US Government asks oil-and-gas companies to help lower fuel costs

MOSCOW (MRC) -- The White House has been speaking with U.S. oil and gas producers in recent days about helping to bring down rising fuel costs, according to two sources familiar with the matter, said Hydrocarbonprocessing.

Energy costs are rising worldwide, in some cases leading to shortages in major economies like China and India. In the United States, the average retail cost of a gallon of gas is at a seven-year high, and winter fuel costs are expected to surge, according to the U.S. Energy Department. Oil-and-gas production remains below the nation's peak reached in 2019.

"We are closely monitoring the cost of oil and the cost of gas Americans are paying at the pump. And we are using every tool at our disposal to address anti-competitive practices in U.S. and global energy markets to ensure reliable and stable energy markets," a White House official said, without addressing whether it has been in touch with the industry.

U.S. crude oil recently hit $80 a barrel for the first time in seven years, as the Organization of the Petroleum Exporting Countries and their allies known as OPEC+ restrict output. The average retail price of a gallon of gasoline has risen to USD3.29, according to AAA figures. The U.S. Energy Department said on Wednesday that household heating costs are expected to rise dramatically this winter for all fuels, but particularly for heating oil and propane.

U.S. oil production has been slow to rebound from 2020, when output dropped during the coronavirus outbreak. Production hit a record of nearly 13 million barrels per day (bpd) in late 2019, but the U.S. Energy Department said Wednesday that output will only average 11 million bpd in 2021, rising to 11.7 million bpd in 2022. Natural gas prices are up sharply this year, the result of supply shortages and stronger-than-expected demand in Europe and Asia.

President Joe Biden's administration has been conducting internal discussions about rising fuel costs, one of the two sources added. U.S. shale producers, who are responsible for the boom in crude oil output in the last 10 years, have been less willing to drill for more oil after years of weak financial performance, and have instead focused on cutting spending to boost returns for investors.

As per MRC, ExxonMobil Synthetics (ExxonMobil) announced it is responding to customer needs and has confirmed plant feasibility to significantly increasing high viscosity metallocene polyalphaolefin (High Viscosity mPAO) synthetic base stock production. The demonstration of higher production capability is a result of a successful plant trial and planned subsequent expansion of the Baytown manufacturing facility in Texas, USA that has been serving customers for 100 years. This resulted in a proven run rate of approximately 20% over design basis and would move the capacity to 60 kilo-tons of High Viscosity mPAO production per year for the plant.

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

MOSCOW (MRC) -- Global engineering firm KBR announced it has been awarded a dual-pressure nitric acid technology contract by Hanwha Corporation for its new plant at Yeosu, South Korea, said the company.

Under the terms of the contract, KBR will provide license, basic engineering design and technical support to Hanwha for a 1,200 tonne/day dual-pressure nitric acid plant. Nitric acid is an intermediate chemical used to produce various products including fertilizers, plastics and dyes.

"KBR is proud to be selected by Hanwha to deliver our leading dual-pressure nitric acid technology that offers tangible CAPEX and OPEX benefits, including reduced net energy consumption through efficient energy recovery," said Doug Kelly, KBR president, Technology.

"This contract highlights KBR's continued commitment to bringing energy-efficient sustainable technologies to the industry."

As MRC reported earlier, in July 2021, KBR was awarded technology licensing contracts by PKN Orlen for KBR's leading Solvent Deasphalting (SDA) and Residue Fluid Catalytic Cracking (RFCC) technologies as part of PKN's Bottom-of-the-Barrel project for its Plock Refinery in Poland.

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.

Since 1954, KBR said it has licensed 76 grassroot nitric acid plants globally.

MOSCOW (MRC) -- Gazprom Neft could increase oil production in 2020 by 10% year on year, reported S&P Global with reference to CEO Alexander Dyukov's statement on Oct. 14.

Dyukov previously said the company was seeking to push hydrocarbons output to 100 million mt in 2021 even if oil production limitations under the OPEC+ pact remained in place, from 96.1 million mt in 2020.

"Considering that next year demand for oil may continue to grow, next year we could increase production by 10%, maybe more, but it will depend on quotas set by the ministry," Dyukov said during the Russian Energy Week conference in Moscow.

