Mexico president says new Pemex refinery will reach full capacity in 2023

Mexican President Andres Manuel Lopez Obrador said Wednesday that a new refinery owned by state-run Petroleos Mexicanos (Pemex) will reach full operating capacity by next year, despite industry experts saying it will take until at least 2024, said Reuters.

Lopez Obrador said in a regular news conference that the Olmeca refinery along the coast of Tabasco, set to open July 2, will go through a "trial period" of several months before beginning production next year. The president and Energy Minister Rocio Nahle said three years ago that the 340,000 barrel-a-day refinery would be up and running by 2023.

"It will already be producing at full capacity by next year," Lopez Obrador said Wednesday, dismissing critics and emphasizing that the country would be able to reach self-sufficiency and stop fuel imports in 2023 as well. "It is a huge, monumental thing ... everything must be harmonized to obtain the fuel. It will take time," Lopez Obrador said of the refinery, also known as Dos Bocas, which has gone over its initial budget of USD8 B and could reach up to USD14 B.

"The construction part, without a doubt, will end this year ... but it will not take two years (to be operational)," Lopez Obrador said. Lopez Obrador also said the country expected crude processing in six currently operating Pemex refineries to increase to 1.2 MMbpd, up from the current level of 840,000 barrels per day, without specifying a time frame.

Total capacity would reach around 1.8 MMbPD including the Olmeca refinery and the Deer Park refinery in Texas, which Pemex became sole owner of in January. That will allow Mexico to reach 800,000 barrels per day of gasoline and between 500,000 and 600,000 barrels per day of diesel in 2023, Lopez Obrador said.

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.
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Dow Inc. released its second annual comprehensive Environmental, Social, and Governance (ESG) report, further demonstrating its commitment to transparency in data disclosure and how the Company is working to deliver solutions to global challenges that create lasting value for all its stakeholders, said Hydrocarbonprocessing.

Dow's "INtersections" report reflects the interdependency between the environment and society, innovation and science, collaboration and action, and builds on 18 consecutive years of voluntary sustainability reporting and three years of inclusion and diversity reporting.

"The challenges facing our local and global communities are increasingly complex and interconnected, and demand a collaborative and integrated approach," said Jim Fitterling, chairman and CEO of Dow. "They also require game-changing ideas fueled by science. As a science and technology company, we eagerly take on the responsibility for finding answers to the most pressing challenges of our time. This is central to our purpose as a company. It is central to our growth strategy. And it is central to driving best-in-class performance and accountability."

As MRC informed before, earlier this month, Dow and Plastogaz SA announced a strategic investment which will help simplify the process of converting plastic waste to feedstock and provide another carbon-efficient option to keep plastic waste out of landfills and the environment. The collaboration marks another milestone in Dow’s ongoing mission to protect the climate and close the loop on plastic waste.

Dow combines global breadth, asset integration and scale, focused innovation and leading business positions to achieve profitable growth. The Company's ambition is to become the most innovative, customer centric, inclusive and sustainable materials science company, with a purpose to deliver a sustainable future for the world through our materials science expertise and collaboration with our partners. Dow's portfolio of plastics, industrial intermediates, coatings and silicones businesses delivers a broad range of differentiated science-based products and solutions for its customers in high-growth market segments, such as packaging, infrastructure, mobility and consumer care. Dow operates 106 manufacturing sites in 31 countries and employs approximately 35,700 people.
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BASF Shanshan Battery Materials Co., Ltd. (BSBM) is expanding its battery materials capacity in China to meet fast-growing demands of the electric vehicle industry, said BASF.

The expansion project at its sites in Changsha, Hunan province, and Shuizuishan, Ningxia province, will enable BSBM to achieve 100,000 tonnes of annual capacity for cathode active materials, the company said in a statement.

Commissioning of the new capacity will start from Q4 2022. "The new production lines are designed with high flexibility to produce an advanced product portfolio and meet customers’ diversified needs, from high-nickel and ultra-high-nickel nickel-cobalt-manganese oxide (NCM) for polycrystalline and single crystalline, as well as manganese-rich NCM products," the company said.

