US Gulf Coast refiners plan to operate through Storm Zeta

MOSCOW (MRC) -- At least five Louisiana oil refineries in the path of Tropical Storm Zeta plan to remain operating as it makes a US landfall, reported Reuters with reference to people familiar with plant operations.

Oil and gas producers evacuated offshore production platforms and shut wells as the storm moved across the Gulf of Mexico. Zeta could strike the Gulf Coast between Louisiana and Alabama at or near hurricane intensity, forecasters said.

Refiners’ plans to continue operations could depend on the storm’s path and whether its winds intensify, the sources said. Two Louisiana plants have not restarted after storms earlier this year.

Exxon Mobil Corp’s 517,700 barrel-per-day (bpd) Baton Rouge, refinery, Royal Dutch Shell Plc’s 227,400 bpd Norco and 211,146 bpd Convent, Louisiana, refineries are proceeding with normal operations.

Exxon’s Baton Rouge plant is about 110 miles (177 km) northwest of the forecast path while Shell’s Convent and Norco refineries are 78 miles and 54 miles northwest of the latest storm track.

Exxon and Shell are monitoring the storm, spokes people said. Shell also said it is prepared to take action as appropriate.

PBF Energy’s 190,000 bpd Chalmette, refinery and Valero Energy Corp’s 125,000 bpd Meraux refinery, both in Louisiana, also plan to remain running during the storm, people familiar with operations at those plants said.

PBF and Valero did not respond to requests for comment.

The PBF refinery is about 36 miles and the Valero refinery about 34 miles northwest of where Zeta is forecast to cross the Mississippi River.

Enbridge Inc shut a natural gas processing plant in Venice, Louisiana, on the wet side of the hurricane, which likely will see the most rain and wind.

The refinery nearest to where Zeta could strike the coast, Phillips 66’s 255,600 bpd Alliance, Louisiana, refinery, has been shut since September for maintenance.

As MRC informed before, last month, US refiner Phillips 66 said it plans to reconfigure its refinery in Rodeo, California to produce renewable fuels from used cooking oil, fats, greases and soybean oils.

We remind that US-based Phillips 66 remains open to developing another ethane cracker for its Chevron Phillips Chemical (CP Chem) joint venture, the refiner's CEO said in March 2018.

Ethylene and propylene are feedstocks for producing 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

Grace sales slide 11% as transportation fuel demand remains depressed

MOSCOW (MRC) -- W.R. Grace reports third-quarter net income of USD7.0 million, down 87.0% year-on-year (YOY), as weak transportation fuel demand due to the COVID-19 pandemic continues to negatively impact refining catalysts volumes, reported Chemweek.

Adjusted earnings of USD0.56/share was 43.8% lower YOY and met the analysts’ consensus estimate compiled by Refinitiv (New York). Net sales were down 10.9% YOY and flat sequentially.

Grace says a 15.4% drop in Catalysts Technologies volumes more than offset a 3.8% increase in Materials Technologies volumes, which was driven primarily by growth in pharma/consumer end-markets. The refining catalyst market stabilized and is improving from the second quarter, but transportation fuel demand is still lagging the overall economic recovery, the company adds. Power outages at the company’s Lake Charles, Louisiana catalyst production site due to Hurricane Laura also increased operating costs.

Catalyst Technologies segment operating income declined 36.2% YOY, to USD67.1 million, on sales down 15.4%, to USD305.7 million. Materials Technologies segment operating income fell 6.9% YOY, to USD24.3 million, on sales up 4.2%, to USD113.7 million.

Hudson La Force, Grace’s President and CEO, says the company is encouraged by improving demand trends. “We expect Specialty Catalysts and Materials Technologies end markets to continue their recovery and sales to return to 2019 levels on a run-rate basis during 2021,” he adds. “In Refining Technologies, the effects of the pandemic will remain a headwind until transportation fuel demand more fully recovers.”

Grace expects fourth-quarter adjusted earnings in the range of USD0.84-0.88/share, below the analysts’ consensus of USD0.94/share. The company also expects sales to increase 10-13% sequentially.

As MRC informed earlier, W. R. Grace & Co. licenses UNIPOL PP process technology to Dongguan Grand Resource for two additional lines. This is part of the continued investment in UNIPOL PP Process Technology lines by DGR. The first license was signed in 2016. Building additional capacity at the same site will help DGR further optimize costs, shorten construction time, and broaden their product portfolio.

According to MRC's ScanPlast report, 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.

A leader in polyolefin catalysts and licensing, Grace has the world’s broadest portfolio of polypropylene and polyethylene catalyst technologies used to produce thermoplastic resins for a variety of applications. A leading innovator and strategic partner to its customers, Grace supplies catalyst solutions for all polyolefin processes, as well as polypropylene process technology and process controls. Grace employs approximately 3,700 people in over 30 countries.
MRC

Eastern Pacific Shipping wins bid for four VLECs for Zhejiang Satellite Petrochemical

MOSCOW (MRC) -- Eastern Pacific Shipping (EPS) has won a bid to purchase, build, and operate four 98,000 cubic meter VLECs for China-based Zhejiang Satellite Petrochemical (STL), said Hydrocarbonprocessing.

