KBR awarded contract for vinyl acetate monomer catalyst by Shenghong Refining

MOSCOW (MRC) -- KBR has been awarded a catalyst supply contract for a Vinyl Acetate Monomer (VAM) project by Shenghong Refining Petrochemical (Lianyungang) Co. Ltd., China, said Industryprojectstechnology.

Under the terms of the agreement, KBR will provide proprietary catalyst for Shenghong’s grassroot 300 KTA VAM unit. The unit represents the first commercial VAM technology license and engineering contract under an alliance agreement between KBR and Showa Denko K.K.(SDK).

The KBR-SDK VAM technology is backed by more than 40 years of know-how accumulated through the safe and stable operation of SDK’s ethylene based VAM unit at the Oita Petrochemical Complex in Japan. VAM is a key intermediate for the production of polymers and resins for adhesives, coatings, paints, films, textiles and other products.

"This award underscores KBR’s emerging leadership in the VAM market and strengthens our successful partnership with Shenghong," said Doug Kelly, KBR President, Technology Solutions.

VAM is the main raw material for the production of ethylene vinyl acetate (EVA).

According to MRC ScanPlast, last month external deliveries of other ethylene polymers, including ethylene vinyl acetate (EVA) to Russia, amounted to 7,300 tonnes against 6,200 tonnes in May. In general, during the period under review, the total external supply of other ethylene polymers reached 46,100 tonnes against 45,200 tonnes a year earlier.

KBR has more than 50 years of experience in providing technologies, flexible solutions and expertise that petrochemical manufacturers rely on to produce ethylene, propylene, acetyls, phenolics, vinyls and other specialty products from a variety of feedstocks, safely and efficiently.

PTTGCA moves forward on Ohio project as Daelim pulls out

MOSCOW (MRC) -- PTTGC (Bangkok) said it is moving forward with its much-delayed Ohio petrochemical project without its partner, Daelim Chemical USA (DCA), said Chemweek.

Toasaporn Boonyapipat, PTTGC America (PTTGCA) president and CEO, said, “The Ohio petrochemical facility continues to be a top priority for PTTGC America. We are in the process of seeking a new partner whilst working toward a final investment decision [FID]. We look forward to making an announcement by the end of this year or early next year on this transformative project for the Ohio Valley Region."

In a joint statement issued by PTTGCA and DAC, the companies said, "The COVID-19 pandemic and recent oil price volatility have caused significant impacts on businesses around the world. As a result of these factors, the Ohio petrochemical complex project being developed by PTTGC America… and Daelim Chemical USA…[would have encountered] a delay of about six to nine months compared to the previously announced timeline…Under this market situation, PTTGCA and DCA have been assessing the impact for major investment projects to ensure that our portfolio is well positioned for the future of petrochemical Industry. While we continue to believe in the long-term strategic importance of this project, DCA has taken the difficult but necessary decision to withdraw as equity partner from the project.

Despite DCA’s withdrawal, PTTGCA intends to continue to develop the project and is currently in the process of seeking new potential partners with DCA’s support during the transition." PTTGCA and DCA intend to work together to transition DCA’s stake in the project, as well as on other business opportunities, the companies say.

PTTGCA and DAC were equal partners in the project planned in Mead Township, Belmont County, Ohio. PTTGC, the parent of PTTGCA, first announced plans for the project in 2015. Daelim Industrial (Seoul, South Korea), the parent of DAC, joined as a partner in 2018. Earlier this year the two companies announced a delay in making a FID on the project, which had originally been expected in the middle of 2020. This is likely to delay the completion of the project to 2027–28.

The project would be based on an ethane cracker designed to produce 1.5 million metric tons/year of ethylene using ethane from the Marcellus and Utica shale deposits. The downstream configuration is yet to be decided, especially in view of DAC’s withdrawal. Original plans revolved around different configurations, including for the entire ethylene output being used to make the equivalent volume of high-density and linear low-density polyethylene, or some of the ethylene used to make ethylene glycol. Most of the output would be sold on the US market.

PTTGC has spent about USD200 million on site preparation and engineering studies. Bechtel was selected last year as the engineering, procurement, and construction contractor on the project, for which initial costs were estimated at $5–6 billion. The complex would be located on the 500-acre site of a former coal-fired power plant. The site is owned by PTTGC.

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.

PKN Orlen set to build hydrogen hub in Włocławek

MOSCOW (MRC) -- In Poland, oil refiner Polski Koncern Naftowy ORLEN S.A is set to build a hydrogen hub in Wloclawek by the end of 2021, ultimately producing up to 600 kg of purified hydrogen per hour, according to BIOENERGY.

The project provides for the construction of a plant for the production of fuel-cell grade hydrogen, logistics infrastructure, and hydrogen refuelling stations.

Initially, the fuel will be distributed primarily for use in public and freight transport. Furthermore, PKN Orlen has already signed several agreements with local governments as potential customers for the hydrogen.

"We are well aware of the challenges posed by the global trend of new mobility, so our strategy provides for constant development of alternative fuels and low-emission technologies. We are confident hydrogen will be an important transport fuel in the future, so we are ramping up our work in this field. Our goal is to strengthen our leadership position in the demanding hydrogen market. Slated for completion next year and sited in Wloclawek, the project will be a milestone enabling us to successfully compete with the biggest players in the region. As a next step, we plan to build a similar hub at PKN Orlen’s refinery in Plock. A hydrogen purification plant is also being built at our biorefinery in Trzebinia", said Daniel Obajtek, President of the PKN Orlen Management Board.

