Indian crude imports fall to lowest in over a decade in July

MOSCOW (MRC) -- India’s crude oil imports fell in July to their lowest since March 2010 as fuel demand slowed amid renewed coronavirus-induced lockdowns and closures of refinery units for maintenance, reported Reuters with reference to government's data.

Crude oil imports last month slumped about 36.4% from a year earlier to 12.34 million tonnes, or 2.92 million barrels per day, data from the Petroleum Planning and Analysis Cell (PPAC) of the Ministry of Petroleum & Natural Gas showed.

That marked a fourth straight monthly decline. Fuel demand in the world’s third-biggest oil importer and consumer also fell, posting a fifth consecutive year-on-year drop.

The country reported a record daily jump of 69,652 coronavirus infections on Thursday, taking the total number of cases to 2.84 million, data from the federal health ministry showed.

India is also Asia’s third-biggest economy, which imports and exports refined fuels.

Refined product imports surged 46.4% to 4.07 million tonnes year-on-year, mainly due to a sharp jump in India’s fuel oil imports. Fuel oil imports rose to record 1.22 million tonnes in July from 127,000 tonnes a year ago.

Reliance Industries Ltd, operator of the world’s biggest refining complex, has been buying some straight-run fuel oil from countries including Iraq to process at its revamped coker, to maximise refining margins.

However, exports of refined products fell 22.7% in July to 3.92 million tonnes, their lowest since April 2018.

Diesel shipments continued to hold a major share of the total exports at 2.06 million tonnes, down 21.1% year on year, the data showed.

Demand for diesel, which is widely used for transportation as well as for irrigation needs in India, fell about 19.3% year-on-year to 5.52 million tonnes, in July.

As MRC informed previously, Reliance Industries, operator of the world’s biggest refining complex in western Gujarat, shut one of its crude refining units at its export-focused plant in the fourth week of July for 3-4 weeks of maintenance. Other Refinery units were expected to operate normally during this period. 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.

We also remind that Reliance Industries says in July, 2020, 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 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) -- The Environmental Protection Agency has not made a decision on US biofuel blending requirements for 2021 or on petitions from refiners asking to be exempted from past-year requirements going back to 2011, reported Reuters with reference to EPA Administrator Andrew Wheeler's statement.

Wheeler could not assure that the agency will decide the 2021 Renewable Volume Obligations (RVO) by the Nov. 30 deadline due to the impact of the COVID-19 pandemic. Under US law, refiners are required to blend billions of gallons of biofuels into their fuel mix, or buy credits from those that do.

"This has been a very unusual year as far as vehicle miles traveled, driving has been down," Wheeler said on a call with reporters. "The COVID response has had a negative impact on both corn growers as well as refiners, and we're trying to understand what the market is going to be and what we should expect for next year as far as the RVO is concerned."

Wheeler said the agency hopes to decide next year's obligations as soon as possible.

He added that the agency is weighing 67 pending petitions from refiners, asking to be exempted from obligations for years covering 2011-2018. Refiners that can prove financial harm from the obligations can apply for exemptions from the rules.

In January, an appeals court ruled that waivers granted to small refineries after 2010 had to take the form of an "extension." Most recipients of waivers in recent years have not continuously received them, casting doubt on the whole program.

Refiners have sent in waiver applications to come into compliance with that court ruling, angering biofuel advocates who say exemptions hurt demand. The oil industry refutes that claim.

On Tuesday, Democratic presidential nominee Joe Biden criticized the Trump administration for its handling of the mandates.

As MRC wrote before, earlier this month, Clariant’s Business Line Biofuels and Derivatives announced that a strategic partnership had been formed with Chemtex Global Corporation for the realization of second-generation biofuel projects.

We remind that in June, 2020, TechnipFMC and Clariant Catalysts announced that they had 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.

ACN is a feedstock for the production of acrylonitrile-butadiene-styrene (ABS).

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

MOSCOW (MRC) -- Rompetrol Rafinare (Navodari, Romania) reports a net loss of USD9.6 million year on year (YOY) for its petrochemicals business in the second quarter, widening from a loss of USD6.1 million, mainly due to increased pressure on margins and lower propylene production volumes, reported Chemweek.

Sales fell USD10 million YOY to USD27.7 million for the quarter, with production volumes of propylene declining by almost 50% to 20,000 metric tons. Production volumes of ethylene, however, rose to 14,000 metric tons, a rise of 5,000 metric tons compared to the prior-year period.

The company says that due to high market volatility and margins pressure, its polyethylene (PE) plants “continued to operate at the most economical rate.” This include its high-density polyethylene (HDPE) plant remaining in a non-operating status for the entire first half of the year, it says. Rompetrol’s low-density polyethylene (LDPE) plant uses 100% imported ethylene as feedstock, while its polypropylene (PP) plant uses raw materials produced and delivered internally by the Petromidia refinery, it says. The company’s petchems business is the only producer of PP and PE in Romania.

Rompetrol reported a group net loss of USD38.7 million in the second quarter, widening substantially from a loss of USD5.4 million a year earlier, on sales that declined 56% YOY to USD596 million. This was due partly to negative gross refining margins between April and June this year, as well as the shutdown of the Petromidia Navodari refinery in Romania in March and April for a scheduled turnaround, it says.

As MRC informed earlier, the petrochemical activities of Romanian Rompetrol Group have been integrated in the refinery arm since November, 2013, in a move designed to cut costs and increase the overall efficiency of the group’s operations. "The integration of the two companies represents the continuation of Rompetrol Group’s strategy to concentrate the production activity in a single activity", said then Rompetrol in a statement.

