Average run rate at Chinese PDH plants rises to 85% in June from 81% in May

MOSCOW (MRC) -- China's propane dehydrogenation plants operated at an average rate of 85% of capacity in June, up from a revised average rate of 81% in May and also from 81% a year earlier, S&P Global calculations based on data from domestic information provider JLC showed July 10.

The higher run rate in June was attributed mainly to two PDH plants raising run rates after maintenance in the month, although two other PDH plants lowered run rates due to technical glitches, according to JLC data.
Tianjin Bohai's PDH unit in northern China doubled its run rate to 80% in June from 40% in May, the data showed, after a period of unstable operations in May, sources said.

Yantai Wanhua in eastern Shandong province raised its run rate to 50% in June from 39% in May after restarting from scheduled maintenance June 10, the data showed. The plant was shut over May 14-June 10 for scheduled maintenance, S&P Global Platts reported earlier.

However, Shaoxing Sanyuan and Ningbo Haiyue in eastern Zhejiang provice both lowered their operating rates in June due to technical glitches. Shaoxing Sanyuan experienced glitches over June 18-22 that lowered its average operating rate to 67% in June from 80% in May, while Ningbo Haiyue experienced technical glitches over June 25-27 that lowered its run rate in the month to 90% from 100% in May, the JLC data showed.

Dongguan Juzhengyuan has had its PDH plant shut for maintenance since July 5 that was expected to take around six weeks, sources said.

The JLC monthly survey covered nine Chinese PDH units with a combined propylene production capacity of 5.66 million mt/year, which can use up to 6.79 million mt/year of propane as feedstock at full capacity.

Chinese PDH units' theoretical processing margin was estimated at Yuan 1,708/mt (USD241.11/mt) in June, up from Yuan 1,398/mt in May, and the highest since October 2019, Platts calculations showed. Market sources attributed the improving margins in June to a rise in domestic propylene prices in the month.

Saudi Aramco set its June contract price for propane at USD350/mt FOB, up USD10/mt month on month. Spot refrigerated propane cargoes on a delivered basis to East China averaged USD324/mt in June, up from USD307/mt inr May, Platts data showed.

Chinese PDH units typically secure half of their propane requirements under term contracts and the rest from the spot market. The average import cost for propane was estimated at Yuan 2,901/mt in June after taxes and fees, up Yuan 39/mt or 1.4% from May, the data showed.

Domestic propylene prices in East China, where most of the country's PDH units are located, were estimated at Yuan 6,689/mt in June, up Yuan 357/mt or 5.6% from May, according to JLC data.

Downstream polypropylene (PP) sales were stable through June, with the run rate at Chinese PP plants remaining healthy at 85%-88% of capacity, according to sources.

Strong global demand for packaging and medical applications, including masks and protective gowns, continues to provide support to China's PP market, Platts has reported.

Propylene is the main feedstock for the production of polypropylene (PP).

According to MRC's DataScope report, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.
MRC

Jiangsu Sailboat resumes production at MTO plant in China

MOSCOW (MRC) -- Jiangsu Sailboat Petrochemical, also known as Jiangsu Shenghong, has restarted its methanol-to-olefins (MTO) plant following a turnaround, as per Apic-online.

A Polymerupdate source in China informed that the company resumed operations at the plant on July 27, 2020. The plant was shut owing to technical issues on July 17, 2020.

Located at Lianyugang in Jiangsu province of China, the plant has an ethylene production capacity of 360,000 mt/year and propylene production capacity of 470,000 mt/year.

As MRC reported earlier, Jiangsu Sailboat Petrochemical is only able to restart its two acrylonitrile (ACN0 plants on July 31, followed an unplanned shutdown of these production units on July 16. The company shut down both their two 260,000 mt/yr ACN plants along with its methanol-to-olefin unit at the same time.

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

According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.

Jiangsu Sailboat Petrochemical, part of the Shenghong Holding Group, is a major petrochemical manufacturer in China, including polyethylene (PE) and ethylene-vinyl-acetate (EVA). The company's production facilities are located in the new Xuwei Industrial Park in Lianyungang City, Jiangsu Province.
MRC

Iraq to sign USD4 billion oil refinery contract with JGC

MOSCOW (MRC) -- Iraq’s government agreed to sign a contract with JGC Corp to build a 55,000 barrels per day refinery in the southern region of Basra, reported Reuters with reference to the oil ministry's statement.

The refinery will produce fuels including liquified petroleum gas, gasoline and gasoil, it said, estimating the cost of the facility at USD4 billion.

As MRC wrote before, in early June 2020, Iraq and Kazakhstan submitted their plans to the OPEC+ alliance on how they will implement deeper oil production cuts in the coming months, following through on pledges to make good on violating their quotas in May. Kazakh energy minister Nurlan Nogayev had said June 9 that his country pumped 3.13 million barrels over its quota over May 1-12. Iraq produced nearly 600,000 b/d over its quota in May, according to Platts latest survey of OPEC output, and oil minister Ihsan Ismaael said June 15 that crude exports in June had already been slashed in an effort to comply with the deal. The OPEC+ alliance's overall compliance with the cuts was 87% for May, the committee said.

