Lotte Chemical shut Daesan cracker for maintenance

MOSCOW (MRC) -- Lotte Chemical has shut down its Deasan cracker for maintenance turnaround, according to Apic-online.

A Polymerupdate source in South Korea informed that the company started maintenance at the cracker on October 14, 2019. The cracker is expected to resume production on November 10, 2019.

Located at Daesan in South Korea, currently the cracker has an ethylene capacity of 1.1 million mt/year and propylene capacity of 540,000 mt/year.

As MRC wrote before, Lotte Chemical Titan Holding (Kuala Lumpur, Malaysia), an affiliate of Lotte Chemical (Seoul, South Korea), has announced that the group's ethane cracker and ethylene glycol (EG) plant at Lake Charles, Louisiana, commenced commercial operations in August, 2019.

Lotte is the first South Korean petrochemical company to enter the ethane-cracking business in North America using shale gas. Lotte Chemical operates naphtha crackers at Yeosu and Daesan, South Korea, and Lotte Chemical Titan operates a cracker at Pasir Gudang, Malaysia. Lotte says that the US cracker increases the group's overall ethylene capacity to 4.5 MMt/y, making it the seventh-biggest producer of ethylene worldwide.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,436,390 tonnes in the first eight months of 2019, up by 9% year on year. Shipments of all PE grades increased. At the same time, the PP consumption in the Russian market was 909,260 tonnes in January-August 2019, up by 10% year on year. Shipments of PP block copolymer and homopolymer PP increased.

Nigeria lands higher oil output target in OPEC

MOSCOW (MRC) -- OPEC has granted Nigeria a higher oil output target under an OPEC-led deal to limit oil supply in a move unannounced by the group, following efforts by Africa’s largest exporter to tweak the agreement to accommodate its expanding oil industry, said Hydrocarbonprocessing.

The country’s allocation was increased to 1.774 million barrels per day (bpd) from 1.685 million bpd at the last OPEC meeting in July, three OPEC delegates with knowledge of the matter said. “It’s happened,” one of the delegates said. “I’ve not heard of any other changes to the agreement."

The quota increase will mean Nigeria will see an improvement in its compliance with the supply cut accord, but it is still pumping more crude than the new target according to OPEC’s own figures and industry surveys. Nigeria’s petroleum ministry and OPEC did not immediately reply to a Reuters request for comment.

Abuja has had a dismal record in delivering its share of the cut, overshooting by 400% in August according to the International Energy Agency. OPEC put Nigerian production at 1.866 million bpd in August - far above the new quota.

The nation has previously tried to draw a distinction between what it considers as crude and what it considers as condensates, an ultra light crude-like product that doesn't fall under the OPEC+ cut agreement.

Its own definition of condensates would shave a significant amount exports from its cap. Data from Nigeria’s Department of Petroleum Resources pegged daily average condensate production as between 414,000 to 497,000 bpd in 2017, the latest year available. That accounted for 17%-19% of total output that year.

One of the OPEC delegates said OPEC granted Nigeria the target revision because of the new Total-operated Egina oilfield which started production in January and had not been factored in when the initial quota was calculated. Some of the Egina production will also classify as condensates, meaning even more of Nigeria’s output would not count towards the new cap.

While OPEC has not formally announced the change, Nigerian Minister of State for Petroleum Resources Timipre Sylva mentioned the new target in a Bloomberg interview last week. He did not elaborate on circumstances leading to the new target.

The 14-nation Organization of the Petroleum Exporting Countries agreed in December with non-OPEC partners including Russia to curb crude production by 1.2 million bpd from the start of this year.

OPEC’s share of the cut is 800,000 bpd, with Venezuela, Iran and Libya exempt. It is not clear whether this figure, or any other countries’ targets, have been adjusted to accommodate Nigeria’s increased quota.

Nigeria only started participating in the deal in January, having been granted and exemption in previous OPEC+ cuts due to militant attacks that reduced its output.

