BP eyes post-Ida oil and gas output recovery

MOSCOW (MRC) -- BP anticipates higher fourth-quarter production from both its upstream business and LNG-focused "gas & low carbon" unit as it recovers from Hurricane Ida and eyes growth in US shale, reported S&P Global with reference to the company's statement Nov. 2.

The UK major reported a 6% year on year decline in its upstream output for the third quarter to 1.3 million b/d of oil equivalent, reflecting hurricane impacts, maintenance, US shale divestments and price impacts on volumes it is entitled to in some countries. Hurricane Ida and its aftermath dented output by 60,000 b/d in Q3.

However, BP's upstream output was up 5% from second-quarter levels as an industry-wide maintenance uptick eased. Also, production in the gas & low carbon unit was up 6% on the year at 889,000 boe/d, and BP's portion of output from its Rosneft stake was up 4% on the year at 1.1 million boe/d.

BP highlighted the startup in September of the oil-focused Thunder Horse South Expansion Phase 2 project in the Gulf of Mexico and the gas-focused Matapal project offshore Trinidad, although it reiterated upstream production for the year is likely to be lower than last year, reflecting shale divestments. CEO Bernard Looney noted expectations for a further boost in the Gulf of Mexico next year with the startup of Mad Dog Phase 2.

Chief Financial Officer Murray Auchincloss forecast a recovery in oil demand to pre-pandemic levels sometime in 2022, saying demand of 100 million b/d had already been reached, and describing the price outlook as "constructive."

Defending BP's long-term pivot to low-carbon energy, he said the plan was for a "focusing" of the hydrocarbons business, rather than to get out of oil. "We should not use emissions reduction as a proxy for no new investments into hydrocarbon projects, so you will continue to see this company invest in hydrocarbon projects, and sanction new ones including LNG projects, as we high-grade the portfolio," Looney said. "We will deliver on our targets of reducing production, but that doesn't mean that there won't be new investment, including in LNG."

Looney added that work was progressing on forming a joint venture in Angola with Italy's Eni, intended to bring about efficiency improvements, and said the deal should be completed early in 2022, with the authorities showing "strong support."

On the company's BPX shale unit in the US, production - which is weighted toward gas - was down 12% on the year at 322,000 boe/d, reflecting efforts to slim the business purchased from miner BHP in 2018, as well as spending cuts in 2020. The company reduced the average number of rigs it operates across its Haynesville, Eagle Ford and Permian acreage from eight in the second quarter to six in the third quarter.

However, chief financial office Murray Auchincloss noted shale production was up from second-quarter levels in the third quarter and said BPX was likely to increase capital investment next year to around USD1.5 billion, from USD1 billion this year, with spending to be focused on eliminating Permian emissions.

BP also gained a boost in the downstream, although limited by higher maintenance and energy costs. Throughput at refineries BP operates was up 2% at 1.6 million b/d, led by Europe.

Overall, the company reported a USD2.9 billion loss for the quarter, but an underlying profit of USD3.3 billion, noting a further reduction in net debt. "Our businesses are generating strong underlying earnings and cash flow while maintaining their focus on safe and reliable operations," Looney said.

As MRC wrote previously, in October, 2021, BP announced plans for a USD269 million investment in three projects at its Cherry Point Refinery in Washington state, aimed at improving the refinery’s efficiency, reducing its carbon dioxide (CO2) emissions and increasing its renewable diesel production capability. The investment is aligned with bp’s aims to be net zero across its operations by 2050 or sooner and to reduce the carbon intensity of the products it sells by 50% by 2050 or sooner.

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 1,638,370 tonnes in the first eight months of 2021, up by 10% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 989,570 tonnes in the first eight months of 2021, up by 30% year on year. Deliveries of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased, whereas shipments of injection moulding PP random copolymers decreased significantly.

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) -- Axens was selected by Qatargas-appointed EPC contractor Medgulf Construction Company to provide a new Tri-ethylene Glycol (TEG) dehydration unit for integration into the CO2 Sequestration and Export Facilities Project at Ras Laffan, Qatar, said Hydrocarbonprocessing.

