Pertamina to build petrochemical plant in Balongan next year

MOSCOW (MRC) -- Pertamina will start building a petrochemical factory in Balongan, Indramayu next year. This plant will be integrated with existing refineries, according to TEMPO.

"This will be the largest integrated refinery and petrochemical plant, located in West Java," Pertamina CEO Nicke Widyawati said after meeting with West Java Governor M. Ridwan Kamil on Wednesday, November 27.

Nicke said that the petrochemical plant would utilize the location of Pertamina's refinery in Balongan, Indramayu, as well as the existing facilities.

She said the petrochemical plant will have a processing capacity of up to 350,000 barrels per day of crude oil. "And for petrochemicals, it can process around 2.5 million Nafta (petrochemical raw materials)," Nicke said.

Pertamina is targeting the petrochemical plant to operate in 2026. Nicke did not say how much investment is disbursed for the project.

West Java Governor Ridwan Kamil said Pertamina received investment from a Taiwanese company to build the petrochemical factory. There is also a possible investment from an Abu Dhabi company "for investment in Indramayu," he said on Wednesday.

"The concrete amount is roughly USD8 billion, or close to Rp100 trillion.

Ridwan Kamil said the construction process would take a maximum period of five years.

As MRC wrote previously, in December 2018, Indonesian state energy company PT Pertamina signed an engineering, procurement and construction (EPC) contract to upgrade Balikpapan refinery, reported Reuters with reference to Chief Executive Nicke Widyawati. Balikpapan refinery upgrade is expected to start construction earlier next year, Senior Vice President Daniel Purba said then. First stage of Balikpapan upgrade is scheduled for operation in 2021 to produce Euro V standard fuel, and stage 2 in 2022 to convert its use to process sour crude, from currently processing medium heavy crude.

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.

Pertamina is an Indonesian state-owned oil and natural gas corporation based in Jakarta. It was created in August 1968 by the merger of Pertamin (established 1961) and Permina (established 1957). Pertamina is the world's largest producer and exporter of liquefied natural gas (LNG).

Cabinet approves BPCL stake sale

MOSCOW (MRC) -- The union cabinet chaired by Prime Minister Narendra Modi has approved the sale of the government's entire 53.29 per cent stake in oil refiner and retailer Bharat petroleum Corporation (BPCL), reported EnergyWorld with reference to Finance Minister Nirmala Sitharaman's statement after a cabinet meeting.

"The strategic disinvestment of BPCL, of the Government of India’s shareholding of 53.29 per cent, along with transfer of certain management control to strategic buyer is approved. The entire management control will be transferred. However, this is excluding BPCL’s equity shareholding of 61 per cent it holds in Numaligarh Refinery Ltd," Sitharaman said.

She said a "carve out" has been made of NRL in Assam that shall not be disinvested and NRL will be moved out of BPCL before the disinvestment and acquired by another PSU.

Sitharaman had said in an interview last week the government would wrap up the sale of the fuel retailer by March 2020.

As MRC wrote before, in August 2019, Sumitomo Chemical signed an agreement with Bharat Petroleum Corporation Limited (BPCL) of India for licensing its propylene oxide (PO) production technology in connection with the petrochemical project which BPCL is conducting.

BPCL is one of the leading government-owned oil companies in India, with a total production capacity of approximately 840,000 barrels a day of crude oil from its four refinery complexes in India. BPCL aims to enter into the petrochemicals market by carrying out a large-scale petrochemical project adjacent to its refinery complex at Kochi in the state of Kerala. The project includes construction of new plants for PO and polyols. For PO production, a decision has been made to adopt Sumitomo Chemical's proprietary technology. From now on, BPCL will conduct front-end engineering design and detailed engineering for the new PO plant, which will have an annual production capacity of 300,000 tons upon its completion targeted in 2022.

Propylene is a feedstock for the production of polypropylene (PP)/

According to MRC's ScanPlast report, Russia's overall PP production rose to about 1,163,200 tonnes in the first ten months of 2018, up by 1.3% year on year. Three producers out of seven reduced the capacity utilisation.

Asia distillates—Gasoil cracks gain, cash premiums crawl up

MOSCOW (MRC) -- Asian refining margins for 10-ppm gasoil climbed on Wednesday, while cash premiums for the industrial and transportation fuel inched higher amid a slight uptick in buying interests in the physical market, Reuters.

Refining margins, also known as cracks, for 10-ppm gasoil rose to USD14.80/bbl over Dubai crude during Asian trade, up from USD14.66/bbl on Tuesday.

Cracks for the benchmark gasoil grade in Singapore, which have dropped about 11% in the last four weeks, were currently about 1% lower than their seasonal average for this time of the year in the last three years, Refinitiv Eikon data showed.

The gasoil market would likely bottom out sometime soon as some refinery run cuts are underway, which would help tighten supplies to an extent, a trader said on Wednesday.

Cash premiums for gasoil with 10 ppm sulfur content were at USD0.18/bbl to Singapore quotes on Wednesday, USD0.02/bbl higher from a day earlier.

The front-month time spread for 10-ppm gasoil widened by USD0.05 to trade at a premium of USD0.20/bbl on Wednesday, Refinitiv data showed. Meanwhile, cash differentials for jet fuel were at a discount of USD0.61/bbl to Singapore quotes on Wednesday, compared with a discount of USD0.62/bbl on Tuesday.

Jet fuel cracks eased to USD14.15/bbl over Dubai crude on Wednesday, compared with USD14.21/bbl in the previous session. Fujairah stocks. Middle-distillate inventories in the Fujairah Oil Industry Zone fell 14.1% from a week earlier to 3 MMbbl in the week to Nov. 25, data via S&P Global Platts showed.

