Nigeria aims to revamp refineries, end oil-for-fuel swaps

MOSCOW (MRC) -- Nigeria aims to end the country’s so-called oil-for-fuel swaps system in the near future and rely instead on oil products from local refineries, which it hopes to have running again by 2023, reported Reuters with reference to the head of Nigeria’s national oil company NNPC.

The oil-for-swap deals, in operation since 2016, provide virtually all Nigeria’s gasoline and some of the diesel and jet fuel. NNPC exchanges around 300,000 barrels per day (bpd) of oil for the imported fuels.

While NNPC has refineries with a combined nameplate capacity of 445,000 bpd, decades without regular maintenance or investment leaves the oil exporting country almost wholly reliant on imports for refined products. Nigeria closed its ailing oil refineries in April until they can be fixed.

NNPC chief Mele Kyari told a virtual panel at the African Refiners & Distributors Association annual conference that while the swaps had saved the country roughly USD1 billion a year, they could soon be scrapped.

“I don’t see an extension of that process in the near future as we progress and transit into more production locally,” he said.

Kyari said he expected NNPC’s refineries to be fully revamped and running again by 2023. NNPC has said it will partner with private companies to upgrade the refineries and then run them as part of a drive to process its own oil and cut reliance on imported fuels.

“Our plan is to deliver all of them by 2023,” Kyari said. He did not name any companies that have expressed interest in the upgrade and repair projects.

“Our banking partners are on top of this. It is a schedule we have agreed with our partners and we believe we can deliver on this,” he said.

As MRC informed previously, in mid-April, 2020, Shell lifted a force majeure on exports of Nigeria’s Forcados crude oil after the pipeline transporting it reopened. The removal of force majeure followed the reopening of the Trans Forcados pipeline by operator Heritage Energy Operational Services Limited, a spokeswoman for the Shell Petroleum Development Company of Nigeria said on Monday. The pipeline was shut down on April 4, Shell said in a previous statement. It declared force majeure on April 6.

We remind that Shell Singapore restarted its naphtha cracker in Bukom Island in early December, 2019, following a two months maintenance shutdown since the beginning of October 2019. Thus, this cracker was taken off-stream for the turnaround on 1 October 2019. The cracker is able to produce 960,000 tons/year of ethylene and 550,000 tons/year of propylene.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,496,500 tonnes in the first eight months of 2020, up by 5% year on year. Shipments of all ethylene polymers increased, except for linear low desnity polyethylene (LLDPE). At the same time, PP shipments to the Russian market reached 767,2900 tonnes in the eight months of 2020 (calculated using the formula - production minus exports plus imports - and not counting producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.
MRC

Irving Oil terminates purchase of North Atlantic Refinery Limited

MOSCOW (MRC) -- Canada-based oil refinery operator Irving Oil announced it has terminated an agreement for the purchase of North Atlantic Refinery Limited, said Hydrocarbonprocessing.

Irving made the announcement on its website. In May, it had agreed to buy the owner of the idled 135,000 barrels per day Come-by-Chance refinery in Newfoundland, for an undisclosed price. According to industry sources, Irving walked away from the purchase and share agreement shortly before it was set to close in mid-October.

“North Atlantic is actively looking for alternate buyer, but the market is very challenging,” said a source familiar with the matter. North Atlantic declined to comment on internal matters. U.S.-based energy company Origin International said it remained interested in purchasing Come-by-Chance after June media reports that it was interested in restarting fuel processing there in “a more environmentally sustainable model."

“We await further clarity on the status of Come by Chance,” an Origin spokesperson told Reuters. The spokesperson said Origin has not done due diligence and was unaware “if any new sale process has begun." It is too soon for Newfoundland and Labrador to consider whether to buy the refinery since Origin is interested, said the province’s Industry, Energy and Technology Minister Andrew Parsons.

