MOSCOW (MRC) -- The closure of one of Australia's last remaining oil refineries, carbon border taxes in Europe and a proposal for the world's biggest battery storage plant may seem unrelated at first glance, said Hydrocarbonprocessing.
But they all speak to the ongoing failure of Australia's conservative government to produce a coherent energy and climate change policy, one that gains public and business sector support and recognizes the reality of a changing world. It's no secret that many leading members of Prime Minister Scott Morrison's Liberal-National coalition government are in favor of ongoing, and increased, use of fossil fuels over renewable alternatives.
But it seems the federal government can't even get a fossil fuel policy that works, and the closure of the Exxon Mobil oil refinery in Melbourne is a case in point. The U.S. oil major announced on Wednesday that it plans to shut its 90,000 barrels per day Altona refinery in Australia's second-largest city and convert the 72-year-old plant to an import and storage terminal.
When Altona shuts it will leave Australia with just two refineries, and one of those, the Ampol plant in Brisbane is under review with closure a likely outcome. The country had eight refineries at the start of the century, which were capable of meeting national fuel demand at the time, but the sector has been hit by shutdowns as plants grew older and less competitive and struggled to compete with the new mega-refineries built across Asia, but especially in China and India.
The government has made an attempt to keep some refining capacity, offering up to A$2.3 billion (USD1.8 billion) in a fuel security package, but this was only accepted by Viva Energy , which operates a plant near Melbourne. Australia will likely become almost entirely dependent on fuel imports in coming years and the government has yet to reveal plans on mitigating the risk. It could, for example, build joint storage facilities with regional partners or more tanks locally.
If the government's fuel policies leave something to be desired, the power generation sector is in even worse shape from a policy perspective. Morrison has been pushing what his government calls a gas-fired recovery from the economic hit caused by the coronavirus pandemic. That involves potential subsidies for natural gas pipelines and the construction of a massive gas-fired power plant north of the Sydney, the country's biggest city.
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 ScanPlast report, Russia's estimated PE consumption totalled 2,220,640 tonnes in 2020, up by 2% year on year. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, polypropylene (PP) shipments to the Russian market reached 1 240,000 tonnes in 2020 (calculated using the formula: production, minus exports, plus imports, excluding producers' inventories as of 1 January, 2020).