Oriental Energy to start up new PDH plant in Ningbo in Sept-Oct 2020

MOSCOW (MRC) -- China's Oriental Energy plans to start up its new propane dehydrogenation (PDH) plant in Ningbo around September-October, after it was delayed from late June, reported S&P Glboal.

The new PDH plant has the capacity to produce 660,000 mt/year of propylene.

And the company will bring on stream two downstream 400,000 mt/year polypropylene (PP) plants at the same venue.

Oriental Energy already operates PDH plant in Ningbo with the same production capacity.

As MRC wrote before, Oriental Energy Ningbo restarted its PDH unit in end-September, 2018, following an unplanned outage. The unit was shut owing to technical glitch in mid-September, 2018.

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

According to MRC's ScanPlast report, 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.

S&P reduces Braskem rating

MOSCOW (MRC) -- S&P Global Ratings lowered its rating for Braskem to speculative grade because the company's debt is expected to exceed the previous estimates of the credit agency, said the company.

The rating now stands at BB+, down from BBB-. The outlook is stable. By the end of 2020, Braskem could report a net debt ratio of 3.5x-4.5x in relation to earnings before interest, tax, depreciation and amortisation (EBITDA), S&P said. That compares with the agency's earlier estimate of 3.0x-3.5x.

The higher debt ratio reflects the fall in demand for petrochemicals around the world, a decline caused by the coronavirus (Covid-19). Given the effects of the pandemic, Braskem's utilisation rates for its crackers fell to 70-75%, S&P said. Based on those lower rates, S&P expects Braskem's volumes to fall by 5-10% in 2020.

At the same time, Braskem could continue to spend money to address damage linked to a former salt mine in the Brazilian state of Alagoas. A report from the Brazilian Geological Service (CPRM) said the mine caused subsidence that damaged nearby neighbourhoods. Already, Braskem reached an agreement with prosecutors worth hundreds of millions of dollars.

With that, S&P expects Braskem to report 2020 EBITDA of USD1.25bn-1.35bn, excluding any income from its Braskem Idesa joint venture. That would be 20-30% higher than in 2019. In 2021, S&P expects petrochemical volumes to increase gradually. Markets should continue to be oversupplied until at least mid-2021 and oil prices should rebound. A rise in oil prices could compress Braskem's margins.

S&P noted the commitment of Braskem's management to lower the company's debt ratio. Given that commitment, S&P expects Braskem's net debt/EBITDA to reach 3.0x-4.0x by the end of 2021. Braskem acknowledged the downgrade in a statement. The company said it has maintained a solid cash position and its debt has long maturity dates.

The company stressed its commitment to maintain liquidity and cost discipline while continuing to adopt measures to reduce its debt ratio at a level corresponding to investment grade.

Braskem makes polyethylene (PE), polypropylene (PP) and polyvinyl chloride (PVC).

As MRC informed earlier, in H2 June, 2020, Braskem announced it had completed construction of its newest PP production facility at La Porte, Texas. The new plant has the capability to produce the entire PP portfolio including homopolymer, impact copolymer and random copolymers. The plant added 50 permanent full-time jobs to support long-term commercial production.

According to MRC's ScanPlast report, 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.

Braskem S.A. produces petrochemicals and generates electricity. The Company produces ethylene, propylene, benzene, toluene, xylenes, butadiene, butene, isoprene, dicyclopentediene, MTBE, caprolactam, ammonium sulfate, cyclohexene, polyethylene theraphtalat, polyethylene, and polyvinyl chloride (PVC).

Marathon refineries operating despite COVID-19 cases

MOSCOW (MRC) -- Marathon Petroleum Corp’s Galveston Bay Refinery and three Houston-area refineries continue operating amid a resurgence in COVID-19 cases, according to Hydrocarbonprocessing with reference to sources familiar with operations at the plants.

As many as 100 people have come down with COVID-19 at Marathon’s Galveston Bay Refinery in Texas City, Texas, since the disease’s US outbreak in late January, sources familiar with plant operations said on Thursday.

Most of those infected were contractors working within the plant, with some employees also catching the disease, the sources said. The refinery has had as many 5,000 people on site while performing a multi-unit overhaul that began in late May.

In addition to requiring social distancing in the workplace and mandating wearing masks while working within 6 feet (1.8 m) of another person, refiners require temperature checks before entering their plants, among other precautions.

