Regulators probe Phillips 66 refinery work

Regulators probe Phillips 66 refinery work

MOSCOW (MRC) -- California Bay Area regulators are investigating whether Phillips 66 failed to obtain necessary permits to produce renewable fuels at its oil refinery in Rodeo, according to an email reviewed by Reuters.

The refiner is undergoing a multi-step conversion of the plant to turn it into the world's largest producer of renewable fuels using feedstocks such as soybean oil and animal fats. California is the biggest gasoline market in the United States, but some of the state's 14 refineries are not always profitable. Several are looking to survive long term by cashing in on state incentives for production of lower-carbon fuels.

Phillips 66 started to process small volumes of soybean oil at the Rodeo refinery in the first quarter of 2021, the company said this year. The Bay Area Air Quality Management District (BAAQMD), which regulates stationary sources of air pollution in the region, is investigating whether the company modified its refinery without getting required additional permits, according to an email last week seen by Reuters.

Phillips 66 wants the Rodeo project to produce more than 800 million gallons of renewable diesel, renewable gasoline and sustainable jet fuel annually. That effort requires increased use of hydrogen, which can cause flaring events and refineries to malfunction, environmental groups say.

At least 10 groups, including the Natural Resources Defense Council, have complained to regulators about the additional emissions produced by using more hydrogen to treat feedstocks like soybean oil and animal tallow. The NRDC, in a July letter, argued that Phillips 66 did not request proper approval from the air quality management district to start processing that oil this year.

The management district, in its email this month to NRDC, said it will conduct an on-site investigation and engineering review of the Rodeo facility, the email said. Phillips 66 told Reuters it obtained the necessary permits to produce renewable diesel from an existing hydrotreater as part of a standalone flexibility project. The management district declined to comment.

As per MRC, Phillips 66's 255,600-barrel-per-day (bpd) Alliance, Louisiana, refinery faces a monthslong shutdown for repairs following flooding from Hurricane Ida, sources familiar with plant operations said. Phillips 66 said it was still assessing the refinery and a timeline for operational restarts was not available. The sources said the company plans to complete its damage assessment next week when floodwaters fully recede. So far, the company still plans to restart the refinery, which in August it announced was up for sale.

We remind that US-based Phillips 66 remains open to developing another ethane cracker for its Chevron Phillips Chemical (CP Chem) joint venture, the refiner's CEO said in March 2018.

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.

Phillips 66 is a diversified energy manufacturing and logistics company. With a portfolio of Midstream, Chemicals, Refining, and Marketing and Specialties businesses, the company processes, transports, stores and markets fuels and products globally. Phillips 66 Partners, the company’s master limited partnership, is integral to the portfolio. Headquartered in Houston, the company has 14,300 employees committed to safety and operating excellence. Phillips 66 had USD55 billion of assets as of Dec. 31, 2020.
MRC

Kazanorgsintez shut PE production

Kazanorgsintez shut PE production

MOSCOW (MRC) -- Kazanorgsintez (part of TAIF Group) has completely shut its polyethylene (PE) production capacities for a scheduled turnaround, according to ICIS-MRC Price report.

The plant's customers said Kazanorgsintez had completely took off-stream its low density polyethylene (LDPE) and high density polyethylene (HDPE) production capacities for the annual scheduled maintenance on 14 September. The outage will be lengthy, the completion of the maintenance works is scheduled for the second decade of October.

It is also worth noting that Gazprom neftekhim Salavat plans to resume its HDPE production after a long turnaround in the third decade of September, and its LDPE production - in early October. The plants' production capacities are 120,000 and 45,000 tonnes per year, respectively.

PJSC "Kazanorgsintez" (part of TAIF Group) is one of Russia's largest plants. Kazanorgsintez produces 40% of overall Russian polyethylene (PE) and is the country's largest exporter. To date, the plant produces PE, polycarbonate (PC), PE pipes, phenol, acetone, bisphenol A. Kazanorgsintez is Russia's only PC producer. It manufactures a total of 170 items of products. Kazanorgsintez's annual output is 1.6 million tonnes. The plant is Russia's largest producer of high density polyethylene (HDPE). The plant's annual HDPE production capacity is 540,000 tonnes and its annual LDPE capacity is 225,000 tonnes.
MRC

COVID-19 - News digest as of 16.09.2021

1. Crude oil prices continue rising in Asia after sharp overnight increase on bullish supply-demand outlook

MOSCOW (MRC) -- Crude oil futures continued their uptrend in midmorning Asia trade Sept. 16 after sharp overnight gains on a bullish supply-demand outlook, reported S&P Global. At 11 am Singapore time (0300 GMT), the ICE November Brent futures contract was up 28 cents/b (0.37%) from the previous close at USD75.74/b while the NYMEX October light sweet crude contract rose 26 cents/b (0.36%) at USD72.87/b. "Crude oil rallied to a six-week high following another large drawdown in inventories. US stockpiles fell 6,422 kbbl last week, according to EIA data. The data follow warnings from the International Energy Agency that supply lost from storms in the Gulf of Mexico would offset gains from OPEC," ANZ analysts said Sept. 16.