Reliance to resume Venezuela oil loadings after four-month pause

MOSOW (MRC) -- Indian refiner Reliance Industries Ltd is scheduled to resume loading Venezuelan crude in October after a four-month pause, according to sources and internal documents from PDVSA seen by Reuters, a move that could help Venezuela’s state-run company drain its large oil inventories, reported Hydrocarbonprocessing.

The United States in January imposed the toughest sanctions yet on Venezuela’s oil industry, depriving the OPEC member of the main destination for its crude exports.

In August, Washington added to the sanctions pressure by threatening non-US companies with punitive action if they “materially assist” Venezuelan President Nicolas Maduro’s government.

The measures have scared away several of PDVSA’s largest customers and tanker operators, causing a fast accumulation of unsold crude that forced the Venezuelan company last month to reduce output.

A Reliance representative said on Wednesday it has been supplying Venezuela with fuels permitted under US sanctions, including diesel, and thus it “is able to recommence crude sourcing” in exchange for the refined products.

“These are actions compliant to US sanctions as crude sourcing against supply of permitted products is allowed,” the representative said in an email to Reuters.

PDVSA did not reply to a request for comment.

China National Petroleum Corp and its units stopped taking Venezuelan oil in August. Others, including Reliance, have recently been buying Venezuelan crude from Russian major Rosneft (ROSN.MM), according to the documents and vessel tracking information from Refinitiv Eikon.

Reliance and the state-run Russian oil company did not respond to requests for comment on these trades.

Reliance needs the type of heavy sour crude that Venezuela sells because its refineries are configured to process it. US sanctions on both Venezuela and Iran have made it harder for the refiners to find supplies of these crude grades.

The Indian firm is sending at least two vessels, the very large crude carriers Antonis I. Angelicoussis and Maran Castor, to Venezuela’s Jose port for loading in late October, according to the PDVSA documents.

The tankers are currently passing the Suez canal, the Refinitiv Eikon data showed.

According to the same PDVSA documents, Italy’s Eni has separately sent the Suezmax tanker Seavoyager to load 1 million barrels of Venezuelan Merey heavy crude in mid-October.

Asked about the shipment, an Eni spokesman said the last time the Italian firm received crude from PDVSA was in late 2018. He did not comment on the cargo allegedly scheduled for October.

"Eni confirms that it has been recovering its receivables with PDVSA through crude supplies, in full compliance with all relevant regulations," the company told Reuters in an email.

The scheduled exports come at a time when PDVSA desperately needs to draw down almost 39 million barrels of unsold oil stocks that have forced it to reduce output and suspend crude blending while shipping more barrels to its political ally Cuba.

A source from one of PDVSA’s joint-venture projects said it was shipping to Cuba and other cargoes would go to Reliance. "We need to make room for storage, otherwise we would have to stop output," the source said.

Besides Rosneft, which takes PDVSA’s oil as repayment of billion of dollars lent to Venezuela in the last decade, Spain’s Repsol has since 2018 taken PDVSA’s crude oil in lieu of dividend payments and also supplying Venezuela with fuel.

Rosneft is scheduled to take at least 7.9 million barrels of Venezuelan oil this month, equivalent to 255,000 barrels per day (bpd), according to the PDVSA document. Venezuela produced between 600,000 and 700,000 bpd of oil last month, according to independent estimates.

The Russian firm became PDVSA’s largest customer in July.

The US Treasury has made clear that transactions between US firms and PDVSA, controlled by Maduro’s government, are not allowed under sanctions but some officials have said oil shipments delivered to foreign firms to repay debt are allowed as long as they do not involve cash payments.

As MRC informed earlier, Saudi Aramco will supply agreed grades and volumes to India’s Reliance Industries in October after the world’s top oil exporter had to provide alternate heavier grader due to drone attacks on its oil installations.

Reliance, owners of the world’s biggest refining complex at Jamnagar in western Gujarat state, is a major buyer of Saudi oil and recently announced plans to sell a fifth of its petrochemical and refining business to Aramco in a multibillion dollar deal.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,436,390 tonnes in the first eight months of 2019, up by 9% year on year. Shipments of all PE grades increased. At the same time, the PP consumption in the Russian market was 909,260 tonnes in January-August 2019, up by 10% year on year. Shipments of PP block copolymer and homopolymer PP increased.

