SOCAR not concerned about future gas sales

MOSCOW (MRC) -- Azerbaijan's state-owned SOCAR expects to see its gas sales continue unimpeded by the energy transition, reported S&P Global with reference to the oil company's president Rovnag Abdullayev.

Despite a growing backlash across Europe toward fossil fuel use, Abdullayev also told S&P Global Platts in an interview with this week that gas still had a crucial role to play in the European energy mix.

SOCAR was looking at carbon capture and storage (CCS) and carbon capture, utilization and storage (CCUS) projects as a way of reducing emissions, he said.

"As a company, we have not observed this backlash against gas yet," Abdullayev said. "We rather feel that there is a more general resentment towards the excessive use of fossil fuels."

Abdullayev said that while there were some general considerations, from a corporate perspective "we are not so concerned about the future sales of gas from Azerbaijan".

Gas from the second phase of the Shah Deniz offshore field is piped to Turkey and will be able to flow onward to Bulgaria, Greece and Italy once the TAP pipeline and the Interconnector Greece-Bulgaria (IGB) line are completed.

First gas to Italy was expected in October next year, with Shah Deniz 2 set to have annual production of some 16 Bcm/year.

"We have almost completed the Southern Gas Corridor, strictly abiding to the highest security and environmental standards," Abdullayev said.

According to European Commission-backed research, Azerbaijan has been classified as a "low-emission source" in the chain from the gas fields to the consumption market among European gas suppliers, he said.

"We have signed contracts for the sale of gas for the next 25 years with a wide array of major European companies. Our buyers do not anticipate any difficulties in the buying of our products as there is a widening gap between local production in Europe and demand, according to forecasts."

Abdullayev said SOCAR was also benefiting economically from its environmental policies, including limiting flaring of associated gas from its oil operations.

"The results of collecting associated gas from our platforms - instead of flaring them - are quite remarkable. It has a significant benefit both in terms of the protection of the environment and as an additional source of income for SOCAR," he said.

Associated gas collected from SOCAR-operated platforms amounts to about 15% of its total annual gas production, while from 2020 the company aims to halt flaring altogether., Abdullayev said.

"From next year, we will have zero flaring of associated gas at SOCAR. This gives us an advantage compared to other companies in the industry that are aiming to achieve these results by 2030."

"This is a case where an environmental program can be regarded both as an investment in sustainable production and business," he said.

Sustainability, he said, was becoming "increasingly important for us as a company".

"We are reviewing project ideas for the accumulation of carbon emissions, to be used as raw materials and to inject it into the underground layers in various segments of our manufacturing chain," Abdullayev said.

"Our methanol plant has already been equipped with an online monitoring system for the reuse of CO2 emissions during the combustion phase of production."

The company has also declared a "long-term goal" for its own operations to be zero emissions, including using more environmentally-friendly corporate transport, such as hybrid vehicles and compressed natural gas (CNG)-fueled vehicles.

Abdullayev said public discourse "sometimes does not differentiate between different types of energy sources and the role of oil and gas beyond its use as fuel is often overlooked".

"For several years, we have been increasing our investments in the petrochemical industry. We provide direct feedstock for a wide array of commodity goods, such as plastics, rubber, fertilizers, and medicine. The feedstock for the petrochemical industry comes from the production of crude oil."

"We need to properly differentiate between the restriction on fossil fuels that have a higher or lower polluting impact for the environment. There is an environmental risk to increasing the ratio of more polluting and sometimes cheaper fuels in the energy basket, like heavy oil and coal, as opposed to natural gas, which is an environment-friendly alternative," he said.

Abdullayev said Socar had also assumed an additional role as a "proactive contributor to and a driving force within the international environmental movement".

For instance, Socar recently organized an international conference on the role of the Paris Agreement in combating climate change and protecting the environment.

As MRC informed before, SOCAR Turkey Energy, which is a subsidiary of the State Oil Company of Azerbaijan (SOCAR), plans to lay the foundation of the Mercury petrochemical complex in Turkey in H1-2020. The plant will be located in Aliaga district, next to the Petkim petrochemical complex and the STAR refinery. With the commissioning of this plant, Turkey will settle the matter with the import of purified terephthalic acid (PTA).

PTA is one of the main feedstocks for the production of polyethylene terephthalate (PET).

