Bukhara refinery revamp brings new technologies to Central Asia’s most populous nation

MOSCOW (MRC) -- Honeywell announced Bukhara Refinery LLC, a subsidiary of JSC Uzbekneftegaz, will use UOP technology to increase crude oil conversion and produce cleaner-burning Euro-V standard gasoline and diesel fuel in compliance with the government of Uzbekistan’s stricter specifications for fuel products taking effect in 2023, said Hydrocarbonprocessing.

Honeywell UOP will provide licensing and basic engineering design services to Bukhara Refinery LLC for new Naphtha Hydrotreating, Par-Isom, RFCC, SelectFining and Merox process units. In addition, the existing DHT and ARU units are to be revamped to meet new requirements. The Euro V standard limits sulfur content to less than 10 parts per million in transportation fuels and restricts emissions of carbon monoxide, hydrocarbons, nitrous oxides and particulate matter from gasoline and diesel vehicles and will improve overall refinery emissions.

"The Bukhara Refinery is revitalizing its operations for improved quality and increased production of fuels to meet growing domestic demand for motor fuels,” said Bryan Glover, vice president and general manager, UOP Process Technologies. “The company selected UOP due to its experience in working in the region and its technologies to assist Uzbekneftegaz in meeting sustainability goals."

The Bukhara refinery is part of the Uzbekistan government’s multi-year development plan to achieve national energy independence and increase the country’s export potential. With 33 million people, Uzbekistan is the most populous country in Central Asia and is a significant producer and exporter of oil and natural gas.

The Par-Isom™ process upgrades light naphtha into high-value isomerate for gasoline blending, and the Merox process treats the naphtha feedstock to meet product specifications. UOP’s Resid Fluid Catalytic Cracking process converts heavy feedstocks into cleaner-burning gasoline and diesel products that meet new global emissions regulations.The SelectFining process uses selective hydrodesulfurization of naphtha to meet low-sulfur gasoline specifications while minimizing octane loss.

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) -- Europe, one of the world’s biggest diesel consumers, faces a major glut which combined with weak demand is weighing heavily on the ability of the region’s refineries to keep running, said Hydrocarbonprocessing.

Having hit record lows at the height of the COVID-19 pandemic in April and May, European diesel margins are trending lower again after posting a modest recovery in July. "Gasoil and diesel is 40%-50% of refining output so it has to be profitable otherwise refineries just burn cash and must shut down,” Hayal Ahmadzada, chief trading officer at Azerbaijain’s SOCAR Trading said.

He said the paper market was showing some traders expect diesel cracks to fall close to zero or even into negative, which would be unprecedented. "There are too many refineries for current demand," he said, adding some won’t be able to operate at those levels for much longer.

While the easing of lockdowns in recent months across Europe has boosted diesel demand, some countries are seeing the recovery stall. According to leading Spanish fuel distributor CLH, August diesel deliveries to the domestic market were around 9% lower than July levels at 2 million cubic meters.

Experimental data from Britain’s Department for Business, Energy & Industrial Strategy shows that in the past four weeks a recovery which started in mid-April in road fuel demand has stalled. The diesel market is also afflicted with high stocks.

According to oil analytics firm Vortexa, Europe now accounts for the biggest share of global middle distillates floating storage globally.

As it was written earlier, Turkish Competition Council has given permission to SOCAR and BP to establish a joint venture that will operate in the petrochemical sector. Earlier it was reported that SOCAR and BP applied to the relevant institutions in Turkey to establish a joint petrochemical company, which will be called Mercury complex, in April 2020. Recall that on December 20, 2018 SOCAR and BP signed contractual principles for evaluation of plans for creation a world-class petrochemical complex in Turkey and establishment of a joint venture to manage it.

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) -- US refiners are stuck between meeting rising gasoline demand and the glut of supply in the lackluster diesel and jet fuel markets, reported Reuters.

Refiners cannot produce gasoline without making other products like diesel, commonly known as distillates. The coronavirus pandemic slashed demand by one-third worldwide, and so far the gasoline use has rebounded faster than that of distillates. Refiners still have big stockpiles of diesel and other fuels, and do not want to make more of those products due to poor margins.

Refiners have been running at around 80% utilization since the end of July, up from the spring, when the pandemic broke out, but still below usual levels. With summer driving season coming to a close, they are reluctant to boost output for the winter season, when gasoline demand declines.

“Once Labor Day wraps up, and especially this year where few parents are dropping off their kids (at school), gasoline and distillate demand will likely see more erosion than usual,” said Patrick De Haan with GasBuddy.

