Nearly 85% of US Gulf oil offline from Zeta; refiners restart after power outages

MOSCOW (MRC) -- Producers took 85% of the US Gulf's crude oil flows ahead of Hurricane Zeta and, now that the storm has passed, some Louisiana refineries are beginning to restart after suffering from the widespread power outages throughout the New Orleans area, reported S&P Global.

The strong Category 2 hurricane made landfall Oct. 28 along the Louisiana Coast and caused disruptions at Shell's 227,400 b/d Norco Refinery, PBF Energy's 190,000 b/d Chalmette Refinery and potentially others, but damages were limited and the restart processes have begun, the companies said.

As for offshore, an estimated 1.57 million b/d of crude production and 1,561 MMcf/d of natural gas production was shut in, reflecting 84.8% and 57.6% of US Gulf output, respectively, according to the US Bureau of Safety and Environmental Enforcement. About 35% of the Gulf's platforms and rigs, or 231 facilities, were evacuated, BSEE said.

Zeta was the 27th named storm of the year, tying the 2005 record with more than a month remaining in the hurricane season.

Shell kept most of its offshore production online as Zeta trekked through the Gulf, but Shell did decide Oct. 29 to shut-in production at its Mars corridor and Appomattox platforms, citing "downstream impacts" after the Norco Refinery was temporarily knocked out of commission. Earlier, Shell had shut in its Stones FPSO, but kept its other Gulf platforms in operation.

"The Shell Norco Manufacturing Complex did experience power outages resulting in the shutdown of some units, but those units are now being returned to operational status," said Shell spokesman Curtis Smith in a statement.

Likewise, PBF's Chalmette Refinery is restarting the reformer and other units that came down due to power outages. Market sources expect it will take three to five days to get it back fully online.

BP, Chevron, BHP and Eqinor confirmed they had shut-in production at all of their operated platforms in the US Gulf. BP, for instance, shut-in its four operated platforms - Atlantis, Mad Dog, Na Kika and Thunder Horse - and evacuated personnel. Chevron also shut down its Fourchon and Empire terminals in Louisiana, as well as their related pipeline systems.

Occidental Petroleum, Murphy Oil and others shut-in some production, but did not specify which platforms were impacted.

Oil and gas volumes in the US Gulf were yet again severely disrupted from the record-setting 2020 Atlantic hurricane season, although production could start returning shortly.

"As conditions continue to improve today and tomorrow, we are beginning the process of redeploying personnel to our assets," Shell said Oct. 29.

Earlier in October, Hurricane Delta forced more than 90% of the US Gulf's nearly 1.9 million b/d of crude production to be shut in, and Zeta nearly took as much offline.

Named storms Zeta, Delta, Beta, Sally, Marco, Laura, Hanna and Cristobal have all disrupted activities in the Gulf from June through October.

Zeta's path through southeastern Louisiana targeted roughly 757,400 b/d of refining capacity, down from a wider cone of 2.7 million b/d earlier in the week.

Refiners all opted to continue operating during the storm, based on their hurricane readiness and response plans. The Louisiana Department of Environmental Quality said it didn't received any notifications of plans to shut down any refineries or plants ahead of Zeta, although disruptions were subsequently reported during the hurricane.

Citgo Petroleum's and Phillips 66's Lake Charles refineries recently came back online after sustaining damages from Hurricane Laura in August. Phillips 66's Alliance Refinery in Belle Chasse also remains offline for maintenance work.

Also, the Cameron Highway Oil Pipeline System, known as CHOPS, that originates in the Gulf of Mexico is expected to stay offline at least into late November after an associated offshore platform was damaged by Laura.

We remind that Royal Dutch Shell plc. said earlier this month that its petrochemical complex of several billion dollars in Western Pennsylvania is about 70% complete and in the process to enter service in the early 2020s. The plant’s costs are estimated to be USD6-USD10 billion, where ethane will be transformed into plastic feedstock. The facility is equipped to produce 1.5 million metric tons per year (mmty) of ethylene and 1.6 mmty of polyethylene (PE), two important constituents of plastics.