Reliance Industries is one of the world's largest producers of polymers. Thus, the company produces among others polypropylene, polyethylene and polyvinyl chloride.

Brenntag to acquire Brazilian distributor Quimisa

MOSCOW (MRC) -- Brenntag, the global market leader in chemical distribution, says it has agreed to acquired Quimisa SA (Brusque, Brazil), a distributor of industrial and specialty chemicals in Brazil, as per Chemweek.

Terms of the transaction, including purchase price, were not disclosed. Quimisa generated sales of about EUR60.8 million (USD66.7 million) in 2018.

The company distributes industrial chemicals such as caustic soda and hydrogen peroxide, as well as specialties such as textile auxiliaries, dyes, and polymers. It mostly does business in southern Brazil, in the textiles, household products, food and beverage, and paper industries.

The deal "is an attractive investment with a strong infrastructure which will allow us to increase our market position in Brazil,” says German Torres, CEO/Latin America at Brenntag. “The location of its facilities in the states of Santa Catarina, Parana, and Rio Grande do Sul and its business model enhance our abilities to support the textile and household chemicals industries."

The transaction is expected to close in the coming weeks.

As MRC reported earlier, Since 1 February 2014, Brenntag has startied distributing the cellulosic additive and latex powder portfolio of Dow Construction Chemicals in Germany and Austria.

Brenntag is the global market leader in full-line chemical distribution. Linking chemical manufacturers and chemical users, Brenntag provides business-to-business distribution solutions for industrial and specialty chemicals globally. The value-added services include just-in-time delivery, product mixing, formulation, repackaging, inventory management, drum return handling as well as extensive technical support. Headquartered in Mulheim an der Ruhr, Germany, the company operates a global network with more than 400 locations in 70 countries.

Indorama Lake Charles steam cracker startup pushed to 2020

MOSCOW (MRC) -- Although Indorama’s Lake Charles steam cracker was mechanically complete in May, the plant likely won’t fully start up until January 2020, reported 1012IndustryReport.

In its latest quarterly earnings relase last week, the company said the availability of cheap spot ethylene amid other cracker startups reduced the pressure to ramp up its own unit.

Indorama bought the cracker from Occidental Chemical in 2015 and launched an extensive revamp to increase its capacity to the current level from 370,000 mt/year. OxyChem had shut the cracker in 2001. Originally planned for commissioning in late 2017, the refurbished cracker - jointly owned by IVP (76%) and Singapore-based Indorama Corp. (24%) - is designed to process both ethane and propane feedstock from US shale to produce about ethylene and propylene.

The cracker’s output "has not been commercialized due mainly to implementation of technical improvements discovered during the testing phase, since spot ethylene availability at a low cost can meet our captive needs," the company said. "We foresee startup of this facility on a permanent basis starting January 2020."

As MRC wrote previously, in May 2019, IVL announced that its indirect subsidiary Indorama Ventures Olefins in Westlake, LA, a manufacturer of Ethylene from Ethane with an annual capacity of 440,000 MT, achieved mechanical completion and is undergoing trial runs. IVOL has stabilized the production of on-spec Ethylene and its byproducts at 5 of its 7 furnaces and will ramp up gradually during the course of 2Q19.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,436,390 tonnes in the first eight months of 2019, up by 9% year on year. Shipments of all PE grades increased. At the same time, the PP consumption in the Russian market was 909,260 tonnes in January-August 2019, up by 10% year on year. Shipments of PP block copolymer and homopolymer PP increased.

Indorama Ventures Public Company Limited, listed in Thailand, is one of the world's leading petrochemicals producers, a global manufacturing footprint with 59 sites in 20 countries across Africa, Asia, Europe and North America. The company's portfolio is comprises necessities and high value-added (HVA) categories of polymers, fibers, and packaging. Indorama Ventures has approx. 15,000 employees worldwide and consolidated revenue of USD 8.4 billion in 2017. The company is listed in the Dow Jones Sustainability Index (DJSI).