Force majeure on Lake Charles polymer units of Westlake Polymer remains in force

MOSCOW (MRC) -- Westlake Polymers has left in force the declared on Aug. 31 force majeure on its North American polymer facilities after Hurricane Laura adversely impacted its unit sites, reported S&P Global.

Westlake's Lake Charles, Louisiana, complex had "incurred limited physical damage" then and restarts primarily depended on the availability of electric power, industrial gases, and other feedstocks.

Westlake Chemical was in the process of a restart following the loss of electricity from Hurricane Laura on 27 August when the arrival of Hurricane Delta on 9 October interrupted the process.

Westlake's facility at Lake Charles, Louisiana, has a 200,000 mt/year linear low density polyethylene (LLDPE) unit; a 60,000 mt/year high density polyethylene (HDPE)/LLDPE unit; a 386,000 mt/year low density polyethylene (LDPE) plant.

Westlake Chemical also declared a force majeure on Aug. 31 for all its North American PVC and VCM, which is also left in force in mid-October. Westlake's shutdown of its Lake Charles complex has idled 38% of its US VCM production, resulting in two VCM plants with a combined capacity of 952,318 mt/year going offline. The complex also has three upstream chlor-alkali plants with a combined capacity of 1.27 million mt/year of chlorine and 1.36 million mt/year of caustic soda - 46% of the company's overall North American chlor-alkali capacity.

Hurricane Delta appears to have wreaked minimal damage to chemical facilities in Lake Charles, Louisiana, just six weeks after Hurricane Laura blew through the region, severely damaging major electricity transmission lines that left facilities offline for weeks.

Westlake Chemical said in a statement on Oct. 12 that initial assessments after Delta's Oct. 9 landfall showed "very limited physical damage" to its Lake Charles complex, and facilities were "in the process of restarting."

According to MRC's ScanPlast report, Russia's overall PVC production totalled 718,500 tonnes in January-September 2020, down by 0.3% year on year. At the same time, only two producers managed to increase their PVC output.

As per 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).

Westlake Chemical Corporation is an international manufacturer and supplier of petrochemicals, polymers and building products with headquarters in Houston, Texas. The company's range of products includes: ethylene, polyethylene, styrene, propylene, chlor-alkali and derivative products, PVC suspension and specialty resins, PVC Compounds, and PVC building products including siding, pipe, fittings and specialty components, windows, fence, deck and film.
MRC

MOSCOW (MRC) -- Yeochun Naphtha Cracking Centre (YNCC) plans to start up its new butadiene plant in Yeosu around the end of this year, reported S&P Global with reference to market participants.

The new plant's capacity will be 130,000 mt/year of butadiene.

Market participants see supplies in Asian butadiene to likely increase as new butadiene plants, including the one of YNCC, are due to start up in the region.

As reported earlier, YNCC has restarted its No. 1 naphtha cracker following a maintenance turnaround. The company resumed operations at the cracker on June 21, 2019. The cracker was taken off-stream on May 20, 2019. Located at Yeosu,South Korea, the cracker has an ethylene capacity of 860,000 mt/year and propylene capacity of 485,000 mt/year.

YNCC also has two other crackers at this site. Thus, the production capacity of its No. 2 naphtha cracker in Yeosu is 578,000 tonnes of ethylene per year ant that of its No.3 cracker - 470,000 tonnes of ethylene per year.

Butadiene is the main feedstock for the production of acrylonitrile-butadiene-styrene (ABS).

According to MRC's ScanPlast report, Russia produced 42,900 tonnes of polystyrene (PS) and styrene plastics in July, 2020, up by 5% year on year. Russia's ABS output totalled 1,100 tonnes over the stated period. At the same time, July estimated consumption grew in the ABS sector by 13% year on year to 4,300 tonnes (3,790 tonnes a year earlier).

