Lukoil unit to remove crude stored at idled Come-by-Chance refinery

MOSCOW (MRC) -- The trading unit of Russia’s Lukoil plans to remove crude oil it has stored at the idled Come-by-Chance refinery in Newfoundland, Canada, reported Reuters with reference to three sources familiar with the matter.

The Canadian refinery has been idled since last year, a casualty of coronavirus-induced demand destruction. Lukoil’s Litasco unit is its primary crude supplier, and currently is storing between 2 and 3 million barrels of oil there that it plans on re-exporting to sell elsewhere, the sources said.

Numerous North American refineries have had to shut as coronavirus restrictions sapped fuel demand. The refinery, operated by North Atlantic Refinery Limited (NARL) and New York-based investment firm Silverpeak, has been closed since March, and is actively searching for a new owner.

Lukoil was not immediately available for comment. NARL declined to comment.

The crude supply deal NARL inked with Lukoil in 2016 is still in place for now, according to the sources. Lukoil also has an agreement to finance the products for sale at its retail units.

Lukoil had been storing its crude oil for free at the refinery while the market was in contango, where later-dated prices are higher than current ones. Now, though, current prices are higher, giving Lukoil the opportunity to sell the oil soon, the sources said.

Some of the oil could be shipped out as early as February, the sources said, adding that other options were also in consideration.

Earlier this month, the Canadian province Newfoundland and Labrador agreed to give NARL a total of CD16.6 million (USD13.05 million) to keep the 135,000 barrel-per-day plant idled as the owner seeks a new capital partner.

Come-by-Chance has been looking for a new owner after Irving Oil backed away from a purchase and share agreement in October.

As MRC informed earlier, Russian energy major Lukoil (Moscow) is studying several potential petrochemical projects in Russia and Bulgaria, with investment decisions expected to be made on two of them in 2021.

Thus, Lukoil announced an investment decision in June, 2019, to proceed with a 500,000-metric tons/year PP plant at its Kstovo refinery. In September this year it selected Lummus Technology’s Novolen PP technology and basic design engineering for the facility’s production unit. Kstovo is one of Lukoil’s largest crude refineries in Russia with a throughput of 17 million metric tons/year, with the company recently adding a catalytic cracking unit that almost doubled the refinery’s production of propylene feedstock to 300,000 metric tons/year.

At Budennovsk in Russia’s far south west, the company’s Stavrolen petchems complex currently has the capacity to produce 350,000 metric tons/year of ethylene, 300,000 metric tons of polyethylene (PE), 120,000 metric tons/year of PP, and 80,000 metric tons of benzene. Lukoil has for several years been considering construction of a new gas chemicals plant at Stavrolen to crack more ethane extracted from associated petroleum gas produced by its oil and gas fields in the north of the Caspian Sea. The potential new plant would raise Stavrolen’s ethylene and PE output to around 600,000 metric tons/year each, and increase PP production to 200,000 metric tons/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.

Lukoil is one of the leading vertically integrated oil companies in Russia. The main activities of the company include exploration and production of oil and gas, production and sale of petroleum products. Lukoil is the second largest privately-owned oil company in the world in terms of proven hydrocarbon reserves. Lukoil's production capacities include polyethylene polypropylene. The structure of Lukoil includes one of the largest petrochemical plant in Russia - Stavrolen.
MRC

MOSCOW (MRC) -- UPM (Helsinki, Finland) says it has started basic engineering and commercial studies for a potential 500,000-metric tons/year biofuels refinery, to be located in either Finland or the Netherlands, and is also under way with construction of a previously announced EUR550-million (USD667 million) biochemicals plant in Leuna, Germany, said Chemweek.

The new biorefinery would manufacture products to “significantly reduce carbon footprint in road transport and aviation, as well as replace fossil raw materials with renewable alternatives in chemicals and bioplastics,” it says. UPM’s solid wood biomass-based residues and side streams will play a substantial role in the feedstock pool for the facility, if it proceeds. The studies will define the business case, select technology options, and estimate investment needs, with the technology concept to include the use of green hydrogen in the production process. The two locations being considered are in Kotka, Finland, and Rotterdam, Netherlands. UPM estimates the base engineering phase will take a minimum of one year.

Construction of the biochemical plant in Leuna began during the fourth quarter of 2020 and is on track, with the company simultaneously setting up the business for eventual market entry, it says. The facility is scheduled to come online by the end of 2022, producing 220,000 metric tons/year of bio–monoethylene glycol (bio-MEG) and lignin-based renewable functional fillers.

As per MRC, UPM (Helsinki, Finland) says it has agreed to buy the entire annual lignin production of Domtar Paper Co.’s plant at Plymouth Mill, North Carolina, starting in January 2021. The 20,000-metric tons/year of lignin will enable UPM to increase its existing supplies and expand its role in the growing lignin business and different application segments, it says. Part of the additional lignin supply will be used to complement UPM’s BioPiva products brand.

As MRC informed earlier, PTT Global Chemical (PTTGC) has announced that Auria Biochemicals Co., a joint venture of PTTGC and Myriant Corp. On 12 Apr. 2018, at a general meeting of Auria shareholders, a resolution was passed to dissolve the joint venture, which was established in 2013 to conduct research and development of bio-based chemicals in order to enhance Myriant's technology. Myriant is a wholly-owned subsidiary of PTTGC.

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) -- Honeywell’s performance materials and technologies segment reports fourth-quarter profits down 25.7% YOY, to USD478 million, on sales down 10.5%, to USD2.5 billion, according to Chemweek.

