Chemical railcar traffic in North America continued downward trend

The Association of American Railroads (AAR) today reported U.S. rail traffic for the week ending June 25, 2022, said AAR.

For this week, total U.S. weekly rail traffic was 493,374 carloads and intermodal units, down 4.4 percent compared with the same week last year. Total carloads for the week ending June 25 were 229,857 carloads, down 3.1 percent compared with the same week in 2021, while U.S. weekly intermodal volume was 263,517 containers and trailers, down 5.5 percent compared to 2021.

Four of the 10 carload commodity groups posted an increase compared with the same week in 2021. They included chemicals, up 1,103 carloads, to 32,742; farm products excl. grain, and food, up 655 carloads, to 16,396; and nonmetallic minerals, up 500 carloads, to 33,631. Commodity groups that posted decreases compared with the same week in 2021 included coal, down 4,554 carloads, to 62,041; metallic ores and metals, down 1,999 carloads, to 21,907; and miscellaneous carloads, down 1,885 carloads, to 8,928.

For the first 25 weeks of 2022, U.S. railroads reported cumulative volume of 5,759,356 carloads, down 0.1 percent from the same point last year; and 6,613,002 intermodal units, down 6.3 percent from last year. Total combined U.S. traffic for the first 25 weeks of 2022 was 12,372,358 carloads and intermodal units, a decrease of 3.5 percent compared to last year.

North American rail volume for the week ending June 25, 2022, on 12 reporting U.S., Canadian and Mexican railroads totaled 324,963 carloads, down 3.8 percent compared with the same week last year, and 348,426 intermodal units, down 5.4 percent compared with last year. Total combined weekly rail traffic in North America was 673,389 carloads and intermodal units, down 4.6 percent. North American rail volume for the first 25 weeks of 2022 was 16,872,272 carloads and intermodal units, down 3.7 percent compared with 2021.

Canadian railroads reported 75,447 carloads for the week, down 3.3 percent, and 70,496 intermodal units, down 1.8 percent compared with the same week in 2021. For the first 25 weeks of 2022, Canadian railroads reported cumulative rail traffic volume of 3,577,573 carloads, containers and trailers, down 5.5 percent.

Mexican railroads reported 19,659 carloads for the week, down 12.9 percent compared with the same week last year, and 14,413 intermodal units, down 17.9 percent. Cumulative volume on Mexican railroads for the first 25 weeks of 2022 was 922,341 carloads and intermodal containers and trailers, up 1.4 percent from the same point last year.

As per MRC, U.S. Energy Secretary Jennifer Granholm is expected to meet with refining executives on June 23 as tensions between the White House and the oil industry mount over soaring gasoline prices. The planned talks come as President Joe Biden, under pressure over high gasoline prices, has demanded that oil refining companies explain why they are not putting more fuel on the market as they reap windfall profits.
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Mexico's president will inaugurate a new oil refinery at the heart of his plan to make the country energy self-sufficient even though it is unfinished and two people familiar with the matter said it will only be running near capacity in 2025, said Reuters.

In 2019, President Andres Manuel Lopez Obrador and Energy Minister Rocio Nahle said the refinery in the southern port of Dos Bocas would be ready in 2022 for USD8 B, in defiance of oil industry predictions that that goal was not feasible.

Lopez Obrador, a left-leaning energy nationalist, last week conceded the refinery would cost more, putting the price tag at some USD12 B. But he emphasized the refinery would be producing gasoline "at full capacity" next year. Still, three people familiar with the project, including a source at state oil firm Petroleos Mexicanos (Pemex), say it will cost billions more to complete, and take longer.

The Dos Bocas refinery is one of the flagship projects of Lopez Obrador, who said his vision has been vindicated by disruptions in energy supply caused by the war in Ukraine. But the president will only inaugurate the first stage of the complex of 17 plants whose construction Pemex is overseeing. The so-called Olmeca refinery is due to have processing capacity of up to 340,000 barrels per day (bpd).

Two of the sources said the energy ministry does not expect the refinery in the president's home state of Tabasco to reach 80% capacity until late 2025 or even 2026. Neither Pemex nor the ministry replied to requests for comment.

A third source familiar with planning said the refinery would not be completely ready before spring 2024, underlining the risk that it could be producing well short of capacity by the time Lopez Obrador leaves office on Sept. 30, 2024. The Pemex source agreed that it would not be in operation before 2024 even if the infrastructure was complete.

