Caribbean refinery to test promises on poverty and pollution

MOSCOW (MRC) -- Earlier this month, Loren Hughes, a longtime resident of the U.S. Virgin Islands, noticed specks of an oily substance covering his home, as well as those owned by his neighbors, said Hydrocarbonprocessing.

For Hughes, 46, it brought back memories of the last time St. Croix's long-idled refinery was operating, roughly a decade earlier. The refinery restarted last month, bringing back hundreds of jobs - but for nearby residents, they say it also brought difficulty breathing, headaches and watery eyes. "Sometimes it's like sulfur or rotten eggs. The other smells are unexplainable," Hughes said.

The U.S. Environmental Protection Agency wants the refinery's owners, Limetree Bay Ventures, to increase its monitoring of air quality due to emissions affecting the nearby neighborhoods, but the owners have so far balked. St. Croix is a long way from the U.S. mainland. But the battle over the refinery's pollution on this Caribbean island and tourist resort is one of the first tests of how the Biden administration will prioritize environmental justice.

As the United States has become the world's largest fossil fuel producer, opponents have grown more vocal about how many projects, particularly in the petrochemical and refining industries, are situated near low-income areas with large minority populations. The Biden administration has vowed to make sure new energy projects do not unfairly harm those communities, such as the ones living near the refinery. About 90 million Americans live within 30 miles (50 km) of at least one refinery, according to environmental group Earthjustice.

"This situation offers the first opportunity for the Biden-Harris administration to stand up for an environmental justice community, and take a strong public health and climate chance stance concerning fossil fuels," said John Walke, senior attorney and director of clean air programs with the Natural Resources Defense Council. After a decade idle, the Limetree Bay refinery restarted this year with plans to process up to 200,000 barrels of oil a day into gasoline and other fuels. Limetree Bay Ventures also received strict conditions from the U.S. EPA, which told the company that it had to add enhanced air quality monitoring.

Limetree Bay, backed by private equity firms EIG and Arclight Capital, is appealing that directive, saying the monitors are not necessary and their operating cost is not Limetree's responsibility. A Reuters examination of publicly available EPA data shows the refinery is also currently not monitoring sulfur dioxide levels near the plant, as required. Limetree declined several requests for comment on this issue.

A spokesperson for EIG representing the refinery told Reuters it is committed to excellent environmental performance and considers it fundamental to the company's success. Arclight did not respond to requests for comment. St. Croix residents are torn between dealing with the effects of pollution and the benefits of high-paying jobs that offset the loss of tourism dollars amid the coronavirus pandemic.

"When you are talking about people who are poor, they're not going to criticize the refinery that gives them jobs," said Virginia Clairmont, a community activist who meets with company representatives quarterly. A 2020 study by researchers at University of Texas Medical Branch concluded that living within 30 miles of an oil refinery was associated with increased risk of multiple cancer types.

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 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) -- Two Shell units plan to sell some upstream assets in Egypt for up to USD926 million in a bid to focus on other operations in the North African country amid company plans to downsize future upstream operations globally, reported S&P Global.

Shell Egypt and one of its affiliates will sell the assets to subsidiaries of Cheiron Petroleum Corp. and Cairn Energy for a base consideration of USD646 million and additional payments of up to USD280 million between 2021 and 2024, depending on the oil price and result of further exploration, Shell said in a statement.

The sold assets include Shell Egypt's interest in 13 onshore concessions and the company's stake in Badr El-Din Petroleum Co., it added. The transaction is subject to regulatory and government approvals and is expected to be finalized by the second half of 2021.

Shell Egypt recently acquired seven new offshore concessions in the West Mediterranean, the Red Sea and in the West Nile Delta.

The deal "will enable Shell to concentrate on its offshore exploration and integrated value chain in Egypt, including seven new blocks in the Nile Delta, West Mediterranean and Red Sea," said Wael Sawan, Shell's Upstream Director. "It will help Egypt maximize the potential of its onshore assets through new investment, helping secure energy and revenue for years to come."

Shell has estimated its 2020 reserves replacement ratio would be minus 53%, reflecting lower prices, postponed investment decisions and asset sales, it said Feb. 4. For the first quarter, Shell expects its upstream output would be in a range of 2.40 million-2.60 million b/d of oil equivalent, up from fourth quarter 2020 levels of 2.37 million boe/d, but well below the Q4 2019 level of 2.76 million boe/d, it added.

The company plans to slim down its future upstream and refining operations and direct more spending to grow its low-carbon businesses, the company said Oct. 29, flagging for the first time that its oil production has likely already peaked.

