EIA estimates show a decrease in global surplus crude oil production capacity in 2022

EIA estimates show a decrease in global surplus crude oil production capacity in 2022

MOSCOW (MRC) -- The EIA's new report, titled Global Surplus Crude Oil Production Capacity, provides estimates of global surplus crude oil production capacity in both OPEC countries and non-OPEC countries, said Hydrocarbonprocessing.

Preliminary estimates for these data show that, as of May 2022, surplus capacity in non-OPEC countries decreased by 80% compared with 2021. The data show that, in 2021, 1.4 MMbpd of surplus production capacity was available in non-OPEC countries, about 60% of which was in Russia. As of May 2022, we estimate that all surplus production capacity in Russia was eliminated due to the sanctions implemented after Russia’s full-scale invasion of Ukraine. We determined that excess oil production capacity declined in other non-OPEC producing countries as well. We estimate that, as of May 2022, producers in non-OPEC countries had about 280,000 bpd of surplus production capacity.

We define surplus capacity as the maximum existing capacity that can be brought online within 30 days and sustained for at least 90 days. Our assessment of surplus crude oil production capacity does not include volumes of oil that are offline because of unplanned outages and disruptions, including sanctions, because these volumes cannot be brought to market voluntarily. For that reason, we exclude crude oil production that is offline in Iran, Libya, Venezuela, and now Russia, from surplus capacity estimates.

Since 2003, we have tracked OPEC surplus capacity in a separate publication: the Short-Term Energy Outlook (STEO). Global Surplus Crude Oil Production Capacity includes information about surplus production capacity located in both OPEC and non-OPEC member countries, based on STEO data. Our estimates of global surplus crude oil production capacity now date back to 1970 and provide a longer history of this measure. We define OPEC in terms of its current membership.

In our June STEO, we estimate that OPEC surplus capacity declined to 3.0 million b/d by May 2022 from 5.4 million b/d in 2021. As a result of the declines of surplus production capacity located in both OPEC and non-OPEC countries, global surplus crude oil production capacity in May 2022 was less than half of its 2021 average.

We remind, more than 5 MM barrels of oil that were part of a historic U.S. emergency reserves release to lower domestic fuel prices were exported to Europe and Asia last month, according to data and sources, even as U.S. gasoline and diesel prices hit record highs.The export of crude and fuel is blunting the impact of the moves by U.S. President Joe Biden to lower record pump prices. Biden on Saturday renewed a call for gasoline suppliers to cut their prices, drawing criticism from Amazon founder Jeff Bezos.
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Shell gets USD1 bln refining boost, upgrades oil and gas assets

Shell gets USD1 bln refining boost, upgrades oil and gas assets

MOSCOW (MRC) -- Shell said surging demand for oil products that had almost tripled refining profits in the second quarter would boost earnings by up to USD1.2 bn, said Reuters.

In an update before second quarter results on July 28, Shell also said it would reverse up to USD4.5 B in writedowns on oil and gas assets after it raised its energy prices outlook following Russia's invasion of Ukraine. Earnings from oil and refined products trading were expected to be strong in the quarter but lower than the first quarter of 2022, Shell said.

Shell's indicative refining margin rose in the second quarter to USD28.04 per barrel from USD10.23 in the first quarter and USD4.17 a year earlier, driven by a recovery in demand after the pandemic, limited global refining capacity and lower fuel exports from Russia to Western economies.

The increased refining margin is expected to boost the division's earnings by USD800 million to USD1.2 B in the second quarter compared with the first quarter. Shell shares were up 2.7% at 1040 GMT, lower than the 3.3% gains to the broader energy index.

Shell, which posted a record quarterly profit of more than USD9 B in the first quarter, said its cash flow in the second quarter was hit by an outflow of about USD6 B. It said current market volatility would hit cash flows. "We see the statement as neutral given a number of offsetting impacts to results, with the main uncertainty being around the magnitude of working capital outflows," RBC Capital Markets analyst Biraj Borkhataria said in a note.

Oil and gas prices remained elevated in the quarter, with benchmark Brent crude averaging about USD114 a barrel. Shell increased its assumed price for Brent to USD80 a barrel in 2023, up from USD60 in its 2021 annual report. For 2024 and 2025, the Brent price was rose to USD70 a barrel compared with USD60. The long-term price was USD65, compared with USD63.

The upgrade will result in post-tax impairment reversals of USD3.5 billion to USD4.5 billion. Shell wrote down more than USD22 billion in 2020 when the pandemic led to an oil price collapse. Shell said it completed its USD8.5 B share buyback program during the second quarter.