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.

Output of polymer products in Russia up by 0.9% in January-September

MOSCOW (MRC) -- Russia's output of products from polymers grew in September 2020 by 6.6% year on year.
However, this figure increased by 0.9% year on year in the first nine months of 2020, reported MRC analysts.

According to the Russian Federal State Statistics Service, September production of unreinforced and non-combined films dropped to 117,600 tonnes from 126,300 tonnes a month earlier. Output of films products grew in January-September 2020 by 8.2% year on year to 980,700 tonnes.

September production of non-porous boards, sheets and films dropped to 39,300 tonnes from 38,700 tonnes in August. Thus, overall output of these products reached 311,200 tonnes over the stated period, up by 4.6% year on year.

September production of porous polymer boards, sheets and films was 31,800 tonnes, up by 1% month on month.
Overall output of these products reached 229,500 tonnes in the first nine months of 2020, compared to 200,900 tonnes a year earlier.

September production of plastic bottles and flasks grew to 1.71 bln items from 1.92 bln items a month earlier.
Overall output of these plastic products totalled 16,4 bln units over the stated period, compared to 15,4 bln units a year earlier.

Last month's production of polymer pipes, hoses and fittings exceeded 68,300 tonnes versus 71,800 tonnes in August. Overall output of these products was 523,200 tonnes in January-September 2020, up by 7.2% year on year.

September production of sacks and bags from ethylene polymers reached 2,881,000,000 units, compared to 2,431,000,000 units a month earlier. Overall output of these plastic products totalled 22,716 bln units in the first nine months of 2020, compared to 19,184 bln units a year earlier.

Last month's production of linoleum and floor coverings decreased 17,4 mln square metres, compared to 18,4 mln square metres in August. Overall output of these products totalled 116,2 mln square metres over the stated period versus 112,3 mln square metres a year earlier.

September production of plastic windows and door blocks reached 2,915 mln square metres and 112,500 square metres, respectively, versus 2,749 mln square metres and 104,800 square metres a month earlier. Overall output of these plastic products totalled 19,685,000 square metres and 737,300,000 square metres, respectively, compared to 17,949,000 square metres and 732,900 square metres a year earlier.

PE production in Russia rose by 63% in Jan-Sept 2020

MOSCOW (MRC) -- Russia's overall polyethylene (PE) production totalled 2,204,200 tonnes in the first nine months of 2020, up by 63% year on year. Linear low density polyethylene (LLDPE) accounted for the greatest increase in the output, according to MRC's ScanPlast report.

September PE production in Russia was 233,200 tonnes, whereas this figure was 258,700 tonnes a month earlier, in the first month of autumn several producers stopped their capacities for repairs at once. Thus, overall PE output reached 2,204,200 tonnes in January-September 2020, compared to 1,349,000 tonnes a year earlier. Production of all PE grades rose, but LLDPE accounted for the greatest increase, which was provided by ZapSibNeftekhim.

The structure of PE output by grades looked the following way over the stated period.

September production of high density polyethylene (HDPE) in Russia exceeded 156,200 tonnes, compared with 169,000 tonnes in August; Kazanorgsintez shut its capacities for scheduled turnaround in September-October. Russian plants' overall HDPE output reached 1,365,600 tonnes in January-September 2020, up by 96% year on year.

September total low density polyethylene (LDPE) production decreased to 28,300 tonnes from 50,300 tonnes in August, as Ufaorgsintez, Tomskneftekhim and Kazanorgsintez shut their facilities for scheduled maintenance works. Thus, overall production of this PE grade totalled 468,200 tonnes over the stated period, down by 2% year on year.

September LLDPE production rose to 48,700 tonnes from 39,300 tonnes a month earlier, ZapSibNeftekhim increased its capacity utilisation. Overall LLDPE production grew to 370,400 tonnes in the first nine months of 2020 from 174,000 tonnes a year earlier.


