Shell Philippines unit to suspend refinery operations for one month

MOSCOW (MRC) -- Pilipinas Shell Petroleum Corp said it will shut down its 110,000-barrel-per-day Tabangao refinery in the Philippines for one month from mid-May as the coronavirus pandemic has hammered oil demand, reported Reuters.

"In response to the drastic decline in local product demand and the significant deterioration of regional refining margins brought about the COVID-19 pandemic, the company will temporarily shut down its refinery operations for approximately one month starting mid-May 2020," the unit of Anglo-Dutch energy firm Royal Dutch Shell said in statement.

Pilipinas Shell said it will continue to comply with the government’s minimum inventory requirement during the shutdown of the refinery in Batangas City, south of the capital Manila.

Manila and some parts of the main island of Luzon as well as a few other Philippine provinces will remain under “enhanced community quarantine” until May 15 to curb the coronavirus spread.

"The temporary shutdown will help insulate the company from further potential drops in refining margins and will also aid in its cash conservation initiatives," it said, adding that it can switch to importation of petroleum products if necessary.

Philippines President Rodrigo Duterte on Monday temporarily increased tariffs on imported crude oil and refined petroleum products to fund measures aimed at mitigating the economic impact of the coronavirus outbreak.

The Tabangao facility is one of the two refineries in the Philippines. The country’s largest refiner Petron Corp operates a 180,000 barrel-per-day facility in Bataan province, also in Luzon.

As MRC informed before, Royal Dutch Shell said it is planning a major maintenance turnaround at its Pernis oil refinery in the Netherlands starting on May 4, 2020.

We also remind that Shell Singapore restarted its naphtha cracker in Bukom Island this week 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 557,060 tonnes in the first three month of 2020, up by 7% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments rose because of the increased capacity utilisation at ZapSibNeftekhim. Demand for LDPE subsided. At the same time, PP shipments to the Russian market was 267,630 tonnes in January-March 2020, down 20% year on year. Homopolymer PP and PP block copolymers accounted for the main decrease in imports.

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

Oil falls on renewed U.S.-China tensions, global glut

MOSCOW (MRC) -- Oil prices fell on worries that a global oil glut may persist even as coronavirus pandemic lockdowns start to ease and amid a fresh spat between the United States and China over the origin of the virus, said Hydrocarbonprocessing.

Brent crude was down 7 cents, or 0.3%, at $26.37 at 1339 GMT, while U.S. West Texas Intermediate (WTI) crude fell 39 cents, or 2%, to USD19.39.

While global oil demand is expected to recover modestly from April lows as countries ease some lockdown measures, the glut created over months in storage facilities will loom over the markets.

“As oil inventories are likely still increasing over the coming weeks, oil prices remain vulnerable to renewed setbacks,” said UBS analyst Giovanni Staunovo. However, Goldman Sachs was more optimistic than before about the rise of oil prices next year due to lower crude production and a partial recovery in oil demand.

The Wall Street bank raised its 2021 forecast for global benchmark Brent to $55.63 per barrel from $52.50 earlier. The bank hiked its estimate for WTI to USD51.38 a barrel from USD48.50 previously.

Signs that the output cuts may help reduce the supply overhang have emerged with the narrowing of Brent’s contango - the market structure in which later-dated prices are higher than prompt supplies.

The six-month spread of Brent futures LCOc1-LCOc7 hit its narrowest in almost a month at a discount of around $6.50, up from a record wide discount of almost USD14 in late-March, reflecting decreasing oversupply expectations and making storage for later sale less profitable.

The re-emergence of trade tensions between the United State and China also weighed on prices. Adding to U.S. President Donald Trump’s threat last week to impose tariffs on China, Secretary of State Mike Pompeo said on Sunday there was “a significant amount of evidence” that the new coronavirus emerged from a Chinese laboratory.

“Demand projections have sobered up last week’s enthusiasm and this, together with the prospect of new U.S.-China trade tensions, have weighted heavily on prices today,” said Rystad’s senior oil markets analyst Paola Rodriguez-Masiu.

