Dow and Johnson Matthey license INA technology in China

MOSCOW (MRC) -- Dow, Inc. (Midland, Mich.) and Johnson Matthey (London, U.K.) announced that China-based company, Zibo Qixiang Tengda Chemical Ltd. (QXTD), has selected LP Oxo Technology to produce isononyl alcohol (INA) at its new manufacturing facility, said Chemengonline.

“QXTD will be the first in the industry to take advantage of our process technology for more sustainable INA production,” said Donna Babcock, global business director for Industrial Solutions, a business segment of Dow. “This technology requires a smaller manufacturing footprint and less energy consumption compared to typical INA production processes, without a loss in efficiency and throughput."

INA is often used to make plasticizers of Diisononyl Phthalate (DINP), Diisononyl Adipate (DINA), and Triisononyl Trimellitate (TINTM). Primarily used in the PVC industry, products made using INA can be found in automotive, wire, cable, and conducting applications, among others. Given the evolving health and environmental regulations associated with downstream applications, INA is well positioned to grow above industry average with its unique properties that meet these needs.

"We are happy to have been able to finalize our license agreement despite the impacts of COVID-19”, said Mr. Zhang Jin, Chairman of Cedar Holdings, the parent group of QXTD. “This licensed process will differentiate us in the industry as we are able to bring new INA volume online to enable downstream products with improved health and environmental profiles."

"JM science is put to work every day to enhance lives, create a positive contribution to a cleaner and heathier world, and help keep our economy going. This will be our 56th license of LP OXOSMTechnology in partnership with Dow, building on our current portfolio with our new INA process”, said John Gordon, Managing Director for Johnson Matthey. “We are committed to bringing value to QXTD and look forward to working with them through the design phase and commissioning of this innovative technology."

The plant will be built at QXTD’s integrated petrochemical complex in Zibo City, China and will produce 200,000 metric tons per year (m.t./yr) of INA. The plant operation is expected to come online in 2023.

As MRC informed earlier, in mid-May 2020, USA based Dow Chemical announced plans to shut three polyethylene (PE) plants in the USA and Argentina to avoid piling inventories amid sluggish global demand conditions due to the COVID-19 related lockdown.

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.

The Dow Chemical Company is an American multinational chemical corporation headquartered in Midland, Michigan, United States. Dow is a large producer of plastics, including polystyrene (PS), polyurethane, polyethylene, polypropylene, and synthetic rubber.
MRC

MOSCOW (MRC) -- The six-member Gulf Cooperation Council will suffer from the worst recession ever in 2020 due to the oil price crash and the coronavirus pandemic, the Institute of International Finance said in a report June 2, said S&P Global.

The economy of the energy-exporting GCC region will shrink 4.4% in 2020, with Oman having the worst contraction of 5.3% among the six countries. GCC countries are Saudi Araba, Kuwait, UAE, Oman, Qatar and Bahrain. "Shocked by COVID-19 and the plunge in oil prices, the six GCC states will experience their worst recession in history," said the IIF in the report.

"The depth of the contraction for this year and the speed of the expected recovery in 2021 is subject to a high degree of uncertainty." The IIF is more bearish than the International Monetary Fund, which forecast in April the GCC region's economy would shrink 2.7% in 2020, compared with October's forecast of a 2.5% growth.

The GCC's oil economy will contract the most, by 5.3% in 2020 due to the OPEC+ cuts, the IIF said. "Growth could resume in 2021, supported by the partial easing in oil production cuts and gradual pick-up in private sector non-oil activity," the IIF said.

OPEC+ is currently in the midst of a historic 9.7 million b/d production cut that started in May to help soak up excess supply in the market as coronavirus crippled demand. The 9.7 million cut, which is for May and June, will be followed by gradual easing of curbs through to April 2022.

OPEC+ members are due to meet this week virtually to discuss whether to extend the 9.7 million b/d cut beyond June. Saudi Arabia, Kuwait and the UAE are OPEC members, while Oman is a member of the non-OPEC states in 23-member coalition of OPEC+.

IIF is estimating that Gulf countries will need lower fiscal breakeven oil prices to balance their budgets because of spending cuts. The fiscal breakeven Brent oil price for Saudi Arabia is USD75/b, Bahrain (USD77/b), Oman (USD80/b), and Qatar (USD54/b) in 2020. "The significant cut in public spending in the six GCC states could more than offset losses stemming from reduced oil exports," the Washington-based institute said.