Shell's oil and gas production, expected to reach as much as 2.93 MM barrels of oil equivalent per day, would be its lowest in at least seven years because of maintenance issues. Shell, the world's largest trader of liquefied natural gas (LNG), said its quarterly LNG production was expected to be in a range of 7.4 MM to 8 MM tons.

The figure reflects the removal of LNG volumes from the Sakhalin-2 plant in eastern Russia which Shell plans to exit. Shell's larger rival Exxon Mobil signaled last week that skyrocketing margins from fuel and crude sales could generate a record quarterly profit.

As per MRC, Shell and Dow have started up an experimental unit to electrically heat steam cracker furnaces at the Energy Transition Campus Amsterdam, The Netherlands. This represents a key milestone in the companies’ joint technology program to electrify steam cracking furnaces, bringing the companies one step closer to decarbonizing one of the most carbon intensive aspects of petrochemical manufacturing.
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Axens to begin licensing Plastic Energy TAC process for advanced plastic recycling

Axens to begin licensing Plastic Energy TAC process for advanced plastic recycling

MOSCOW (MRC) -- Following the signature of the strategic partnership between Plastic Energy and Axens in 2021, Axens is pleased to announce that Plastic Energy’s TAC process has now been fully integrated into Axens’ technology portfolio, thanks to a hardworking collaboration between the technology experts at both Plastic Energy and Axens, said Hydrocarbonprocessing.

Plastic Energy’s advanced recycling technology will now be licensed by Axens. Axens will provide its customers with associated services that includes basic engineering, supply of proprietary equipment, and technical assistance for start-up and operation of the plant, leveraging the expertise of Plastic Energy at each step.

Axens may also deliver the licensed technology as a complete modular unit. Plastic Energy’s TAC process for plastic waste is a unique, patented and industrially proven advanced recycling technology, processing end-of-life mixed plastic waste into TACOIL, which can be used to create virgin-quality plastics. Plastic Energy and Axens are the exclusive licensors of the TAC process.

Axens can license Plastic Energy’s recycling technology either independently or combined with its Rewind Mix purification process. “This is a major milestone in the cooperation between Plastic Energy and Axens, allowing Axens to now deploy Plastic Energy’s recycling technology worldwide, answering the strong demand of the market for robust and proven technological solutions to industrially develop advanced recycling of mixed plastics waste” said Stephane Fedou, Vice-President Plastic Circular Economy of Axens.

“We are delighted to be able to move to the next phase of our strategic partnership with Axens in the licensing of our unique and patented advanced recycling technology. This will provide endless opportunities worldwide to recycle more plastic waste and to provide more food-grade post-consumer recycled content to the marketplace for incorporation into products and packaging.” said Carlos Monreal, Founder and CEO of Plastic Energy.

As per MRC, Borealis and Axens have recently signed a license agreement for the Rewind Mix process in order to purify and upgrade 50 KTA of pyrolysis oils produced from plastics wastes at the petrochemical plant of Borealis in Stenungsund, Sweden. The unit is planned to be in commercial operation in 2025, subject to FID, and will produce a virgin-like recycled feedstock to be further processed in the existing steam cracker unit for the production of recycled polymers, which could be used for food-grade packaging and other high-value applications.

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Tupras selects Honeywell Ecofining Technology for biofuel production in Turkey

Tupras selects Honeywell Ecofining Technology for biofuel production in Turkey

MOSCOW (MRC) -- Honeywell announced that Tupras will license Honeywell UOP Ecofining technology to produce biofuels from feedstocks such as used cooking oil and waste animal fat at their refinery in Izmir, Turkiye, said Hydrocarbonprocessing.

The new Ecofining plant is being designed to convert approximately 8,300 barrels per day of waste feeds/feedstocks to SAF, renewable diesel, and other products. By utilizing the Honeywell Ecofining process, Tupras should realize a capital efficient and high yield solution, ideal for producing biofuels and petrochemical precursors from renewable feedstocks. SAF and renewable diesel have similar molecules to petroleum-based diesel and jet fuels and can be used as a drop-in replacement without engine modifications. In the case of SAF, it can be used in blends of up to 50 percent with the remainder as conventional (fossil based) jet fuel. Apart from SAF, Bio-naphtha and Bio - LPG are used in the production of plastics, specifically olefins that are building blocks for other chemicals and aromatics used to produce polyester and other packaging materials.

