Pemex sharply cuts crude oil supply to India amid preparations for new refinery

Pemex sharply cuts crude oil supply to India amid preparations for new refinery

MOSCOW (MRC) -- Pemex has sharply reduced crude exports to India, the third largest market for its oil, amid preparations for a new refinery expected to absorb more of its output, reported Reuters with reference to data and people familiar with the matter.

Petroleos Mexicanos in December said it would cut crude exports this year and could suspend them altogether in 2023 as the company works to meet the government's target of refining all of its oil domestically.

Pemex is prepared to sacrifice a large portion of this year's crude sales to Asia, according to analysts and traders, with the expansion of its downstream business. In January, it took complete ownership of the 340,000 bpd Deer Park, Texas, refinery, and agreed to supply it with over 100,000 bpd of its flagship Maya heavy crude.

"Indian refiners that buy Mexican crudes every month are being called to notify them of volume cuts in 2022. Pemex has also turned down requests by refiners trying to sign new contracts," one of the sources said.

Mexico has scheduled only one crude cargo to India for the first two months of the year, which will cut exports to about 15,000 bpd from the almost 98,000 bpd shipped in the same period last year.

Last year, Pemex exported an average of 132,500 bpd to India, according to Refinitiv Eikon Trade Flows data, and worth some USD3.26 B at Pemex's crude market prices to Asia.

Asia is the second most important region for Pemex's crude after North America, with Indian and South Korean refiners leading Asian purchases until last year, according to company and Eikon data.

In India, the main buyers of Pemex's Maya and Isthmus crudes last year were Indian Oil Corporation Ltd (IOC) and HPCL-Mittal Energy Ltd (HMEL), Eikon data showed. Reliance Industries also has been a frequent buyer of Mexico's oil in recent years, one of the people said.

Pemex volumes to IOC could fall to about 22,000 bpd this year, from 40,000 bpd in 2021, one of the people said. Supplies to HMEL and Reliance also have been cut, the people familiar with the matter added.

As MRC wrote previously, in late January, 2022, Pemex signed a long-term crude supply contract with Royal Dutch Shell Plc as part of its acquisition of the Deer Park refinery in Texas. Pemex and Shell in May, 2021, announced the transaction, which is worth almost USD600 MM and will make the Mexican firm the sole owner of the refinery near Houston. The facility has capacity to process 340,000 bpd. Shell will supply about 200,000 bpd of foreign and US crude to the plant for at least 15 years.

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

Linde signs agreement with BASF in France

Linde signs agreement with BASF in France

MOSCOW (MRC) -- Industrial gases major Linde has signed a long-term agreement with BASF to supply BASF’s planned hexamethylenediamine (HMDA) project in Chalampe, France, with hydrogen and steam, said the company.

As part of the contract, Linde will design, build, own and operate a new hydrogen production facility at Chalampe, doubling its capacity there.

The new Linde plant is expected onstream in the first half of 2024. Financial details were not disclosed.

We remind, BASF, SABIC and Linde have signed a joint agreement to develop and demonstrate solutions for electrically heated steam cracker furnaces. The partners have already jointly worked on concepts to use renewable electricity instead of the fossil fuel gas typically used for the heating process.

As per MRC, JSC SIBUR-Neftekhim and JSC Linde Gas Rus signed an agreement on the utilization of carbon dioxide formed in the technological process of SIBUR.

Linde is a global leader in the production, processing, storage and distribution of hydrogen. It has the largest hydrogen liquefaction capacity and gaseous hydrogen pipeline distribution system anywhere in the world. The company operates the world's first high-purity hydrogen storage cavern plus pipeline networks totaling approximately 1,000 kilometers globally, to reliably supply its customers. Linde is at the forefront in the transition to clean hydrogen and has installed 200 hydrogen fueling stations and 80 hydrogen electrolysis plants worldwide. The company offers the latest electrolysis technology through its world class engineering organization, key alliances and partnerships.
MRC

Shell to start up new petrochemical complex in the USA by end of 2022

Shell to start up new petrochemical complex in the USA by end of 2022

MOSCOW (MRC) -- Shell Chemicals expects its new petrochemical complex in southwest Pennsylvania to come online by the end of 2022, Royal Dutch Shell CFO Jessica Uhl said February 3, during the company's Q4 2021 earnings call, according to Polymerupate.

She said that the company was finishing up the project in 2022, "which should hopefully be up and running by the end of the year."

The project's startup was delayed from earlier in 2022 after Shell temporarily suspended work in 2020 to implement safety protocols at the height of coronavirus-related shutdowns.

The project in Monaca, Pennsylvania, includes a 1.6 million mt/year cracker and three polyethylene (PE) plants with a combined capacity of 1.6 million mt/year. Of those three plants, one will produce high density polyethylene (HDPE) and the other two will produce linear low density polyethylene (LLDPE).

As MRC wrote earlier, Royal Dutch Shell plc. said in November, 2021, that its petrochemical complex of several billion dollars in Western Pennsylvania is about 70% complete and in the process to enter service in the early 2020s. The plant's costs are estimated to be USD6-USD10 billion, where ethane will be transformed into plastic feedstock.

Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MR''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.

