Rosneft ups its stake in Bayernoil refinery

MOSCOW (MRC) -- Russian oil producer Rosneft said that its German subsidiary Rosneft Deutschland GmbH had completed the deal to acquire a 3.57% stake in Germany’s Bayernoil Raffineriegesellschaft mbH from BP, said the producer.

The deal increased Rosneft’s stake in the Bayernoil refinery to 28.57% from 25%, Rosneft said in a statement, adding that the deal also increased its share in the refinery’s capacity to almost 3 million tonnes a year and strengthened its marketing presence in Germany’s Bavaria and Austria.

As MRC informed earlier, Rosneft, which owns downstream assets in Germany including stakes in a number of oil refineries, plans to invest around EUR600 million (USD690 million) in the German downstream market.

In January 2017, Russia's Rosneft and its shareholder BP completed dissolution of Ruhr Oel, their refining joint venture in Germany. Rosneft said with the restructuring it had embarked on developing its own business in Germany and had created a new subsidiary called Rosneft Deutschland.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,904,410 tonnes in the first eleven months of 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments increased from both domestic producers and foreign suppliers. The PP consumption in the Russian market was 1,161,830 tonnes in January-November 2019, up by 7% year on year. Deliveries of all grades of propylene polymers increased, with the homopolymer PP segment accounting for the largest increase.

Rosneft became Russia's largest publicly traded oil company in March 2013 after the USD55 billion takeover of TNK-BP, which was Russia’s third-largest oil producer at the time.
MRC

Middle East share of Indias oil imports falls to 4-yr-low in 2019

MOSCOW (MRC) -- India’s imports of Middle Eastern oil plunged to a four-year low in 2019, tanker data obtained from sources shows, as the energy-hungry nation diversifies its supplies to cut costs and help shield itself from geopolitical tensions, said Hydrocarbonprocessing.

India, the world’s third-biggest oil consumer, imports about 84% of its oil needs and traditionally relies on the Middle East for the majority of its supplies. However, the region’s share of India’s crude shrank to 60% last year - down from 65% a year ago and the lowest since 2015 - as record output from the United States and countries like Russia offered opportunities for importers to tap other sources.

India shipped in 2.68 million barrels per day (bpd) oil from the Middle East in 2019, down about 10% from 2018, and around 1.8 million bpd from elsewhere, the data reviewed by Reuters showed.

Deeper than expected oil output cuts by OPEC and allies, shouldered by Saudi Arabia, and less supply from Iran due to U.S. sanctions also dented India’s intake of Middle Eastern oil, said Ehsan Ul Haq, analyst with Refinitiv.

Last year, sanctions and output cuts by OPEC and allies, known as OPEC+, reduced the group’s supplies by 1.9 million bpd from 2018, while non-OPEC supply rose by 2 million bpd, the International Energy Agency said in its latest report.

The IEA forecast that producers outside the OPEC+ pact would grow supplies by 2.1 million bpd in 2020. India is working on a strategy to diversify its oil supply sources to cut dependence on the Middle East, Oil Minister Dharmendra Pradhan said last week, adding that some refiners are in advance negotiations to boost Russian oil imports.

The drive to expand crude sources also reflects a push by Prime Minister Narendra Modi to bolster ties with countries like Russia and the United States.

India’s overall oil imports in 2019 fell by about 2.1% to 4.48 million bpd, the data showed, because most refiners temporarily shut processing units for upgrades ahead of new fuel standards in 2020. India is migrating to Euro VI compliant fuel from April 1.

Imports from CIS nations rose in 2019 by about 65% to 171,000 bpd, the data showed. Intake of African grades rose by 7.3% to about 713,000 bpd, while U.S. supplies surged by about 63% to 181,000 bpd.

U.S. oil accounted for about 4% of India’s overall imports in 2019, up from just 2.5% a year earlier. “The opening of an arbitrage window for U.S. oil during the year changed oil flows. The differential was enough to take care of shipping,” said Haq.

Demand for heavy Middle Eastern grades was also affected by a shift in bunker fuel specifications from January, following new industry rules promoting lower sulfur fuels. “Most Middle Eastern grades yield high sulfur fuel oil (HSFO) and because of new marine fuel norms, refiners are buying more from other producers to cut production of HSFO and increase output of very low sulfur fuel oil,” Haq added.

As MRC informed earlier, state-owned Bharat Petroleum Corporation Ltd (BPCL) will invest about Rs25,000 crore to set up an ethylene cracker plant at Rasayani, 50 kilometres from its Mumbai refinery, as the firm pushes further into the petrochemicals business to fuel growth.