South Korea’s Yeochun NCC (YNCC) pyrolyzes naphtha to produce basic feedstock materials for the petrochemical industry. YNCC, a joint venture between South Korean firms Hanwha and Daelim, is a key exporter of ethylene and propylene in the country.
MRC

MOSCOW (MRC) -- Crude oil futures ticked higher during mid-morning Asian trade Oct. 15, as positive data from the American Petroleum Institute and an increase in China's and India's refinery activities stoked bullish market sentiment despite tightening coronavirus restrictions, reported S&P Global.

At 10.45 am Singapore time (0245 GMT), ICE Brent December crude futures were up 6 cents/b (0.14%) from the Oct. 14 settle to USD43.38/b, while the NYMEX November light sweet crude contract was up 4 cents/b (0.10%) at $41.08/b. Both international crude markets had jumped 2.05% and 2.09% to settle at USD43.32/b and USD41.04/b, respectively, on Oct. 14.

The uptick in prices can be attributed to positive API data released late Oct. 14, which showed that US crude inventories had declined 5.4 million barrels to 495.4 million barrels in the week ended Oct. 9. This large draw in crude stocks far exceeded analysts' expectations of a 2.3 million barrel draw, according to an S&P Global Platts survey.

The API also reported a 1.513 million-barrel and a 3.930 million-barrel draw in US gasoline and distillate inventories, respectively, indicating that fundamentals in downstream oil markets were improving.

At 10.45 am Singapore time, the NYMEX November RBOB contract was trading 0.0011 cents/gal (0.09%) higher from the overnight settle at USD1.1982/gal and November ULSD contract was 0.17 cents/gal (0.14%) higher at USD1.1942/gal.

An added boost to market sentiment were indications that demand in Asia's oil-consuming behemoths China and India were on the mend.

Data collected by Platts on Oct. 14 showed that crude and bitumen blend imports by independent Chinese refineries were up 1.6% to 18.14 million mt, or 4.43 million b/d, in September, from a three-month low of 17.85 million mt in August. Earlier, data from the Chinese customs released Oct. 13 had also shown that the country's crude imports were up 2.1% on the month and 17.6% year on year to 48.5 million mt in September.

Meanwhile, Indian demand was also on the rise according to ANZ analysts in an Oct. 15 note: "India's refiners have boosted buying ahead of two main festivals, Navratri and Diwali, that typically increase demand for consumer goods and transportation fuel."

However, capping oil markers was the demand outlook, which remained bleak amid the coronavirus pandemic, as France declared a state of emergency late Oct. 14. and became the latest in a growing list of countries that are imposing tougher restrictions to stem the spread of the virus.

Edward Moya, senior market analyst at OANDA, said in an Oct. 15 note: "The COVID-19 second wave in Europe is getting out of control and that should force further action from lawmakers and central banks...It will be hard for risk appetite to return as Europe continues to go down the path of lockdowns."

As MRC informed earlier, global oil demand is forecast to peak by around 2040 because transport-fuel demand will decline steeply and economic growth will slow in the post-coronavirus world, the Institute of Energy Economics, Japan, said in its annual IEEJ Outlook 2021 on Oct. 15.

We remind that global oil demand may have already peaked, according to BP's latest long-term energy outlook, as the COVID-19 pandemic kicks the world economy onto a weaker growth trajectory and accelerates the shift to cleaner fuels.

Earlier this year, BP said the deadly coronavirus outbreak could cut global oil demand growth by 40 per cent in 2020, putting pressure on Opec producers and Russia to curb supplies to keep prices in check.

And in September 2019, six world's major petrochemical companies in Flanders, Belgium, North Rhine-Westphalia, Germany, and the Netherlands (Trilateral Region) announced the creation of a consortium to jointly investigate how naphtha or gas steam crackers could be operated using renewable electricity instead of fossil fuels. The Cracker of the Future consortium, which includes BASF, Borealis, BP, LyondellBasell, SABIC and Total, aims to produce base chemicals while also significantly reducing carbon emissions. The companies agreed to invest in R&D and knowledge sharing as they assess the possibility of transitioning their base chemical production to renewable electricity.

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) -- Portugal’s Galp Energia temporarily suspended fuel production at its smallest oil refinery at Matosinhos due to unstable national and international markets shaken by the coronavirus pandemic, according to Hydrocarboprocessing with reference to a Galp spokesman's statement.