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

PPG to acquire powder coatings division of Arsonsisi

PPG to acquire powder coatings division of Arsonsisi

MOSCOW (MRC) -- US paints and coatings group PPG has entered into an agreement to buy the powder coatings business of Italian company Arsonsisi, boosting its offering in Europe, the Middle East and Africa, said the company.

As part of the deal, PPG will gain Arsonsisi’s highly automated, small- and large-batch powder manufacturing plant in Verbania. The acquisition will also add metallic bonding to the US group’s portfolio. According to PPG, metallic bonding is one of the fastest growing markets for powder coatings used in specialty finishes for automotive, appliance and general industrial applications.

“We are pleased that the addition of this business will offer our EMEA customers expanded powder coating options to meet increasing demand for these sustainably advantaged coatings,” said Michael Shukov, PPG general manager, industrial coatings, EMEA.

PPG said powder coatings are one of the fastest growing coating technologies due to their sustainability benefits – they do not release solvents and are fully reusable as any paint not deposited on a substrate during application returns to the system, thus reducing waste. The Pittsburgh-based company aims to have 40% of its sales from sustainably advantaged products by 2025.

Arsonsisi said it will continue to produce and sell its range of liquid paints for industrial use, which include high-quality specialty products for numerous sectors, as well as UV coatings, electroplating, anti-corrosion and tinting systems.

Commenting on the divestment, Arsonsisi’s chairman Carlo Junghanns said: “The sale of our powder coatings division will allow us to invest new and significant resources in our energetic research and development activities to further strengthen Arsonsisi’s presence in the industrial liquid paints business, with the aim of offering increasingly innovative and tailor-made solutions to our valuable partners."

The transaction is expected to close in the first quarter of 2022. Financial terms were not disclosed. Last year saw PPG make two acquisitions, namely Finland’s Tikkurila in June and Germany’s Worwag in May.

As MRC reported earlier, in June 2021, PPG announced an expansion of its coatings manufacturing capacity in Europe for packaging applications. The investments at sites in The Netherlands and Poland will support growing customer demand in the region for the latest generation of coatings for aluminum and steel cans used in packaging for beverage, food and personal care items. The projects include a further expansion of the company’s location in Tiel, The Netherlands, which will increase the plant’s production capacity for PPG INNOVEL non-BPA internal coatings for beverage cans by 30%. Expected to be completed in the first quarter of 2022, the project follows a 50% expansion completed at the end of 2020.

We remind, PPG Industries Ohio Inc. received a patent in Russia for a new coating. The authors of the invention were a group of American specialists. The material is a film-forming composition that ensures the uniformity and appearance of the coating, and also avoids smudges. The material consists of polymer binders, polysiloxane resin, hardener and other substances.

PPG Industries Group was founded in 1883 in the USA. PPG Industries Inc. is an international American company producing coatings, chemicals, optical components, specialty materials, glass and fiberglass. The company includes over 150 production units and representative offices in more than 60 countries around the world. PPG is one of the top 500 US corporations by sales.

MRC

Idemitsu Kosan has no plans for financial aid to NSRP in Vietnam

Idemitsu Kosan has no plans for financial aid to NSRP in Vietnam

MOSCOW (MRC) --Japan's No. 2 oil refiner, Idemitsu Kosan, has no plan at the moment to give fresh financial aid to Vietnam's Nghi Son Refinery and Petrochemical (NSRP), which has cut production to 80% of capacity due to a funding problem, reported Reuters with reference to an official's statement.

Vietnam's largest refinery avoided a lengthy shutdown last month after a major shareholder secured short-term funding following a disagreement between shareholders about financing for crude, having earlier cut its run rate.

"The refinery is taking measures to bring back its run rate to normal levels," Yoshitaka Onuma, a general manager at Idemitsu, told an earnings news conference on Tuesday, but declined to say when.

"Since the short-term funding issue has been solved, we have no plan to book an impairment loss on the refinery."

Idemitsu has a stake of 35.1% in the 200,000 bpd refinery, which meets a third of Vietnam's petroleum needs.

But the refinery's shareholders are in talks to improve its financial health as the funding is not ample, Onuma added.

Asked if Idemitsu would provide fresh financial support, Onuma said, "We don't have such a plan for now."

Kuwait Petroleum has a share of 35.1% in the refinery, while PetroVietnam holds 25.1% and Mitsui Chemicals owns 4.7%.

NSRP has been struggling because of system trouble that delayed its 2018 launch while oil product margins slumped during the COVID-19 pandemic, but the loss has shrunk, as oil prices have soared since, Onuma said.

As MRC wrote before, Vietnam’s Nghi Son oil refinery officially began commercial production from 14 November 2018, following months of tests. The USD9 billion refinery is 35.1% owned by Japan’s Idemitsu Kosan Co, 35.1% - by Kuwait Petroleum, 25.1% - by PetroVietnam and 4.7% - by Mitsui Chemicals Inc.

We remind that NSRP shut its new polypropylene (PP) plant in Vietnam for maintenance on 24 August, 2021, instead of the initially scheduled date of 17 August, for approximately three weeks. The company decided to postpone the maintenance shutdown at this plant by one week from the previous schedule due to the COVID-19 related lockdown. Thus, the new PP plant came back on-line in mid-September, 2021.

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