S-Oil to enter hydrogen business by investing in next-generation fuel cell company

MOSCOW (MRC) -- South Korea's S-Oil has made an equity investment in a next-generation fuel cell company in a move to enter the hydrogen business, according to BusinessKorea.

Thus, S-Oil has acquired a 20% stake in Fuel Cell Innovations (FCI), a company that provides clean energy solutions based on fuel cells.

With the investment, S-Oil became the largest Korean shareholder of FCI, a Korea-Saudi Arabia joint venture. S-OIL is planning to promote the hydrogen business by forging a strategic partnership with FCI.

FCI has about 40 patents on solid oxide fuel cells (SOFCs). It has been cooperating with various companies and research institutes, including Solid Power, an Italian fuel cell company with which it cooperated to develop products suitable for the Korean and foreign markets.

FCI will invest 100 billion won by 2027 to expand its business areas into green hydrogen and set up production facilities with a capacity exceeding 100MW.

S-Oil is studying ways to cooperate when FCI enters overseas fuel cell markets such as the Middle East. S-Oil is also studying ways to enter the entire value chain of the hydrogen industry from hydrogen production to distribution and sales. In cooperation with Aramco, its largest shareholder, the company is considering launching businesses based on green hydrogen and ammonia and liquefied hydrogen production and distribution businesses.

As MRC reported earlier, S-Oil, South Korean petrochemical major, took off-stream its residue fluid catalytic cracker (RFCC) unit for a turnaround in June, 2020. The company undertook a planned shutdown at the unit by early-July, 2020. The unit remained off-line for about two weeks. Located at Onsan, South Korea, the RFCC unit has a propylene capacity of 705,000 mt/year.

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

According to MRC's ScanPlast report, PP shipments to the Russian market reached 141,870 tonnes in January 2021 versus 123,520 tonnes a year earlier. Supply of homopolymer PP and PP block copolymers increased.
MRC

India aims to diversify crude oil supplies, which maybe hard to achieve due to harsh realities of the global market

MOSCOW (MRC) -- India’s obvious displeasure with restrictions on output imposed by OPEC and its allies, and its aim to diversify crude oil suppliers, may run into the harsh realities of the global market, reported Reuters.

The world’s third-biggest oil importer and consumer has told state-owned refiners to speed up the diversification of crude imports in order to cut dependence on its main source of supply, the Middle East, reported Reuters in March, citing two sources with knowledge of the plan.

India’s supply is dominated by members of the group known as OPEC+, which includes the long-standing producer group and allies such as Russia. The OPEC+ decision to continue its output cuts of around 7 million barrels per day (bpd) into April was met with anger in India, which imports 84% of its crude needs, with more than 60% coming from the Middle East.

Buying crude from the Middle East has made sense for India, given its close proximity to the region, which cuts down on shipping time and costs and allows Indian refiners to be flexible in their purchases. But with the output restrictions helping drive crude oil prices to a 14-month peak, India is worried that its recovery from the economic hit from the coronavirus pandemic may be hurt by high fuel prices.

Brent has been climbing steadily in recent months and the futures contract has gained 30% since the end of last year. Already, the rising prices are starting to affect demand in India, especially since the reform of the fuel taxation and subsidy system means consumers are now more directly exposed to changes in crude prices.

India’s oil imports appear to have fallen sharply in February, with Refinitiv Oil Research estimating that 4.1 million barrels per day (bpd) were discharged in the month, a four-month low and down from 4.39 million bpd in January and 4.75 million bpd in December. India’s biggest supplier in recent months has been Iraq, with Refinitiv shipping and port data pointing to imports of 900,000 bpd in February, in line with December’s 890,000 bpd.

However, imports from Saudi Arabia, the leading member of the OPEC+ group, have slumped, with just 590,000 bpd arriving in February, down from 730,000 bpd in January and 910,000 bpd in December. India has made up some of the losses from Saudi Arabia from Russia, with February imports pegged at 180,000 bpd, up from just 60,000 bpd in January and 130,000 bpd in December.

India is also buying more from the United States, with February arrivals estimated at 590,000 bpd, up from 480,000 bpd in January and 260,000 bpd in December.

However, if India is to meaningfully diversify away from the Middle East, it will run into the problem of sourcing the medium to heavy grades of crude preferred by many of its refineries. There is plenty of crude available from west African exporters such as Nigeria and Angola, but this tends to be lighter grades, which yield more gasoline and less diesel.