MRC

NSRP restarts its new PP plant in Vietnam after turnaround

NSRP restarts its new PP plant in Vietnam after turnaround

MOSCOW (MRC) -- Nghi Son Refinery and Petrochemical (NSRP) has completed maintenance works at its new polypropylene (PP) plant in Vietnam this week, reported CommoPlast.

The 400,000 mt year of PP plant was shut on 24 August 2021, instead of the initially scheduled date of 17 August, for approximately three weeks. The company decided to postpone the maintenance shutdown at this plant by one week from the previous schedule due to the COVID-19 related lockdown.

Demand in the local Vietnam market has been sluggish due to the COVID-19 outbreak that forced many manufacturing plants to shut down.

As MRC reported earlier, in the third week of September 2020, NSRP restarted its PP unit in Vietnam following a 10 days unscheduled shutdown starting 7 September 2020 due to a persistent technical issue. And this year, NSRP also shut its PP plant in central Vietnam from 30 March to 13 April 2021 for a two-week turnaround due to a technical issue.

We also remind that Vietnam’s Nghi Son oil refinery officially began commercial production from 14 November 2018, following months of tests. The USD9 billion refinery is 35.1% owned by Japan’s Idemitsu Kosan Co, 35.1% - by Kuwait Petroleum, 25.1% - by PetroVietnam and 4.7% - by Mitsui Chemicals Inc.

According to MRC's ScanPlast report, 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.
MRC

Crude oil prices continue rising in Asia after sharp overnight increase on bullish supply-demand outlook

Crude oil prices continue rising in Asia after sharp overnight increase on bullish supply-demand outlook

MOSCOW (MRC) -- Crude oil futures continued their uptrend in midmorning Asia trade Sept. 16 after sharp overnight gains on a bullish supply-demand outlook, reported S&P Global.

At 11 am Singapore time (0300 GMT), the ICE November Brent futures contract was up 28 cents/b (0.37%) from the previous close at USD75.74/b while the NYMEX October light sweet crude contract rose 26 cents/b (0.36%) at USD72.87/b.

"Crude oil rallied to a six-week high following another large drawdown in inventories. US stockpiles fell 6,422kbbl last week, according to EIA data. The data follow warnings from the International Energy Agency that supply lost from storms in the Gulf of Mexico would offset gains from OPEC," ANZ analysts said Sept. 16.

Market watchers remain bullish on the outlook for the oil market amid the demand growth estimates for 2022.

The International Energy Agency has raised its 2022 oil demand growth estimate by 100,000 b/d to 3.2 million b/d, a day after OPEC hiked its own forecast of 2022 global demand growth by 900,000 b/d to 4.15 million b/d.

"Sentiment was boosted by the release of OPEC's latest outlook on the oil market, raising its 2022 oil demand forecast by 860kb/d, and now sees demand increasing by 4.15mb/d next year," ANZ analysts said, adding that the stronger outlook was being driven by an optimistic view on Chinese demand, along with positive economic developments supporting stronger demand in Europe.

On the supply side, all eyes were on the US Gulf Coast where recovery efforts continued post Hurricane Ida. Less than 30% of US Gulf of Mexico crude production remained offline Sept. 15 in the aftermath of Hurricane Ida and Tropical Storm Nicholas, although the delayed restoration of onshore facilities continued to slow the return to normalcy in offshore operations.

WTI crude closed up USD2.15/b to settle at USD72.61/b while Brent closed above USD75/b on Sept. 15 for the first time since late July, marking the highest level in six weeks after a US government report showed a bigger-than-expected drop in crude inventories, UOB analysts said.

In inventory news, EIA data showed Sept. 15 that total US commercial crude stocks fell 6.42 million barrels to 417.45 million barrels in the week ended Sept. 10, putting stockpiles 7% behind the five-year average for this time of the year. Total gasoline inventories decreased 1.9 million barrels and were about 4% below the five-year average for this time of the year while distillate fuel inventories decreased 1.7 million barrels in the same period - about 13% below the five-year average.

The draw was largely the result of lingering US Gulf production outages following Hurricane Ida, which made landfall near Port Fourchon, Louisiana, Aug. 29 as a Category 4 storm.

Total US crude output averaged 10.1 million b/d in the week ended Sept. 10, the EIA said, up 100,000 b/d from the week prior but still down 1.4 million b/d from prestorm levels.

As informed earlier, Shell said earlier this month 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 then it was 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