Oil prices recovered some of their losses after U.S. Treasury Secretary Steven Mnuchin said he expected China to make good on its trade agreement with the United States. He also said he expected oil markets to rebound, and that the Trump administration was looking for more storage capacity. Concerns about weak manufacturing data in Asia and Europe, assessed by Purchasing Managers’ Index (PMI) of manufacturing companies, also put pressure on oil prices.

In Asia, a series of PMIs from IHS Markit fell deeper into contraction from March, with some diving to all-time lows and others hitting levels last seen during the 2008-2009 global financial crisis. PMIs in France, the euro zone’s second-biggest economy, dropped in April to the lowest level on record. IHS Markit’s Final PMI for German manufacturing, which accounts for about a fifth of Europe’s largest economy, shrank at the fastest rate on record.

The U.S. dollar surged against most major currencies on Monday amid fears that last year’s U.S.-China dispute will be re-ignited. Oil is usually priced in dollars so a stronger greenback makes crude more expensive for buyers with other currencies.

Ethylene and propylene are feedstocks for producing PE and 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

Petrobras to raise price of gasoline at refineries

MOSCOW (MRC) -- Brazil’s state-owned oil giant Petrobras will raise the average price of gasoline at refineries by 12% as of Thursday, but is keeping diesel prices unchanged, reported Reuters with reference to the firm’s press office's statement.

The pass through to final consumers at gas stations will not be immediate, and will depend on a series of factors such as distribution and resale margins, taxes, and the mandatory addition of anhydrous ethanol.

As MRC wrote previously, the chief executive of Brazilian state-run oil firm Petroleo Brasileiro said in December 2019 he wants to sell the company's stake in petrochemical company Braskem within 12 months.

Besides, Braskem is no longer pursuing a petrochemical project, which would have included an ethane cracker, in West Virginia. And the company is seeking to sell the land that would have housed the cracker. The project, announced in 2013, had been on Braskem's back burner for several years.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 557,060 tonnes in the first three month of 2020, up by 7% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments rose because of the increased capacity utilisation at ZapSibNeftekhim. Demand for LDPE subsided. At the same time, PP shipments to the Russian market was 267,630 tonnes in January-March 2020, down 20% year on year. Homopolymer PP and PP block copolymers accounted for the main decrease in imports.

Headquartered in Rio de Janeiro, Petrobras is an integrated energy firm. Petrobras' activities include exploration, exploitation and production of oil from reservoir wells, shale and other rocks as well as refining, processing, trade and transport of oil and oil products, natural gas and other fluid hydrocarbons, in addition to other energy-related activities.
MRC

BASF manufactures and donates hand sanitizer to support the fight against COVID-19 in Canada

MOSCOW (MRC) -- With the goal of helping overcome current and future bottlenecks for hand sanitizer resulting from a significant increase in demand, BASF has started production of hand sanitizers in Canada, said the producer in its press release.

This safe and high-quality sanitizing product manufactured at BASF’s Windsor facility, will be donated to hospitals, care facilities and other institutions in areas of high need, identified in collaboration with the provincial governments of Quebec, Ontario and Alberta.

Between the amount of hand sanitizer produced in Canada and imported from BASF’s Wyandotte, Michigan facility, the company expects to donate more than 10,000 liters over the next few days and will assess future production and supply in the near term.

"The novel coronavirus outbreak has had a tremendous impact to our society. At BASF Canada, we have considered how our businesses and local footprint could positively respond to these challenges and support those who are particularly in need now and in the immediate future: healthcare facilities and essential service professionals," said Marcelo Lu, President of BASF Canada. "I am extremely proud of our Canadian colleagues for their fast response to the crisis. They worked diligently and in close collaboration with Health Canada, other government departments and our supplying partners to obtain approvals and pivot our production to hand sanitizers. We thank both federal and provincial government’s rapid response in collaborating with industry as we work together to provide solutions for the COVID-19 pandemic and supply shortages."