Stocks of middle distillates in the Fujairah oil hub have averaged 2.2 MMbbl so far in 2019, Reuters calculations showed. This compares with a weekly average of 2.8 MMbbl in 2018. Compared with year-ago levels, weekly Fujairah middle distillate stocks were 34.5% higher.

API inventory data. U.S. crude stocks rose last week while gasoline inventories increased and distillate stocks fell, data from industry group the American Petroleum Institute showed on Tuesday. Crude inventories rose by 3.6 MMbbl in the week to Nov. 22 to 449.6 MMbbl, compared with analysts' expectations for a decrease of 418,000 bbl.

Distillate fuels stockpiles, which include diesel and heating oil, fell by 665,000 bbl, compared with expectations for a 750,000-bbl gain, the API data showed.

As MRC informed earlier, oversupply condition in the Asian butadiene market is likely to be offset by a possible export cut from the US after a fire hit the TPC Group's Port Neches butadiene and raffinate petrochemical plant east of Houston, Texas.

Located adjacent to the Sabine Neches River, a part of the Sabine Neches Waterway, TPC's Port Neches plant can produce more than 900 million lb (426,000 mt) of butadiene and raffinate a year, according to the company's website. A source familiar with company's operations said the site has two butadiene lines with capacities of 166,000 mt/year and 260,000 mt/year.

Butadiene is one of the feedstocks for the production of acrylonitrile-butadiene-styrene (ABS).

According to ICIS-MRC Price report, in Asia, the falling prices of feedstocks for ABS production have been pushing prices of material down in the Russian market. LG Chem's import prices for November quantities were as follows for Russian buyers: natural ABS - at USD1,400-1,420/tonne FOB Korea, black ABS - at USD1,610-1,630/tonne FOB Korea, white ABS - at USD1,640-1,660/tonne FOB Korea. December prices may drop by another USD30-50/tonn.
Natural grades of Korean ABS went down to Rb138,000-143,000/tonne CPT Moscow, including VAT, in the domestic market in mid-November, whereas black ABS was offered at Rb156,000-160,000/tonne and white ABS - at Rb158,000-163,000/tonne CPT Moscow , including VAT.

Lotte Titan resumes production at No. 1 LLDPE unit in Cilegon

MOSCOW (MRC) -- PT Lotte Titan Nusantara Indonesia has restarted its No. 1 Linear Low Density Polyethylene (LLDPE) unit at Cilegon, as per Apic-online.

A Polymerupdate source in Indonesia informed that the company has resumed operations at the unit early last week. The unit was shut owing to shortage of feedstock in early-November, 2019.

Located in Cilegon, Indonesia, the No. 1 unit plant has a production capacity of 125,000 mt/year.

As MRC informed earlier, PT Lotte Titan Nusantara, Indonesia shut its LLDPE units at Cilegon from 4 to 12 August, 2019, owing to power failure. Located in Cilegon, Indonesia, the No. 1, 2 and 3 units have a production capacity of 125,000 mt/year, 125,000 mt/year and 200,000 mt/year respectively.

Lotte Chemical Titan produces Malaysia's most comprehensive portfolio of olefins and polyolefins which contribute to the enhancement of everyday life. Lotte Chemical Titan's production site in Malaysia consists of eleven process facilities, two co-generation plants and three tank farms. They are located on 2 sites in Pasir Gudang and Tanjung Langsat in the state of Johor. In 2006, Lotte Chemical Titan acquired PT Lotte Chemical Titan Nusantara, Indonesia’s first and largest polyethylene plant in the country. This acquisition boosted the polyolefins capacity by approximately 50%, thus making the company one of the largest producers in South East Asia. Lotte Chemical Titan was acquired by Lotte Chemical Corp., forming part of the Lotte conglomerate of Korea, in 2010. The company thus became one of Lotte Chemical Corp.’s largest overseas subsidiaries.

Sekisui Chemical acquires composite parts maker AIM Aerospace

MOSCOW (MRC) -- Japan’s Sekisui Chemical Co. Ltd. has acquired carbon fibre parts manufacturer AIM Aerospace, based in Renton, Wash., for an undisclosed amount, said Canplastics.

As a result of the purchase, the company will change its name to Sekisui Aerospace.

"The acquisition of Sekisui Aerospace continues Sekisui’s commitment to investing in growth markets with high-quality and principled companies that share our corporate values,” Ian Moran, president of subsidiary Sekisui America, said in a statement. “The addition of Sekisui Aerospace creates new value for our shareholders, customers, communities and employees."

Founded in 1988, Sekisui Aerospace manufactures advanced composite structures, systems, engine components, assemblies and thermoplastic technology for the aerospace industry.

With more than 1,000 employees, the company operates manufacturing centers of excellence as well as a research and technology centre at locations in the U.S. states of Washington and Iowa. Sekisui Aerospace is a fully integrated, diversified composites supplier and includes Quatro Composites.

As MRC informed earlier, Sumitomo Chemical and Sekisui Chemical (Tokyo) said that they are combining their respective polyolefin films business under a new joint venture.

AS per MRC's ScanPlast, October total production of unmixed PVC was about 88,500 tonnes versus 89,400 tonnes a month earlier, SayanskKhimPlast and RusVinyl increased their capacity utilisation last month. Overall PVC production reached 809,000 tonnes in January-September 2019, compared to 784,900 tonnes a year earlier. All plants raised their output, except for Kaustik Volgograd.

Sekisui Specialty Chemicals is an industry leader in research and development of polyvinyl alcohol (PVOH) products.