Petronas plant will likely restart at the end of July

MOSCOW (MRC) -- Petronas Chemical's 1.7 million mt/year plant will likely restart at the end of July after a landslide in Labuan affected the gas feed to the plant. Rectification works are currently ongoing, said S&P Global.

The No.2 unit, which can produce 1.6mn t/yr of methanol, was taken off line last week. The producer did not specify the exact date of the shutdown.

But repairs are ongoing at affected parts of the complex and Petronas expects production to resume within this month.

"Rectification work is currently ongoing and progressing as planned. The rectification work is expected to be completed within this month," the producer said.

As MRC wrote before, in early May, 2020, Petronas Chemicals (Kuala Lumpur), Malaysia’s leading petrochemicals player, reported a drop in first-quarter sales and earnings citing the coronavirus disease 2019 (COVID-19) pandemic. The sharp decline in petrochemical product prices following the outbreak of COVID-19, the deepening industry downcycle as crude oil prices collapsed due to the OPEC+ fallout, and the recessionary global economic outlook have hurt results, the company 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.

Petronas, short for Petroliam Nasional Berhad, is a Malaysian oil and gas company wholly owned by the Government of Malaysia. The Group is engaged in a wide spectrum of petroleum activities, including upstream exploration and production of oil and gas to downstream oil refining; marketing and distribution of petroleum products; trading; gas processing and liquefaction; gas transmission pipeline network operations; marketing of liquefied natural gas; petrochemical manufacturing and marketing; shipping; automotive engineering; and property investment.

MRC

Formosa Petrochemical to reduce the run rate of its residual fluid catalytic cracker in Mailiao

MOSCOW (MRC) -- Taiwan's Formosa Petrochemical is expected to reduce the run rate of its residual fluid catalytic cracker after a fire at its number 2 residue desulfurization unit on July 15, said S&P Global.

There are two RFCC units, each with a propylene capacity of 330,000 mt/year, located near the RDS, which supplies feedstock to the RFCCs. Market sources familiar with the matter said the RFCC will not stop production, but it may operate at a lower rate.

As MRC informed earlier, Formosa Petrochemical Corp has shut a residue desulphurises (RDS) unit at its 540,000 barrels-per-day (bpd) Mailiao refinery after it was hit by a fire on 15 July. Mailiao is one of Asia’s 10 largest standalone refining plants. The sources said its no. 2 RDS, with a capacity of 80,000 bpd, had been affected by the fire.

As MRC informed earlier, Formosa Petrochemical plans to shut down its No.3 cracker in Taiwan for maintenance in mid-August, 2020. The 1.2-MMt/y No. 3 cracker is due to be offline until end-September.

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.

Formosa Petrochemical is involved primarily in the business of refining crude oil, selling refined petroleum products and producing and selling olefins (including ethylene, propylene, butadiene and BTX) from its naphtha cracking operations. Formosa Petrochemical is also the largest olefins producer in Taiwan and its olefins products are mostly sold to companies within the Formosa Group. Among the company's chemical products are paraxylene (PX), phenyl ethylene, acetone and pure terephthalic acid (PTA). The company"s plastic products include acrylonitrile butadiene styrene (ABS) resins, polystyrene (PS), polypropylene (PP) and panlite (PC).
MRC

Reliance to shut crude unit for maintenance

MOSCOW (MRC) -- Reliance Industries, operator of the world’s biggest refining complex in western Gujarat, will shut one of its crude refining units at its export-focused plant in the fourth week of July for 3-4 weeks of maintenance, said Reuters.

Other Refinery units are expected to operate normally during this period, the company said in a statement.

Reliance has two equal-size crude distillation units at the 704,000 barrel per day (bpd) export-focused refinery. This refinery at the Jamnagar complex is adjacent to a 660,000 bpd plant that mostly meets local fuel demand.

As MRC informed earlier, Reliance Industries says that due to unforeseen circumstances in the energy market as well as COVID-19, its talks with Saudi Aramco to form an oil-to-chemicals (O2C) partnership have not progressed according to the original timeline.

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 Aramco is an integrated oil and chemicals company, a global leader in hydrocarbon production, refining processes and distribution, as well as one of the largest global oil exporters. It manages proven reserves of crude oil and condensate estimated at 261.1bn barrels, and produces 9.54 million bbl daily. Headquartered in Dhahran, Saudi Arabia, the company employs over 61,000 staff in 77 countries.

