Zhejiang Petrochemical intends to operate its newly built crude units in China at full rates in 2022

MOSCOW (MRC) -- East China-based Zhejiang Petrochemical, the country's single-largest refiner, aims to operate its newly built 800,000-bpd crude units at full rates this year, reported Reuters with reference to two company executives.

That will represent an increase of 280,000 bpd versus 2021.

Zhejiang Petrochemical didn't immediately respond to requests for comment.

As MRC informed earlier, Zhejiang Petrochemical Co Ltd (ZPC) has started up its No. 2 cracker in Zhoushan, China, which is part of the company's phase 2 petrochemical project in the county. Thus, the cracker with an annual capacity of 1.4 million tons/year of ethylene and 700,000 tons/year of propylene began trial runs in the first week of April, 2021.

Earlier, in the first half of November 2019, ZPC started operations at its No. 1 cracker, and the commercial production at this cracker was received in late December 2019.

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.
MRC

MOSCOW (MRC) -- China's crude oil imports could rebound by 6-7% this year, reversing 2021's rare decline as buyers step up purchases for new refining units and to replenish low inventories, reported Reuters with reference to analysts and oil company officials' statement.

Robust demand from China, which accounts for a tenth of the global crude trade, would help underpin global oil prices, keeping supplies tight amid forecasts for a jump in crude prices.

Demand recovery, however, is not expected until the second half of the year as China continues to combat COVID-19 outbreaks and limit production by smaller refiners.

For 2022, crude oil imports into China look set to grow by 600,000-700,000 barrels per day (bpd), offsetting last year's 590,000 bpd fall to match or beat 2020's record volume of 10.85 million bpd, analysts at FGE, Rystad Energy and Energy Aspects told Reuters.

Brent and West Texas Intermediate futures are already at 7-year highs near USD90 a barrel as investors look beyond the demand hit from the Omicron variant.

"We expect China's refinery runs to grow by 500,000 bpd, mainly driven by new refinery capacity coming online in 2022 and the recovery in transport and aviation fuels picking up the pace in the second half of the year," said Julie Torgersrud of Rystad Energy.

Imports are likely to make a slow start initially as Beijing's zero-tolerance virus control measures keep a lid on fuel demand, while reduced import quotas and narrowing refining margins will limit production by independent refiners.

Refinitiv data showed January arrivals totaled 41.13 million tons (9.69 million bpd), below 44.6 million tons in January 2021 and 46.1 million tons two years ago.

A possible release of state petroleum reserves (SPR) in coming weeks will also dampen national oil companies' purchases, analysts said.

Demand is set to recover later in the year, driven by new refining capacity at integrated petrochemical producers, in particular Zhejiang Petrochemical Corp and Jiangsu Shenghong Petrochemical.

"We expect crude imports to grow by 600,000 bpd year-on-year, driven by new capacities and a return of stockpiling," said Mia Geng, analyst with FGE.

The restocking of oil reserves is also expected to boost buying in the second half, led by state refiners Sinopec and PetroChina after an estimated steep inventory drawdown last year.

Total onshore crude oil stocks, excluding underground storage which is hard for satellites to detect, fell by 140 million barrels last year, Vortexa Analytics estimated, which a market source said was likely the largest drawdown since 2015.

China began refilling tanks in recent weeks, putting 4 million barrels of Iranian oil nL1N2U105C into reserve tanks in south China, Reuters reported.

Unipec, Sinopec's trading arm, has also been sweeping up millions of barrels of crude from the United States, Russia and the Middle East this month in an unusual buying spree, traders said. The extra supply could be used to ramp up refining output after the Lunar New Year and to refill stockpiles, they said.

As MRC wrote before, in December 2021, Amur Gas Chemical Complex LLC agreed and signed loan documents to finance the completion of Amur GCC’s construction. Amur GCC will act as the borrower; SIBUR and Sinopec will be sponsors proportional to their stakes (60/40, respectively) in the joint venture (JV). Upon completion of standard conditions precedent, AGCC will begin to draw on the loan which will total USD USD9.1bn and has a final maturity of 2035. Project costs in excess of USD 9.1bn will be covered by the JV parties pro rata.

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.
MRC

MOSCOW (MRC) -- Ineos has invited engineering design contractors to tender for the design of a hydrogen production plant equipped with carbon capturing capabilities at its Grangemouth site, said the company.

The chemicals giant said the “world-scale” plant marked the next significant step on its net zero roadmap, which would see emissions fall by more than 60% across the site by 2030.

