Technology selected for major modernization project at refinery in India

MOSCOW (MRC) -- KBR has announced that its market-leading ROSE solvent de-asphalting (SDA) process will be integrated with LC-MAX technology, an advanced, patented, ebullated-bed residue upgrading process from Chevron Lummus Global (CLG) to assist Hindustan Petroleum Corporation Limited (HPCL)'s modernization at the Visakh refinery residue upgrading project in India, according to Hydrocarbonprocessing.

Under the terms of the contract, KBR will provide CLG the technology licensing, basic engineering design and proprietary equipment for the ROSE SDA portion of the LC-MAX unit. ROSE is a cost-effective residue upgrading process that allows refiners to upgrade a larger proportion of their low-value residue streams into high-value products and gives clients the flexibility to respond to market developments in fuel, lube and petrochemical applications as well as reduce the environmental footprint of their products.

"We are proud to announce this latest project award for KBR's world-leading ROSE process," said Doug Kelly, KBR President, Technology Solutions. "Our innovative ROSE technology integrated with the LC-MAX ebullated-bed hydrocracking process is an attractive economic solution and will enhance the overall refinery profitability."

KBR continuously updates ROSE technology with multiple flow schemes for optimum integration with new and existing refineries. The company has been awarded more than 60 ROSE licenses with a combined licensed capacity of nearly 1.6 million BPSD with many repeat licensees.

As MRC reported earlier, in July 2019, Haiwan Chemical Co. awarded a technology contract to KBR for a new 320,000-t/y phenol and acetone facility to be built in Dongjiakou Industrial Zone, Qingdao City, Shandong Province, China. Under the terms of the contract, KBR will provide the technology license and basic engineering design, as well as technical and training services to Haiwan Chemical.

Phenol and acetone are the main feedstock component for the production of bisphenol A (BPA), which, in its turn, is used to produce polycarbonate (PC).

According to ICIS-MRC Price report, Russia's estimated consumption of polycarbonate (PC) rose in in the first three quarters of 2019 by 11% year on year to 61,000 tonnes (54,800 tonnes a year earlier). Consumption in the injection moulding sector grew in the first nine months of 2019 by 10% year on year to 7,900 tonnes from 7,200 tonnes a year earlier.

KBR is a global provider of differentiated professional services and technologies across the asset and program lifecycle within the Government Solutions and Energy sectors. KBR employs approximately 38,000 people worldwide (including our joint ventures), with customers in more than 80 countries, and operations in 40 countries.

Bankrupt Philadelphia refiner seeks USD2.5 MM in executive bonuses

MOSCOW (MRC) -- The bankrupt Philadelphia Energy Solutions oil refiner is seeking a minimum of USD2.5 MM in bonus payments to the refiner's top executives as part of a plan to reorganize or sell the company, US bankruptcy court filings show, reported Reuters.

This would represent a potential second round of bonuses for PES executives, who were already paid roughly USD4.5 MM in retention awards after a massive June fire that resulted in the plant's shutdown. PES laid off hundreds of workers without severance pay or benefits following the blaze.

The latest round of bonuses will be paid if PES confirms a reorganization within 15 months of its July Chapter 11 bankruptcy filing, according to documents filed with the United States Bankruptcy Court for the District of Delaware on Friday.

Alternatively, the USD2.5 MM could also be paid if PES secures at least $300 MM in net proceeds from a sale, insurance proceeds or other payments, including a lawsuit the refiner filed against the federal government over excise taxes, the documents show.

Under the plan, Chief Executive Officer Mark Smith would receive 29% of any incentive bonuses, PES board of directors Chairman Mark Cox gets 25%, Chief Financial Officer Rachel Celiberti 18% and attorney Anthony Lagreca would get 14%. Three other employees would receive smaller amounts.

The executives are needed to oversee the bankruptcy and sale process, seek insurance proceeds and manage idling the plant, among other work, the court filings said, with attorneys noting these duties "go well beyond the demands of their day-to-day jobs."

The company was not immediately available for comment.

PES entered bankruptcy on July 21 and shut its last crude distillation unit later that month. The refinery has since been put up for sale and has attracted interest from more than a dozen parties, ranging from biofuels producers to real estate developers.

Bonus payments to the executives would increase by 2.5% on every dollar above the USD300 MM in net proceeds minus expenses. If the proceeds hit USD1 B, bonuses would increase seven-fold.