Sales declined to on continued delays in Process Solutions automation projects as well as volume declines in smart energy and thermal solutions, and lower gas processing projects, catalyst shipments, licensing, and engineering due to softness in the oil and gas sector in UOP, partially offset by return to growth in Advanced Materials driven by demand for fluorine products. Segment margin contracted 380 basis points to 18.7% driven by the impact of lower sales volumes and mix, partially offset by productivity actions.

Honeywell’s net income declined 13.3% YOY, to USD1.4 billion. Adjusted earnings per share of USD2.07 was a penny higher YOY and beat the analysts’ consensus estimate of USD2.00, as reported by Refinitiv (New York). Net sales were down 6.3% YOY, to USD8.9 billion.

As MRC reported earlier, in May, 2020, Honeywell announced that Enterprise Products Partners L.P. will use Honeywell UOP’s C3 Oleflex technology in its second propane dehydrogenation plant, called "PDH 2". Located near Mont Belvieu, Texas, PDH 2 will produce 750,000 metric tons per year of polymer-grade propylene as part of Enterprise’s expansion of propylene manufacturing capacity.

We remind that in November, 2020, Honeywell announced Zhenhua Petrochemical Co. Ltd will use Honeywell UOP’s C3 Oleflex technology for propane dehydrogenation to process 1 million metric tons per year of polymer-grade propylene for a proposed plant in Dongying City, Shandong Province, China.

Propylene is the main feedstock for the production of polypropylene (PP).

According to MRC's DataScope report, PP imports into Russia increased by 23% year on year to about 224,000 tonnes in 2020. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.
MRC

MOSCOW (MRC) -- Japanese refiner Idemitsu Kosan Co said on Friday it had extended its public tender offer for a smaller rival, Toa Oil Co, in which a US investment fund has been building up a stake, reported Reuters.

In a statement to the Tokyo Stock Exchange, Idemitsu said the tender would run until Feb. 15, as Toa Oil had revised its earnings forecast.

Idemitsu launched the tender in December to buy all the shares of Toa Oil at 2,450 yen each in a deal worth 15 billion yen (USD143 million).

Toa shares have since surged to trade above Idemitsu’s offer. By Thursday, asset manager Cornwall Capital Management had boosted its stake to 22.98%, a public filing showed, amassing a stake sufficient to block a bid.

Idemitsu, which already owns 50.12% of Toa, aims to acquire a further stake of at least 16.55% to succeed in its bid.

Shares of Toa Oil closed at 2,805 yen on Friday. (USD1=104.5500 yen)

As MRC informed earlier, Japan's Idemitsu Kosan took off-stream its naphtha cracker in Japan for a turnaround on September 7, 2020. The cracker remained under maintenance by end-October, 2020. Located at Tokuyama, Japan, the cracker has an ethylene production capacity of 690,000 mt/year and propylene production capacity of 110,000 mt/year. Idemitsu Kosan also operates another cracker in Chiba, Japan, with an ethylene production capacity of 410,000 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.

Idemitsu Kosan is a Japanese petroleum company. It owns and operates oil platforms, refineries and produces and sells petroleum, oils and petrochemical products. The company runs two petrochemical plants in Chiba and Tokuyama. The two naphtha crackers can produce up to 997,000 tonnes of ethylene per year.
MRC

MOSCOW (MRC) -- Royal DSM, a global science-based company in Nutrition, Health and Sustainable Living, and Clariter, an international clean-tech company, today announced a strategic partnership to pursue a next-generation chemical recycling solution for products based on DSM’s Dyneema, an ultra-high-molecular-weight polyethylene (UHMWPE) fiber, said the company.

As a first step, sample products - including ropes, nets and ballistic materials made with Dyneema® - were successfully converted at Clariter’s pilot plant in Poland, demonstrating the recyclability potential of Dyneema® and underlining the active commitment of DSM Protective Materials to shape a more sustainable world.

In line with its ambitious sustainability targets, and following the successful launch of bio-based Dyneema® (mass balance), DSM Protective Materials is actively pursuing reuse and recycling solutions for end-of-life Dyneema®-based products. To drive technical recycling solutions, DSM Protective Materials and Clariter partnered to test the feasibility of using Dyneema® as a feedstock in Clariter’s chemical recycling process. Sample products made with Dyneema® were used in Clariter’s tests at its pilot plant in Poland. The positive results confirm the technical viability of transforming Dyneema®-based end-products into high-value, industrial grade, product families: oils, waxes, and solvents via Clariter’s patented 3-step chemical recycling process. These can be further used as ingredients to manufacture new end- and consumer products.

Moving forward, DSM Protective Materials and Clariter will continue to drive this initiative to shape a more sustainable world. Specifically, building on the success of the lab-scale trial, Clariter has scheduled commercial-scale trials at its facility in South Africa for 2021, with the aim to use Dyneema®-derived feedstock in its full-scale European plants that will be built in the coming years. In addition, DSM will continue to actively explore the possibilities of reducing the environmental impact of Dyneema® across all product life stages.

As per MRC, SABIC, a global leader in the chemical industry, has recently collaborated with DSM and Viscofan in the development of an innovative multi-barrier film for meat casings. The film combines layers of a SABIC’s certified circular polyethylene (PE) from its TRUCIRCLE portfolio and a circular polyamide (PA) from DSM Engineering Materials in a more sustainable packaging solution without compromising the high functional and aesthetic performance required in the fresh food packaging market.

According to MRC's ScanPlast report, December PE production in Russia decreased to 265,100 tonnes, whereas this figure was at 272,800 tonnes a month earlier, as ZapSibNeftekhim decreased its capacity utilisation in the first month of calender winter. Thus, overall PE production reached 2,987,000 tonnes in 2020, compared to 1, 857,600 tonnes a year earlier. Production of all PE grades increased, with low density polyethylene (LDPE) being the exception.
MRC