Qatar signs deal with Shell to supply Kuwait 1 mil mt/year of LNG

MOSCOW (MRC) -- Qatargas has signed an agreement with Shell to deliver 1 million mt/year of LNG to Kuwait for 15 years, starting this year, reported S&P Global.

The LNG will come from Qatar Liquefied Gas Co. 4, a joint venture between Qatar Petroleum (70%) and Shell (30%), Qatargas said Sunday in a statement.

The new agreement comes a month after Qatar Petroleum agreed to supply Kuwait Petroleum Corp. with up to 3 million mt/year of LNG over 15 years starting in 2022, as Kuwait seeks to rely more on gas for power generation.

"These agreements demonstrate our commitment to the state of Kuwait, which is a very important LNG market," Saad Sherida al-Kaabi, Qatar's energy minister, said in the Qatargas statement.

Kuwait began importing LNG in 2009, in an attempt to lower reliance on crude to produce electricity and water. In 2017, it signed a 15-year LNG agreement with Shell for supplies to start this year.

Kuwait is set to bring online 4.5 GW of new gas-fired power plants in the next few years and, combining that with industrial demand growth, Kuwait's gas demand is expected to peak above 80 million cubic meters/day by 2025, or 27% higher than last year, according to S&P Global Platts Analytics.

"Qatar and Shell have historically been the largest suppliers of LNG to Kuwait, and the slew of deals we have had in the last month show how they are angling to maintain that dominance," according to Samer Mosis, senior LNG analyst at Platts Analytics. "For Qatar, pressure to sign new offtake agreements is increasingly dire, with over 20 million mt/year of existing deals expiring within the next five years, and that is before we take into consideration Qatargas's massive expansion plans, none of which are contracted for yet."

Qatar and Australia are vying to be the world's largest LNG exporter, with Australia No. 1 in January and Qatar largest last year for every month except July, according to Mosis. Qatar plans to boost its production capacity to 126 million mt/year by 2027, from the current 77 million mt/year.

As MRC informed earlier, in March 2019, Mammoet safely completed a critical lift at Shell’s Pennsylvania Chemicals Project in Potter Township, utilizing its MSG80 to hoist a 2,000 ton quench tower into position. The facility is the first major US project of its kind to be built outside of the Gulf Coast region in 20 years. Once operational, the facility will boast an ethane cracker and three polyethylene units, and is expected to employ up to 600 employees.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,093,260 tonnes in 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments rose from both domestic producers and foreign suppliers. The estimated PP consumption in the Russian market was 1,260,400 tonnes in January-December 2019, up by 4% year on year. Supply of almost all grades of propylene polymers increased, except for statistical copolymers of propylene (PP random copolymers).

Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.
MRC

Exxon Louisiana refinery restart depends on natgas supply

MOSCOW (MRC) -- Restarting Exxon Mobil Corp’s 502,500 barrel-per-day (bpd) Baton Rouge, Louisiana, refinery after an early morning fire will depend on how quickly natural gas supply can be restored to the crude distillation units (CDUs), reported Reuters with reference to sources familiar with plant operations.

The fire broke out in a natural gas pipeline supplying the units before midnight on Tuesday, the sources said. The fire was put out on Wednesday morning, the company said. No injuries were reported.

Exxon had made preliminary plans to restart the Baton Rouge refinery’s large CDU, the 210,000 bpd PSLA-10, before the fire was extinguished, the sources said. The unit cannot be restarted until the natural gas supply is restored.

Most of the refinery’s units, including the three CDUs, were shut early on Wednesday, the sources said.

Exxon spokesman Jeremy Eikenberry declined on Wednesday to discuss the status of units at the refinery. He did say operations were continuing at the refinery and adjoining chemical plant.

Eikenberry also said Exxon would continue to meet its contractual commitments.

The 210,000-bpd PSLA-10 CDU is the largest of three at the refinery doing the primary conversion of crude oil into hydrocarbon feedstock for all other production units. The natural gas is used to operate the units as they breakdown crude oil.

One of the two 110,000-bpd gasoline producing fluidic catalytic cracking units (FCCUs) continues to operate at a minimal production level while one of the light ends units is also operating at minimum rates, the sources said.

The Baton Rouge refinery is the second-largest in Louisiana and the fifth-largest in the United States by capacity. It is Exxon’s second-largest refinery in the nation.

The company also operates a cracker at this site with the annual production capacity of 1 mln tonnes of ethylene и 575,000 tonnes of propylene, which was shut for maintenance on 11 February 2019 to mid-Apirl 2019.

