ExxonMobil to make final investment decision for Huizhou petchem project

MOSCOW (MRC)-- ExxonMobil Corp has yet to make a final investment decision (FID) for the project in the Dayawan Industrial Park. The project still requires government permits, and ExxonMobil's own competitiveness appraisal, before FID can be reached, reported Argus with reference to ExxonMobil's statement.

ExxonMobil started early construction at its proposed Huizhou petrochemical complex in south China last Wednesday, which it targets to bring on line in 2023.

But last week's announcement that early-phase work has started represents some progress at the project, which was first announced in November 2017, just before US President Donald Trump visited China. US-China relations have deteriorated since then.

The complex will include a 1.2mn t/yr flexible feed steam cracker and downstream polyethylene (PE) and polypropylene (PP) plants that will produce material used in packaging, automotive, industrial and consumer products.

The Huizhou complex will use advanced proprietary technologies in direct crude steam cracking and performance polymers manufacturing. ExxonMobil would own 100pc of the project, which is relatively unusual for a foreign investment in China.

The company's presence in China includes a 25pc joint venture stake in a 240,000 b/d refinery and associated 800,000t/yr ethylene steam cracker in Quanzhou, in neighbouring Fujian province.

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 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.

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

MOSCOW (MRC) -- Chinese state energy company Sinopec is in early-stage talks with Hin Leong Trading Pte Ltd to buy a stake in an oil storage terminal that is partly owned by the Singapore trader, reported Reuters with reference to three sources with knowledge of the matter.

The sale could provide much needed cash for family-owned Hin Leong, one of Asia’s biggest independent traders.

The company owes a total of USD3.85 billion to 23 banks and has applied to a Singapore court to delay its debt repayments, according to a Hin Leong presentation to lenders on April 14 contained in the court filing, which was reviewed by Reuters but has not been made public.

Sinopec, Asia’s largest refiner, was approached by Hin Leong earlier this month to look at investing in the Universal Terminal in Singapore, said one Beijing-based Sinopec official.

Hin Leong’s founder Lim Oon Kuin and his family own 41% of the terminal through Universal Group Holdings Pte Ltd. PetroChina holds 25% and Australian investment bank Macquarie the remaining 34%.

"Sinopec is interested, and is evaluating the quality and cost of the asset," said the official, who declined to be named as the discussions are not public.

The three sources did not know the size of the stake Sinopec might be interested in buying, or the potential price.

Hin Leong and Sinopec did not respond to requests for comment.

A previous sale of a stake in the terminal in 2016 valued the whole terminal at more than USD1.5 billion, industry sources said at the time.

Sinopec, which owns several storage facilities outside China - in Rotterdam, Antwerp and Fujairah - has long been looking for more storage sites to boost its global trading profile, the company official said.

The state oil giant, however, would be cautious about any possible investment given growing internal scrutiny over spending after a plunge in oil prices, and is closely monitoring developments around Hin Leong’s debts, the official added.

"Sinopec is aware of the good asset quality of Universal Terminal, but the question is at what price and if the terminal can come clean of creditors’ debt claims," said the official.

Of Hin Leong Group’s assets, which also include about 130 oil tankers, the stake in Universal Terminal is the most attractive to potential investors, trade sources said.

"The terminal is the prize," said Tony Quinn, chief executive of terminals advisory group Tankbank International.

"One big advantage is that it has its own integrated marine infrastructure - like having your own little port authority within Singapore," said Quinn.

He added the terminal has the only independently owned supertanker jetty on Jurong Island, which is the only access point to Singapore’s rock caverns, Southeast Asia’s first underground oil storage facility.

In an affidavit contained in the court filings reviewed by Reuters, Lim Oon Kuin, also known as O.K. Lim, said Hin Leong was in discussions with a large state-owned Chinese energy company over a potential strategic investment, without giving details.

A PetroChina executive said last week that Hin Leong had not approached his company about potentially raising its stake in the terminal.

PetroChina, in around 2006, became Hin Leong’s first partner, taking a 35% stake in the terminal while the Singapore trader held the remaining 65%.

