COVID-19 - News digest as of 27.05.2020

1. Japanese refiners facing stagnant market may cut capacity

MOSCOW (MRC) -- Japanese refineries may be forced to shut down capacity once again unless they see a strong recovery from the coronavirus pandemic, reported Reuters. They’ve been hit by declining use for fuel at home, competition from newer refineries in China and South Korea dominating in other markets, as well. Idemitsu Kosan on Tuesday reported an annual loss, like its competitors have done in recent days.




MRC

MOSCOW (MRC) -- Kazanorgsintez (part of TAIF Group) has restarted some of its low density polyethylene (LDPE) production capacities after shutdown for a scheduled turnaround, according to ICIS-MRC Price report.

The plant's customers said Kazanorgsintez had completely resumed production at its third LDPE line after the annual scheduled maintenance. A gradual launch of production began a week earlier, and the outage started on 19 April.

The third line's production capacity is 140,000 tonnes/year.

It is also worth noting that next shutdowns for turnarounds at Russian LDPE plants are scheduled for late June-early July. Angarsk Polymers Plant will shut down its production capacities for a month from 22 June, whereas Gazprom neftekhim Salavat will take off-stream its production from 1 July.

PJSC "Kazanorgsintez" (part of TAIF Group) is one of Russia's largest plants. Kazanorgsintez produces 40% of overall Russian polyethylene (PE) and is the country's largest exporter. To date, the plant produces PE, polycarbonate (PC), PE pipes, phenol, acetone, bisphenol A. Kazanorgsintez is Russia's only PC producer. It manufactures a total of 170 items of products. Kazanorgsintez's annual output is 1.6 million tonnes. The plant is Russia's largest producer of high density polyethylene (HDPE). The plant's annual HDPE production capacity is 540,000 tonnes and its annual LDPE capacity is 225,000 tonnes.
MRC

MOSCOW (MRC) -- BASF and Red Avenue New Materials Group have signed a joint agreement that grants Red Avenue New Materials Group the license to produce and sell certified compostable aliphatic-aromatic co-polyester (PBAT) according to high BASF quality standards, said the company.

For that purpose, Red Avenue New Materials Group will build a 60,000 metric tons PBAT plant in Shanghai, using BASF`s process technology in exchange for the access to raw material from this plant which BASF will sell as ecoflex®. Production at the new plant will start in 2022 and supply the market of biopolymers.

The global market for certified compostable and bio-based plastics is expected to grow by around 15 percent per year. With upcoming new laws and regulations in a lot of countries enforcing the use of compostable materials in packaging, agricultural mulch films and bag applications, the positive market development is expected to continue. “Our successful bio-polyester ecoflex® and the innovative ecovio® are already giving us significant participation in this growing market. The additional available PBAT capacities will substantially strengthen our position,” says Olivier Ubrich, head of BASF’s global business unit Specialty Polymers.

The BASF biopolymer ecoflex was introduced into the market in 1998 and is certified compostable in accordance with DIN EN 13432 and ASTM D6400. It is used as a blend with other renewable raw materials to compound ecovio®, BASF’s certified compostable biopolymer. The renewable raw material content means that ecovio® is also partly bio-based. Typical applications for ecovio® are organic waste bags, cling film, fruit and vegetable bags, as well as agricultural mulch films and food packaging applications. Studies show the advantages of ecovio® for production, packaging and shelf life as well as for the waste collection of food. These advantages are based on the material’s certified biodegradability in industrial and home composting as well as in soil: Food waste is reduced, nutrients are returned to the soil by means of greater volumes of compost and the accumulation of plastic in soil is avoided, thus closing the nutrient cycle to a Circular Economy.

As MRC reported earlier, BASF has recently announced the commercial launch of Fourtune which is a new Fluid Catalytic Cracking (FCC) catalyst product for gasoil feedstock. Fourtune is the latest product based on BASF’s Multiple Framework Topology (MFT) technology. It has been optimized to deliver superior butylene over propylene selectivity while maintaining catalyst activity and performance.

