Denmark approves use of ships with anchors to lay Nord Stream 2 gas link

MOSCOW (MRC) -- Denmark has approved a request from the developer of the Nord Stream 2 gas pipeline from Russia to Germany for permission to lay the line in Danish waters using ships with anchors, reported S&P Global with reference to the Danish Energy Agency's statement July 6.

In early June, Nord Stream 2 asked - as a precautionary measure - for an amendment to its Danish pipelaying permit to allow the potential use of pipelay ships that use anchors for positioning.

"The Danish Energy Agency has decided that Nord Stream 2 may use pipelaying vessels with anchors in connection with construction of the Nord Stream 2 pipelines," the agency said in a statement.

The Gazprom-owned Nord Stream 2 operating company had hoped to bring Nord Stream 2 online by the end of 2019, but first permitting issues in Denmark and then the US sanctions meant the project has been delayed.

The 55 Bcm/year pipeline is crucial to Russia's plans to scale down from 2021 the use of the Ukrainian transit corridor in its gas supplies to Europe.

Just 160 km (99 miles) of Nord Stream 2 is left to lay in Danish waters out of the total 2,460 km length.

According to the original Danish permit from October last year, pipelaying ships, such as the Pioneering Spirit used by Switzerland-based Allseas to lay much of the pipeline before the US sanctions forced it to halt work, should have dynamic- or self-positioning capabilities.

"The Danish Energy Agency has - at the request of Nord Stream 2 - made a decision to change the condition of using pipelaying vessels with self-positioning," it said.

"The change means that the company can use pipe-laying vessels with anchors, either independently or in combination with self-positioning pipelaying vessels."

In the decision, the Danish Energy Agency emphasized that the remaining part of the pipeline to be constructed in Denmark is outside the area where bottom trawling, anchoring and seabed intervention are discouraged due to the risk posed by dumped chemical warfare agents.

Nord Stream 2 has said the technique of using anchored ships was used successfully during the installation of the already operational Nord Stream pipelines in Danish waters, and for the Nord Stream 2 pipelines already installed in German waters.

However, being anchored would slow significantly the progress of a ship laying the pipeline, while ships with dynamic positioning are able to lay pipe at a much faster rate.

The Danish approval comes as the US is also pressing to introduce expanded sanctions against the project that would target more companies involved in building the line's final segment, including service providers and insurers.

Last week, German Chancellor Angela Merkel said it was "right" to complete the pipeline, saying the US sanctions "did not correspond" to Germany's interpretation of international law.

"We believe that the type of extraterritorial sanctions imposed by the US is not in line with our understanding of the law," Merkel said.

"We have to concede, however, that this will make the construction process more difficult," she said. "Nevertheless, we believe that it is right to complete this project, and we are acting in this spirit.

As MRC reported earlier, Denmark expects to rule "within four weeks" on a request from the developer of the Nord Stream 2 gas pipeline from Russia to Germany for permission to lay the line in Danish waters using ships with anchors, a spokesman for the Danish Energy Agency said June 17.

We remind that Gazprom neftekhim Salavat shut down its dioctyl phthalate (DOP) production for a scheduled maintenance. Market participants and a plant"s representative said Gazprom neftekhim Salavat took off-stream its DOP production for a long scheduled turnaround. The outage began on 12 May and lasted for about 30 day.

According to MRC's ScanPlast report, Russian producers of unmixed PVC decreased capacity utilisation in April. However, Russia's overall PVC output totalled 351,000 tonnes in January-April 2020, up by 2% year on year.
MRC

MOSCOW (MRC) -- CPC Corporation has restarted its No. 4 naphtha cracker in Linyuan on 6 July 2020, just four days after a technical glitch that forced the company to declare emergency shutdown, reported CommoPlast with reference to market sources.

The unit has an annual capacity of 380,000 tons/year of ethylene and 193,000 tons/year of propylene.

Sources added that the producer has only restarted the furnace and yet to reveal the timeline target to reach on-spec cargoes.

The company also operates another cracker at the same site - No. 3 cracker, which has an ethylene capacity of 720,000 mt/year and propylene capacity of 370,000 mt/year.

As MRC informed previously, CPC Corporation took one of its naphtha crackers off-stream on 8 November 2019 for major maintenance work. The No. 4 cracker was expected to remain offline for about 65 days. The shutdown resulted in a production loss of 67,671 tons of ethylene and 34,370 tons of propylene.

