Oil prices decreased on expected deal to tap emergency crude reserves

MOSCOW (MRC) -- Oil prices dropped, reversing gains in the previous session, on growing talk the United States, Japan and India will release crude reserves to tame prices despite the threat of demand faltering as COVID-19 cases flare up in Europe, said Hydrocarbonprocessing.

The U.S. Department of Energy is expected to announce a loan of oil from the Strategic Petroleum Reserve on Tuesday, and will be coordinated with other countries, a Biden administration source familiar with the situation said. U.S. West Texas Intermediate (WTI) crude futures fell 43 cents, or 0.6%, to USD76.32 a bbl at 0128 GMT. Brent crude futures fell 30 cents, or 0.4%, to USD79.40 a bbl.

Brent and WTI both rose 1% on Monday on reports that the Organization of the Petroleum Exporting Countries (OPEC), Russia and their allies, together called OPEC+, could adjust their plan to raise oil production if large consuming countries release crude from their reserves or if the pandemic dampens demand.

With talk of a coordinated crude release having succeeded in driving prices back below USD80 a bbl and an actual release only expected to have a temporary impact, analysts are turning their attention to the potential hit to demand from a fourth wave of COVID-19 cases in Europe. "As Europe, and in particular Eastern Europe, struggles to halt the spread of COVID-19, the risk of lockdown-like measures looms large," said Rystad Energy analyst Louise Dickson.

She said demand in November for road and jet fuel in Europe is expected to fall to 7.8 MMbpd from 8.1 MMbpd in October, although part of that is a normal decline for this time of year. "If a new wave of lockdowns are enacted in Europe, oil prices will not be spared during the remainder of the flu season in the North Hemisphere," Dickson said in emailed comments.

As per MRC, crude oil futures were higher in mid-morning trade in Asia Nov. 24, extending gains of more than 3% overnight, after major oil-consuming economies announced a smaller-than-expected release from their strategic petroleum reserves. Some bearish pressures also came from an unexpected build in US crude oil and gasoline inventories last week. At 10:23 am Singapore time (0223 GMT), the ICE January Brent futures contract was up 14 cents/b (0.17%) from the previous close at USD82.45/b, while the NYMEX January light sweet crude contract was 25 cents/b (0.32%) higher at USD78.75/b.

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, EIA said in a monthly report earlier this year, a smaller decline than its previous forecast for a drop of 210,000 bpd.
MRC

MOSCOW (MRC) -- South Korea's crude oil imports in October rose 1.9% from a year earlier, reflecting the country's rising refinery run rates as Seoul rapidly eases COVID-19 restrictions, while major refiners plan to actively purchase spot cargoes from non-OPEC producers amid tight Middle Eastern supply, reported S&P Global.

The world's fifth-biggest crude importer received 11.419 million mt, or 83.7 million barrels, of crude oil last month, compared with 82.14 million barrels imported a year earlier, data from the Korea Customs Service showed. The October imports were also up 6.4% from 78.63 million barrels received in September.

The country's crude imports are on course to a full recovery to levels seen before the outbreak of the pandemic as major refiners raise run rates to lift transportation fuel production amid easing domestic and international movement restrictions with the government's call to shift to a phase of living with COVID-19 from Nov. 9, refinery and industry sources told S&P Global Platts.

South Korea's top refiner SK Innovation raised its average crude throughput to 68% in the third quarter, from 66% in Q2 and 63% in Q1, while the country's second-biggest refiner GS Caltex raised its average refinery run rate to 92% in Q3 from 88% in Q2 and 83% in Q1.

No. 3 refiner S-Oil Corp. also boosted its run rate to average 99.2% in Q3, compared with 90.7% a year earlier, 98.8% in Q2 and 94.4% in Q1.

South Korea's crude imports are likely to continue to rise during Q4 as Seoul's decision to phase out coronavirus restrictions and guide the nation back to normal life encouraged the major refiners to further boost their run rates and middle distillate fuel output.

The country's nationwide run rates were estimated to have averaged around 81% in the first 10 months, lower than the average 84% during the same period in 2020, according to latest data from Korea Petroleum Association and industry information collected from major refiners by S&P Global.

As MRC informed before, South Korea's SK Innovation Co Ltd said in August, 2021, it is considering spinning off and listing its growing battery business, taking a page out of rival LG Chem Ltd's playbook that is on track to list its battery unit this year. The move, announced by SK Innovation CEO Kim Jun earlier this year, comes as demand for electric vehicles (EVs) surges and carmakers partner with battery makers to ensure uninterrupted supplies.

