PetroChina and Hengli win 4.43 mil barrels of state crude reserves in Chinese first set of planned auctions

PetroChina and Hengli win 4.43 mil barrels of state crude reserves in Chinese first set of planned auctions

MOSCOW (MRC) -- PetroChina and privately-held Hengli Petrochemical (Dalian) Refinery were awarded 4.43 million barrels of crudes in China's first set of planned auctions from state crude reserves, reported S&P Global with reference to sources from both companies.

The state-run PetroChina won 951,137 barrels of Qatar Marine and 1.1 million barrels of Forties, each cargo priced at USD65/b.

Hengli took 1.79 million barrels of Oman at USD65/b and 592,031 barrels of Upper Zakum at USD70.50/b.

However, the 2.95 million barrels of Murban crude failed to attract any bids.

As planned, China's National Food and Strategic Reserves Administration held the auction on the National Oil Reserve Trading System Sept. 24. Participants said the notional price for the auction barrels was USD65/b.

As MRC informed previously, PetroChina, Asia's largest oil and gas producer,aims to have oil, gas and green energies to each account for a third of its portfolio by 2035, as the Chinese oil major shifts toward a lower-carbon future.

We remind that in August, 2021, PetroChina Liaoyang Petrochemical Co Ltd , part of the Chinese petrochemical major - PetroChina,successfully started up its new polypropylene (PP) plant last week. Based in Liaoning City, Liaoyang Province, China, the new PP plant has a production capacity of 300,000 tons/year.

According to MRC's ScanPlast report, PP shipments to the Russian market were 841,990 tonnes in the first seven months of 2021, up by 29% year on year. Supply of propylene homopolymers (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of statistical copolymers of propylene (PP random copolymers) subsided.

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.

Hengli Group is an international company that owns a diversity of business: petrochemical, advanced polyester materials, textiles, trading, finance and thermal power. In 2019, Hengli’s total revenue was 556.7 billion RMB, ranking No. 181 in the Fortune Global 500 list. Hengli operates the largest PTA site in the world combined with the biggest performance fibre textile production base.
MRC

Asian refining margins climbed last week

Asian refining margins climbed  last week

MOSCOW (MRC) -- Asian refining margins for 10 ppm gasoil climbed for a fourth consecutive session on Friday, posting a second straight weekly gain, riding on tighter supplies amid lower Chinese exports in the spot market and steady arbitrage shipments to the West, said Hydrocarbonprocessing.

Refining margins or cracks for 10 ppm gasoil jumped to USD11.24 per barrel over Dubai crude during Asian trading hours, a fresh high since March-end last year. They were at $10.85 per barrel a day earlier. Cracks for the benchmark gasoil grade in Singapore have risen 7% this week, Refinitiv Eikon data showed. Cash premiums for gasoil with 10 ppm sulphur content dipped 3 cents to 45 cents per barrel to Singapore quotes on Friday, while cash differentials for jet fuel were at a premium of 11 cents per barrel to Singapore quotes, up from 4 cents per barrel on Thursday. Jet fuel cracks surged to USD9.16 per barrel over Dubai crude during Asian trading hours, the strongest since March 2020. The cracks were at USD8.57 per barrel in the previous session.

Gasoil stocks held independently in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub dropped 5.7% to about 2 million tonnes in the week ended Sept. 23, according to Dutch consultancy Insights Global. - ARA jet fuel inventories fell 14.7% this week to 879,000 tonnes.

State major PetroChina and private refiner Hengli Petrochemical on Friday won four cargoes totalling about 4.43 million barrels, or 60% of the total oil offered in China's first state reserves auction, industry sources said. - Completed in less than an hour, PetroChina's Dalian refinery took one cargo each of Qatar Marine and U.K. Forties crude at USD65 a barrel, said several sources with direct knowledge of the matter. Hengli bought an Oman cargo at USD65 a barrel and Abu Dhabi's Upper Zakum crude at USD70.50 a barrel, they said.

As per MRC, China's oil consumption is likely to peak around 2026 at about 16 million barrels per day and that of natural gas by around 2040. Siinopec's oil peak forecast echoes a prediction by consultancy Rystad Energy in April that cited rapid adoption of electric vehicles as the main cause for global oil demand to peak over the next five years.

As MRC wrote previously, in August 2021, China Petroleum and Chemical Corp, also known as Sinopec, the world's petrochemical major, launched the first phase of the Gulei refining complex in Zhangzhou city in China’s southeastern Fujian province. The refining complex, a 50:50 joint venture between Sinopec’s Fujian Petrochemical Company Ltd and Taiwan Xuteng Investment Company Ltd, invested 27.8 billion yuan (USD4.28 billion) in the first phase. That will result in an 800,000 tonnes per annum ethylene plant, a 600,000 tonnes per annum styrene unit and seven other downstream petrochemical units, Sinopec said.