The oil and gas industry is using innovative solutions to reduce its carbon emissions and this is exemplified by the initiative undertaken by Qatar Petroleum (QP). Several new facilities, being built as part of the project by Qatargas, will support QP’s CO2 Sequestration and Enhanced Oil Recovery (EOR) initiative.

With water contained in the CO2-rich stream (? 98 vol%), a gas dehydration technology is required to avoid the risk of pipeline corrosion. Axens’ solution was selected and is based on TEG technology, which absorbs the water contained in the CO2-rich stream counter-currently by lean TEG in a gas/glycol contactor. The TEG unit will include three high-pressure contactors, three high-pressure separators and one common TEG regeneration delivered in modules.

"Axens is delighted to be part of this key project and to support QP and Qatargas’ sustainability strategy. The project will benefit from Axens’ engineering capabilities for modules delivery and Axens’ expertise with proven technologies with more than 300 TEG references and an experience exceeding 40 years. This project is another new reference in CO2 dehydration and strengthens Axens role in CO2 capture and energy transition” said Rachid Chennit, Gas Business Group Director, Process Licensing Business Unit at Axens.

As per MRC, Sumitomo Chemical successfully conducted the first waste-based polyolefin production at its laboratory in Japan earlier this year, by use of the ethylene produced by Axens ethanol-to-ethylene technology Atol. This process value chain is complemented with the upfront “Waste to Ethanol” technology by Sekisui Chemical.

As MRC wrote before, Repsol, Axens, a worldwide technology provider and IFPEN, the renowned French research and innovation player in the field of energy, have recently developed a pioneering and patented process to enhance the chemical recycling of plastic waste and boost circular materials production. The Rewind Mix process removes impurities such as silicon, chlorine, diolefins, and metals from the plastics pyrolysis oils produced, allowing the direct and undiluted feed to petrochemical units.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,638,370 tonnes in the first eight months of 2021, up by 10% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 989,570 tonnes in the first eight months of 2021, up by 30% year on year. Deliveries of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased, whereas shipments of injection moulding PP random copolymers decreased significantly.
MRC

MOSCOW (MRC) -- Royal Vopak has announced the opening of a new Vopak industrial terminal on the US Gulf Coast, said Hydrocarbonengineering.

The new terminal has been designed and built by Vopak to serve Gulf Coast Growth Ventures, a joint venture by ExxonMobil and SABIC to build and operate a world-scale plastics manufacturing facility in San Patricio County, Texas, US. The terminal is 100% owned and operated by Vopak.

The total capacity is 144 000 m3 tankage and includes pipelines connecting the terminal to the petrochemical complex.

“We are very excited to have successfully and timely delivered this new industrial terminal to support GCGV in the US. This new terminal fits well into our growth strategy for industrial terminals,” said Eelco Hoekstra, Chairman of the Executive Board and CEO of Royal Vopak.

“We are proud of our expertise and long track record of storing vital products. We have high standards on safety and environmental care and we are looking forward to being part of the Coastal Bend community."

This terminal is covered with a 20-year commercial agreement.

As per MRC, Huizhou QuanMei Petrochemical Terminal Co. has awarded a contract to Vopak for storage and services of a liquid products terminal that would be constructed and operated as part of ExxonMobil?s proposed Huizhou chemical complex project in China. The complex, to be located in Daya Bay Petrochemical Park, will include a 1.6-million-t/y flexible feed ethylene steam cracker, two performance polyethylene (PE) lines and two differentiated performance polypropylene (PP) lines. The project was earlier scheduled to start up in 2023.

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) -- Marathon Petroleum Corp signaled on Tuesday that a sustained rally in natural gas prices could take a toll on earnings, sending the largest US refiner's shares down 4%, according to Hydrocarbonprocessing.

The warning comes after US natural gas prices soared more than 60% in the third quarter - translating into higher costs since natgas is used to power refining operations - as sky-rocketing global rates keep demand for US liquefied natural gas exports elevated.

"For every USD1 change in natural gas prices, we anticipate there is an approximate USD360 MM impact to annual EBITDA to our R&M (Refining and Marketing) segment," Chief Financial Officer Maryann Mannen said.

"Based on current prices, we estimate that in the fourth quarter, higher natural gas prices have the potential to impact our business by an incremental USD0.30 per bbl," Mannen added.