PKN Orlen will announce a tender procedure for the hydrogen hub, to be sited at the ANWIL plant in Wloclawek, by the end of August. Initially, the plant will run at a capacity of ca. 170 kg per hour, but its modular design will allow it to flexibly increase production in line with growth in demand.

The feedstock that will undergo purification at the Wloclawek plant is produced in an environmentally friendly process of brine electrolysis as a by-product of chlorine extraction and so far has been used by the ammonia unit.

The choice of a hydrogen purification method is being analysed with the project’s technical adviser. The project will comprise a hydrogen purification plant, infrastructure for loading the fuel on rail tank cars and trucks, trailers, a hydrogen fuel supply system, and two refuelling stations.

Initially, the hydrogen undergoing purification at the Wloclawek site will be distributed primarily for use in public and freight transport, including rail transport.

The company has already signed Letters of Intent (LoI) on collaboration in advancing hydrogen-powered public transport services with the Metropolitan Association of Upper Silesia and Dabrowa Basin, Krakowski Holding Komunalny, Miejskie Przedsiebiorstwo Komunikacyjne of Krakow, and the City of Plock. Further agreements are being negotiated with other municipalities.

Also, the company has signed an LoI with PESA Bydgoszcz to develop a hydrogen-powered locomotive, to be used by PKN Orlen for logistics purposes.

As the market expands, the hydrogen fuel will also be used in passenger cars and coaches. In the long term, the company intends to supply its hydrogen for applications in ships and ferries and for stationary applications, such as heating. The hydrogen could also be sold to third parties for resale in other markets, for instance, food or metallurgical industries.

In addition to the hydrogen hub in Wloclawek and a similar project planned in Plock, the company is also developing hydrogen technologies at its Orlen Poludnie biorefinery in Trzebinia, where first fuel-cell grade hydrogen is to be produced in 2021.

Investment in infrastructure for hydrogen-fuelled transport fits into the European strategy of sustainable development and is a response to the EU’s environmental target of a 30 percent reduction in greenhouse gas emissions (GHG) by 2030 compared with 2005.

In common with electromobility and next-generation biofuels, hydrogen has been hailed as a fuel of the future that can provide a real tool to meet the EU’s environmental targets.

As MRC reported earlier, Honeywell has recently announced that PKN Orlen plans to use the UOP Q-Max and Phenol 3G technologies to produce 200,000 metric tons per year of phenol at its facility in Plock, Poland.

Phenol is one of the main feedstocks for the production of bisphenol A (BPA), which, in its turn, is used for the production of polycarbonate (PC).

According to MRC's ScanPlast report, Russia's estimated consumption of polycarbonate (PC) granules (excluding imports and exports to/from Belarus) rose in January-May 2020 by 19% year on year to 38,900 tonnes (32,700 tonnes a year earlier).

COVID-19 - News digest as of 15.07.2020

1. Eni lowers price assumptions, expects to write off EUR3.5 billion in assets value

MOSCOW (MRC) -- Eni (Rome, Italy) says it expects to record a post-tax, noncash impairment charge of approximately EUR3.5 billion (USD3.95 billion) in its second-quarter 2020 results after revising downward its short- and long-term price assumptions for oil and gas following an assessment of the impact of COVID-19 on its trading environment, said Chemweek. Up to EUR2.8 billion of the write-down relates to the value of its upstream assets, with the remaining amount to be recorded in its refining business, says Claudio Descalzi. The company’s long-term price of Brent crude oil has been lowered by USD10/barrel (bbl) from its previous assumption to USD60/bbl from 2023 onward in real terms, he says. The estimated impairment charge has a plus or minus range of 20%, with the estimation representing a drop of around 4% in the value of noncurrent assets, he adds.


Chinese June crude imports hit fresh high at 12.99 mil b/d, surge 34% on year

MOSCOW (MRC) -- China's crude oil imports surged 34.4% year on year to all-time high of 12.99 million b/d or 53.18 million mt in June as Chinese buyers who rushed into the market to secure cheap crudes in late March received their deliveries in the month, reported S&P Global with reference to preliminary General Administration of Customs data as of July 14.

It was the first time China's monthly crude imports had surpassed 12 million b/d, and was 14.6% higher than the previous record high of 11.34 million b/d in May, GAC data showed.

The record-high inflow was within expectations, but has caused serious congestion in China waters, S&P Global Platts has reported.

The record June volume brought imports for the first half of 2020 to 10.82 million b/d, up 9.3% on year, despite inflow hitting an eight-month low of 9.72 million b/d in March amid the coronavirus pandemic, the data showed.

GAC releases data in metric tons, which Platts converts to barrels using a 7.33 conversion factor.

For oil products, China's exports fell further to a 16-month low of 3.88 million mt in June from 3.89 million mt in May after hitting a fresh record high of 8 million mt in April, GAC data showed. Exports were last lower at 3.81 million mt in February 2019.

Product exports over January-June rose 3.8% on year to 33.76 million mt, the data showed.

Meanwhile, China's oil product imports edged up 0.7% on year to 16.9 million mt in H1. As a result, China's net oil product exports rose 7.1% on year to 16.86 million mt in the period, the GAC data showed.

As MRC wrote earlier, Chinese independent refineries' June crude imports edged down 0.5% to 4.4 million b/d, or 18 million mt, in June from the record high of 4.42 million b/d in May as Zhejiang Petroleum & Chemical could only manage to take in half of its feedstock tanker arrivals due to port congestion. ZPC received about 2.85 million mt of crude arrivals in June, according to market information collected by S&P Global Platts on July 3.

We remind that Zhejiang Petrochemical Co Ltd started up its ethylene cracker in late December, 2019. Based in Zhejiang, China, the cracker is able to produce 1.4 million tons/year of ethylene.

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.