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 1,396,960 tonnes in January-July 2021, up by 7% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 841,990 tonnes in the first seven months of 2021, up by 29% year on year. Supply of propylene homopolymers (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of statistical copolymers of propylene (PP random copolymers) subsided.
MRC

ADNOC raising over USD1.1 blln from drilling unit IPO

ADNOC raising over USD1.1 blln from drilling unit IPO

MOSCOW (MRC) -- The Abu Dhabi National Oil Company (ADNOC) has completed the book-building process for the initial public offering of its drilling unit, raising more than USD1.1 billion in the company's second flotation of a subsidiary, reported S&P Global.

Now ADNOC is selling 11% of ADNOC Drilling, which is expected to be listed on the Abu Dhabi Securities Exchange on Oct. 3, it said in a Sept. 27 statement. ADNOC initially had intended to sell a 7.5% stake in its drilling unit.
Following the listing, ADNOC will own 84% of ADNOC Drilling and Baker Hughes will retain the 5% stake it bought in the unit in 2018. Helmerich & Payne will own 1% through its IPO investment that was announced on Sept. 8.

ADNOC Drilling, which currently has 96 rigs, will acquire eight more for USD86.5 million from Helmerich & Payne, ADNOC said in a Sept. 8 statement. After the transaction, Helmerich & Payne will invest USD100 million in ADNOC Drilling's IPO.

This will be ADNOC's second flotation of a unit after it sold 10% of fuel retailer ADNOC Distribution on the Abu Dhabi exchange in 2017, raising USD851 million.

Last year, ADNOC raised USD1 billion from institutional placement of another 10% of shares of ADNOC Distribution, with the parent company retaining an 80% shareholding in the unit.

Since 2019, ADNOC has been monetizing its oil and gas assets as it seeks to unlock cash to fund strategic projects, which include increasing oil output capacity to 5 million b/d by 2030, from around the current 4 million b/d.

In June 2020, ADNOC inked a deal worth more than USD10 billion with a group of investors to sell a 49% stake in its gas pipelines a year after striking a similar transaction for its oil pipelines.

As MRC wrote before, in August 2021, ADNOC partnered with Fertiglobe for the sale of blue ammonia to Idemitsu in Japan, for use in its refining and petrochemicals operations.

We remind that in June 2021, Indian refining giant Reliance Industries signed an agreement with ADNOC to build a multi-billion-dollar chemical project in Ruwais, marking the group’s first investment in a greenfield overseas project.

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 1,396,960 tonnes in January-July 2021, up by 7% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 841,990 tonnes in the first seven months of 2021, up by 29% year on year. Supply of propylene homopolymers (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of statistical copolymers of propylene (PP random copolymers) subsided.
MRC

COVID-19 - News digest as of 25.09.2021

1. August crude oil processing of Indian refiners down to its lowest in 10 months

MOSCOW (MRC) -- Indian refiners' crude oil throughput in August dipped to its lowest in 10 months due to ongoing maintenance activities at multiple refineries, reported Reuters with reference to government data. Refiners processed 4.36 million barrels per day (18.44 million tons) of crude oil last month, the lowest since October 2020 and about 4.8% lower than 4.58 million bpd processed in July. Maintenance activities at some facilities limited production in August, Refinitiv analyst Ehsan Ul Haq said, adding that demand was likely to resume as the festival season approaches, provided cases of COVID-19 remain low.

MRC

Crude oil futures continue rising in Asia amid bullish demand outlook and supply constraint

Crude oil futures continue rising in Asia amid bullish demand outlook and supply constraint

MOSCOW (MRC) -- Crude oil futures were higher in mid-morning trade in Asia trade Sept. 27 amid bullish demand outlook and supply tightness, reported S&P Global.

At 10:05 am Singapore time (0205 GMT), the ICE November Brent futures contract was up 1.14 cents/b (1.46%) from the previous close at USD79.23/b, while the NYMEX November light sweet crude contract was 1.12 cents/b (1.51%) higher at USD75.10/b.

"Supply tightness continues to draw on inventories across all regions," said ANZ research analysts on Sept. 27, adding that the rally in the natural gas price improved the price parity for oil to produce power, which is exerting upward pressure on oil.

Concerns remained over tightness in energy markets, particularly for natural gas, as the gas market continues to trade at elevated levels amid tight supply going into winter.

"These higher gas prices will lead to some gas to oil switching, which would be supportive of oil demand. This stronger demand coupled with supply losses in excess of 30 million barrels from the US Gulf of Mexico due to Hurricane Ida suggest a tighter than expected market," said ING market analysts in a note Sept. 27.

The US Bureau of Safety and Environmental Enforcement reported Sept. 23 that around 294,414 b/d, or 16.18%, of the Gulf's oil production remained offline post-Ida. Despite the proportion of offline production easing, full production recovery is not expected until early 2022, with Shell reporting extensive damage to its infrastructure.

Meanwhile, market watchers will track the OPEC+ meeting, which is scheduled to have on Oct. 4 to discuss about the strength in energy markets. In the previous meeting on Sept. 1, OPEC+ alliance agreed to stick with its existing plan to release 400,000 bpd to the market in October.

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