Crude oil futures rise in Asia on concerns about tight US supply post Hurricane Ida and expected tropical storm in US

MOSCOW (MRC) -- Crude oil futures were higher in midmorning Asia trade Sept. 13 on concerns about tight US supply in the aftermath of Hurricane Ida and as Tropical Storm Nicholas is expected to begin moving up the Texas coast Sept. 13, reported S&P Global.

At 11:25 am Singapore time (0325 GMT), ICE November Brent futures was 43 cents/b (0.59%) higher at USD73.35/b while the NYMEX October WTI contract was up 45 cents/b (0.65%) at USD70.17/b.

"US oil industry struggles to get back on its feet following Hurricane Ida. More than 1m b/d of capacity are still offline, nearly two weeks after the storm hit the Gulf of Mexico," ANZ analysts said Sept. 13.

As of Sept. 10, 1.207 million b/d, or 66.36%, of US Gulf of Mexico crude oil production remained offline, according to the Bureau of Safety and Environmental Enforcement.

Further, Tropical Storm Nicholas was seen churning through the US Gulf Coast Sept. 12, heading for an expected landfall along the Texas shoreline by late-Sept. 13.

Nicholas is forecast to approach the middle of Texas coast as a strong tropical storm, and it could be near-hurricane intensity if it moves to the right of the forecast track and remains over water longer, according to a Sept. 12 note from the National Hurricane Center.

NYMEX October RBOB was up 1.77 to settle at USD2.1717/gal, and October ULSD rose 1.15 cents to USD2.1575/gal.

Elsewhere, market watchers were observing the situation in Libya, where protests brought about by a power struggle between Oil Minister Mohamed Oun and the chairman of state-owned National Oil Corporation Mustafa Sanalla threatened to take a large chunk of capacity offline.

The outages have already seen large inventory drawdowns, with US stockpiles falling 1.53 million barrels the previous week.

Stocks data from the US Energy Information Administration released Sept. 9 reflected the Ida impact in the near term. Crude inventories fell 1.53 million barrels to 423.87 million barrels for the week ended Sept. 3, around 6% below the five-year seasonal average, while gasoline stocks saw a 7.2 million-barrel drop to 220 million barrels, leaving inventories 4% below the five-year seasonal average.

As informed earlier, Shell said it observed damage from Hurricane Ida to its transfer station West Delta-143 offshore facilities in the Gulf of Mexico. West Delta-143 serves as the transfer station for all production from its assets in the Mars corridor in the Mississippi Canyon area of the Gulf of Mexico to onshore crude terminals. Shell said it is not yet safe to send personnel offshore to learn the full extent of the damage and estimate the effect on production.

We remind that in late August, 2021, US crude stocks dropped sharply while petroleum products supplied by refiners hit an all-time record despite the rise in coronavirus cases nationwide, the Energy Information Administration said. Crude inventories fell by 7.2 million barrels in the week to Aug. 27 to 425.4 million barrels, compared with analysts' expectations in a Reuters poll for a 3.1 million-barrel drop. Product supplied by refineries, a measure of demand, rose to 22.8 million barrels per day in the most recent week. That's a one-week record, and signals strength in consumption for diesel, gasoline and other fuels by consumers and exporters.

We also remind that US crude oil production is expected to fall by 160,000 barrels per day (bpd) in 2021 to 11.12 million bpd, the US Energy Information Administration (EIA) said in a monthly report, a smaller decline than its previous forecast for a drop of 210,000 bpd.
MRC

MOSCOW (MRC) -- Russia's overall production of unmixed polyvinyl chloride (PVC) totalled 664,100 tonnes in the first eight months of 2021, up by 5% year on year. Three producers increased their output, according to MRC's ScanPlast report.

August production of unmixed PVC increased to 83,600 tonnes versus 64,600 tonnes a month earlier, the increase in production was caused by the end of scheduled turnarounds at two producers, which took place in July. Overall output of polymer totalled 664,100 tonnes in January-August 2021, compared to 632,200 tonnes a year earlier. Three producers raised their output, whereas one manufacturer maintained its last year's production.

The structure of PVC production by plants looked the following way over the stated period.

