Kazakhstan to resume exports of its oil to China in March

MOSCOW (MRC) -- Kazakhstan’s energy ministry said that the country would resume exports of its oil to China in March 2020, reported Reuters.

The ministry did not disclose the amount of oil supplies.

As MRC informed before, in January 2020, Kazakhstan suspended its oil exports to China after organic chlorides contamination was found in crude supplied by a Kazakh producer less than a year after the "dirty oil" crisis in neighboring Russia.

We also remind that South Korea's LG Chem said in January 2016, it had decided to drop a plan to jointly build a USD4.2-billion petrochemical complex in Kazakhstan, citing a prolonged slump in oil prices and a sharp increase in facility investments. In 2011, the chemical company said it would construct the complex near the western Kazakh city of Atyrau as part of a 50-50 joint venture with two Kazakh companies. The plan involved building ethylene and polyethylene plants with annual capacities of 840,000 tonnes and 800,000 tonnes, respectively. The project was announced in 2013.

Ethylene and propylene are feedstocks for producing 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

McDonalds and Starbucks Are Developing Reusables

MOSCOW (MRC) -- McDonald’s and Starbucks are developing reusables; pilot programs in California that start this week will test systems to collect, clean and redistribute plastic coffee cups, said Bloomberg.

In the future, when you order a coffee at McDonald’s or Starbucks, it could be served in the same cup you used a few months earlier.

That’s the vision behind pilot programs this week that will introduce two types of “smart” reusable cups in independent coffee shops in San Francisco and Palo Alto, California. The models, made mostly from plastic and outfitted with RFID chips or QR codes for tracking, are the fruit of a two-year “moon shot” project known as the NextGen Cup Challenge, which was led by Starbucks Corp. and McDonald’s Corp.

Those two chains alone blow through billions of paper cups a year, and most are coated with a plastic lining that makes them almost impossible to recycle. Eliminating that waste would go a long way toward meeting environmental goals set by each company. The NextGen group also intends to try some new compostable and recyclable single-use cups in Oakland.

The key to leaving a lighter footprint on the planet may not be choosing the perfect material, because there are downsides to any disposable cup, whether paper, aluminum or plastic. Instead, NextGen’s big idea is to make cups durable and create a system in which they would be reused. That means collecting, cleaning, redistributing and digitally tracking them — a process that could keep tabs on rates of reuse and attrition. It could theoretically identify areas where people are buying drinks but not returning cups, perhaps indicating a need for more collection sites nearby.

“This technology for tech-enabled reusable cups didn’t exist five years ago,” said Bridget Croke, managing director at Closed Loop Partners, a recycling-focused private equity firm that coordinated the challenge.

The pilot programs starting at independent coffee shops in California this week are a test for the public as well as for the new cups: Will consumers choose to drop cups at certain collection sites instead of in trash cans?

Two small startups will use this trial to scale up their logistics and get a sense of what it would be like to run a reusable cup system globally.

The model on trial in San Francisco, from the startup Muuse, is printed with a distinct QR code on each cup, which consumers can scan when they pick up and drop off cups. Muuse has been used on college campuses.

The model from a startup called CupClub, which will debut in Palo Alto, was designed by London-based architect Safia Qureshi in 2015. The cups are meant to be easily stacked at bright-yellow drop-off points, scattered throughout the city. Then they will be piled into vans and sent for cleaning. Embedded with RFID tags, the cups can be scanned as they pass near certain points, like the coffee shop counter or a collection site. The startup has been selling the system to corporate offices and says reusing its cups can reduce landfill waste by as much as 40%.

Qureshi said people didn’t like the experience of drinking out of reusable metal cups, so the company settled on recyclable white plastic. “Consumers need a product that isn’t going to be so much of a step change,” she said.

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

Moodys downgrades Nayara Energy rating to negative

MOSCOW (MRC) -- Research and rating agency Moody’s has recently downgraded Nayara Energy Limited’s corporate family rating to negative from stable, driven largely by weak refining margin environment in Asia, according to Energyworld.

"The downgrade to Ba3 reflects the significant deterioration in Nayara's credit metrics, driven largely by the weak refining margin environment in Asia," Sweta Patodia, Moody's lead analyst for Nayara, said in a statement.

Nayara's operating performance was further affected by a planned maintenance shutdown in December 2018, which resulted in lower throughput and capacity utilization during the period. In addition, the implementation of new accounting standards with respect to operating leases resulted in higher leverage and further weakened the company's credit metrics.

“Nayara's leverage - as measured by debt/EBITDA - increased to approximately 6.3x for last twelve months ended 30 June 2019 from 3.9x for fiscal year ended March 2018, and interest cover - as measured by EBIT/interest - declined to 1.5x from 2.1x over the same period,” Moody’s said in a statement.

