Indian Oil to invest in expansion project in Gujarat

MOSCOW (MRC) -- IndianOil and the Gujarat government on Monday signed a memorandum of understanding (MoU) worth Rs 24,000 crore for promotion of investment in the state, said Timesofindia.

The MoU involves the state-owned refiner setting up a Petrochemical and Lube Integration (LuPech) project and Acrylics/Oxo Alcohol project along with other infrastructure projects at its Gujarat Refinery at Vadodara. The MoU was signed in the presence of Gujarat Chief Minister Vijay Rupani and Union Minister of Petroleum, Natural Gas and Steel Dharmendra Pradhan.

The LuPech project will produce import substitutes like Lube Oil Base Stock (LOBS) and Polypropylene. The Acrylics/Oxo Alcohol project at Dumad and Gujarat refinery will manufacture value-added Butyl Acrylate, a key ingredient for paints, coatings, adhesives, textile chemicals, plasticizer industry, and other similar products.

These projects will strengthen IndianOil’s readiness for venturing into petrochemical projects like PVC, Styrene, Acrylonitrile, Poly-Methyl Methacrylate and Ethylene Oxide in future. The Petrochemicals and Specialty products (Gr-II/III LOBS) integration index based on additional crude oil added under this project is estimated to be 20.7 per cent.

Another MoU was signed for infrastructure facilities at Dumad for the Koyali-Ahmednagar-Solapur Pipeline (KAhSPL) and Tank Truck Loading facility for Linear Alkyl Benzene (LAB) — a feedstock for detergent industries. The other infrastructure projects envisaged are New Flare System at Gujarat Refinery and a Hydrogen dispensing facility for Fuel Cell Electric Vehicles (FCEV).

IndianOil’s Gujarat Refinery will be implementing India’s first Hydrogen Dispensing facility as a clean fuel initiative. This facility aims to fuel hydrogen buses plying between Vadodara and Kevadia/Sabarmati Ashram. During his address, Rupani mentioned that Gujarat is a leading state in the field of oil and petrochemicals. The Chief Minister said, “As a result of the transparent policies, acceleration of ‘Ease of Doing Business’ and a favourable environment for industries in Gujarat despite the Covid-19 pandemic has for the fourth year in a row maintained its numero uno position as the highest recipient of Foreign Direct Investment (FDI) in the country."

Dharmendra Pradhan said, “Gujarat has become the first choice of investors as in its roots is Prime Minister Narendra Modi’s vision that implements new plans for the holistic development of the State." Giving further details during the MoU function, IndianOil Chairman S.M. Vaidya said, "Today Gujarat is charting a new path of prosperity. To power that journey, IndianOil’s Gujarat Refinery is now poised to grow to 18 MMTPA capacity. New units for the production of Polypropylene, Butyl Acrylate and Lube Oil Base stocks will also be added to the Refinery’s portfolio."

These projects will enable large-scale direct and indirect employment opportunities during the peak construction period and later for the operation of these facilities. During the construction stage, nearly 125 million person-hours of employment will be generated. The total investment outlook for these projects in different execution stages is nearly Rs 24,000 crore.

As per MRC, IOC is expanding its petrochemical capacity by more than 70 per cent from its current 3.2 million tonnes a year. It is also on new technologies that reduces the cost of producing petrochemicals. The project will add a 500,000 metric tons/year PP unit as well as a 235,000 metric tons/year lube oil base stock plant.

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 744,130 tonnes in the first four month of 2021, up by 4% year on year. Shipments of all PE grades increased. At the same time, PP deliveries to the Russian market were 523,900 tonnes in January-April 2021, up by 55% year on year. Supply of homopolymer PP and PP block copolymers increased, whereas shipments of PP random copolymers decreased.

Indian Oil Corporation Limited, or IndianOil, is an Indian state-owned oil and gas corporation with its headquarters in New Delhi, India.
MRC

MOSCOW (MRC) -- Royal DSM has completed the sale of its advanced solar business in backsheet products to Worthen Industries (Nashua, New Hampshire), a company specialized in polymer technologies for multiple end markets, according to MarketScreener.

The proposed transaction was announced 11 March 2021. Financial terms have not been disclosed.

