ADNOC invests 3.5B to upgrade refining capabilities and maximize Value for Abu Dhabi and the UAE

MOSCOW (MRC) -- The Abu Dhabi National Oil Company (ADNOC) confirms significant progress made on its “Crude Flexibility Project” (CFP), with 73% project delivery of ADNOC’s ongoing upgrade of refining capabilities in Ruwais and strengthening the role of Ruwais as a critical driver for industrial growth for Abu Dhabi and the UAE, said the company.

For more than 40 years, ADNOC has predominantly refined Murban grade crude, extracted from its onshore fields in the Emirate of Abu Dhabi. The CFP allows for the Upper Zakum grade, extracted from Abu Dhabi's offshore oil fields, to be processed along with over 50 other types of different crudes.

H.E. Dr. Sultan Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology and ADNOC Group CEO said: “We continue to focus on stretching the margin of every barrel of oil we produce to maximize the value of our resources, while also making responsible investments in the current market environment. This investment is another step in our progress to develop Ruwais into a dynamic, global hub for downstream activity, further strengthening ADNOC's role as a key driver of the UAE's long-term industrial growth and economic diversification".

In 2018, ADNOC announced plans to diversify the feedstocks it processes. The USD 3.5 BN (AED 12.8 BN) CFP upgrade initiative is a core driver of ADNOC Downstream’s 2030 smart growth strategy. The project will increase the value ADNOC derives from every barrel of oil, both by boosting refining margins and by leaving more high-value Murban crude available for export.

Much of the physical infrastructure required for the CFP has now been put in place. Major structural elements, notably 2 new fractionators and 24 atmospheric residue desulfurizer reactors have been installed at the site over the past two months. Each of the 317-ton fractionators was transported to the UAE from South Korea. Installing the 80-meter structures took three weeks across June and July 2020. They will serve to separate the component products within the crude oil to allow for further refining.

Upon completion in mid-2022, the CFP will allow ADNOC to process up to 420,000 bpsd (Barrels per Stream Day) of heavier and sourer grades of crude oil, as part of the 840,000 bpsd refinery in Ruwais.

The development of a more flexible and adaptive refining capability in Ruwais represents a cornerstone of ADNOC Downstream’s 2030 smart growth strategy, launched at ADNOC’s Downstream Investment Forum in 2018. Since the Forum, ADNOC has attracted significant foreign investment to Ruwais and expanded its downstream partnerships across its refining, fertilizer, and pipeline assets. ADNOC continues to deliver on the expansion of its downstream business in the UAE, which will see the Ruwais industrial hub transformed into a globally competitive chemicals cluster, leveraging the UAE’s close geographic proximity to global growth markets, access to competitive feedstocks, streamlined utilities and services offer, as well as Abu Dhabi’s attractive fiscal and regulatory environment. Investment at Ruwais will stimulate private sector activity and support long-term specialized employment opportunities, particularly in Al Dhafra.

As MRC informed earlier, in late July 2019, ADNOC said its Ruwais refinery west cracker was offline for maintenance.

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

MOSCOW (MRC) -- Clariant’s Business Line Biofuels and Derivatives announced that a strategic partnership has been formed with Chemtex Global Corporation for the realization of second-generation biofuel projects, said Hydrocarbonprocessing.

Under the partnership, the two parties will collaborate to market and sell Clariant’s sunliquid® technology licenses, as well as services and supplies for advanced biofuel plants in China. As the largest passenger car market in the world, the environmental impact posed by transport greenhouse gas (GHG) emissions has become a big challenge for the Chinese government. In 2017, the State Council of PRC endorsed a new strategic plan1 to further utilize bioethanol converted from agricultural residue as gasoline for motor vehicles. Under the nationwide blending mandate proposed, all gasoline used for motor vehicles will need to contain bioethanol as an additive. Clariant, with its innovative sunliquid® technology that offers an efficient process for converting agricultural residues into low-emission, carbon negative biofuel, is fully supporting the rollout of the mandate.

"China represents one of the key growth markets for Clariant. This strategic partnership with Chemtex is another milestone reached in our continued pursuit of the corporate goal of Adding Value with Sustainability,” says Christian Librera, Clariant’s Head of Business Line Biofuels and Derivatives. “It is also pivotal in further strengthening our position in the national 2G biofuels market by providing our customers a comprehensive solution for the development, construction, and commissioning of their commercial-scale cellulosic ethanol plants in China along the ‘green’ development path of the country."

In addition to reducing GHG emissions by offering 2G biofuel that is climate-friendly, the sunliquid® process also makes great use of agricultural residues, which so far are mostly burned in the fields after harvesting to become a seasonal source of air pollution.

