Essar, Progressive to partner on GBP750-million low-carbon hydrogen project in UK

MOSCOW (MRC) -- Essar Oil (Mumbai, India) and clean energy specialist Progressive Energy (Stonehouse, UK) say they have agreed to partner on the development of two low-carbon hydrogen production plants at Essar’s Stanlow refinery in Cheshire, UK, that will supply Progressive’s planned HyNet low-carbon regional distribution network, accoring to Chemweek.

The companies have signed a memorandum of understanding to jointly invest GBP750 million (USD1.02 billion) to build two hydrogen production hubs, they say. The first hub will initially produce 3 terawatt-hours (TWh) of low-carbon hydrogen each year from 2025, converting natural gas and fuel gases from the refinery. This will be followed by a facility twice as large, enabling a total capacity of over 9 TWh of hydrogen/year. Carbon dioxide (CO2) from the process will be captured and injected using existing pipelines into subsurface geological reservoirs offshore in Liverpool Bay on the UK’s west coast.

The Stanlow refinery produces 16% of UK road transport fuels and processes 10 million metric tonnes/year of crude oil and other feedstocks.

The new plants will provide Essar with low-carbon hydrogen to decarbonize its own energy demand, in addition to creating a regional hydrogen economy, Essar says. The hydrogen supplied into Progressive’s HyNet North West system will be used for both industrial and domestic purposes, it says.

The plants will utilize Johnson Matthey’s Low Carbon Hydrogen (LCH) technology, with engineering in partnership SNC-Lavalin well advanced, Essar says. An initial GBP7.5 million in funding for early engineering work on the hydrogen project was provided by the UK government in February last year.

The hydrogen development will set the Stanlow refinery “on a journey to be the UK’s first net-zero emission refinery,” says Stein Ivar Bye, CEO of Essar’s UK energy business. The project has the potential to remove over 2 million metric tonnes/year of CO2 emissions current being produced, he says.

Essar acquired Stanlow refinery from Shell in 2011.

As MRC reported earlier, in late September 2019, Essar resumed operations at its cracker in Stanlow, UK with the capacity of 45,000 mt/year of ethylene and 165,000 mt/year of propylene. It was shut on 11 September, 2019, due to the power outage at the site.

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

According to MRC's DataScope report, PE imports to Russia decreased in January-November 2020 by 17% year on year and reached 569,900 tonnes. High density polyethylene (HDPE) accounted for the greatest reduction in imports. At the same time, PP imports into Russia increased by 21% year on year to about 202,000 tonnes in the first eleven months of 2020. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.
MRC

MOSCOW (MRC) -- BASF says its 420,000-metric ton/year steam cracker in Ludwigshafen, Germany is continuously running and has not caused any interruption of supply to its customers, according to a letter received by MRC from the company's press office.

Earlier several media outlets reported that unscheduled flaring started on 13 January at the northern part of the Ludwigshafen site and was expected to last until 17 January and that an unspecified unit was shut, which "was not the case", as per the company's letter.

BASF operates another steam cracker at the northern part of Ludwigshafen with a capacity of 240,000 metric tons/year. Crackers No. 1 and 2 mostly function independently of each other. The two crackers process around 2 million metric tons/year of feedstock naphtha.

As MRC informed earlier, BASF has restarted its No. 1 steam cracker following a maintenance turnaround. Thus, the company resumed operations at the plant on September 30, 2019. The plant was shut for maintenance in mid-August, 2019. Located at Ludwigshafen in Germany, the No. 1 cracker has an ethylene production capacity of 235,000 mt/year and a propylene production capacity of 125,000 mt/year.

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

According to MRC's DataScope report, PE imports to Russia decreased in January-November 2020 by 17% year on year and reached 569,900 tonnes. High density polyethylene (HDPE) accounted for the greatest reduction in imports. At the same time, PP imports into Russia increased by 21% year on year to about 202,000 tonnes in the first eleven months of 2020. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.

BASF is the leading chemical company. It produces a wide range of chemicals, for example solvents, amines, resins, glues, electronic-grade chemicals, industrial gases, basic petrochemicals and inorganic chemicals. The most important customers for this segment are the pharmaceutical, construction, textile and automotive industries.
MRC

MOSCOW (MRC) -- Oil rose above USD56 a barrel on Wednesday, supported by expectations that the new US administration will deliver massive stimulus spending that would lift demand, as well as by OPEC curbs and forecasts for a drop in US crude inventories, reported Reuters.