The manganese-rich products are already produced "on a multi-ton scale", BASF added. BSBM is 51% owned by BASF while lithium-ion battery materials supplier Shanshan holds the remaining 49% share of the company.

As per MRC, BASF completed a double-digit million euro investment to increase production capacity for Tinopal CBS optical brighteners at its Monthey site. Following phase one of the stepwise capacity increase in 2021, the recent completion of the investment program has now brought significantly increased capacity on stream to meet growing global customer demand.

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.
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British energy giant BP has agreed to sell its remaining 50% stake in the Sunrise oil sands project in northern Alberta, Canada, to Cenovus Energy, said the company.

The deal’s total consideration includes a USD466.9m (CD600m) cash payment and a conditional payment with a USD466.9m (CD600m) maximum aggregate value that expires after a two-year period. As part of the deal, Cenovus will sell its 35% stake in the undeveloped Bay du Nord project offshore Newfoundland and Labrador, in Eastern Canada, to BP.

The Bay du Nord project comprises several oil discoveries in the Flemish Pass basin, located approximately 500km north-east of St John’s. Situated in water depths of approximately 1,200m, the project is estimated to hold recoverable reserves of nearly 300 million barrels of oil.

BP Gulf of Mexico & Canada senior vice-president Starlee Sykes said: “This is an important step in our plans to create a more focused, resilient, and competitive business in Canada. “Bay du Nord will add sizeable acreage and a discovered resource to our existing portfolio offshore Newfoundland and Labrador. Along with BP’s active Canadian marketing and trading business, this will position BP Canada for strong future growth."

With the sale, BP will have no interests in the oil sands production assets in the North American country. Following the completion of the transaction, BP will focus on the future growth of offshore production. The firm currently owns stakes in six exploration licences in the offshore Eastern Newfoundland region. The transaction is subject to regulatory approvals and is scheduled to close this year.

As per MRC, The Abu Dhabi National Oil Company (ADNOC), oil major BP and Abu Dhabi future energy company Masdar have joined forces to develop clean hydrogen and technology hubs. Announcing their new-energy partnerships, ADNOC said the H2Teesside low-carbon hydrogen project with BP had moved into the design phase.

As per MRC, Adnoc and Mubadala Mubadala announced a strategic transaction involving Borealis, one of Europe’s leading petrochemical companies. Under this agreement, Adnoc will acquire a 25% shareholding in Borealis from Mubadala. Upon completion of the transaction, which is subject to customary closing conditions and regulatory approvals, Borealis will be owned 25% by Adnoc and 75% by OMV, an Austrian multi-national integrated oil, gas and petrochemical company listed on the Vienna Stock Exchange.
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Oil refiner Idemitsu Kosan plans to cut its capacity by 13% in less than two years as the ageing and shrinking population in Japan and the global shift to greener energy eats into household demand for petroleum, said Reuters.

"Domestic demand for petroleum products is declining faster than expected because of the population's ageing and shrinkage, as well as the worldwide trend for decarbonisation," Idemitsu Executive Vice President Susumu Nibuya told a news conference.

Idemitsu will terminate refining operation at Seibu Oil's Yamaguchi plant in western Japan by March 2024, the company said. Idemitsu holds a 66.9% stake in Seibu Oil.

The 120,000 bpd plant represents about 13% of Idemitsu's domestic capacity. Idemitsu plans to make Seibu Oil a wholly owned subsidiary as soon as possible to set about restructuring, Nibuya said.

As MRC wrote before, in early February, Idemitsu Kosan had no plan to give fresh financial aid to Vietnam's Nghi Son Refinery and Petrochemical (NSRP), which ha cut production to 80% of capacity due to a funding problem. Vietnam's largest refinery avoided a lengthy shutdown that month after a major shareholder secured short-term funding following a disagreement between shareholders about financing for crude, having earlier cut its run rate.

We remind that in October 2018, Idemitsu Kosan finalized a deal to buy out Showa Shell Sekiyu through a share swap in a deal worth about USD5.6 billion.
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