We remind that in July 2021, SK Innovation Co Ltd said refining margins were likely to gradually improve in the second quarter due to recovering demand as the impact of COVID-19 eases.

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 1,868,160 tonnes in the first nine months of 2021, up by 18% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,138,510 tonnes in January-September 2021, up by 30% year on year. Supply of propylene homopolymer (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding statistical copolymers of propylene (PP random copolymers) decreased significantly.
MRC

MOSCOW (MRC) -- Global major Royal Dutch Shell may build a biofuels plant in Singapore to meet the region's rising demand for sustainable aviation fuels (SAF), reported Reuters with reference to the head of the company's downstream business' statement on Wednesday.

The proposed 550,000 tpy project at Singapore's Bukom Island could produce SAF, bionaphtha for petrochemicals and renewable diesel to supply major Asian hubs such as Hong Kong International Airport and Singapore's Changi, Shell Downstream Director Huibert Vigeveno told reporters.

Citing discussions with Asian airlines, including Singapore Airlines, Cathay Pacific, Japan Airlines and Nippon Airlines, he said the appetite for SAF was not just in Europe or the United States.

As Shell seeks to move away from fossil fuels, in response to pressure for climate action from governments and some shareholders, it is already building a 820,000 tpy biofuels plant in Rotterdam, the Netherlands.

Globally, Shell aims to make about 2 MMtpy of SAF by 2025, although the renewable fuel accounts for less than 0.1% of today's global jet fuel demand.

To make room for low-carbon fuel production, Shell has shut a crude distillation unit at Bukom, which reduced its refining capacity by half, Vigeveno said, despite a recovery in global refining margins.

As MRC wrote previously, Royal Dutch Shell has restarted its cracker in Pulau Bukom, Singapore after resolving technical issue. Thus, this cracker with an annual output of 960,000 tons/year of ethylene and 550,000 tons/year of propylene came back on-line on 5 November, 2021. It was shut on 1 November, after a flare occurred at the plant.

We remind that Royal Dutch Shell plans to reduce its refining and chemicals portfolio by more than half, it said in July 2020 without giving a precise timeframe. The move is part of the Anglo-Dutch company's plan to shrink its oil and gas business and expand its renewables and power division to reduce greenhouse gas emissions sharply by 2050.

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 1,868,160 tonnes in the first nine months of 2021, up by 18% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,138,510 tonnes in January-September 2021, up by 30% year on year. Supply of propylene homopolymer (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding statistical copolymers of propylene (PP random copolymers) decreased significantly.

Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.
MRC

MOSCOW (MRC) -- Royal Dutch Shell has halved its crude processing capacity at its Singapore hub and reduced fuel exports, executives said on Tuesday, as the major transits from fossil fuels to cut emissions and meet global low-carbon energy needs, said Hydrocarbonprocessing.

The refinery on Pulau Bukom will continue to produce naphtha for its ethylene unit, Shirley Yap, senior vice president of chemicals and products at Shell Singapore, told reporters. Shell has also started testing new chemical feedstocks - pyrolysis oil and bionaphtha - at the cracker, she said, as the major aims to supply olefins with lower carbon footprint to customers like Japanese chemical maker Asahi Kasei Corp.

Shell is a key fuel supplier in Asia and the drop in exports has tightened supplies and propelled margins for refiners in the region back to pre-pandemic levels in recent months. "The reality is that we've cut a substantial part of our capacity and there's demand for fuels today so we have to ensure that we are doing it at a pace that is in step with our customers and in step with the society," Shell Singapore Chairman Aw Kah Peng said.

"But at the same time ... it can't be turned on with just a flick of the switch as infrastructure needs to be build but we want to be there as quickly as we can," she said. Shell will build its first pyrolysis oil upgrader to produce 50,000 tpy of treated pyrolysis oil for its 800,000 tpy cracker on Bukom in 2023.

Pyrolysis melts plastic waste into products such as pyrolysis oil, which can be upgraded as raw material for plastics and chemicals, although the process isn't commercially proven and consumes a lot of energy. Other projects in Shell Singapore's pipeline include a CCS hub and a 550,000 tpy biofuels plant to process waste and vegetable oils into sustainable aviation fuel (SAF). Shell aims to make about 2 MMtpy of SAF by 2025 globally although SAF accounts for less than 0.1% of today's global jet fuel demand.