That is because many contracts with companies working on the refinery are due to run until then, the source said. "So it's not going to be ready, and you have to add on months of testing," the source said. Energy Minister Nahle earlier this month declined to say when the refinery would produce its first barrel of gasoline, pointing to the complexity of the project. "I don't want to give a date because it would be irresponsible," she told Mexican radio.

Pressed on whether it could be in a year, she said: "A year is a reasonable amount of time, I'd like to do it sooner". Lopez Obrador wants to ramp up Pemex's total refining capacity to between 1.8 MM and 2 MMbpd, counting Mexico's six refineries, plus Olmeca, and Deer Park in Texas, so he can cease to import gasoline from abroad by next year.

Pemex data show that in the first five months of 2022, average processing output at the six domestic refineries was just shy of 828,493 bpd, barely half of their combined capacity. Deer Park's output meanwhile stood at 282,000 bpd of crude. The six domestic plants produced 288,000 bpd of gasoline, a figure that compared with imports of 368,700 bpd and total domestic sales of the fuel of 656,600 bpd, the data show.

As per MRC, 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. 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.
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LyondellBasell has signed its first two U.S. power purchase agreements (PPA) supporting the company's climate goal to procure a minimum of 50 percent of electricity from renewable sources by 2030, said the company.

The combined agreements represent 216 megawatts (MW) of renewable energy, which is estimated to generate approximately 628,000 megawatt-hours (MWh) of clean power annually. Approximately 15 percent of LyondellBasell's total scope 1 and 2 greenhouse gas emissions come from its electricity consumption. These agreements will enable the company to reduce its carbon dioxide emissions by approximately 225,000 metric tons annually.

Construction is currently underway at ENGIE’s Limestone wind project, including initial delivery of some of the 264 individual blades that will make up the 88 turbines, each capable of producing 3.4 MW of output.

"Creating a better future for the next generation is important to us, which is one reason we are focused on delivering on our climate goal to achieve net zero emissions from our global operations," said Peter Vanacker, LyondellBasell CEO. "Renewable energy is an important component for how we will get there, and power purchase agreements are our preferred approach to decarbonizing our electricity supply. These strategic projects propel us forward in greenhouse gas emissions reduction, but they also provide scalability and support investment in new renewable energy capability."

LyondellBasell signed a PPA with ENGIE North America (ENGIE) for 100 MW of renewable electricity sourced from ENGIE's new Limestone wind project in Texas' Navarro and Limestone counties. The project is expected to commence operations late in 2022. The 12-year agreement is estimated to generate approximately 377,000 MWh of clean power annually, equivalent to around 135,000 metric tons of carbon dioxide or the yearly electricity consumption of more than 35,000 average American homes.

"This agreement demonstrates a collaboration to create a path forward that helps address the collective global challenge of climate change," said ENGIE Chief Renewables Officer David Carroll. "We are particularly honored to work with LyondellBasell on their first PPA agreement which will deliver steady economic and environmental value in the long run for both parties."

As pre MRC, LyondellBasell announced its board of directors has declared a special dividend of USD5.20 per share and a quarterly dividend of USD1.19 per share. The quarterly dividend represents a 5 percent increase over the company's first quarter 2022 dividend. The special and quarterly dividends will both be paid on June 13, 2022 to shareholders of record as of June 6, 2022, with an ex-dividend date of June 3, 2022.

As per MRC, LyondellBasell announced that Levima Green (Shandong) Advanced Materials Co., Ltd. will use LyondellBasell’s Lupotech T high-pressure polyethylene technology at a new site. The Lupotech T process technology will be used for a 200 kiloton per year (KTA) vinyl acetate copolymer (EVA) line. The new line will be located in the Zaozhuang City, Shandong Province, P.R. of China.
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German oil refiner Bayernoil GmbH plans to halt deliveries of diesel and heating oil to customers for several days from Thursday after a lightning strike, said Reuters.

Bayernoil is the largest oil refiner in Germany's southern state of Bavaria and the incident adds to two other outages in the same region as Europe's diesel market suffers from the loss of imports from Russia.

In early June, a mechanical incident during a routine check-up damaged a crude oil distillation unit at the Austrian oil and gas group OMV's Schwechat refinery, and the company also plans maintenance at its Burghausen refinery this summer.

Due to these outages, trucks have had to wait in long queues for fuel at Bayernoil in recent days, Bloomberg cited a source as saying. The two plants affected by the incident can process just over 200,000 barrels of crude a day, according to data compiled by Bloomberg.

This is roughly equivalent to the capacity of OMV's Schwechat oil refinery, while the one in Burghausen can process about 76,000 barrels per day.

