US shale oil output to rise 49,000 bpd to record 9.1 Mbpd

MOSCOW (MRC) -- US crude oil output from seven major shale formations is expected to rise about 49,000 barrels per day in December to a record 9.13 million bpd, reported Reuters with reference to the US Energy Information Administration said in a monthly forecast.

Output at the largest formation, the Permian Basin of Texas and New Mexico, is expected to rise 57,000 bpd to 4.73 million bpd, the smallest increase since July this year but offsetting projected declines elsewhere.

Output in North Dakota and Montana's Bakken region is expected to edge higher by 9,000 bpd to a record 1.51 million bpd, the data showed.

Meanwhile, production declines are forecast in the Eagle Ford and Anadarko basins.

Production increases in the Permian and Bakken have been at the forefront of a shale boom that has helped make the United States the biggest oil producer in the world, ahead of Saudi Arabia and Russia.

Still, the rate of growth in the Permian has slowed as independent oil producers cut spending on new drilling and completions and focus more on earnings growth.

Investor dissatisfaction is expected to spur companies to rein in spending for a second year, with capital expenditures among companies that have released budgets set to fall more than 10% in 2020.

Still, majors are ramping up spending, offseting some of the impact this year.

Separately, US natural gas output in the big shale basins was projected to increase to a record 85.2 billion cubic feet per day (bcfd) in December.

That would only be up about 0.3 bcfd over the November forecast, its smallest monthly increase since January when production in the big shale basins declined.

Growth was slowing as the number of rigs in each region has declined since the start of the year.

Output in the Appalachia region, the biggest US shale gas formation, was set to rise less than 0.1 bcfd to a record 33.7 bcfd.

EIA said producers drilled 1,148 wells, the least since December 2017, and completed 1,373 in the biggest shale basins in October, leaving total drilled but uncompleted (DUC) wells down 225 to 7,642, the lowest since October 2018.

That was the biggest monthly decline in DUCs on record, according to EIA data going back to December 2013.
MRC

MOSCOW (MRC) -- INEOS has opened a new pilot plant in Rosignano, Italy, producing polymers from increasing levels of plastic waste diverted from landfill or incineration, said the producer.

Part of the company’s EUR100m research and development programme, the new plant will manufacture polymers for end markets such as auto parts using waste plastic as a feedstock instead of fossil fuels. “The plant demonstrates INEOS' commitment to develop this technology to full commercial scale," said INEOS Olefins & Polymers South CEO Iain Hogan.

The company has also introduced a new range of polymers melding 50% recycled polymers with virgin material earlier this month. The capacity and investment level were not disclosed.

Franken, chairman of INEOS Olefins & Polymers Europe, and chairman of INEOS Polyolefins Catalyst, said: “This pilot plant will help to use more and more plastic waste for new high-value polymers, which is the very core of the circular economy. It demonstrates INEOS' commitment to develop this technology to full commercial scale."

Dr Iain Hogan, CEO of INEOS Olefins & Polymers South, said: “I would like to thank those that have supported this key R&D project from the beginning, across regional and local authorities. This is an important investment in the Rosignano site and for the whole of INEOS O&P."

Earlier this month, INEOS Olefins & Polymers also announced the introduction of the Recycl-IN polymer range to its portfolio. The range contains up to 50% post-consumer recycled plastic compounded with new highly engineered virgin polymers.

We remind that, as MRC wrote before, in September 2019, INEOS Phenol broke ground at its world scale cumene investment in Marl, Germany. The new state-of-the-art 750 000 t unit is scheduled to be completed in 2021. Its location will help optimise the efficiency of the plant by integrating raw materials from the refinery and cracker complex. The site also benefits from the Marl harbour waterway connection.

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.

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MOSCOW (MRC) -- Equinor offloaded a rare cargo of very low-sulfur fuel oil (VLSFO) from Norway last week at UAE’s Fujairah bunkering hub to meet expected demand from stricter ship fuel emission rules, according to trade sources and shipping data, said Hydrocarbonprocessing.

The 130,000-tonne cargo has been sold to Saudi Arabia’s Aramco Trading Corp (ATC), said five fuel oil trade sources who declined to be identified due to company policies. Equinor said it did not comment on specific cargoes. ATC did not respond to a Reuters request for comment.

New rules from the International Maritime Organization (IMO) take effect from Jan. 1, capping the sulfur content of shipping fuel at 0.5% from 3.5% now, unless vessels use exhaust-cleaning scrubbers.

The rare shipment is one of the new trade flows for the residue fuel as traders stock up on VLSFO supplies at major bunkering hubs to meet an expected surge in demand next year.

"This is the first VLSFO parcel we’ve seen from Mongstad (to Fujairah)," said Ranjith Raja, head of oil research at Refinitiv for Middle East and North Africa.

Suezmax tanker Cap Diamant loaded on Oct. 10 the VLSFO cargo at Mongstad port where Equinor’s refinery is located and the ship discharged its cargo at Fujairah last week, shipping data on Refinitiv Eikon showed.

The tanker was chartered by Equinor, according to a shipping report.

The cargo consisted of VLSFO with 0.472% sulfur and the oil has a viscosity of 160-centistoke and 0.933 density, the sources said.

