PetroChina refinery in Daqing expands capacity to 200,000 bpd

MOSCOW (MRC) -- PetroChina’s Daqing refinery has expanded its crude oil processing capacity to 10 million tons per year, or 200,000 barrels per day, from 6.5 million, after completing a two-year upgrade, reported Reuters.

The refinery in China’s northeastern province of Heilongjiang also revamped its 1.2 million tons hydrocracker and 1.2 million gasoline and diesel hydrotreating units.

With total investment of 4.45 billion yuan (USD651 million), Daqing also added a series of facilities, such as a 2 million tons per year fluid catalytic cracker, a 600,000 tons per year gas fractionation unit and two 20,000 tons per year sulfur recovery units.

The upgrade allows the refinery to process 3.5 million tons of Russian ESPO Blend crude oil annually, on top of its current refining capacity of 6.5 million tons of local Daqing crude.

“(The upgrade project) will help Daqing refinery to break the bottleneck of development, to adjust structure of units and products, and to improve risk resistance capacity as well as improve profitability,” parent China National Petroleum Corp (CNPC) said in a statement.

The city of Daqing, home to the refinery and China’s largest oilfield by production, said this year it planned to embark on a five-year plan to expand oil refining and high-value added petrochemical production.

The refinery is expected to produce 180,000 tons of propylene, 260,000 tons of liquid hydrocarbon, 220,000 tons of toluene and 280,000 of xylene to supply chemical plants in the region.

As MRC wrote previously, PetroChina Ningxia PC, part of PetroChina, brought on-stream its polypropylene (PP) plant following a turnaround. The company resumed 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.

Propylene is the main feedstock for the production of PP.

According to MRC's ScanPlast report, overall PP production in Russia increased in January-July 2020 by 24% year on year to 1,063,700 tonne. ZapSibNeftekhim accounted for the main increase in the output.

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.

IHS Markit PEPP 2020: COVID-19 reveals complexity of plastic waste issue

MOSCOW (MRC) -- Although the COVID-19 pandemic has highlighted the unique value of plastics, plastic waste remains an increasingly urgent problem whose solution will require extensive collaboration throughout the value chain, reported Chemweek with reference to industry representatives' statement last Thursday during the IHS Markit PEPP 2020 Online: Annual Polyethylene-Polypropylene Chain Global Technology & Business Forum.

"The value proposition for plastic materials has been reemphasized in the consumer base," said Venetia Spencer, secretary general of the Polyolefin Circular Economy Platform (PCEP). "I think that people recognize the value of the product. They recognize the importance of food safety, of the application of plastics in personal protective equipment (PPE) and hygiene and medical applications. At the same time, the issue on end-of-use is still there."

Indeed, the pandemic has exacerbated the problem, said Justin Wood, vice president/strategic partnerships at The Alliance to End Plastic Waste. "Coronavirus is a major health crisis, and clearly it's also a major economic crisis, but it's also very much an environmental crisis, and particularly in the context of plastic," he observed. "If you look at the consumption of plastic globally, it is increasing the use of single-use plastic in many, many cases."

These include not only PPE for healthcare workers, but also home delivery of food and other products that consumers historically purchased in stores.

"So we've seen dramatic increase in many uses of plastic. But we've also at the same time seen collapsing management of the waste that is produced from all of that. In many cases, the materials recovery facilities and so on that process this waste plastic have been shuttered temporarily in name of social distancing. Equally, people have been much more reluctant to handle plastic waste from other people given scares around the virus, so this situation is really a double whammy, in the sense that you see soaring use of single-use plastic and, at the same time, falling collection and management of the plastic waste."

The pandemic has thus not only renewed appreciation for plastics, but also heightened awareness of the disposal problem.

"This is clearly a situation that companies need to get ahead of," said Wood. "Many companies are doing that, but … many of them are still thinking about how do they individually improve their performance, and how do they individually try to put in place measures to manage plastic waste."