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.

Rompetrol Rafinare is majority owned by Kazakhstan’s KMG International with a 54.63% stake, with the Romanian state holding the remainder.
MRC

MOSCOW (MRC) -- Mexico’s president said on Aug. 22 an “abusive” ethane supply deal he has pushed to cancel between a consortium backed by Brazilian firm Odebrecht and Mexican state oil firm Pemex had likely cost taxpayers around 15 billion pesos (USD683 million), reported Reuters.

The contract between Petroleos Mexicanos (Pemex) and the consortium made up of Odebrecht-controlled Braskem and Mexico’s Grupo Idesa, was agreed a decade ago during the tenure of ex-President Felipe Calderon, who was in office from 2006-2012.

In a video address on YouTube, President Andres Manuel Lopez Obrador said his estimate was based on what he described as probable unfair subsidies and fines paid out over a failure to meet the terms of the deal he described as “abusive”.

“We’re talking about damages to the nation worth around 15 billion pesos,” said the president, who earlier this week declared the contract should be canceled.

Still, he suggested that about 2.1 billion pesos in penalties that he apparently included in his overall calculation had never been lost to Mexico because his administration ceased to pay the fines after he took office at the end of 2018.

Braskem Idesa did not immediately reply to a request for comment. Earlier this week the consortium rejected any wrongdoing and said it won the supply contract fairly.

Under the terms of the contract, Pemex has had to deliver ethane below current market prices.

Braskem Idesa said the price formula had no preference or advantage and was typical of long-term raw material contracts and consistent with prices Pemex charged in the 16 years before.

As MRC reported previously, Petrobras may need more than a year to divest its stake in Braskem, said Andrea Almeida, Petrobras CFO, in early July. She said during the companyпїЅs recent webinar that Petrobras plans to give more time for potential investors to make offers for the company"s assets, including for its refineries and stakes at its petrochemical and fuel distribution affiliates. The divestment of Petrobras"s stake in Braskem in 2020 would be desirable but "might not be possible" as the COVID-19 pandemic has changed market conditions, she said. The company plans to close part of its refinery sales in 2021. In December, Roberto Castello Branco, CEO of Petrobras, said that he wants to sell the companyпїЅs stake in Braskem within a year. Petrobras owns 32.15% of Braskem.

We remind that Braskem is no longer pursuing a petrochemical project, which would have included an ethane cracker, in West Virginia. And the company is seeking to sell the land that would have housed the cracker. The project, announced in 2013, had been on Braskem"s back burner for several years.

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.

Braskem S.A. produces petrochemicals and generates electricity. The Company produces ethylene, propylene, benzene, toluene, xylenes, butadiene, butene, isoprene, dicyclopentediene, MTBE, caprolactam, ammonium sulfate, cyclohexene, polyethylene theraphtalat, polyethylene, and polyvinyl chloride (PVC).
MRC

MOSCOW (MRC) -- Indian Oil Corp, the country’s top refiner, is close to winning its first contract to export up to 720,000 tons of clean products to Mauritius under an annual deal from November, reported Reuters with reference to two sources familiar with the matter.

IOC mostly stays away from participating in term tenders for fuel exports as the refiner sells most of its fuel in the local market, besides supplying its retail outlets in Nepal and Bhutan.

This year because of falling local demand due to COVID-19 and weak margins, the company is attempting to lock in sales of its fuels.

IOC this year also won its first contract to supply fuels to Bangladesh.

IOC will deliver 205,000 tons of 95 RON gasoline, 235,000 tons of 10 ppm gasoil, 175,000 tons of jet fuel and up to 105,000 tonne of marine gasoil at Port Louis in Mauritius, sources said.

Other companies that competed for the tender issued by State Trading Corp of Mauritius were the trading arm of France’s Total, Sahara Energy Resources Ltd, OQ Trading and Vitol, according to a document seen by Reuters.

India’s Mangalore Refinery and Petrochemicals Ltd supplied Mauritius’ full requirement for fuel for 12 years to 2018/19. In 2019/20 refined fuels were supplied by Petrochina and Vitol.

IOC had placed a second lowest premium on gasoline after OQ Trading but the lowest premiums on other fuels to emerge as the frontrunner for the annual tender, the document showed.

IOC has offered to sell fuels at premiums of USD50.15 per tonne for gasoline, USD3.58 per barrel for gasoil, USD3.22 per barrel for jet fuel and USD5.91 per barrel for marine gasoil, the document showed.

The tender closed in mid-August.

The sources did not wish to be identified citing confidentiality. IOC and STC did not respond to Reuters emailed requests for comment.

As MRC informed previously, Indian Oil says it will build an integrated paraxylene (PX) and purified terephthalic acid (PTA) facility at Paradip in Odisha State, India, at an estimated investment of 138 billion Indian rupees (USD1.84 billion). The project will be completed by early 2024, with the complex planned to produce 800,000 metric tons/year of p-xylene and 1.2 million metric tons/year of PTA, it says.

PTA is used to produce polyethylene terephthalate (PET), which is used in the manufacturing of plastic bottles, films, packaging containers, in the textile and food industries.

According to MRC's ScanPlast report, Russia's estimated PET consumption totalled 367,720 tonnes in the first six months of 2020, up by 19% year on year. Russian companies processed 62,910 tonnes of material in June.

Indian Oil Corporation Limited, or IndianOil, is an Indian state-owned oil and gas corporation with its headquarters in New Delhi, India.
MRC