South Africa sees new Saudi-backed USD10B refinery onstream by 2028

MOSCOW (MRC) -- South Africa’s Central Energy Fund (CEF), partnering with Saudi Aramco, expects a proposed new 300,000 barrel per day crude oil refinery along South Africa’s east coast to come onstream by 2028, making it the region’s largest refinery, reported Hydrocarbonprocessing with reference to CEF’s acting group chief executive's statement.

Work on the project is still at an early stage, but indications are that it would cost in the region of USD10 billion, said Kholly Zono, adding this cost excluded the development of a related petrochemical complex at Richards Bay.

Former Saudi Energy Minister Khalid al-Falih announced the project in January, ahead of plans by Saudi Aramco, the world’s biggest oil firm, to list its shares.

"We are comfortable we have a very solid business case to attract investment and funding from bankers," Zono told Reuters on the sidelines of an oil and gas conference in Cape Town.

"This refinery will not only increase capacity for South Africa but also the region," he said, adding it would be funded through a mix of debt and equity.

A pre-feasibility study will be completed in the next few weeks, after which a more detailed feasibility study will firm up the design and capital cost estimates, followed by front-end engineering and design.

"We are looking at the refinery becoming operational by 2027/28," Zono said.

The new refinery would reduce the need for refined product imports and cement Saudi Arabia’s dominant position in South Africa’s oil sector. The Gulf kingdom already supplies around 40 percent of the crude oil consumed in South Africa, which is a net importer of petroleum products.

The refinery will be designed to accept other types of crude and produce fuel compliant with South Africa’s impending clean fuels regulations based on Euro V specifications, Zono said.

South Africa has talked about building a new refinery for more than a decade, but has struggled to find investors.

Africa’s most industrialised economy has six refineries, four using crude oil and two synthetic fuel as feedstock. Royal Dutch Shell, BP, Total and Sasol are among the major refinery operators.

Zono said the new refinery will not jeopardise the Mossel Bay gas-to-liquid (GTL) refinery operated by CEF’s subsidiary PetroSA, amid fears the plant could be shuttered.

South Africa’s national oil company, PetroSA, said in September its flagship GTL refinery could run out of domestic supplies by the end of 2020.

"The refinery in Mossel Bay will continue to operate and there is no intention to close it down," said Zono.

As MRC informed earlier, Saudi Aramco, which temporarily lost half of its oil production following the September 14 attacks on two key oil facilities, is running its local refineries at full capacity and is forging ahead with plans to start up new refineries. The company is also starting up a joint venture refinery in Malaysia next year. According to Aramco's bond prospectus released in April, the refining and petrochemical joint venture with Petronas - the Malaysian national oil company - collectively known as PRefChem, was supposed to start this year.

The PRefChem joint venture includes a 300,000 b/d refinery, an integrated steam cracker with capacity to produce 1.3 million mt of ethylene located in Johor, Malaysia. Aramco was supposed to provide a significant portion of PRefChem's crude supply under a long-term supply agreement. Jazan and PrefChem will help Aramco reach a gross refining capacity of 5.6 million b/d, it said in the prospectus. The company currently owns and has stakes in four refineries abroad with a total refining capacity exceeding 2 million b/d.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,589,580 tonnes in the first nine months of 2019, up by 7% year on year. Shipments of all PE grades increased. The estimated PP consumption in the Russian market was 976,790 tonnes in January-September 2019, up by 4% year on year. Shipments of PP block copolymer and homopolymer PP increased.

Saudi Aramco is an integrated oil and chemicals company, a global leader in hydrocarbon production, refining processes and distribution, as well as one of the largest global oil exporters. It manages proven reserves of crude oil and condensate estimated at 261.1bn barrels, and produces 9.54 million bbl daily. Headquartered in Dhahran, Saudi Arabia, the company employs over 61,000 staff in 77 countries.
MRC

China and US agree to roll back existing tariffs in phases

MOSCOW (MRC) -- After weeks of high-level discussions, the US and China have agreed to simultaneously lift existing trade tariffs on each other’s goods in phases, reported NCT with reference to the Chinese local media.

Chinese media reported that a spokesperson from China’s Ministry of Commerce the leaders of both counties have resolved their core concerns in the past two weeks through constructive discussions.

Quoting the ministry spokesperson, the report said the most important condition for the first phase of the trade agreement was that the both countries must remove the same amount of charges simultaneously.

