U.S. oil refiners to keep running at breakneck speeds in fourth quarter

U.S. oil refiners this quarter will run their plants at breakneck rates, near or above 90% of capacity, as tight fuel supplies spur high profits and operating rates, according to company forecasts and analysts surveyed by Reuters.

The refining industry has minted huge profits this year on buoyant demand for gasoline, diesel and jet fuel. Fourth-quarter outlooks should keep earnings high even as gasoline consumption slips during the winter.

Largest U.S. refiner Marathon Petroleum Corp aims to operate its system at 93% of combined oil processing capacity, a cooler pace as it completes maintenance work at some plants. It ran at 98% of capacity last quarter.

Second-largest Valero Energy plans to run at between 91% and 95% of capacity this quarter, while LyondellBasell Industries targets an above 90% rate, and Phillips 66 projects a low-to-mid 90% run rate, according to figures released by the companies.

Sixth-largest U.S. refiner PBF Energy has not disclosed its plan. On Oct. 25, finance chief Erik Young said the company had the cash and borrowing power to "operate our refining system at elevated utilization rates."

PBF restarted units idled during the pandemic at its Paulsboro, N.J., plant to produce more diesel and jet fuel, with the company's refineries running at a record-high 980,000 barrels per day last quarter, Young said.

Overall, refiners are forecasting production will remain close to third quarter levels, which averaged 92.75%, said Matthew Blair, refining analyst at researcher Tudor Pickering & Holt. If refiners overall hold their production flat "that would be really strong,” Blair said.

The plans reflect robust demand for diesel and jet fuel with U.S. inventories below the five-year average, said John Paisie, president of energy consultancy and researcher Stratas Advisors.

Diesel stocks in particular “are well below typical levels and are running at some 20% below the seasonal average,” Paisie said. He expects utilization in the U.S. "will continue to be relatively high and will average around 90% in 4Q.”

We remind, Britain has sanctioned four Russian steel and petrochemical business owners, including the former head of steel producer Evraz, the government said on Wednesday, its latest measures taken against Moscow over the war in Ukraine.
mrchub.com

Honeywell and Aramco have announced the signing of a joint venture agreement to provide a set of end-to-end business process automation solutions, under the Aramco Namaat Industrial Investments Program, said Hydrocarbonprocessing.

The technology solutions can be offered to a wide range of industrial sectors to help maximize profitability, improve productivity, sustainability and operational excellence, on a global scale. The new JV offerings will leverage Aramco’s Plant.Digital platform (formerly Integrated Manufacturing Operations Management System – iMOMS) as well as Honeywell Connected Enterprise’s technology development and industrial digital solutions implementation experience.

The JV aims to equip industrial companies with the tools, processes and practices they need to run plant operations more effectively and accelerate sustainable digital transformation and operational excellence initiatives. It will emphasize the development, integration, and deployment of Operations Technology (OT) solutions and Digital Transformation consulting.

“This JV agreement with Honeywell is expected to bring new jobs to the market, contribute to economic growth and serves as another way in which Aramco continues to pursue its Digital Transformation program as part of its evolution to become the world’s leading digitalized energy corporation,” said Ahmad Al Sa’adi, SVP Technical Services at Aramco.

The JV offering combines Aramco’s Plant.Digital platform and its technical and domain knowledge in end-to-end plant operations with Honeywell’s global software development, systems integration capabilities and commercialization expertise to help industrial companies become more sustainable while maximizing yield, reducing downtime, improving plant productivity and increasing profit.

“The powerful combination of Aramco’s business, operations, technology and Plant.Digital delivery expertise, coupled with Honeywell’s proven experience in industrial software and big data analytics solutions, as well as our long tenure in the Kingdom, is anticipated to unlock tremendous value for the industry,” said Kevin Dehoff, president and CEO, Honeywell Connected Enterprise.

The new JV is expected to create more than 300 jobs in Saudi Arabia within five years, supporting the Aramco Namaat Industrial Investments Program, which is designed to boost Saudi economic and workforce development.

The collaboration highlights the efforts of Aramco and Honeywell to support Saudi Vision 2030 – the national roadmap to transform the Kingdom into an industrial powerhouse and a global logistics hub. The vision’s focus is on developing high-tech and knowledge-based careers that add significant value to the Saudi economy to compete globally.