Houston has emerged as a hotspot for COVID-19’s return in the past month. Harris and Galveston counties have recorded 45,000 cases out of 230,000 across the state.

]A total of 53 people, including 14 employees, have been confirmed as having COVID-19 at Lyondell Basell’s Houston refinery, according to sources familiar with that plant’s operations. The other 39 cases are contractors.

At Lyondell, another 27 employees are quarantined for the disease.

Lyondell spokeswoman Chevalier Gray declined to disclose the number of those infected.

"None of the cases resulted from an event or exposure of any employee to COVID-19 in the workplace," Gray said.

At Royal Dutch Shell Plc’s Deer Park, Texas, refinery, nine COVID-19 cases were confirmed this week bringing the total for the year to 50, said company spokesman Curtis Smith.

Three employees and two contractors have caught the disease since January at Chevron’s Corp’s Pasadena, Texas, refinery, said sources familiar with operations at the plant.

As MRC reported earlier, US refiner Marathon Petroleum Corp is delaying all maintenance projects at its 102,000 barrel-per-day St. Paul Park, Minnesota, refinery for 2020 amid concerns related to the spread of the novel coronavirus. Several refiners have delayed planned maintenance at their plants this year due to concerns around the spread of the coronavirus among workers, or as part of capital and operational expense cuts.

Besides, Marathon Petroleum Corp idled its 166,000 barrel-per-day (bpd)refinery in Martinez, California beginning April 27 in response to the coronavirus pandemic’s hit to demand for refined products.

Meanwhile, Marathon Petroleum Corp plans to operate the gasoline-producing fluidic catalytic cracker (FCC) at its 585,000 barrel-per-day (bpd) Galveston Bay Refinery in Texas City, Texas. The 140,000 bpd FCC restarted on Sunday, 12 April, after repairs following a March 23 brief power outage that shut the unit.

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

According to MRC's ScanPlast report, 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.

New Indian JV of BP and Reliance begins operations

MOSCOW (MRC) -- BP and Reliance Industries Limited (RIL) have announced the start of their new Indian fuels and mobility joint venture, Reliance BP Mobility Limited (RBML), according to Hydrocarbonprocessing.

Following initial agreements in 2019, BP and RIL teams have worked closely over the past few months in a challenging environment to complete the transaction as planned. BP has paid RIL USD1 billion for a 49% stake in the joint venture, with RIL holding 51%.

Operating under the “Jio-bp” brand, the joint venture aims to become a leading player in India's fuels and mobility markets. It will leverage Reliance’s presence across 21 states and its millions of consumers through the Jio digital platform. BP will bring its extensive global experience in high-quality differentiated fuels, lubricants, retail and advanced low carbon mobility solutions.

BP and RIL expect the venture to grow rapidly to help meet India’s fast-growing demands for energy and mobility. India is expected to be the fastest-growing fuels market in the world over the next 20 years, with the number of passenger cars in the country estimated to grow almost six-fold over the period. RBML aims to expand from its current fuel retailing network of over 1,400 retail sites to up to 5,500 over the next five years. This rapid growth will require a four-fold increase in staff employed in service stations - growing from 20,000 to 80,000 in this period. The joint venture also aims to increase its presence from 30 to 45 airports in the coming years.

Commenting on the partnership Mukesh Ambani, Chairman and Managing Director of Reliance Industries Limited said: "Reliance is expanding on its strong and valued partnership with bp, to establish a pan-Indian presence in retail and aviation fuels. RBML will aim to be a leader in mobility and low carbon solutions, bringing cleaner and affordable options for Indian consumers with digital and technology being our key enablers."

Bernard Looney, bp chief executive officer, said: "India has been leading the way with innovations in digital technology, value engineering and new energy solutions. It is a country that will require more energy for its economic growth and, as it prospers, its needs for mobility and convenience will accelerate. bp has a proud history in India spanning over a century. We are honored to be a strategic partner with Reliance - India’s most valuable company - and pleased that our partnership has grown in both substance and spirit over this past decade.

"Reliance’s digital capabilities, technical expertise and reach complement our international fuels and service offers. Today’s announcement is another milestone in our common goal to serve the Indian consumer. This new venture is a unique opportunity to build a leading, fast-growing business that can help meet India’s demands and create exciting new digital and low-carbon options for the future."

