COVID-19 - News digest as of 27.05.2021

1.Asia Distillates-Jet fuel cash differentials flip back to discounts on the back of fresh waves of coronavirus infections

MOSCOW (MRC) -- Asia's cash differentials for jet fuel flipped back into discounts on Wednesday, 19 May, after staying in positive territory for two weeks, as fresh waves of coronavirus infections in several regional markets weighed on aviation demand, reported Reuters. Cash differentials for jet fuel JET-SIN-DIF plunged to a discount of 3 cents per barrel to Singapore quotes, compared with a premium of 5 cents a barrel on Tuesday. A resurgence in coronavirus cases and a slow rate of vaccinations are forcing people to avoid travel and governments to keep border restrictions intact.


Total operating profit in upstream oil and gas business almost triple in Q1

MOSCOW (MRC) -- Total has reported a strong first-quarter recovery in its upstream oil and gas business, with higher prices leading to almost triple the level of adjusted operating profit in the segment compared to a year ago, but also noted continued market volatility and "very poor" refining margins, reported S&P Global.

Total also reported record-high adjusted operating profit from its 'integrated gas renewables & power' division, which includes its LNG business. The company's LNG sales were stable compared with a year ago at 9.9 million mt, but the company said it had more than doubled its installed renewable power generation capacity in the last year from 3 GW to 7.8 GW, and the division as a whole generated 8% more in adjusted operating profit.

The French major forecast its oil and gas production would remain stable in 2021 compared with 2020 levels, even though first-quarter hydrocarbon production was down 7% on the year at 2.86 million b/d of oil equivalent, within which liquids output fell 11% to 1.51 million b/d.

The fall in upstream output was due to reductions under the OPEC+ agreement, which crimped volumes from Kazakhstan, Nigeria and the UAE, as well as unplanned Norwegian maintenance, Total said. But the company also benefited from a recovery in Libya and growth from new projects, notably Culzean and Johan Sverdrup in the North Sea, North Russkoye in northern Russia, and Brazil's Iara sub-salt field.

CEO Patrick Pouyanne highlighted that adjusted profit for the quarter was higher than the same quarter two years earlier, in 2019, reinforcing hopes for recovery. However, "the oil environment remains volatile and dependent on the global demand recovery, still affected by the COVID-19 pandemic," the company added.

Underlining the precarious state of European refining, Total said European refining margins were 80% lower than a year earlier, at USD5.3/mt, reflecting a 2 million b/d drop in European demand for refined products, to 13 million b/d. Total reduced its refinery throughput by 38% globally and 81% in France, to 1.15 million b/d and 114,000 b/d respectively, as it works to reduce capacity or convert facilities to renewable fuel production. Poor refining results were, however, offset by strong petrochemical performance and "resilient" marketing and services, Total said.

Overall, Total reported a 69% year-on-year increase in adjusted net profit, to USD3 billion for the quarter.

As MRC reported 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 the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MRC's ScanPlast report, Russia"s estimated PE consumption totalled 576,270 tonnes in the first three month of 2021, up by 4% year on year. Low density polyethylene (LDPE) and high density polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market totalled 410,890 tonnes in January-March 2021, up by 56% year on year. Supply of homopolymer PP and PP block copolymers 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.

Oil production may possible increase by Iran - Novak

MOSCOW (MRC) -- Global oil deficit is currently seen at around 1 million barrels per day, Russia's deputy prime minister Alexander Novak told reporters, said Hydrocarbonprocessing.

He added that the Organization of Petroleum Exporting Countries and its allies, a group known as OPEC+, should take into account possible increase in oil production by Iran when considering its further steps.

As MRC informed earlier, an explosion on an oxygen pipeline in a petrochemical plant in Assaluyeh on Iran's Gulf coast killed one worker, Iranian state media reported, adding that the ensuing fire had been extinguished. "One worker was killed and two others were injured in the explosion on the oxygen transmission pipeline," Iran's state news agency IRNA quoted Abdolnabi Yusefi, governor of Assaluyeh in Iran's Busher province, as saying. "The reason for the blast is under investigation and the fire has been extinguished."