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.

CPC Corporation, Taiwan, is engaged in the exploration, production, refining, procurement, transportation, storage, and marketing of oil and gas. The company provides fuel oil, including automotive unleaded gasoline and diesel fuel, low-sulfur fuel oil, marine distillate fuels, marine residual fuels, and aviation fuel; petrochemicals, such as ethylene, propylene, butadiene, benzene, para-xylene, and ortho-xylene; liquefied petroleum gas products comprising liquefied petroleum gas, propane, butane, and a propane/butane mixture; lubricants, motor oil, industrial oil, grease, and marilube oil; SNC products, including petroleum ether, naphtha, toluene, xylene, crude octene, methyl alcohol, normal paraffin, viscosity-graded asphalt cement, and sulfur; and natural gas.
MRC

MOSCOW (MRC) -- Chemours will close its aniline and nitrobenzene site in Pascagoula, Mississippi state, by the end of the year, said Chemweek.

The First Chemical site produces aniline, nitrobenzene and nonylated diphenylamine (NDPA) lubricant antioxidant. "As a result of a business review we determined that aniline business is not core to our future strategy," Chemours said in a statement.

The company has decided to exit the business and cease production at the site. Chemours said it was reviewing options for productive reuse of the site.

Aniline is used to make polyurethanes, dyes and rubber chemicals among other products.

As MRC informed before, in December 2019, Chemours announced plans to sell its methylamines and methylamides unit to Belle Chemical, an affiliate of Cornerstone Chemical. The sales price was not disclosed. Thus, Chemours had signed a letter of commitment with Belle Chemical Co. to sell Chemours' methylamines and methylamides business and production facilities at the Belle location. Earlier in 2019, Chemours announced it would stop making methylamines and methylamides at the plant. In 2020, it planned to start dismantling the methylamines operations. Once Belle takes possession of the plant, most of the employees at Belle and others assigned in supporting roles at other locations will become part of Belle, Chemours said. Cornerstone makes acrylonitrile (ACN) and melamine at Fortier, Louisiana.

We remind that Russia's output of chemical products rose in May 2020 by 4.4% year on year. Thus, production of basic chemicals increased year on year by 5.4% in the first five months of 2020, according to Rosstat's data. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the output in January-May.

Chemours is a global leader in titanium technologies, fluoroproducts and chemical solutions, providing its customers in a wide range of industries with market-defining products, application expertise and chemistry-based innovations. Chemours ingredients are found in plastics and coatings, refrigeration and air conditioning, mining and oil refining operations and general industrial manufacturing. Chemours has approximately 9,000 employees across 37 manufacturing sites serving more than 5,000 customers in North America, Latin America, Asia-Pacific and Europe. Chemours is headquartered in Wilmington, Del.
MRC

MOSCOW (MRC) -- US energy companies slammed the brakes on returning staff to their Houston offices as COVID-19 cases soared and top hospitals warned they could soon run out of beds for the most severely ill patients, reported Reuters.

Texas officials imposed restrictions as new cases in the state topped 5,000 on three consecutive days as of Thursday. Intensive care unit (ICU) beds were 97% full at Houston’s Texas Medical Center, which said it may soon move to increase ICU capacity assignments, officials said.

Texas Governor Greg Abbott has announced a phased reopening of shops, bars and amusement parks from May 1, and businesses have rolled out their own office restarts. But on Wednesday, he warned of a “massive outbreak” and urged people to stay at home.

Many energy firms qualify as essential, and therefore are free to staff normally, but the surge in illness and hospitalizations has prompted large employers to delay or halt openings.

Halliburton Co, the second-largest US oilfield service company by revenue, delayed for two weeks a second phase of its return-to-work plan, and power producer Calpine pushed back the start of returning non-essential workers to offices until August from July 6, representatives for the two companies said.

Chevron also has delayed its reopening plans for further evaluation, said spokesman Sean Comey. About 5% of its Houston office staff and about 2% of its San Ramon, California, workforce are in their offices now, he said.

Midcoast Energy, a natural gas pipeline company, reopened on June 1 but sent Houston employees home three weeks later after two tested positive for the virus, said a person familiar with the matter. President Robert Bond did not respond to requests for comment.

Exxon Mobil, Phillips 66 and ConocoPhillips returned some white-collar workers to their campuses in May or this month. Exxon will remain below 50% capacity at its Houston-area facility, a spokesman said. Conoco is prepared to change its return-to-office plan if needed, a spokesman said.

