Eni says production at its Italian refineries has slowed, most at 60% capacity

MOSCOW (MRC) -- Italian energy group Eni said most of its oil refineries in Italy were working at around 60% of their capacity as the coronavirus emergency continues, reported Reuters.

The pandemic has shut down large parts of economies across the globe and prompted many governments to slap tough restrictions on travel, triggering a steep fall in the demand for refined oil products.

In emailed comments, Eni said its biggest refinery Sannazzaro, in northern Italy, was running at around 50% of its capacity since it was also impacted by planned maintenance work.

It said maintenance work at its Taranto plant in southern Italy had been completed and the units involved were gradually being turned on.

“Eni is monitoring developments in the market so as to be able to make any eventual adjustments to supply,” it said.

State-controlled Eni distributes the fuels and lubricants it produces at its six Italian refineries across more than 4,000 service stations in Italy.

As MRC informed earlier, Italian energy group Eni said in mid-March all its refineries in Italy were working normally except for two which had partially cut their volumes for maintenance work.

Besides, operations at Italian petrochemical producer Versalis (part of Eni) have not affected by emergency quarantine measures in the country. Italian Prime Minister Giuseppe Conte extended its emergency coronavirus measures Wednesday evening and announced the closure of "non-essential" commercial businesses. This follows the announcement of a nationwide lockdown on Monday, limiting movement for around 60 million people. Under these measures people will only be allowed to leave their homes for work or health reasons. Versalis has three steam crackers in Italy, capable of producing 1.675 million mt of ethylene, 750,000 of propylene and 285,000 mt of butadiene a 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 383,760 tonnes in the first two month of 2020, up by 14% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments increased due to the increased capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market were 192,760 tonnes in January-February 2020, down by 6% year on year. Homopolymer PP accounted for the main decrease in imports.
MRC

MOSCOW (MRC) -- Oriental Union Chemical Corp (OUCC), has restarted its Monoethylene glycol (MEG) unit following a turnaround, as per Apic-online.

A Polymerupdate source in Taiwan informed that, the company resumed operations at the unit on April 1, 2020. The unit was shut for maintenance in mid-March 2020.

Located at Linyuan, Taiwan, the unit has a production capacity of 260,000 mt/year.

MEG is used to produce polyethylene terephthalate (PET), which is used in the manufacturing of plastic bottles, films, packaging containers, in the textile and food industries.

As per MRC's ScanPlast report, the estimated PET consumption in Russia increased in January 2020 by 9% year on year. Totally, Russia recycled 55,390 tonnes of PET chips in January (excluding shipments of Russian material to the countries of the Customs Union). Russia's PET chips production totalled 43,200 tonnes in January 2020.
MRC

MOSCOW (MRC) -- Mexico has been communicating with other oil-producing countries about stabilizing production to obtain an appropriate crude price, the government said, even though it has given no indication of any plans to curb Mexican output, said Reuters.

U.S. President Donald Trump said on Thursday he expected Russia and Saudi Arabia to announce a major oil output cut by as much as 15 million barrels per day, while Saudi state media said the kingdom was calling an emergency meeting of oil producers.

Global oil prices, which in the first quarter registered their steepest fall in history, soared in reaction. Benchmark Brent crude futures jumped 19% while U.S. WTI gained 23% to USD22.55 per barrel. Writing on Twitter, in reaction to Trump’s prediction of a major output cut, Mexico’s Energy Minister Rocio Nahle said she was pleased the United States, Russia and Saudi Arabia were “on the same track."

"Mexico’s government maintains communication with producing countries with the purpose of stabilizing the production platform and achieving a suitable oil price,” Nahle added. Earlier on Thursday, Mexican President Andres Manuel Lopez Obrador said the country, which he said is producing nearly 1.8 million barrels per day (bpd) of oil, would increase domestic refining as opposed to planning output cuts.

He did not provide a time frame for the measure to be implemented. Lopez Obrador has promised to increase domestic refining capacity by building a new $8-billion refinery, while also refurbishing existing facilities to produce more gasoline and diesel. The move would reduce Mexico’s crude exports as it makes more use of its oil at home.

Even though other Latin American producers such as Brazil have announced production cuts and slashed oil investment to deal with historically low oil prices, Lopez Obrador has said the new Dos Bocas refinery will not be postponed or cancelled.

Mexico’s oil revenue is protected by a USD1.4-billion hedging program. State oil company Pemex also contracts an annual hedge, which this year covers about a quarter of its current export volume. But rating agencies have said the hedging programs and Pemex’s available credit lines will not be enough for the country and its highly indebted oil company to weather the storm of low oil prices this year.

As MRC informed earlier, Mexico will reduce the tax burden of heavily indebted Pemex by some USD7 billion over the next two years and inject government capital to build a new refinery and raise output from onshore and shallow water fields.
MRC

MOSCOW (MRC) -The Ningxia refinery, owned by PetroChina, has raised the operation rate of its crude oil processing units to 93%, as of April 1, from 72% last month, the company said in a statement, as per Reuters.

Hit by the fallout from the coronavirus pandemic, Ningxia refinery processed 943,600 tonnes of crude oil in the first quarter, a drop of 82,000 tonnes from a year-ago period.

China’s oil refineries had lowered crude oil throughput in the past two months as the flu-like outbreak dampened fuel consumption.

Ningxia refinery has an annual crude oil processing capacity of 5 million tonnes.

As MRC informed earlier, PetroChina in February 2020 built and commissioned six production lines for the production of medical masks with a total capacity of 600 thousand units. in a day. PetroChina's state-owned group of companies, also known as China National Petroleum (CNPC), has announced that it will build and launch another 21 mask production lines in March to reach 1.5 million units. in a day.

As per MRC's ScanPlast, February PP production in the country decreased to 157,700 tonnes, compared with 168,600 tonnes in January; several producers decreased their capacity utilisation. Russia"s overall PP production reached 326,300 tonnes in January-February 2020, compared to 212,700 tonnes a year earlier. Six out of eight producers increased capacity utilisation, while the two largest producers from Tobolsk provided the largest increase in production volumes.
MRC

MOSCOW (MRC) -- A brief loss of power forced Royal Dutch Shell Plc to shut the coker at its 225,300 barrel-per-day (bpd) Norco, Louisiana, refinery, said sources familiar with plant operations, said Reuters.

Shell is working to restart the 25,000-bpd coker, which was shut shortly after 1 a.m. CDT (0600 GMT) on Thursday.

Shell spokesman Ray Fisher said units in the refinery and Shell’s adjoining chemical plant were affected by the power loss. He declined to say which units were affected at the Norco complex.

The coker converts residual crude oil from distillation units into feedstock for motor fuels or petroleum coke, a coal substitute.

An olefins unit in the chemical plant was also affected by the power loss, according to the sources.

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 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.

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