Crude oil prices hit 7-year highs on tight supply

Crude oil prices hit 7-year highs on tight supply

MOSCOW (MRC) -- Oil prices on Tuesday climbed to their highest since 2014 as investors worried about global political tensions involving major producers such as the United Arab Emirates and Russia that could exacerbate the already tight supply outlook, reported Reuters.

The risk added a premium to prices during the session. Brent crude futures rose USD1.03, or 1.2%, to settle at USD87.51 a barrel. US West Texas Intermediate (WTI) crude futures ended USD1.61, or 1.9%, higher at USD85.43 a barrel.

Both benchmarks touched their highest since October 2014, and some OPEC sources say USD100-per-barrel oil is not out of reach.

Supply concerns mounted this week after Yemen's Houthi group attacked the United Arab Emirates, escalating hostilities between the Iran-aligned group and a Saudi Arabian-led coalition.

After launching drone and missile strikes that set off explosions in fuel trucks and killed three people, the Houthi movement warned it could target more facilities, while the UAE said it reserved the right to "respond to these terrorist attacks."

The strike on a leading Gulf Arab ally of the United States takes the war between the Houthi group and a Saudi-led coalition to a new level, and may hinder efforts to contain regional tensions as Washington and Tehran work to rescue a nuclear deal.

"The damage to the UAE oil facilities in Abu Dhabi is not significant in itself, but it raises the question of even more supply disruptions in the region in 2022," said Rystad Energy's senior oil markets analyst Louise Dickson.

"The attack raises the geopolitical risk in the region and may signal the Iran-US nuclear deal is off the table for the foreseeable future, meaning Iranian oil barrels are off the market, boosting demand for similar grade crude originating elsewhere," Dickson added.

UAE oil company ADNOC said it had activated business continuity plans to ensure uninterrupted supply of products to its local and international customers after an incident at its Mussafah fuel depot.

Separately, a senior US State Department official said Russian troops deployed to Belarus for what Moscow and Minsk say will be joint military exercises is raising concerns that they "potentially" could be used to attack neighboring Ukraine.

Russia has built up a large troop presence near Ukraine's border, stoking fears of invasion. US and German officials have discussed ways to deter Russia, which could include halting the Nord Stream 2 gas pipeline from Russia to central Europe.

At the same time, producers within the Organization of the Petroleum Exporting Countries are struggling to pump at their allowed capacities under the OPEC+ agreement with Russia and allies to add 400,000 barrels per day each month.

OPEC on Tuesday stuck to its forecast for robust growth in world oil demand in 2022 despite the Omicron coronavirus variant and expected interest rate hikes.

As MRC informed before, in November 2021, ADNOC signed of a strategic partnership with Borealis AG that confirms a USD6.2 B (AED22 B) investment agreement between the companies to build the fourth Borouge facility - Borouge 4 - at the polyolefin manufacturing complex in Ruwais, United Arab Emirates (UAE), which will produce 1.4 MM tons of polyethylene (PE) per year. Expansion project includes construction of a 1.5 MM tons ethane cracker, two state-of-the-art Borstar PE plants and a cross-linked PE plant. Borouge 4 will meet growing customer demand across the Middle East, Africa and Asia with differentiated polyolefin solutions in energy, infrastructure, and advanced packaging.

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 2,265,290 tonnes in the first eleven months of 2021, up by 14% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,363,850 tonnes in January-November, 2021, up by 25% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding PP random copolymers decreased significantly.
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KBR wins work for Woodside liquid hydrogen project in Oklahoma

KBR wins work for Woodside liquid hydrogen project in Oklahoma

MOSCOW (MRC) -- KBR announced it has been awarded an engineering services contract by Woodside Energy (USA) Inc. for its proposed H2OK liquid hydrogen production facility project in Ardmore, Oklahoma, said the company.

Under the terms of the contract, KBR will provide a front-end engineering design for Woodside's H2OK liquid hydrogen facility. Cryogenic liquid hydrogen is used in the transportation industry as a fuel for fleets where the combustion of liquid hydrogen produces zero-emissions, with water as the only by-product.

Capacities may later be expanded to 550 MW and 180 tonnes/day, respectively. A final investment decision (FID) is expected in H2 2022, with first production of liquid hydrogen in 2025.

"KBR is pleased to support Woodside on this project as the company advances its portfolio of decarbonization solutions," said Jay Ibrahim, President – Sustainable Technology Solutions. "Our focus on energy transition and carbon footprint reduction is helping our clients meet their sustainability goals around the globe. At KBR, we continually strive to develop new technologies and solutions that benefit our planet."

As per MRC, KBR and Petron Scientech Inc. (PSI) have announced they have signed an alliance agreement to license differentiated, energy-efficient, and sustainable technologies for renewable chemicals production. Under this agreement, KBR will be the exclusive licensor for PSI’s Ethylene Oxide/Ethylene Glycol (K-MEG), Alcohol Dehydration (K-SEET) and Maleic Anhydride (Max-Leic) technologies, which are used to convert ethanol into ethylene and further derivative chemicals used in a wide range of industry and consumer products.

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.

