Eni and Sonatrach expand their strategic partnership

Eni and Sonatrach expand their strategic partnership

MOSCOW (MRC) -- The Chief Executive Officer of Sonatrach, Toufik Hakkar, and the Chief Executive Officer of Eni, Claudio Descalzi, in the presence of the Minister of Energy and Mines Mohamed Arkab and the Ambassador of Italy to Algiers Giovanni Pugliese, have signed a new oil contract related to the onshore Berkine basin area, where Eni has been a leader since 1981. On the same occasion, Eni and Sonatrach also signed a MOU for cooperation on initiatives in the energy transition, according to Hydrocarbonprocessing.

Eni's CEO Claudio Descalzi commented: "Today’s agreements are testimony to the commitment of Sonatrach and Eni to continue the shared strategy of accelerated project development, and to pursue the decarbonization objectives within our common commitment to achieve carbon neutrality."

The contract, which is the first ever signed under the aegis of the new Algerian oil law, covers an area of 7,880 km2 in the southern part of the Berkine basin, in close proximity to the company's current production assets, Menzel Ledjemet Est (MLE) and Central. Area Field Complex (CAFC), already operated by the JV Eni-Sonatrach.

Descalzi and Hakkar shared the commitment to create an ambitious exploration and development program in the area. In the first phase, the project envisages the fast-tracked development of reserves estimated at 135 MM bbl of oil equivalent, with a start-up of production expected by the end of 2022. This project will enhance synergies with existing plants. The entry into force of the new contract is subject to approval by the competent Algerian authorities.

With a view to building on the cooperation already in place in the technological field and to continue the decarbonization process undertaken in support of the initiatives towards carbon neutrality, Eni and Sonatrach have also signed a MOU with a strategic value for cooperation in the energy transition sector.

The agreement provides for the assessment of joint opportunities in the fields of renewables, hydrogen, CCUS, bio-refining, and many other initiatives in line with the companies’ respective decarbonization objectives. This agreement is in line with Eni's commitment to achieving carbon neutrality by 2050, consolidating the partnership with Sonatrach for a sustainable development and to jointly tackle the energy transition challenges.

As MRC wrote earlier, Eni is evaluating conversion of its Livorno refinery in northwest Italy into a biorefinery, as part of the Italian company's wider strategy to make its activities more environmentally sustainable. Eni has already converted two of its Italian refineries and is looking to almost double its biorefining capacity to around 2 million mt/year by 2024, and expand this to at least five times by 2050, as part of its pledge to achieve complete carbon neutrality 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 2,047,100 tonnes in the first ten months of 2021, up by 17% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,226,530 tonnes in January-October 2021, up by 26% year on year. Supply of propylene homopolymers (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding stat-copolymers of propylene (PP random copolymers) decreased significantly.

Eni, abbreviation of Ente Nazionale Idrocarburi, in full Eni SpA, Italian energy company operating primarily in petroleum, natural gas, and petrochemicals. Established in 1953, it is one of Europe's largest oil companies in terms of sales.
MRC

Orlen Poludnie starts up bio-MPG plant

Orlen Poludnie starts up bio-MPG plant

MOSCOW (MRC) -- PKN Orlen's subsidiary Orlen Poludnie started production at it’s 30,000 tonne/year bio-monopropylene glycol (MPG) plant, the largest plant of its kind in Europe, according to a company statement dated 4 November, said the company.

To be located in Trzebinia, southern Poland, the unit will produce technical-grade bio-MPG based on plant-derived glycerine, according to the company, and will be included in the company’s glycols portfolio, according to Orlen.

MPG pricing has trended sharply upward through Q4, driven by tight stock and robust demand.

As per MRC, Orlen Unipetrol (part of PKN Orlen), a major Czech producer of petrochemical products, will expand the capacity of its steam cracker in Litvinov (Czech Republic) by installing a new furnace. The new cracking unit will be built by Technip Energies in Zaluzi, the largest chemical plant in the Czech Republic, and is due to be commissioned in 2022. Orlen is investing over 700 mln Polish zlotys (Zl) in the project.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,047,100 tonnes in the first ten months of 2021, up by 17% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,226,530 tonnes in January-October 2021, up by 26% year on year. Supply of propylene homopolymers (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding stat-copolymers of propylene (PP random copolymers) decreased significantly.
MRC

COVID-19 - News digest as of 14.12.2021

1. Crude oil prices steady on demand concerns after renewed restrictions in Europe and Asia amid rise in coronavirus cases