US Treasury Secretary nominee Janet Yellen on Tuesday urged lawmakers to "act big" on pandemic relief spending. A fall in the dollar after the comments helped oil to rally, analysts said.

"This provided a good backdrop for oil and other risk assets," said Stephen Brennock of broker PVM. "While the near-term demand environment continues to be gripped by weakness and uncertainty, the future is brightening."

Brent crude was up 61 cents, or 1.1%, at USD56.51 a barrel at 1435 GMT, having gained 2.1% on Tuesday. U.S. West Texas Intermediate (WTI) crude climbed 66 cents, or 1.3%, to USD53.64.

President-elect Joe Biden's inauguration is on Wednesday.

"Increased fiscal support means more growth and higher U.S. oil demand," said Eugen Weinberg of Commerzbank. "What is more, the oil market is likely to remain in supply deficit both in the first quarter and in the year as a whole."

A record output cut by OPEC and its allies, a group known as OPEC+, last year helped to lift prices from historic lows.

This month Brent hit an 11-month high of USD57.42, helped by Saudi Arabia pledging to make additional, voluntarily cuts and most OPEC+ members agreeing to keep output steady in February.

Oil drew more support from expectations of lower US crude inventories. Analysts estimate crude stocks fell by 300,000 barrels in the week to Jan. 15. The first of the week's two supply reports is due on Wednesday from the American Petroleum Institute.

Gains were limited by concern about near-term demand as COVID-19 infections rise.

China's capital, Beijing, on Wednesday announced stricter COVID-19 control measures. Germany on Tuesday extended a lockdown for most shops and schools.

As MRC informed previously, oil producers face an unprecedented challenge to balance supply and demand as factors including the pace and response to COVID-19 vaccines cloud the outlook, according to an official with International Energy Agency"s (IEA) statement.

We remind that the COVID-19 outbreak has led to an unprecedented decline in demand affecting all sections of the Russian economy, which has impacted the demand for petrochemicals in the short-term. However, the pandemic triggered an increase in the demand for polymers in food packaging, and cleaning and hygiene products, according to GlobalData, a leading data and analytics company. With Russian petrochemical companies having the advantage of access to low-cost feedstock, and proximity to demand-rich Asian (primarily China) and European markets for the supply of petrochemical products, these companies appear to be well-positioned to derive full benefits from an improving market environment and global economy post-COVID-19, says GlobalData.

We also remind that in December 2020, Sibur, Gazprom Neft, and Uzbekneftegaz agreed to cooperate on potential investments in Uzbekistan including a major expansion of Uzbekneftegaz’s existing Shurtan Gas Chemical Complex (SGCC) and the proposed construction of a new gas chemicals facility. The signed cooperation agreement for the projects includes “the creation of a gas chemical complex using methanol-to-olefins (MTO) technology, and the expansion of the production capacity of the Shurtan Gas Chemical Complex”.

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

According to MRC's DataScope report, PE imports to Russia decreased in January-November 2020 by 17% year on year and reached 569,900 tonnes. High density polyethylene (HDPE) accounted for the greatest reduction in imports. At the same time, PP imports into Russia increased by 21% year on year to about 202,000 tonnes in the first eleven months of 2020. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.

MRC

MOSCOW (MRC) -- Omsky Kauchuk (Omsk Rubber) says it has begun producing isopropyl alcohol (IPA) at its new 30,000-metric tons/year plant in Omsk, Russia, as per the producer's press release.

“Thanks to the new capacities, the production of isopropyl alcohol in our country will increase by more than 2.5 times, to almost 100,000 tons per year,” Denis Maturov, Russia’s Minister of Industry and Trade, said at the plant’s commissioning on 18 January. “This will significantly reduce the share of imports in this niche, and Omsky Kauchuk will be able to cover more than half of the market.”

Acetone feedstock for the IPA plant is supplied from a phenol-acetone plant that Omsky Kauchuk brought online last year. Other Russian IPA producers are Khimprom, in Novocheboksarsk; Orsknefteorgsintez, in Orsk, and Sintez-Acetone, in Dzershinsk, according to data from IHS Markit.