As per MRC, A fire broke out at the site of Bashneft-Ufaneftekhim branch in Ufa. The fire was quickly extinguished by the operational services of the branch. No one was injured. Bashneft-Ufaneftekhim explained that a small volume of oil caught fire at the industrial site, the area of the fire did not exceed 15 sq. m. The company does not see environmental threats: constant environmental monitoring is carried out on site. The main production of the plant is operating normally.

According to MRC's ScanPlast report, Ufaorgsintez was operating with higher capacity utilisation in March, the plant's PP production totalled about 11,400 tonnes versus 9,500 tonnes a month earlier. The Ufa plant's overall PP output reached 32,800 tonnes in the first quarter of 2021, down by 3% year on year.

Arkema to acquire Agiplast in line with its sustainable growth strategy

MOSCOW (MRC) -- With the planned acquisition of Agiplast, a leader in the regeneration of high performance polymers, in particular specialty polyamides and fluoropolymers, Arkema will be able to offer a full service to customers in terms of materials circularity, addressing growing market expectations in this field, as per the company's press release.

This project, which contributes to the sustainable development of the polymer industry, is perfectly in line with Arkema’s sustainable growth strategy.

Arkema plans to acquire Agiplast, a company specialized in the regeneration of high performance polymers and its historical partner in recycling operations.

The company, with annual sales of around EUR15 million, operates a plant in Italy and has 32 employees.

Agiplast’s strong know-how in mechanical recycling technologies will enable Arkema to offer high quality recycled polymers to its customers.

In October 2019, Arkema, the world leader in bio-based high performance polymers, had already launched Virtucycle, an ambitious program with Agiplast aimed at developing loops for the collection and regeneration of high performance polymers while minimizing CO2 emissions.

With this acquisition, Arkema will be the first fully integrated high performance polymer manufacturer offering both bio-based and recycled materials in order to address the challenges of resource scarcity and end-of-life products. This bolt-on acquisition is thus in line with Arkema’s CSR and sustainable growth strategy, and in particular the transition to a circular economy.

The deal is expected to close in June 2021.

As MRC reported earlier, Arkema is further increasing its fluoropolymer production capacities in Changshu, China, by 35% in 2022. The increase in capacity is scheduled to come on stream before the end of 2022. Financial and overall capacity details of the expansion project were not disclosed.

We remind that Russia's output of chemical products rose in March 2021 by 5.4% year on year. Thus, production of basic chemicals increased year on year by 6.7% in the first moths months of 2021. March production of polymers in primary form was 958,000 tonnes versus 861,000 tonnes in February. Overall output of polymers in primary form totalled 2,740,000 tonnes over the stated period, up by 8.5% year on year.

OQ Chemicals shows its emphasis on sustainability by receiving ISCC Plus certification for its German production sites

MOSCOW (MRC) --OQ Chemicals (Monheim am Rhein, Germany), formerly Oxea, is showing its emphasis on sustainability as it has received ISCC certification under the ISCC Plus scheme for its German production sites and headquarters, according to CoatingsWorld.

International Sustainability and Carbon Certification (ISCC) is a globally recognized system for mass balance certifications, with a focus on the circular economy.

Customers can now procure ISCC Plus certified oxo intermediates and oxo derivatives out of Oberhausen and Marl. ISCC focuses on circular economy intending to ensure traceability of raw materials throughout the value chain and complies with the Renewable Energy Directive (RED) of the European Commission.

“With the ISCC Plus certification, we can now offer our customers an alternative to our fossil-based portfolio featuring the same quality and performance as conventional products. However, they contain a certain amount of sustainable feedstocks from sources such as biomass, biogenic wastes and residues, or renewables. Using the mass balance concept, we track the sustainability characteristics of our products and attribute them on the basis of a verifiable record-keeping audit trail. This supports our customers in producing their own ISCC Plus compliant products,” said Dr. Ina Werxhausen, responsible for sustainability management at OQ Chemicals. “The ISCC Plus certificates for our German sites are an important milestone on our path toward greater sustainability. The certificates apply to all products and processes in Oberhausen and Marl.”

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 the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 576,270 tonnes in the first three month of 2021, up by 4% year on year. Low density polyethylene (LDPE) and high density polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market totalled 410,890 tonnes in January-March 2021, up by 56% year on year. Supply of homopolymer PP and PP block copolymers increased.

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.