PrefChem shuts cracker in Malaysia following explosion and fire

MOSCOW (MRC) -- Malaysia's Pengerang Refining and Petrochemical (PRefChem), a 50:50 JV between Petronas and Saudi Aramco, took its naphtha cracker in Johor off-stream after an explostion and fire at the site with no notice on how long the unit would remain shut, reported CommoPlast with reference to market sources.

The cracker has an annual capacity of 1.2 million tons/year of ethylene and 600,000 tons/year of propylene.

As MRC wrote before, the explosion occurred at PRefChem complex at roughly 10.50 PM on 15 March 2020, which killed five people. The initial report confirmed that the incident took place at the 300,000 barrel per day refinery unit.

CommoPlast has not received any updates pertaining to the production status of downstream polypropylene (PP) and polyethylene (PE) plants following the explosion. PrefChem owns two PP lines at the Johor complex with a combined capacity of 900,000 tons/year, a 400,000 tons/year high density polyethylene (HDPE) line and a 350,000 tons/year linear low density polyethylene (LLDPE) line.

As MRC reported earlier, PRefChem abruptly shut down its cracker in Pengerang, Malaysia, on 25 October 2019, due to an unspecified technical issue. The naphtha cracker produces 1.2 million tons/year of ethylene and 600,000 tons/year of propylene. Sources with knowledge of the matter said then that it might take roughly ten days for the cracker to come back online.

We also remind that the company received commercial ethylene and propylene at its new cracker in Pengerang on 13 September, 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 215,390 tonnes in the first month of 2020, up by 23% year on year. Shipments of all grades of high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) increased due to higher capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market were 127,240 tonnes in January 2020, up by 33% year on year. ZapSibNeftekhim's homopolymer PP accounted for the main increase in shipments.

PrefChem is a 50:50 joint venture between Malaysia's Petroliam Nasional Bhd, or Petronas, and Saudi Aramco. The Pengerang Refining development, part of Petronas’ USD27 billion Pengerang Integrated Complex, consists of a 300,000 barrels-per-day (bpd) oil refinery and a petrochemical complex with a production capacity of 7.7 million tonnes per year in the southern Malaysian state of Johor.

Petronas, short for Petroliam Nasional Berhad, is a Malaysian oil and gas company wholly owned by the Government of Malaysia. The Group is engaged in a wide spectrum of petroleum activities, including upstream exploration and production of oil and gas to downstream oil refining; marketing and distribution of petroleum products; trading; gas processing and liquefaction; gas transmission pipeline network operations; marketing of liquefied natural gas; petrochemical manufacturing and marketing; shipping; automotive engineering; and property investment.

Saudi Aramco, officially the Saudi Arabian Oil Company, is a Saudi Arabian national oil and natural gas company based in Dhahran, Saudi Arabia. Saudi Aramco"s value has been estimated at up to USD10 trillion in the Financial Times, making it the world"s most valuable company. Saudi Aramco has both the largest proven crude oil reserves, at more than 260 billion barrels, and largest daily oil production.
MRC

MOSCOW (MRC) -- China’s Jinxi Petrochemical Corp, a refinery unit of state-owned PetroChina, last week loaded its first shipment of very low-sulfur fuel oil (VLSFO) for marine bunker hub Zhoushan, reported Reuters with reference to parent company China National Petroleum Corp's (CNPC) statement.

The 3,000-tonne cargo was Jinxi’s first export of the cleaner marine fuel to supply international vessels at Zhoushan port in east China, following a government tax-waiving policy in January to encourage exporting the fuel that meets the new global emission rules.

The plant, based in the northeastern province of Liaoning, manufactured the marine bunker by blending semi-refined fuels such as catalytic diesel, vacuum residue and gas oil from coking unit, CNPC said.

One of PetroChina’s nine designated producers of VLSFO, Jinxi will be able to make 700,000 tonnes a year of the cleaner shipping fuel, the parent company said.

State refiners China National Offshore Oil Corp (CNOOC), PetroChina, Sinopec and privately-run Zhejiang Petrochemical Corp (ZPC) were among the first to export VLSFO under the new tax regime, putting the oil into bonded storage in the ports of Dalian, Shandong and Zhoushan.

As MRC informed before, state-owned PetroChina shut its Guangxi Petrochemical in southern Guangxi province on February 9 for scheduled 50-day maintenance. The maintenance should help the refinery to offset stock pressure after product demand slumped due to the coronavirus outbreak.

We also remind that Sichuan Petrochemical (part of PetroChina) undertook an emergency shutdown at its naphtha cracker in Sichuan province of China on July 11, 2018 owing to a gas leak at its natural gas supply pipeline. Further details on duration of the outage could not be ascertained. Located at Sichuan province of China, the cracker has an ethylene capacity of 800,000 mt/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 215,390 tonnes in the first month of 2020, up by 23% year on year. Shipments of all grades of high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) increased due to higher capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market were 127,240 tonnes in January 2020, up by 33% year on year. ZapSibNeftekhim's homopolymer PP accounted for the main increase in shipments.

PetroChina Company Limited, is a Chinese oil and gas company and is the listed arm of state-owned China National Petroleum Corporation, headquartered in Dongcheng District, Beijing. It is China's biggest oil producer.
MRC

MOSCOW (MRC) -- Saudi Arabia on Wednesday denied press reports that Saudi Arabia’s Minister of Investment Khalid al-Falih is having any discussions "formal or informal" with Russia’s Energy Minister Alexander Novak to resolve differences in position regarding oil production policies that surfaced during the OPEC+ meetings in Vienna, reported Chemweek.