“Supply of the national market is guaranteed to remain, with an adequate level of products to satisfy the needs of the Portuguese, companies and industrial units,” he said in a statement.

Galp said that although the suspension had no end date as yet, no workers would be laid off.

The suspension, which began on Oct. 10, was Galp’s second at the refinery this year, after one in April along with a halt at its largest refinery in Sines. The two refineries comprise 20% of refining capacity on the Iberian peninsula.

Galp resumed production at both refineries in June, a month after Portugal slowly started to emerge from a coronavirus lockdown.

Portugal has recorded nearly 90,000 confirmed coronavirus cases and 2,110 deaths - far fewer than in many other European countries. But the pandemic is set to leave lasting scars on the Portuguese economy, with the government predicting gross domestic product to contract 8.5% this year.

Earlier this year, Galp said it would kick off its green business by installing renewable energy capacity of 10 gigawatts in the next decade, enough to power millions of homes.

As MRC reported before, earlier this year BP set one of the oil sector's most ambitious targets for curbing emissions, although some environmental campaigners accused it of greenwash and said it had not given enough detail on how it would achieve its targets.

We remind that , in September 2019, six world's major petrochemical companies in Flanders, Belgium, North Rhine-Westphalia, Germany, and the Netherlands (Trilateral Region) announced the creation of a consortium to jointly investigate how naphtha or gas steam crackers could be operated using renewable electricity instead of fossil fuels. The Cracker of the Future consortium, which includes BASF, Borealis, BP, LyondellBasell, SABIC and Total, aims to produce base chemicals while also significantly reducing carbon emissions. The companies agreed to invest in R&D and knowledge sharing as they assess the possibility of transitioning their base chemical production to renewable electricity.

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

MOSCOW (MRC) -- The problem-plagued Limetree Bay refinery in St. Croix, Virgin Islands, may lose its main supplier of crude, oil major BP, if it isn’t successfully up and running by December, reported Reuters with reference to two people familiar with the matter.

The Caribbean refinery’s owner, Limetree Bay Ventures, has spent at least USD2.7 billion restoring the facility, initially hoping to tap rising demand for low-sulfur fuels and markets in Latin American and Caribbean. But the plant’s restart date has been delayed by nearly a year now.

BP Plc BP.L invested in the plant with an agreement to supply its crude and market the fuels produced in anticipation of a late 2019 startup. BP can terminate that contract if the plant cannot reach a certain production target by year-end, the people said, threatening the future of the largest new refining capacity in the Americas.

Limetree owners EIG Global Energy Partners and Arclight Capital Partners embarked on the overhaul in expectation of a surge in demand for marine fuels that comply with new maritime rules for low sulfur content. BP’s investment was to be repaid from product sales.

The goal was to have the refinery produce as much as 210,000 barrels per day (bpd)of refined product, but the COVID-19 pandemic has crushed refining margins for fuels across the globe.

BP and EIG declined comment. Arclight could not be reached for comment.

In recent weeks, Limetree experienced problems trying to restart the crude unit, according to one of the people familiar with the matter. That followed a series of delays due to corrosion uncovered during renovations.

With the problems the refinery is having, it is less attractive for BP to remain invested, according to sources familiar with the plant. The oil major is in the midst of a global overhaul of its operations, with plans to boost renewable investments and cut fossil fuel development, which also now makes this investment less attractive.

At least one vessel carrying crude oil booked by BP has been moored outside the refinery since the end of August, waiting to unload crude loaded from Guyana, according to two sources and data from Refinitiv Eikon. Companies usually pay demurrage fees when ships idle without unloading.

As MRC informed previously, global oil demand may have already peaked, according to BP's latest long-term energy outlook, as the COVID-19 pandemic kicks the world economy onto a weaker growth trajectory and accelerates the shift to cleaner fuels.

Earlier this year, BP said the deadly coronavirus outbreak could cut global oil demand growth by 40 per cent in 2020, putting pressure on Opec producers and Russia to curb supplies to keep prices in check.

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

ccording 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