There is an opportunity to buy crude from emerging exporter Guyana, with the South American nation ramping up output of its medium to light crude, but it’s unlikely India could obtain sufficient volumes to make much of an impact. In reality, the best sources of alternative supplies for India are both OPEC producers, but both outside the current output restrictions, and both subject to political considerations.

The two exporters in question are Iran and Venezuela, which are both subject to US sanctions on their crude exports, measures which India has so far observed. India hasn’t officially imported any Iranian crude in more than a year, and it last imported cargoes from Venezuela in November. Both these countries supply the heavier crude grades preferred by India, and both are capable of shipping volumes large enough to allow the South Asian nation to cut reliance on Saudi Arabia and other Middle East producers such as Kuwait.

But resuming purchases from Iran and Venezuela would likely require some kind of understanding to be reached between New Delhi and the administration of new US President Joe Biden. Until this is reached, and it’s by no means certain that an accommodation can be reached, India may find itself scrambling to source suitable crude grades from a limited pool of suppliers, and paying handsomely for the privilege.

As MRC informed before, earlier this month, Mammoet completed the lifting of three columns for the Guru Gobind Singh Polymer Expansion Project in Bathinda, Punjab, India. Thus, the team lifted a 1,305t ethylene fractionator, and 2 propylene fractionators weighing 1,200t and 2,490t - the second of which was lifted in two sections. The completed project is part of an expansion plan to build an integrated petrochemical manufacturing site within Guru Gobind Singh’s current refinery complex. The refiner aims to increase India’s refined hydrocarbon product capacity.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 241,030 tonnes in January 2021 versus 217,890 tonnes a year earlier. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, PP shipments to the Russian market reached 141,870 tonnes in January 2021 versus 123,520 tonnes a year earlier. Supply of homopolymer PP and PP block copolymers increased.
MRC

Technip Energies completes modernization of Socar petchems complex

MOSCOW (MRC) -- Technip Energies (Paris, France) announced that its work on the Azerikimya modernization project in Azerbaijan has been completed on time, said Chemengonline.

The overhaul of the Socar petrochemical complex near the nation’s capital, Baku, is now complete and the plant has been handed over and is fully in operation. It has been producing ethylene and propylene on demand since October 2020.

Testing has shown that all the technological modifications introduced as part of the project execution are functioning properly. The contractual performance test was successfully completed in February and the plant met the ethylene and propylene production capacity and quality specification.

Stefano La Femina, Project Director, said: “This is another result that demonstrates the reliability of our design in this technology. Technip Energies’ high quality standards, followed in all phases of the project from engineering, procurement, construction and commissioning to start-up, allowed us to achieve the performance targets without any problem."

Technip Energies now confirms it also completed commissioning and startup activities for the project.

Neither Socar nor Technip Energies disclosed details regarding current capacity rates of APU’s modernized ethylene and PE plant.

Socar let a contract to the service provider in November 2016 for delivery of engineering, procurement, and construction (EPC) services for the revamp project, the scope of which included modernization of the EP-300 steam cracker, including construction of cracker furnaces licensed by Technip Energies, as well as installation of a refinery dry gas treatment unit, ethylene and propylene storage, and related utilities and off sites.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 241,030 tonnes in January 2021 versus 217,890 tonnes a year earlier. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, PP shipments to the Russian market reached 141,870 tonnes in January 2021 versus 123,520 tonnes a year earlier. Supply of homopolymer PP and PP block copolymers increased.
MRC

EPA asked industry groups for input on the future of the biofuel policy

MOSCOW (MRC) -- The U.S. Environmental Protection Agency has asked industry groups for their input on the future of the nation's biofuel policy after it ends its current phase in 2022, four sources familiar with the matter said, said Hydrocarbonprocessing.

The consultations will provide a new opportunity for the oil, corn and biofuel lobbies to reshape the regulation, called the Renewable Fuel Standard, which has bitterly divided the two industries for more than a decade. Under the RFS, oil refiners must blend increasing billions of gallons of biofuels into the nation's fuel mix each year or buy trade able credits from those that do.

The oil industry dislikes the policy because it is costly and props up a huge and competing market for biofuels like corn-based ethanol, while the corn and biofuel sectors want to see the program expanded to help farmers hard hit by years of low commodity prices and trade disputes. Under the regulation, the EPA will have discretion over annual mandated volumes from 2023 on, taking over that responsibility from Congress.

