Marubeni inks offtake deal for Enterprise propylene supply

MOSCOW (MRC) -- Enterprise Products Partners LP (EPP), through one of its affiliates, has entered a long-term agreement with Marubeni Corp. of Japan, under which Marubeni will offtake polymer-grade propylene (PGP) produced from a second propane dehydrogenation plant (PDH 2) currently under construction at EPP’s operations in Mont Belvieu, Tex., for supply to global customers, according to Oil&Gas Journal.

Concluded on June 16, the PGP offtake agreement is part of a long-term collaboration between EPP and Marubeni that also includes the export of liquefied ethylene, the first 25-million lb vessel of which loaded and sailed from EPP and Navigator Holdings Ltd.’s 50-50 joint venture marine terminal at Morgan’s Point, Tex., in early January, EPP and Marubeni said on June 30.

While neither company revealed a precise volume of PGP included under the new agreement, Marubeni - the globe’s largest trader of olefins - said access to PGP supply included in the deal will help meet its international customers’ demand for derivative products.

Still on schedule to enter service in second-quarter 2023, PDH 2 will have the capacity to upgrade 35,000 b/d of propane into 1.65 billion lb/year of PGP.

Upon PDH2’s full commissioning, EPP said its Mont Belvieu complex equipped with capacity to produce up to 8 billion lb/year of PGP from its seven propylene fractionators and 3 billion lb/year from PDH1 and PDH2 - will have a total PDH production capacity of 11 billion lb/year to become the largest complex of its kind in the world.

As MRC reported earlier, in June 2020, Enterprise Products Partners' new ethylene export terminal in Texas signed contracts for 95% of its eventual 1 million mt/year capacity, reported S&P Global with reference to executives from Navigator Gas, the company's 50% partner in the venture.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 595,170 tonnes in the first five month of 2020, up by 10% year on year. Deliveries of all ethylene polymers, except for linear low density polyethylene (LLDPE), rose partially because of an increase in capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market was 457,930 tonnes in January-May 2020 (calculated by the formula production minus export plus import). Deliveris of exclusively PP random copolymer increased.
MRC

MOSCOW (MRC) -- Nova Chemicals (Calgary, Alberta, Canada) says its board of directors has named Luis Sierra president and CEO, effective 1 August, said Chemweek.

He will succeed Todd Karran, who is retiring. Sierra joins Nova from BP, where he spent 30 years, most recently as CEO of the aromatic chemicals business.

Sierra "brings a wealth of knowledge and experience from a strong and successful career with BP,” says Musabbeh Al Kaabi, chairman of the board of directors. “The board believes that Todd’s retirement provides the opportunity to introduce new leadership with the external perspective and renewed impetus required to drive the next phase of the company’s development."

As MRC reported earlier, in January 2017, NOVA Chemicals announced the start up of its new world-scale linear low density polyethylene (LLDPE) gas phase reactor at its Joffre, Alberta site.

Besides, NOVA Chemicals expanded ethylene production capacity by 20% at its cracker in Corunna, Ontario from the previous capacity of about 839,000 tpy. The expansion occurred between 2014 and 2018 and was part of a wave of expansions and upgrades to NOVA's existing facilities near Sarnia, Ontario. Other upgrades in the plan included a debottlenecking of the Moore low-density polyethylene (LDPE) line and a retrofit of the Moore high-density polyethylene (HDPE) line.

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.

NOVA Chemicals Corporation is a plastics and chemical company headquartered in Calgary, Alberta, Canada, and is wholly-owned ultimately by Mubadala Investment Company of the Emirate of Abu Dhabi, United Arab Emirates.
MRC

1. Global recession will hasten refinery rationalization

MOSCOW (MRC) -- Coronavirus and the cyclical slump in petroleum consumption are accelerating a long-term rationalization of the global refining industry and a shift eastwards in its center of gravity to Asia, said Hydrocarbonprocessing. Refinery margins for making middle distillates such as gasoil and jet fuel have plunged to their lowest since 2009 as lockdowns and recession have cut fuel consumption by millions of barrels per day. Much of this is cyclical and will unwind if and when the major economies and their fuel consumption recover and stocks of gasoline and diesel return to more normal levels. But the crisis is compounding the long-term challenge for smaller, older and simpler refineries, especially in North America and Europe, faced with a growing competition from more modern mega-refineries in Asia. Refinery margins, the difference between the prices at which refineries purchase crude and sell refined products, have historically aligned with the business cycle.