We remind that in late May, 2020, Borealis said it will not proceed with the development of a multi-billion-dollar integrated steam cracker and polyethylene (PE) project in Kazakhstan. “The decision to discontinue this project is based on a thorough assessment of all aspects of the prospective venture and impacted by the effects of the COVID-19 (coronavirus disease 2019) pandemic as well as the increased uncertainty of future market assumptions,” Borealis states.

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

According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.
MRC

Consortium studies halving Antwerp petchem cluster greenhouse gas emissions by 2030

MOSCOW (MRC) -- A consortium has been formed by chemical and energy companies and Port of Antwerp with the goal of halving carbon dioxide (CO2) emissions within the port’s integrated petrochemical cluster by 2030, said Chemweek.

The consortium, named Antwerp, will investigate the technical and economic feasibility of building CO2 infrastructure to support future carbon capture, utilization and storage (CCUS) applications, it says. Carbon capture and storage (CCS) and the potential utilization of CO2 as a raw material for the chemical industry are seen as important routes in the transition to a carbon-neutral port, it adds. The participating companies are Air Liquide, BASF, Borealis, ExxonMobil, Fluxys, Ineos, Total, and Port of Antwerp. Greenhouse gas emissions within the port were measured at 18.65 million metric tons in 2017, according to Port of Antwerp.

A feasibility study, supported by the Flemish Agency for Innovation & Enterprise, is investigating the building of a central pipeline “backbone” along the industrial zones on both banks of the River Scheldt at Antwerp, the consortium says. The study also includes various shared processing units, a shared CO2 liquefaction unit, and interim storage facilities at Antwerp, and cross-border transport of CO2 by both ship and pipeline.

As Belgium does not have suitable geological strata, international collaboration will be necessary to transport the CO2 across borders and store it permanently in assets such as depleted offshore gas fields, the consortium says. It is studying piping the CO2 to Rotterdam or transporting it by ship to Norway. Air Liquide, Total, Fluxys, and Port of Antwerp this week submitted subsidy applications to the European Union to carry out detailed studies of both options under the Connecting Europe Facility (CEF). A decision on the award of grants is expected in November.

Other subsidy applications are being prepared for the European Innovation Fund as part of the European Green Deal. “Broad support—especially financial support—by the EU, the Belgian Federal Government, and the Flemish Government will be essential to ensure the success of the project,” according to the consortium.

"As the largest petrochemical cluster in Europe we are assuming our responsibility with unprecedented collaboration between eight leading companies,” says Wouter De Geest, the consortium’s chairman. “Together we are investigating the possibilities for cutting CO2 emissions from our production processes, as well as additional innovative solutions for more sustainable petrochemistry in Antwerp."

As MRC informed earlier, an estimated 11 million metric tons (MMt) of plastic waste enter the ocean every year and this will almost triple by 2040, to 29 MMt, if immediate and sustained action is not taken, according to a newly published in-depth report. This is equivalent to dumping 110 lbs (50 kilograms) of plastic on every meter of coastline around the world, it says. However, it is possible to reduce annual flows of plastic into the ocean by about 80% in the next 20 years by applying existing solutions and technologies, according to the report, Breaking the Plastic Wave.

According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.
MRC

Upstream oil output slumps 7% in Q1 on COVID-19, technical issues

MOSCOW (MRC) -- UK oil production slumped by almost 7% on the year to 1.103 million b/d in the first quarter due to COVID-19 disruption as well as technical issues, said S&P Global.

The Q1 data from the Department for Business, Energy and Industrial Strategy (BEIS) showed crude oil production was down 6% on the year at 1.01 million b/d, while natural gas liquids output fell 14% to 93,000 b/d.

In March, the UK oil and gas industry moved to a minimal staffing regime at offshore facilities to protect workers' health, likely resulting in operators moderating production levels, although activity levels are now thought to be increasing.

Disruption in the North Sea oil industry is likely to have continued into the current quarter, although output may be supported by the cancellation of swaths of summer maintenance, both for health and cost-cutting reasons. The industry has also gradually adopted new testing regimes and work protocols to enable higher staffing levels.

The International Energy Agency this month forecast UK oil output would fall by 30,000 b/d this year, with the recent crash in oil prices likely to have a longer-term impact on production levels due to reduced investment in new production projects.

The majority of UK oil output is usually exported, with producers finding higher prices in Asia for grades such as Forties, generally the largest component in the Dated Brent benchmark.

UK consumption of indigenously produced crude and NGLs jumped by 37% on the year to 2.74 million mt, while total feedstock intake by UK refineries fell 6% to 14.21 million mt, BEIS said.

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 DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.
MRC