Despite the region's spending cuts, the GCC's fiscal deficit is forecast to widen to 10.3% of GDP in 2020 from 2.5% in 2019, assuming an average Brent oil price of USD40/b.

"Brent oil prices are expected to remain in a range of $40-$50 a barrel over the medium term, well below the fiscal breakeven oil prices for the six GCC states," the IIF said. "Under such prolonged oil prices, the deficits could remain large despite continued fiscal adjustment." GCC oil revenue is projected to plunge to USD200 billion in 2020 from USD326 billion in 2019, the institute said.

"Saudi Arabia, Kuwait, Qatar, and the UAE, with large public foreign assets, are better placed to accommodate large deficits than Bahrain and Oman," the IIF said. "While Bahrain can count on financial aid from its neighbors as a cushion against external pressure, Oman is emerging as an increasingly vulnerable spot in the region in light of its mounting debt."

As MRC informed earlier, data collected and tabulated by the American Chemistry Council (ACC) show that with stabilizing activity in China partially offsetting widespread weakness due to COVID-19, global chemicals production fell 1.3 percent in April, an improvement from the 3.3 percent decline in March and 2.1 percent decline in February. During April, chemical production fell in every region. Headline global production was off 5.8 percent year-over-year (Y/Y) on a three-month moving average (3MMA) basis and stood at 110.2 percent of its average 2012 levels.

As MRC informed earlier, Russia's output of products from polymers grew in April 2020 by 11.2% year on year due to quarantine restrictions. However, this figure increased by 3.4% year on year in the first four months of 2020. According to the Russian Federal State Statistics Service, April production of unreinforced and non-combined films decreased to 107,000 tonnes from 110,400 tonnes a month earlier. Output of films products grew in the first four months of 2020 by 12.5% year on year to 402,800 tonnes.
MRC

MOSCOW (MRC) -- PTTGC America and Daelim Chemical USA, equal partners in their long-planned PTTDLM petrochemical project in Mead Township, Belmont County, Ohio, have delayed making a final investment decision (FID) on their multi-billion-dollar petrochemical project, originally expected in the middle of 2020, reported CW.

Senior company sources in Bangkok told CW on Monday that the FID is expected to be made either the end of this year or, more likely, next year and it would take five to six years to complete construction of the facilities. This would take the project’s completion date to around 2027-28.

PTT Global Chemical (PTTGC), parent of PTTGC America, first announced plans for the project in 2015. In 2018, Dealim Industrial joined as partner. The companies were hoping to make a FID on the project by the middle of this year. The company tells CW that engineering studies are still being carried out on the project, which would be based on an ethane cracker designed to produce 1.5 million metric tons/year (MMt/y) of ethylene using ethane from the Marcellus and Utica shale deposits. The downstream configuration has not yet been fully decided on but could involve the entire ethylene output being used to make the equivalent amount of high-density and linear low-density polyethylene and/or some of the ethylene also used to make ethylene glycol. Most of the output would be sold on the US market.

The company tells CW that the COVID-19 pandemic as well as the latest forecasts in demand are the main reasons for the delay. PTTGC CEO Kongkrapan Intarajang said recently that the company will review its short and long-term investment plans worldwide based on projects’ costs as well as changes in product demand expected in the post COVID-19 global economy.

PTTGC has reportedly spent about USD100 million on site preparation and engineering studies. Bechtel was last year selected as the engineering, procurement and construction contractor on the project whose initial costs were estimated at USD5-6 billion. The complex would be located on a 500-acre site of a former coal-fired power plant. It would also include on-site railcar and truck loading facilities, supporting utilities, infrastructure, storage tanks and logistics facilities.

As MRC informed earlier, PTT Global Chemical (PTTGC) fully restarted its No. 2 cracker in Map Ta Phut in early March,2020, after a planned turnaround. The company started resuming operations at the cracker by end-February, 2020. The cracker was shut for maintenance on January 20, 2020. Located at Map Ta Phut, Thailand, the No. 2 cracker has an ethylene production capacity of 400,000 mt/year. The company also operates No. 1 cracker at the same site with a capacity of 515,000 tonnes of ethylene and 310,000 tonnes of propylene per year, which was also shut on 23 January, 2020, for a 40-day turnaround.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 721,290 tonnes in the first four month of 2020, up by 4% year on year. Low density polyethylene (LDPE) and linear low density polyethylene (LLDPE) shipments grew partially because of the increased capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market totalled 347,440 tonnes in January-April 2020 (calculated by the formula production minus export plus import). Supply exclusively of PP random copolymer increased.

