NSRP might restore normal run rate at its PP plant in mid-May

NSRP might restore normal run rate at its PP plant in mid-May

Nghi Son Refinery and Petrochemical (NSRP) continues to face production hiccups weeks after an unspecified technical issue, which hit the plant on 26 March and forced the producer to shut its polypropylene (PP) plant, according to CommoPlast.

According to sources close to the maker, the 370,000 tons/year PP unit remained offline in late April and might not be able to restore the normal run rate until mid-May 2022.

Nghi Son has not been able to operate smoothly since the beginning of the year. In February, the company slashed operating rates by 50% as a result of financial issues at the refinery and was only able to operate for several weeks before being shut down again.

As MRC reported earlier, NSRP shut its new 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.

We remind that 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.

According to MRC's ScanPlast report, PP shipments to the Russian market totalled 1,494.280 tonnes in 2021, up by 21% year on year. Deliveries of homopolymer PP and PP block copolymers increased, whreas.shipments of PP random copolymers decreased significantly.

Lanxess opened new engineering plastics plant in Germany

Lanxess opened new engineering plastics plant in Germany

Lanxess officially opened a new EUR50m facility for engineering plastics at its site in Krefeld-Uerdingen, said the company.

The compounding plant will provide Durethan ployamide and Pocan polybutylene terephthalate, for use in the automotive and electronic industries, Lanxess said in a statement. Capacity details were not disclosed. The company added that it received support for the project from the North Rhine-Westphalia state government, but it did not provide details.

The state’s minister president, Hendrik Wust, who attended the opening, said the government has kept working to ensure continued energy supply for the state’s many chemical production sites amid uncertainty from the Ukraine war. “The effects of the Russian war on Ukraine on local companies must be cushioned, a production standstill due to a natural gas shortage or a permanent supply stop would have far-reaching consequences, especially for the energy-intensive chemical industry,” Wust said.

He added that Germany needed to reduce its dependence on Russian gas as quickly as possible and needed to support companies in the “upcoming transformation processes”. Krefeld-Uerdingen, where LANXESS employs 1,900 people, is the company's second-largest production site globally.

As per MRC, Lanxess said it was suspending its business activities in Russia due to the war in Ukraine. Thus, the company had “suspended business activities with Russian customers as far as contractually possible until further notice” and had suspended all investments in Russia. Its sales in Russia and Ukraine made up less than 1% of its global sales, it said.

Lanxess is a leading specialty chemicals company with about 19,200 employees in 25 countries. The company is currently represented at 74 production sites worldwide. The core business of Lanxess is the development, manufacturing and marketing of chemical intermediates, additives, specialty chemicals and plastics. Through Arlanxeo, the joint venture with Saudi Aramco, Lanxess is also a leading supplier of synthetic rubber.


US oil refiners set for strong start to 2022 on higher global fuel prices

US oil refiners set for strong start to 2022 on higher global fuel prices

US oil refiners expect strong first-quarter earnings as margins to sell gasoline and diesel strengthened due to a steep dropoff in refining capacity and crude oil supplies tightened because of Russia's war with Ukraine, reported Reuters.

Refining capacity worldwide has dropped during the coronavirus pandemic, with several less profitable oil refineries closing in the last two years. However, worldwide fuel demand has rebounded to near pre-pandemic levels, boosting profits for facilities that are still operating.

Seven US independent refining companies are projected to post earnings-per-share of 61 cents, compared with a loss of USD1.32 in first quarter of 2021, according to IBES data from Refinitiv.

Profit margins for making both gasoline and distillates - diesel, jet fuel and heating oil - were already at their highest in several years coming into 2022, and have since risen, with the heating oil crack spread at nearly USD41 per barrel by the end of March, nearly USD20 more than average over the past five years.

US independent refiners including Marathon Petroleum Corp , Valero Energy Corp and Phillips 66 also benefited from a surge in natural gas prices in Europe which occurred due to the risk of European sanctions on Russian energy exports.

Valero kicks off refinery earnings on Tuesday; Phillips reports on Friday, with Marathon the following week.

