Arctic snap in Texas forces OQ Chemicals to shut Bay City plant, declare force majeure

MOSCOW (MRC) -- OQ Chemicals (Monheim am Rhein, Germany) says it has been forced to temporarily shut down its manufacturing plant at Bay City, Texas, and declare force majeure “due to severe weather” after the Texas Gulf Coast area was hit by an extreme cold front, reported Chemweek.

The cold weather conditions have affected the area’s terminals, barging, and shipping facilities, as well as OQ’s plant operations, it says. “As a consequence of the plant shutdown, OQ Chemicals provides notice of force majeure and suspension of performance of its supply obligations for oxo alcohols, aldehydes, acids, and esters,” it says.

The company is continuing to monitor the situation and “working diligently to resume production as soon as possible,” says Fred Gaytan, vice president at OQ Chemicals.

The cold weather conditions and high power demand have impacted operations at several oil refineries in Texas, with nearly 2.0 million barrels/day of refining capacity either off-line or in the process of coming down, according to OPIS, an IHS Markit company.

Earlier this week, OQ announced global sales control on all grades of its carboxylic acids and aldehydes due primarily to strong demand and recent short-term raw material disruptions, as well as in preparation for a planned maintenance turnaround at the Bay City plant.

As MRC wrote before, in September 2020, OQ Chemicals entered into an agreement to license its advanced proprietary technology for the production of ethylene and propylene derivatives to Duqm Refinery and Petrochemicals Industries Company (DRPIC) in Oman. DRPIC, a joint venture between Oman Oil Company and Kuwait International Oil Company, is a planned grassroots petrochemical complex at Duqm, Oman. In all, DRPIC awarded twelve license packages to international licensors.

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).

OQ Chemicals, formerly Oxea, is a global manufacturer of oxo intermediates and oxo derivatives, such as alcohols, polyols, carboxylic acids, specialty esters, and amines. These products are used for the production of high-quality coatings, lubricants, cosmetics and pharmaceutical products, flavours and fragrances, printing inks and plastics. OQ Chemicals is part of OQ, an integrated energy company that delivers sustainability and business excellence. OQ operates in 16 countries and covers the entire value chain from exploration and production to the marketing and distribution of its products.

TechnipFMC completes separation of two industry-leading, independent, publicly traded companies

MOSCOW (MRC) -- TechnipFMC has announced the completion of its spin-off transaction to create two industry leading, independent, publicly traded companies, TechnipFMC and Technip Energies, according to Hydrocarbonprocessing.

In connection with the separation, the Technip Energies technical reference price was set at EUR9.00 ahead of its direct listing on the Euronext Paris Exchange where it will trade under the symbol “TE”.

Doug Pferdehirt, Chairman and CEO of TechnipFMC, stated: “I am delighted to announce the successful completion of the separation transaction. As the market leader and industry’s only fully integrated pure-play, we are uniquely positioned to transform our clients’ project economics, helping them to unlock traditional and new energy resources while reducing carbon intensity and supporting their energy transition ambitions.”

New board of directors appointment for Technip Energies. Technip Energies today announced the appointment of a new member of its Board of Directors, Simon Eyers, effective February 16, 2021. Mr. Eyers previously served as Managing Director of Warburg Pincus International from 2012 to 2018 focusing on energy investments, and as a Senior Advisor until the end of 2020 after retiring from his full-time role. In addition to being a founding partner of 4D Global Energy Advisors, a private equity firm based in Paris specializing in the energy sector, Mr. Eyers also held executive leadership roles in various technology ventures and worked 13 years in energy investment banking at SG Warburg & Co, Goldman Sachs and Credit Suisse First Boston Europe.

"We are pleased to welcome Simon Eyers to the Technip Energies Board," said Arnaud Pieton, CEO of Technip Energies. "Simon’s deep understanding of global energy markets and strong experience with the development of new technologies will be invaluable as we grow our business in the future."

As MRC reported earlier, in November 2020, TechnipFMC successfully completed the remaining conditions required to enable work to commence on the EPC contract with Assiut National Oil Processing Company (ANOPC) for the construction of a new hydrocracking complex for the Assiut refinery in Egypt.