RusVinyl produced 24,200 tonnes of PVC in August, with emulsion polyvinyl chloride (EPVC) accounting for 2,200 tonnes, compared to 31,700 tonnes a month earlier, technical issues led to lower capacity utilisation. RusVinyl's overall output of resin exceeded 231,100 tonnes in the first eight months of 2021, compared to 216,600 tonnes a year earlier. Higher production was mainly caused by the absence of a shutdown for maintenances this year.

Sayanskkhimplast significantly increased its capacity utilisation last month and produced slightly over 28,000 tonnes of suspension PVC (SPVC) versus 14,200 tonnes in July, the low July figure was caused by a shutdown for maintenance. The Sayansk plant managed to produce 199,100 tonnes of PVC in January-August 2021, compared to 188,700 tonnes a year earlier.

The Bashkir Soda Company (BSK) produced 24,000 tonnes in August, compared to 11,600 tonnes a month earlier, the low July figure was also caused by a two-week turnaround. Baskhir Soda Company's overall output of resin reached 176,200 tonnes in January-August 2021, which corresponds to the last year's figure.

Kaustik (Volgograd) produced 7,400 tonnes of SPVC last month, whereas this figure was 7,100 tonnes in July. The plant's overall production of resin reached 57,700 tonnes over the stated period versus 50,800 tonnes a year earlier.

MRC

MOSCOW (MRC) -- Chevron is poised to acquire an equity interest in the Advanced Clean Energy Storage project, a developing green hydrogen hub that could support more than 1 GW of electrolysis facilities and store 5,500 metric tonnes of their produced green hydrogen in salt caverns near Delta, Utah, according to POWER.

The integrated energy giant on Sept. 9 announced that it agreed, through its Chevron New Energies division, “on a framework” to acquire an equity interest in ACES Delta, a 2019-formed joint venture between Mitsubishi Power Americas and Magnum Development that owns the Advanced Clean Energy Storage project. Chevron, Magnum, and Mitsubishi Power are currently negotiating definitive documentation outlining Chevron’s participation in the joint venture.

The development is another notable sign of progress for the green hydrogen hub, which Mitsubishi Power (then known as Mitsubishi Hitachi Power Systems) and Magnum unveiled in 2019. The project essentially comprises a series of facilities above and within the Magnum Salt Dome, a geologic formation that was tectonically developed from a bedded salt deposit, and which seismic mapping suggests measures at least one mile thick and about three miles wide. Magnum already currently operates five salt caverns at the formation for liquid fuels storage.

Chevron, Magnum, and Mitsubishi Power said in a joint statement on Thursday that Chevron will bring its “footprint and expertise” in the transportation and industrial sectors to the project. Chevron is already working to “build demand for hydrogen—and the technologies that support it - in heavy-duty transportation and industrial sectors in which greenhouse gas emissions are hard to abate,” the company said.

For Chevron, the potential to partner on the Advanced Clean Energy Storage project presents “an exciting opportunity” that would “provide a scalable platform” to supply its customers with “affordable, reliable and ever-cleaner energy,” said Jeff Gustavson, president of Chevron New Energies, a division that he said the oil and gas giant created “to grow new competitive business lines in areas like hydrogen.”

Chevron’s participation, however, provides a new financing dimension for the green hydrogen hub. When launched in 2019, the project was estimated to cost USD1 billion.

As MRC reported earlier, in August 2021, Chevron and other partners said they are investing in a startup to build modular waste-to-green hydrogen and renewable synthetic fuel facilities in northern California with tentative plans to eventually grow worldwide. The USD20 million investment in Wyoming-based Raven SR is focused on technology to develop combustion-free, green hydrogen for transportation that is cleaner than so-called blue hydrogen derived from natural gas.

We remind that Chevron Phillips Chemical, a joint venture of Phillips 66 and Chevron, will make a final investment decision on a new cracker in far southeast Texas in 2022, followed by an FID in 2023 on an USD8 billion joint venture petrochemical complex along the US Gulf Coast in 2023.

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 1,176,860 tonnes in the first half of 2021, up by 5% year on year. Shipments of exclusively low density polyethylene (LDPE) decreased. At the same time, PP shipments to the Russian market were 727,160 tonnes in the first six months of 2021, up by 31% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased. Supply of statistical copolymers of propylene (PP random copolymers) subsided.