Smith would get a USD725,000 payment under the minimum payment and as much as USD5.8 MM if the net proceeds hit USD1 B.

The refiner is attempting to secure as much as USD1.25 B in insurance proceeds for damage and business interruption linked to the June fire and explosions.

As MRC wrote before, in mid-November 2019, a US bankruptcy judge approved a process for the sale of the Philadelphia Energy Solutions oil refinery, the largest and oldest on East Coast, under which city officials and a trade union will consult on the matter.

After Turkmen oil breakthrough, Vitol adds products to portfolio

MOSCOW (MRC) -- Vitol, the world’s biggest oil trader, will begin exporting fuel oil and diesel from Turkmenistan via the Russian port of Novorossiisk this month, five trading sources said, capitalizing on its recent success in restarting Turkmen crude oil exports via Russia, said Hydrocarbonprocessing.

Market analysts predicted the Swiss-based trading house would struggle to execute the deal due to a lack of tankers in the Caspian Sea, most of which are controlled by SOCAR, but Vitol succeeded and is now expanding into refined products.

Turkmenistan has been selling most of its oil products to Azerbaijan or exporting it to the Black Sea market via Georgian ports. Some traders have also exported oil products via the Volga-Don shipping canal in Russia but that is typically closed from November to April due to ice.

"In December the first, test shipment (via Novorossiisk) is planned. If everything goes well, next year they expect to supply around 500,000 tonnes (of oil products)," a source familiar with the trading firm’s plan said.

Vitol declined to comment on its trading activity. According to two traders, Vitol won a tender in May to buy oil products from the Turkmenbashi refinery in Turkmenistan this year, but it took the company months to negotiate logistics. "They had to negotiate with Russia’s railways, customs, fix vessels to cross the Caspian Sea,” one of the traders said.

Shipping oil products from Turkmenistan to the Russian port of Novorossiisk on the Black Sea is quite complicated as it involves loading at Turkmenbashi, crossing the Caspian Sea, offloading in Russia’s Makhachkala port then transporting the products via rail to Novorossiisk, where they will be offloaded for seaborne exports, according to traders.

According to Russian railway data seen by Reuters, 20,000 tonnes of fuel oil and 25,000 tonnes of diesel produced in Turkmenistan are scheduled to be transported from Makhachkala railway station to Novorossiisk port this month.

As MRC informed before, test operations at a new gas chemical complex (GCC) for processing natural gas and producing polyethylene (PE) and polypropylene (PP) in the village of Kiyanly started back in August 2018. An official launch of production took place on 17 October, 2018.

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.

Pemex reports first quarterly production gain in 14 years

MOSCOW (MRC) -- Mexico's state-owned Pemex on Monday announced its first quarterly production increase in 14 years, an outcome executives attributed to the strategy of a new business plan announced in July, reported S&P Global.

In the third quarter, Pemex produced a gross 4.86 Bcf/d of gas, equivalent to a 96 MMcf/d, or 2%, increase in output compared to the second quarter, company data showed.

Crude oil production rose by 21,000 b/d over the same period to 1.694 million b/d.

On Monday's third-quarter earnings call, executives also touted the company's quarterly improvements in processing and refining, along with gains in refined products output.

Processing of wet gas, which accounts for most of Pemex's gas production, climbed about 5% from the second to third quarter, rising to nearly 2.9 Bcf/d. Dry gas output also edged up 6.8% to 2.37 Bcf/d.

Natural gas liquids production, though, fell by 5,000 b/d to 218,000 b/d.

Higher nitrogen content in Pemex's production mix saw the company's natural gas use decline to about 94% -- down from levels closer to 95% in the first and second quarters. Elevated nitrogen levels prompted a nearly 20% increase in flaring, which rose to an average 310 MMcf/d during the quarter.

Recent investments in Pemex's processing and refining business also showed results in the third quarter.

Refining throughput climbed 10% from Q2 while production of gasoline and diesel rose about 3% and 1%, respectively, over the same period.

Chief Financial Officer Alberto Velazquez said, "Pemex is on the right path," emphasizing the company's commitment to a new business strategy, first announced by Mexican President Andres Manuel Lopez Obrador in December.

That five-year business plan has called for Pemex to increase oil production to 2.7 million b/d 2024 and balance the company's budget by 2021. When the strategy was first announced, it also included an ambitious goal to grow natural gas production at Pemex to nearly 6.5 Bcf/d by 2024.

