Prax Group completes acquisition of UK refinery from Total

MOSCOW (MRC) -- The Prax Group has completed the acquisition of the 110,000-b/d Lindsey refinery at Killinghome, UK, from Total, reported Chemweek with reference to the company's statement.

The value of the acquisition was not disclosed. Following the completion of the deal that was first announced in June 2020, the Prax Group has finalized a crude oil and feedstock supply agreement with global commodities giant Trafigura.

The Prax Group, a physical oil trading and logistics company, will purchase crude oil and refinery feedstocks from Trafigura for all of its requirements for the re-named Prax Lindsey oil refinery.

"This arrangement is an important step in the group's plans for the long-term growth of the refinery and it will pave the way to further strengthen our long-term relationship with Trafigura," Sanjeev Kumar, Prax Group CEO, said in the statement.

A shakeup of the European refinery sector is underway following a demand slump arising from the COVID-19 pandemic. Royal Dutch Shell put its subsidiary Dansk Shell up for sale in June last year, which included the 68,000-b/d Fredericia refinery in Denmark.

Even before the pandemic struck, a wave of rationalization was expected to sweep through Europe, as the region was caught between flagging domestic oil demand and competition from new super-sized refineries east of the Suez Canal.

More than 4 million b/d of new refining capacity will have been added to the world by 2023, mainly in the Middle East Gulf and China, according to Hedi Grati, head of Europe/CIS refining research at IHS Markit.

Overall, Europe currently has nameplate refining capacity of 14.9 million b/d, and utilization rates were around 12.35 million b/d in 2019, according to IHS Markit data. But IHS Markit forecast crude runs will fall to just 10.8 million b/d by 2025, according to Grati. IHS Markit analysts predict global oil demand will not return to levels seen in 2019 until 2023.

OPIS is an IHS Markit company.

As MRC wrote earlier, within the framework of its net zero strategy, Total will convert its Grandpuits refinery (Seine-et-Marne) into a zero-crude platform and will invest more then EUR500 mln into this project. By 2024 the platform will focus on four new industrial activities: production of renewable diesel primarily intended for the aviation industry, production of bioplastics, plastics recycling and operation of two photovoltaic solar power plants.

We remind that in November 2019, Total disclosed that itis evaluating construction of a new gas cracker at its Deasan, South Korea, joint venture (JV) with Hanwha Chemical.

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). Supply of exclusively PP random copolymer increased.

Total S.A. is a French multinational oil and gas company and one of the six "Supermajor" oil companies in the world with business in Europe, the United States, the Middle East and Asia. The company's petrochemical products cover two main groups: base chemicals and the consumer polymers (polyethylene, polypropylene and polystyrene) that are derived from them.
MRC

MOSCOW (MRC) -- Nigeria is losing 200,000 barrels of crude oil a day because of theft and vandalism, the head of the state oil company said, underscoring how insecurity is causing vast financial losses for the West African country, said Hydrocarbonprocessing.

With Brent Crude oil prices hovering around USD66.70, the losses would amount to more than USD13 million a day and more than USD4.8 billion a year, at a time when Nigeria needs funds to tackle poverty, improve security and boost the economy, which shrank 1.92% in 2020 in part due to the pandemic.

The group managing director of the Nigerian National Petroleum Corporation (NNPC), Mele Kyari, made the comments on Wednesday while meeting the new head of Nigeria's military, Lucky Irabor, a statement from the firm said.

"In terms of crude losses, it is still going on," said Kyari in the statement. "On the average, we are losing 200,000 barrels of crude every day," he added, attributing the losses to thieves and vandals. Irabor said the armed forces would protect Nigeria's oil and gas.

"Our existence, economically, rests almost solely on the NNPC, and to that extent, we must do everything possible to give you everything that you require," he said.

As per MRC, Nigeria’s state oil firm NNPC is in talks to raise around USD1 billion in a prepayment with trading firms to refurbish its largest refining complex at Port Harcourt. If the financing is concluded, the long overdue rehabilitation of the refinery should reduce Nigeria’s hefty fuel import bill. It would also mark Nigeria’s second oil-backed financing since the COVID-19 pandemic that has added to the difficulty of finding investors as fuel demand is sapped by lockdowns and renewable energy is gaining ground over fossil fuels.

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.

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). Supply of exclusively PP random copolymer increased.
MRC

MOSCOW (MRC) -- BASF has announced prices increases in North America for formic acid, neopentylglycol, select polyetheramines, and 1,4-butanediol (BDO) and its derivatives, reported Chemweek.

The price of all grades of formic acid has been raised by 5 cents/pound (cts/lb), effective immediately or as existing contracts permit, it says. Prices for BDO and its derivatives gamma-butyrolactone and n-methylpyrrolidone, meanwhile, will rise by 15 cts/lb as of 1 April, or as contracts allow. Prices will also be increased by 20 cts/lb for tetrahydrofuran and polytetramethylene ether glycol, also as of 1 April.

BASF says prices for three of its polyetheramine products in North America will also rise, effective 1 April or as contracts permit, by 30-38 cts/lb. The polyetheramine products are used mainly for the processing and curing of epoxy resins in various coating applications and sealing compounds.

The price of neopentylglycol, meanwhile, has been increased in the Americas, also effective 1 April or as allowable. BASF says it will hike its price for all grades of the polyalcohol in North America by 27 cts/lb, and in South America by $595/metric ton.

