About 23% of US Gulf oil, gas still offline after Cristobal: BSEE

MOSCOW (MRC) -- About 23% of US oil and natural gas production from the Gulf of Mexico remained offline on June 10 after Tropical Storm Cristobal swept through the region during the weekend, reported S&P Global.

Another 140,000 b/d of crude came back online from June 9 to June 10, according to daily updates from the US Bureau of Safety and Environmental Enforcement. Nearly 35% of the US Gulf production was shut-in in advance of the storm. After a peak of 635,781 b/d was shut in, BSEE said 435,767 b/d remained down on June 10, or 23.55% of total US Gulf oil production.

BSEE decreased its gas shut-in estimate from 898 MMcf/d down to 619 MMcf/d, keeping 22.84% of the offshore gas volumes offline.

BP, Occidental Petroleum and other producers that shuttered some volumes said they are working to resume operations and production volumes.

"We have safely returned staff to all of our central and eastern (US Gulf) facilities that were affected by Tropical Storm Cristobal, and we are in the process of carefully ramping back up production and resuming normal operations," Oxy said in a statement late June 9.

Ahead of Cristobal's move onshore, BSEE said, operators evacuated 188 platforms and rigs in the US Gulf - roughly 30% of the region's total platforms with working personnel - and relocated several drillships. BSEE said 61 platforms remained evacuated on June 10.

BP reduced output at its Thunder Horse, Atlantis and Na Kika platforms in the US Gulf. Those three BP-operated platforms churn out more than 200,000 boe/d. BP's Mad Dog platform was not affected.

"BP has started to resume normal operations at its four operated platforms in the deepwater Gulf of Mexico," BP said in a June 8 statement, declining to give further updates.

Others such as Royal Dutch Shell and Chevron said they had not reduced their US Gulf production volumes during the storm.

Cristobal battered southern Mexico and shut down ports over the past week, before moving through the Gulf of Mexico and depositing heavy rainfall from Louisiana to Florida. The storm hit just as oil prices were moving up, with the OPEC+ group agreeing to extend deeper production cuts at least through July and front-month NYMEX WTI flirting with $40/b for the first time since early March.

Total US Gulf oil production was nearly 2 million b/d before the coronavirus pandemic cratered global demand and oil prices. BSEE was estimating US Gulf oil production at closer to 1.85 million b/d before Cristobal.

However, S&P Global Platts Analytics data estimates that US Gulf crude production will fall to an estimated 1.62 million b/d average for June as some producers reduced their volumes because of lower prices.

In Mexico, Pemex had to shutter production at some of its wells in the area struck by storms Amanda and Cristobal for 10 working days between May and June, CEO Octavio Romero said during a press conference June 7.

Romero did not say how many wells were affected or where they are located. Amanda hit Mexico on May 31, passing through the states of Campeche, Chiapas, Oaxaca, Tabasco and Veracruz. Only Chiapas does not have Pemex oil or gas infrastructure.

As MRC informed earlier, Total SA cut production at its Port Arthur, Texas, refinery to 70% of its 225,500 barrel-per-day (bpd) capacity with a reduction in the operating level of the large crude distillation unit (CDU), said Gulf Coast market sources in mid-May, 2020.

We also remind that Total has recently disclosed that it is evaluating construction of a new gas cracker at its Deasan, South Korea, joint venture (JV) with Hanwha Chemical.

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.

Domo to close nylon films plant in Germany, citing overcapacity

MOSCOW (MRC) -- Domo Chemicals says it will cease production of biaxially oriented polyamide (BOPA) films at Leuna, Germany, closing its plant there in August 2020, said Chemweek.

The company's Domo Film Solutions (DFS) subsidiary will continue operating its BOPA and cast non-oriented polyamide (CPA) film plants at Cesano Maderno, Italy. The company says it has informed employees at Leuna about the closure but has not specified how many jobs will be lost. Domo says it employs about 2,200 people worldwide.

Other operations at the site will not be impacted by the closure. Family-owned Domo says it will maintain the Leuna site as its nylon 6 “core operations hub.” The site is integrated and Domo operates a caprolactam plant there.

Domo says it decided to close the Leuna BOPA plant because of worldwide overcapacity for nylon films. The plant started up in 2018, according to the DFS website. “In these extraordinary circumstances of high business volatility, we have opted to continue to focus on quality and flexibility through cautious and smart asset management, rather than reacting with short-term volume strategies,” Attilio Annoni, managing director at DFS, says.

Following the acquisition of Solvay’s Europe-based nylon 6,6 business at the beginning of this year, Domo says it has become a leading integrated nylon 6 and 6,6 player worldwide. Despite the current market slowdown, which is hurting the automotive and other industrial segments served by Domo’s polymers and intermediates, and engineering materials units, the company says it remains on course to achieve its growth objectives.

Domo says its nylon film business forms an integral part of the supply chains related to segments such as pharmaceuticals, medical, and food packaging, which have all proven to be “essential during the COVID-19 period.”

“We continue to focus on flexibility and competitiveness and have not been impacted in how we support our customers…we will continue to partner with our customers in developing and supplying nylon films for high-performing and sustainable flexible packaging structures,” Annoni says.

