Shell Norco, Louisiana refinery restarts reformer, hydrocracker

MOSCOW (MRC) -- Royal Dutch Shell Plc restarted the reformer and hydrocracker at its 227,400-barrel-per-day (bpd) Norco, Louisiana, refinery, sources familiar with plant operations said, said Reuters.

The 40,000-bpd reformer restarted on Sunday after a month-long overhaul, the sources said. The 40,000-bpd hydrocracker restarted on Monday after tripping out of operation due to a brief furnace malfunction.

Shell spokesman Curtis Smith declined comment.

As MRC wrote before, in May 2020, CNOOC Oil & Petrochemicals Co. Ltd (CNOOC), Shell Nanhai B.V (Shell) and the Huizhou Government have announced a strategic cooperation agreement to further expand the CNOOC and Shell Petrochemical Company (CSPC) 50:50 joint venture in Huizhou, Guangdong Province, China.

The expansion is planned to serve the growing number of intermediate and performance chemicals customers in the key market of China, supplying products including SMPO, polyols, ethylene glycol, polyethylene (PE) and polypropylene (PP). These chemicals are used in a wide range of end products, in healthcare, construction, fabrics, packaging, transport and electronics. For the first time in Asia, Shell would apply its advanced technology for linear alpha olefins. The project is intended to include construction of a new 1.5 million-tonnes-per-year ethylene cracker, with the mega-site bringing economies of scale and enhanced competitiveness.

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.

Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.
MRC

CPChem defers decision on USGC II Petrochemical Project

MOSCOW (MRC) -- Chevron Phillips Chemical (CPChem; The Woodlands, Texas) says it will take longer than originally planned to make a final investment decision (FID) on the USGC II Petrochemicals Project, an $8-billion joint venture with Qatar Petroleum (QP; Doha, Qatar), said Chemweek.

The company cites uncertainty created by the COVID-19 pandemic. Front-end engineering and design (FEED) of the project continues. "As with other capital-intensive activities, we are closely monitoring economic developments and moderating timing to preserve optionality on this project,” says a statement from CPChem. “In light of uncertainty created in the wake of the COVID-19 pandemic, our company intends to defer a final investment decision while it revisits market conditions and project fundamentals." The company says it has not set a new date for FID.

Orange, Texas, where CPChem already has two high-density polyethylene (HDPE) plants, remains the preferred location for the project, says the company. According to a local newspaper, the Beaumont Enterprise, Orange County authorities have approved a 10-year, 100% tax break for the project that must enter effect no later than 1 January 2024.

CPChem and QP announced the USGC II Petrochemicals Project in July 2019. At the time, they expected FID by 2021 and completion in 2024.

CPChem would hold a 51% share, provide project management and oversight, and be responsible for the operation and management of the facility. Centered on a 2 million metric tons/year (MMt/y) ethylene plant, the project would also include two downstream 1 MMt/y HDPE plants.

As MRC informed earlier, Chevron-led consortium that operates Kazakhstan's largest oil field, Tengiz, is imposing production cuts in line with government legislation covering May-June and is not yet aware of additional restrictions for July. In production since 1993, Tengiz is the mainstay of Kazakhstan's crude production and the CPC export blend loaded on the Black Sea coast. It accounts for 40% of Kazakh oil production, with output of 667,000 b/d in the first quarter. A major coronavirus outbreak at the site by the Caspian Sea has disrupted a USD46.5-billion expansion project expected to lift output to 900,000 b/d in 2023.

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.
MRC

Aramco CEO discusses Sabic acquisition, flags importance of crude-to-chemicals

MOSCOW (MRC) -- Crude-to-chemicals is “very important” to Saudi Aramco, with the company’s recently completed acquisition of Sabic “ideal,” according to Aramco’s president and CEO Amin Nasser, reported Chemweek.

Speaking exclusively to IHS Markit vice chairman Daniel Yergin in the latest CERAWeek Conversations, Nasser also says he believes “the worst is behind us” in terms of oil markets, and that he is “very optimistic” about already-recovering demand for the second half of 2020.

Aramco completed its USD69.1-billion purchase of a 70% stake in Sabic, the world’s fourth-largest petrochemicals company, on 17 June. Describing Sabic as a leading global company for petrochemicals, Nasser says Aramco’s “aspiration from the beginning” was that it needed to be a leading energy and petchems company. “We have a leading position when it comes to upstream and refining. We needed to integrate further our refinery with petrochemical; in addition, we are looking at crude-to-chemicals. We could not do all of these aspirations in terms of adding value, extracting more value from our barrels, without a big acquisition.”

