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.


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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.
MRC

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.
mrchub.com

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.
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Pemex oil refinery under construction in Mexico is unlikely to come online in 2022

Pemex oil refinery under construction in Mexico is unlikely to come online in 2022

MRC -- A major Pemex oil refinery under construction in Mexico is running over budget and unlikely to come online this year as promised, according to documents seen by Reuters and sources close to the project, despite being a presidential priority.

The Olmeca refinery has an official USD8.9 billion price tag approved by the board of the national oil company in 2020. President Andres Manuel Lopez Obrador has long pitched the refinery as essential to weaning Mexico off its dependence on foreign gasoline and diesel supplies, which he argues undermines the country's energy security.

But two sources with direct knowledge of the project's finances say the latest cost estimate has reached USD14-B, or some USD5-B over budget.

Officials at Pemex, the energy and finance ministries did not respond to requests for comment.

Sources within Pemex say the original budget of USD8.9-B was always unrealistic, with internal estimates calculating a range of up to USD12-B. The upper end of the range, which included the possibility of higher costs, administrative expenses or other contingencies, was never made public.

The USD12-B figure was based on 2020 estimates but the sources said the cost of building Olmeca is now around USD14 billion, due largely to already-committed contracts through early 2024. The sources did not give details about those contracts.

Lopez Obrador, a leftist resource nationalist who has pledged to revive the fortunes of state-owned Pemex, early on tapped his close confidant Energy Minister Rocio Nahle to oversee construction of the new refinery, in the president's native Tabasco state in southern Mexico.

Squeezed by higher costs and Lopez Obrador's determination to see the signature project completed in time for an inauguration this summer, the sources say Nahle is scrambling for additional funding.

"The minister is committing resources that have not been authorized by the Pemex board and that the finance ministry wants to avoid due to legal issues," said one of the sources, who spoke on condition of anonymity to discuss the project's finances.

To date, more than USD8.818 billion has already been spent on the Olmeca refinery, according to the government documents.

Designed to be able to process up to 340,000 bpd of crude, Olmeca would be Pemex's biggest domestic refinery.

The documents seen by Reuters reveal a back-and-forth between the finance and energy ministries, and show how the former has so far declined to approve more money, arguing that the Pemex board must first authorize more spending.

As part of her duties as energy minister, Nahle chairs the Pemex board.

A few days ago, Nahle publicly acknowledged that the refinery's costs had risen by USD900 MM to reach USD9.8-B, due to added pipelines, a power plant and aqueduct. Previously, she had repeatedly denied reports that the project was over budget.

In January, Nahle also batted away suggestions that the refinery would not begin operations later this year, which Lopez Obrador promised in 2019, his first full year in office.

She most recently said the first barrels of gasoline will be produced in December, despite the facility's scheduled inauguration in early July, while Lopez Obrador has acknowledged that the refinery would need a few months for production tests after the formal ribbon-cutting ceremony.

As MRC informed previously, Mexico will reduce refining output at state oil company Pemex while it modernizes its oil refineries, according to President Andres Manuel Lopez Obrador's statement earlier this month.

We remind that n 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 2,487,450 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.
MRC