Parsons said Canada’s Competition Bureau had never decided whether Irving would have been permitted to buy North Atlantic. Federal Natural Resources Minister Seamus O’Regan said he was monitoring developments and would be there for workers “no matter what the final outcome,” according to a statement from spokesman Ian Cameron.

“In the face of this global pandemic too many businesses are being closed and too many projects are being put on hold all over the world. And it’s workers who are bearing the brunt of it all,” Cameron said. Come-by-Chance was the first North American refinery to close as fuel demand collapsed during the coronavirus pandemic. It supplied major U.S. East Coast harbors including New York and Boston.

Refining margins have been pressured by lower processing rates due to an oversupply of distillate stocks, which include jet fuel. The crack spread - the difference between crude and fuel - is hovering around USD10.50 a barrel. The plant has been idled since early April. It was nearly sold in 2018, with Irving Oil as the leading bidder, but the two former oil traders at the helm of the refinery disagreed on the sale price and the sale subsequently fell apart.

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

Nouryon celebrates two-year anniversary with new growth strategy

MOSCOW (MRC) -- Nouryon is celebrating two years as a stand-alone company. During that time, it has made significant progress in driving efficiencies and increasing profitability while continuing to invest in supporting the growth of its customers. Now, the company is taking a further step to accelerate growth with a new company strategy that aims to exceed customer expectations, outgrow the competition, and increase the share of specialties in its portfolio, as per the company's press release.

“We have achieved phenomenal success during the past two years,” said Charlie Shaver, Nouryon’s Chairman and CEO. “We have set up a new organizational structure that allows our Businesses, Operations and Functions to focus on what they do best. That new structure, combined with our continued efforts to drive efficiencies has allowed us to increase our profitability, even in the challenging business environment of today.”

The company has taken several steps to further optimize its portfolio. These include three significant acquisitions; Brazilian peroxides producer Polinox; Chinese metal alkyls maker Zhejiang Friend Chemical; and the carboxymethyl cellulose (CMC) business of J.M. Huber, along with the divestment of its Elotex business. It has also continued investing to support the growth of its customers, with more than 20 capacity expansion projects announced or completed and the introduction of 20 new products with clear sustainability benefits.

“We are now ready to take the next step in our growth journey with a new strategy that will target the most attractive growth sectors and increase the focus on key emerging markets,” Shaver said. “With this stronger market focus, we want to transition from being an ingredient supplier to a true solution provider to our customers. At the same time, we will continue to execute successfully on the cost and productivity initiatives that will enable us to keep growing profitability.”

The new strategy will increase the focus on the following four segments: Agriculture, Buildings & Infrastructure, Cleaning goods and Personal care, as well as on emerging markets including China, Southeast Asia and India. Plans include growing in new applications and geographies through M&A and partnerships; further expanding the company’s sustainable product offering; and maximizing capacity utilization and flexibility of its manufacturing plants.

As MRC wrote previously, in February 2019, Nouryon (formerly AkzoNobel Specialty Chemicals) announced that it would license its innovative continuous initiator dosing (CiD) technology to Karpatnaftochim, Ukraine’s largest polyvinyl chloride (PVC) producer. Nouryon’s patented CiD technology allows PVC producers to increase reactor output by up to 40 percent, improve product quality, and make the production process intrinsically safer - all with minimum capital expenditure.

According to ICIS-MRC Price report, last week, Karpatneftekhim finalised prices for PVC shipments to the domestic market in October. Because of the situation in foreign markets, Ukrainian PVC significantly raised its prices, deals were negotiated in the range of USD1,095-1,120/tonne FCA, excluding VAT, for K 67, and USD1,150-1,170/tonne FCA, excluding VAT, for PVC K70. PVC in September was by USD150-200/tonne cheaper.
MRC

DNV GL, TCM and SINTEF join forces in international CCUS partnership

MOSCOW (MRC) -- Three international organizations specializing in technology research, testing, advisory services, and standardization have joined forces to find new ways to accelerate the adoption of carbon capture, utilization and storage (CCUS) technology in emissions-heavy industries, said Hydrocarbonprocessing.