Sabic was ideal, he says. “It’s run based on best-in-class when it comes to operations. It works in more than 50 countries. There’s a lot of synergy with Saudi Aramco; we operate also in similar markets. There’s a lot of value that can be extracted by acquiring a significant position in Sabic,” he says. “I’m sure we can achieve our goals of adding value to our shareholders, both shareholders in Sabic and Saudi Aramco, by turning our feedstock to petrochemicals and adding value. Crude-to-chemicals is very important to Aramco.”

Crude-to-chemicals was part of Aramco’s strategy in acquiring Sabic, according to Nasser. “The highest sector in terms of use of oil demand up to 2040 is chemicals. Climate change and reducing carbon footprints and identifying new usage for oil is a focus area for Saudi Aramco going forward,” he says.

Climate change and sustainability are two of Aramco’s highest priorities, although oil and gas will continue to be a strong part of the worldwide energy mix in the long term, Nasser says. “Climate change is a priority. You see it in a lot of our centers, in addition to discovery and recovery, and improving our cost. Climate change, carbon capture and sequestration, turning CO2 into useful products, the use of hydrogen from crude oil or from gas, ultra-clean engine fuel systems,” he says.

Discussing the near-term outlook for oil markets, Nasser says worldwide crude demand has recovered to close to 90 million b/d, up from 75-80 million b/d in April. Looking forward, demand by the end of the year will be 95–97 million b/d, according to various forecasts, he notes. “We see it in China today - it’s almost at 90%. In gasoline it’s around 95% in China. Gasoline and diesel are picking up to pre-COVID-19 levels. Jet fuel is still lagging in terms of less air travel. More countries will start opening up. So, we see that reflected in the demand on crude,” he says.

The demand forecasts for the end of the year “all depend on whether there will be a second wave of coronavirus or not,” Nasser says. “But I am also not as concerned about a second wave because I think we are much better prepared now. All countries, all medical establishments are much better prepared. We learned a lot during the first wave.” More than half of Aramco’s office workers worked from home during the height of the COVID-19 pandemic, while all the company’s fields and plants ran smoothly with “very high reliability,” he adds. “When it comes to field presence, everybody was working, especially in remote areas and offshore sites. We were able to manage the situation very well by putting all the precautions necessary to maintain their safety and health while maintaining our operational resilience during this time.”

This period also included the ramping up by Aramco of its production from 9.7 million b/d to 12 million b/d in just 20 days, before reducing it to 7.5 million b/d, Nasser says.

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.

Saudi Basic Industries Corporation (Sabic) ranks among the world"s top petrochemical companies. The company is among the world"s market leaders in the production of polyethylene, polypropylene and other advanced thermoplastics, glycols, methanol and fertilizers.

Saudi Aramco, officially the Saudi Arabian Oil Company, is a Saudi Arabian national oil and natural gas company based in Dhahran, Saudi Arabia. Saudi Aramco"s value has been estimated at up to USD10 trillion in the Financial Times, making it the world"s most valuable company. Saudi Aramco has both the largest proven crude oil reserves, at more than 260 billion barrels, and largest daily oil production.
MRC

Iran oil storage almost full as sanctions and pandemic weigh

MOSCOW (MRC) -- Iran has slashed crude oil production to its lowest level in four decades as storage tanks and vessels are almost completely full due to a fall in exports and refinery run cuts caused by the coronavirus pandemic, industry data showed, said Hydrocarbonprocessing.

Total onshore crude stocks surged to 54 million barrels in April from 15 million barrels in January, and swelled further to 63 million barrels in June, according to FGE Energy. Market intelligence firm Kpler estimated Iranian average onshore crude storage for June to be around 66 million barrels.

That is around 85% of available onshore storage capacity. “However, it will technically not be possible to fill tanks to 100% given technical constraints at storage tanks and potential infrastructure bottlenecks,” said Homayoun Falakshahi, a senior analyst at Kpler.

Tensions between Tehran and Washington have ratcheted up since 2018, when the United States withdrew from a 2015 nuclear pact between Iran and six major powers and President Donald Trump reimposed sanctions on Iran, hammering vital oil exports. Iran’s floating storage is also filling up. Shipping sources said Iran was estimated to be using in the region of 30 tankers to store oil – most of them supertankers, each of which can carry a maximum of 2 million barrels of oil.

This would equate to over 50 million barrels of oil being stored, which has been static for some months. This is likely to be a combination of crude and condensate, a very light grade of crude, the sources said. Refinitiv data showed a maximum of 56.4 million barrels were being held in floating storage by July 3.

Iran’s fleet of crude oil tankers numbers 54 vessels, data from valuations specialist VesselsValue showed. “Iran storage is expected to continue as we do not see these vessels being able to trade anytime soon,” a spokesman for shipping group NORDEN said.

“The exact number of Iranian vessels on floating storage is a bit of a black box as they have all turned off their AIS signals,” he said, referring to a vessel’s tracking transponder.

As MRC informed earlier, Iran's petrochemical products will reach 100 million tons by the end of 2021.

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

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