The vessels will be carrying ethane from the US Gulf Coast to Shenzhen-listed STL’s plant in Lianyungang, China. All four VLECs will feature dual fuel ethane propulsion which will reduce greenhouse gas emissions when compared to conventional marine fuels.

EPS CEO Cyril Ducau said, “We are extremely pleased to partner with STL and enter the ethane carrier segment. Both companies share a vision of being the green and technology-driven leaders in our respective industries. This made the negotiations and subsequent agreement an enjoyable and seamless process. For EPS, the addition of these four vessels complement our existing, and growing, mid and large gas carrier fleet. This deal also serves as an example of our commitment to using alternative marine fuels as transitional fuels towards decarbonization and the preservation of the environment for future generations. This 15-year charter is a major milestone for us that will strengthen our foundation as we grow and diversify our fleet."

The VLECs will be built at South Korea’s Hyundai Heavy Industries and Samsung Heavy Industries and are scheduled for delivery in the first half of 2022.

As MRC informed earlier, in July, Malaysian national shipping group MISC has entered into memorandum of agreements with China’s Zhejiang Satellite Petrochemical for the acquisition of six newbuild 98,000 cu m very large ethane carriers (VLECs). The six VLECs, currently under construction at South Korean yards Hyundai Heavy and Samsung Heavy, were originally ordered by Delos Shipping with charters fixed to Satellite Petrochemical who later took over the ownership of the six ships.

Ethylene and propylene are feedstocks for producing 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

Brenntag plans job cuts, site closures under transformation program

Brenntag plans job cuts, site closures under transformation program

MOSCOW (MRC) -- Brenntag has confirmed details of its previously announced transformation program, Project Brenntag, according to Chemweek.

The program is expected to deliver an additional, “sustainable” annualized operating EBITDA contribution totaling EUR220 million (USD260 million) by the start of 2023. The program also involves about 1,300 job cuts and 100 site closures. Brenntag's 2019 operating EBITDA was EUR1 billion on sales of EUR12.8 billion.

Brenntag launched a strategic analysis at the beginning of 2020 as a starting point for the transformation program. The company says that the program is designed to expand Brenntag’s global market-leading position in chemicals and ingredients distribution through an increased focus, reduced complexity, and stronger partnerships with customers and suppliers. Brenntag announced last month that, starting in January 2021, the company would be steered in two global divisions with a focus on changing customer and supplier needs: Brenntag Essentials and Brenntag Specialties.

“With our transformation program Project Brenntag, we take decisive action to create the strong basis for sustainable organic earnings growth in the coming years,” says Christian Kohlpaintner, CEO of Brenntag. “To harvest our full potential, it is crucial to become leaner and more efficient.”

The total net cash outflow to be incurred in course of implementing Project Brenntag is expected to amount to about EUR370 million. The program “will lead to significant efficiency gains and contribute to top-line growth as well,” Brenntag says.

The planned job cuts, to take place over the next two years, represent more than 7% of Brenntag’s total workforce. Less than 200 of the job cuts are expected to be in Germany. Brenntag says it will strive to avoid compulsory redundancies. The measures will be further elaborated over the coming months in line with local rules and labor regulations. “This step will be anything but easy for us, but it is necessary to ensure Brenntag’s success in the long term,” Kohlpaintner says.

The 100 site closures will be across all regions and half will be of third-party logistics sites, Brenntag says. The company says it will also invest in existing and new sites, create regional hubs, and close white spots in its network.

“While maintaining its global reach, with the optimized network Brenntag will improve efficiency, leverage scale benefits across divisions and products, and increase proximity to business partners,” the company says. “The optimization envisions closing sites to consolidate the site network in geographies and improve the utilization of existing sites.”

Brenntag says it will provide further details of the program in a capital markets update on 4 November.

As MRC informed earlier, Brenntag says it has acquired the operating assets of Suffolk Solutions’ (Suffolk, Virginia) caustic soda distribution business. Financial terms of the deal have not been disclosed.

We remind that August production of sodium hydroxide (caustic soda) in Russia were 99,200 tonnes (100% of the basic substance) versus 89,400 tonnes a month earlier, said MRC analysts. Russia's overall output of caustic soda totalled 837,600 tonnes in the first eight months of 2020, down by only 2% year on year.
MRC

Petro Rabigh swings to net loss on lower margins, market conditions

MOSCOW (MRC) -- Rabigh Refining and Petrochemical Company (Petro Rabigh) swung to net losses of SAR 610 million in the third quarter (Q3) of 2020, versus net profits of SAR 394 million in the same quarter a year earlier, said Chemweek.

The return to losses was driven by the challenging market conditions and the prevailing coronavirus pandemic, which led to lower refinery margins, according to a bourse statement on Tuesday.

Moreover, the decline in global travel has severely impacted demand for Jet fuel.

Revenues amounted to SAR 7.1 billion in the three-month period ended 30 September 2020, a yearly decrease of 19.3%.

Over the first nine months of the year, the Tadawul-listed firm turned to a net loss of SAR 3.8 billion, against a net profit of SAR 343 million in the year-ago period.

As MRC informed earlier, Sumitomo Chemical and Saudi Aramco have jointly loaned out a total of USD2bn to Rabigh Refining and Petrochemical Co (Petro Rabigh), which faced shortfall of working capital as “the market environment has rapidly deteriorated” since end-2019.

Ethylene and propylene are feedstocks for producing 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