Kenya first crude oil export sparks demands over revenue sharing

MOSCOW (MRC) -- Kenya exported its first crude oil amid pointed speeches by local leaders asking the government to stick to its commitment to share revenues from future shipments equitably, as per Hydrocarbonprocessing.

Although commercial production is years away, the discovery of oil has heightened expectations that citizens, especially those living adjacent to the deposits, will benefit.

President Uhuru Kenyatta in March signed into law a long-awaited petroleum bill that regulates oil exploration and production and outlines how revenues will be shared between the government, local communities and companies.

Of the revenues due to the state, the law allocates 20% to local government, 5% to the communities living where oil was found and 75% to the central government. An earlier draft gave 10% to the communities.

The law also says parliament will review the percentages within 10 years.

The law is required for large-scale oil production but was delayed by tussles between layers of government and residents of Turkana, the impoverished northern region where the oil deposits were found.

As the first shipment left Kenya's port of Mombasa, three governors, an oil executive and the president compared carving up the profits to sharing a goat.

"When you slaughter a goat, the owner of the goat is left with the leg," Turkana County deputy governor Peter Emuria Lotethiro said. "Turkana want their leg."

Tullow Oil estimates that Kenya's Turkana fields hold 560 million barrels of oil and expects them to produce up to 100,000 barrels per day from 2022.

London-based Tullow said it and its partners had to date invested USD2 billion in Kenya.

"Having spent USD2 billion, the joint venture partners will be able to get a bit of that goat. There is much more investment to come which will create jobs across Kenya," Tullow Chief Executive Paul McDade said.

Mining and Petroleum Minister John Munyes said approval to pump water from neighbouring West Pokot County to pressurise oil wells had been granted. The deal is crucial for next year's final investment decision on proceeding to commercial production.

"By 2020 we should have the plans to let us proceed with the construction of the pipeline from Lokichar to Lamu," he said.

On 26 August, shipment was 250,000 barrels of oil. The crude was trucked to the port since there is no pipeline. The shipment's destination was not announced.

Tullow and partner Africa Oil discovered commercial oil reserves in Turkana's Lokichar basin in 2012. France's Total has since taken a 25% stake in the project.

About two weeks ago, Kenya and a group led by explorer Tullow picked trading company ChemChina UK Ltd to buy its first shipments. ChemChina UK's initial purchases are small-scale, with full commercial shipments due once the pipeline is built.

As MRC wrote before, in June 2019, Kenya’s government and oil firms Tullow Oil, Total and Africa Oil Corp signed agreements for the development of a 60,000-80,000 barrels per day crude oil processing facility for oil discovered in the country’s north west.
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MOSCOW (MRC) -- China’s Sinopec said that its Yangzi refinery is able to produce gasoline that meets European exports standards, said Hydrocarbonprocessing.

The success of the 160,000-barrel-per-day plant in eastern province Jiangsu will help the company expand high-quality gasoline exports amid a saturated domestic market, it said.

As MRC informed earlier, in 2017, Sinopec to double capacity of the Neopentylglycol (NPG) production line at its Yangzi refinery from 40,000 tpy to 80,000 tpy. Expanded production line will start operation in 2020. NPG is used as a raw material to produce paints and lubricants.
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MOSCOW (MRC) -- Austria’s Borealis has halted PP operations at its Burghausen site in Bavaria, Germany, reported NCT.

The company has been experiencing issues related to an interruption of the raw material deliveries from the neighboring cracker of OMV, sources reported.

However, the news was not directly confirmed by the company at the time of press.

The company currently operates two PP plants at the complex, which have a combined capacity of 560,000 tons/year.

As MRC wrote previously, in March 2018, Borealis and United Chemical Company LLP (UCC) signed a Joint Development Agreement (JDA) for the development of a world-scale polyethylene project, integrated with an ethane cracker, in the Republic of Kazakhstan.

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..

Borealis is a leading provider of innovative solutions in the fields of polyolefins, base chemicals and fertilizers. With headquarters in Vienna, Austria, Borealis currently employs around 6,500 and operates in over 120 countries.
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MOSCOW (MRC) -- Shaanxi Yulin Energy & Chemical has restarted its Linear low density polyethylene (LLDPE) unit following a maintenance turnaround, according to Apic-online.

A Polymerupdate source in China informed the company has resumed operations at the units on September 4, 2019. The units were shut for maintenance on August 20, 2019

Located at Shaanxi province of china, the LLDPE unit has a production capacity of 300,000 mt/year.

The company also operates the polypropylene (PP) plant with a capacity of 330,00 mt/yeat at the same time.

As MRC reported earlier, in July 2017, LyondellBasell granted its Spherizone and Lupotech T Licenses to Shaanxi Coal Yulin Energy and Chemical. Spherizone is the most advanced PP technology and should help expand the company’s product portfolio, while Lupotech T should provide a cost advantage. This technology is used in the Jingbian Chemical Industrial Park in Yulin City, China.

According to MRC's ScanPlast report, LLDPE shipments to the Russian market increased in the first seven months of 2019 by 8% year on year to 234,130 tonnes. Local producers increased their production by 24%.

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.
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MOSCOW (MRC) -- All petrochemical units at Germany’s Burghausen refinery had gradually restarted following a technical incident and had come back in operation by Sunday, 1 September 2019, according to Hellenic Shipping News with reference to the company's statement.

First deliveries of propylene have also commenced, it said.

Due to the incident on August 24, "no ethylene and butadiene are currently being delivered from the Burghausen refinery," owner OMV said, adding that the facility’s customers have been informed. Then, OMV declared force majeure on supplies from its cracker in Burghausen Refinery, Germany.

According to local media, the glitch occurred at the cooling system of the ethylene plant. During the restart, flaring were expected.

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