HollyFrontier contract workers no longer in refineries

MOSCOW (MRC) -- Independent U.S. refiner HollyFrontier has removed contract workers from its refineries and all significant capital activity has stopped because of the coronavirus pandemic, Chief Executive Michael Jennings said , as per Hydrocarbonprocessing.

"As for plant operations, we have limited ourselves to only operations staff - only the hourly and management work force that actually runs the units - and core maintenance functions,” Jennings said during the Scotia Howard Weil Virtual Energy Conference. “So contractors are out of the plants and all significant capital activity has stopped."

Jennings also said gasoline demand at the company’s five U.S. refineries, located in mid-continent and Rocky Mountain states, had “cratered” in the push to halt the spread of coronavirus by social distancing.

"The diesel crack spread is pretty stalwart in at, probably, between USD15 and USD20 (a barrel), depending on the day,” he said. “But that’s a reflection that the supply chain still needs to function and toilet paper still needs to be delivered to keep those cities and their populations moving or at least functioning."

HollyFrontier’s share price was up 7.9% on Tuesday at USD20.13. Jet fuel demand has also dropped as people are staying in their homes, Jennings said. Out of a combined throughput of 514,630 barrels per day (bpd) the company only makes 6,000 bpd of jet fuel.

The company also expects a drop-off in the demand for lubricants following a surge in March as buyers stocked up their supplies, he said.

As MRC informed earlier, HollyFrontier Corp said it would build a biodiesel plant in New Mexico to lower costs related to blending renewable fuels and announced a USD1 billion share buyback program. Oil companies, including refiners, have to blend increasing amounts of renewable fuels with their petroleum products or purchase credits, known as Renewable Identification Numbers (RINs), to meet US biofuel requirements. The company’s RIN costs totaled USD184 million in 2018.

As MRC informed earlier, the U.S. Environmental Protection Agency will not appeal a court ruling that would sharply reduce its use of waivers exempting refineries from the nation’s biofuels regulation, a big win for the Corn Lobby, according to a Reuters case docket review.

As MRC informed earlier, US Senators Chuck Grassley and Joni Ernst of Iowa have asked the Trump administration not to appeal a court ruling that would slash the use of small refinery biofuel waivers, but have not heard back yet on its decision. President Donald Trump said the United States would take advantage of low oil prices and fill the nation’s emergency crude oil reserve, in a move aimed to help energy producers struggling from the price plunge.

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) -- Honeywell UOP announced that Zhejiang Petrochemical Co. Ltd. (ZPC) will use four Honeywell UOP Polybed pressure swing adsorption (PSA) units to supply high-purity hydrogen for the second phase of an integrated refining and petrochemical complex in Zhoushan, Zhejiang Province, according to Hydrocarbonprocessing.

The complex is one of several new large industrial sites that are part of China’s current national economic development plan.

Zhejiang Petrochemical earlier awarded petrochemical process technology licensing, engineering design and catalysts for the first two phases of the project to Honeywell UOP. When completed, the new plant will be the largest crude-to-chemicals complex in China and one of the largest in the world, manufacturing petrochemicals to make plastic resins, films and fibers, as well as fuels.

“More petrochemical manufacturers and refiners in China are choosing UOP’s PSA technology because it is an extremely competitive and reliable source of high purity hydrogen,” said Bryan Glover, vice president and general manager, Petrochemicals & Refining Technologies at Honeywell UOP. “High-purity hydrogen is a critical element in the efficient operation of these complexes because all of the conversion technologies in them depend on it.”

UOP announced the first phase of the ZPC project in 2017, including technologies for hydroprocessing and heavy oil upgrading, and production of aromatics for plastic resins, films and fibers. ZPC awarded the second phase of the project in January 2019, doubling the plant’s aromatics capacity to about 12 million metric tons per year. With more than 50% of its crude capacity converted to petrochemicals, it will move China closer to self-sufficiency in paraxylene production and be a major new source of propylene and other products.

Polybed PSA systems are skid-mounted, modular units complete with hardware, adsorbents, control systems and embedded process technology, enabling quick and efficient installation to reduce cost and downtime.

The PSA process uses proprietary UOP adsorbents to remove impurities at high pressure from hydrogen-containing process streams, allowing hydrogen to be recovered and upgraded to more than 99.9% purity to meet refining needs. In addition to recovering and purifying hydrogen from steam reformers and refinery off-gases, the Polybed PSA system can be used to produce hydrogen from other sources such as ethylene off-gas, methanol off-gas and partial-oxidation synthesis gas.

Since its introduction in 1966, UOP has improved Polybed PSA technology with new generations of adsorbents, enhanced cycle configurations, modified process and equipment designs and more reliable control systems and equipment. Today, Honeywell UOP has installed more than 1,100 Polybed PSA units in more than 70 countries. As a result, Polybed PSA is a proven technology with dozens of large-scale unit references globally.

The Zhoushan facility is the largest integrated refining and petrochemicals project in the world. It includes two complexes, together containing two UOP VGO Unicracking units with a total capacity of 8 million metric tons per year (mmta), and two diesel Unicracking units with a total capacity of 7 mmta. The complexes also include RCD Unionfining and RFCC units, each with a capacity of 5 mmta, four CCR Platforming units with a total capacity of 15.2 mmta, a Butamer unit with a 400 kmta fresh feed rate, four LD Parex trains with a total capacity of 8.8 mmta, and a C3 Oleflex unit with a capacity of 510 kmta.