Refiners cannot bet on profit margins improving soon. The refining crack spread, a proxy for margins, fell last week to USD7.93, lowest since April 2020, because demand for product is not strong enough to draw down inventories, nor keep up with rising crude prices.

Several refiners shut during Hurricane Laura, reducing overall refining capacity use to less than 77%, but refiners have indicated that they will not ramp up much more due to concern of oversupply of distillates.

“Refineries are in no rush to reopen, because they’re making no money,” said Bob Yawger, director of energy futures at Mizuho.

One refining executive who requested to remain anonymous said they are constrained by distillate inventories and would continue to run plants between 80% to 82%.

US demand for gasoline has recovered by about 70% since early April, US Energy Information Administration data shows. Gasoline stockpiles have dropped over the last two months during the summer driving season.

Consumption for distillate fuel, which includes diesel widely used in trucks for construction and transporting goods, increased by only around 40% since April.

Distillate inventories are higher than usual, currently at 177.5 million barrels, or about 20% above the five-year average for this time of year, according to EIA data.

Jet fuel demand, meanwhile, is expected to drop by 40% this year to 3.1 million barrels per day, the International Energy Agency said earlier this month.

“I’m not convinced that we could get to full utilization in this industry if jet demand is where it is today,” PBF Energy Chief Executive Thomas Nimbley said on an earnings call in late July.

Refiners hope export demand will offset the weak domestic consumption, but there, too, distillates are lagging gasoline.

Finished gasoline exports in August were down just 4% from a year ago, compared to a 35% drop in middle distillate exports, said Matt Smith, director of commodity research at ClipperData.

We remind, as MRC wrote before, most chemical production facilities in the region between Beaumont-Port Arthur, Texas, and Lake Charles, Louisiana, have shut down in preparation for Hurricane Laura, which was forecast to make landfall near the Texas-Louisiana border Wednesday night or early Thursday. Several olefin crackers and associated derivative polymer units have been shut down, as has about 2.5 million b/d of refining capacity.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and PP.

According to MRC's ScanPlast report, Russia's overall PE production totalled 1,712,400 tonnes in the first seven months of 2020, up by 58% year on year. Linear low density polyethylene (LLDPE) accounted for the greatest increase in the output. At the same time, 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.
MRC

MOSCOW (MRC) -- Huntsman says its polyurethanes segment is performing well above expectations owing to continued strength in construction-related markets, faster improvement in automotive demand, and higher overall margins, reported Chemweek.

The company says third-quarter results in its other segments are still roughly in line with previous guidance.

During its second-quarter earnings call on 28 July, Huntsman forecast a 30% year-over-year (YOY) decline in the segment’s third-quarter adjusted EBITDA, but the company now expects a figure close to the year-ago value of USD146 million.

During the second quarter of 2020, the polyurethanes segment turned in adjusted EBITDA of USD31 million, down 80% YOY, and revenue of USD730 million, down 28% YOY, both reflecting lower average selling prices for methylene di-para-phenylene isocyanate (MDI) and lower overall polyurethanes sales volumes.

As MRC informed before, in January 2020, Indorama Ventures Public Company Limited (IVL), a global chemical producer, completed its acquisition of Huntsman’s world-class integrated oxides and derivative businesses, including a large flagship site on the US Gulf Coast (USGC) at Port Neches, as well as Chocolate Bayou and Dayton in Texas, Ankleshwar in India, and Botany in Australia.

The acquisition is a profitable and growing end applications business along with unique products and geographical profile among the crowded olefins space. It has a well-integrated assets base with an extensive infrastructure and future expansion possibilities. The area is adjacent to many USGC feedstock suppliers. The cash value of USD2.0 billion makes it the largest acquisition by Indorama Ventures ever and now our capital employed is nicely spread over plastic, chemicals and fibers. The transaction value translates to an EV/EBITDA of ~5.7x and is expected to add substantial synergies to Indorama’s existing 450kta Ethane/Propane Cracker and our 550kta EO/EG. IVL will now be integrated from Ethane to PET as well as the high-margin EO and PO derivative businesses.

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.

Huntsman Corporation is a publicly traded global manufacturer and marketer of differentiated and specialty chemicals with 2019 revenues of more than USD7 billion. Its chemical products number in the thousands and are sold worldwide to manufacturers serving a broad and diverse range of consumer and industrial end markets. The company operate more than 75 manufacturing, R&D and operations facilities in approximately 30 countries and employ approximately 10,000 associates within its four distinct business divisions.
MRC

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.
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