Rosneft to supply Indian Oil up to 2 mln tonnes of crude in 2022

Rosneft to supply Indian Oil up to 2 mln tonnes of crude in 2022

MOSCOW (MRC) -- Rosneft has signed a deal to supply refiner Indian Oil Corp (IOC) with up to 2 million tonnes of crude next year, the Russian oil producer said in a press release on its website.

"The new oil supply deal confirms the strategic nature of long-term partnership between Rosneft and Indian Oil", head of Rosneft Igor Sechin said in a statement.

The deal was signed on Monday among a number of other agreements made during the visit of Russian President Vladimir Putin to India.

Rosneft will supply up to 2 million tonnes of Russian oil loading from the Black Sea port of Novorossiisk.

The deal follows several supply agreements between the companies in recent years.

India's top refiner is also seeking collaboration with Russian petrochemicals company SIBUR to explore the feasibility of setting up a dual-feed cracker along with downstream units at IOC's 300,000 barrel per day Paradip refinery in eastern Odisha state, an Indian foreign ministry statement said.

A potential technical tie-up between Gazprom Neft and IOC will also be explored, the statement said.

IOC is also a shareholder in several Rosneft production projects in Russia, including Vankorneft and Taas-Yuryah.

As MRC reported earlier, in October 2021, the Indian company Nayara Energy, 49.13% of which is owned by Russia's largest state oil company - Rosneft, launched a USD750 million petrochemical development program. Nayara Energy has the second largest refinery in India with a capacity of 20 million tons per year. The Indian company has already launched a refinery development program: within the first stage, it is planned to build units for the production of polypropylene (PP) with a capacity of up to 450,000 tonnes per year.

Rosneft became Russia's largest publicly traded oil company in March 2013 after the USD55 billion takeover of TNK-BP, which was Russia’s third-largest oil producer at the time.
MRC

More OPEC production and higher global natural gas prices widen crude oil price spreads

MOSCOW (MRC) -- Recently, prices of high-sulfur crude oils have been declining relative to low-sulfur crude oils. Rising crude oil exports from OPEC members that produce higher-sulfur crude oils, also called sour crude oils, and higher natural gas prices have contributed to lower prices for sour crude oils relative to low-sulfur (sweet) crude oils, said Hydrocarbonprocessing.

Sour crude oils typically sell at a discount to sweet crude oils because they must first be treated with hydrogen to meet low-sulfur fuel specifications. They also require desulfurization to avoid damage to refinery units. In recent months, however, sour crude oil discounts have increased compared with historical averages. For example, Mars crude oil, which is a relatively sour crude oil produced in the Federal Offshore Gulf of Mexico, has decreased in price relative to the sweet Magellan East Houston and Brent crude oils. Brent crude oil is produced in the North Sea of the United Kingdom.

The Mars crude oil spot price averaged $4.92 per bbl less than the Brent crude oil spot price in November. This price spread is higher than the $4.09/b average price difference between Mars and Brent crude oil in August (the first month of recently announced production increases from OPEC+). The spread is also significantly higher than the USD1.47/b average spot price difference between Mars and Brent crude oil in January.

The increasing price of sweet Magellan East Houston crude oil relative to the price of Brent crude oil suggests geography is not the cause of the increasing Mars crude oil price discount to Brent crude oil. Magellan East Houston and Brent are both light, sweet crude oils of similar quality, and therefore, the Magellan East Houston-Brent spread reflects how geographic and logistical factors affect U.S. Gulf Coast crude oil prices relative to Brent prices. Differences in supply and demand for sweet versus sour crude oils likely explain the increasing discount between Mars crude oil and Brent crude oil.

One contributing factor to the widening spread between sweet and sour crude oils is the increasing supply of medium and heavy sour crude oils. OPEC has been increasing its production and exports since the second half of 2021, particularly in countries that produce sour grades. Unlike the sour crude oil supply that has been increasing, supply from OPEC members that produce mostly sweet crude oils has been relatively flat. Likewise, U.S. production in the Lower 48 states (primarily sweet crude oil) has also been relatively flat.

A second contributing factor to the widening spread between sweet and sour crude oils is higher natural gas prices. The hydrogen used to treat sour crude oils is often produced using steam methane reforming, a process that uses natural gas as an input. As a result, the recent increases in global natural gas prices have contributed to higher refinery feedstock costs. Higher costs have led to lower demand for sour crude oils that incur more of these costs, at the same time increasing demand for sweeter crude oils that avoid these extra costs.

As per MRC, the ongoing impacts of COVID-19, surging prices for energy and raw materials, and Forces Majeures destabilising the global supply chain put mounting pressure on the supply chain not only in one industry, but instead represents a global challenge wrought by global issues. Most unprecedented is the COVID-19 pandemic and subsequent lockdowns that have led to a huge shift in consumer behaviour and economic patterns.

As MRC wrote before, oil refiners are ramping up output to meet a synchronized uptick in demand across Asia, Europe and the United States, but plant maintenance and high natural gas prices will constrain supply in the fourth quarter. This comes as profits for producing ground transportation fuels such as diesel and gasoline have rebounded globally for the first time since the start of the pandemic, as countries gradually emerge from COVID-19 movement restrictions.
MRC

BASF selected Clariant ammonia synthesis catalyst AmoMax for its plant in Belgium

BASF selected Clariant ammonia synthesis catalyst AmoMax for its plant in Belgium

MOSCOW (MRC) -- Clariant's new AmoMax 10 Plus ammonia synthesis catalyst was successfully started up at the BASF ammonia plant in Antwerp, Belgium, according to Hydrocarbonprocessing.