As MRC wrote before, in late December 2019, Zhejiang Petrochemical Co Ltd started up its ethylene cracker . ased in Zhejiang, China, the cracker is able to produce 1.4 million tons/year of ethylene.

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

MOSCOW (MRC) -- The Trump administration has decided not to appeal a court ruling that would sharply reduce its use of waivers exempting refineries from the nation’s biofuels regulation, cheering the corn lobby but drawing anger from oil refiners, reported Reuters.

The administration had until the end of March 24 to file a challenge, but by early March 25, no such filing had been entered, according to a case docket on the US government’s electronic access service for court records.

Officials for the Environmental Protection Agency and the White House did not respond to requests for comment on Wednesday.

The decision appears to end a years-long battle between the rival oil and corn industries, two crucial political constituencies for President Donald Trump, over the waiver program. Refiners argue the waivers are crucial to keeping small refining facilities in business, but agriculture representatives say they have been overused and hurt farmers by eroding demand for corn-based ethanol.

The stakes have only grown recently, as both industries are hard-hit by the economic impact of the coronavirus pandemic.

Under the US Renewable Fuel Standard, refiners are required to blend billions of gallons of ethanol into their gasoline every year. But the EPA, which administers the program, can give out waivers to small facilities that prove that compliance would put them in financial straits.

The Trump administration has roughly quadrupled the number of waivers the EPA grants to refiners. Reuters reporting has shown that some of those waivers have been going to small facilities owned by huge, profitable companies like Exxon Mobil and Chevron Corp, as well as to operations owned by billionaire Trump ally Carl Icahn.

The waiver program was cast into question in January after the 10th Circuit Court of Appeals ruled that the Trump administration had been too free with the waivers and set a standard for the exemptions that would greatly reduce the numbers of waivers the EPA can grant.

Since the ruling, the EPA has been in deliberations with the White House and the Department of Justice over how to respond.

The country’s main lobby group for oil refiners blasted the EPA’s decision not to challenge the court ruling.

"It is astonishing that President Trump has abandoned our country’s small-refinery workers and the communities that rely on these critical facilities in this time of national crisis and economic uncertainty," said Chet Thompson, head of the American Fuel & Petrochemical Manufacturers group.

Refiners involved in the court case have asked for a rehearing, but it is unclear if the requests would be granted in the absence of support from the EPA.

The biofuels industry, meanwhile, cheered the decision.

"Requesting a re-hearing would have only prolonged uncertainty in the marketplace and exacerbated the pain and frustration already being experienced in the Heartland," said groups including the Renewable Fuels Association in a statement.

Sources had told Reuters earlier this month that the Trump administration was likely to adhere to the court’s ruling and apply it nationally. The agency, meanwhile, was discussing the possibility of other measures to ease the financial burden on refiners, the sources said.

Such measures could include price caps on biofuel blending credits that refiners must earn or purchase to show compliance with the RFS, according to the sources.
MRC

MOSCOW (MRC) - Imports of PET chips into Russia decreased by 2% in two months of this year compared to the same time a year ago and reached 18,300 tonnes compared to 18,700 tonnes (excluding supplies from Belarus over the past two months), according to MRC's DataScope.

Russia's PET imports decreased by 42% in February to 6,700 tonnes against 11,600 tonnes in January; last February material imports amounted to 9,800 tonnes. Imports of Chinese injection moulding PET chips in Russia decreased by 26% in Jan-Feb, compared with the same period a year ago and reached 12,900 tonnes. The same indicator in January-February 2019 amounted to 17,400 tonnes.
The share of bottle PET imports from China since the beginning of the year has decreased compared to the same period of the previous year and amounted to 71% against 93%. The share of Chinese material was 92% (6,200 tonnes) in February versus 58% (6,700 tonnes) a month earlier. This figure was at 9,100 tonnes in February 2019.

Last month, the largest number of external deliveries of injection moulding PET chips to the Russian market was at Yisheng and Sinopec manufacturers - 3,200 tonnes and 2,300 tonnes, respectively.
The top 5 Chinese suppliers this year are as follows: Yisheng delivered 4,900 tonnes of injection moulding PET chips, Jiangsu - 2,900 tonnes, Sinopec - 2,600 tonnes, Indorama - 1,700 tonnes, Wankai - 500 tonnes.

The share of Lithuanian PET produced by Neo Group in January - February of this year significantly increased and amounted to 24% (4,400 tonnes) compared to 2% (300 tonnes) in the same period in 2019.

MRC

MOSCOW (MRC) -- India's ONGC Petro Additions (OPaL) has yet to make any force majeure declaration, but its operations are also likely to be severely affected, reported Argus.

Opal has a 1.1mn t/yr cracker at Dahej in the western state of Gujarat.

Downstream operations include 350,000 t/yr polypropylene (PP), 340,000 t/yr high density polyethylene (HDPE) and swing 720,000 t/yr HDPE/linear low density polyethylene (LLDPE) units.

As MRC wrote previously, in December 2019, Oil and Natural Gas Corp. (ONGC) announced that it had shelved its stake sale plans for OPaL unable to attract a strategic partner.

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).

OPaL is a joint venture between Gujarat State Petroleum Corp (GSPC), Gas Authority of India Ltd (GAIL) and ONGC.
MRC