Shell wants to pursue more "value over volume" by simplifying its upstream assets to nine core positions; Brazil, Brunei, Gulf of Mexico, Kazakhstan, Malaysia, Nigeria, Oman, Permian and UK North Sea.

As MRC informed previously, in early November 2020, Royal Dutch Shell announced it was closing its refinery in Convent, Louisiana, the largest such US facility and first on the US Gulf Coast to shut down since the coronavirus pandemic devastated worldwide demand.

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.

Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.
MRC

1. North American petrochemical producers might see long-term cost advantage by reducing CAPEX

MOSCOW (MRC) -- The shale gas advantage of North American petrochemical majors provides a boost for investments in the region, primarily in the U.S., said Hydrocarbonprocessing. However, the oil price crash narrowed this advantage and is likely to affect profitability. North American petrochemical majors that strive to pace investments efficiently, in line with market trends, will boost their competitiveness and seize further opportunities for growth over the long-term, says GlobalData, a leading data and analytics company. John Paul Somavarapu, Oil and Gas Analyst at GlobalData, comments: “The sudden decline in crude oil prices have distinctly affected the planned investments by the North American producers and they now need to efficiently pace investments while preserving long-term gains. GlobalData expects companies to lower their operating expenses and capital expenditures and focus on less capital intense investments to position themselves well while the market recovers." The pandemic and the resulting impact on feedstock costs have prompted petrochemical majors in North America to announce project delays.


MRC

MOSCOW (MRC) -- Crude oil futures rose during the mid-morning trade in Asia March 9, as expectations of higher oil demand amid an improved economic climate encouraged buying activity from investors, even as the market recovered from the chaos brought about by an attempted attack on a Saudi oil shipping port, reported S&P Global.

At 11:29 am Singapore time (0329 GMT), the ICE Brent May contract was up by 51 cents/b (0.75%) from the March 8 settle to USD68.75/b, while the April NYMEX light sweet crude contract was up by 41 cents/b (0.63%) to USD65.46/b.

Earlier on March 8, news of an attempted March 7 drone attack on a petroleum storage tank at the heavily protected Ras Tanura port had sent the Brent and NYMEX light sweet crude markers surging, with the front-month Brent contract crossing USD71/b briefly. Prices however came right back down after reports emerged that oil supply had not been affected.

This morning, after the volatility seen on March 8, prices increased, as the market fell back onto the promise of an improved supply-demand equation.

The demand prospect for oil has brightened considerably as COVID-19 infection numbers have fallen in major economies, and as the global economic climate continues to improve. A USD1.9 trillion US stimulus package, which has been approved by the US Senate and is now pending final approval by the US House of Representatives, promises to further expedite the demand recovery for oil.

Meanwhile, supply remains tight as the OPEC+, in its March 4 meeting, decided to largely roll over its March production quotas into April, and therefore keep 8 million b/d of OPEC+ production - or roughly 8% of pre-pandemic supply - off the market for at least another month.

"We have seen what looks like a classic V-shaped recovery in oil prices in the past few months, and that has been prompted by a broader improvement in the economic climate. Fundamentals for oil look good, and in the absence of noteworthy events, we are likely to see oil trending higher," David Lennox, resource analyst at Fat Prophets, told S&P Global Platts on March. 9.

Meanwhile, in inventory data, commercial US crude stocks are expected to have increased 2.7 million barrels to around 487.3 million barrels in the week ended March 5, analysts surveyed by Platts said. The build would leave inventories 3.6% above the five-year average of US Energy Information Administration data, in from 4% the week prior.

The weekly inventory reports from the American Petroleum Institute and the EIA, are due to be released later March 9 and March 10 respectively.

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 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) -- Spanish oil company Cepsa said it expects the coronavirus pandemic to keep downward pressure on its refining margins and demand for refined products in Europe in the next few months, reported Reuters.

The profit it makes per barrel of oil rebounded to USD2.40 in the fourth quarter of 2020 from USD0.50 in the third, but was still more than 35% lower than in the same period of the previous year.

The Madrid-based company, which is owned by Abu Dhabi state fund Mubadala and private equity firm Carlyle, said it ended 2020 with positive free cash flow and would set out a plan to address a global shift to lower-carbon fuels in the coming months.

"The COVID-19 pandemic also acted as a catalyst for the energy transition," Chief Executive Philippe Boisseau said in a statement.

As MRC wrote before, in December 2020, driven by a shared vision of sustainability and strong collaboration, DSM, SABIC, Cepsa, Fibrant, and Viscofan together created a multi-barrier casing for meat products made via advanced recycling of post-consumer plastics.

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