Reflecting the companies’ net zero ambitions, the new joint venture aspires to provide Indian consumers with advanced fuels with lower emissions, electric vehicle charging and other low carbon solutions over time. RBML is also committed to the decarbonization of its own operations as well as that of its wider ecosystem.

RBML has received the marketing authorization for transportation fuels, amongst other necessary regulatory and statutory approvals. The joint venture will begin selling fuels and Castrol lubricants with immediate effect from its existing retail outlets, which will be rebranded to “Jio-bp” in due course.

As MRC wrote before, Reliance Industries is continuing talks with Saudi Aramco to form an oil-to-chemicals (O2C) partnership, despite apparent lack of progress as Aramco concentrated on completing a deal to acquire majority stake in Sabic. In April, analysts said that the collapse in the price of crude oil had raised the risk that the USD15-billion deal for Aramco to acquire a 20% stake in Reliance Industries’ O2C division may not go through.

We also remind that RIL has been running its two refineries almost uninterrupted at its integrated Jamnagar petrochemical complex despite the lockdown.

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.

Reliance Industries is one of the world's largest producers of polymers. Thus, the company produces among others polypropylene, polyethylene and polyvinyl chloride.

Pertamina to use Honeywell Forge Process Advisor at Cilacap Refinery

MOSCOW (MRC) -- Honeywell announced that Pertamina (Persero) will use Honeywell Forge Process Advisor to maintain high operational reliability of crude oil upgrading processes at its Cilacap refinery in Central Java, Indonesia, reported Hydrocarbonprocessing.

Honeywell Forge Process Advisor is a cloud-based service that continually analyzes plant data to provide operations staff with recommendations that can enhance the reliability of specific industrial processes. It can improve plant efficiency, safety performance and profitability, and help avoid plant failures and unplanned production downtime.

The service continuously feeds plant data through Honeywell UOP process and fault models to provide key performance information and process recommendations, helping plants run more smoothly and detecting operational problems before they can seriously affect production and plant profitability.

“Pertamina chose this technology to ensure high performance of its operations,” said Budi Santoso Syarif, Deputy CEO of Kilang Pertamina International. “This will help our personnel work more efficiently by understanding factors affecting production, and by implementing this advanced technology, we hope it will boost our profitability.”

“Honeywell Forge Process Advisor is unique in the industry because it relies on UOP’s vast library of operational data, proprietary process models and deep troubleshooting experience,” said Sunil Pandita, chief commercial officer of Honeywell Connected Enterprise. “This allows the service to provide near-real time recommendations that can keep plants running as smoothly and profitably as possible.”

Pertamina will use the technology on a resid FCC unit to ensure high performance of its heavy oil upgrading processes. Fluid Catalytic Cracking, or FCC, converts heavier low-value residual oil into more valuable smaller-chain molecules suitable for making clean-burning fuels and petrochemicals. The company also will use Honeywell Forge Asset Performance Manager for continuous monitoring and performance recommendations of key equipment associated with the FCC unit, and Honeywell Forge Corrosion Advisor, which estimates the corrosion rate of refinery equipment.

UOP has worked with Pertamina for nearly 50 years, licensing technologies to the company’s Plaju, Dumai, Cilicap, Balikpapan, Balongan, and Kasim refineries.

Pertamina is a state-owned oil and natural gas corporation based in Jakarta, Indonesia. The company is active in the upstream and downstream sectors of the oil and gas industry, with total refining capacity 1 million barrels per day.

As MRC reported before, Pertamina was in plans to bring on-stream its polypropylene (PP) unit early last week. The company undertook an unplanned shutdown at the unit on June 26, 2020, following an unspecified technical glitch at the upstream RFCC unit that causes a disruption of the propylene feeds. Thus, the unit was to remain shut for around 10-12 days. Located in Plaju, Indonesia, the PP unit has a production capacity of 45,000 mt/year.

According to MRC's ScanPlast report, 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.

Pertamina is an Indonesian state-owned oil and natural gas corporation based in Jakarta. It was created in August 1968 by the merger of Pertamin (established 1961) and Permina (established 1957). Pertamina is the world's largest producer and exporter of liquefied natural gas (LNG).