Spencer agreed. "We have this great opportunity right now to shape policy, but to do that, we have to kind of stop (focusing on) competing, and really think about collaboration. So you have to share the expertise and start to understand everyone else's business. That's really what a value chain approach is, right? It's not just thinking about my business as a brand or my business as a waste management company. It's understanding how what I do impacts everyone else," she said. "I think that is really critical, and we need to do it right now so that we can properly have a value chain and position on what we want to see. Because once we do that, once we have a common viewpoint, we're going to be able to shape investment, policy, goals, and tools that help us deliver. But until we have that clear alignment within the polyolefin industry, we lose too much time fighting with each other and there just isn't time for that."

"The challenge… is very complex," said Bob Maughon, executive vice president/sustainability, technology and innovation as well as CTO and CSO at SABIC. " I think that you therefore need a suite of solutions." He noted that SABIC's new product platform, Trucircle, tackles the problem from four different directions: certified renewable products made from biobased feedstocks; certified circular products based on chemical, or feedstock, recycling; mechanically recycled solutions, which are compounds engineered for high recycled content; and designing for recyclability, whereby resins are tailored to make products easier to recycle.

"There's a need to think about …designing appropriately for the application, not overdesigning benefits and complexity into the structure of the package, which then makes recycling more complex," he continued. "There's definitely innovation [to do] on the material side, but it has to be done in concert with the machine manufacturers, the converters, and the brands to make sure that it meets the end requirements (without being) overdesigned."

Ultimately the problem is not plastics as such, but the efficient use of resources, the participants suggested.

"People are talking about the reduction of plastics, but I prefer talking about the smarter use of plastics and making sure that you try, when you can, to design for recycling," said Marco Jansen, circular economy leader at Braskem Europe. "It's not always possible -- sometimes it's more important to preserve food [than to] design for recycling specifically, but I think it's a very strong focus that we need to have."

Similarly, there is only so much resin producers can do to deliver economically viable circular solutions before end users may have to reconsider their assumptions about the aesthetics of packaging.

"I think that the brand owners and retailers maybe need to have a new view on recycled plastics and have a different perception of quality," said Jansen. "I'm thinking mainly for optical reasons. Sometimes we say, jokingly, that grey is the new white. People need to accept that grey isn't necessarily worse than white or natural packaging, and that in fact (there is) value in showing that something has been recycled."

As MRC informed earlier, Magnum's pint tubs are made using certified circular polypropylene (PP) from SABIC's TruCircle portfolio. When it comes to food and drink applications, recycled plastic has limited uses. Regulations forbid the use of post-consumer resin (PCR) in food & drink contact, as well as in hygiene and medical applications. However, brand owner Unilever and its partner SABIC have developed a solution and introduced it to some European markets. Their goal: prove that PCR can be transformed for use in food-contact applications safely.

According to MRC's ScanPlast report, overall PP production in Russia increased in January-July 2020 by 24% year on year to 1,063,700 tonne. ZapSibNeftekhim accounted for the main increase in the output.

Chevron in talks with Eni to sell stake in Indonesia Deepwater Development: officials

MOSCOW (MRC) -- Oil major Chevron is in talks with Italy's Eni over the possibility of selling its stake in the Indonesia Deepwater Development project in offshore East Kalimantan in Southeast Asia, reported S&P Global with reference to two senior government officials' statement in August.

The talks are happening against the backdrop of Chevron's recent acquisition of upstream company Noble Energy for USD5 billion and a global slump in oil and gas prices that has upended valuations of hydrocarbon reserves and forced energy conglomerates to reconfigure their portfolios.

If the sale goes through it could provide some certainty to the development of the gas fields under IDD that has been in limbo due to disagreements with the government. It would also mean the exit of yet another oil major from a flagship Indonesian upstream project amid resource nationalization concerns.

"Now (Chevron's stake) is being offered to Eni. What I know is Chevron is offering. We will wait," acting oil and gas director general at the Energy and Mines Ministry Ego Syahrial said.

