Repsol to lay off about 830 workers at two refineries in Spain

MOSCOW (MRC) -- Spanish energy firm Repsol said it will furlough up to 830 workers at its A Coruna and Puertollano refineries in Spain as pandemic restrictions have led to an "unprecedented" slump in demand for fuels, reported Reuters.

"It is a sustained situation that has kept fuel consumption for transport much lower than expected," Repsol said in a statement.

In Q1 2021, the profit Repsol makes on refining products that come into its refineries in Spain decreased to USD0.2 per barrel from USD4.7 in the first three months of 2020, its trading statement released on Thursday showed.

Uncertainty generated by the broad global shift towards clean energy and away from fossil fuels contributed to the decision to furlough the workers, Repsol said.

As MRC informed previously, Repsol is seeking European pandemic recovery funds to support projects including new biofuel plants and 'green' hydrogen production made from renewable sources in a pivot away from oil and gas to supplying low-carbon energy.

We remind that Repsol's refinery at Puertollano in central Spain has recently carried out an upgrade of its olefins unit. The modernization was a part of planned maintenance of the cracker and chemical derivative plants at the end of 2020.

We also remind that Spain’s Repsol shut down its cracker in Tarragona (Spain) for maintenance in the fourth quarter of 2019. The turnaround at this steam cracker, which produces 702,000 mt/year of ethylene and 372,000 mt/year of propylene, was pushed back from Q3 2019. The exact dates of maintenance works were not disclosed.

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.

Repsol S.A is an integrated Spanish oil and gas company with operations in 28 countries. The bulk of its assets are located in Spain.

Danaflex will build a new plant in Tatarstan

MOSCOW (MRC) - Danaflex (Tatarstan) plans to build a new plant on the territory of the special economic zone "Alabuga" in Tatarstan, Tatar-Inform reports.

The launch of the production capacity of Danaflex was discussed on 5 April during a meeting of the Supervisory Board of the SEZ. It is planned to create a new packaging plant on the territory of the special economic zone. The volume of investments is over 4.5 billion rubles The commissioning of the plant is scheduled for the first half of 2022.

In 2018, the Danaflex group of companies opened a plant on the territory of the special economic zone "Alabuga" for the production of up to 22,000 tonnes of flexible packaging materials for food and non-food products. Investments exceeded Rb3 bn.

In addition, Danaflex launched the production of IML labels for food and non-food products in February 2020. Danaflex has created a product that meets the most important requirement of the time - recycling, since the product and packaging consist of mono-raw materials. This is the reason for the general trend of transition of other types of marking (self-adhesive, dry label, direct printing, etc.) to IML label.

According to the ScanPlast by MRC, the estimated consumption of PE in Russia amounted to 241,030 tonnes in January 2021 against 217,890 tonnes in the same period a year earlier. Only high-density polyethylene (LDPE) and low-density polyethylene (HDPE) supplies have grown.

Danaflex Group of Companies was founded in 2001. The main activity is the production of flexible packaging materials for various industries. The group positions itself as the largest manufacturer of packaging materials. The structure of the GC includes four production facilities: CJSC Danaflex, LLC Danaflex-Nano, LLC Danaflex-Alabuga and DGPack s.r.o (in the Czech Republic). In 2018, the group's revenue amounted to RUB 12.1 billion.

Huge fire broke out at Texas chemical facility

MOSCOW (MRC) -- Firefighters responded to a large fire at a chemical warehouse in the Channelview neighborhood of Houston, Texas, according to Hydrocarbonprocessing.

Local media reported residents heard loud noises followed by a huge plume of smoke filling the air above the K-Solv facility, which stores chemicals such as hydrochloric acid, acetone, ethanol, ethylene dichloride (EDC) and other acids.

K-Solv director of environmental health, safety and security, Mikie Sopczak, said the fire started during a dump transfer operation in which one product is transferred into a smaller container. An ignition source caused the fire during a transfer, although it is unclear which chemical was burning.

The company said all employees were safe and accounted for. One person was transported to an area hospital for respiratory issues as a precautionary measure.

The Houston ship pilots association said vessel traffic along the Houston Ship Channel was not affected by the blaze. The fire happened north of the waterway through which crude oil, motor fuels and petrochemicals move in and out of the nation’s busiest energy port.

As MRC reported before, earlier this year, another US petrochemical producer - Delek US - issued a statement regarding the fire over the weekend at their El Dorado refinery. According to Delek US, the fire at the Penex unit occurred on Saturday, February 27. An on-site emergency response team along with the El Dorado Fire Department were able to extinguish the fire. The air quality was monitored following the fire and Delek US says they have not detected any adverse impacts.

EDC is one of the main feedstocks for the production of polyvinyl chloride (PVC).

According to MRC's ScanPlast report, Russia's overall PVC production reached 169,200 tonnes in the first two months of 2021, down 4% year on year. All producers decreased production volumes over the reported period.

Sinopec Shanghai Petrochemical to increase its oil production to 61.2% in 2021

MOSCOW (MRC) -- China's Shanghai Petrochemical,part of Sinopec Group, targets to hike its oil product production yield to 61.2% in 2021 from 57.1% in 2020 and 60.5% in 2019, suggesting that the company will be reducing its petrochemical yield, reported S&P Global.

In addition, Sinopec Shanghai Petrochemical, which exports jet fuel and supplies it to domestic airports, plans to raise its jet fuel production by 32% year on year to 1.49 million mt in 2021, in anticipation of the easing of travel bans.

The refinery's planned jet fuel yield in 2021 is at 10.5%, still below the pre-COVID-19 level of 12.4% reported for 2019 but above the 7.7% in 2020.

As MRC informed earlier, Sinopec Shanghai Petrochemical plans to shut its high density polyethylene (HDPE) unit in Shanghai for a scheduled turnaround on April 18, 2021. The HDPE plant is expected to resume operations after a 29-day maintenance on May 17, 2021. Located at Shanghai in China, the unit has a production capacity of 260,000 mt/year.

According to MRC's ScanPlast report, Russia's HPE production totalled 329,800 tonnes in the first two months of 2021, up by 13% year on year. At the same time, only one Russian producer increased HDPE output.

China Petroleum & Chemical Corporation, or Sinopec Limited is a Chinese oil and gas company based in Beijing, China. It is listed in Hong Kong and also trades in Shanghai and New York . Sinopec is the worlds fifth biggest company by revenue.

Russia sees pandemic impact on crude oil demand to last until 2023-2024

MOSCOW (MRC) -- Russia expects the fallout from the COVID-19 pandemic on the global consumption of oil and oil products may last until 2023-2024, a draft government document, seen by Reuters, showed.

The global oil and liquid fuels production dropped in 2020 to 94.25 million barrels per day (bpd) from 100.61 million bpd in 2019, amid the pandemic, which led to lockdowns, halting 80% of air traffic and a quarter of road traffic at its peak and denting fuel consumption.

The Organization of the Petroleum Exporting Countries expects oil demand to grow by 5.6 million barrels per day this year under its base case scenario. Russian Deputy Energy Minister Alexander Novak has also projected similar growth.

The draft document, outlining oil industry developments until 2035, also showed that Russia could lose global oil market share due to curbs on oil production and exports.

It says global oil prices are likely to trade in the range of USD50-USD75 per barrel by 2025, while in the second half of 2020s prices are seen at USD50-USD60 per barrel and they are unlikely to fall significantly below USD50.

Russia also sees challenges to its oil industry from the decarbonization of the economics in Europe and North-East Asia, its key exporting markets.

As MRC wrote previously, 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 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.