Phillips 66 said the vast majority of its staff had returned and would remain working from their offices.

"We are a critical infrastructure industry and have an ongoing obligation to continue operating," spokesman Joe Gannon said, noting that the company follows Centers for Disease Control and government advisories.

As MRC wrote before, Exxon Mobil Corp is restarting the hydrocracker at its 560,500 barrel-per-day (bpd) Baytown, Texas, refinery. The 25,000-bpd hydrocracker was shut by a malfunction on Monday, 22 June, caused by a heavy thunderstorm.

We remind that boiler work at the ExxonMobil-operated 830,000-metric tons/year ethylene plant at Mossmorran, UK, was scheduled for completion in June, 2020. Two of the three boilers at the plant exploded in August 2019, resulting in the plant being taken offline until the end of February. OPIS sources said in May that the plant was currently able to operate at full capacity with two boilers in operation but that the third boiler would be working by June.

We also remind that 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 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) -- Crude oil futures were trading higher in mid-morning trade in Asia July 1 after a significant draw in US crude oil inventories, and despite an increase in coronavirus cases clouding the demand outlook, reported S&P Global.

At 10:25 am Singapore time (0225 GMT), new front-month ICE Brent September crude futures were up 45 cents/b (1.09%) from the June 30 settle at USD41.72/b, while the NYMEX August light sweet crude contract was 53 cents/b (1.35%) higher at USD39.80/b.

"The American Petroleum Institute survey estimated a significant draw in crude oil inventories of 8.156 million barrels for the week ending June 26, which was much higher than analysts' guesses," Stephen Innes, chief global markets analyst at AxiCorp, said in a note July 1.

Market participants will look to more definitive US Energy Information Administration data due for release later in the day to confirm these estimates.

"The reports could go a long way to easing some of those lingering inventory concerns. And possibly there is enough oomph in (the API) announcement to trigger a retest of the psychologically important WTI USD40/b before (the) EIA release," Innes added.

Meanwhile, rising coronavirus cases in some US states continue to weigh heavily on market sentiment, capping any strong recovery in crude prices in the short term.

Coronavirus cases more than doubled in 14 US states in June, including California, Florida and Texas, according to media reports. White House infectious disease expert Anthony Fauci told a Senate hearing June 30 that new cases could more than double to 100,000/day unless a full nationwide effort was undertaken, according to media reports.

"This has seen the EU extend its travel ban on US citizens. Within the US, states stalled the easing of restrictions. New York extended its list of states from which visitors must quarantine on arrival. Sentiment wasn't helped by signs that supply may be on the rise," ANZ analysts said in a note July 1.

ConocoPhillips said June 30 it will start increasing producing in July after announcing some of the biggest North American production cuts in the second quarter, with 460,000 boe/d curtailed in June. The company said it will begin by restoring its Lower-48 US production and its Alaskan production in July, followed by its Surmont volumes in Canada later in the third quarter.

"Brent ended Q2 with gains of 21%. It has been an eventful Q2 for crude oil, with WTI plunging into negative price territory briefly and OPEC+ enacting the largest output reduction in its history. In Q3, we think oil prices may continue to rise, but at a much slower pace than Q2. The path to recovery is unlikely to be smooth or linear," OCBC analysts said in a note July 1.

As MRC informed before, global oil consumption cut by up to a third in Q1 2020. What happens next in the oil market depends on how quickly and completely the global economy emerges from lockdown, and whether the recessionary hit lingers through the rest of this year and into 2021.

Earlier this year, BP said the deadly coronavirus outbreak could cut global oil demand growth by 40 per cent in 2020, putting pressure on Opec producers and Russia to curb supplies to keep prices in check.

We remind that, in September 2019, six world's major petrochemical companies in Flanders, Belgium, North Rhine-Westphalia, Germany, and the Netherlands (Trilateral Region) announced the creation of a consortium to jointly investigate how naphtha or gas steam crackers could be operated using renewable electricity instead of fossil fuels. The Cracker of the Future consortium, which includes BASF, Borealis, BP, LyondellBasell, SABIC and Total, aims to produce base chemicals while also significantly reducing carbon emissions. The companies agreed to invest in R&D and knowledge sharing as they assess the possibility of transitioning their base chemical production to renewable electricity.

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