As per MRC, Italian oil and gas company Eni said on Friday it was not using oil of Russian origin in operations related to its 20% share in the Bayernoil refinery in the Germany state of Bavaria. Swiss firm Varo Energy, another shareholder in the Bayernoil refinery, said it had not entered into new deals to buy Russian oil since the start of Russia's invasion of Ukraine and did not plan to. It said previous contracts had expired. The West has imposed sweeping sanctions on Russia over the invasion. The US has banned Russian oil imports, while the European Union, which is more reliant on Russian fuel, has banned investments in Russia's energy sector.
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TotalEnergies Marine Fuels and Mitsui O.S.K. Lines, Ltd. (MOL) have successfully completed the first biofuel bunker operation for a vehicle carrier in Singapore, said Hydrocarbonprocessing.

The local operation was made possible with support from the Maritime and Port Authority of Singapore. The MOL-operated car and truck carrier, Heroic Ace, was refueled by TotalEnergies-supplied biofuel on 11th June 2022 via ship-to-ship transfer, while the carrier performed cargo operations simultaneously. The biofuel has been consumed during the carrier’s voyage to Jebel Ali, in the United Arab Emirates.

The biofuel blend used in this trial composed of VLSFO (Very Low Sulfur Fuel Oil) blended with 20% second-generation, waste-based and ISCC-certified UCOME (Used Cooking Oil Methyl Ester). From a well-to-wake assessment, the biofuel will reduce approximately 17% of Greenhouse Gas (GHG) emissions compared with conventional fuel oil.

MOL’s initial analysis of the vehicle carrier’s engine and machinery performance have demonstrated a high compatibility and safe use of the biofuel onboard the vessel.

Laura Ong, General Manager of Trading and Operations for Asia Pacific, TotalEnergies Marine Fuels, based in Singapore, said: “We are delighted to work with frontrunners in green shipping, such as MOL, on the use of sustainable biofuels to reduce their vessels’ carbon footprint. For TotalEnergies Marine Fuels, we want to develop a sustainable, cost-efficient and low-carbon biofuel solutions for customers across different shipping segments. This partnership with MOL has allowed us to build on our amassed biofuels supply chain capabilities and operational success, to deliver this lower-carbon fuel to a new vessel type."

Koichi Hirata, General Manager, Car Carrier Division of MOL, said: “MOL Car Carrier Division has been working on trial usage of biofuel during navigation in the European short haul trade for more than a year. Today we are very pleased to announce that we have expanded our actions to the long haul trades and successfully conducted a milestone voyage together with our valued partner, TotalEnergies. Along with various partnerships we have with TotalEnergies in many fields, this collaboration in the biofuel field means an important step for MOL. We will continue to accelerate efforts towards a low- and de-carbonized vehicle transportation sector and to develop services required by our customers."

TotalEnergies and MOL believe biofuels provide an immediate and sustainable solution to decarbonize shipping today, as they can be blended or dropped into existing conventional fuels with little or no technological developments required on vessels.

As part of TotalEnergies’ strategy to produce a new generation of biofuels for use in transport, TotalEnergies is investing in biofuels projects based on animal fat or used oils, thereby sourcing from the circular economy and limiting the competition for and impact on arable land.

These initiatives reinforce TotalEnergies’ climate ambition to reach net-zero emissions by 2050 together with society. In parallel, TotalEnergies Marine Fuels is committed to drive the decarbonization of shipping through the provision of clean and low-carbon marine fuel solutions across the short and long-term.

Biofuel is positioned as an effective alternative to fossil fuels in 'MOL Group Environmental Vision 2.1', which includes the achievement of net zero emissions by 2050. MOL Group continually takes a proactive stance in promoting adoption of clean alternative fuels with the aim of reducing greenhouse gas emissions in ocean transport.

TotalEnergies and MOL will continue to build on their successful collaborations to explore new joint initiatives that promote the introduction of clean, low-carbon alternative fuels. Both companies have co-developed bunker vessels, the Gas Agility and the Gas Vitality, for the supply of marine Liquefied Natural Gas (LNG) in the Northwestern Europe and Mediterranean regions. They are also part of a consortium that seeks to establish an ammonia fuel supply chain in Singapore.

As per MRC, TotalEnergies has taken logistics measures to make sure its network of petrol stations and its clients will be sufficiently supplied throughout the weekend despite a strike hitting its French oil refineries on Friday. The CGT union, which wants an immediate increase in wages to compensate for rising inflation, has called for the 24-hour strike after talks with CEO Patrick Pouyanne fell through.
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