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

OPEC+ hits the refinery wall

MOSCOW (MRC) -- Fuel traders and refiners are becoming more pessimistic about the outlook for the global economy and transportation for the rest of this year, even as the crude producers in OPEC+ try to push oil prices higher, said Hydrocarbonprocessing.

OPEC+ is anxious to see higher crude prices as soon as possible but its ambition is likely to be thwarted in the short term by the renewed softness in fuel consumption. Price premiums for gasoline and diesel over crude have been flat or falling for almost four weeks since June 23 amid growing anxiety about a resurgence in the coronavirus and a new round of lockdowns.

Futures for U.S. gasoline delivered in September fell yesterday to less than USD8 per barrel over Brent for delivery in the same month, down from more than USD11 in late June. Gasoline margins have been trending lower since June 23, after rebounding strongly over the previous three months as the major economies emerged from lockdown.

Earlier expectations of a quick and complete V-shaped recovery are giving way to fears about an extended period of below-trend output and employment. U.S. gasoline consumption has been broadly flat for the last three weeks as the emergence from lockdown has run into a new wave of coronavirus cases.

Even before the latest bout of weakness, refiners in the United States had been forced to restrain crude processing to allow excess fuel inventories inherited from the lockdown to be absorbed. The renewed weakness in gasoline and diesel prices is signalling to refiners that they may need to trim processing rates to avoid a new build up in stocks.

Refiners are trapped between OPEC+, which wants to drain excess crude inventories as quickly as possible and drive oil prices higher, and sluggish consumption of gasoline and diesel. Benchmark Brent futures prices and calendar spreads have also been essentially flat over the last four weeks as the crude market has run into a refinery wall.

Brent prices, calendar spreads and gasoline margins started to soften around June 20, when the number of confirmed coronavirus cases in the United States rose again. Until the crisis has been brought under control and/or the transportation system resumes its return towards normal, oil prices will struggle to rise sustainably.

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

Clariant awarded second catalyst contract with Dongguan Grand Resource

MOCOW (MRC) -- Clariant announced a second contract win for its CATOFIN catalysts with Dongguan Grand Resource Technology (DGR) in Dongguan, China, according to Hydrocarbonprocessing.

The company based its decision on the successful startup of its 600 KTA CATOFIN propane dehydrogenation (PDH) unit in October 2019. Together, both PDH units will represent 1.2 million metric tons annually of additional annual propylene capacity. Since 2017, CATOFIN Technology has now been selected for a majority of new PDH awards globally, representing 22 new PDH plants, or more than 15 million metric tons of propylene annually.

Stefan Heuser, Senior Vice President and General Manager at Clariant Catalysts, stated, “We are honored to have been selected by DGR for this second propylene project. Continuous catalyst innovation, together with ongoing advancements in Lummus Technology’s process, demonstrate why CATOFIN is one of the most productive and reliable solutions on the market.”

“We are very proud of the fast execution of our project,” commented Hanchu Li, General Manager of Dongguan Grand Resource Technology. “Mechanical completion for the first phase was achieved in just two and a half years, followed by a quick and smooth start up. The results speak for themselves, and we thank Clariant and Lummus for their expertise and support. We expect the same favorable results upon commissioning the second phase in 2022.”

Used to produce more than 10 million metric tons of olefins annually, CATOFIN is increasingly selected for its higher production, reliability, and return on investment. The catalyst is proven to provide reliable operation at high on-stream conditions (typically above 98%) and enable production significantly beyond design capacity (up to 110% on average). These benefits are further enhanced by the inclusion of Clariant’s innovative Heat Generating Material in the process. The proprietary material produces heat inside the catalyst bed, which helps to increase selectivity and yield, while reducing energy costs and carbon dioxide emissions. Consequently, propylene producers can benefit from faster returns on their investments and highly profitable day-to-day operations.

As MRC reported earlier, in June 2020, TechnipFMC and Clariant Catalysts entered into a joint development agreement for the demonstration and commercialisation of Clariant’s new state-of-the-art AcryloMax propylene ammoxidation catalyst for the production of acrylonitrile (ACN).

Besides, in May 2020, Clariant’s CATOFIN catalysts was selected by Advanced Global Investment Co. (AGIC), a joint venture between Advanced Petrochemical Company (APC) and SK Group, to build a PDH facility in the Middle East.

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.

Clariant AG is a Swiss chemical company and a world leader in the production of specialty chemicals for the textile, printing, mining and metallurgical industries. It is engaged in processing crude oil products in pigments, plastics and paints.
MRC