Honeywell and Aramco have partnered for more than 60 years to drive Saudi Arabia’s industrial leadership forward through technology and innovation. This JV is the latest milestone in that journey, building on an MoU signed between Honeywell and Aramco in September 2021 to explore the co-development and commercialization of a next-generation digital technology solution for industrial companies. Closing of the joint venture is subject to certain regulatory approvals and other customary closing conditions. The companies also signed an MoU in 2017 to explore the benefits of Honeywell's Industrial Internet of Things (IIoT) offering in support of Saudi Vision 2030.

As per MRC, Saudi Aramco's net profit rose by 39.5% year on year to Saudi Riyal (SR) 159.1bn in the third quarter on the back of higher crude oil prices and volumes sold. Net income growth in the third quarter was partially offset by increased production royalties largely attributable to higher average effective royalty rate resulting from stronger crude oil prices and higher sales volumes, the company said in a filing to the Saudi bourse, Tadawul.
mrchub.com

Some of the world's biggest consumer goods companies, including PepsiCo, Mars and Nestle, are almost certain to miss a target to make plastic packaging more sustainable by 2025, according Reuters.

The study by the Ellen MacArthur Foundation and the United Nations Environment Program also revealed that some companies - including Coca-Cola and Pepsi - are using more virgin plastic despite a pledge to reduce its use.

The report comes as U.N. members are due to meet in Uruguay this month to start negotiations on the first ever global plastics treaty, which is aimed at reining in soaring waste pollution choking marine life and contaminating food.

Some U.N. members are pushing for a pact that includes legally binding targets to increase recycled content in packaging and use less petroleum-derived virgin plastic, rules that would have financial implications for the consumer goods and petrochemical industries.

Dozens of major brands have in recent years set targets to increase plastic recycling and reduce the use of single-use packaging in partnership with the Ellen MacAurthur Foundation, as part of efforts to burnish their green credentials.

The headline pledge was that 100% of plastic packaging would be reusable, recyclable or compostable by 2025, but this goal will "almost certainly be missed by most organizations", the environmental group's report said.

Nestle said these targets were hampered by a lack of government recycling infrastructure globally, noting that it had reduced the amount of virgin plastic it uses by 8% since 2018.

Mars said it is making progress in tackling plastic waste and investing hundreds of millions of dollars to redesign thousands of packaging components. Pepsi and Coca-Cola did not respond to requests for comment.

Greenpeace said the report is evidence that voluntary corporate targets have failed and called on the U.N. to forge a treaty that forces governments and companies to use less single-use plastic packaging.

"This underlines the need for governments to ensure that the global plastic treaty ... delivers major reductions in plastic production and use," said Graham Forbes, Greenpeace’s USA Global Plastics Project Leader.

We remind, Dow, and ByFusion are announcing a new business agreement that continues their collaboration in the greater Boise area to divert hard-to-recycle plastics from the landfill. The announcement follows a successful demonstration project that began in July 2021 to collect plastic waste from the community through the Hefty EnergyBag program and convert the materials into ByBlocks.
mrchub.com

Abu Dhabi National Oil Company (ADNOC) and ADQ, the majority shareholders in TA’ZIZ, launched the next phase of growth at the TA’ZIZ Industrial Chemicals Zone, in Al Ruways Industrial City, which will more than double the number of chemicals produced at the industrial hub, said Hydrocarbonprocessing.

The centerpiece of the expansion will be a new world-scale, low-carbon footprint steam cracker to supply feedstocks for the various downstream production units, bringing multiple new product value chains to the UAE for the first time. The project is in the feasibility study phase, with the design phase set to commence in Q1 2023.

The first phase of TA’ZIZ growth continues to progress, with a new strategic agreement signed at the Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC) to advance the development of world-scale facilities for the production of ethylene dichloride (EDC) and chlor-alkali, polyvinyl chloride (PVC). Site preparation at TA’ZIZ is underway and final investment decisions on the first phase of projects are expected before year end.

In line with the UAE Net Zero by 2050 Strategic Initiative, TA’ZIZ will leverage low carbon electricity sources such as cogeneration from the on-site utility facility, grid power from nuclear and solar clean energy and use best available technology to drive manufacturing growth with lower carbon emissions.

