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, as per 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.

The world’s largest refiner, Sinopec Corp has started very low-sulfur fuel oil (VLSFO) output at 10 refineries in China. The company plans total VLSFO capacity of 10 million tonnes a year (about 180,000 bpd) by 2020 and build a fleet of 100 barges over the next three years to supply cleaner fuels to ships.

PetroChina (0857.HK) has targeted 4 million tonnes of VLSFO in 2020, while Total (TOTF.PA) plans to supply marine fuel in a joint venture with China’s Zhejiang Energy.

China Marine Bunker, known as Chimbusco, secured at least 4 million tonnes of VLSFO for the fourth quarter of 2019 and the first two quarters of 2020, and has started to supply all major Chinese ports from bonded storage.

At SK Energy’s largest refinery in South Korea, engineers are rushing to complete a new processing unit ahead of schedule. The unit of SK Innovation started supplying MGO from October and is building a vacuum residue desulphurization (VRDS) unit that can produce 40,000 bpd of low sulfur fuel oil due online in March or April.

Japan’s second-biggest refiner Idemitsu Kosan Co is increasing capacity for LSFO, but is also relying on blending to produce IMO2020 compliant bunker fuel. In Japan, Fuji Oil Co Ltd (5017.T), Cosmo Energy Holdings Co Ltd (5021.T) and Idemitsu Kosan Co Ltd (5019.T) began shipping IMO-compliant fuels in October.

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.

MRC

MOSCOW (MRC) -- Residents of four Texas communities menaced by a petrochemical fire began returning to their homes on Friday after authorities declared the blaze contained, said an official for Jefferson County, and as federal and state investigators began scouring for clues to its origin, reported Reuters.

The blaze at the TPC Group petrochemical plant in Port Neches, Texas, was contained by firefighters and the threat of further explosions greatly reduced, said country official Allison Getz.

It began with a fiery blast early on Wednesday morning that injured three workers, blew locked doors off their hinges and was felt in communities far from the site. The plant makes chemicals used in production of synthetic rubber, resins and an octane-boosting component of gasoline.

Pollution regulators US Environmental Protection Agency and Texas Commission on Environmental Quality are conducting a joint investigation, a commission spokesman said. US Chemical Safety Board, a federal agency charged with investigating industrial chemical accidents, also is probing the blast.

Twenty federal and state agencies were in Port Neches to deal with the fire and explosion, Getz said. Some are trying to determine the cause and others were assisting with emergency response.

The county’s top executive, Judge Jeff Branick, lifted an evacuation order requiring as many as 60,000 people to leave their homes in all or parts of four south east Texas communities after meeting with fire chiefs and local mayors on Friday morning.

"What we were waiting was for the fire to be contained," Getz said in a telephone interview. "Once we got word that the fire was contained the county judge felt it was safe to lift the order."

Branick ordered a mandatory evacuation after a secondary explosion Wednesday afternoon lifted a chemical distillation tower hundreds of feet into the air. Officials worried if nearby storage tanks containing volatile butane and butadiene caught fire, they could lead to larger explosions endangering residents.

Law firm Provost, Umphrey separately said it had sued TPC claiming the blast damaged residents’ properties and disrupted area businesses.

A TPC spokeswoman was not immediately available to comment about the lawsuit.

Located adjacent to the Sabine Neches River, which is 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. The source familiar with company operations said the site has two butadiene lines with capacities of 166,000 mt/year and 260,000 mt/year. The MTBE unit at this site produces up to 400,000 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.

Headquartered in Houston, TPC was acquired in 2012 by private equity groups First Reserve and SK Capital.
MRC

MOSCOW (MRC) -- The Dow Chemical Company has recently announced its plan to invest in an alkoxylation facility on the US Gulf Coast, according to Kemicalinfo.

Upon completion, this new facility will support global growth in Dow’s core end-markets related to infrastructure and home and personal care, as well as additional end-markets where Dow continues to strengthen its position for the TRITON, TERGITOL, ECOSURF and CARBOWAX SENTRY brands, the company stated in a press release.

"We continue to see strong demand, well ahead of global GDP, across multiple consumers, industrial and manufacturing sectors," said Ester Baiget, Business President for Dow Industrial Solutions. "These investments will build on Dow’s recent US Gulf Coast investments; they will expand production capacity and enable Dow to meet customer and value chain needs for alkoxylate products."

The new alkoxylation facility is expected to come online by the end of 2021. This expansion is in addition to various incremental debottlenecking projects being conducted across Dow’s global alkoxylation production units. These projects will support growing customer demand across the Americas, Europe and Asia.

As MRC reported before, Dow Chemical's propylene dehydrogenation (PDH) unit in Freeport, Texas, was offline in October - November, 2019, for a turnaround, said US olefin market participants. Sources said the PDH unit went offline for scheduled maintenance September 26, and the work was expected to last 45-60 days. Originally, sources expected the turnaround to begin in early September, but then learned it had been delayed.

