Mexico postpones clean diesel rule for Pemex

MOSCOW (MRC) -- Mexico’s energy regulator voted to defer for five more years a rule requiring national oil company Pemex to produce, distribute and sell ultra-low-sulfur diesel (ULSD) nationwide, reported Hydrocarbonprocessing.

By a unanimous vote, Mexico’s Energy Regulatory Commission (CRE) decided to postpone the closely watched rule in a meeting that lasted barely a few minutes, with no public discussion and no reason given.

The postponement follows an earlier deferral late last year amid an ongoing legal battle over the matter.

Under the CRE’s resolution, Pemex can continue marketing ULSD only in Mexico City, Guadalajara, Monterrey - Mexico’s three largest cities - and on the northern border with the United States through the end of 2024.

In the rest of Mexico, companies may choose which type of diesel they will offer.

The government argues that technical and operational conditions for distributing ULSD nationwide will only exist in late 2024, according to a document sent last week to the regulator by deputy energy minister Miguel Maciel.

Pemex does not produce enough clean diesel to satisfy the demand the new rule would create, which was passed during the administration of former President Enrique Pena Nieto. It was aimed at reducing emissions and replicating regulations in neighboring countries.

US refiners last year prepared to produce surplus ULSD for export to Mexico, one of the world’s top fuel importers. But the higher demand never occurred as the rule was postponed and later suspended while Pemex and the CRE disputed the issue in court.

Pemex was not ready to boost output and start distributing ULSD nationwide by the time the rule was created in 2016, due to storage and production limitations, the company told Mexico’s Energy Ministry, according to Maciel’s letter, signed Dec. 11.

"As it did not have the required infrastructure for producing ULSD, (Pemex) was unable to immediately comply," Maciel wrote.

A project to produce ULSD at Pemex’s Cadereyta refinery was suspended, and similar projects only reached 9% completion due to insufficient capital, Pemex said.

Pemex and the Energy Ministry did not immediately respond to requests for comment.

Pemex was meant to switch to ULSD nationwide at the end of 2018. The CRE approved a first six-month postponement that was never published officially.

A Pemex lawsuit put a hold on the regulation until the court rules.

The postponed ULSD rule was also intended to help require trucks and buses to include equipment to use clean diesel from 2021.

As MRC informed before, in August 2019, the environmental regulator for Mexico’s oil industry said it had approved the construction of a refinery for state oil company Pemex, but imposed conditions to mitigate the environmental impact of the USD8 billion project.

Besides, we remind that Pemex shut the steam cracker at its Cangrejera complex for a two-week maintenance on February 15, 2016. Pemex has two steam crackers, one at Morelos and one at Cangrejera, and each has a similar capacity. Ethylene production at the crackers is estimated at 500,000 mt/year each.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,724,670 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.

Pemex, Mexican Petroleum, is a Mexican state-owned petroleum company. Pemex has a total asset worth of USD415.75 billion, and is the world's second largest non-publicly listed company by total market value, and Latin America's second largest enterprise by annual revenue as of 2009. Company produces such polymers, as polyethylene (PE), polypropylene (PP), polystyrene (PS).
MRC

SCG Chemicals to shut PP plant for maintenance

MOSCOW (MRC) -- SCG Chemicals Co Ltd is planning to take one of its polypropylene (PP) plants in Map Ta Phut off-stream for maintenance by late January 2020, reported CommoPlast with reference to market sources.

The No. 2 PP unit has an annual capacity of 160,000 tons would be offline for 16 days.

Meanwhile, the No. 1 and No. 3 units are not affected by the maintenance this time.

As MRC wrote previously, SCG plastics took its high density polyethylene (HDPE) plant off-stream for a maintenance turnaround on November 26, 2019. It remained under maintenance until December 14, 2019. Located in Map Ta Phut, Thailand, the plant has a production capacity of 200,000 mt/year.