The combined offerings of Clariant and Chemtex will provide a comprehensive package of 2G ethanol technology licenses and Engineering Procurement Construction (EPC) services, enabling customers in China to successfully design, build and operate their own full-scale plants. While Clariant will offer its sunliquid® technology licenses, technical services and the supply of starter cultures from its proprietary enzyme and yeast platform, Chemtex will be responsible for engineering, procurement and construction.

As MRC informed before, in June, 2020, TechnipFMC and Clariant Catalysts announced that they have 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). This new collaboration will bring together Technip Energies’ well-established expertise in fluid bed technologies and process development with Clariant’s longstanding experience and knowledge in the development, manufacturing and supply of catalysts for the petrochemical industry.

Russia's output of chemical products rose in June 2020 by 2.6% year on year. However, production of basic chemicals increased year on year by 4.9% in the first six months of 2020. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the output in January-June. Production of benzene was 106,000 tonnes in June 2020, compared to 110,000 tonnes a month earlier. Overall output of this product reached 721,000 tonnes over the stated period, up by 3.9% year on year.

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

MOSOW (MRC) -- Spanish-based integrated oil group Cepsa said July 30 it expects refinery rates at its Spanish complexes to edge up to 85% during the month of July and steadily approach the optimal run rate by year-end, assuming the positive trend in demand continues, reported S&P Global.

The gradual reopening of the Spanish economy in Q2 resulted in increased volumes towards the end of the quarter and by the end of June all fuel retail stations were operational,

Cepsa said, noting that at the end of June its refineries were running at a 82% utilization rate. This compares to a rate of 74% reported for the Q2 period, during which refining output fell 19% year on year to 4.4 million mt.

As MRC wrote previously, Cepsa (Madrid, Spain) reports a 30% rise year on year to EUR86 million (USD101 million) in clean EBITDA on a current cost of supply (CCS) basis for its chemicals business in the second quarter, due to a rebound in margins and volumes in the phenol/acetone segment and “high demand” in the detergents sector.

We remind that Cepsa Quimica (Shanghai) shut its phenol and acetone plant in Shanghai for 5 days from December 10, 2019, due to the repair work on the gas pipeline in the Shanghai Caojing Chemical Industry Park, where the plant is located.

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

According to MRC's ScanPlast, Russia's overall estimated consumption of PC granules totalled 47,300 tonnes in the first two quarters of 2020 (excluding imports and exports to/from Belarus), compared to 40,700 tonnes a year earlier. Demand increased by 16% year on year.
MRC

MOSCOW (MRC) -- Chinese polyethylene (PE) producers have been running plants at around 80-90%, and inventories were heard around 640,000 mt, stable in the first week of August, reported S&P Global with reference to source estimates.

Demand is described as mediocre in the market.

Global uncertainty still remains at a decade low PE price, while decline in global operating rates after a period of heavy investments could potentially be countered by capacity rationalization in high-cost production centers, sources said.

As MRC informed before, four large new crackers are poised to start operations in China in the next 3-6 months, in a sharp expansion of the country's petrochemical cracker sector.

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

MOSCOW (MRC) -- OPEC has managed to raise crude prices and stabilize the oil market, OPEC member Iran’s oil minister was quoted as saying by his ministry’s website SHANA, as per Reuters.

“OPEC’s performance has been successful because the price of oil has risen from $16 in May to around $45 and has stabilized,” Bijan Zanganeh said.

The Organization of the Petroleum Exporting Countries and allies including Russia, a group known as OPEC+, agreed record output cuts to tackle the fallout from the COVID-19 pandemic. Zanganeh said Iran’s oil industry has signed 13 contracts worth roughly 1.5 billion euros with 14 local firms to enhance and maintain the country’s oil production.

In 2018, U.S. President Donald Trump pulled the United States out of Iran’s 2015 nuclear deal with six powers and reimposed sanctions that have sharply cut Iran’s oil exports.

“We welcome the participation of all foreign companies in the development of oil industry projects except companies from Israel, but we will continue our work even without their participation in our projects,” Zanganeh said.

Fearing U.S. penalties, foreign companies have stayed away from investing in Iran. Tehran does not recognise Israel.

As MRC reported earlier, in late April, 2020, the first phase of Connell Chemical Industry Ltd.'s 600 KTA MTO complex, a 300 KTA MTO plant, successfully started up and produced on-spec ethylene and propylene. This project is the first large-size chemical project brought online during period when Chinais in the process of restarting the economy while fighting COVID-19 pandemic. The MTO plant started feed-in at 8:18 AM on April 15, produced on-spec propylene at 7:00 AM on April 18, and produced on-spec ethylene at 4:00 AM on April 20.

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