As MRC informed earlier, Repsol has agreed to buy Equinor's equity position in US Eagle Ford shale basin for USD325 million in a deal giving it 100% control and operatorship of the shale assets. Under the deal, Repsol said it will acquire 69,000 net acres and 34,000 b/d of oil equivalent production taking its total output at Eagle Ford to 54,000 boe/d.

We remind that Repsol will shut down its cracker in Tarragona (Spain) for maintenance in the fourth quarter of 2019. The turnaround at this steam cracker, which produces 702,000 mt/year of ethylene and 372,000 mt/year of propylene, was pushed back from Q3 2019. The exact dates of maintenance works are not disclosed.

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.
MRC

MOSCOW (MRC) -- US oil refineries have cut their crude processing by almost 100 million barrels so far this year, mostly in response to slack demand at home and overseas, as per Hydrocarbonprocessing.

Crude processing in the year-to-date has fallen for the first time since the recession of 2008/09, according to data from the US Energy Information Administration.

US refineries have processed 16.61 million barrels per day (bpd) of crude so far in 2019, down from 16.91 million bpd at the same point in 2018.

Some of the reduction can be attributed to the closure of the 335,000 bpd Philadelphia Energy Solutions refinery on the East Coast following an explosion and fire on June 21.

East Coast processing has fallen 138,000 bpd (13%) this year, but processing is also down by 147,000 bpd (1.6%) on the Gulf Coast and by 54,000 bpd (2.2%) on the West Coast.

Nationwide processing has fallen by 1.8% compared with 2018, with refineries on the East Coast accounting for less than half the total reduction.

Instead, refiners have trimmed crude throughput in line with reduced demand for petroleum products to avoid a build up of unwanted stocks crushing their margins.

Nationwide consumption of finished products was down 1.0% in the eight months from January through August, including an 0.5% decline in gasoline and a 1.2% decline in distillates.

Total consumption of finished products, including imports, fell by 44 million barrels in January-August compared with the same period a year ago, the first decline since 2012.

US exports of finished products were also down 30 million barrels in the first eight months, the largest decline for more than 20 years, reflecting weak foreign demand for gasoline, residual fuel oil and petroleum coke.

By throttling back crude processing, US refineries have averted a surplus of gasoline and diesel, but created an even bigger surplus in the crude market, in the process supporting refining margins.

As MRC wrote before, US and local officials are opposing the sale procedure for the bankrupt Philadelphia Energy Solutions oil refinery, arguing the plan discourages bidders and keeps the city locked out of the process, reported Reuters with reference to federal court filings. The proposed PES sale plan does not give potential buyers of the fire-damaged refinery enough time or information to outbid a stalking-horse bid chosen by PES, US Trustee Andrew Vara argued in a filing with the US Bankruptcy Court in Delaware.
MRC

MOSCOW (MRC) -- Ellen Kullman, the former CEO of DuPont, was named the head of Carbon, a 3D-printing company that can use a host of thermoset resins in additive manufacturing, said Forbes.

Joseph DeSimone was named executive chairman of the board, the company said. He is a co-founder of the company and was the CEO for the past six years.

DeSimone will focus on promoting further mainstream adoption of the technology and spreading the company's vision to existing and new customers, partners and the public.

Kullman will lead the development and execution of short- and long-term strategies, Carbon said. She had been on the company's board. Both appointments are immediate.

Carbon's additive-manufacturing technology uses a process similar to stereolithography as well as heat curing. The company won this year's Polyurethane Innovation Award.

3D-printing unicorn Carbon is bringing in a new high-powered CEO as it goes beyond the startup stage. Ellen Kullman, former CEO of DuPont, replaces cofounder Joe DeSimone, effective immediately, the company announced today. DeSimone, who had been in the CEO role since launching Carbon in 2013, becomes executive chairman of the board with the change.

DeSimone, 55, a former professor at the University of North Carolina, told Forbes that as he built out the Redwood City, California, company’s leadership team over the past 18 months, he’d begun to think about his own role at the expanding business—and who might take on the top operating spot. “[Investor] Bobby Long is the people person on the board. He and I talk seven times a week, and it was through that conversation that the idea emerged,” DeSimone said. “Bobby has a lot of ideas, often harebrained and not possible. And we pulled it off."

As MRC informed earlier, DuPont Teijin Films has launched a new depolymerisation process which upcycles post-consumer PET waste into technically-advanced BOPET films suitable for use in various applications.

As per MRC's DataScope, imports of injection moulding PET chips in Russia increased by 14% in the first ten months of the year compared with the same period a year ago and reached 106,000 tonnes. The same indicator in January-October 2019 amounted to 92,700 tonnes. The share of bottle grade PET imports from China amounted to 90% compared to 86% for the same period last year.

DuPont Teijin Films is a joint venture between DuPont and Teijin Ltd and supplies polyester films and related services to a wide range of industries, including healthcare, alternative energy, electronics and packaging.

DuPont makes a broad array of industrial chemicals, synthetic fibres, petroleum-based fuels and lubricants, pharmaceuticals, building materials, sterile and specialty packaging materials, cosmetics ingredients, and agricultural chemicals. It has plants, subsidiaries, and affiliates worldwide.

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