According to MRC's DataScope report, PP imports into Russia dropped in the first eleven months of 2019 by 4% year on year to 167,400 tonnes. Propylene homopolymer (homopolymer PP) accounted for the greatest decrease in imports.

SCG Chemicals is a subsidiary of SCG and is one of SCG’s 3 core businesses consisting of Chemicals, Paper and Cement-Building Materials. SCG embarked upon the chemicals business in 1989. At present, SCG Chemicals manufactures and supplies a full range of petrochemical products ranging from upstream petrochemicals such as Olefins, intermediate petrochemicals such as Styrene Monomer, PTA, and MMA, to downstream petrochemicals such as Polyethylene, Polypropylene, Polyvinyl Chloride, and Polystyrene resins. SCG Chemicals is now one of the largest integrated petrochemical companies in Thailand and a key industry leader in the Asia-Pacific region.
MRC

Saratovorgsintez will launch in 2020 the production of acrylamide and polyacrylamide

MOSCOW (MRC) - Production of acrylamide and polyacrylamide based on Saratovorgsintez (part of the LUKOIL structure) is scheduled to be launched in 2020, said the regional governor’s press service.

The joint project of LUKOIL and the French SNF was launched in 2012. The construction of the SNF Vostok plant at the Saratovorgsintez site was supposed to begin in 2014, in 2016 it was planned to receive the first products. At the time of the investment decision, the project cost was estimated at EUR50 million.

However, the laying of the first stone in the foundation of the new production took place only on May 26, 2016. To support the construction and further operation of the plant in May, OOO SNF Flopam was registered.

The first phase of construction was subsequently planned to be completed in 2019. The project is designed to produce 60 thousand tons of products with the possibility of expanding to 150 thousand tons. Investments in the first place of production as of 2018 were estimated at 2.5 billion rubles.

The territory of the new enterprise will be 20 hectares, the area of ??production, storage and technical premises - more than 20 thousand square meters. The plant will house two acrylamide workshops and four workshops for the production of powdered polyacrylamide.

Earlier, SNF owner Rene Peak said that before launching a new plant in Saratov, the investor will have to convince Russian oil companies to use new technologies, since, according to him, with the help of polymers, oil production can be almost doubled.

Earlier it was reported that in September Saratovorgsintez closed the production of acrylonitrile (ACN) for scheduled repairs. This production with a capacity of 190,000 tonnes of ACN per year was closed for repair within one month.

Saratovorgsintez was commissioned in 1957, and became a member of LUKOIL in 1999. The company operates the production of acrylonitrile with a capacity of 150 thousand tons per year (raw materials for polyacrylamide) and sodium cyanide with a capacity of 48 thousand tons.
MRC

Chevron returns to Australia fuel retail with USD288 M asset

MOSCOW (MRC) -- Chevron Corp’s Australian unit said it would buy the domestic commercial and retail fuels business of Puma Energy for AD425 million (USD288 million), marking a return to the country’s fuel distribution market, as per Hydrocarbonprocessing.

The sale by Singapore-based Puma Energy, 49%-owned by commodities trading giant Trafigura, comes as Puma pushes to rebalance its books after a decade-long spree snapping up oil assets. It reported a net loss of USD463 million in the first nine-months of the year.

For Chevron, the deal marks a return to a sector it left in March 2015 after selling its half-share in refiner Caltex Australia for USD3.7 billion. Puma has more than 270 retail sites, 20 depots and 3 bulk seaboard terminals across Australia and delivers more than 1 billion litres of fuel a year.

"The acquisition will provide Chevron with a stable market for production volumes from our refining joint ventures in Asia and create a foundation for sustainable earnings growth," Mark Nelson, Chevron’s executive vice president for downstream and chemicals said in a statement.

The deal is expected to complete by the middle of next year.

Last month, sources familiar with the sale told Reuters that Trafigura would accept a hefty discount to the price it paid and that the assets would likely fetch no more than USD500 million, which they said would be a sharp drop in price.