MRC

MOSCOW (MRC) - Ukrainian company Karpatneftekhim (Kalush, Ivano-Frankivsk region) has increased prices of suspension polyvinyl chloride (SPVC) and high density polyethylene (HDPE) for July deliveries to the domestic market by USD70-80/tonne under the pressure from higher feedstock prices, according to the ICIS-MRC Price Report.

According to the company's customers, SPVC prices for July deliveries rose on average by USD75-80/tonne tonne compared with the level a month earlier. HDPE prices increased by USD70/tonne compared with the level in mid-June.

Demand for polyvinyl chloride and HDPE from the domestic market has grown significantly in the past two months.
Both the seasonal factor and the introduction of import duties on polymers in the amount of 18% in June played a role in increasing demand.

Karpatneftekhim is one of the largest enterprises of Ukraine's petrochemical complex. Currently, the plant can produce annually 300,000 tonnes of PVC, 200,000 tonnes of caustic soda, about 180,000 tonnes of chlorine, as well as 250,000 tonnes of ethylene and 100,000 tonnes of polyethylene.
MRC

MOSCOW (MRC) -- A fire hit the catalytic cracking unit at Venezuelan state oil company PDVSA’s 310,000 barrel-per-day Cardon refinery, Falcon state Governor Victor Clark said, while two people familiar with the matter said gasoline output was halted , said Reuters.

The unit stopped working around noon, less than a month after it restarted with the help of equipment imported from Venezuela’s ally Iran, according to the sources, threatening an aggravation of fuel shortages that have plagued the South American country for months. Clark added that the fire was quickly controlled and that there were no injuries.

Catalytic cracking units are crucial for the production of finished fuel in most refineries. Cardon had been producing between 15,000 and 30,000 bpd of gasoline since restarting in mid-June, according to three people with knowledge of the matter, who spoke on condition of anonymity.

The rest of Venezuela’s 1.3 million bpd refining network is mostly offline. The country received several fuel shipments from Iran in late May and early June, but has not imported gasoline since then. Efforts to restart gasoline output at the 146,000 bpd El Palito refinery have not yet been successful.

U.S. prosecutors last week filed a lawsuit to seize gasoline aboard four vessels Iran is trying to send to Venezuela. PDVSA did not respond to a request for comment on gasoline output at Cardon.

As MRC informed earlier, PDVSA recently restarted the catalytic cracker at its 310,000 barrel-per-day (bpd) Cardon refinery, a necessary step for producing gasoline. It is also aiming to restart gasoline output at the 146,000 bpd El Palito refinery.

As MRC informed before, Russian state oil company Rosneft's decision to cease operations in Venezuela and sell its assets there to a Russian government-owned company was a "maneuver" made in reaction to collapsing oil prices, a US State Department official said earlier this year.

We remind that Angarsk Polymers Plant, part of Russian oil giant Rosneft, has shut down its low density polyethylene (LDPE) production for a scheduled turnaround. The plant"s customers said Angarsk Polymers Plant took off-stream its LDPE production for the scheduled maintenance on 22 June. The outage is scheduled to last for one month. The plant"s annual production capacity is about 75,000 tonnes.

According to MRC's ScanPlast report, April estimated LDPE consumption in Russia decreased to 52,270 tonnes from 55,160 tonnes a month earlier. Kazanorgsintez reduced its capacity utilisation. Russia's estimated LDPE consumption rose to 191,000 tonnes in January-April 2020, up by 5% year on year. Russian producers raised their production significantly, and LDPE imports also increased.
MRC