Propylene is a feedstock for the production of polyprolypele (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.

The Dow Chemical Company is an American multinational chemical corporation. Dow is a large producer of plastics, including polystyrene, polyurethane, polyethylene, polypropylene, and synthetic rubber.
MRC

MOSCOW (MRC) -- Evonik plans to increase its capacity for sodium methylate at its Rosario/Santa Fe facility from 60,000 metric tons up to 90,000 metric tons until 2021, as per the company's press release.

The expansion is driven by growing demand for biodiesel in South America, mainly Argentina and Brazil. Sodium methylate is an important catalyst for large-scale biodiesel production. “Confirmed higher mandates in Brazil such as the biodiesel blend increase from 11% to 15% by 2023, but also the competitiveness of biodiesel exports from Argentina throughout the world drive our decision,” said Marcos Salgueiro, general manager at Evonik’s Functional Solutions business line in South America. “This is why we continue to invest in our efficient reliable plant, which is strategically located right in the centre of the Argentinean soybean and biodiesel production region."

“This investment, coupled with the ongoing expansion of our sodium methylate plant in Mobile, Alabama, demonstrates our commitment to our core market of the Americas,” noted Andreas Kripzak, vice president and general manager Americas.

Alexander Weber, global head of the product line Alkoxides & Potassium Derivatives, added: “This decision fits perfectly into our global strategy and strengthens further our market leadership position for alkoxides."

In addition to the increase in capacity, Evonik Functional Solutions is also investing in infrastructure and logistics improvements in South America, including expanded storage solutions in the region. These developments will ensure continuous high supply reliability to its customers.

A string of recent biodiesel production capacity additions in the region reflect the increased importance of the product in Central & South America. “We are following our customers’ investments with our own to ensure ample future supply for this important renewable fuel, which helps to reduce emissions”, said Elias Lacerda, regional president Central & South America.

Besides Argentina and the U.S., Evonik also produces high volumes of sodium methylate in Luelsdorf, Germany, mainly for the European and Asian markets.

As MRC informed earlier, PSC TAIF-NK, a wholly owned subsidiary of TAIF Group of Kazan, Tatarstan, Russia, has let a construction-related contract to Linde Group, Munich, for two hydrogen plants at its 7 million tonnes/year Nizhnekamsk refinery. The contract is valued at about ?120 million, according to Linde.

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.

Evonik is one of the world leaders in specialty chemicals. The focus on more specialty businesses, customer-oriented innovative prowess and a trustful and performance-oriented corporate culture form the heart of Evonik’s corporate strategy. They are the lever for profitable growth and a sustained increase in the value of the company. Evonik benefits specifically from its customer proximity and leading market positions. Evonik is active in over 100 countries around the world with more than 36,000 employees.

MRC

MOSCOW (MRC) -- PKN Orlen’s Petrochemicals Development Programme is about to reach another milepost. As part of the project to extend the olefin complex in Plock, a contract has been signed for technical consultancy and Project Management Contractor (PMC+) services, as per World of Chemicals.

It is expected to optimally prepare the project for successful delivery within the allocated budget and schedule.

The technical consultancy and PMC+ contract has been signed with Fluor, one of the world’s leading providers of engineering & design services. It guarantees proven, tailored-to-fit solutions designed to support complex projects in the en’ergy and fuel sector.

The services will involve end-to-end project management across all functional areas – from managing its timescales, costs, contractors and risks, through ensuring work safety, technical support and supervision of technical design standards, to managing procurement and actual execution. The works will engage a fully integrated team, made up of PKN ORLEN employees and a PMC+ consultant.

With to the PMC+ collaborative work model, PKN ORLEN will gain know-how in managing integrated capital projects. The model will also help develop and enhance the company’s in-house capabilities to benefit its further projects. In addition, by effectively employing the industry’s best business practice, it will allow PKN ORLEN to strengthen its competitive advantage on the market.

"We have taken another major step towards the key milestone in our plans to develop the petrochemical business, which is the olefin plant extension. Petrochemicals have enormous potential we are determined to make the most of. Our capital projects to develop the petrochemical area will solidify our position on the European market while providing tangible benefits to the Polish economy, turning it from an importer into a net exporter of petrochemicals," said Daniel Obajtek, President of the PKN ORLEN Management Board.

"Given the scale of our venture, we have decided to deploy a consulting service within the PMC+ framework. In the case of particularly large projects, such as the olefin plant extension, this solution is a globally applied standard. Our contract with Fluor will fully integrate the project management, offering potential synergies and facilitating knowledge flows between PKN ORLEN and the contractor," stresses Zbigniew Leszczyski, Member of the PKN ORLEN Management Board, Development.

As MRC reported earlier, in September 2019, Honeywell announced that PKN ORLEN had licensed the UOP MaxEne process, which can increase production of ethylene and aromatics and improve the flexibility of gasoline production.

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.
MRC