June prices for European PP up EUR40/tonne for CIS countries

MOSCOW (MRC) -- The June contract price of propylene was settled in Europe up by EUR60/tonne from the previous month. Nevertheless, European producers are not going to increase export PP price proportionally for shipments to the CIS markets, according to ICIS-MRC Price Report.

Negotiations on June prices of European PP began last week. All market participants said that European producers have made a significant increase in the export prices of propylene polymers for shipments in the current month, but the price increase does not exceed EUR40/tonne, while propylene increased by EUR60/tonne in the current month in Europe.

Deals for June shipments of propylene homopolymers (homopolymer PP) were discussed in the range of EUR840 - 900/tonne FCA, up by EUR40/tonne from May. Deals for block copolymers of propylene for June delivery were discussed in the range EUR920-980/tonne FCA.

Some producers had export restrictions, in particular, injection moulding homopolymer PP. But they are not critical for most buyers, since the demand for polypropylene has declined significantly in the last two months.

S-Oil likely to undertake maintenance at RFCC unit

MOSCOW (MRC) -- S-Oil, South Korean petrochemical major, is in plans to take off-stream its residue fluid catalytic cracker (RFCC) unit for a turnaround, as per Apic-online.

A Polymerupdate source in South Korea, informed that, the company is likely to undertake a planned shutdown, at the unit by early-July, 2020. The unit is slated to remain off-line for about two weeks.

Located at Onsan, South Korea, the RFCC unit has a propylene capacity of 705,000 mt/year.

As MRC reported earlier, S-Oil's new residue upgrading complex (RUC) and olefin downstream complex (ODC) was inaugurated at the company's Onsan Refinery in Ulsan, South Korea, in July, 2019. The project, which cost around USD4-billion, involved construction of a plant to upgrade low-value residue oil to high-value gasoline and propylene. The propylene is to be used for the production of 405,000 t/y of polypropylene (PP) and 300,000 t/y of propylene oxide.

Separately, S-Oil and Saudi Aramco, a majority shareholder in S-Oil, signed a memorandum of understanding (MoU) to collaborate on a USD6-billion steam cracker and olefin downstream project. Completion is expected by 2024. PCN earlier reported that the project would include a 1.5-million-t/y steam cracker, which would produce ethylene and other basic petrochemicals from naphtha and refinery off-gas. The downstream units would include the production of polyethylene and PP.

Propylene is the main feedstock for the production of PP.

According to MRC"s ScanPlast report, 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.

UK expected to break away from ECHA and EU Reach post-Brexit Close

MOSCOW (MRC) -- The UK is no longer seeking associate membership of the European Chemicals Agency (ECHA) after it departs the EU customs union umbrella next year, meaning that the country will have its own regulatory framework post-Brexit, according to a UK Member of Parliament, said Hydrocarbonprocessing.

Rebecca Pow, Parliamentary Under Secretary of State at the UK’s Department for Environment, Food and Rural Affairs (Defra), confirmed in a letter to the chair of the state watchdog the Environmental Audit Committee (EAC) that Brexit negotiators are not seeking to broker associate membership of ECHA.

“We are not seeking associate membership of the European Chemicals Agency (ECHA) and participation in EU REACH,” she said, in a letter dated 22 May and disseminated by the UK Lubricants Association (UKLA) to its members on Thursday. “While the transition to UK REACH will take some adjustment, we believe that the benefits of having control of our own laws outweigh the costs,” she added.

No country currently holds associate membership status with ECHA but the UK’s regulatory overlap with the EU and its unusual position of shifting from an EU member state to a third country fuelled hopes that a new arrangement could be brokered.

The UK’s Confederation of British Industry (CBI) has stated that the chemicals sector is among the industries with the least to gain from any deviation from EU norms, as the sector is so tightly regulated and the UK is so dependent on the EU as a market. 60% of the UK’s chemicals exports flow to the bloc.

Lobbyists and industry have pushed for continued tight regulatory harmony with the EU post-Brexit, with former Prime Minister Theresa May singling out Reach in speeches as one of the regulatory frameworks the UK hoped to remain tied to. Chemicals has been mentioned in government updates alongside aerospace and pharmaceuticals as the sectors where it was hoped special arrangements could be agreed as recently as the end of 2019.

UK distributor trade body the Chemical Business Association confirmed that it had received notification of the plan last week and has been asked by the EAC to provide feedback, which is expected to be complete in the next few days.

The UK Chemical Industries Association (CIA) stated that, while the best outcome for the sector would have been remaining within EU Reach, the specific mention of special arrangements for the chemicals sector in the UK’s free trade agreement proposals for the EU could provide some benefit.