Marathon said there was still some uncertainty around supply-demand dynamics heading into the fourth quarter, but lower inventories and strong holiday travel could be supportive.

"Looking at next year, if global product inventories remain tight and demand continues to recover, we would expect the refining sector to rebound in 2022," Chief Executive Officer Michael Hennigan said.

Total throughput, or amount of crude processed, rose to 2.8 MM barrels per day (bpd) in the third quarter from 2.5 bpd in the year-ago period. The refiner expects fourth quarter total refinery throughput to be 2.79 bpd.

As MRC reported earlier, in May, 2021, US refiner Marathon Petroleum Corp said its board had approved the conversion of the Martinez refinery in California to a renewable diesel plant. Besides, the company made a final investment decision regarding this project. Martinez, once complete, will be one of the largest renewables facilities in the country.

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 1,638,370 tonnes in the first eight months of 2021, up by 10% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 989,570 tonnes in the first eight months of 2021, up by 30% year on year. Deliveries of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased, whereas shipments of injection moulding PP random copolymers decreased significantly.

Marathon Petroleum Corporation (MPC) is a leading, integrated, downstream energy company headquartered in Findlay, Ohio. The company operates the nation's largest refining system. MPC's marketing system includes branded locations across the United States, including Marathon brand retail outlets.
MRC

MOSCOW (MRC) -- China's coastal province of Shandong is expected to shutter refineries with daily capacity of more than half a MM bbls by the end of 2022 to make way for a new petrochemical complex, said Reuters.

The clean-up of 10 plants, accounting for about 3% of refining capacity in the world's largest importer of crude, is part of efforts to streamline a bloated oil refining sector that brought fuel shortages in some regions recently.

Their closure, aimed at scrapping excess fuel output and curbing carbon emissions, will also dampen demand by removing 13 MM tons of annual crude oil import quotas, or 260,000 bpd, from China's quota list, sources estimated. "This is a positive development to help Shandong's shift to more advanced manufacturing capacity that also serves the national carbon goal," said Zhou Mi, an analyst with consultancy JLC who is based in the eastern region.

"However, it's going to have some impact on China's crude oil imports as the government lowers quotas for independent refiners." Between June and September, three of the plants - Hengyuan Petrochemical, Fuyu Petrochemical and Lianmeng Petrochemical - closed crude units with a combined capacity of nearly 160,000 bpd, the sources said.

The closures bring Shandong's permanent plant shutdowns to nearly 20 MMtpy (400,000 bpd) since 2020, when it began to consolidate its fragmented refining sector, along with a plan to build a $20-B petrochemical complex in its city of Yantai.

The province, home to about 60 small refiners sometimes known as teapots, aims to mothball crude units with capacity of another 150,000 bpd by the end of 2022, taking total shutdowns to about 560,000 bpd, the sources said. All the sources sought anonymity because they were not authorized to speak to the media.

A Shandong government official confirmed the details of the shutdowns as well as the timeframe, but declined further comment. China's crude oil imports fell nearly 7% in the first nine mos of this yr, as Beijing reins in illicit quota trading and cuts import permits to teapots.

In recent yrs it has favored building huge integrated refinery and chemical complexes, such as Zhejiang Petrochemical Corp in its east, with a focus on growing high value-added chemical business, while capping crude processing capacity.

Shandong started building the USD20-B Yulong complex in the port city of Yantai a yr ago, media have said. The project, with investment led by private aluminum smelter Shandong Nanshan Group, consists of a 400,000-bpd oil refinery and a 3-MM-ton-per-yr ethylene plant, Reuters has reported.

The firms that dismantle plants were expected to receive cash compensation from the Yulong project funds which they can invest in new projects or use to relocate workers, industry sources have said. "You'll see many of them shift to new materials manufacturing or even greener projects such as electric vehicle related chemicals production," said one senior source close to some of the plants.

As MRC informed before, in August, 2021, 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 1,638,370 tonnes in the first eight months of 2021, up by 10% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 989,570 tonnes in the first eight months of 2021, up by 30% year on year. Deliveries of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased, whereas shipments of injection moulding PP random copolymers decreased significantly.
MRC