A second senior government official confirmed that Chevron was in talks with Eni over the IDD project, and a third unnamed upstream investor was also involved in discussions.

A Chevron spokesman said it does not comment on commercial discussions as a matter of long-standing policy, and Eni acknowledged the query but didn't provide an immediate confirmation.

The IDD project includes the production sharing contracts for the Ganal and Rapak blocks in offshore Indonesia, and the gas fields of Bangka and Gehem-Gendalo.

Chevron has a 62% interest in the Bangka field and a 63% stake in Gendalo-Gehem, according to its website. The other partners in the gas fields are Eni, Tiptop Energy and Sinopec.

In January, Chevron said it had opened a data room to facilitate discussions about th potential sale of its interest in IDD but no final decision had been made to sell its interest. It said Bangka, which began production in August 2016 as the first phase of IDD, was not able to compete for capital in Chevron's global portfolio.

Indonesian energy ministry's Syahrial said the IDD development and Rokan block were actually "one package."

The Indonesian government had appointed Pertamina to take over the Rokan block in central Sumatra from Chevron when the contract expires in August 2021, citing a more attractive development proposal from the national oil company. The Rokan issue had only served to exacerbate concerns of resource nationalism.

The IDD project is expected to contain of 2.3 Tcf of gas. Upstream regulator SKK Migas expects the second phase of IDD to be on stream in the fourth quarter of 2026; and peak production is expected to reach 844 million cu ft/d of natural gas and 27,000 b/d of crude oil.

As MRC wrote before, low commodity prices and deep spending cuts in the first half of 2020 could lead US supermajors ExxonMobil and Chevron to write down huge chunks of their proved oil and natural gas reserves if prices remain depressed in the second half.

We remind that Chevron Phillips Chemical, part of Chevron Corporation, declared force majeure Sept. 1 on its polyethylene (PE) products after assessing the impact of Hurricane Laura to its Gulf Coast PE operations.

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.

Headquartered in San Ramon, California, Chevron Corporation is the the second-largest integrated energy company in the United States and among the largest corporations in the world. Chevron is involved in upstream activities including exploration and production, downstream activities including refining, marketing and transportation, and advanced energy technology. Chevron is also invested in power generation and gasification processes.

Rethinking plastic packaging and recycling

MOSCOW (MRC) -- Magnum's pint tubs are made using certified circular PP from SABIC's TruCircle portfolio, said Chemweek.

When it comes to food and drink applications, recycled plastic has limited uses. Regulations forbid the use of post-consumer resin (PCR) in food & drink contact, as well as in hygiene and medical applications. However, brand owner Unilever and its partner SABIC have developed a solution and introduced it to some European markets. Their goal: prove that PCR can be transformed for use in food-contact applications safely.

"Unilever and SABIC thought it vital to move fast in bringing this type of solution to the market. Because it helps consumers and regulators become aware of what is currently possible when it comes to plastic recycling technology," says Mark Vester, circular economy leader at SABIC, told CW during a recent phone interview.

In early 2019 the brand owner got together with SABIC to discuss the new packaging concept for one of Unilever's Magnum ice cream tubs. In just over nine months, the collaboration went from concept to market with a packaging solution made from recycled polypropylene (rPP).

"Thanks to this partnership, we are now providing a sustainable product that does not compromise on the functionality or experience that the consumer is expecting, which is critical," Sanjeev Das, global packaging director/foods and beverages at Unilever, told CW during the same call. "[As a brand owner], when you have a product in the market, you cannot just change materials that go into its manufacturing and packaging."

Certified circular PP from SABIC's TruCircle portfolio is used to make the tubs. Products in the range include certified circular polymers from the chemical recycling of used, mixed plastic, certified renewable polymers from bio-based feedstock, and mechanically recycled polymers.