The new strategy has seen Pemex increase investment in the shallow water fields of the Gulf of Mexico this year, while simultaneously slashing the company's costs for administration, fuel distribution and fuel theft.

In the fourth quarter, the company expects to continue growing production thanks to the startup of 11 new development wells and 10 exploration wells expected to come online in November and December.

The company's new strategy, though, has also been accompanied by a decline in bottom line profitability.

In the third quarter, Pemex reported a net loss of nearly 88 billion pesos (USD4.6 billion), significantly more than the 53 billion peso (USD2.7 billion) net loss in Q2. In the third quarter last year, Pemex reported net positive income of 27 billion pesos (USD1.4 billion).

As MRC wrote previously, in 2016, Pemex shut its steam cracker at its Cangrejera complex for maintenance on February 15. The cracker was idle for about 14 days. The conducted repairs at the cracker were a part of planned maintenance.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,724,670 tonnes in the first ten months of 2019, up by 7% year on year. Shipments of all PE grades increased. The estimated PP consumption in the Russian market in January-October 2019 totalled 1,066,520 tonnes, up by 7% year on year. Supply of block copolymers of propylene (PP block copolymer) and homopolymer of propylene (homopolymer PP) increased, demand for statistical copolymers (PP random copolymer) decreased.

Pemex, Mexican Petroleum, is a Mexican state-owned petroleum company. Pemex has a total asset worth of USD415.75 billion, and is the world's second largest non-publicly listed company by total market value, and Latin America's second largest enterprise by annual revenue as of 2009. Company produces such polymers, as polyethylene (PE), polypropylene (PP), polystyrene (PS).

Linde signs MoU with Baowu Clean Energy to further develop China hydrogen market

MOSCOW (MRC) -- Linde announced that it has signed a memorandum of understanding (MoU) with Baowu Steel Group's new subsidiary, Baowu Clean Energy Ltd, to jointly cooperate on research and development to further develop China's hydrogen market for industrial and mobility applications, said Chemicalonline.

The two companies will work together to increase the accessibility of hydrogen to industries and advance the acceptance of hydrogen mobility solutions in China. Under the agreement, Linde and Baowu Clean Energy will also explore the option to invest in liquid hydrogen plants and infrastructure.

"We are delighted to build on our long-term partnership with Baowu Group with this latest cooperation to accelerate the development of hydrogen infrastructure and solutions for mobility and other industrial applications. Linde with its technology leadership in hydrogen is delighted to be the strategic partner for the Baowu Group as we work together to make hydrogen accessible for users across China," said Sanjiv Lamba, EVP & CEO Asia Pacific for Linde.

"This agreement with Linde marks an important new milestone in our long and successful partnership. Linde's expertise in hydrogen technology and solutions gives us the confidence that together we can transition to a cleaner low-carbon future for China," said Mr Guo Bin, Deputy General Manager, Baowu Steel Group.

Linde is a member of the global Hydrogen Council and the China Hydrogen Alliance which promotes hydrogen to help meet climate goals. The strategic agreement with Baowu follows Linde's recent joint venture with ITM Power and underscores the company's continued focus on delivering sustainable solutions in support of the global transition to cleaner energy.

Baowu Clean Energy is a subsidiary of Baowu Steel Group, one of the world's largest steel manufacturers. It was founded on 15 November 2019 to implement the Group's cleaner energy vision. The company will focus on the development of the hydrogen ecosystem in China, from production, to storage and distribution infrastructure and mobility concepts.

As MRC wrote previously, German chemical company BASF and The Linde Group’s Engineering Division are collaborating to serve natural gas processing applications using BASF’s absorbent technology and Linde’s adsorption and membrane technology. With the combined capabilities of materials expertise from BASF and engineering expertise from Linde, the two companies are well positioned to expand their global leadership position in natural gas applications. The collaboration is a strong signal to the natural gas industry and will open access to previously inaccessible gas compositions for treatment.

In June 2017, the heads of TAIF Group and Linde AG, the German holding, signed a memorandum of strategic cooperation for the period up to 2025 and a total investment of up to 12 billion euros. The document implies contracts on gas separation, industrial gases, but most importantly — on four stages of the construction of a new ethylene complex in Tatarstan.

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.