BASF’s Windsor site, where the hand sanitizer is being produced, is a key coatings supplier in several automotive OEM and refinish applications. "Given the slower demand from the automotive sector, we were happy to adjust and contribute to the fight against COVID-19,” said Jeff Klevering, Site Director for the Windsor facility. “We have an amazing team who wanted to rally around this cause and generate a positive impact."

In the past days, BASF Canada has also donated other key supplies to the healthcare sector across Canada such as disinfectants, hand soap, masks, gloves and protective suits.

Another area where BASF Canada is contributing, both directly and indirectly, is the country’s food supply. BASF has a strong presence in the agricultural sector in Canada and is working closely with farmers to ensure they have the tools they need to produce a healthy, sustainable crop this season. Moreover, BASF Canada’s Agricultural Solutions team has launched a virtual food drive in partnership with Food Banks Canada to help maintain Canadian’s access to healthy, safe food during this time. For every dollar employees raise, BASF will match up to a combined total of $100,000.

Globally, BASF Group currently supplies around 175,000 liters of hand sanitizer weekly free of charge and has recently donated over 100 million protective masks.

As MRC reported previously, BASF said in late April it will not be able to meet full-year sales and earnings guidance issued on 28 February and withdrew its outlook in advance of its first-quarter earnings report.

We remind that BASF has restarted its No. 1 steam cracker following a maintenance turnaorund. Thus, the company resumed operations at the plant on September 30, 2019. The plant was shut for maintenance in mid-August, 2019. Located at Ludwigshafen in Germany, the No. 1 cracker has an ethylene production capacity of 235,000 mt/year and a propylene production capacity of 125,000 mt/year.

Ethylene and propylene are feedstocks for producing 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.

BASF Canada, headquartered in Mississauga, Ontario, has over 1,200 employees at production facilities and offices located across Canada. BASF Canada is a subsidiary of BASF SE, and an affiliate of BASF Corporation.

BASF is the leading chemical company. It produces a wide range of chemicals, for example solvents, amines, resins, glues, electronic-grade chemicals, industrial gases, basic petrochemicals and inorganic chemicals. The most important customers for this segment are the pharmaceutical, construction, textile and automotive industries. BASF generated sales of EUR59 billion in 2019.
MRC

Pemex increased oil production, refining in March

MOSCOW (MRC) -- Mexico’s state oil company Petroleos Mexicanos increased crude production to 1.745 million barrels per day (bpd) in March while processing more at its domestic refineries, according to official data seen by Reuters.

Mexico agreed to a 100,000-bpd output cut as part of an initiative by the OPEC+ group to push up plummeting oil prices by withdrawing barrels from an oversupplied market. The cuts will be put in place this month.

Mexico’s energy minister, Rocio Nahle, said the nation would cut output only during May and June.

The reduction is expected to mostly affect newly drilled oilfields while a larger portion of shallow-water production by Pemex, as the company is known, would be used for domestic refining.

Pemex’s crude production has consistently grown this year from 1.724 million bpd in January, including shared oilfields, official figures showed. Last week, the company reported a massive loss of nearly USD24 billion in the first quarter and announced a USD1.9 billion cut in its investment budget.

Pemex’s crude processing at its refineries rose to almost 600,000 bpd in March from 464,018 bpd the previous month, the official data showed. Pemex said its total production of fuel averaged 717,400 bpd last month.

As MRC wrote previously, Petroleos Mexicanos posted a USD18.3 billion net loss for 2019, nearly doubling the previous year’s loss and dealing a major blow to the Mexican president’s quest to revive the heavily-indebted state oil company.

We also remind that in 2016, Pemex shut its steam cracker at its Cangrejera complex for maintenance on February 15. The cracker was idle for about 14 days. The conducted repairs at the cracker were a part of planned maintenance.

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.

Pemex, Mexican Petroleum, is a Mexican state-owned petroleum company. Pemex has a total asset worth of USD415.75 billion, and is the world's second largest non-publicly listed company by total market value, and Latin America's second largest enterprise by annual revenue as of 2009. Company produces such polymers, as polyethylene (PE), polypropylene (PP), polystyrene (PS).
MRC