PTT Global Chemical is a leading player in the petrochemical industry and owns several petrochemical facilities with a combined capacity of 8.45 million tonnes a year.
MRC

MOSCOW (MRC) -- Israel’s Oil Refineries (ORL) said it named Moshe Kaplinsky as its new chief executive officer to replace Shlomi Basson, said Hydrocarbonprocessing.

Kaplinsky, 63, most recently served as CEO of Israeli cement producer Nesher between 2013 and 2020 after a 30-year career in Israel’s military, where he reached the rank of major general.

After retiring from the military in 2007, he became CEO of Better Place, a short-lived electric vehicle venture, until 2012.

Kaplinsky in a statement called ORL "a vital industry for the economy that has sharpened in recent times."

ORL, Israel’s largest refining and petrochemicals group and controlled by Israel Corp, last week said it swung to a loss in the first quarter as refining margins plummeted in the wake of the coronavirus crisis.

As MRC informed earlier, Israel’s Oil Refineries (ORL) reported zero profit in the fourth quarter for the second straight year on Wednesday and said it had so far not seen a big impact to the company from the coronavirus outbreak. Its revenue in the quarter fell 13% to USD1.55 billion. ORL, Israel’s largest refining and petrochemicals group, said the only hit to its sales has been in jet fuel sales in Israel, which comprise just 8% of the total fuel sector output.

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

MOSCOW (MRC) -- UAE's ADNOC is keeping a beat ahead of the OPEC+ members by ensuring customers of its crude oil in Asia of sufficient supplies as demand for Middle East sour crude returns, market sources told S&P Global Platts.

The announcement came unexpectedly early, said a crude trader based in Singapore, adding that "buyers have not even nominated volumes yet."

While OPEC+ members discuss whether to meet on June 4 or June 10, and whether to continue cutting at 9.7 million b/d or not, the Abu Dhabi oil producer has already informed its customers that it will cut its crude exports by only 5% for July loading barrels.

ADNOC's announcement was issued to certain customers late in the week ended May 30, several market sources based in Asia told Platts. The move was seen as a competitive edge for the emirate's marketing entity as refineries shuttered in recent months prepare to restart for summer production, said market participants in the East.

ADNOC declined to comment on the matter.

The cuts - 5% for volumes of Murban, Das Blend, Umm Lulu and Upper Zakum in July - are expected to have a lighter effect on the market than those for June.

"They are supplying higher volumes in July compared to June," said a source with an Asian refiner.

Last month, ADNOC announced cuts of 20% to June loading Murban and Upper Zakum cargoes, while Umm Lulu and Das Blend were cut by 5% each respectively.

This is in keeping with ADNOC's commitment to OPEC+, which will see members collectively retract 9.7 million b/d over May and June, but then whittle that figure down to 7.7 million b/d starting July.

Other producers are not far behind, however, with an earlier OPEC+ meeting now highly likely in order to gain more clarity on H2 2020 production cut quotas before the monthly crude trading cycle kicks off in Asia.

The alliance is now expected to meet June 4 instead of the previously scheduled June 9-10, so that July nominations can factor in any changes to oil production quotas, Platts reported May 31.

Depending on the outcome of the meeting, ADNOC's 5% could be called into question, said several market sources in Asia.

While confirming that they had received the notice of the cuts from ADNOC end-May, a Japanese refiner pointed out that buyers would be keeping an eye on the results from the meeting, as ADNOC's committed volumes could vary post-meeting.

Major Asian crude importers such as China, Japan and Korea are showing preliminary signs of returning demand as countries relax coronavirus-linked restrictions on work and travel, Platts data showed.

Crude demand from China, which has kept a few notches ahead of the rest of Asia even in the depths of the pandemic, is expected to continue at an upbeat pace during June and July, said traders based in the country.

In Japan, gasoline demand is expected to recover over the summer months after contracting heavily over May, gasoline traders told Platts.

Meanwhile in South Korea, refiners have said they are planning to import full term contractual volumes of crude from Saudi Aramco for June and beyond.

A company source at the country's SK Innovation said it plans to receive full term supply for July from other major Middle Eastern suppliers including ADNOC and SOMO.

Other South Korean refiners including GS Caltex and Hyundai Oilbank declined to comment on their term Saudi and Abu Dhabhi crude supplies for June and July, but the companies indicated that they plan to ramp up refinery run rates from Q3 and Middle Eastern term supply nomination cuts, if any, would be minimal for the South Korean customers.

As MRC informed earlier, in late July 2019, ADNOC said its Ruwais refinery west cracker was offline for 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 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.
MRC