German BASF, the world's petrochemical major and the inventor of the Haber Bosch process, has already installed Clariant's previous catalyst generation, AmoMax 10, at their BASF/Yara joint production plant in Freeport, Texas, USA. Based on the catalyst's highly favorable performance, BASF elected to use a Clariant catalyst again, this time the new AmoMax 10 Plus, which offers an additional boost in activity, stability, and startup speed.

Compared to the previous generation, AmoMax 10 Plus allows operation at lower pressure (up to 10 bar) and a lower recycle ratio (up to 1% more ammonia at the reactor outlet), thereby conserving more energy and reducing CO2 emissions.

AmoMax 10 Plus is Clariant's latest generation of wustite-based ammonia synthesis catalysts. It is founded on the industry-proven AmoMax 10 and is designed with a further improved promoter set. This optimization leads to higher activity, improved stability, and faster startup. The AmoMax 10 Plus allows operation with a higher per pass conversion at lower operating pressure. Consequently, it can increase ammonia production (up to 3%) and reduce energy consumption and CO2 footprint.

Compared to the previous version AmoMax 10, AmoMax 10 Plus allows significant energy savings with an expected CO2 reduction of up to 125,000 tons CO2 emissions for a 2,000 mtpd ammonia plant over the course of the typical catalyst lifetime of 15 years. On a yearly basis, this equals the CO2 emissions of more than 1,600 cars.

As MRC reported earlier, Air Liquide and BASF plan to develop world largest cross-border CCS value chain. The goal is to significantly reduce CO2 emissions at the industrial cluster in the port of Antwerp. The joint project Kairos@C has been selected for funding by the European Commission through its Innovation Fund, as one of the seven large-scale projects out of more than 300 applications.

We remind that BASF aims is to electrify its production processes for basic chemicals, which are currently based on fossil fuels.

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 the first nine months of 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 PP random copolymers decreased significantly.

BASF is the leading chemical company. It produces a wide range of chemicals, for example solvents, amines, resins, glues, electronic-grade chemicals, industrial gases, basic petrochemicals and inorganic chemicals. The most important customers for this segment are the pharmaceutical, construction, textile and automotive industries.
MRC

Asian Paints to expand Gujarat manufacturing capacity

MOSCOW (MRC) -- Asian Paints Ltd has announced that it will invest Rs 960 crore to expand the manufacturing capacity of its facility situated at Ankleshwar in Gujarat, according to Business Standard.

The company has signed a memorandum of understanding (MOU) with the Government of Gujarat commencing the proposed expansion of manufacturing capacity of paint from 1.3 lakh KL to 2.5 lakh KL and resins and emulsions from 32,000 MT to 85,000 MT, Asian Paints said in a regulatory filing.

The expansion is to be completed in the next 2-3 years at a total investment of Rs 960 crore approximately on plant and machinery at the current prevailing prices, it added.

"This expansion will be carried out on the existing land owned by the company," the filing said.

As MRC reported previously, in early May, 2020, Reliance Industries Ltd. (RIL) announced that it was considering selling its stake in India’s largest paint maker valued at about USD989 million as the conglomerate steps up efforts to trim its debt. RIL was in discussions with banks for a potential sale of its 4.9% stake in Asian Paints Ltd. through a series of block trades. Reliance holds the stake through Teesta Retail. The size and timing of any potential sale haven’t been finalized, and Reliance could decide not to proceed with a deal, the people said then. The sale of stake in Asian Paints is part of RIL’s string of fundraising plans unveiled in order to bolster investor confidence, even as the crash in oil prices pulled down profit at the company’s oil-to-chemicals business.

We remind that in November 2019, Reliance Industries confirmed plans to invest 700 billion Indian rupees (USD9.75 billion) to establish a crude-oil-to-chemicals (COTC) complex at the company's Jamnagar, India.

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

BASF to sell 25.2% of HKZ to Allianz

BASF to sell 25.2% of HKZ to Allianz

MOSCOW (MRC) -- BASF agreed to sell a quarter of its Dutch offshore wind farm to insurance giant Allianz, said the company.

Allianz Capital Partners will buy 25.2% of the Hollandse Kust Zuid (HKZ) wind farm following a transaction between Vattenfall and BASF, when the chemicals major bought 49.5% of HKZ from the Swedish energy firm on 1 September. BASF has stated it intends to reduce its shares to a financial investor.

The deal is expected to close in the first quarter 2022, and BASF will consolidate its remaining 24.3% participation at-equity. As part of the long-term fixed price corporate power purchase agreement, BASF will continue to receive most of the power produced at HKZ as part of its originally acquired 49.5% share.

HKZ will be one of the largest offshore wind farm in the world when it becomes fully operational – expected in 2023 with 140 wind turbines and total installed capacity of 1.5GW.

As per MRC, BASF, the world's petrochemical major, is strengthening its global catalyst development and helping customers to bring new products faster to the market. As part of this strategy, BASF is building a new pilot plant center at its Ludwigshafen site. The new Catalyst Development and Solids Processing Center will serve as a global hub for pilot-scale production and process innovations of chemical catalysts. The construction of the new pilot plant center in Ludwigshafen also emphasizes the importance of the site for global research. The new building is scheduled for completion by mid-2024.

As MRC wrote before, BASF will build a battery recycling prototype plant in Schwarzheide, Germany, at the site of its cathode active materials (CAM) plant.

BASF is the leading chemical company. It produces a wide range of chemicals, for example solvents, amines, resins, glues, electronic-grade chemicals, industrial gases, basic petrochemicals and inorganic chemicals. The most important customers for this segment are the pharmaceutical, construction, textile and automotive industries.
MRC