Massive fire at ONGC plant hit gas supplies to industries

MOSCOW (MRC) -- A fire at an Oil and Natural Gas Corp (ONGC) plant caused by a pipeline rupture has cut gas supplies to customers including power and fertilizer companies, reported Hydrocarbonprocessing with reference to gas marketing firm GAIL's (India) Ltd statement on Thursday.

The fire broke out on Thursday morning at ONGC's Hazira gas processing plant in western Gujarat state and has since been extinguished, ONGC said, adding that there were no casualties.

The plant, which produces liquefied petroleum gas and other products such as naphtha, has been closed but ONGC said it is working to resume normal operations.

GAIL, India's biggest gas marketing firm, supplies the bulk of gas produced at ONGC's western offshore fields to customers in the states of Gujarat, Goa, Rajasthan, Uttar Pradesh and Madhya Pradesh.

It supplies about 60 million standard cubic metres of gas daily to these customers.

In a statement, GAIL said ONGC had shut off the supply of 30 MM standard cubic metres a day (mmscmd) of gas to GAIL's north-western pipeline network to contain any further damage.

"Supply cuts of up to 40% against current allocations have been imposed on downstream customers," it said, adding that supplies to households had not been disrupted and the pipeline grid, which supports about 80 mmscmd of gas, had not been damaged.

India's biggest utility NTPC Ltd shut its 656 megawatt gas-based power plant at Kawas near Hazira and a 657 megawatt Jhanor-Gandhar plant due to gas supply disruption, a person at the company said.

Capacity utilization at fertilizer maker KRIBHCO fell to 50% and Jadish Prasad Verma, general manger for production at the company's Hazira plant, said they were trying to secure gas from other local suppliers.

Gas supplies to customers have temporarily closed due to safety reasons, an ONGC spokesman said.

"There could be some impact on our production... We are investigating the cause of fire, and extent of damage."

NTPC did not respond to Reuters emails seeking comments.

Surat Collector and District Magistrate Dhaval Patel, a senior city official, told Reuters the fire was caused by a rupture in a pipeline at the gas terminal. ONGC's plant is in Surat, a city in Gujarat.

"The area was cordoned off, depressurized and cooled as part of firefighting measures," Patel said.

Surat Municipal Commissioner Banchhanidhi Pani said the fire was in the 36-inch Uran-Mumbai gas pipeline.

As MRC informed earlier, four people were killed and three seriously injured in a fire at an oil and gas processing plant on the outskirts of Mumbai run by India’s Oil and Natural Gas Corp. The fire broke out in the morning, on 3 September. ONGC supplies crude oil from the plant to the Mumbai-based refineries of Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum (HPCL) as well as natural gas to city gas distribution company Mahanagar Gas Ltd in Mumbai.

We remind that in January 2020, BPCL said it would invest about Rs25,000 crore to set up an ethylene cracker plant at Rasayani, 50 kilometres from its Mumbai refinery, as the firm pushes further into the petrochemicals business to fuel growth.

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

Oil and Natural Gas Corporation (ONGC) is an Indian multinational oil and gas company. Its registered office is now at New Delhi, India. It is a Public Sector Undertaking (PSU) of the Government of India, under the administrative control of the Ministry of Petroleum and Natural Gas. It is India's largest oil and gas exploration and production company. It produces around 70% of India's crude oil (equivalent to around 30% of the country's total demand) and around 62% of its natural gas.

MOSCOW (MRC) -- Senex Energy Ltd. announced a domestic gas sales agreement (GSA) for up to 2.5 petajoules (PJ) of natural gas with Southern Oil Refining’s Northern Oil Refinery near Gladstone, said Hydrocarbonprocessing.

Northern Oil Refinery will use Atlas natural gas in its oil refining and advanced biofuels production plants at Yarwun, near Gladstone. These plants represent a world-class approach to management of used oils and are aimed at eliminating waste.

The biofuels production plant is undertaking ground-breaking research in the application of waste materials to produce bio-crude oil. Under the initial two and a half year agreement, Senex will supply Northern Oil Refinery with 0.3 PJ of gas a year with a mechanism to extend the supply of gas for a further five years at 0.35 PJ a year, taking the total contract quantity to 2.5 PJ. Gas is being supplied at the Wallumbilla Gas Hub in Queensland at a fixed price in line with current market levels, indexed annually.

Managing Director and Chief Executive Officer, Ian Davies said the gas sales agreement with Northern Oil Refinery follows the announcement of Senex’s planned 50% increase in Atlas natural gas production. “Senex is pleased to be supporting 30 jobs directly and hundreds of jobs indirectly by providing natural gas to our new customer, Northern Oil Refinery and their Gladstone oil recycling plant.

This gas sales agreement adds to our existing portfolio of domestic customers with a Queensland presence including CSR, Orora, Visy Glass and CleanCo Queensland, reinforcing Senex’s importance as a supplier of natural gas to the east coast market. “Senex is committed to investing for the long-term to unlock both development-ready and exploration opportunities and working with our customers to deliver affordable and sustainable gas supply to the domestic market. “It is also critical that customers commit to suppliers, just as Northern Oil Refinery has done, so as to support ongoing investment in upstream gas development," Mr Davies said.

Announcement follows the award of new Atlas gas acreage to Senex as part of the Queensland Government’s domestic gas acreage tender process. The new acreage will underpin a 50% increase in Atlas gas production to ~18 PJ/year.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (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) -- The European Chemicals Agency (ECHA; Helsinki, Finland) says that its Committee for Socio-economic Analysis (SEAC) supports France and Sweden’s proposal to restrict the use of skin-sensitizing substances in textile, leather, synthetic leather, hide, and fur articles that are placed on the market for the first time, said Chemweek.