It follows the group’s commitment made last year to invest more than GDP1 bn to reduce the environmental impact of its Grangemouth refinery, and reach net zero by 2045.

The tender will cover design of a “state-of-the-art” carbon capture-enabled hydrogen production plant, as well as major associated infrastructure, Ineos said.

In September 2021 when Ineos first announced low-carbon hydrogen production at the site, Andrew Gardner, CEO and chairman of INEOS at Grangemouth, said that low-carbon hydrogen production at could reach around 150,000 tonnes of hydrogen per year. This would put the capacity of the plant at around 700MW at higher heating value.

According to data from National Grid, industrial gas offtake at Grangemouth has averaged around 1.02 million cubic metres (mcm)/day between 1 October 2021 and 25 January 2022. To produce the equivalent amount of energy as hydrogen, roughly 1.20mcm/day of natural gas would be required.

As per MRC, Ineos Styrolution, the global leader in styrenics, announced today that its Novodur 550 has been selected by THACO Plastics Component (TPC), one of the leading OEMs producing key automotive parts for global brands in Vietnam, to be used for rear spoiler application.

As MRC reported earlier, in March 2021, Ineos and French power company Engie announced a pilot project to partially replace natural gas feed with hydrogen at Ineos’s phenol plant in Doel near Antwerp, Belgium. No investment figure has been given. Hydrogen will be used in a commercial-scale cogeneration plant designed to generate electricity and heat from natural gas.

Ineos Group Limited is a privately owned multinational chemicals company consisting of 15 standalone business units, headquartered in Rolle, Switzerland and with its registered office in Lyndhurst, United Kingdom. It is the fourth largest chemicals company in the world measured by revenues (after BASF, Dow Chemical and LyondellBasell) and the largest privately owned company in the United Kingdom.
MRC

1. Valero posts profit well above estimates on stronger fuel demand

MOSCOW (MRC) -- San Antonio-based Valero Energy Corp, the second-largest US oil refiner, posted quarterly earnings well above expectations, as margins nearly tripled on the back of soaring demand for fuel thanks to a vaccine-induced economic recovery, reported Reuters. Gasoline and distillate consumption in the United States improved drastically in the last quarter of 2021, compared with the year-ago period, as more people commuted to offices and took to holiday travel on easing coronavirus curbs. A jet fuel recovery and low product inventories from years of refinery shutdowns combined to nearly triple Valero's fourth-quarter refining margins to USD3 billion from a year earlier, Valero Chief Executive Office Joe Gorder said on a post-earnings call.

MRC

MOSCOW (MRC) -- Vietnam's Binh Son refinery on Wednesday said it was operating above capacity to address supply concerns, as top petroleum firms announced plans to boost imports amid fears of a shutdown of the country's biggest refinery, reported Reuters.

Binh Son, one of two refineries in the Southeast Asian nation, said it was operating at 103% of capacity and would also import two shipments of crude oil of between 85,000 and 90,000 tons each, during the first days of February.

"The demand for petroleum products is increasing, especially during the Lunar New Year holiday, while other sources are facing difficulty," the refinery told Reuters.

The announcement comes after Vietnam's other refinery, Nghi Son, which provides 35% of its petroleum needs, cut its production to 80% of capacity, over what media reports and a source familiar with the issue said was a disagreement between shareholders about financing for crude oil.

On Wednesday, state oil firm PetroVietnam blamed Nghi Son Refinery and Petrochemical (NSRP) for the recent production cut.

State media had reported PetroVietnam had failed to make an early payment under a "Fuel Products Offtake Agreement" (FPOA) with the refinery, causing financial difficulties for Nghi Son. But PetroVietnam, which owns 25.1% of the 200,000 barrel-per-day refinery in Thanh Hoa province, insisted it was not to blame.

"The management board of NSRP is responsible for its decision to cancel two shipments of crude oil that put the refinery at risk of shutdown," PetroVietnam said in a statement, adding it was in talks with other shareholders about restructuring NSRP.

NSRP did not immediately respond to a request from Reuters for comment.

Japan's Idemitsu Kosan Co has a 35.1% stake in the Nghi Son refinery, the same as Kuwait Petroleum, while Mitsui Chemicals Inc owns 4.7% of the firm.

As MRC informed earlier, NSRP resumed operations at its new polypropylene (PP) plant in Vietnam on 17 October, 2021, after an unscheduled maintenance. The 400,000 mt year of PP plant was unexpectedly shut on 7 October, 2021, due to a technical glitch.

According to MRC's ScanPlast report, 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.
MRC