Puma, which said it was retaining its bitumen business in Australia, entered the country in 2013 with the purchase of Ausfuel, Neumann and Central Combined Group assets. Media reports at the time said it paid around $850 million for the Ausfuel and Neumann assets.

Despite the potential scale of the price tag difference, some investors said the sale would be welcomed by Trafigura, which last week reported its lowest annual net profit in nearly a decade after a string of losses in its physical asset portfolio.

"It’s a pretty good deal for Trafigura," said a Melbourne-based fund manager, who declined to be named because he was not authorised to speak to the press.

It is the second major sale for Puma this year. The firm announced the sale of its Paraguay business for USD200 million in early October to a Trafigura joint venture. Puma also sold its small business in Indonesia for USD3 million and it is still evaluating its portfolio.

Puma’s other shareholders include Angola’s state oil firm Sonangol with 28% and Cochan Holdings, which is run by a former Angolan general, with 15%.

As MRC wrote before, US-based Phillips 66 remains open to developing another ethane cracker for its Chevron Phillips Chemical (CP Chem) joint venture, the refiner's CEO said in March 2018.

We also remind that in March 2018, Chevron Phillips Chemical Company LP, part of Chevron Corp, successfully introduced feedstock and commenced operations of a new ethane cracker at its Cedar Bayou facility in Baytown, Texas. At peak production, the unit will produce 1.5 million metric tons/3.3 billion lbs. per year.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,724,670 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.

Headquartered in San Ramon, California, Chevron Corporation is the the second-largest integrated energy company in the United States and among the largest corporations in the world. Chevron is involved in upstream activities including exploration and production, downstream activities including refining, marketing and transportation, and advanced energy technology. Chevron is also invested in power generation and gasification processes.
MRC

The best specialists of PJSC Nizhnekamskneftekhim had the honor of winning an award

MOSCOW (MRC) -- The best specialists of PJSC Nizhnekamskneftekhim had the honor of winning an award. 35 employees of PJSC Nizhnekamskneftekhim had the honor of winning state awards, said the company.

Awards presentation took place on December 2, the celebration was timed to the 90th anniversary of N.V. Lemaev, the first General Director of the petrochemical enterprise. Azat Bikmurzin, the General Director, rewarded the best petrochemists.

"We decided to present state awards in a new format and this will become a good tradition. I appreciate many years of your diligent work for the benefit of our company. I wish you good health and further achievements in your work and life".

Among those awarded are managers and workers, engineers and specialists. “Your work is aimed at further development of Nizhnekamskneftekhim, increase in output of high-quality, competitive products in order to further improve the living standards of petrochemists and their families, " stated the Head of the Company said in his speech.

5 employees of the Company were awarded the honorary title “Honored Chemist of the RT”, 3 - “Honored Power Engineer of the RT”, 1 - with the medal “For Valiant Labor”. 15 specialists were awarded with diplomas and thanks of the Ministry of Energy of the Russian Federation. The best petrochemists were also noted with letters of gratitude from the President of the Republic of Tatarstan, the Cabinet of Ministers of the Republic of Tatarstan, the Ministry of Education and Science of the Republic of Tatarstan, the Ministry of Transport and Roads of the Republic of Tatarstan, and letters of commendation from the head of the Ministry of Defense of the Republic of Tatarstan.

According to Price Report ICIS-MRC, Nizhnekamskneftekhim in 2019 produces exclusively linear polyethylene (LLDPE). LLDPE shipments to the Russian market increased in the first seven months of 2019 by 8% year on year to 234,130 tonnes. Local producers increased their production by 24%.

PJSC "Nizhnekamskneftekhim" (NKNH) is one of the largest Russian producers of petrochemical products. The production complex of the company includes ten factories of the main production and ten departments (railway transport, ethylene pipelines, etc.). NKNH produces more than 120 types of chemical products, including synthetic rubber, polyethylene, polypropylene, polystyrene, and surfactants. Nizhnekamskneftekhim is a member of TAIF Group of Companies.
MRC