As MRC informed before, in September 2019, ExxonMobil announced plans to spend GBP140 million over the next two years in an additional investment program at its Fife ethylene plant, which has a capacity of more than 800,000 t/y.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,093,260 tonnes in 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments rose from both domestic producers and foreign suppliers. The estimated PP consumption in the Russian market was 1,260,400 tonnes in January-December 2019, up by 4% year on year. Supply of almost all grades of propylene polymers increased, except for statistical copolymers of propylene (PP random copolymers).

ExxonMobil is the largest non-government owned company in the energy industry and produces about 3% of the world's oil and about 2% of the world's energy.
MRC

Trinseo partners with CEDAP on PS application development

MOSCOW (MRC) -- Trinseo, the global materials company and manufacturer of plastics, latex binders, and synthetic rubber, has announced its collaboration with CEDAP, a leading specialist in sheet extrusion for the packaging industry, according to the company's press release.

The partnership seeks to advance the implementation of recycled polystyrene (PS) used in food packaging applications by utilizing chemically recycled PS to develop and test food grade recycled PS packaging.

Trinseo will also collaborate with CEDAP lending technical expertise to support the development of a 100% PS made yogurt container. CEDAP is currently participating in a project, which aims to create a mono material yogurt container, including the label, lid, and pot. This project is spearheaded by the consortium Citeo, including Plastiques Venthenat (PV), Amcor, and Triballat.

"This is an exciting collaboration that Trinseo is lending technical, processing and performance expertise on," said Nicolas Joly, Global Business Director, Polystyrene and Feedstocks at Trinseo. "The implementation of a recycled PS in food grade packaging is coming closer to reality as we work hand in hand with the packaging industry. Furthermore, the development of a mono material yogurt pot would enable greater ease of recyclability and in turn unlock the opportunity for a new life in other applications via chemical or mechanical recycling of PS."

Trinseo is highly engaged in several partnerships and initiatives to close the loop on PS recycling, namely:

Recently announcing a first-of-its-kind polystyrene chemical recycling facility to be built in Europe;
Planning to offer an average of 30% recycled content to customers for polystyrene packaging in Europe by 2025;
Serving as a founding member of Styrenics Circular Solutions (SCS), a consortium that explores new methods for polystyrene recycling; and
Partnering with the waste supply chain to help identify new ways to increase the volume and quantity of plastics disposed and recovered through waste separation.
Full PS circularity is a game changer, offering a unique potential for closed loop recycling – with two fewer steps than recycling of other polymers. Depolymerization is an innovative technology for PS recycling, which has already proven to bring polystyrene waste back into a monomer – unlocking the intrinsic circularity of PS even further. In turn, PS circularity is particularly advantageous as it diverts waste material away from landfills, leading to a reduction in greenhouse gases and harmful emissions.

In North America, Trinseo’s joint venture, Americas Styrenics (AmSty), recently formed a joint venture with Agilyx, named Regenyx LLC, dedicated to fully recycling post-consumer polystyrene materials back into new PS products. Through Regenyx, AmSty is providing customers with PS recycled from a monomer state, from post-consumer waste, known as PolyUsable.

As MRC informed before, Trinseo have announced a price increase for all PS grades, acrylonitrile-butadiene-styrene (ABS) and acrylonitrile styrene copolymer (SAN) grades in Europe. Effective February 1, 2020, or as existing contract terms allow, the contract and spot prices for the products listed below rose as follows:

-- STYRON general purpose polystyrene grades (GPPS) -- by EUR100 per metric ton;
-- STYRON and STYRON A-Tech and STYRON X- Tech high impact polystyrene grades (HIPS) - by EUR100 per metric ton;
- MAGNUM ABS resins - by EUR55 per metric ton;
- TYRIL SAN resins - by EUR55 per metric ton.

According to MRC's ScanPlast report, Russia's estimated consumption of PS and styrene plastics was 46,260 tonnes in December 2019, up by 8% year on year. The estimated consumption of PS and styrene plastics totalled 500,660 tonnes in 2019, down by 1% year on year. Russian producers of PS and styrene plastics produced 44,960 tonnes of material in December 2019, up by 1% year on year.

Trinseo is a global materials company and manufacturer of plastics, latex and rubber. Trinseo's technology is used by customers in industries such as home appliances, automotive, building & construction, carpet, consumer electronics, consumer goods, electrical & lighting, medical, packaging, paper & paperboard, rubber goods and tires. Formerly known as Styron, Trinseo completed its renaming process in 1Q 2015. Trinseo had approximately USD4.6 billion in net sales in 2018, with 16 manufacturing sites around the world, and approximately 2,500 employees.
MRC

Exxon eyes crude unit restart at Louisiana refinery this week

MOSCOW (MRC) -- Exxon Mobil Corp has made preliminary plans to restart the large crude distillation unit (CDU) at its 502,500 barrel-per-day (bpd) Baton Rouge, Louisiana, refinery later this week, sources familiar with plant operations said, as per Hydrocarbonprocessing.