Demand for IPA has surged globally over the past year owing to its use as an active ingredient in hand sanitizers, tightening supply and prompting multiple capacity expansions. In December 2020, Seqens (Ecully, France) announced a 45,000-metric tons/year expansion at Roussillon, France, with startup in early 2022. In October, Advanced Petrochemicals Co. announced plans for a 70,000-metric tons/year unit at Jubail, Saudi Arabia.

As MRC informed earlier, the production of phenol and acetone at Omsky Kauchuk was opened in January 2020.

Along with phenol, acetone is largely used to produce bisphenol A (BPA), which, in its turn, is used in the production of plastics such as polycarbonate (PC) and epoxy resins.

According to MRC's ScanPlast report, Russia's estimated consumption of PC granules (excluding imports and exports to\\from Belarus) rose in January-November 2020 by 18% year on year to 83,600 tonnes (70,600 tonnes a year earlier).
MRC

MOSCOW (MRC) -- Industry groups welcomed President Joe Biden on his first day in office, vowing to work together with the administration on its stated goals to address the COVID-19 pandemic and climate change in its early days. The American Chemistry Council particularly praised Biden for following through on his "Day One" promise of signing an executive order rejoining the Paris Agreement and committing the United States to lower carbon emissions, reported Chemweek.

“(ACC) and its members welcome President Biden’s executive decision to rejoin the Paris Agreement,” ACC said in a statement. “America’s chemical and plastics manufacturers - a primary driver of the American economy, American innovation and the creation of emissions-reducing technologies - support meaningful efforts to reduce emissions for the health of our planet and future generations.”

The Paris Agreement seeks to limit GHG concentrations to a level consistent with a global warming of well below 2 degrees Celsius above pre-industrial levels. It was signed in 2015 at the Sustainable Innovation Forum COP21 and ratified by 189 countries. Former President Trump withdrew the US from the Paris accord in 2017, a move that only became effective in November of last year.

ACC cautioned, however, that for the Paris targets to be met, Congress and the private sector must work together to develop and implement a national, comprehensive, market-based system to drive emissions reductions. “The technologies and materials created by our industry are helping to reduce emissions throughout our economy today,” the trade group added. “As demand for low and zero emissions solutions continues to grow in the future, so too will the demand for the products of chemistry, including plastics. Virtually every low-carbon electricity, energy efficiency and transportation technology is made possible by the chemical industry, including solar panels, wind turbines, electric and high-efficiency vehicles, energy-efficient building products, low-emissions fuels, and advanced batteries.”

ACC also pledged to work with Democrats, Republicans, NGOs, and “Americans of all political stripes” to find common ground on the solutions needed to help solve other pressing challenges. “From chemistry’s unique role in defeating COVID-19, to combating climate change, to improving sustainability and protecting the health and safety of people worldwide, the stakes could not be higher – and the ability of the Biden Administration and chemical industry to work together to develop solutions, more imperative,” ACC added.

SOCMA also issued a release saying it looked forward to working with the Biden administration. "SOCMA is committed to creating a robust dialogue with incoming officials and cultivating long-standing relationships within key agencies that govern our industry, such as the Environmental Protection Agency, Occupational Safety and Health Administration, the Department of Homeland Security and the Food and Drug Administration, among others," the trade group said in a statement. "By working together, we can resolve challenges and identify opportunities for the specialty chemical industry to thrive.”

Biden has also indicated he will reverse several Trump policies reducing environmental protections.

As MRC informed earlier, ACC’s chemical activity barometer (CAB), a composite of industry activity and leading economic indicator, increased 1.1% on a sequential three-month moving average (3MMA) basis in December. The index fell 1.1% year-on-year (YOY) in December. The CAB index points toward continued economic recovery.

We remind that Russia's output of chemical products rose in November 2020 by 9.5% year on year. At the same time, production of basic chemicals increased in the first eleven months of 2020 by 6.6% year on year, according to Rosstat's data. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the January-November 2020 output. Last month"s production of polymers in primary form rose to 896,000 tonnes from 852,000 tonnes in October. Overall output of polymers in primary form totalled 9,240,000 tonnes over the stated period, up by 17.1% year on year.
MRC