Depending on feedstock choice, renewable diesel and SAF, which are produced from the Ecofining process, are expected to result in a significant reduction in lifecycle greenhouse gas emissions compared to conventional diesel or aviation fuel from petroleum. Honeywell is an early pioneer in SAF production with its Ecofining technology, which has been used to produce SAF commercially since 2016.

Serdar Kemaloglu, Assistant General Manager at Tupras for Technical Affairs, said, “As Tupras, we have set out to become carbon neutral by 2050, as we expand into new sustainable business areas. A large portion of our investments will be allocated to new energy sources such as sustainable aviation fuels, green hydrogen and zero-carbon electricity. Biofuels will play a major role in the decarbonization of the industry. We aim to process 400,000 tons of bio feedstock by 2030, and triple our sustainable aviation fuel production capacity by 2035. We plan to become the largest SAF supplier in our country. In line with our future roadmap, Tupras selected Honeywell Ecofining technology to produce sustainable aviation fuel from plant and animal-based waste feedstocks because it produces high yields of high-value renewable products."

"This project is the first awarded in Turkiye and is significant because renewable fuels from waste feedstocks are the key to reducing the refining industry’s carbon footprint and meeting regulatory compliance. We, as Honeywell, are proud to be implementing this technology, which we pioneered, for the first time in our country, together with Tupras,” said Uygar Doyuran, Honeywell Turkiye, Israel & CA President.

As per MRC, Honeywell launched communications systems and bi-directional amplifiers (BDA) that cover the entire Public Safety spectrum, providing scalable solutions to support first responder emergency radio connectivity even in challenging environments. The new products also meet regulations of almost any jurisdiction or city.

As per MRC, Honeywell announced an Emissions Control & Reduction Initiative designed to help customers achieve carbon neutrality in a wide range of areas. The initiative will initially focus on helping oil and gas customers with upstream, midstream and downstream operations to monitor and reduce fugitive methane emissions, which are more than 25 times as potent as carbon dioxide at trapping heat in the atmosphere according to the Environmental Protection Agency.
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Celanese sells USD7.5 bn of bonds to finance DuPont unit deal

Celanese sells USD7.5 bn of bonds to finance DuPont unit deal

MOSCOW (MRC) -- Celanese Corporation, a global chemical and specialty materials company, today priced USD7.5 billion in permanent financing for the acquisition of a majority of DuPont’s Mobility & Materials business (the “acquisition”), said the company.

The Company announced that its subsidiary, Celanese US Holdings LLC (the “Company”), has priced a registered offering (the “Offering”) of USD7.5 billion aggregate principal amount of notes of various maturities with interest rates ranging from 5.91% to 6.38% (the “Notes”). The Notes will be guaranteed on a senior unsecured basis by the Company and certain Celanese domestic subsidiaries, similar to prior issuances. The Offering is expected to close on or about July 14, 2022.

The Company simultaneously entered into a cross-currency swap to effectively convert USD2.5 billion of the US dollar denominated Notes into a euro-denominated borrowing at prevailing euro interest rates. The effective net borrowing rate to the Company will be approximately 5.6%, inclusive of the yield on the Notes and the beneficial impact of the currency swap.

"We are pleased to have secured a significant portion of the permanent financing for the M&M acquisition in this first window of opportunity,” said Scott Richardson, executive vice president and chief financial officer. “We were purposeful in securing an amount of debt that maintained competitive rates considering current debt market conditions. The cross-currency swap we simultaneously entered will help to align our currency mix with our anticipated global earnings while reducing our total borrowing cost. Looking to the future, we expect to have multiple windows and potential funding sources to secure the remaining financing, with flexibility depending on market conditions and the eventual timing to close the acquisition."

As MRC reported earlier, in H2, 2021, Celanese Corporation announced a force majeure (FM) in China for vinyl acetate monomer (VAM) shipments from its plant Nanjing, China. Celanese temporarily shut down its acetic anhydride and VAM production in Nanjing to comply with requirements of government departments in order to achieve dual energy consumption targets in the Jiangsu Province in 2021. Thus, its VAM plan with the capacity of 300,000 mt/year was shut on 17 September, 2021, and its resumed operations on 9 October, 2021.

Celanese Corporation is a global technology leader in the production of differentiated chemistry solutions and specialty materials used in most major industries and consumer applications. Based in Dallas, Celanese employs approximately 8,500 employees worldwide and had 2021 net sales of USD8.5 billion.
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