Orbit export terminal to start shipping ethane by November to cracker in China

MOSCOW (MRC) -- Energy Transfer Partners (ETP; Philadelphia, Pennsylvania) says the company’s Orbit ethane export terminal at Nederland, Texas, should be commissioning its first ships in November, reported Chemweek.

ETP is developing the terminal in a joint venture with China’s Satellite Petrochemical.

A first steam cracker nearing completion by Satellite Petrochemical in Jiangsu Province, China, will be online in the fourth quarter of this year, with a second cracker facility also using ethane feedstock scheduled to start up in the first half of 2021, according to ETP’s CFO Tom Long on a recent quarterly earnings call. “For the first time at Nederland we’ll be bringing on 180,000 b/d of ethane capacity, primarily for (Satellite),” Long says. “However, we are chasing other markets. We do anticipate selling ethane to other third parties as early as the first quarter of next year. And we’ll do everything we can to fully utilize that facility on a daily basis, depending on what Satellite actually pulls on a daily basis.”

ETP produced record volumes of natural gas liquids (NGLs) in the second quarter, despite the COVID-19 pandemic wreaking havoc on energy demand. As a result, the company has focused its growth capital expenditures on key expansions, including the Mariner East NGL pipeline expansion, Lone Star Express NGL pipeline expansion, LPG export expansion, and the Orbit export terminal. The Mariner East pipeline expansion is on track for an early 2021 completion. “Both domestic and international demand for all natural gas liquids have remained strong even while motor fuel demand has waned because of COVID-19,” Long says. The Lonestar Express pipeline expansion should be complete in late 2020, bringing an additional 400,000 b/d of NGLs from the Permian Basin. The company reached record high fractionation volumes in the second quarter as a result of the start-up of its seventh fractionator in Mont Belvieu in February. An eighth fractionator is under construction and expected to start up in the second quarter of 2021. All the company’s fractionators are at full capacity, says Long.

“LPG demand has remained strong and our LPG expansion projects in Nederland will bring our total export capacity to approximately 500,000 b/d by the end of 2020, further integrating our Mont Belvieu assets with our Nederland assets,” he says.

ETP reported net income of USD353 million in the second quarter, down year on year from USD878 million but up from a net loss of USD855 million in the first quarter.

As MRC informed before, in September 2019, Zhejiang Satellite Petrochemical Co. received regulatory approval from the Jiangsu provincial government to ethane from the US in a new polyethylene (PE) plant to be built in Lianyungang, China. The 1.25-million-t/y ethylene facility, on which construction was expected to begin in September 2019, is estimated to cost USD4.2-billion. Completion is anticipated in about one year. Zhejiang will receive the ethane from Energy Transfer Partners, starting in the fourth quarter of 2020, under a 10-year supply agreement.

Ethylene is the main feedstock for the production of PE.

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.

PetroChina Ningxia refinery to resume operations

MOSCOW (MRC) -- PetroChina’s Ningxia refinery is scheduled to resume operation of its 100,000 barrels per day oil refining units in mid-August after an overhaul, reported Reuters.

The plant in northwestern China began 45 days of maintenance on July 1.

As of Thursday, 84% of the work had been completed, the Ningxia refinery said on Friday.

In 2019, the refinery processed 4.53 million tonnes of crude oil and produced 3.82 million tonnes of refined oil products.

As MRC wrote previously, PetroChina Ningxia PC, part of PetroChina, is in plans to bring on-stream its polypropylene (PP) plant following a turnaround. The company is likely to resume operations at the plant on August 18, 2020. The plant was shut for maintenance on July 1, 2020. Located at Yinchuan, China, the PP plant has a production capacity of 110,000 mt/year.

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.

PetroChina Company Limited, is a Chinese oil and gas company and is the listed arm of state-owned China National Petroleum Corporation, headquartered in Dongcheng District, Beijing. It is China's biggest oil producer.

Toray income dives on declining demand due to COVID-19

MOSCOW (MRC) -- Toray Industries reports a 62.8% drop in net income for its fiscal first quarter ended 30 June, to ?9.5 billion (USD90 million), compared with ?25.6 billion a year earlier, according to Chemweek.

Operating income plummeted 63.7% year on year (YOY) to ?12.5 billion. Revenue was ?397.6 billion, a decrease of 22.5% YOY.

Sales by Toray’s fibers and textiles segment were ?145 billion, a decline of 25.9%. Operating income plunged 50.3% YOY to ?7.2 billion. All applications of the segment’s products were affected by stagnation in production activities and consumption behavior caused by the COVID-19 pandemic in Japan and overseas. In apparel applications, demand declined due to lockdowns and the closure of retail stores in various countries. In industrial applications, sales volume for mainstay automotive applications decreased as car manufacturers suspended operations and decreased production volume.

Sales by Toray’s performance chemicals business decreased 21.2% YOY to ?155.6 billion and operating income plunged 52% YOY to ?8.1 billion. Toray says that in the resins business, demand from automotive and industrial applications declined in Japan and overseas. The chemicals business was pressured by a decline in the basic chemicals market. In the films business, sales of packaging materials were strong, reflecting the growing demand for home meals. Demand for battery separator films for lithium-ion secondary batteries and polyester films remained low. The company says that COVID-19 drove down the performance of this business.

In the carbon fiber composite materials unit, wind turbine blade and casing applications remained strong in industrial applications. Aircraft applications were hurt by a decline in the production rate of large-sized passenger aircraft. Operating income fell 73.4% YOY to ?1.7 billion on sales of ?45.4 billion, down by 26.2% YOY.

Sales by Toray’s environment and engineering segment were ?37.2 billion, a decline of 11.2% YOY. Operating income plunged 40% YOY to ?800 million. The company says that demand for reverse osmosis membranes and other products grew strongly and that shipments to some regions were curtailed by the pandemic.