Domo generated 2019 sales of more than EUR900 million (USD1 billion).

Phthalic anhydride is widely used in the manufacture of paints and varnishes and plasticizers for PVC products. In a small amount it is used in the manufacture of rubber products, tires. In addition, it is used in the light, pharmaceutical and electrical industries.

As per MRC's ScanPlast, Russia's production of unmixed polyvinyl chloride (PVC) decreased in April, including due to the scheduled maintenance works of one of the producers. Overall PVC output totalled 432,100 tonnes in January-May 2020, up by 2% year on year.


Qatar Petroleum announces integration of Muntajat into QP

MOSCOW (MRC) -- As part of its ongoing efforts to strengthen its global competitive position in the downstream sector, Qatar Petroleum announces its decision to integrate Qatar Chemical and Petrochemical Marketing and Distribution Company (Muntajat) into QP, according to The Peninsular.

The integration will involve leveraging a combined set of human, technical, commercial, and financial capabilities, as well as customer relationships into the QP organization with the aim of being completed within the next few months, which will enable QP to continue expanding its global reach, and to remain the partner of choice providing superior high quality products and excellence in customer service.

In making the announcement, H E Saad Sherida Al-Kaabi, Minister of State for Energy Affairs, President and CEO of Qatar Petroleum, said, "The integration of Muntajat into QP is a strategic move that will further strengthen our downstream capabilities and enhance the State of Qatar’s global competitive position in the downstream sector. We are committed to establishing a center of excellence for the downstream business in Qatar by pooling the commercial, technical, and financial capabilities of both QP and Muntajat, and by leveraging higher efficiencies in the deployment of our human and financial resources."

During the integration process, Muntajat will continue to deliver its commitments and contractual obligations to all its customers around the world with no interruption and with the same superior customer service.

This integration marks another step towards achieving Qatar Petroleum’s vision to become one of the best national oil & gas companies in the world.

As MRC reported earlier, Qatar Petrochemical Company (Qapco) has failed to restart its linear low density polyethylene (LLDPE) line and extented force majeure on shipments of material. The company unexpectedly shut down the LLDPE line on 3 May 2020 due to an unspecified technical issue. The shutdown has forced its sole marketing and distribution arm - Muntajat to declare force majeure on the shipment of these cargoes to Asian customers. Apparently, the plant failed to restart on 12 May. The company bought the 570,000 tons/year LLDPE line online in late May 2020.

According to MRC's ScanPlast report, April LLDPE shipments rose to 42,830 tonnes from 36,790 tonnes a month earlier, production increased. Overall LLDPE shipments totalled 152,840 tonnes in the first four months of 2020, up by 13% year on year. SabSibNeftekhim accounted for the main increase in shipments.

Showa Denko completes vinyl ester expansion project in China

MOSCOW (MRC) -- Showa Denko (SDK) expanded production lines to produce vinyl ester resin (VE) and synthetic resin emulsion (EM) in the premises of Shanghai Showa Highpolymer Co., Ltd. (SSHP), a Chinese subsidiary of SDK, and has increased production of VE and EM there, aiming to expand the Showa Denko Group’s functional resin business in China, said the company.

The market for electronic parts such as liquid crystal displays (LCDs) and touch panels has been expanding due to the progress in telecommunication technologies including 5th Generation mobile communication system. As a result, the demand for VE, which is used in the process to produce electronic parts including LCDs and touch panels, has been rapidly increasing in China. In addition, since VE has excellent corrosion resistance and chemical resistance, the demand for VE for use as corrosion-resistant inner lining material has also been increasing.

This use includes inner lining for desulfurization equipment increasingly introduced to thermal power plants to prevent air pollution, wastewater treatment equipment for electronic parts factories, garbage plants and storage tanks for chemicals. In China, regulation against volatile organic compound (VOC) as an environmental protection policy started in 2015, and, since then, there has been strict regulation for use of paints and adhesives containing organic solvents. As a result, switching over to aqueous paints and aqueous adhesives utilizing EM has been in progress, and therefore the demand for EM has been increasing. Responding to these movements, SHHP increased the capacities of its production lines to produce VE and EM to about twice as much as before.

As per MRC's ScanPlast, Russia's production of unmixed polyvinyl chloride (PVC) decreased in April, including due to the scheduled maintenance works of one of the producers. Overall PVC output totalled 432,100 tonnes in January-May 2020, up by 2% year on year.

Showa Denko K.K. Mainly engaged in the petrochemical business. The company's petrochemical division produces and markets industrial gases, olefins, organic chemicals, and others.

ACC releases April 2020 resin production and sales statistics

MOSCOW (MRC) -- U.S. production of major plastic resins totaled 7.0 billion pounds during April 2020, a decrease of 2.8 percent compared to the same month in 2019, according to statistics released today by the American Chemistry Council (ACC).

Year-to-date production was 30.0 billion pounds, a 4.3 percent increase as compared to the same period in 2019.

Sales and captive (internal) use of major plastic resins totaled 7.3 billion pounds during April 2020, decrease of 2.0 percent from the same month one year earlier. Year-to-date sales and captive use was 30.2 billion pounds, a 3.8 percent increase as compared to the same period in 2019.

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.