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 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.

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

MOSCOW (MRC) -- Engineering, procurement and construction firm KBR has been awarded an energy efficiency opportunities study at Gladstone LNG (GLNG) in Australia by energy giant Santos, said Gasworld.

Building on KBR’s strong and successful portfolio within the LNG sector, the study seeks to explore opportunities to improve the overall energy efficiency of the plant and reduce CO2 emissions associated with the GLNG liquefaction facility.

KBR will assist GLNG in identifying and screening potential modifications to enhance the operational facility through improvements of thermal efficiency while also accounting for the associated reduction in carbon emissions.

"KBR has long been trusted by clients across the LNG sector and this study is indicative of KBR’s capabilities and skillsets across complex industrial assets, demonstrating our strategic commitment to sustainability and decarbonization and optimising operational efficiencies across the supply chain,” said Jay Ibrahim, KBR President, Energy Solutions.

This project will leverage the specialist energy, decarbonisation and process optimisation skills of KBR’s strategic and advisory consulting team.

As MRC informed erlier, KBR announced that it has been awarded a contract by Hainan Huasheng New Material Technology Co., Ltd. (Hainan Huasheng) to license Mitsubishi Chemical Corporation's (MCC) proprietary Bisphenol A (BPA) technology for a new plant in Dongfang City, Hainan Province, China. Under the terms of the contract, KBR will provide a Licensing and Basic Engineering Design (LBED) package to Hainan Huasheng for building a grassroots 240,000 tons per annum BPA plant. KBR will also provide commissioning, startup support, and training services for the project.

BPA is the main feedstock for the production of epoxy resins and polycarbonate (PC).

According to MRC's ScanPlast report, Russia's estimated consumption of PC granules (excluding imports and exports to/from Belarus) totalled 78,500 tonnes in 2019, up by 15% year on year (68,100 tonnes a year earlier).

KBR globally licenses and designs plants with proprietary technologies, including phenol/acetone, BPA and polycarbonate processes. KBR's integrated phenolic offering provides advantages in raw material, utility, OPEX and maintenance costs.
MRC

MOSCOW (MRC) -- Chinese state oil giannt CNOOC has waived its right to pre-empt the sale of a major oil field farm-out deal in Uganda to France's Total, said S&P Global.

Total agreed last month to buy out the Ugandan assets of troubled Tullow Oil in a USD575-million deal that cleared up a tax dispute with the government hanging over the country's maiden oil project.

Under the terms of the deal, Total will acquire all of Tullow's existing 33.33% stake in each of the Lake Albert project licenses and the proposed export-pipeline system. CNOOC had pre-emption rights to acquire 50% of the assets on the same terms and conditions as Total.

With no further changes to the ownership stakes under the farm-out deal, Tullow said it expects the transaction to complete in the second half of 2020.

The companies had been waiting on the farm-down deal to kick-start the USD20-billion oil development which includes a USD3.55-billion, crude-export pipeline and the drilling of over 500 wells to produce 230,000 b/d.

Total is currently the operator of Block 1 and Block 1A and CNOOC is the operator of Block 3A, while Tullow operates Block 2.

In February, Total said it expected the FID to take place in "2020 or after" despite official hopes by the Ugandan government that the partners would approve the project in early 2020.

As MRC wrote before, in early May, 2018, China National Offshore Oil Corporation (CNOOC) and Shell Nanhai B.V. (Shell) announced the official start-up of the second ethylene cracker at their Nanhai petrochemicals complex in Huizhou, Guangdong Province, China.

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.

China National Offshore Oil Corporation (CNOOC), the largest offshore oil & gas producer in China. CNOOC businesses cover the main segments of oil & gas exploration and development, engineering & technical services, refining and marketing, natural gas and power generation, and financial services.

MRC