Tightening regulations on the use of heavy fuel oil in the shipping industry from January 2020 will result in an increase in demand for middle distillates and lead to some recovery in refining margins for the refinery, the agency projected.

The rating agency expects Nayara to benefit from the new regulations given its high proportion of light and middle distillate output. However, the impact of recent outbreak of coronavirus on regional demand growth of petroleum product remains uncertain.

"While we expect Nayara's credit metrics to improve over the next 12-18 months, they will continue to remain weakly positioned," Patodia said. The negative outlook reflects that the regional refining margin environment continues to remain uncertain and could delay improvement in Nayara's credit metrics from current levels, Moody’s said.

“Given the negative outlook, an upgrade is unlikely over the next 12-18 months. The outlook could return to stable if there is an improvement in the operating environment which leads to an improvement in the company's profitability,” the agency said.

Nayara Energy Ltd is a refiner and supplier of petroleum products in India and overseas. It operates the country's second largest single-site refinery in Gujarat, with a nameplate capacity of 405 thousand barrels per day and a high complexity index of 11.8.

As MRC reported previously, Thyssenkrupp Industrial Solutions (India) has recently signed a contract with Nayara Energy, under which it will provide project management consultancy (PMC) services for Nayara's new petrochemical project to be built at the site of Nayara's 20-million-t/y Vadinar refinery in India. The USD850-million project, which will mark Nayara's entry into the petrochemical sector, includes a 450,000-t/y propylene recovery unit, a 450,000-t/y Unipol polypropylene (PP) plant, a 200,000-t/y methyl tertiary butyl ether unit and associated off-sites and utility facilities. PCN earlier said the project was expected to be completed in 2022.

According to MRC's ScanPlast report, Russia's 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

PetroRabigh starts maintenance at phenol and acetone plant in Saudi Arabia

MOSCOW (MRC) -- Saudi Arabia’s Rabigh Refining and Petrochemical (Petro Rabigh)has shut its phenol-acetone plant, according to Apic-online.

A Polymerupdate source in Saudi Arabia informed that, the company has started turnaround at the plant on February 24, 2020. The plant is expected to remain under maintenance for about one month.

Located at Rabigh in Saudi Arabia, the plant has a phenol capacity of 270,000 mt/year and acetone capacity of 165,000 mt/year.

As MRC wrote previously, Petro Rabigh is planning to shut its low density polyethylene (LDPE) plant in Rabigh, Saudi Arabia for maintenance in late February, 2020. At present the restart dates of this LDPE plant with the capacity of 160,000 tons/year could not be ascertained.

Petro Rabigh also operates No. 1 and 2 linear low density polyethylene (LLDPE) units at the same location with a combined capacty of 600,000 tons/year. Besides, the company has here a 300,000 tons/year high density polyethylene (HDPE) unit.

Phenol is one of the main feedstocks for the production of bisphenol A (BPA), which, in its turn, is used for the production of polycarbonate (PC).

According to MRC's ScanPlast report, Russia's estimated consumption of PC granules (excluding imports and exports to/from Belarus) totalled 78,500 tonnes in 2019, up by 15% year on year (68,100 tonnes a year earlier).

PetroRabigh, a joint venture between Saudi Aramco and Japan's Sumitomo Chemical, has an annual output capacity of 18 million tonnes of refined products and 2.4 million tonnes of petrochemicals. Thus, the complex currently has a cracker to produce 1.6-million t/y of ethylene, as well as downstream production of polyethylene, polypropylene, propylene oxide, ethylene glycol and butene-1.
MRC

Chemical production in Russia up by 3% in January 2020

MOSCOW (MRC) -- Russia's output of chemical products rose in January 2020 by 3% year on year. Last year's production of basic chemicals increased by 3.4% year on year, according to Rosstat's data.
According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the largest increase in the January output.

281,000 tonnes of ethylene were produced last month, compared to 275,000 tonnes in January 2019 and 264,000 tonnes in December 2019. 2,984,000 tonnes of this olefin were produced in 2019.

Output of benzene were 133,000 tonnes in January 2020, compared to 122,000 tonnes in January 2019 and 132,000 tonnes last December. Overall production of this material reached 1,470,000 tonnes last year.

January production of sodium hydroxide (caustic soda) was 113,000 tonnes (100% of the basic substance) versus 110,000 tonnes in January and December 2019. Overall output of caustic soda totalled about 1,289,000 tonnes in 2019.

January production of mineral fertilizers was 1,923,000 tonnes (in terms of 100% nutrients) versus 2,078,000 tonnes and 1,913,000 tonnes in January and December 2019, respectively. Overall, Russian plants produced 23,588,000 tonnes of fertilizers last year.

Last month's production of polymers in primary form fell to 818,000 tonnes from 681,000 tonnes and 928,000 tonnes in January and December 2019, respectively. Overall output of polymers in primary form totalled 8,759,000 tonnes.
MRC