BASF announced a price rise on 1 March for BDO and its derivatives in Europe.

As MRC wrote before, in mid-February, BASF said it was restarting one of its steam crackers at its Ludwigshafen complex in Germany after operations were halted last Wednesday due to a technical issue. The naphtha cracker produces ethylene and propylene, and is one of two crackers on the site. One has a production capacity of 420,000 metric tons/year, with the other’s capacity at 240,000 metric tons/year, according to IHS Markit data.

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). Supply of exclusively PP random copolymer increased.

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) -- ExxonMobil has said that it is adding Michael Angelakis and Jeffrey Ubben to the company’s board of directors, bringing the size of the company’s board to 13 directors, according to Chemweek.

Angelakis is CEO of Atairos (New York, New York), a diversified investment firm, and a former CFO at cable and telecommunication company Comcast (Philadelphia, Pennsylvania). Ubben is a co-founder of Inclusive Capital Partners (San Francisco, California), an investment firm focused on environment, social and governance (ESG) investing.

“Their contributions will be valued as ExxonMobil advances plans to increase shareholder value by responsibly providing needed energy while playing a leadership role in the energy transition,” says ExxonMobil chairman and CEO Darren Woods.

ExxonMobil shares jumped on 1 March on the news, closing at USD56.40, after closing at USD54.38 on Friday. Ubben has a history as an activist shareholder, having previously co-founded ValueAct Capital Partners, which has held stakes in Baker Hughes, Rolls-Royce and Motorola, among other major companies.

As MRC wrote before, ExxonMobil's recent operational shutdowns include polyethylene (PE) facilities amid power outages prompted by the deep freeze that has enveloped the US Gulf Coast. "This event has caused widespread power outages across Texas and Louisiana" Feb. 15," the letter, dated Feb. 16, said. "As a consequence, several ExxonMobil Chemical operations have experienced loss of power and other key utilities, impacting our ability to resume full operations." ExxonMobil operates three PE units in Mont Belvieu, Texas, with combined capacity of 880,000 mt/year, according to S&P Global Platts Analytics.

Exxon is among many petrochemical producers that shut Feb. 14 and subsequent days because of sustained extreme sub-freezing temperatures in the region. ExxonMobil previously confirmed Feb. 16 that the company had shut all refining and chemical operations at its Baytown and Beaumont, Texas, complexes. Ethylene produced at Baytown feeds the Mont Belvieu PE operations.

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.

ExxonMobil is the largest non-government owned company in the energy industry and produces about 3% of the world"s oil and about 2% of the world's energy.
MRC

MOSCOW (MRC) -- Ineos and French power company Engie have announced a pilot project to partially replace natural gas feed with hydrogen at Ineos’s phenol plant in Doel near Antwerp, Belgium, said Chemweek.

No investment figure has been given. Hydrogen will be used in a commercial-scale cogeneration plant designed to generate electricity and heat from natural gas. About 10% of the cogeneration plant's gas feed will initially be replaced by hydrogen, with this to then be increased to 20% in a gradual process. This is the first time that such tests have been carried out on an industrial scale in Belgium, says Ineos. The cogeneration plant at the phenol site “has the ideal profile to realize this test," it says.

Engie will be responsible for the design, installation, and operation of the technology at the site in Doel, says Ineos, which adds that its phenol business “has experience in handling hydrogen as a raw material for its production processes and also has the necessary permits for the hydrogen project." The project will provide practical insights and data in the use of hydrogen in industrial facilities, including monitoring efficiency and measuring emissions during combustion.

Ineos and Engie are both already participating in a potential power-to-methanol project consortium at Port of Antwerp, which aims to produce green methanol by reusing captured carbon dioxide (CO2) in combination with sustainably generated hydrogen. Ineos subsidiary Inovyn plans to operate an 8,000-metric tons/year demonstration plant at the company’s Lillo manufacturing site in Belgium, with the unit operational by 2022.

Ineos currently produces 300,000 metric tons/year of hydrogen as a coproduct of its chemical processes. The hydrogen is used largely as a low-carbon fuel and raw material in the company’s production processes, it says. The pilot project at Doel will “demonstrate the potential for conversion of existing installations to hydrogen, as a springboard for further industrial upscaling," it adds.

As per MRC, Ineos Styrolution, a subsidiary of Ineos, a major European manufacturer of petrochemical products, has announced force majeure for the supply of polystyrene (PS) in North America. The company's operations in Altamira, Mexico, Chanakhon, Illinois and Decatur, Alabama have been severely affected by the recent winter storms in Texas.

According to MRC's ScanPlast, the estimated consumption of PS and styrene plastics at the end of 2020 amounted to 502,630 tonnes, which corresponds to the consumption indicator a year earlier. Estimated consumption of PS and styrene plastics in December increased by 5% compared to the same month in 2019 and amounted to 47,490 tonnes.

Styrolution, the world's leading manufacturer of styrene monomer, polystyrene and styrene-based products, was founded in October 2011 by BASF and Ineos, who held equal shares in a joint venture. In June 2014, Ineos closed the deal to acquire a 50% stake in BASF in a joint venture between the two companies - Styrolution. The deal was valued at EUR1.1 billion. Thus, upon completion of the deal, Ineos became the sovereign owner of Styrolution. The sale of BASF's stake in Styrolution is part of a 2011 shareholder agreement. In January 2016 Styrolution made the decision to change its name to Ineos Styrolution.
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