The deal covers DSM’s solar business that was not included in the company's agreement to sell its resins and functional materials businesses to Covestro in September 2020.

As MRC reported earlier, in April 2021, DSM said it had completed the sale of the resins & functional materials businesses to Covestro for EUR1.6 billion (USD1.9 billion), including EUR1.4 billion in cash. It included DSM Niaga, DSM additive manufacturing, and the coatings activities of the DSM advanced solar business, which together represented EUR1.01 billion of DSM’s 2019 total annual net sales and EUR133 million of DSM’s 2019 total EBITDA.

We remind that Covestro closed the sale of its European polycarbonates (PC) sheets business to the Munich-based Serafin Group effective January 2, 2020. This includes key management and sales functions throughout Europe as well as production sites in Belgium and Italy.

Royal DSM, commonly known as DSM, is a Dutch multinational corporation active in the fields of health, nutrition and materials. The Materials cluster is made up of DSM Engineering Materials, DSM Protective Materials and DSM Resins & Functional Materials. DSM Engineering Materials’ specialty plastics are used in components for the electrical and electronics, automotive, flexible food packaging and consumer goods industries.
MRC

MOSCOW (MRC) -- PKN Orlen’s strategic focus on petrochemicals on the planned merger with fellow Polish state-controlled groups Grupa Lotos and PGNiG could be positive for the credit outlook of resulting merged entity, said agency Fitch.

PKN Orlen’s credit profile will benefit from larger scale, stronger business diversification and expansion into the more stable utility sector if its merger with the second-largest refiner in Poland, LOTOS, and integrated Polish utility, PGNiG, is completed. The financial profile of the combined group and its strategic direction will be key to resolving the RWP. Fitch expects to resolve the RWP once the transactions, especially the merger with PGNiG, are closed, which is expected in 4Q21, but the process, including regulatory approvals, may be completed subsequent to six months in the future.

PGNiG is a Polish majority state-owned integrated utility with dominant domestic position in oil and gas exploration and production (E&P), gas imports, gas distribution and gas supply. Its 2019 EBITDA comprised 62% upstream, 36% gas distribution and 16% heat and power generation. LOTOS is the second largest refiner in Poland operating a 210 thousand barrels per day (kbbl/d) refinery in Gdansk, retail network with 513 stations and upstream assets with production of 20 thousand barrels of oil equivalent per day (kboe/d).

It added that Orlen’s planned merger with Lotos, the second-largest refiner in Poland, and PGNiG, a gas, heat and power utility, would benefit from larger-scale, stronger business diversification and expansion into the more stable utility sector.

As per MRC, the European Commission agreed to the merger of the Polish concerns PKN Orlen and Lotos. For example, PKN Orlen received conditional EU antitrust consent to take over its rival Lotos and announced that it plans to buy Poland's largest oil and gas company PGNiG. The Polish state is the largest shareholder in PKN Orlen, Lotos and PGNiG. Orlen's acquisition of Lotos was announced in February 2018.

As MRC informed earlier, Polski Koncern Naftowy Orlen SA, (PKN Orlen) reduced the production of terephthalic acid (PTA) at the plant in Wloclawek (Wloclawek, Poland) due to a technical breakdown. Production problems at the enterprise supplying raw materials for PTA production led to a decrease in its output in January and most of February by 20%, and by the end of February - by about 50%.

PTA is one of the main raw materials for the production of polyethylene terephthalate (PET).

As per MRC ScanPlast, Russia's calculated consumption of polyethylene terephthalate (PET) grew to 263,660 tonnes in the first four months in 2021, up 13% compared to the same period in the previous year. 78.3% of the increase in consumption falls on the share of bottled PET chips due to the virtual absence of exports and an increase in the volume of imports.

MRC

MOSCOW (MRC) -- Chinese authorities have ordered a unit of state-run PetroChina to stop trading off crude oil import quotas with local refineries as part of a crackdown on excessive fuel production, a move that could cut the country's crude imports by 3%, reported Reuters with reference to sources.