PetroChina’s initial investment of SD750 million (USD524 million) was recouped in less than 36 months, said a separate industry official with direct knowledge of PetroChina’s investment in the terminal.

The two companies sold a combined 34% to Macquarie in 2016 in a deal that was estimated by industry sources at about USD500-USD550 million.

As MRC wrote before, Sinopec expects its full-year 2020 refining runs will be lower than in 2019 because of a contraction in Chinese fuel demand caused by the coronavirus outbreak.

We remind that Sinopec Qilu Petrochemical, a subsidiary of Sinopec Corporation, plans to shut the cracker unit in Tianjin in northeast China for scheduled repairs on 15 June, 2020. This cracking unit with a capacity of 900,000 tonnes of ethylene per year and 480,000 tonnes of propylene tons per year will be closed for scheduled repairs until 24 June, 2020.

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

According to MRC's ScanPlast report, 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.

Sinopec corp. is one of the world's largest integrated energy and chemical companies. Business Sinopec Corp. includes oil and gas exploration, production and transportation of oil and gas, oil refining, petrochemical production, production of mineral fertilizers and other chemical products. In terms of refining capacity, Sinopec Corp. ranks second in the world, in terms of ethylene capacity - fourth.
MRC

MOSCOW (MRC) -- Overall imports of acrylonitrile-butadiene-styrene (ABS) to the Ukrainian market grew in the first quarter of 2020 by 57% year on year, according to MRC's DataScope report.

Thus, imports of material into Ukraine totalled 1,500 tonnes over the stated period. This figure was at 960 tonnes in January-March 2019.

However, last month's ABS imports into the country dropped by 3% to 5,100 tonnes from 5,200 tonnes in February. This figure was at 360 tonnes in March 2019.

South Korea and Austria were the largest ABS suppliers to the region this year.

The share of Korean material in the total shipments fell in January-March 2020 to 34% (5,000 tonnes) year on year from 62% a year earlier (600 tonnes), with LG Chem's shipments being at 230 tonnes and Lotte's imports - at 260 tonnes.

Deliveries of Austrian material to the region grew significantly - to 350 tonnes - with a share of 23% in the total imports.

MRC

1. Turkish Tupras cuts refinery runs due to weak demand

MOSCOW (MRC) -- Turkish refiner Tupras has cut runs at its Izmir refinery by 50% due to weak fuel demand because of the coronavirus outbreak, four trading sources familiar with the matter told Reuters. Tupras has also cut runs at its Izmit refinery by 20% and its Kirikkale refinery by 50%, the sources said.





MRC

MOSCOW (MRC) -- Austria-based petrochemical producer Borealis has lifted force majeure on operations at its Stenungsund steam cracker in Sweden, the company told S&P Global Thursday.

"The FM on operations of our steam cracker in Stenungsund, Sweden, was lifted on April 19, 2020. We also returned to normal operations on this date and informed affected customers accordingly," a Borealis spokesperson said.

The company declared FM on April 8 due to a technical incident, while before that Borealis had had lowered its steam cracker operating rates as a result of the recent slump in oil prices and the coronavirus lockdowns in Europe.

"Our steam crackers are ...operating at reduced rates due to the COVID-19 impact as overall demand is lower," Borealis said in early April, without giving further details.

Borealis' cracker in Stenungsund can produce 625,000 mt a year of ethylene. The company's other cracker in Porvoo, Finland, can produce 400,000 mt/year of ethylene. Both crackers are able to process a mix of feedstocks including liquids, LPG and ethane.

As MRC informed earlier, in early October 2019,, Austrian polyolefin supplier Borealis AG lifted a force majeure declared in the previous months at its production site in Kallo. On 2 Sep, 2019, the company declared force majeure on refinery grade propylene and propane from its production site in Kallo, Belgium, as a consequence of “unforeseen technical issues."

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.

Borealis is a leading provider of innovative solutions in the fields of polyolefins, base chemicals and fertilizers. With headquarters in Vienna, Austria, Borealis currently employs around 6,500 and operates in over 120 countries.
MRC