Most of the refinery’s units, including the three CDUs, were shut early on Wednesday after a natural gas line in a group of pipes caught fire late on Tuesday night, the sources said. The fire is contained but continued to burn on Wednesday morning in the pipeline area.

No injuries were reported from the fire, Exxon said earlier on Wednesday. A company spokesman said Exxon would continue to meet its contractual commitments.

The 210,000-bpd PSLA-10 CDU is the largest of three at the refinery doing the primary conversion of crude oil into hydrocarbon feedstock for all other production units.

An assessment of the damage to the bundle of pipelines where the fire is burning has yet to be done, the sources said.

One of the two 110,000-bpd gasoline producing fluidic catalytic cracking units (FCCUs) continues to operate at the minimal production level while one of the light ends units is also in operation at minimum rates, the sources said.

The Baton Rouge refinery is the second-largest in Louisiana and the fifth-largest in the United States by capacity. It is Exxon’s second-largest refinery in the nation.

As MRC informed earlier, a fire at Exxon Mobil Corp’s 502,500 barrel-per-day Baton Rouge refinery in Louisiana was extinguished by the refinery’s fire team on 12 February. The company earlier said the fire was contained in the area it occurred and there were no reported injuries with all personnel accounted for. Exxon is monitoring air quality in the refinery and surrounding areas, company spokesman Jeremy Eikenberry said in an emailed response. The company operates a cracker at this site with the annual production capacity of 1 mln tonnes of ethylene и 575,000 tonnes of propylene, which was shut for maintenance on 11 February 2019 to mid-Apirl 2019.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,093,260 tonnes in 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments rose from both domestic producers and foreign suppliers. The estimated PP consumption in the Russian market was 1,260,400 tonnes in January-December 2019, up by 4% year on year. Supply of almost all grades of propylene polymers increased, except for statistical copolymers of propylene (PP random copolymers).
MRC

Saudi Arabia cuts March crude supply to some Asian buyers

MOSCOW (MRC) -- The world’s top oil exporter Saudi Arabia has reduced crude supplies to some Asian buyers in March after refiners cut output following the coronavirus outbreak and for regular maintenance, four sources with knowledge of the matter said, as per Reuters.

The drop in supplies comes after state oil giant Saudi Aramco cut March official selling prices (OSPs) more than expected. Buyers’ overall nominations for March-loading cargoes were lower, but so far the virus has not had a big impact, a source familiar with Aramco oil exports said, adding that seasonal maintenance in Asia in the second quarter had made more difference.

Two of the sources declined to say how much lower the volumes were at their refineries, but said Saudi Aramco may have allowed some Chinese buyers to reduce their volumes by more than 10% as their situation was an exceptional case. Another of the sources said its refinery’s March loading reduction was caused by scheduled maintenance.

China’s refiners, including state-owned Sinopec Corp, PetroChina, China National Offshore Oil Company, and independent refiners such as Hengli Petrochemical and those in Shandong have cut their crude processing rate in February.

The spread of the coronavirus in China has killed more than 1,100 people and slowed the world’s second largest economy.

Saudi oil contracts allow the seller or the buyer to adjust loading volumes by plus or minus 10% of contracted volume, depending on demand and shipping logistics under a contractual clause known as operational tolerance.

As MRC informed earlier, Saudi Arabia, the world’s biggest oil exporter, may cut the prices of its light crude grades sold to Asia in February on signs of slowing demand ahead of the region’s peak refinery maintenance season.

Saudi Aramco officials as a matter of policy do not comment on the kingdom’s monthly OSPs.

As MRC wrote before, Saudi Aramco, which temporarily lost half of its oil production following the September 14 attacks on two key oil facilities, has been running its local refineries at full capacity since November 2019 and is forging ahead with plans to start up new refineries. The company is also starting up a joint venture refinery in Malaysia in 2020. According to Aramco's bond prospectus released in April, the refining and petrochemical joint venture with Petronas - the Malaysian national oil company - collectively known as PRefChem, was supposed to start this year.

The PRefChem joint venture includes a 300,000 b/d refinery, an integrated steam cracker with capacity to produce 1.3 million mt of ethylene located in Johor, Malaysia. Aramco was supposed to provide a significant portion of PRefChem's crude supply under a long-term supply agreement. Jazan and PrefChem will help Aramco reach a gross refining capacity of 5.6 million b/d, it said in the prospectus. The company currently owns and has stakes in four refineries abroad with a total refining capacity exceeding 2 million b/d.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,904,410 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