He expressed hope that oil prices would not reach USD100/b, but that "everything was possible."

Gazprom Neft, like other Russian producers, is subject to quotas under the OPEC+ agreement.

In accordance with OPEC+ efforts to counter the impact of the coronavirus pandemic, the company cut oil output to about 1.06 million b/d in May 2020, compared to 1.33 million b/d in April 2020, when the deal was not yet in effect, according to the energy ministry's data.

As MRC informed earlier, in August, 2021, Gazprom Neft redeemed BO-01 and BO-04 series bonds ahead of schedule on 24 August. Bonds were repaid ahead of schedule at the outstanding part of the par value, while the coupon yield was paid for the coupon period, on the date of payment of which the securities are repaid ahead of schedule. Bond issues with a total par value of Rb15 bln. were placed in 2016 with maturity in 2046.

Gazprom Neft (headquartered in St. Petersburg, part of Gazprom, which owns 95.68% of its shares) is one of the largest Russian oil companies. In 2015, Gazprom Neft remained one of the leaders in the oil industry in terms of key performance indicators - the level of operating profit and return on invested capital. In 2015, Gazprom Neft produced 79.7 mln tonnes of hydrocarbons, increasing production by more than 20% compared to 2014 and thus achieving the highest production growth in the Russian oil industry.

Gazpromneft - Moscow Oil Refinery is a subsidiary of Gazprom Neft. The plant's production capacity is 12.15 mln tonnes/year of hydrocarbons. The company produces motor gasolines, diesel, marine and aviation fuel, fuel oil, high-octane additives to motor gasoline, bitumen and gases for various purposes, as well as polypropylene (PP). And in 2010, Moscow Oil Refinery and SIBUR created a joint venture for PP production - NPP Neftekhimiya LLC.
MRC

MOSCOW (MRC) -- Overall polyethylene (PE) imports to the Ukrainian market dropped in the first nine months of 2021 by 4% year on year to 196,600 tonnes. Imports of all PE grades decreased, with few exceptions, according to MRC's DataScope report.

Last month's PE imports to Ukraine were 25,500 tonnes versus 25,900 tonnes in August, local companies reduced their purchasing of low density polyethylene (LDPE) and high density polyethylene (HDPE). Thus, overall PE imports reached 196,600 tonnes in January-September 2021, compared to 204,200 tonnes a year earlier. Imports of all PE grades decreased, except for ethylene copolymers, with HDPE accounting for the greatest reduction in shipments.

The supply structure by PE grades looked the following way over the stated period.

Last month's HDPE imports fell to 7,300 tonnes from 8,000 tonnes, shipments of polyethylene for extrusion blow moulding (EBM) decreased. Overall HDPE imports totalled 62,700 tonnes in the first nine months of 2021 versus 73,400 tonnes a year earlier.

September LDPE imports were 7,300 tonnes versus 8,300 tonnes a month earlier, Ukrainian companies faced limited purchases of PE in Azerbaijan and Russia. Overall LDPE imports reached 59,700 tonnes in January-September 2021, down by 2% year on year.

Last month's imports of linear low density polyethylene (LLDPE) were 8,700 tonnes, compared to 7,300 tonnes in August, shipments of film grade LLDPE from Saudi Arabia increased. However, overall LLDPE imports were 59,500 tonnes in January-September 2021, which equalled the last year's figure.

Imports of other PE grades, including ethylene-vinyl-acetate (EVA), totalled 14,700 tonnes over the stated period, compared to 10,600 tonnes a year earlier.

MRC

1. Asia crude oil imports stay soft in September

MOSCOW (MRC) -- Despite a rally in crude oil prices to three-year highs, there is scant evidence that demand in the top importing region of Asia is recovering. In fact, imports across the region dropped in September from the previous month, as high prices and economic disruption from the coronavirus pandemic continued to affect fuel demand, reported Reuters. What there is early evidence of is that the major producers in the OPEC+ group of exporters are re-gaining market share lost due to their earlier output cuts, as they ramp up production and cut their official selling prices. Asia's crude imports were 22.99 MM barrels per day (bpd) in September, according to Refinitiv Oil Research, down from 23.24 MMbpd in August and only just above July's 22.61 MMbpd.


MRC