Shell to pull out of Russia due to war in Ukraine

Global oil and gas giant Shell said Monday that it is pulling out of Russia as President Vladimir Putin’s invasion of Ukraine continues to cost the country’s all-important energy industry foreign investment and expertise, reported TIME.

Shell announced its intention to exit its joint ventures with Russia’s state-owned energy giant Gazprom and related entities, including a 27.5% stake in a key liquefied natural gas project as well as 50% stakes in two projects that are developing oil fields in Siberia.

Shell also said it intends to end its involvement in Nord Stream 2, a controversial pipeline built to carry Russian natural gas to western Europe. German Chancellor Olaf Sholz halted certification of the project after Russia invaded Ukraine.

“We are shocked by the loss of life in Ukraine, which we deplore, resulting from a senseless act of military aggression which threatens European security,” Shell Chief Executive Ben van Beurden said in a statement.

Shell’s most important investment in Russia is its stake in the Sakhalin-II project in the waters near Sakhalin Island off Russia’s east coast. Japan-based Mitsui owns 12.5% of the project, and Mitsubishi holds 10%.

Shell also holds 50% stakes in two joint ventures with Gazprom that are developing oil fields on the Gydan Peninsula in northwestern Siberia and for the Salym Development project in the Khanty-Mansiysk Autonomous District of western Siberia.

In addition to investment, Shell provided expertise that helped develop Sakhalin-II, Russia’s first offshore gas project. It began year-round production in 2008 and includes three offshore platforms designed to withstand earthquakes and crashing ice sheets in the frozen seas.

The project supplies about 6% of the liquefied natural gas used in the Asia-Pacific region and is “one of the world’s largest integrated, export-oriented oil and gas projects,” Shell said.

As MRC informed earlier, on Sunday, Shell’s U.K. rival BP announced plans to shed its almost 20% stake in Rosneft, which is controlled by the Russian state. Norway’s Equinor said Monday that it would halt new investment in Russia and begin selling its holdings in the country.

We remind that 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.

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

Technip Energies announces that it has signed an agreement with Encina Development Group, LLC (Encina) to deliver the Front-End Engineering Design (FEED) of the fluidized bed catalytic pyrolysis reaction section for Encina’s commercial Plastic Fluid Catalytic Cracking (PFCC) unit to produce circular chemicals from plastic waste in North America, according to SpecialChem.

Encina utilizes a proprietary process to convert post-consumer scrap plastic to valuable circular chemical products. The process, called Plastic Fluid Catalytic Cracking (PFCC), converts mixed hard-to-recycle plastics into petrochemical feedstock such as light olefins and BTX aromatics.

These circular feedstock chemicals can be seamlessly dropped into the fabrication process of new consumer products, reducing the need for virgin materials, and significantly reducing waste plastics.

This FEED will leverage Technip Energies’ industry credentials and know-how in fluidized design, established in the Process Technology FCC program. Technip Energies has an extensive portfolio of licensed and engineered FCC units, including more than 60 grassroots and 250 revamps, demonstrating its process and mechanical design experience.

The company’s development team is committed to ongoing development initiatives in providing technology and engineering solutions to support the industry and its energy transition targets.

As MRC wrote before, Encina (The Woodlands, Texas) was founded to produce benzene, toluene, and xylenes (BTX) from coal, but the company made a sharp change in direction in October, 2019, after discovering that an alternative feedstock - plastic waste - dramatically improved the economics of its process. Advanced plans to build a coal-based facility in Wyoming have since been scrapped, and Encina will soon announce the location for a USD255-million, 100,000-metric tons/year plastics-to-BTX facility. “Our business plan is to have at least five operating facilities with expansion capabilities (located) globally to tackle the plastic problem,” says David Schwedel, founder and executive director in July, 2020. “We’re looking to do an IPO in about two years, and we’re positioning ourselves to be the go-to waste-plastics-to-chemical/fuels company in the world. That is our focus.”

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

Westlake Corporation’s 4Q net income rose more than fivefold year on year on the back of stronger sales prices and higher margins across most of its businesses, said the company.

Profitability during the quarter was driven by an over sevenfold increase in net income for Westlake’s performance and essential materials business year on year, rising to USD821m due to higher pricing and the impact of hurricane outages in Louisiana during the same period in 2020.

Housing and infrastructure products division 4Q net income rose USD21m year on year to USD86m on the back of healthy housing and remodelling demand.

Westlake Chemical Partners – a limited partnership formed by Westlake Chemical to operate and acquire ethylene production facilities and related assets – recorded net income of USD29.5m during the quarter compared to $15m during the same period a year earlier.

"Market conditions continue to look favourable in 2022," said Westlake CEO Albert Chao. "As the market leader in Performance and Essential Materials including PVC, polyethylene, epoxy, chlorine and caustic soda, we are well positioned to continue to provide value to our customers and investors. The outlook also remains favourable in our Housing and Infrastructure Products with strong market indicators in 2022," he added.

We remind, Westlake Chemical Corp will officially change its name to Westlake Corp, effective 18 February. The new name would reflect the company’s more diversified business portfolio stemming from recent acquisitions and organic and strategic growth, it said. Westlake recently concluded four key acquisitions valued at about USD3.8bn.