According to MRC's ScanPlast report, Russia's overall estimated PET consumption reached 42,020 tonnes in October 2019, down by 32% year on year. At the same time, the estimated PET consumption in Russia increased to 593,480 tonnes in January-October 2019, up by 5% year on year.

SOCAR, which is keen on expanding operations in the retail oil products market abroad, is involved in exploring oil and gas fields, producing, processing, and transporting oil, gas, and gas condensate, marketing petroleum and petrochemical products in the domestic and international markets, and supplying natural gas to industry and the public in Azerbaijan.
MRC

MOSCOW (MRC) - Polief plant, the Bashkirian subsidiary of SIBUR, did not resume production of polyethylene terephthalate (PET) after forced repairs, according to the ICIS-MRC Price Report.

The producer extended the period of unscheduled shutdown at the Polief plant in Blagoveshchensk until 31 December of this year.

Polief resumed PTA production at one of its two lined in the early December in Blagoveshchensk It was expected that the second line will be launched soon.

Earlier it was reported about an accident at Polief, which happened on 9 October. Due to the collapse of the concrete tank, about 8 tonnes of untreated sewage spilled onto the territory of the plant and adjacent.

Polief launched the production of terephthalic acid (PTA) in Blagoveshchensk in September. The modernisation of the production of terephthalic acid (PTA) at Polyef was completed in mid-August. The volume of consumption of PTA in the Russian market is about 500,000 tonnes per year. Thus, the reconstruction of the existing production at Polief with an increase in the production capacity of the product from 272,000 tonnes to 350,000 tonnes per year will significantly replace imports.

SIBUR began the reconstruction of the production of PTA in Blagoveshchensk in December 2017. Polief JSC (Blagoveshchensk, Republic of Bashkortostan) is the only producer of terephthalic acid and the largest supplier of polyethylene terephthalate in Russia. The capacity for the production of PTA after modernisation is 350,000 tonnes per year, PET - 219,000 tonnes per year.
MRC

MOSCOW (MRC) -- French oil major Total said on Saturday that production at its 253,000 barrel-per-day Gonfreville Normandy refinery in northern France was partially halted following a fire that broke overnight, reported Reuters.

Deliveries of refined products are continuing and petrochemical units are operating normally, the group said in a statement.

The fire that broke out at 0300 GMT at Gronfreville, Total’s biggest refining platform in France, did not cause any injuries, the group said.

Total said the main fire had been extinguished but that a secondary blaze was still burning at the top of the unit, although it was under control. An investigation has been launched to determine the cause of the fire.

The partial shutdown in output comes as concern has risen in the country about fuel shortages caused by a nationwide protest movement against pension reform.

The French government said on Friday that all the country’s refineries were operating and petrol stations were well supplied, despite some temporary problems with shipping their output at two of them.

"Total is doing everything in its power to ensure that there is no consequence on the fuel supply chain," the company said.

As MRC wrote before, in early November 2019, Total disclosed that it is evaluating construction of a new gas cracker at its Deasan, South Korea, joint venture (JV) with Hanwha Chemical.

Total is also developing a USD1.4-billion propane dehydrogenation and polypropylene (PP) complex at Arzew, Algeria, in partnership with Algeria’s state-owned oil company Sonatrach. The facilities will be designed to produce 600,000 metric tons/year each of propylene and PP. The project is in FEED phase with FID due in 2021.

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

Total S.A. is a French multinational oil and gas company and one of the six "Supermajor" oil companies in the world with business in Europe, the United States, the Middle East and Asia. The company's petrochemical products cover two main groups: base chemicals and the consumer polymers (polyethylene, polypropylene and polystyrene) that are derived from them.
MRC

MOSCOW (MRC) -- Evonik is committed to offering customers the general-purpose plasticizer DINP (diisononyl phthalate) on a global basis. The safe and long-lasting use of plasticizers is always Evonik's top priority, said the company in its press release.

Recently, Evonik joined with other manufacturers in the High Phthalates Panel (HPP), a sector group of the American Chemistry Council (ACC), in a voluntary manufacturer request to the US Environmental Protection Agency (EPA) to conduct a broad-based risk evaluation of the uses of DINP.

The EPA granted the request in early December 2019, a decision welcomed by Evonik. The EPA’s risk evaluation will be performed using the best available science and weight of scientific evidence. The process will be documented and open for public review and comment.