Natural gas is needed to operate various units of oil refineries and the expense caused some European refineries to cut runs, particularly distillate-producing units. This contributed to a sharp fall in distillate inventories worldwide, putting a premium on production of diesel and jet fuel.

"Geopolitical dynamics should support US refiners on wide natural gas spreads, though some impacts may be less visible with first quarter earnings than in future quarters," said Jason Gabelman, refining analyst at Cowen.

As MRC wrote previously, San Antonio-based Valero Energy Corp, the second-largest US oil refiner, ran its 14 refineries at between 88% and 92% of their combined capacity of 3.2 million barrels per day (bpd) in the fourth quarter of 2021.

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 2,487,450 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.

Neste fully owned Neste Engineering Solutions Oy to be merged into Neste Corporation

Neste fully owned Neste Engineering Solutions Oy to be merged into Neste Corporation

Neste’s Board of Directors has approved a merger plan according to which the company’s wholly-owned subsidiary Neste Engineering Solutions Oy will be merged into Neste Corporation, said Hydrocarbonprocessing.

The merger is expected to take place on September 30, 2022 and it will only affect the Finnish operations. The entire personnel, approximately 750 professionals, will transfer to Neste Corporation. Contractual rights and obligations of Neste Engineering Solutions Oy will transfer to Neste Corporation upon completion of the merger.

Neste Engineering Solutions offers high quality technology and engineering services, including among others engineering, procurement and project management services for the oil & gas, petrochemicals and bio based industries. Neste Engineering Solutions operates in Finland, in Singapore and in the Netherlands.

In the next couple of months, Neste will further assess whether it is beneficial and feasible to also combine Neste Engineering Solutions’ businesses with Neste in the Netherlands and Singapore.

As per MRC, Neste has replaced most of its Russian crude oil purchases with other crudes such as North Sea oil due to the crisis in Ukraine. Previously the Finnish refiner purchased from Russia some two-thirds of the crude oil it uses.

As MRC wrote before, Neste has successfully concluded its first series of trial runs processing liquefied waste plastic at its Porvoo refinery in Finland. After kicking the series off with its first-ever industrial scale trial run with liquefied waste plastic in 2020, Neste has conducted additional runs in 2021. In the course of the trial runs, Neste has been able to upgrade liquefied waste plastic to drop-in solutions for plastic production and develop industrial scale capabilities to upgrade recycled feedstocks. Trials pave the way for continuous and commercial activities. Neste has set itself the goal of processing more than 1 MM tons of plastic waste per year from 2030 onwards.

Neste (Helsinki) creates solutions for combating climate change and accelerating a shift to a circular economy. The company refines waste, residues and innovative raw materials into renewable fuels and sustainable feedstock for plastics and other materials. The company is the world’s leading producer of renewable diesel and sustainable aviation fuel, developing chemical recycling to combat the plastic waste challenge. In 2020, Neste's revenue stood at EUR11.8 billion, with 94% of the company’s comparable operating profit coming from renewable products.

Phillips 66 Q1 chems net income jumps year on year

Phillips 66 Q1 chems net income jumps year on year

Phillips 66’ first-quarter chemicals profits more than doubled year on year, but fell slightly compared to the closing months of 2021 as polyethylene margins cooled, said the company.

The mid- and downstream operator derives its chemicals earnings through CP Chem, its joint venture with Chevron.

Olefins and polyolefins business remained firm but slipped slightly from fourth-quarter levels due to lower polyethylene margins, which offset higher sales volumes. Global utilisation stood at 99% for the quarter.

Fourth-quarter chemicals business had benefited from a USD14m insurance pay-out associated with winter storm damages.

We remind, Phillips 66 announced the completion of the previously announced merger between Phillips 66 Partners (PSXP) and Phillips 66. The merger resulted in Phillips 66 acquiring all limited partnership interests in PSXP not already owned by Phillips 66 and its affiliates. Partnership unitholders received 0.50 shares of PSX common stock for each outstanding PSXP common unit, including preferred units that were converted into common units at a premium prior to closing.

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.