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.

New gas treating technology aimed at helping customers lower sulfur and overall CO2 emissions

MOSCOW (MRC) -- BASF SE and ExxonMobil Catalysts and Licensing LLC have released a new highly energy efficient amine gas treatment technology named OASE sulfexx, said Hydrocarbonprocessing.

The technology is based on a new proprietary amine-based solvent that selectively removes hydrogen sulfide (H2S), while minimizing the co-absorption of carbon dioxide (CO2) from gas streams.

The companies jointly developed the amine-based solvent to help petroleum refiners and gas processors meet future requirements, while also increasing capacity and lowering operating costs on existing equipment. For new facilities, the use of this technology will reduce the size of the equipment and the initial capital investment compared to conventional amine gas treatment units.

"We are pleased to partner with BASF to develop OASE sulfexx, a compelling solution aimed at helping operators reduce emissions and lower costs,” said Dan Moore, president of ExxonMobil Catalysts and Licensing, LLC. “Collaborating to develop new, game-changing technologies is central to how we work, and the development of this new product provides yet another example of what we bring to the marketplace."

"OASE sulfexx will help our customers to achieve their sustainability goals by lowering energy consumption and reducing sulfur emissions,” said Andreas Northemann, vice president of BASF Gas Treatment. “The H2S selectivity of OASE sulfexx is outstanding – it’s hard to find a product on the market with that type of capability."

Multiple pilot plant tests at ExxonMobil and BASF facilities have demonstrated the superior selective properties of this solvent compared to methyldiethanolamine (MDEA) formulations and FLEXSORB™ SE and SE Plus solvents. A commercial demonstration concluded at a tail gas treating unit located in North America further confirms the results.

OASE sulfexx will help to debottleneck existing Claus tail gas treating, acid gas enrichment, and highpressure acid gas removal units. In Claus tail gas treating units, the technology can achieve less than 10 ppmv H2S specifications while rejecting CO2 to meet future emission requirements.

As MRC informed earlier, 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 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.

Indian HPCL delays USD3 B refinery expansion

MOSCOW (MRC) -- India’s Hindustan Petroleum Corp Ltd has pushed back the completion of a billion-dollar expansion at its southeastern Vizag refinery to at least October-November due to a labor shortage and the onset of monsoon, a company source said, said Hydrocarbonprocessing.

The state-run refiner had initially planned to complete the 209.28 billion rupee (USD2.77 billion) expansion, which will nearly double the capacity of its coastal plant to 300,000 barrels per day (bpd), in July.

Many workers have returned to their hometowns due to the nationwide lockdowns to curb the spread of coronavirus, while the onset of monsoon has made it difficult to carry out construction work, the source told Reuters.

“Because of the lockdown we could not carry out the planned pre-monsoon work. We lost that window,” the source said, asking not to be named due to sensitivity of the issue. “We have not yet done our assessment but it seems completion of the project would be delayed to at least October-November."

HPCL did not respond to a Reuters’ request seeking comments. India has significantly eased the lockdown but a return to pre-COVID activity will take some time as inter-state transportation remain restricted and the virus cases are still rising.

Construction and mechanical work is usually held off during monsoon as a safety precaution, the source said. The four-month Indian monsoon season starts from June. The expansion includes the replacement of a smaller crude distillation unit with a new 180,000 bpd at the refinery in Andhra Pradesh state.

HPCL is also building facilities including a 0.352 million tonnes per year (tpy) naphtha isomerisation unit, a 3.053 million tpy hydrocracker and a power plant that can run on either naphtha or natural gas.

The project also involves the revamp of units including a 30% increase in capacity of naphtha hydrotreater to 1.5 million tpy and diesel hydrotreater to 2.86 million tpy, while the capacity of continuous catalytic cracker will be raised to 1.039 million tpy.

As MRC informed before, India's private-sector Haldia Petrochemicals (HPL) has shut its naphtha cracker, after ports in the country declared force majeure to prevent the spread of the coronavirus. The petrochemical maker operates a 670,000 tonnes per year cracker, which on average would need more than 150,000 tonnes of naphtha feedstock a month if the unit is at full capacity, based on Reuters calculations.

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.

Haldia Petrochemicals Ltd is a modern naphtha based petrochemical complex at Haldia, West Bengal, India. Haldia has played the role of a catalyst in emergence of more than 500 downstream processing industries in West Bengal with a capacity to process more than 3,50,000 TPA of polymers, among which are PE and PP.