Karpatneftekhim shuts PVC and HDPE production

MOSCOW (MRC) -- The Ukrainian plant Karpatneftekhim (Kalush, Ivano-Frankivsk region) has shut down its suspension polyvinyl chloride (SPVC) and high density polyethylene (HDPE) production capacities for a scheduled maintenance, according to ICIS-MRC Price report.

The plant's customers said the Ukrainian producer had taken off-stream its SPVC and HDPE production capacities for a scheduled turnaround by the beginning of this week. The outage will last for several weeks until 18 November.

Karpatneftekhim produced 53,900 tonnes of HDPE and 205,000 tonnes of PVC in the first nine months of 2020, down by 19% and up by 19%, respectively, year on year.

Karpatneftekhim is one of the largest enterprises of Ukraine's petrochemical complex. Currently, the plant can produce annually 300,000 tonnes of PVC, 200,000 tonnes of caustic soda, about 180,000 tonnes of chlorine, as well as 250,000 tonnes of ethylene and 100,000 tonnes of polyethylene.

Trinseo and TRS partner to improve recyclability

MOSCOW (MRC) -- Trinseo, a global materials solutions provider and manufacturer of plastics, latex binders and synthetic rubber, has reached definitive agreements with Tyre Recycling Solutions (TRS) on a commercial collaboration and an equity investment in TRS, as per the company's press relese.

The transaction is expected to close later this quarter, subject to ordinary closing conditions.

The new collaboration agreement will see the two companies collaborate on research and development, pooling their combined technology expertise to help global tire manufacturers develop more sustainable tire formulations. Trinseo and TRS share the long-term goal of developing new value-creating systems for the manufacture of tires that reduce environmental footprint and create a sustainable outlet for end of life tires.

“This collaboration is extremely important for developing real circular solutions for the tire and technical rubber goods industries. As a leading supplier of synthetic rubber to the tire industry, we are committed to helping our customers achieve their sustainability goals and believe that the most successful way to do this is through collaboration across the value chain. The partnership with TRS will provide us with high quality recycled tire feedstock to serve customers globally,” said Francesca Reverberi, Vice President, Engineered Materials and Synthetic Rubber, Trinseo.

Staffan Ahlgren, Chief Executive Officer, TRS, commented: “TRS has already been working closely with Trinseo for several years and we are excited to enter the next phase of our collaboration. TRS has developed proprietary technologies to process end-of-life tires and deliver output products with higher circular economical value. The partnership with Trinseo is confirmation of the great strides we’ve made since the company was founded seven years ago.”

The investment is aligned and consistent with Trinseo’s recently announced 2030 Sustainability Goals which outline the company’s focus on tackling climate change, embedding sustainability in its product portfolio, promoting supplier and operational stewardship, and embodying responsibility as an employer. Launched to coincide with the company’s ten-year anniversary, these long-term goals are now at the heart of the company at every level.

As MRC reported previously, in mid-October, 2020, Trinseo (Berwyn, Pennsylvania) said it had received mass-balance certification for three families of products that it manufactures at sites in Europe: polystyrene (PS), at Tessenderlo, Belgium; polycarbonate (PC), at Stade, Germany; and synthetic rubber, at Schkopau, Germany.

According to ICIS-MRC Price report, October prices of Russian PS continued their upward trend. A shortage of material remained in the domestic market. Traders said Nizhnekamskneftekhim reduced its offer prices for this month's PS purchases to 40%. October prices of Nizhnekamskneftekhim's general purpose polystyrene (GPPS) grew for the agreed with buyers quantities to Rb89,000-95,000/tonne CPT Moscow, including VAT, whereas high impact polystyrene (HIPS) prices - to Rb93,000-99,000/tonne CPT Moscow, including VAT.

Trinseo is a global materials company and manufacturer of plastics, latex and rubber. Trinseo's technology is used by customers in industries such as home appliances, automotive, building & construction, carpet, consumer electronics, consumer goods, electrical & lighting, medical, packaging, paper & paperboard, rubber goods and tires. Formerly known as Styron, Trinseo completed its renaming process in 1Q 2015. Trinseo had approximately USD3.8 billion in net sales in 2019, with 17 manufacturing sites around the world, and approximately 2,700 employees.