The company’s other business segment is life sciences.

Toray has issued forecasts for the full fiscal year ending 31 March 2021. It anticipates full-year net income of ?40 billion and sales of ?1.8 trillion. Toray says it calculated the forecasts based on the assumption that the worldwide impact of COVID-19 would pass its peak in the fiscal second quarter and that economies in Japan and abroad would start on a recovery track in the third quarter.

As MRC reported earlier, in December 2018, Toray Industries, Inc., announced its decision to enhance production capacity of acrylonitrile-butadiene-styrene (ABS) resin TOYOLAC, manufactured at and distributed by Toray Plastics (Malaysia) Sdn. Berhad. The company will add a facility with production capacity of 75,000 tons annually to expand the sales of high performance varieties such as transparent grade, which has the No. 1 global market share, and start its operation in November 2020. The move will increase TPM’s production capacity to 425,000 tons a year and Toray Group’s capacity with the existing facility at Toray’s Chiba Plant to 497,000 tons a year.

According to MRC's ScanPlast report, Russia's estimated consumption decreased in January-June 2020 by 18% year on year in the acrylonitrile-butadiene-styrene (ABS) sector, totalling 19,360 tonnes. 2,680 tonnes of ABS plastics were processed in June 2020.

BP Midstream pipeline volumes fall in second quarter, but revenues up

MOSCOW (MRC) -- BP Midstream Partners LP pipeline volumes fell roughly 10% in the second financial quarter as efforts to curb the spread of the coronavirus pandemic slashed fuel demand, reported Hydrocarbonprocessing with referemce to company executives.

Despite lower volumes, revenue of BP’s US pipeline unit rose to USD31.50 in the three months ending June 30 from USD28.6 million in the same period last year as it clamped down on expenses.

Onshore pipelines, including the BP2 crude oil line and the River Rouge refined products line, which connect to BP’s Whiting, Indiana refinery, saw 13% fewer barrels, the company said.

Volumes on offshore pipelines, including the 400,000 barrel-per-day Mars crude oil pipeline off the Louisiana coast, fell 8%. BP Midstream still plans to expand the Mars crude oil pipeline system starting next year.

Activity on those lines have picked up in the current quarter, company officials said.

"The impact of COVID-19 and broader market volatility on pipeline throughput was much more apparent across our portfolio in the second quarter compared to the first quarter, set against the backdrop of significant product demand destruction across the U.S.,” Craig Coburn, BP Midstream’s chief financial officer, said on a company earnings call.

“Industry-wide we saw reduced refinery utilization during the quarter,” Coburn said.

US refinery utilization fell from record highs to 68% of the 19 million barrels-per-day total capacity in April as states and local governments attempted to combat COVID-19 by restricting travel and business activity.

As MRC wrote before, BP reports a 43% year-on-year (YOY) decline to USD47 million in second quarter earnings for its petrochemicals business, which remains on schedule to be sold to Ineos for USD5 billion before the end of the year. BP says it received proceeds from divestments and other disposals in the quarter of USD1.1 billion, including “the first payment from the agreed sale of BP’s petrochemicals business to Ineos.”

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.

Lotte Chemical acquires Vina Polytech in Vietnam

MOSCOW (MRC) -- Lotte Chemical has taken over a Vietnamese high-tech material company to attain its vision of becoming the seventh-largest chemical industry in the world, said Businesskorea.

The company is diversifying its overseas business portfolio, ranging from basic materials to high-tech materials.
Lotte Chemical acquired Vina Polytech in April. Vina Polytech produces materials for home appliances and mobile products. Lotte Chemical has invested billions of won to acquire it.

Shortly after the acquisition of Vina Polytech, Lotte Chemical set up a local corporation in Indonesia under the name of PT Lotte Chemical Engineering Plastic Indonesia. It established the company to build a compounding product plant that produces high-tech materials for automobiles. Lotte Chemical has expanded its business in Southeast Asia, which has been focused on basic materials, to include high-tech materials.

Southeast Asia is one of Lotte Chemical's key markets. Major Southeast Asian countries including Indonesia, Malaysia and Vietnam are home to production facilities of large companies from around the world. This explains why Lotte Chemical has established a base in Southeast Asia.

In 2010, Lotte Chemical knocked on the door to the Southeast Asian market by acquiring Malaysia's state-run petrochemical company Titan (currently Lotte Chemical Titan). Lotte Chemical is planning to create a large petrochemical complex in Indonesia by investing five trillion won. Tthe petrochemical complex, when completed, will produce one million tons of ethylene annually.

Lotte Chemical aims to become the world's seventh-largest chemical company with sales of 50 trillion won by 2030. For this, it has been expanding investment in the basic materials business, sharpening competitiveness and promoting growth in the high-tech material business. Lotte Chemical's sales in 2019 amounted to 15.12 trillion won. It needs to more than triple its sales over a decade to attain the goal.

We remind that, as MRC informed before, Lotte Chemical Titan Holding (Kuala Lumpur, Malaysia), an affiliate of Lotte Chemical (Seoul, South Korea), announced that the group's ethane cracker and ethylene glycol (EG) plant at Lake Charles, Louisiana, commenced commercial operations in August, 2019. Lotte Chemical USA, a 40/60 joint venture (JV) between Lotte Chemical Titan and Lotte Chemical, holds the Lotte group's stakes in the plants. The USD3.1-billion ethane cracker is an 88/12 JV between Lotte Chemical USA and Axiall, a subsidiary of Westlake Chemical. Lotte has invested about USD1.9 billion in the JV. Lotte Chemical USA owns 100% of the EG plant.

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.