KBR has nearly 50 years of experience designing, developing, and supporting cryogenic liquified natural gas facilities and has extensive experience in hydrogen both through its work in the space industry and in industrial facilities. This deep domain knowledge makes KBR ideally suited to provide high end engineering and be the integrator for cryogenic liquid hydrogen facilities.

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BASF to expand European production for Hexamethylenediamine and Polyamide 6.6

BASF to expand European production for Hexamethylenediamine and Polyamide 6.6

MOSCOW (MRC) -- BASF will build a new hexamethylenediamine (HMDA) facility at Chalampe, near Mulhouse, in northeastern France and plans to expand polyamide 6,6 capacity at its nearby site in Freiburg in southwest Germany, said the company.

BASF decided to build a new hexamethylene diamine (HMD) plant in Chalampe, France. The new plant is set to increase BASF’s annual HMD production capacity to 260,000 metric tons. Production is expected to start in 2024. Furthermore, BASF will expand its polyamide 6.6 production in Freiburg, Germany starting 2022.

The planned investments will further expand the polyamide 6.6 business that BASF acquired from Solvay in 2020. “With this new HMD plant in Chalampe and the expansion of the polymerization in Freiburg, BASF ensures that customers can be reliably supplied with HMD and PA6.6, while also addressing increasing demand in the market,” said Dr. Ramkumar Dhruva, President of BASF’s Monomers division.

HMD is a precursor used in the production of high-quality polyamide 6.6 plastics and coating raw materials. Among other things, these products are used in the automotive industry as well as in the production of special fibers.

As MRC informed earlier, BASF signed a joint development agreement with China BlueChemical Limited Company (China BlueChemical), a leading natural gas producer, and the chemical engineering company Wuhuan Engineering Co., Ltd. (Wuhuan Engineering) to promote low-carbon development and utilization of marine gas resources. In the Dongfang Industrial Park of Hainan Province, China BlueChemical extracts large quantities of such offshore natural gas (marine gas) from gas fields in the South China Sea.

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.
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Repsol selects Honeywell for first biofuels plant to be built in Spain

Repsol selects Honeywell for first biofuels plant to be built in Spain

MOSCOW (MRC) -- Honeywell announced that it has been selected by Repsol to supply an integrated control and safety system (ICSS) for the first advanced biofuels production plant to be built in Spain, according to Hydrocarbonprocessing.

The new facility will employ a variety of distributed control systems, emergency shutdown (ESD), fire and gas (F&G) and human-machine interface (HMI) solutions from Honeywell to achieve efficient, sustainable and low-emission operations.

Last year, Repsol announced its strategy to become a net-zero emissions company by 2050 and recently announced more ambitious targets that will accelerate its transformation.

The company’s biofuels plant located at its Cartagena, Spain refinery will have an annual production capacity of 250,000 tons of hydrobiodiesel, biojet fuel, bionaphtha and biopropane. The plant will also produce advanced biofuels from recycled raw materials to be used in road transportation and aviation. These advanced biofuels will facilitate the reduction of CO2 emissions by 900,000 tpy.

“With this initiative, we at Repsol are decisively promoting a new technological route that will be key in our path towards carbon neutrality. This initiative will be incorporated into projects we‘ve already implemented in energy efficiency, low-emissions electricity generation, green hydrogen, circular economy, synthetic fuels, CCUS and much more,” stated Josu Jon Imaz, Repsol CEO.

As MRC reported earlier, Spanish oil and gas company Repsol said in October, 2021, it will invest EUR2.549 billion (USD2.958 billion) in the entire hydrogen value chain by 2030. Renewable hydrogen is one of Repsol’s strategic pillars to achieve zero emissions by 2050. Thus, the company presented its hydrogen strategy for up to 2030.

We remind that the “Cracker of the Future” consortium has recently announced two new member companies: Repsol and Versalis (Eni) have joined the consortium.

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 2,265,290 tonnes in the first eleven months of 2021, up by 14% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,363,850 tonnes in January-November, 2021, up by 25% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding PP random copolymers decreased significantly.

Repsol is headquartered in Madrid, Spain. In the 2020 Forbes Global 2000, Repsol was ranked as the 645th-largest public company in the world. It has more than 24,000 employees worldwide. Its products are distributed in nearly 100 countries to around 24 million customers. Repsol Industrial Complex in Sines is the largest chemical site in Portugal.
MRC

COVID-19 - News digest as of 18.01.2022

1. Crude oil prices up as global supply expected to remain tight

MOSCOW (MRC) - Oil prices rose on Monday with investors betting that global supply will remain tight, although restraint by major producers was partially offset by a rise in Libyan output, reported Reuters. Brent crude settled up 42 cents, or 0.5%, to USD86.48 a barrel. Earlier in the session, the contract touched its highest price since Oct. 3, 2018, at USD86.71. US West Texas Intermediate crude was up 53 cents, or 0.6%, at $84.35 after touching its highest price since Nov. 10 at USD84.78. Trade was subdued due to the US holiday honoring slain civil rights leader Martin Luther King Jr. Frantic oil buying, driven by supply outages and signs the Omicron coronavirus variant will not be as disruptive to fuel demand as previously feared, has pushed some crude grades to multi-year highs, suggesting the rally in Brent futures could be sustained for a while longer, traders said.

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