Oil and biofuel groups have begun meetings with the EPA to discuss ways in which the agency could approach the RFS after that date. The EPA declined to comment. Some of the groups, such as the American Petroleum Institute are advocating for the EPA to use the RFS to encourage increased use of advanced and cellulosic biofuels, instead of conventional biofuels such as ethanol.

The RFS currently centers around four categories of renewable fuels: biomass-based diesel, cellulosic biofuel, advanced biofuel and conventional biofuels like ethanol. "Renewable diesel, renewable natural gas from landfills and many other technologies can help achieve our shared goal of reducing GHG (greenhouse gas) emissions," API senior policy advisor Patrick Kelly told Reuters.

However, Brooke Coleman, executive director of the Advanced Biofuels Business Council, said the EPA should not discourage production of conventional biofuels in favor of other biofuels. "Any plan that displaces biofuel with biofuel is an innovation killing non-starter that would cannibalize the industry revenue needed for investment in innovation," he said.

Another oil group, the American Fuel & Petrochemical Manufacturers, said it wants the EPA to establish a methodology to ensure blending volumes are in line with market conditions for that year – meaning they would be lower in periods of weak demand and higher when demand ticks up. The National Biodiesel Board, which represents the biodiesel industry, told Reuters that the EPA should ensure that the RFS keeps up with anticipated growing demand for biodiesel and renewable diesel.

One representative from a biofuel group, who asked not to be named, said the group is looking for continued growth or "at the bare minimum" stability in blending volumes for each category of renewable fuels.

As MRC informed earlier, US Environmental Protection Agency said it would propose to extend deadlines for refiners to prove compliance with biofuel laws, but signaled it would not decide on a slew of pending waiver requests submitted by the industry. The agency’s proposal represented mixed news for refiners hard hit by slumping energy demand during the coronavirus pandemic and eager to sidestep regulatory costs associated with US biofuel blending policy. It also marks one of the last actions from President Donald Trump’s EPA before he leaves office on Jan. 20.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia"s estimated PE consumption totalled 241,030 tonnes in January 2021 versus 217,890 tonnes a year earlier. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, PP shipments to the Russian market reached 141,870 tonnes in January 2021 versus 123,520 tonnes a year earlier. Supply of homopolymer PP and PP block copolymers increased.
MRC

Petrobras Board elects CEO, CFO, new division heads

MOSCOW (MRC) -- The board of Brazil's Petrobras has officially elected a slate of new executives, reported Reuters with reference to the state-run oil company's statement in a securities filing on Friday.

Thus, Joaquim Silva e Luna was elected as the company's CEO, who is the nominee picked by the federal government.

The board also elected new heads of the company's upstream, logistics and production development divisions, as well as a new chief financial officer, the filing said.

All of the executives with the exception of Luna are long-time employees of Petroleo Brasileiro SA, as the company is formally known.

As MRC informed before, in December 2020, it became known that Brazil's state-run oil company Petrobras was seeking 800 million reais (USD152 million) in compensation from engineering group Odebrecht in arbitration proceedings over its alleged violation of the shareholders agreement in petrochemical company Braskem.

We remind that Petrobras may need more than a year to divest its stake in Braskem, said Andrea Almeida, Petrobras CFO, in early July, 2020. She said during the company"s recent webinar that Petrobras plans to give more time for potential investors to make offers for the company"s assets, including for its refineries and stakes at its petrochemical and fuel distribution affiliates. The divestment of Petrobras"s stake in Braskem in 2020 would be desirable but "might not be possible" as the COVID-19 pandemic has changed market conditions, she said. The company plans to close part of its refinery sales in 2021. In December, Roberto Castello Branco, CEO of Petrobras, said that he wants to sell the company"s stake in Braskem within a year. Petrobras owns 32.15% of Braskem.

We also remind that Braskem is no longer pursuing a petrochemical project, which would have included an ethane cracker, in West Virginia. And the company is seeking to sell the land that would have housed the cracker. The project, announced in 2013, had been on Braskem"s back burner for several years.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 241,030 tonnes in January 2021 versus 217,890 tonnes a year earlier. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, PP shipments to the Russian market reached 141,870 tonnes in January 2021 versus 123,520 tonnes a year earlier. Supply of homopolymer PP and PP block copolymers increased.

Headquartered in Rio de Janeiro, Petrobras is an integrated energy firm. Petrobras' activities include exploration, exploitation and production of oil from reservoir wells, shale and other rocks as well as refining, processing, trade and transport of oil and oil products, natural gas and other fluid hydrocarbons, in addition to other energy-related activities.
MRC