We remind that Saad Helal, the Chairman of Egyptian Petrochemicals Holding Company (ECHEM), stated in September 2020 that his company is rapidly working on implementing a number of seven new projects to the national plan for the period of 2020-2035. He said that these projects include one by Wood Technology Company for producing medium-density fibreboard (MDF) wood which is being installed and implemented by Petrojet, a methanol derivative production project which produce a capacity of 140 tons per year and is worth USD117 million, and a project by the Egyptian Ethylene and Derivatives Company (Ethydco) for producing rubber polybutadiene at a capacity of 36,000 tons per year with costs USD183 million.

Butadiene is the main feedstock for the production of acrylonitrile-butadiene-styrene (ABS).

According to ICIS-MRC Price report, last year's ABS imports to Russia increased by 4% year on year to 35,000 tonnes from 33,700 tonnes a year earlier. South Korean shipments accounted for 62% (21,600 tonnes) in January-December 2020 versus the share of 58% (19,700 tonnes) a year earlier.

L&T awarded two EPCC Contracts for HRRL refinery, PC complex

MOSCOW (MRC) -- HPCL Rajasthan Refinery Ltd. (HRRL) has recently selected L&T hydrocarbon Engineering (LTHE) for the engineering, procurement, construction and commissioning (EPCC) of a dual feed cracker unit and a petrochemical fluidized catalytic cracking unit for its integrated refinery and petrochemical complex in Rajasthan, India, reported Apic-online.

Earlier estimated to cost around Rs 43,129 crore, the project involves a 9-million-t/y refinery, as well as facilities to produce petrochemicals. Start-up was originally scheduled for 2017. A new schedule was not given.

The dual feed cracker unit, with a capacity of 890,000 t/y, will convert refinery naphtha and offgases to produce polymer-grade ethylene and propylene, as well by-products such as butadiene, benzene, toluene and gasoline, through a thermal cracking process. The ethylene and propylene will be used as feedstock for a polyethylene and polypropylene unit.

The 2.9-million-t/y petrochemical fluidized catalytic cracking unit will convert heavy hydrocarbons from the vacuum distillation unit to produce gasoline, diesel, pro-pylene and lighter products by the process of catalytic cracking.

As MRC informed earlier, India's HPCL-Mittal Energy Limited, or HMEL, will start a new 500,000 mt/year polypropylene (PP) plant in Bhatinda in 2021. The company has an existing 440,000 mt/year PP unit at the same site.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and 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). Supply of exclusively PP random copolymer increased.

Hindustan Petroleum Corporation Limited (HPCL) is an Indian state-owned oil and natural gas company with its headquarters at Mumbai, Maharashtra and with Navratna status. HPCL has about 25% marketing share in India among PSUs and a strong marketing infrastructure. The Government of India owns 51.11% shares in HPCL and others are distributed amongst financial institutes, public and other investors.

Arkema declares force majeure on methyl acrylate in Europe

MOSCOW (MRC) -- Arkema has declared force majeure on its sales of methyl acrylate (methyl-A) in Europe, said the company.

Arkema does not produce methyl-A in Europe, but provides it to customers via a combination of imports from the US and swap deals with other local producers.

However, imports from the US are currently restricted, and there are limitations on the amount of material available for swap deals because of feedstock issues, meaning Arkema is unable to fully meet its contractual obligations.

As per MRC, Trinseo is on track to acquire Arkema’s polymethyl methacrylate (PMMA) business. In December, Trinseo announced that it agreed to buy the business for EUR1.14bn. Arkema’s PMMA business has consistently delivered good margins and cash flow, and it also serves many of Trinseo’s end markets. CEO Frank Bozich said that the acquisition of Arkema’s acrylics business is part of Trinseo’s strategy to grow the business in areas with higher margins and less cyclicality.

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. November 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.

COVID-19 - News digest as of 16.02.2021

1. Marathon Oil lays off 5% of workforce as part of cost-cut plans

MOSCOW (MRC) -- Marathon Oil Corp has laid off around 100 U.S. employees, or about 5% of its total workforce, a company spokeswoman told Reuters, days after the oil and gas producer cut salaries for top executives and board members, said Reuters. Although oil prices have raced back above the pre-pandemic level of $60 per barrel in recent months, producers are focusing on improving balance sheets instead of raising output, as demand forecasts hinge on vaccine rollouts. Marathon Oil's spokeswoman said the company's actions were part of its "commitment to continuously optimize our cost structure."