"One of the advantages of chemical recycling is that you can produce the materials with the same properties and if they came from naphtha, suitable for existing applications. That saves a lot of time at the development phase," says Vester as he explains how it was possible to move so quickly from concept to market.

"Many of our partners are looking at conventional mechanic recycling, but one of the main recommendations that we have for supplier partners is to focus on chemical recycling to feedstocks," Das adds.

What began with the launch in 2019 of 600,000 ice cream tubs in Belgium, the Netherlands, and Spain continued in 2020. More than 7 million Magnum ice cream tubs will be introduced across other European countries. By the end of 2020, all Magnum pint tubs in Europe will be produced with rPP, the equivalent to over 160,000 kilograms of recycled plastic, according to Unilever.

The company anticipates that the new packs will be rolled out globally from 2021 onwards, with the goal that all Magnum tubs will be made with recycled plastic by 2025.

Plastic packaging is often used only once before it is discarded. This fact means that about 95% of the value of plastic packaging materials, equating to some USD80-120 billion per year, is lost to the economy, according to a recent Ellen McArthur Foundation report.

The Unilever-SABIC collaboration is just one of many solutions aiming to reroute plastic packaging away from waste streams and back into the materials loop, reclaiming some of those billions of dollars that are otherwise 'discarded' annually.

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.

Chandra Asri commences operation of MTBE, butene-1 plants at Cilegon, Indonesia

MOSCOW (MRC) -- Indonesian manufacturer, PT Chandra Asri Petrochemical Tbk has started the operating of the Methyl Tert-butyl Ether (MTBE) and B1 plants, which are the first in the country, said the company.

The construction of both factories was carried out by Toyo Engineering Corporation and PT Inti Karya Persada Tehnik since 2018. According to the minister of industry, Agus Gumiwang Kartasasmita in an official statement said, the petrochemical industry in Indonesia has an important role in substituting imports. Based on the ministry data, in 2018, Indonesia is still importing methanol chemical products, including derivatives, namely MTBE and B1, worth of Rp174 trillion.

"Apart from import substitution, petrochemical companies like Chandra Asri are also able to attract new investors which will certainly have a positive impact on the Indonesian economy," he added.

President Director of the producer, Erwin Ciputra, stated, with the operation of this new factory, he hope that the government’ goal of reducing imports by 35 percent in 2022 can be achieved. On August 26, the largest integrated petrochemical company has completed the issuance of a Rp1 trillion bond.

The issuance will be used the proceeds to fund Chandra Asri’ working capital as part of its Integration Master Plan, with its MTBE and Butene-1 plant projects. The chemical producer has allocated capital expenditure (capex) USD294 million in 2020.

Director of the issuer, Suryandi explained, the company will use the internal cash to meet the capex. He said, the company still had cash of around $649 million as first half (1H) of 2019. The new factories he said were built with an investment of USD130.5 million with a capacity of 127,000 tons per year.

While the Butene-1 plant will have a capacity of 43,000 tons per year. These new factories will absorb Raffinate-1 to be used as raw material. In October of 2019, Chandra Asri will also complete the construction of a polyethylene and polypropylene factory.

With the operation of these two new factories, the company’ production capacity could increase to 4.2 million tons from the current 3.9 million tons. After operate four new factories in this year, Suryandi revealed, the company will also complete the construction of the CAP 2 factory in June 2024.

The manufacturer will allocate around USD5 billion to build the factory. The company is looking strategic investors to build the plants. The director stated, “After CAP 2 is operational, our production capacity can increase to 8 million tons."

The subsidiary of PT Barito Pacific Tbk as the majority shareholders, is the largest integrated petrochemical company producing olefins and polyolefins. The company factories located in Cilegon and Serang, Banten Province. The company is the only producer who operates a naphtha cracker and is the sole domestic producer of ethylene, styrene monomer and butadiene.

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.

In addition, CAPC is also the largest polypropylene producer in Indonesia, including produces plastic raw materials and chemicals used for packaging products, pipes, automotive, electronics, others.