Versalis starts the production of Invix, bioethanol-based disinfectant at Crescentino

MOSCOW (MRC) -- Versalis, Eni's chemical company, has launched a new line to produce liquid hand disinfectant marketed under the brand name Invix at its plant in Crescentino (Vercelli, Piedmont), to meet the growing demand as a result of the current health situation across the nation, said the company.

The disinfectant, which has been developed based on the formulation provided by the World Health Organization and authorized by the Italian Ministry of Health, is a medical device, the active substance of which is ethanol obtained from vegetable raw materials. The bio-ethanol is produced at the Crescentino plant, designed to process residual biomasses, which has been adapted to temporarily use corn glucose syrup as a raw material to cope with the health emergency.

The product acts as an effective disinfectant, thanks to the alcohol and hydrogen peroxide content, and as an emollient, because of its glycerine content.

The new range of Invix disinfectants will soon be expanded to include gel and surface sanitizing products.

As part of Eni's initiatives supporting communities to handle the current health situation, and thanks to the collaboration of the Italian National Customs Agency and its Vercelli department, several dozens of tonnes have already been delivered to the Piedmont Regional Environmental Protection Agency [ARPA] and the Civil Defence service of the Piedmont Region.

As MRC informed earlier, Versalis plans to increase its 30 ktpa acrylonitrile butadiene styrene (ABS) production at Mantova, Italy in the first quarter of 2021. It was decided to postpone the expansion and maintenance schedule at the plant until the first quarter of 2021 due to market conditions and the impact of the coronavirus pandemic.

According to MRC ScanPlast, ABS production in Russia in May amounted to 780 tonnes. For the period January - May this year, the volume of production of Russian ABS plastics amounted to 4,240 tonnes, down 17% compared to last year.

Versalis is a petrochemical company, a 100% subsidiary of the Italian oil and gas company Eni SpA. The company produces a wide range of petrochemical products and is also one of the world's leading elastomer companies.

Eni S.p.A. (Ente Nazionale Idrocarburi) is an Italian oil and gas company headquartered in Rome. Eni operates in 70 countries around the world.
MRC

Crude oil futures slip on rising coronavirus infections worldwide

MOSCOW (MRC) -- Crude oil futures traded lower during mid-morning trade in Asia July 20 as rising coronavirus infections worldwide weighed market sentiment down, reported S&P Global.

At 10:30 am Singapore time (0230 GMT), ICE Brent September crude futures were down 24 cents/b (0.49%) from the July 17 settle at USD42.90/b, while the NYMEX August light sweet crude contract was down by 20 cents/b (0.46%) at USD40.39/b.

Rising demand and a strong drawdown on inventories, with the US Energy Information Administration's data showing inventories falling 7.5 million barrels and total product supplied for distillate fuel oil climbing 22% to 3.69 million b/d for the week ended July 10, signaled improving demand-supply fundamentals and kept prices buoyant last week.

However, lingering concerns over rising coronavirus infections worldwide and its impact on demand continued to weigh on market sentiment and limited the upside. The rolling three-day daily average for cases globally is at a record high 242,000, with the US contributing to nearly 30% of these case counts, latest data from John Hopkins University showed.

"Even though the US had continued to see a rising number of cases, printing a record daily count of above 77,000 into the end of last week, the relatively contained mortality rate compared to the earlier flare up in the March to April period had perhaps downplayed some of the market concerns on hand," Pan Jingyi, market strategist at IG, said in a July 20 note.

On the supply front, while OPEC+ has agreed to taper production cuts to 7.7 million b/d starting from August, extra compensation cuts of roughly 840, 000 b/d from previously non-compliant countries indicates only 1.1 million b/d of returning production, instead of the anticipated 2 million b/d.

At the same time, even as an increased supply of crude from producers was seen as largely negative for the oil markets amid an uncertain demand outlook, the willingness of member nations to comply with agreed production cuts and a guarantee of the principle of compensation is ultimately supportive.

"In the coming months, my rangebound price forecast remains anchored to the view that OPEC compliance will provide a dependable price plank. At the same time, bullish ambitions will continue to be thwarted by the COVID-19 demand risk," Stephen Innes, chief global markets analyst at AxiCorp, said in a note July 20.

He added that, while "the medium and longer-term trajectory looks broadly positive", the steepening epidemic curve has to flatten and oil demand has to pick up again before the market will view oil as an absolute risk-on trade.

As MRC wrote previously, 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.

