Production sections in Syrias Banias refinery back to work after explosion

MOSCOW (MRC) -- The Syrian oil ministry said on Tuesday that all production sections in Syria’s Banias refinery, near the Mediterranean coast, are back to work after an explosion earlier this month, state news agency (SANA) reported, as per Hydrocarbonprocessing.

A worker was killed after the explosion broke out during maintenance operations in one of the production units of the refinery on Nov. 7.

As MRC informed earlier, a Dow Chemical plant near Plaquemine, Louisiana, in the US experienced an explosion on Sunday but there were no casualties. Dow Chemicals operations in Louisiana include the integrated manufacturing facility near Plaquemine and brine operations in Grand Bayou.

The Louisiana Operations has 23 production units manufacturing more than 50 different intermediate and specialty chemical products, such as chlorine and PE, that are used to produce cosmetics, detergents, solvents, pharmaceuticals, adhesives, plastics for a variety of packaging, automotive parts, and electronics components.

As MRC informed earlier, Dow Chemical shut its ethylene cracker No. 3 at its Plaquemine, Louisiana site with the annual production of 758,000 mt for expansion from mid-September to end-November 2016. After the restart this cracker can produce by 250,000 mt of ethylene more than before.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,589,580 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.

Global refiners raise cleaner shipping fuel output ahead of IMO 2020

MOSCOW (MRC) -- Global oil refiners have upgraded processing units and adjusted operations to raise output of low-sulfur residual fuels and marine gasoil (MGO) to prepare for stricter shipping fuel standards that kick in on Jan. 1, 2020, said Hydrocarbonprocessing.

The new International Maritime Organization (IMO) rules prohibit ships from using fuels containing more than 0.5% sulfur, compared with 3.5% through the end of December, unless they are equipped with exhaust-cleaning “scrubbers”.

The shipping industry consumes about 4 million barrels per day (bpd) of marine bunker fuels, and the rule changes will impact more than 50,000 merchant ships globally, opening a significant new market for fuel producers. Below is a summary of how top refiners have prepared.

The world’s largest refiner, Sinopec Corp has started very low-sulfur fuel oil (VLSFO) output at 10 refineries in China, including Zhenhai Refining and Chemicals Co, Jinling Petrochemical Co and Hainan Petrochemical Co. The company plans total VLSFO capacity of 10 million tonnes a year (about 180,000 bpd) by 2020.

It also plans to build a fleet of 100 barges over the next three years to supply cleaner fuels to ships.

PetroChina has pledged 4 million tonnes of VLSFO in 2020, likely from its Jinzhou, Jinxi and Dalian refineries in China’s northeast, and Guangxi refinery in the south.

PetroChina Fuel Oil Co Ltd has a license to supply ship fuel in Zhoushan on China’s east coast. Total plans to supply marine fuel in Zhoushan in a joint venture with China’s Zhejiang Energy.

Top South Korean refiner SK Energy, a unit of SK Innovation, started supplying MGO from October. It can produce up to 27,000 bpd of marine gasoil, about 8% of its total gasoil output. SK is also building a vacuum residue desulphurization (VRDS) unit that can produce 40,000 bpd of LSFO* due online in March or April 2020.

As MRC informed earlier, in April 2019, LyondellBasell announced that PetroChina will use the LyondellBasell Hostalen "Advanced Cascade Process" technology to produce 1,100,000 metric tons per year of high density polyethylene (HDPE) capacity. Licensor selection had been done by China HuanQiu Contracting & Engineering Co., Ltd. (HQC), a wholly owned subsidiary of PetroChina. The low-pressure slurry process technology will be used for a 300,000-mt/year HDPE unit to be built in Korla City, Xinjiang Province, a 400,000-mt/year plant in Jieyang City, Guangdong Province and a 400,000-mt/year plant in Yulin City, Shaanxi Province in the P.R. China.

We also remind that PetroChina Co, Asia’s largest oil and gas producer, reported a sharp fall in third-quarter profit on Wednesday, dragged down by weaker global energy prices and slowing growth in its domestic gas market.