SEAC’s decision follows an opinion by ECHA’s Committee for Risk Assessment (RAC) in March, the agency says. The opinions of the committees as well as the proposal of France and Sweden will be sent to the European Commission, which will take a decision together with the EU member states, ECHA says.

The two committees have concluded that if an EU-wide restriction is adopted, it will prevent many people from developing skin allergies and relieve the symptoms of many who already have them, ECHA says. This is expected to result in health benefits equivalent to at least €708 million/year (USD828 million), it says. Meanwhile, the raw material costs for industry to replace the chemicals are estimated at up to EUR23.8 million/year and there will also be costs related to reformulation, testing, and enforcement, ECHA says.

The proposed restriction covers substances that have a harmonized classification as skin sensitizers under the EU classification, labeling, and packaging (CLP) regulation such as chromium VI, nickel, and cobalt compounds, according to ECHA. Some dyes that are considered to have skin-sensitizing properties, but do not have a harmonized classification, are also included in the proposed restriction, the agency says.

ECHA notes that the proposal introduces a link with the CLP regulation meaning that any substance that is classified as a skin sensitizer in the future under CLP would automatically be covered by the restriction. When substances are automatically added to the restriction, SEAC recommends a transitional period of three years between classification and the conditions of the restriction taking effect, to allow manufacturers to adapt, it says.

At its September meeting, SEAC also adopted its final opinion on ECHA’s proposals to restrict the placing on the market of calcium cyanamide used as a fertilizer; five cobalt salts, since all five cobalt salts are classified as carcinogenic, mutagenic, and reprotoxic; and formaldehyde in articles, road vehicles, and aircraft. It is also expected to adopt its final opinion on ECHA’s proposed restriction of intentionally-added microplastics in December 2020, ECHA says.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (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) -- Japan's biggest oil refiner Eneos Holdings Inc will shift its joint venture with PetroChina Co to Eneos' Chiba refinery after shutting the venture's Osaka refinery next month, reported Reuters with reference to Eneos' statement on Friday.

Eneos plans to close the 115,000 barrel per day (bpd) Osaka refinery that it jointly operated with Petrochina next month amid falling demand for fuel in Japan.

Eneos, formerly known as JXTG, said that the joint venture, which is 51% held by Eneos and the rest by PetroChina, will take over the 129,000-bpd Chiba refinery near Tokyo from December.

"We came to the conclusion that utilizing Chiba refinery's export capacity would contribute the most to a further development of our joint venture which is aimed at strengthening the foundation of stable energy supply in the Asia-Pacific region," Eneos said in a statement.

The Chiba refinery will process crude supplied by PetroChina and export refined products which will be marketed by PetroChina, an Eneos spokeswoman said. She declined to comment where the products will be sold.

The two companies formed the joint venture and started jointly operating the Osaka refinery in 2010, with a view that demand for oil products would grow in the Asia-Pacific region while that in Japan would decline.

The Osaka plant will be converted to an asphalt-fueled electric power station after ending refining operations.

As MRC wrote earlier, Eneos Corporation has taken off-stream its fluid catalytic cracker (FCC) unit owing to technical issues. The company undertook an unplanned shutdown at the unit around September 7, 2020. The unit is likely to remain off-line for around 15 days. Located at Chiba in Japan, the FCC unit has a propylene capacity of 50,000 mt/year.

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.

Japan's largest refiner JXTG Nippon Oil & Energy was renamed ENEOS Corporation on 25 June, 2020, as part of a wider re-organization of the parent company JXTG Holdings. The move, which also involved renaming the parent company to ENEOS Holdings upon approval at its annual shareholders meeting in June 2020, comes as it strives to be a more comprehensive energy and materials company under its 2040 vision announced in May, 2019. JXTG Holdings was formed as a result of a merger between JX Holdings and TonenGeneral in April 2017. This followed the establishment of JX Holdings as a result of the merger between Nippon Oil and Nippon Mining Holdings in April 2010.
MRC

MOSCOW (MRC) -- Celanese Corporation, a global technology and specialty materials company, and a global leader in vinyl acetate ethylene (EVA) emulsions, has announced an increase in its September low density polyethylene (LDPE) prices in the Americas, as per the company's press release.

The price increases below are effective for orders shipped on or after 15 September 2020, or as contracts otherwise allow, and are incremental to any previously announced increases.

Thus, LDPE prices rose, as follows:

- by USD0.05/lb - for the USA and Canada;
- by USD100/mt - for Mexico & South America.

As MRC reported earlier, Celanese also raised its September prices of ethylene-vynil-acetate (EVA) for the stated above regions, as follows:

- by USD0.05/lb - for the USA and Canada;
- by USD100/mt - for Mexico & South America.

According to ICIS-MRC Price report, in Russia, demand for LDPE has remained very weak in the spot market since the beginning of the month. Converters made purchases exclusively under the existing orders for finished products, they refused to put LDPE and finished products into their warehouses. Buyers were confident that in October, with the end of the shutdowns for maintenance at several production capacities, supply of PE would increase significantly and prices would substantially decrease.

Celanese Corporation is a global technology leader in the production of differentiated chemistry solutions and specialty materials used in most major industries and consumer applications. Based in Dallas, Celanese employs approximately 7,700 employees worldwide and had 2019 net sales of USD6.3 billion.
MRC