BPCL will commission its Rs5,236 crore Propylene Derivative Petrochemical Project (PDPP) at Kochi refinery for manufacturing niche petrochemicals in the next six months. To expand its product portfolio further, BPCL is investing Rs11,130 crore to set up a facility in Kochi refinery for manufacturing Polyols, Propylene Glycol and Mono-Ethylene Glycol.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,904,410 tonnes in the first eleven months of 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments increased from both domestic producers and foreign suppliers. The PP consumption in the Russian market was 1,161,830 tonnes in January-November 2019, up by 7% year on year. Deliveries of all grades of propylene polymers increased, with the homopolymer PP segment accounting for the largest increase.

Bharat Petroleum Corporation Limited (BPCL) is an Indian state-controlled oil and gas company headquartered in Mumbai, India. Bharat Petroleum owns refineries at Mumbai, Maharashtra and Kochi, Kerala (Kochi Refineries) with a capacity of 12 and 9.5 million metric tonnes per year.
MRC

Extreme cold in Western Canada disrupts oil production, refining

MOSCOW (MRC) -- Canadian oil producers and refiners have cut processing rates last week as extreme cold weather grips Western Canada, reproted Reuters with reference to traders familiar with the matter.

Cold weather has spread across western Canada this week. In Edmonton, the capital of Canada’s main oil-producing province, Alberta, temperatures dropped to minus 36 degrees Celsius (minus 33 Fahrenheit) last Wednesday, according to Environment Canada.

Syncrude, one of the largest producers of crude oil from Canada’s oil sands, as well as North West Refining (NWR), which operates the Sturgeon refinery, have declared force majeure, two traders familiar with the matter said.

Force majeure is a declaration that unforeseeable circumstances prevented a party from fulfilling a contract.

Syncrude is a joint venture majority owned by Suncor Energy Inc, with minority stakes held by Imperial Oil Ltd and others. It can produce up to 360,000 barrels per day, upgrading thick bitumen to light oil. A spokeswoman for the Suncor did not respond to a request for comment.

NWR did not respond to a request for comment.

Meanwhile, Shell Canada’s Scotford facility is operating at reduced rates, two sources said. The Shell Scotford Complex consists of a bitumen upgrader, oil refinery, and chemicals plant. Shell declined to comment.

"We think the reduced runs are due to upgraders being short natural gas. Nat gas receipts are down by about 1-1.5 billion cubic feet per day (bcfd) due to freeze-offs," one source at a producer said.

Upgraders need natural gas to create steam to produce the hydrogen that converts bitumen into synthetic crude oil.

The weather-related disruptions are the latest in a series of issues to hit the Canadian oil market. Inventories are already at record highs due to a recent outage on the Keystone pipeline and a Canadian National rail strike.

High inventories are weighing on prices. The discount for Western Canada Select (WCS) heavy blend crude for February delivery in Hardisty, Alberta widened to the biggest since December 2018 versus US benchmark West Texas Intermediate (WTI) crude last week.

As MRC informed earlier, Shell Singapore restarted its naphtha cracker in Bukom Island in early December 2019, following a two months maintenance shutdown since the beginning of October 2019. Thus, this cracker was taken off-stream for the turnaround on 1 October 2019. The cracker is able to produce 960,000 tons/year of ethylene and 550,000 tons/year of propylene.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,904,410 tonnes in the first eleven months of 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments increased from both domestic producers and foreign suppliers. The PP consumption in the Russian market was 1,161,830 tonnes in January-November 2019, up by 7% year on year. Deliveries of all grades of propylene polymers increased, with the homopolymer PP segment accounting for the largest increase.
MRC

American Chemistry Council strengthens federal affairs shop

MOSCOW (MRC) -- The American Chemistry Council (ACC) announced two new hires and an internal promotion that strengthen the association’s congressional federal affairs and legal team under President and CEO Chris Jahn, said ACCA.

Ross Eisenberg will join ACC as vice president of federal affairs on February 3, 2020. Eisenberg, currently serving as vice president of energy and resources policy at the National Association of Manufacturers, will lead congressional and federal lobbying activities overseeing an issue portfolio that includes chemical management; global trade; energy and environment; rail, transportation and infrastructure, and security, among others. Eisenberg will also oversee ACC’s political action committee, AmeriChem PAC.