According to MRC's ScanPlast report, Russia's September estimated HDPE consumption fell to 70,570 tonnes from 108,320 tonnes a month earlier. Russian producers reduced their output due to maintenance works, whereas imports were high partially because of an increase in US shipments. The estimated HDPE consumption totalled 862,170 tonnes in January-September 2019, up by 7% year on year. HDPE imports increased by 47%, whereas production dropped by 5% due to a long period of maintenance works at three production capacities.

Sinopec to launch USD5.7 B refinery

MOSCOW (MRC) -- China’s Sinopec Corp is set to launch a new USD5.7 billion refining and petrochemical complex in the south of the country in second-quarter 2020 using crude oil from Kuwait as a key feedstock, industry officials with knowledge of the matter said, as per Reuters.

The project being developed by Asia’s top refiner, a 200,000 barrels-per-day (bpd) plant in Zhanjiang, a coastal city in Guangdong province, will become the third greenfield refinery-petrochemical complex to be built in China within a space of two years.

Sinopec is seeking to finalize a crude oil supply deal that will help boost Kuwait’s oil sales to China to a record of nearly 600,000 bpd next year, the sources said. They declined to be identified because they were not authorized to talk to media.

The 40 billion yuan ($5.69 billion) complex comes on the heels of two privately invested mega-refineries - Hengli Petrochemical and Zhejiang Petrochemical Corp - that have piled onto an over-supplied domestic fuel market where demand for transportation fuels slowed and China’s fuel exports soared.

Sinopec did not respond to a request for comment.

The refinery is slated for start-up in April, followed by an ethylene plant in June next year, said one official briefed on the progress of the plant, located on Donghai island, Zhanjiang.

As MRC wrote earlier, in mid-September 2019, SIBUR Holding (SIBUR) and China Petroleum & Chemical Corporation (Sinopec) signed a framework cooperation agreement to produce SEBS (styrene, ethylene and butylene-based block copolymers). SEBS is a pelletised modifier for thermoplastics used to impart elasticity to plastic materials or as a primary polymer to produce elastic components. SEBS boasts excellent durability and is leveraged across a variety of industries such as plastics and bitumen modification, adhesives, modification compounds, and toys. Under the agreement, SIBUR and Sinopec will establish a 50/50 joint venture (JV) in Russia to produce at least 20 ktpa of SEBS.

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.

Sinopec Corp. is one of the largest scale integrated energy and chemical company with upstream, midstream and downstream operations. Its principal business includes: exploring, developing, producing and trading crude oil and natural gas; producing, storing, transporting and distributing and marketing petroleum products, petrochemical products, synthetic fiber, fertilizer and other chemical products. Its refining capacity and ethylene capacity rank No.2 and No.4 globally. Sinopec listed in Hong Kong, New York, London and Shanghai in August 2001. Sinopec Group, the parent company of Sinopec Corp., is ranked the 5th in Fortune Global 500 in 2012.

BASF breaks ground on USD10bn China chemical complex

MOSCOW (MRC) -- BASF has broken ground on a USD10bn petrochemical complex in southern China, becoming the latest foreign company to increase its presence in the country as Beijing gradually relaxes restrictions on overseas investment, said the company.

Martin Brudermuller, the German chemical group’s chief executive, said the facility in Guangdong province is the largest investment in BASF’s 154-year history and reflects confidence in the growth of the Chinese market.

The company forecasts that China will account for 50 per cent of global chemical demand by 2030, up from 40 per cent today. BASF said the plant would be fully operational within a decade and employ thousands of workers.

Beijing loosened restrictions that excluded foreign companies from investing or taking ownership stakes in industrial and financial sectors after the pace of growth of foreign direct investment into China slowed to just 3 per cent last year.

Foreign companies have long been excluded from several high-growth sectors or forced to form joint ventures with Chinese companies. US and European chambers of commerce have called on Beijing to accelerate access for foreign investment.