However, a timeline was not provided at the time of publication.

The US and China, the world’s two biggest economies, have been embroiled in a tit-for-tat tariff war since the start of 2018.
MRC

Air Liquide acquires Malaysian industrial gases company

MOSCOW (MRC) -- Air Liquide acquired Malaysia's Southern Industrial Gases for an undisclosed sum, said Bloomberg.

The acquisition doubles Air Liquide’s packaged gases filling capacity in Malaysia, and it is expected to deliver significant synergies by enlarging its footprint there, it said.

Southern Industrial Gases has eight manufacturing and refilling facilities locations across Malaysia and employs about 200 people. It has annual sales of about EUR20m.

As MRC informed earlier, Air Liquide signs new long term contract with Kazakhstan Petrochemical Industries (KPI) to build, own and operate a new nitrogen unit in the growing chemical basin of Karabatan, close to the Atyrau refinery.

As MRC informed earlier, Air Liquide in 2018 signed a new long-term agreement with LyondellBasell, one of the world’s largest plastics, chemicals and refining companies, to supply oxygen to LyondellBasell’s new large-scale petrochemical plant which will be constructed in Channelview, Texas. LyondellBasell’s new propylene oxide/tertiary butyl alcohol plant (PO/TBA), is expected to be the largest of its kind plant in the world when completed.

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.

Air Liquide began operating in Malaysia in 1927. Its presence in the country now includes all industrial gas activities, a Smart Innovative Operations Centre as well as shared services which serve Asia and the Pacific Regions. In 2016, Air Liquide Malaysia reinforced its position in the industrial merchant business with the acquisition of a distributor located in the Kuala Lumpur region. The acquisition which was finalised recently placed Air Liquide in an even stronger position to serve its customers in the country.
MRC

INEOS declares force majeure on ethanolamines, cites EO outage at Plaquemine

MOSCOW (MRC) -- INEOS Oxide (League City, Texas) has declared force majeure on all grades of mono-, di-, and triethanolamine, and for Alkanolamine 5503 (polyethanolamine), effective 3 November 2019, reported Chemweek.

According to a letter sent to customers on 6 November, supply of feedstock ethylene oxide (EO) to the company’s manufacturing site at Plaquemine, Louisiana, has been interrupted by "an industrial event affecting its supplier," which appears to be Dow.

INEOS has 159,000 metric tons/year of ethanolamines capacity at Plaquemine. The company also has 57,000 metric tons/year of ethanolamines capacity in Lavera, France.

INEOS says the outage began on 3 November, the same day Dow reported that an explosion had burst a vessel containing water and small volumes of sulfuric acid and ethylene oxide at its Glycol 2 plant at Plaquemine. Dow’s Glycol 2 plant includes 206,000 metric tons/year of ethylene oxide capacity, a small portion of which the company consumes internally, according to data from IHS Markit. Dow on 3 November said the plant was in "recovery mode."

Ethylene is a feedstock for producing polyethylene (PE).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,589,580 tonnes in the first nine months of 2019, up by 7% year on year. Shipments of all PE grades increased.
MRC

Sinopec Guangzhou Petrochemical to restart No. 2 PP line in China this week

MOSCOW (MRC) -- Sinopec Guangzhou Petrochemical, part of China's petrochemical giant - Sinopec, is expected to bring on-line its new PP unit after maintenance in the first week of November, reported CommoPlast with reference to market sources.

Based in Guangzhou, China, this unit's production capacity is 200,000 tons/year. The company also operates an old No. 1 PP line at the site with a production capacity of 140,000 tons/year.

Both units were shut down for a turnaround on 9 October 2019.

Meanwhile, its 60,000 tons/year old No. 2 PP line is still running regularly at the moment.

According to MRC's ScanPlast report, the estimated PP consumption in the Russian market was 976,790 tonnes in January-September 2019, up by 4% year on year. Shipments of PP block copolymer and homopolymer PP increased.

China Petroleum & Chemical Corporation or Sinopec Limited is a Chinese oil and gas company based in Beijing, China. Sinopec's business includes oil and gas exploration, refining, and marketing; production and sales of petrochemicals, chemical fibers, chemical fertilizers, and other chemical products; storage and pipeline transportation of crude oil and natural gas; import, export and import/export agency business of crude oil, natural gas, refined oil products, petrochemicals, and other chemicals.
MRC