Beijing has stepped up scrutiny of crude oil quota use and imports by state and private firms this year to ease a fuel surplus that has weighed on the sector's profits and led to excess emissions that have undermined China's climate goals, said five industry sources with knowledge of the matter.

PetroChina Fuel Oil Co Ltd is a major crude oil supplier to China's independent refineries.

Without additional quotas from the company, crude purchases by the independent refineries, also known as teapots, will fall by 12 million to 16 million tonnes annually (240,000 to 320,000 barrels per day), or roughly 3% of China's total crude imports, the sources said, forcing the firms to import fuel oil instead to keep plants running.

The drop in crude imports by the world's largest oil importer could also cap a recovery in global oil prices, which are now hovering above USD70 a barrel.

China has in recent months unleashed an array of measures aimed at curtailing its bloated oil refining sector, from examining illicit trading of import quotas to levying new taxes to curb unwanted fuel supplies.

PetroChina Fuel Oil, which produces and trades fuel oil and bitumen, was ordered in April to stop re-selling imported crude oil and trading off quotas to about half a dozen teapots, a legacy practice the firm has engaged in for years.

"The government is taking a lot more seriously carbon emissions this year, and sees large crude oil imports and large refined fuel exports as something unsustainable," said one official.

Teapots that are processing more crude beyond their quota allowances are expected to be reined in, said the official.

China, the world's second-largest refiner, has since late 2015 allowed over 40 smaller plants to process imported oil to support private investment, but controls overall oil purchases using a quota system to curb wasteful refinery expansions.

Under a legacy scheme endorsed by parent company PetroChina , the fuel oil unit partnered with teapot refineries under a so-called "processing" arrangement, under which the firm pays a processing fee to the teapots and buys back refined products such as diesel at an agreed price, said a second official. But sources said it was "very tough" to agree on the buy-back terms on prices or fuel quality, so PetroChina Fuel Oil often simply let these plants use its import allowances or sometimes directly resold imported crude oil to them.

"(The investigation) officially ends the years-long partnership between the company and teapots," said a third official.

After being cut off from the crude supply business, PetroChina Fuel Oil will be forced to resume importing fuel oil to supply its four bitumen plants and also expand into other businesses to boost revenue.

As MRC informed earlier, PetroChina, Asia's largest oil and gas producer, has reported its biggest quarterly profit in seven years, citing rising oil and gas prices and a recovery in Chinese fuel demand from last year's deep coronavirus slump. The company swung to a 27.7 billion yuan (USD4.28 billion) first-quarter net profit, having posted a loss in the same period last year, and announced that it is setting up a new investment vehicle with a focus on strategic assets and low-carbon projects.

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 744,130 tonnes in the first four month of 2021, up by 4% year on year. Shipments of all PE grades increased. At the same time, PP deliveries to the Russian market were 523,900 tonnes in January-April 2021, up by 55% year on year. Supply of homopolymer PP and PP block copolymers increased, whereas shipments of PP random copolymers decreased.

PetroChina Company Limited, is a Chinese oil and gas company and is the listed arm of state-owned China National Petroleum Corporation, headquartered in Dongcheng District, Beijing. It is China's biggest oil producer.
MRC

MOSCOW (MRC) -- The hydrocracker at Royal Dutch Shell Plc's 227,400 barrel-per-day (bpd) Norco, Louisiana, refinery was partially shut because of a malfunction, reported Reuters with reference to sources familiar with plant operations.

The second stage of the 40,000-bpd hydrocracker was taken offline, the sources said.

Hydrocrackers break down feedstocks, usually, gas oil to make diesel and other motor fuels. The unit's first stage continues to operate.

As MRC informed previously, in late May, 2021, Shell agreed to sell its controlling interest in a Texas refinery to partner Petroleos Mexicanos (Pemex) for about USD596 million. And in early May, Shell announced the sale of its 149,000 barrel per day (bpd) refinery in Washington to Hollyfrontier Corp.

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 744,130 tonnes in the first four month of 2021, up by 4% year on year. Shipments of all PE grades increased. At the same time, PP deliveries to the Russian market were 523,900 tonnes in January-April 2021, up by 55% year on year. Supply of homopolymer PP and PP block copolymers increased, whereas shipments of PP random copolymers decreased.

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