BP and Maersk Mc-Kinney Moller Center to collaborate on development of new solutions for zero carbon shipping

MOSCOW (MRC) -- BP and the Maersk Mc-Kinney Moller Center for Zero Carbon Shipping signed a partnership agreement committing to a long-term collaboration on the development of new alternative fuels and low carbon solutions for the shipping industry, according to Hydrocarbonprocessing.

As a strategic partner to the Center, bp will second experts to work on relevant research and development projects in the Center’s portfolio and contribute to the development of methodologies and optimized pathways for safe and sustainable fuel solutions for shipping. Additionally, bp will join the Center Advisory Board providing guidance for transition strategies and further development of the Center’s activities.

William Lin, bp’s executive vice president of regions, cities and solutions said: “At bp, we want to play a role in advocating for policies to help decarbonize carbon intensive sectors like shipping. The shipping industry’s transition to net zero is complex and requires technology advancements and policies that will give companies across the value chain the confidence to act. This is a privileged opportunity to collaborate and advocate with key industry players to progress solutions at the pace and scale needed. When we work together, we can fast track development, de-risk investments and provide signals to the market that will speed up the decarbonization of the shipping industry.”

With 70,000 ships consuming m300Tons fuel p.a., global shipping accounts for around 3% of global carbon emissions, a share that is likely to increase as other industries tackle climate emissions in the coming decades.

Achieving the long-term target of decarbonization requires new fuel types and a systemic and regulatory change within the industry. Shipping is a globally regulated industry, which provides an opportunity to secure broad-based industry adoption of new technology and fuels.

As MRC reported before, BP and Lukoil want to quit their Iraqi energy projects due to the current investment environment, the country's oil minister said earlier this month, as OPEC's second biggest producer faces an exodus of international oil companies that want to exit unattractive contracts. Lukoil wants to sell its stake in West Qurna 2 to Chinese companies.

We remind that Russian energy major Lukoil (Moscow) is studying several potential petrochemical projects in Russia and Bulgaria, with investment decisions expected to be made on two of them in 2021.

Thus, Lukoil announced an investment decision in June, 2019, to proceed with a 500,000-metric tons/year polypropylene (PP) plant at its Kstovo refinery. In September this year it selected Lummus Technology’s Novolen PP technology and basic design engineering for the facility’s production unit. Kstovo is one of Lukoil’s largest crude refineries in Russia with a throughput of 17 million metric tons/year, with the company recently adding a catalytic cracking unit that almost doubled the refinery’s production of propylene feedstock to 300,000 metric tons/year.

At Budennovsk in Russia’s far south west, the company’s Stavrolen petchems complex currently has the capacity to produce 350,000 metric tons/year of ethylene, 300,000 metric tons of polyethylene (PE), 120,000 metric tons/year of PP, and 80,000 metric tons of benzene. Lukoil has for several years been considering construction of a new gas chemicals plant at Stavrolen to crack more ethane extracted from associated petroleum gas produced by its oil and gas fields in the north of the Caspian Sea. The potential new plant would raise Stavrolen’s ethylene and PE output to around 600,000 metric tons/year each, and increase PP production to 200,000 metric tons/year.

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 953,400 tonnes in the first five months of 2021, which virtually corresponded to the same figure a year earlier. High denisty polyethylene (HDPE) shipments decreased. At the same time, PP shipments to the Russian market were 607,8900 tonnes in January-May 2021, up by 33% year on year. Shipments of homopolymer PP and PP block copolymers increased, whereas deliveries of PP random copolymers decreased.

BP is one of the world's largest oil and gas companies, serving millions of customers every day in around 80 countries, and employing around 85,000 people. BP’s business segments are Upstream (oil and gas exploration & production), and Downstream (refining & marketing). Through these activities, BP provides fuel for transportation; energy for heat and light; services for motorists; and petrochemicals products for plastics, textiles and food packaging. It has strong positions in many of the world's hydrocarbon basins and strong market positions in key economies.
MRC

MOSCOW (MRC) -- Sanctions barring U.S. imports of Venezuelan crude put refiner Citgo Petroleum Corp at a disadvantage to better-financed rivals, the board chair named by Venezuela's political opposition for state oil company PDVSA said, as per Reuters.

Many refineries on the U.S. Gulf Coast - including Citgo's facilities in Texas and Louisiana - were designed to process heavy, sour crudes, which historically came largely from OPEC member Venezuela. After Washington imposed sanctions on PDVSA two years ago, Venezuelan crude "disappeared" and U.S. refiners have competed for alternatives from Colombia, Mexico and Canada, said Horacio Medina, chair of the PDVSA ad-hoc board named by the opposition, which has controlled Citgo since 2019.

"These refineries have an important advantage over Citgo," Medina told opposition lawmakers. "They have investors with deep pockets who were capable of putting in money to make investments and modify some of the plants ... to adapt them to process light and medium crudes, which we have not had."