DNV GL, SINTEF and Technology Centre Mongstad (TCM) have signed a memorandum of understanding to further develop carbon capture, utilization and storage technologies to make full-scale CCS a reality globally. CCS is the only currently available technology to deeply decarbonize hydrocarbon use. Scaling the technology will be critical to a range of industry sector’s ability to align with national and international climate targets. DNV GL’s 2020 Energy Transition Outlook forecasts that the technology will help mitigate more than 2 gigatons of CO2 emissions by mid-century. However, the forecasts also indicate that CCS will not begin to scale until 2030, and not to a significant level until 2040 without government incentives and with industry focusing on finding ways to reduce the cost of CCS technology.

On September 21, the Norwegian government announced its decision to provide 13.8-16.8 billion NOK funding to support the realization of the Norwegian Longship CCS project. All parties have provided consultancy support to enable the realization of this project, which boasts many first-of-a-kind elements, including capture of CO2 emissions from the cement industry, transport of CO2 by ship, and temporary storage of CO2 prior to pipeline transportation and storage.

The aim of the memorandum of understanding is to assist technologies and projects to move more rapidly from demonstration to commercial deployment. TCM’s capability to facilitate large scale testing and verification of CO2 capture technology allows technology developers the lowest possible technological and financial risk. DNV GL and SINTEF can provide confidence to technology developers and stakeholders by guiding and supporting processes to qualify CO2 capture technology, and providing verification of assets, infrastructure and storage sites.

“TCM’s capability to allow large scale demonstration of CO2 capture technologies is key to lower the cost and risk of deployment of the technologies at scale. Our mandate is to reduce cost and risk for emerging CCS projects through our own and two partners knowledge”, said Ernst Petter Axelsen, managing director at TCM.

“There is a significant need to accelerate efforts to scale CCS technology to allow the world to move toward its net-zero targets with greater confidence. Our partnership with TCM and SINTEF will allow us to work closely together to accelerate the deployment of CCS as a critical technology to deliver on nationally and internationally agreed climate targets.” said Liv A. Hovem, CEO, DNV GL – Oil & Gas.

"We are finally at a moment in time where CCS is being recognized as a key driver for sustainable growth, and we must succeed on the global scale quickly, according to both the IPCC, the European Commission among many others. This partnership will build on a deep knowledge-base, which SINTEF has actively contributed to for more than three decades, enabling a fast track to full scale and global use of CCS." said Alexandra Bech Gjorv, president and CEO SINTEF.

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

Sinopec starts ethylene production at new Zhanjiang refinery

MOSCOW (MRC) -- China's Sinopec has started operation of a 800,000 tons-per-year ethylene facility at its Zhanjiang refinery, reported Reuters with reference to the company's statement.

The refinery, located in the southern Chinese coastal city of Zhanjiang, commenced operation of its 200,000 barrel per day crude oil refining units in June.

As MRC informed before, Sinopec SABIC Tianjin Petrochemical Co. (SSTPC), a 50-50 joint venture of Sinopec and SABIC, completed the debottlenecking of its ethylene cracker on 11 July 2020, adding another 30,000 tons/year output to its current capacity. Followed the expansion, the Tianjin based plant become the country's largest compressor unit, producing 1.3 million tons of ethylene annually.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,496,500 tonnes in the first eight months of 2020, up by 5% year on year. Shipments of all ethylene polymers increased, except for linear low desnity polyethylene (LLDPE). At the same time, PP shipments to the Russian market reached 767,2900 tonnes in the eight months of 2020 (calculated using the formula - production minus exports plus imports - and not counting producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.

China Petrochemical Corporation (Sinopec Group) is a super-large petroleum and petrochemical enterprise group established in July 1998 on the basis of the former China Petrochemical Corporation. Sinopec Group"s key business activities include the exploration and production of oil and natural gas, petrochemicals and other chemical products, oil refining.
MRC