The Saudi Press Agency says that while Minister Falih "fully supports the efforts being led by…Prince Abdulaziz bin Salman, Saudi Arabia's Minister of Energy, he is not playing any role in these discussions nor is he planning on travelling to Moscow as has also been suggested by some media outlets."

Falih said his mandate remains focused on elevating Saudi Arabia’s position as an attractive global investment destination, and urged the media to avoid publication of any claims that have not been properly corroborated from the appropriate and reliable source. Additionally, Alexander Novak, Russia’s minister of energy, has also confirmed that these claims are false.

On 6 March, The Wall Street Journal reported that the two ministers are expected to meet in Russia to discuss the current situation. This followed a row between the two countries, which sent oil prices tumbling to their lowest level since 1991.

Today, the Saudi press reported that Saudi Arabia is keen to provide continuous global cooperation to maintain stability in the global oil market and to achieve cooperation with Russia, another major oil producer, but Russia did not collaborate.

As MRC wrote before, Saudi Aramco expects the coronavirus impact on oil demand to be short-lived and for consumption to rise in the second half of the year, Chief Executive Amin Nasser told Reuters in late February 2020.
MRC

MOSCOW (MRC) -- INEOS is enacting a series of ‘social distancing’ measures in order to protect its employees who play a vital role in the production of essential products, said the producer on its site.

Sir Jim Ratcliffe, INEOS Chairman says, "Our immediate priorities are to keep our people safe and to keep our plants and businesses running".

INEOS has announced a series of measures to protect employees and thereby ensure the continued operation of its plants and businesses through the coming weeks and months. As the manufacturer of essential materials that are vital to life, the company is taking immediate action to limit the spread of the virus. These actions include:

- All office-based staff working from home unless in exceptional circumstances
- All employees maintaining a 1-meter rule within offices or plants
- Restricting visits to plants and offices
- Postponing non-essential work on plants
- Cancelling group events

Sir Jim Ratcliffe, Chairman of INEOS says, "We take our responsibility as a global manufacturer of essential products to every-day life very seriously, with health and safety our top priority.

"As a result of the rapidly evolving Covid-19 pandemic we are taking all necessary steps to ensure that we keep our people safe and keep our plants and our businesses running.

"This includes changes to working patterns for our staff globally, a ban on all non-essential travel, changes to our site cleaning regimes, the postponement of non-essential work at sites and the cancellation or postponement of all events involving groups. These mandatory rules will all be in effect from Monday, 16 March.

“Our responsibility and our focus is to ensure the plants that we run, which produce products essential to everyday life including the healthcare system, remain operational, with the safety of our employees the number one priority.

"We will continue to review the situation and make all necessary adjustments to minimise the impact we have as a global business on the spread of Covid-19, prioritising the health and safety of our staff, while recognising the role we need to play in the production of essential products."

As MRC informed before, in January 2019, INEOS announced Antwerp as the location for its new petrochemical investment. The EUR3 billion investment will be the biggest ever made by INEOS and is first cracker to be built in Europe in 20 years. The investment is a game changer for the chemical sectors and will bring huge benefits to the Belgium and wider European economies.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 215,390 tonnes in the first month of 2020, up by 23% year on year. Shipments of all grades of high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) increased due to higher capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market were 127,240 tonnes in January 2020, up by 33% year on year. ZapSibNeftekhim's homopolymer PP accounted for the main increase in shipments.
MRC

MOSCOW (MRC) - Demand for low density polyethylene (LDPE) in the Russian market has grown significantly, a gradual increase in prices has begun. Last week, a limited supply from a number of sellers led to the most tangible price increase in the last few weeks, according to the ICIS-MRC Price Report.

After a long period of surplus, which was seen in October - January, Russian manufacturers managed to balance the domestic LDPE market by February of this year, including due to the growth in export sales. Since the middle of last month, excess polyethylene in the market has disappeared, and prices have begun to rise slowly.

Demand rose significantly in March due to early spring in several regions, and in the second week of the month, some sellers reported that they had already sold all their LDPE volumes. As a result, prices have risen over the week for some positions of polyethylene by Rb2,000-4,000/tonne.

The 108th LDPE was in greatest demand in the last few weeks, and its supply in the market is declining every day.
Some sellers of polyethylene produced by the Angarsk ZP and Ufaorgsintez reported last week that they had already sold all of their March quotas. A similar situation with the 158th LDPE.

Most of the sellers of polyethylene produced by Kazanorgsintez also sold all their volumes. The Kazan manufacturer intends to shut down production of the 158 and 153 LDPE for almost a month scheduled maintenances from 11 April.

Also, traditional spring restrictions on road transport of goods on secondary routes in certain regions will put pressure on LDPE prices in the near future. Such restrictions were introduced in Bashkortostan from 23 March; from 1 April in Tatarstan.

Some producers; prices of 108 LDPE grew in the spot market to the level of Rb69 500-70 000/tonne CPT Moscow, including VAT by mid March; showing an increase in value at the level of Rb4,000/tonne. Prices of 158 LDPE continued to rise. Kazanorgsintez and Tomskneftekhim announced a price increase of Rb2,000/tonne last week.
MRC