Evonik is active around the world to promote scientifically-founded evaluations of its products, and the company’s recent request with the US. EPA is yet another example. The company has consistently pursued lifecycle management for the softener DINP, which is used in a large number of soft PVC applications.

In addition, Evonik has been selectively expanding its existing portfolio with new plasticizer types, in close cooperation with customers.

"As an innovative player in the plasticizer industry, our goal is to offer a broad portfolio of plasticizers. In order to achieve this, we focus on the long-term trends in the plasticized PVC industry as well as the requirements of our customers. This includes, for example, high delivery reliability and safe usability of our products," explains Roland Pietz, Market Segment Manager Oxo Alcohols and Plasticizers at Performance Intermediates.

In addition to DINP, marketed under the VESTINOL 9 brand, Evonik's plasticizer portfolio already includes the innovative products ELATUR CH and ELATUR DPT.

As MRC wrote previously, Evonik Industries is expanding its capacities for organic dispersions for heat sealing applications in Darmstadt (Germany). The significant plant expansion is scheduled for completion by second half of 2021. Organic dispersions for heat sealing applications, which Evonik markets under the brand name DEGALAN, are ideally suited for formulating high-quality heat seal lacquers and ensure secure sealing in combination with smooth peeling properties for food and beverage packaging. DEGALAN organic dispersions provide direct adhesion to aluminum and PET lidding materials for environmentally friendly packaging solutions, like mono material packaging with recyclability property.

According to MRC's ScanPlast report, exports of suspension polyvinyl chloride (SPVC) from Russia totalled 175,600 tonnes in the first eleven months of 2019, up by 22% year on year. Imports increased more significantly - by 230% year on year to 48,500 tonnes.

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) -- BP and Reliance Industries Limited (RIL) signed a definitive agreement relating to the formation of their new Indian fuels and mobility joint venture, said Hydrocarbonprocessing.

This follows the initial heads of agreement signed in August this year. The venture is expected to be formed during the first half of 2020, subject to regulatory and other customary approvals.

The new venture, a further development of RIL and BP's longstanding partnership, will include an India-wide fuels retail service station network and aviation fuel marketing business. Building from RIL's existing businesses, the partners expect the venture to co-create a world class fuels partnership to grow rapidly and help meet India's fast-growing demands for energy and mobility.

The venture expects to expand from RIL's current fuel retailing network of over 1,400 retail sites and 30 aviation fuel stations across India to up to 5,500 retail sites and 45 aviation fuel stations over the next five years to become the most preferred provider of automotive and aviation fuels. The retail network will operate under the Jio-BP brand, signaling a new paradigm shift in fuels marketing and mobility solutions. It brings together Reliance's extensive access and connection to consumers through its Jio digital platform and BP's deep experience in fuel retailing around the world. The joint venture will seek to offer Indian consumers high-quality differentiated fuels, convenience and services. Castrol lubricants will also be available across the venture's network.

The agreement was signed in Mumbai today by Mukesh Ambani, Chairman and Managing Director of Reliance Industries Limited, and Bob Dudley, Group Chief Executive of BP.

The partners intend to set up a new joint venture company, held 51% by RIL and 49% by BP, that will assume ownership of RIL's existing Indian fuel retail network and access its aviation fuel business.

As MRC reported earlier, BP Plc is expected to resume operation at its small gasoline-producing fluidic catalytic cracking unit (FCCU) at its 430,000 barrel-per-day (bpd) Whiting, Indiana, refinery in late October after about a month of the overhaul. The company began a planned overhaul of the small FCCU on 19 September.

PTA is used to produce polyethylene terephthalate (PET), which is used in the manufacturing of plastic bottles, films, packaging containers, in the textile and food industries.

According to MRC's DataScope report, Chinese bottle grade PET deliveries to Russia increased 34% in the first eight months of 2019 to 95,600 tonnes. China accounted for 90% of the total imports, compared to 85% a year earlier.
August imports of material from China decreased by 41% to 7,600 tonnes from 12,800 tonnes in July. Jiangsu Sanfangxiang, Yisheng, Wankai and Sinopec were the leading Chinese suppliersof material to the Russian market.

BP is one of the world's leading international oil and gas companies, providing its customers with fuel for transportation, energy for heat and light, retail services and petrochemicals products for everyday items.
MRC