The BASF facility, in the city of Zhanjiang, is the first of its kind in China that will be fully owned by the company after Beijing allowed full foreign ownership of chemical “cracking” facilities used to produce plastics.

BASF said the plant would produce 60,000 metric tonnes of plastic by 2022. Chinese central government officials attended the groundbreaking ceremony on Saturday.

As MRC informed before, in early September 2019, SIBUR, the largest petrochemical comples in Russia and Eastern Europe, and BASF, Geman petrochemical major, agreed to closely cooperate on sustainable development to share their best practices. SIBUR held a design session on sustainable development in the petrochemical industry. At the event, BASF shared details on its new sustainability strategy and its integration into the company's overall strategy. The participants were also presented with the company's methods of environmental impact assessment and approach to the circular economy, which embraces opportunities for chemical recycling of plastics, such as the ChemCycling project. With chemical recycling, fossil resources for chemical production can be replaced with recycled material from plastic waste.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,589,580 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.

BASF is the leading chemical company. It produces a wide range of chemicals, for example solvents, amines, resins, glues, electronic-grade chemicals, industrial gases, basic petrochemicals and inorganic chemicals. The most important customers for this segment are the pharmaceutical, construction, textile and automotive industries.

Russian ESPO crude premiums slide

MOSCOW (MRC) -- Premiums for January-loading ESPO Blend crude oil have dropped after rising to a record last month as Chinese refineries cut purchases before the Lunar New Year holidays and as refining margins fell, several trade sources said, as per Hydrocarbonprocessing.

The drop in spot premiums for Russian ESPO ESPO-DUB, one of the most popular crude grades for Chinese independent oil refiners, also known as “teapots”, could signal softer demand for other types such as Brazil’s Lula and Angolan crude.

Russian oil producer Surgutneftegaz sold late on Wednesday two 740,000-barrel ESPO cargoes, loading over Jan. 8-15 and Jan. 11-18, at premiums of around $6.60-$6.90 a barrel to Dubai quotes, the sources said.

Russia’s Paramount Energy also sold about four cargoes of January-loading ESPO crude at premiums of around USD6.50-USD7 a barrel to Dubai quotes, with the late-January loading cargoes sold at the lower end of the price range, the sources said. The buyers of the cargoes are not immediately known.

The premiums are nearly USD1 a barrel lower than a Surgutneftegaz ESPO tender awarded on Monday for cargoes loading on Dec. 31-Jan. 5 and Jan. 4-9, which were sold at about USD7.60 and about USD7.80 a barrel.

Some traders attributed the falling ESPO spot premiums to weak Chinese crude demand as cargoes loading in mid-and late-January from Russian’s Kozmino port will arrive in China close to the Lunar New Year holiday starting on Jan. 24 when the country winds down economic activity.

Crude purchases from China, the world’s top oil importer, are also declining because of falling refining margins. In November margins for plants across the country averaged about 160 yuan per tonne, or USD3.11 a barrel, down from 200 yuan per tonne, or USD3.89 a barrel, in October, according to data from Wang Zhao, an analyst at Sublime China Information Co.

As MRC informed earlier, Kazakhstan plans to increase the transit of Russian oil to China by 30 percent after 2023. Russia’s Rosneft currently sends 10 million tons of oil annually to China through Kazakhstan under a deal which will last until 2023. Some of Rosneft’s oil is consumed by a Kazakh refinery and replaced under a swap arrangement.

We remind that, Russia's output of chemical products rose in October 2019 by 5.4% month on month.
However, production of basic chemicals increased by 3.9% in the first ten months of 2019. According to the Federal State Statistics Service of the Russian Federation, the largest increase in production volumes on an annualized basis accounted for mineral fertilizers and polymers in primary form. Thus, 210 ,000 tonnes of ethylene were produced in October, compared to 200,000 tonnes a month earlier. Limited production was a result of scheduled shutdowns of several large producers in September-October.