Citgo Chief Executive Officer Carlos Jorda last month said that the company was working on processing more lighter crudes, and its refineries were on track to boost utilization rates in the second quarter after bad weather hit some plants early this year. The eighth-largest U.S. refiner, with a total capacity to process some 769,000 barrels per day between its three plants, has suffered net losses in six of the last eight quarters, including a USD667 million total loss for 2020 and a USD180 million loss in the first quarter of 2021 due to weak demand and storm-related disruptions.

The company has refinanced and raised new debt and is expecting an about USD500 million income-tax refund to bolster liquidity this year. U.S sanctions on PDVSA were meant to pressure Venezuelan President Nicolas Maduro's government, which stands accused of corruption and election rigging. Maduro has accused the opposition of "stealing" Citgo.

As per MRC, Citgo Refining, the US subsidiary of Venezuelan PDVSA, began the process of restarting production on 21 July at its FCC 2 in Corpus Christi, TX, USA after refurbishment. This unit with a capacity of 136 thousand tons of propylene per year was closed on June 18 due to the interruption of the steam supply. Chemical emissions during the restart are expected until 27 July.

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 953,400 tonnes in the first five months of 2021, which virtually corresponded to the same figure a year earlier. High denisty polyethylene (HDPE) shipments decreased. At the same time, PP shipments to the Russian market were 607,8900 tonnes in January-May 2021, up by 33% year on year. Shipments of homopolymer PP and PP block copolymers increased, whereas deliveries of PP random copolymers decreased.

Citgo operates refineries, terminals and a network of gas stations in the United States. The company produces 749 thousand barrels of oil daily and provides about 5% of the country's refining capacity.
MRC

MOSCOW (MRC) -- Private equity firm Cresta Fund Management has agreed to buy a controlling stake in idled Canadian 135,000-barrel-per-day (bpd) Come-by-Chance refinery, a fund representative said, with the aim of converting it to renewable fuels production, reported Reuters.

The refinery, owned by North Atlantic Refining Ltd (NARL), has been idled for more than a year.

Several refiners since then have announced plans to convert their operations to renewable fuels production to remain viable as both Canada and the United States try to reduce carbon emissions.

Canada’s Clean Fuel Standard (CFS) will require carbon-intensity reduction targets set for fuels such as gasoline, diesel and kerosene, starting in 2022 and is projected to increase renewable fuel demand.

The first phase of the conversion would change Come-by-Chance refinery to a facility capable of initially producing 14,000 barrels of sustainable aviation fuel and renewable diesel daily by about mid-2022, said Chris Rozzell, Cresta’s managing partner said in an email.

A second phase will seek to double the capacity of the refinery and incorporate the ability to produce green hydrogen - where renewable energy such as wind or solar powers the extraction of hydrogen - Rozzell said.

The deal is expected to close in the third quarter and the fund declined to disclose the value of the transaction.

We remind that, as MRC informed previously, NOVA Chemicals declared force majeure (FM) on all its polyethylene (PE) resins produced in the Sarnia region of Ontario, Canada, because of mechanical failures, according to the company's letter to its customers as of April 27. The FM did not affect any of its other PE products. The PE plants affected include Mooretown high density polyethylene (HDPE) at 210,000 mt/year, Mooretown low density polyethylene (LDPE) capacity at 170,000 mt/year, and St. Clair HDPE capacity at 209,000 mt/year. The FM was lifted on 14 July, 2021.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 953,400 tonnes in the first five months of 2021, which virtually corresponded to the same figure a year earlier. High denisty polyethylene (HDPE) shipments decreased.
MRC

MOSCOW (MRC) -- Brookfield Infrastructure Partners’ fourth offer for Inter Pipeline Ltd. has convinced the embattled pipeline company to abandon a friendly deal with rival Pembina Pipeline Corp. in favour of the Toronto-based asset manager, said Reuters.

IPL’s move comes after Brookfield Infrastructure Partners earlier this month raised its hostile bid for IPL, and as two shareholder advisory firms advised IPL shareholders against the merger deal with Pembina. Instead of pursuing the merger with Pembina, IPL will now engage with Brookfield “to reach a mutually agreeable transaction”, it said in a filing late on Monday.

Pembina confirmed the termination of the deal with IPL, saying that it would continue to seek other opportunities for growth through focused acquisitions. Pembina CEO Mick Dilger added that “the industrial logic” of combining Pembina and IPL “remains unparalleled and the value creation between certain of our assets is impossible to replicate by any other entity."

IPL has a propane dehydrogenation/polypropylene (PDH/PP) production complex in Alberta province that is due to start up next year. A combination with IPL could have created synergies enabling a second PDH/PP project in Alberta, officials had previously said.

As per MRC, Canadian midstream energy companies Pembina Pipeline and Inter Pipeline (IPL) are mulling the prospects of dehydrogenation/polypropylene (PDH/PP) production in Alberta province. On May 31, 2021, Pembina and Inter Pipeline entered into an agreement to create one of the largest and best positioned energy infrastructure companies in Canada. Together the companies' diversified and integrated asset base can support and grow an extensive value chain for natural gas, natural gas liquids and crude oil, from wellhead to end user, that far exceeds anything either company can do separately.