Headquartered in San Ramon, California, Chevron Corporation is the the second-largest integrated energy company in the United States and among the largest corporations in the world. Chevron is involved in upstream activities including exploration and production, downstream activities including refining, marketing and transportation, and advanced energy technology. Chevron is also invested in power generation and gasification processes.
MRC

MOSCOW (MRC) -- Formosa Plastics USA, part of Formosa Petrochemical, partially restarted its Baton Rouge operations, which include a 513,000 mt/year polyvinyl chloride (PVC) plant, post-Ida on September 7, 2021, reported S&P Global with reference to sources familiar with company operations.

Meanwhile, the company is awaiting full restoration of normal industrial gas feedstock supply, according to sources.

Formosa declared force majeure on PVC on 3 September, 2021, in light of reduced output after the storm's assault, according to a customer letter seen Sept. 7.

Formosa did not respond to a request for comment.

As MRC wrote previously, Formosa Plastics USA has postponed the start-up of its expanded PVC production capacities at its existing plant in Baton Rouge, Louisiana, to Q4 2022. Initially, the company planned to launch the expanded capacities at its 513,000 mt/year of PVC plant in Q4 2021. Formosa did not respond to inquiries about the delay. The company intends to debottleneck production at this plant, adding 130,077 mt/year of PVC capacity, according to permitting documents.

According to MRC's ScanPlast report, Russia's overall production of unmixed PVC totalled 580,500 tonnes in the first seven months of 2021, up by 4% year on year. At the same time, one producer reduced its output.

Formosa Petrochemical is involved primarily in the business of refining crude oil, selling refined petroleum products and producing and selling olefins (including ethylene, propylene, butadiene and BTX) from its naphtha cracking operations. Formosa Petrochemical is also the largest olefins producer in Taiwan and its olefins products are mostly sold to companies within the Formosa Group. Among the company's chemical products are paraxylene (PX), phenyl ethylene, acetone and pure terephthalic acid (PTA). The company"s plastic products include acrylonitrile butadiene styrene (ABS) resins, polystyrene (PS), polypropylene (PP) and panlite (PC).
MRC

MOSCOW (MRC) -- Linde has said it will construct a proton exchange membrane (PEM) electrolyser plant in Niagara Falls to produce green hydrogen for the state – and the company says it will be operational in 2023, said Gasworld.

The project, expected to start production in two years, has a USD17.3 million price tag and includes two parallel systems to maximize daily production of emission-free hydrogen, using the hydropower generated by Niagara Falls.

The hydrogen is produced through electrolysis, with an electric current splitting water into its hydrogen and oxygen components, without pollution. Water and heat are the byproducts.

"By providing an emission-free fuel that can be used for hard-to-electrify industrial and other power needs, Linde’s project will also reduce greenhouse gas emissions and support the State’s climate goals, as well as fulfill the WNYREDC’s focus on innovation and sustainability in its tradable sector of advanced manufacturing,” said Kevin Younis, COO and executive deputy commissioner at Empire State Development.

Empire State Development used the Excelsior Jobs Program to offer tax credits of up to USD671,000 and a Regional Council Capital Fund Grant is providing USD250,000.

“As we strive to rebuild and restart our economy following the COVID-19 pandemic, the opportunity to retain 86 jobs in Niagara Falls is more than welcome," said state Sen. Republican Leader Rob Ortt (R-North Tonawanda). "The significance of these career opportunities to our area cannot be overstated."

As it was earlier reported, BASF SE (Germany), Sabic (Saudi Arabia) and Linde (Germany) signed an agreement to develop electrically heated cracking furnaces. Steam cracking units require significant amounts of energy to break down hydrocarbons into olefins and aromatics.

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 1,176,860 tonnes in the first half of 2021, up by 5% year on year. Shipments of exclusively low density polyethylene (LDPE) decreased. At the same time, PP shipments to the Russian market were 727,160 tonnes in the first six months of 2021, up by 31% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased. Supply of statistical copolymers of propylene (PP random copolymers) subsided.

Linde is a leading global industrial gases and engineering company with 2020 sales of USD27 billion (EUR24 billion). We live our mission of making our world more productive every day by providing high-quality solutions, technologies and services which are making our customers more successful and helping to sustain and protect our planet.
MRC