The projects form part of Shell Singapore's plans to cut emissions from its operations by half by 2030, from 2016 levels on a net basis, Shell Downstream Director Huibert Vigeveno said. Shell did not provide investment figures for the projects. Energy companies are face increasing pressure from investors, activists and governments to steer away from fossil fuels and rapidly ramp up investment in renewables. Globally, Shell has pledged to halve emissions from its operations by 2030, as well as reduce its net carbon footprint by 45% by 2035.

Bukom, together with other Shell chemical plants on Jurong Island, forms one of five Energy and Chemical Parks owned by the major globally and is the only one in Asia. Shell plans to build two chemical conversion units in Asia to convert waste plastics into pyrolysis oil for Singapore, similar to units in the Netherlands with JV partner BlueAlp which will be operational in 2023.

Shell previously announced it would trial the use of hydrogen fuel cells for ships in Singapore and is exploring developing a solar farm in a landfill near Bukom.

As MRC reported earlier, Royal Dutch Shell plans to reduce its refining and chemicals portfolio by more than half, it said in July 2020 without giving a precise timeframe. The move is part of the Anglo-Dutch company's plan to shrink its oil and gas business and expand its renewables and power division to reduce greenhouse gas emissions sharply by 2050.

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 1,868,160 tonnes in the first nine months of 2021, up by 18% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,138,510 tonnes in January-September 2021, up by 30% year on year. Supply of propylene homopolymer (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding statistical copolymers of propylene (PP random copolymers) decreased significantly.

Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.
MRC

MOSCOW (MRC) -- Clariant, a focused, sustainable and innovative specialty chemical company, has launched a major global campaign to reduce the climate change impact of nitrous oxide (N2O), according to Hydrocarbonprocessing.

Drawing on decades of catalyst research expertise, the company has developed the EnviCat N2O-S catalyst, which is proven to remove up to 95% of N2O generated as a by-product of nitric acid production.

Clariant is now offering a free fill of EnviCat N2O-S to 10 nitric acid producers who do not have N2O off-gas treatment in place. Through the campaign, the company intends to help avoid greenhouse gas emissions equivalent to several MM tons of CO2 per year.

Of the approximately 500 nitric acid plants operating globally, more than half run without N2O abatement, mostly in regions without applicable emission control regulations. Clariant now aims to tip the balance towards more sustainable production processes. The company is offering a free first fill of EnviCat N2O-S catalyst to up to 10 nitric acid producers who currently do not use an N2O abatement catalyst.

Hans Bohnen, Chief Operating Officer at Clariant, commented, “Sustainability is no longer an afterthought of business; it is central to what we do and requires action now. That’s why we announced new ambitious science-based climate targets for Clariant. But as a specialty chemicals company we can do more: I am therefore particularly proud to announce that we have committed a substantial investment to help nitric acid producers worldwide virtually eliminate their N2O off-gas emissions. This benefits the climate, while also helping the nitric acid manufacturers to minimize their carbon footprint and progress on their sustainability journey.”

Clariant’s EnviCat N2O-S catalyst converts up to 95% of the N2O formed during nitric acid production into the harmless substances oxygen and nitrogen. Besides climate benefits, the catalyst can also slightly increase nitric acid yield by improving the efficiency of the ammonia oxidation process. Designed as a convenient “drop-in” solution, the catalyst is easy to install with almost no engineering modifications.

As MRC reported earlier, in October 2020, Clariant announced the construction of a new state-of-the-art catalyst production site in China. This project represents a significant investment which further strengthens Clariant’s position in China and enhances its ability to support its customers in the country’s thriving petrochemicals industry.

The new facility will be primarily responsible for producing the Catofin catalyst for propane dehydrogenation, which is used in the production of olefins such as propylene. Thanks to its excellent reliability and productivity, Catofin delivers superior annual production output compared to alternative technologies, resulting in increased overall profitability for propylene producers, says the company. Construction at the Dushan Port Economic Development Zone in Jiaxing, Zhejiang Province was scheduled to commence in Q3 2020, and Clariant expects to be at full production capacity by 2022.

Propylene is the main feedstock for the production of polypropylene (PP).

According to MRC's ScanPlast report, PP shipments to the Russian market were 1,138,510 tonnes in January-September 2021, up by 30% year on year. Supply of propylene homopolymer (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding statistical copolymers of propylene (PP random copolymers) decreased significantly.

Clariant AG is a Swiss chemical company and a world leader in the production of specialty chemicals for the textile, printing, mining and metallurgical industries. It is engaged in processing crude oil products in pigments, plastics and paints.
MRC