MOSCOW (MRC) -- Oil prices edged higher on Tuesday but price gains were capped due to investor worries about oil demand after renewed restrictions were imposed in Europe and Asia amid a rise in coronavirus cases, reported CNBC. Brent crude oil futures edged higher by 1 cent to USD74.40 a barrel by 0113 GMT, while US West Texas Intermediate (WTI) crude futures gained 1 cent to USD71.30. “Energy traders don’t want to bet against OPEC+ but all the short-term risks from omicron to Fed tightening is proving to be very disruptive to the short-term outlook for oil prices,” said Edward Moya, senior analyst at OANDA. “The virus spread across Europe is delivering a bigger hit than expected and when you calculate family gatherings for the holidays, the short-term outlook could get slashed over the next month.”

MRC

Ukrainian PE imports up by 1% in Jan-Nov 2021

MOSCOW (MRC) -- Overall polyethylene (PE) imports into the Ukrainian market reached 246,800 tonnes in the first eleven months of 2021, up by 1% year on year. Only high density polyethylene (HDPE) accounted for the decrease in imports, according to MRC's DataScope report.

Last month's PE imports to Ukraine were 26,400 tonnes versus 23,800 tonnes in October, local companies raised their purchasing of low density polyethylene (LDPE) and HDPE. Thus, overall PE imports reached 246,800 tonnes in January-November 2021, compared to 245,100 tonnes a year earlier. Only HDPE imports decreased, whereas imports of other PE grades increased.

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


Last month's HDPE imports rose to 9,600 tonnes from 7,600 tonnes a year earlier, and shipments of film grade PE more than doubled. Overall HDPE imports totalled 80,100 tonnes in the first eleven months of 2021 versus 88,600 tonnes a year earlier.

November LDPE imports were 8,100 tonnes versus 6,200 tonnes a month earlier, Ukrainian companies raised their PE purchases in Russia. Overall LDPE imports reached 75,500 tonnes over the stated period, up by 3% year on year.

Last month's imports of linear low density polyethylene (LLDPE) were 7,200 tonnes, compared to 7,700 tonnes in October, shipments of film grade LLDPE from Saudi Arabia decreased. However, overall LLDPE imports reached 74,400 tonnes in January-November 2021, up by 5% year on year.

Imports of other PE grades, including ethylene-vinyl-acetate (EVA), totalled 16,900 tonnes in the first eleven months of 2021, compared to 12,500 tonnes a year earlier.

MRC

Crude oil prices steady on demand concerns after renewed restrictions in Europe and Asia amid rise in coronavirus cases

Crude oil prices steady on demand concerns after renewed restrictions in Europe and Asia amid rise in coronavirus cases

MOSCOW (MRC) -- Oil prices edged higher on Tuesday but price gains were capped due to investor worries about oil demand after renewed restrictions were imposed in Europe and Asia amid a rise in coronavirus cases, reported CNBC.

Brent crude oil futures edged higher by 1 cent to USD74.40 a barrel by 0113 GMT, while US West Texas Intermediate (WTI) crude futures gained 1 cent to USD71.30.

“Energy traders don’t want to bet against OPEC+ but all the short-term risks from omicron to Fed tightening is proving to be very disruptive to the short-term outlook for oil prices,” said Edward Moya, senior analyst at OANDA.

“The virus spread across Europe is delivering a bigger hit than expected and when you calculate family gatherings for the holidays, the short-term outlook could get slashed over the next month.”

Governments around the world, including most recently Britain and Norway, were tightening restrictions to stop the spread of the omicron variant.

In China, major manufacturing province Zhejiang is fighting its first Covid-19 cluster this year, with tens of thousands of citizens in quarantine and virus-hit areas suspending business operations, cutting flights and cancelling events.

Still, the Organization of the Petroleum Exporting Countries raised its world oil demand forecast for the first quarter of 2022 and stuck to its timeline for a return to pre-pandemic levels of oil use, saying the Omicron coronavirus variant would have a mild and brief impact.

Supply meanwhile is expected to increase with the largest US shale basin’s output expected to surge to a record in January, according to a monthly forecast from the US Energy Information Administration on Monday.

As MRC informed before, US commercial crude stocks fell 3.48 million barrels to 413.96 million barrels in the week ended Sept. 17, to more than 8% below the five-year average, Energy Information Administration data showed. Stocks were last lower Oct. 5, 2018.

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