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 953,400 tonnes in the first five months of 2021, which virtually corresponded to the same figure a year earlier. High density polyethylene (HDPE) shipments decreased. At the same time, PP shipments to the Russian market were 607,8900 tonnes in January-May 2021, up by 33% year on year. Shipments of homopolymer PP and PP block copolymers increased, whereas deliveries of PP random copolymers decreased.

Inter Pipeline Ltd is a multinational oil transportation and infrastructure limited company that ranks among North America's leading natural gas production and processing companies. It is one of the top 100 companies in Alberta in terms of earnings and assets.

Pembina Pipeline has been a gas supplier to the North American power system for over 60 years. Pembina owns and operates pipelines that transport a variety of hydrocarbon fluids, including conventional and synthetic crude oil and others, produced in Western Canada and North Dakota.
MRC

MOSCOW (MRC) -- Beijing's crackdown on the misuse of import quotas combined with the impact of high crude prices could see China's growth in oil imports sink to the lowest in two decades in 2021, despite an expected rise in refining rates in the second half, reported Reuters.

Shipments into the world's top crude importer and No. 2 refiner could be steady, or increase by up to 2% to just over 11 million barrels per day (bpd) this year, consultancies Energy Aspects, Rystad Energy and Independent Commodity Intelligence Services (ICIS) found.

That compares to an average annual import growth rate of 9.7% since 2015, and would be the slowest growth since 2001, China customs data showed.

The flat forecasts coincide with plans by OPEC+ to raise oil output by 400,000 barrels per day between August and December. News of the decision by the Organization of the Petroleum Exporting Countries and allied producers sparked a sell-off in benchmark prices this week.

China has been the global oil demand driver for the last decade, and accounted for 44% of worldwide growth in oil imports since 2015, when Beijing started issuing import quotas to independent refiners.

While analysts expect global crude markets to stay in deficit this year despite the OPEC+ output rise, China's investigations into the trading of crude import quotas, and the resulting lower import allocations to independent refiners, have already cooled demand from the group that provides a fifth of China's imports.

"This could mean an end to the rapid growth in China's crude imports which we've seen in the past," said a Beijing-based analyst who declined to be named because of company policy.

China's crude imports in June fell to the lowest since 2013 after Beijing clamped down on import quota trading as part of a drive to consolidate its refining industry and reduce emissions. Several small refiners did not receive any quotas in a second batch issued in June, while others have already used their full allocations, traders and analysts said.

The remaining refiners are expected to reserve whatever quotas they have left for the fourth quarter, when fuel demand typically peaks, FGE said.

Shandong refiners, where most of the small, independent refiners, known as teapots, are located, will reduce imports by around 350,000 bpd and 250,000 bpd in third and fourth quarters, respectively, FGE added.

"Overall, we see Shandong independent refinery runs falling by around 490,000 bpd from pre-clampdown levels to average 1.75 million bpd in 3Q. Runs should make a recovery to 1.90 million bpd levels in 4Q."

This has curbed demand for crude from Africa, Brazil and Russia, prompting traders to divert cargoes to Europe and the United States.

A senior trader based in Singapore, who also asked to remain anonymous, said teapot refineries had lost their position as market drivers and it was wise for sellers to find other outlets. Increasingly, he said, Brazilian and Russian ESPO crudes have been heading to the United States while Brazilian Buzios crude has gone to Europe.

Despite slowing imports, China's crude processing could hit another all-time high this year as state-owned majors and large private refiners operate plants at higher rates and buy more crude to offset lower independent refining, analysts and traders said.

Sinopec and PetroChina are likely to consolidate their positions as the top Chinese crude traders as the independent refiners are sidelined. Together with other refiners, they are boosting output to replace lower supplies of light cycle oil and mixed aromatics used in fuel blending, imports of which have slumped since new taxes took effect in June.

Rystad Energy, FGE and Energy Aspects forecast higher refining throughput at 14.5 million to 14.6 million bpd in the second half, with imports between 10.85 million and 11.5 million bpd. Beijing-based consultancy SIA Energy forecasts processing of 16 million bpd in the second half of 2021, 6.8% higher year on year, leading to imports of 12.48 million bpd, up 15%.

As MRC wrote before, earlier this year, Sinopec Engineering (Group) and ExxonMobil (Huizhou) Chemical (EMHCC) entered into a BEPC (basic design, engineering, procurement and construction) contract for the proposed Huizhou Chemical Complex Project (Phase I). The main units of the project include a 1.6 million tonnes/year ethylene flexible feed steam cracker, downstream polymer and derivative units and utilities. The main product units include two performance polyethylene (PE) lines and two differentiated performance polypropylene (PP) lines.

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 953,400 tonnes in the first five months of 2021, which virtually corresponded to the same figure a year earlier. High denisty polyethylene (HDPE) shipments decreased. At the same time, PP shipments to the Russian market were 607,8900 tonnes in January-May 2021, up by 33% year on year. Shipments of homopolymer PP and PP block copolymers increased, whereas deliveries of PP random copolymers decreased.
MRC