And 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

Formosa to shut PVC plant in Taiiwan for turnaround

MOSCOW (MRC) -- Formosa Plastics Corporation, part of Formosa Petrochemical, is planning to shut its polyvinyl chloride (PVC) plant for a scheduled maintenance by mid of August 2020, reported CommoPlast with reference to market sources.

Based in Mailiao, Taiwan, the PVC plant has a production capacity of 458,000 tons/year.

It is slated to remain off-stream for a month.

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

According to MRC's DataScope report, imports of suspension polyvinyl chloride (SPVC) into Russia totalled 13,800 tonnes in the first half of 2020, up by 5% year on year, whereas exports grew by 7% year on year.

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

Shell to announce major restructuring by year-end

MOSCOW (MRC) -- Shell will announce a major restructure by the end of the year as the company prepares to accelerate its shift toward its net-zero emissions goal by 2050, reported Chemweek with reference to CEO Ben van Beurden's statement to employees.

The restructuring will include workforce reductions as part of broader cost-cutting measures, although no figures have been decided yet, the CEO reportedly said during an internal webcast, according to Reuters. “Ben spoke about positioning the company in the energy transition,” said one source. “The company will announce the new shape of the organization by the end of the year.” The new structure will not take effect before 2021.

“Over the coming months we will go through a comprehensive review of the company. Where appropriate we will redesign our organization to adapt to a different future and emerge stronger,” Shell said in a statement, Reuters reports.

In a new video posted up on Shell’s official website today under the title ‘The opportunity of a green recovery,’ van Beurden says that as countries emerge from the COVID-19 pandemic and restart their economies, it is a key moment to “make the right choices for a better world. And that is why society must remain focused on the longer-term challenge of climate change. Because it hasn’t gone away. It still needs urgent action. Shell has a big part to play.”

Highlighting the company’s ambition to be a net-zero emissions energy business by 2050, van Beurden says, “Our current business plans will not get us to where we need to be, and we will have to change those plans over time.” Society now has a “unique opportunity” to accelerate toward a cleaner energy future and has been looking hard “at what we do and where we invest,” he says.

Last month a mini-backlash among Shell investors following the company’s decision to slash its dividend by two-thirds saw reported calls from major investors to identify potential successors to van Beurden and for a clearer path into the future. In March Shell slashed its capital expenditure plans for 2020 by 20% to around $20 billion and announced other operational cost savings of up to $4 billion to be implemented over the remainder of the year in its response to the COVID-19 pandemic and the historic plunge in oil prices.

Last month, UK oil major BP said it would cut its operating costs in 2021 by USD2.5 billion and cut around 10,000 jobs, mostly before the end of this year as part of its response to COVID-19 and its strategy to become a lower-carbon company.

As MRC reported previously, Royal Dutch Shell Plc plans to idle a sulfur recovery unit (SRU) at the joint-venture Deer Park, Texas, refinery in 2021, said Shell spokesman Curtis Smith in July 2020. Currently, the refinery is operating at about 75% of its 318,000 barrel-per-day capacity because of reduced demand due to the COVID-19 pandemic.

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.

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

Iraq Gharraf oil field restarts at production rate of 50,000 b/d: Japex

MOSCOW (MRC) -- Iraq's Gharraf oil field has restarted production at a rate of 50,000 b/d after output was suspended in mid-March as part of measures to contain the coronavirus pandemic, a Japan Petroleum Exploration spokesman told S&P Global.

Production was restarted July 21 after Malaysia's Petronas, the operator of the field in southern Iraq, dispatched personnel to the oil field in southern Iraq in mid-June, according to the Japex spokesman.

News of the Gharraf oil field restart came to light after OPEC+ members on July 15 pared back their production cut commitment. The 23-country coalition enacted a 9.7 million b/d output cut accord in May in response to the coronavirus crisis and will roll the deal back to 7.7 million b/d in August through to the end of the year, maintaining the terms of the agreement laid out in April.

Production at the Gharraf oil field was suspended on March 16 after Baghdad closed all airports as part of its measures to contain the coronavirus pandemic. The field produced an average of 75,000 b/d over January-March, the Japex spokesman said July 20.

The Gharraf field started production in August 2013 under a technical service contract with Iraq's South Oil Co. The consortium consists of Petronas with a 45% stake, Japex Garraf with 30% and North Oil Co. with 25%. Japex holds a 55% stake in Japex Garraf with state-owned Japan Oil, Gas and Metals National Corp. holding 35% and Mitsubishi 10%.

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.
MRC