Khaleefa Yousef Al Mheiri, TA’ZIZ Acting Chief Executive Officer, said: “TA’ZIZ is a critical enabler of the UAE’s industrial development and manufacturing growth ambitions. Following strong demand from partners and investors for the first phase of world-scale growth at TA’ZIZ, and capitalizing on growing global demand for chemicals, we are expediting plans for the next phase of expansion of our chemicals production.

“In line with our chemicals’ growth strategy, this major project supports our wise leadership’s vision to harness our country’s vast natural resources, while responding to the growing global demand for chemicals. By leveraging clean grid power and gas-based feedstocks, we are building new low-carbon industrial value chains that will further grow, diversify and future-proof our economy, as well as create opportunities to support the private sector.”

During ADIPEC, the TA’ZIZ EDC/PVC partners, TA’ZIZ, Reliance Industries and Shaheen signed a Joint Venture incorporation agreement for the development of a world-scale ethylene dichloride (EDC), chlor-alkali, polyvinyl chloride (PVC) production facility, with a total investment in excess of USD2 B.

Fertiglobe, Mitsui & Co., Ltd (Mitsui) and GS Energy Corporation (GS Energy) are also partnering with TA’ZIZ to develop a world-scale low-carbon ammonia facility while TA’ZIZ and Proman are focused on progressing a methanol facility, both at the TA’ZIZ Industrial Chemicals Zone.

Separately, the Zone’s utility facilities, that will provide power, steam, cooling, demineralized and wastewater services will be jointly developed by ADNOC and TAQA. And ADNOC L&S and AD Ports Group will develop a liquids terminal and logistics facility with an international partner, VTTI B.V., which will include construction of a new world-class port. The Engineering, Procurement and Construction (EPC) contract for the utility facilities and the EPC contract for the logistics facilities marine works have both been tendered, with EPC awards expected shortly.

The total investment in the first phase of TA’ZIZ will be in excess of USD5 billion (AED18 billion), with most of the chemicals produced in the UAE for the first time. All agreements are subject to regulatory approvals. Launched at the end of 2020, TA’ZIZ is driving and enabling expansion of the Al Ruways Industrial City, as well as Abu Dhabi’s wider chemicals, manufacturing and industrial sectors.

We remind, Abu Dhabi National Oil Company (ADNOC) and GAIL (India) Limited signed a Memorandum of Understanding to explore collaboration opportunities in liquefied natural gas (LNG) supply and decarbonisation, including short and long term LNG sales agreements. The agreement also includes potential optimization of LNG trading activities, the review of joint equity investments in renewables and the monitoring of greenhouse gasses for LNG cargoes, to support low carbon LNG supplies.
mrchub.com

LyondellBasell announced that its leading polypropylene (PP) technology has been selected by Stavian Quang Yen Petrochemical, Ltd. (Stavian) for a new world scale production facility, said the company.

The facility will include a 600 kiloton per annum (KTA) polypropylene plant using LyondellBasell’s Spheripol technology. The facility will be built in Quang Ninh Province, Vietnam.

“We are delighted Stavian Quang Yen Petrochemical selected LyondellBasell as its polypropylene licensor for their first polyolefin facility,” said Neil Nadalin, director of licensing at LyondellBasell. Nadalin added, “The selection of the Spheripol process will enable Stavian to produce benchmark polypropylene resins in a state-of-the-art process technology, allowing them to best serve the fast growing Vietnamese polyolefin market."

Mr. Bui Viet Ha, Project Director at Stavian Quang Yen Petrochemical stated: “Working with the leading polypropylene technology licensor gives us enormous confidence that we will be able to deliver timely large scale quality resins to the domestic market. The excellent reputation of LyondellBasell and its solid licensing record and experience as well as an extensive product portfolio lead us to choose LyondellBasell as the PP licensor for our project."

Spheripol is the leading PP process with more than 30 million tons of licensed capacity. The latest fifth generation Spheripol technology includes process improvements that further maximize operational efficiency. The plant will commence operation using the LyondellBasell Avant ZN catalyst.

New licensees take advantage of the LyondellBasell in-house expertise of continuous production improvement, sustainable product development and catalyst knowhow, by optionally joining our Technical Service program.

We remind, LyondellBasell and Shakti Plastic Industries, India's largest plastic scrap recycler and waste collection company, have signed a Memorandum of Understanding (MoU) to form a joint venture to build and operate a fully-automated, mechanical recycling plant in India.

mrchub.com