., is mainly engaged in polypropylene (PP), polyethylene (PE), etc. The company's registered capital is unknown, its office is located in known as "China's Kuwait" in Yulin, Shaanxi Hengshan County Yulin, 1000 employees.

What should be next for Saudi Aramco

MOSCOW (MRC) -- The Saudi Arabian monarchy made a major change this week in the leadership of its national oil company, Saudi Aramco. Khalid Al-Falih, the former CEO and current oil minister, was removed as chairman and replaced by Yasir Al-Rumayyan, the head of Saudi Arabia’s sovereign wealth fund, as per Bloomberg.

With the kingdom readying plans for an Aramco IPO, what should we make of this shift, and is Al-Rumayyan – a confidante of Crown Prince Mohammed bin Salman with no experience in oil or energy – the best choice to fill the position.

On the one hand, removing Al-Falih from the board of Saudi Arabian Oil Co. will help the company establish itself as distinct from the Saudi government team that creates oil policy at OPEC. This should insulate Aramco from some antitrust allegations. If or when Aramco does go public, the move could help protect the company from investigations by other governments concerning its connections to the international oil cartel. As Al-Falih himself wrote in a tweet in Arabic, the new leadership of the board is a step toward an IPO:But Al-Rumayyan isn’t a choice that should promote confidence in the direction of the company.

For one, his background is in finance: After various jobs in Saudi banking, he was appointed to run the Public Investment Fund, or PIF, in 2015, and is said to consult very closely with Prince Mohammed. He has used a large portion of the PIF as a venture-capital fund – so much so that through the PIF, Saudi Arabia has become one of the single biggest investors in U.S. startups. Al-Rumayyan has also overseen the PIF’s position as a power broker in the kingdom, with the fund backing new ideas and even social causes such as a major investment that brought AMC Theaters to Saudi Arabia when cinemas were legalized. None of this points to any expertise in oil.

Al-Falih was an oil company veteran with a successful track record in the business, so it made sense for him to lead the board. In fact, it’s typical for major international oil companies to be led by energy professionals. At Exxon Mobil Corp. and Chevron Corp., for example, the chairmen are also the CEOs. Royal Dutch Shell PLC’s chairman is Charles Holliday, who once ran the chemicals firm DuPont. BP PLC’s chairman is the former CEO of BG Group and Statoil, both energy companies.

The monarchy could have replaced Al-Falih with the current CEO, Amin Nasser; one of several retired top Aramco executives still active in the company community; an outside industry veteran; or even Prince Mohammed's own half-brother, Abdul Aziz, who was a university professor and formerly a top bureaucrat in the oil ministry. Instead, it chose Al-Rumayyan, a yes-man for the monarchy.

More importantly, the shake-up points to the impending transfer of Aramco to the PIF portfolio, as Prince Mohammed has wanted to do for years. Before he even ascended to his current role, Prince Mohammed argued that Aramco should be just another portfolio company. In 2016, he said Aramco “is a company that has a value – an investment. You must own it as an investment. It should not be owned as a primary commodity or a major source of income.” That’s not inspiring for Saudi Arabia, which still relies on Aramco for most of its revenue. Nor is it inspiring for potential investors who are looking for the supremely profitable company to continue on its prior positive trajectory.

Petrobras extends period for companies to flag interest in buying its refineries

MOSCOW (MRC) -- Brazil’s state-owned oil company Petroleo Brasileiro SA said that it would extend the deadline for parties to state their interest in buying four refineries it has put up for sale, based on high investor interest, as per Hydrocarbonprocessing.

Petrobras, as the firm is known, extended the deadline to Sept. 16 for firms to enter the first phase of the sales process, it said in a securities filing. Investors then have until Sept. 27 to sign confidentiality and other agreements required to advance in the sales process.

The oil firm is selling its Abreu e Lima, Landulpho Alves, Presidente Getulio Vargas and Alberto Pasqualini (REFAP) refineries and associated assets.

Together the four refineries represent 37% of Brazil’s refining capacity, according to Petrobras. The deal is expected to raise billions of dollars for the oil firm.