"Ross brings deep expertise on issues that are vital to a thriving chemical industry and the broader manufacturing sector, including energy use and production; air and water quality; climate; energy efficiency and other significant environmental and sustainability issues,” said Jahn. “The chemical industry faces intense and growing scrutiny and Ross brings the right leadership expertise and collaborative approach to help advance sound public policies that protect public and environmental health; preserve our global competitiveness; promote innovation, and drive economic expansion,” he added.

The organization also announced the hiring of Jill Brubaker as a director of federal affairs responsible for a core portfolio that includes transportation and infrastructure issues. Brubaker joins ACC from member company Dow where she served most recently as director of federal legislative affairs and director of political affairs.

In addition to the federal affairs appointments, ACC announced the promotion of Allison Starmann to General Counsel and Corporate Secretary, effective January 1, 2020.

Starmann has been with ACC for ten years, 5 of those as deputy general counsel, providing legal counsel and oversight on issues ranging from Toxic Substances Control Act (TSCA) litigation, chemical-specific product groups, and Responsible Care, the industry’ world-class environmental health, safety, and security management and performance initiative.

"Allison’s integrity, along with her strategic legal expertise made her a natural choice for ACC’s executive team. Her knowledge of leading industry issues such as TSCA, coupled with her previous experience as assistant corporate secretary will be invaluable to the association and our members as we continue to face an increasingly challenging legal and political environment," said Jahn.

As MRC informed earlier, Russia's output of chemical products dropped by 3.2% in November 2019 month on month.
However, production of basic chemicals increased by 3.6% in the first eleven months of 2019, according to Rosstat's data. 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. Last month, 255,000 tonnes of ethylene were produced versus 210,000 tonnes in October; by November, Russian producers had completed all their scheduled works. Thus, 2,721,000 tonnes of this olefin were produced in January-November 2019, up by 0.3% year on year.
MRC

Showa Denko decides to establish second factory in Shanghai to produce high-purity gases for electronics

MOSCOW (MRC) -- Showa Denko K.K. (SDK) decided to establish its subsidiary’s second factory in Shanghai to produce high-purity gases for electronics, said the producer.

Shanghai Showa Electronics Materials Co., Ltd. (SSE), which is SDK’s wholly owned subsidiary producing high-purity gases for electronics, acquired a right to use a site for its second factory adjacent to the First Factory for 50 years, and will establish facilities to produce high-purity nitrous oxide (N2O) and high-purity octafluorocyclobutane (C4F8) gases and a dangerous goods warehouse to stock high-pressure gases. The second factory will start its operations in the second half of 2021.

High-purity N2O is a specialty gas used to form oxidized films on surfaces of integrated circuits which will compose semiconductor chips or display panels. High-purity C4F8 is a specialty gas used for etching of those oxidized films and other micromachining processes. Due to progress in information communication technologies including 5G mobile communication technology and Chinese government’s policy to nurture high-technology industry, the market in China for semiconductor chips and display panels (e.g., organic electroluminescent display panels for TVs, etc.) is expected to expand.

The Showa Denko Group is now producing high-purity N2O at Kawasaki Plant and a site of a group company in the Republic of Korea, and high-purity C4F8 at Kawasaki Plant and SSE’s First Factory in Shanghai. In order to strengthen its adaptability to changes in needs of the market, including the need for stable supply of high-purity gases, the Group now aims to promote “local consumption of locally produced high-purity gases” further. Moreover, in the present situation where the Chinese government is strengthening regulations on chemicals, establishment and expansion of the Showa Denko Group’s dangerous goods warehouse in Shanghai to stock high-pressure gases will enable the Group to strengthen its supply chain and competitiveness. By combining its production and quality-control technologies and getting best supply system ready for customers, the Showa Denko Group will further strengthen its high-purity gas business.

As per MRC, Showa Denko K.K. in March 2018, it stopped production at a cracking unit in Oita (Oita, Japan) for preventive maintenance. Maintenance at this enterprise with a capacity of 691 thousand tons of ethylene per year continued until April 19, 2018.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,904,410 tonnes in the first eleven months of 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments increased from both domestic producers and foreign suppliers. The PP consumption in the Russian market was 1,161,830 tonnes in January-November 2019, up by 7% year on year. Deliveries of all grades of propylene polymers increased, with the homopolymer PP segment accounting for the largest increase.

Showa Denko K.K. Mainly engaged in the petrochemical business. The company's petrochemical division produces and markets industrial gases, olefins, organic chemicals, and others.
MRC