Also, Westlake Corporation announced its target to reduce Scope 1 and Scope 2 CO2 equivalent emissions per ton of production by 20% by 2030 from a 2016 baseline.To further reduce its carbon footprint, Westlake’s strategy is to optimally allocate capital to both proven and emerging technologies, including additional product and operational innovations. This strategy includes energy-efficiency projects, increasing power from less carbon-intensive electricity providers, adding more hydrogen as a fuel gas, and other continuous operational improvements.

Westlake is a global manufacturer and supplier of materials and innovative products that enhance life every day. Headquartered in Houston, with operations in Asia, Europe and North America, we provide the building blocks for vital solutions — from housing and construction, to packaging and healthcare, to automotive and consumer.

MRC

BASF’s fourth-quarter net profit fell by 15% year on year to EUR898m, as higher raw material prices and increased energy and logistics costs weighed across all business segments, said the company.

At its European sites, higher natural gas prices translated to about EUR800m in additional cost in the fourth quarter, which was more than half the full-year total of EUR1.5bn. For the whole of 2021, however, BASF swung into a net profit on the back of higher prices and sales volumes.

Sales prices were raised by 25%, while volumes increased by 11% compared with 2020 levels. “All segments achieved price and volume growth in 2021,” Brudermuller said.

Over the next five years to 2026, BASF’s capital expenditures (capex) will be EUR25.6bn, up by EUR2.7bn compared with 2021-2025 levels. “The main reasons for this are our two major growth projects: the new Verbund site in Zhanjiang in China and our battery materials activities," company chief financial officer Hans-Ulrich Engel said.

“These two projects are key to drive BASF’s future growth,” he added. For 2022, BASF forecasts sales to reach between EUR74bn and EUR77bn, with operating profit projected at between EUR6.6bn and EUR7.2bn.

As MRC wrote before, Air Liquide, BASF and Shell are joining Calpine, Chevron, Dow, ExxonMobil, INEOS, Linde, LyondellBasell, Marathon Petroleum, NRG Energy, Phillips 66 and Valero to collectively evaluate and advance emissions reduction efforts in and around the Houston industrial area. Three additional companies have announced their support for exploring the implementation of large-scale carbon capture and storage (CCS) technology in and around the Houston industrial area. The 14 companies are evaluating how to use safe, proven CCS technology at Houston-area facilities that provide energy and products for modern life, including advanced manufacturing for plastics, packaging, motor fuels and power generation.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,487,450 tonnes in 2021, up by 13% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market totalled 1,494.280 tonnes, up by 21% year on year. Deliveries of homopolymer PP and PP block copolymers increased, whreas.shipments of 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

MRC) -- Phillips 66 announced that it intends to reduce the GHG emissions intensity from its operations companywide 50% by 2050, said Hydrocarbonprocessing.

The new target builds upon the company’s previously announced Scope 1 and 2 GHG emissions reduction targets. "We are committed to being part of the solution and helping the world address climate change,” said Phillips 66 Chairman and CEO Greg Garland. “Our 2050 target further reflects our drive to create shareholder value and ensure Phillips 66 participates in the energy transition."

Phillips 66 introduced 2030 targets last year, signaling its commitment to taking action and reducing the carbon intensity of its operations. Both sets of targets are compared to 2019 levels. "We support the ambitions of the Paris Agreement and are increasing our commitment with the 2050 target,” Garland said. “We will continue to prioritize our resources to drive innovation and do our part. The company’s investments to meet its targets will be consistent with its disciplined approach to capital allocation."

The company’s 2022 capital program of USD1.9 B includes USD916 MM for growth capital, of which 45% supports lower-carbon opportunities. The targets set by Phillips 66 are based on the company’s lower-carbon strategy and leverage its Emerging Energy group. The company has made meaningful progress toward developing a lower-carbon business, pursuing opportunities in renewable feedstocks and fuels, sustainable aviation fuel, the U.S. supply chain for batteries and lower-carbon hydrogen, among other areas.

"Achieving long-term GHG emissions reductions is ambitious and will require changes at and beyond Phillips 66,” Garland said. “Policies are needed to spur investment in lower-carbon infrastructure and technology development, significant shifts are required in consumer behavior, and materials throughout the supply chain must be readily available."

Phillips 66, a diversified energy manufacturing and logistics company, announced fourth-quarter 2021 earnings of USD1.3 billion, compared with earnings of USD402 million in the third quarter of 2021. Excluding special items of USD25 million, the company had adjusted earnings of USD1.3 billion in the fourth quarter, compared with third-quarter adjusted earnings of USD1.4 billion.

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.

Phillips 66 is a diversified energy manufacturing and logistics company. With a portfolio of Midstream, Chemicals, Refining, and Marketing and Specialties businesses, the company processes, transports, stores and markets fuels and products globally. Headquartered in Houston, the company has 14,000 employees committed to safety and operating excellence. Phillips 66 had USD56 billion of assets as of Dec. 31, 2021.
MRC