Petrobras ends talks to sell Regap refinery

Petrobras rejected a binding proposal for the Gabriel Passos Refinery (REGAP) in Minas Gerais state, said Reuters.

Petrobras rejected the bid because the proposal was below its "economic and financial evaluation", the company said. It will now consider when it could start a new bidding process.

Petrobras had planned on selling several refineries, including some larger ones. However, it has succeeded in finding buyers for the smaller ones. Out of the five large refineries, it has sold only one, the Landulpho Alves refinery in Bahia state. It has four other large refineries that are still up for sale.

Brazil's president elect, Luiz Inancio Lula da Silva may choose to suspend the sale of the refineries. The Brazilian government can influence Petrobras's policies because it holds a majority of the company's common shares, entitling it to one vote for each share. The government also nominates the CEO and board members.

During his campaign for president, Lula said he opposes the privatisation of Petrobras. Lula's nominations to his cabinets could point to whether his administration will allow Petrobras to proceed with the remaining refinery sales.

We remind, Petrobras said it has signed a contract to sell the REMAN refinery in the northern state of Amazonas for USD189.5 MM to Ream Participacoes S.A., a subsidiary of distributor Atem. In a separate filing, however, the company formally known as Petroleo Brasileiro SA said it had failed to secure a buyer for the Abreu e Lima (RNEST) refinery after the interested firms declined to offer a bid. Petrobras said it would end the sale process, and analyze its next steps.

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LG Chem will invest 310 billion won (USD233 million) to build a plastic recycling plant and an aerogel plant in Dangjin, South Chungcheong, said Koreajoongangdaily.

The chemical company signed a memorandum of understanding with the South Gyeongsang provincial office and Dangjin city government Wednesday, with CEO Shin Hak-cheol and South Gyeongsang governor Kim Tae-heum and Dangjin Mayor Oh Seong-hwan, in attendance.

The plastic recycling plant will be a plastic pyrolysis facility that heats plastic waste at above 400 degrees Celsius to convert it into fuel oil. The fuel oil can then be processed and reused as a raw material of chemical products.

The plastic pyrolysis market is expected to grow at an annual rate of 17 percent to reach 3.3 million tons in 2030, according to LG Chem.

Aerogel, known as a next-generation material, is a class of low-density solid gel where the liquid has been replaced with gas or air. It has been explored in a range of applications including catalysis, thermal insulators, solar energy uses, sensors and photocatalysis.

Ground will be broken on both facilities on a 240,000-square-meter site in Dangjin in the first quarter of next year, with the goal of starting mass production in 2024.

Some 150 new jobs will be created through the investment, LG Chem estimated.

We remind, LG Chem may extend maintenance at its naphtha cracker for a month into December, a company official said on Wednesday, to deal with unattractive cracking margins. The company had started planned maintenance for its 1.16-MMt Yeosu cracker at the end of September. It was expected to last until November.

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Lyondell Basell Industries is evaluating expansion of propylene production capacity at its Channelview Complex near Houston, the chemicals maker said.

The potential expansion would involve building a new propylene facility using LyondellBasell's existing technology to convert ethylene into propylene for use in the production of polypropylene and propylene oxide. The related product lines are used to make everyday items such as flexible foam for mattresses, cosmetic packaging, electrical covering for 5G network infrastructure, plastic wrap for food packaging, medical syringes, vehicle bumpers, furniture upholstery and pipe for home plumbing, to name a few.

"In addition to the lower carbon emissions than competing technologies, we believe the project has more favorable economics compared to other production methods," said Ken Lane, Executive Vice President Global Olefins & Polyolefins. "The products offered through this investment will be an important element to helping our value chain partners achieve their long-term sustainability ambitions. Additionally, this upstream investment would allow us to be less dependent on propylene market supply and demand, providing us with the opportunity to serve growing customer needs better."

A final investment decision on this 400 kiloton propylene expansion project is expected towards the end of next year. The project would have an annual capacity of 950 million pounds per year. It would increase the company's propylene capacity at the Channelview Complex by more than 35 percent and would create approximately 10-15 new jobs.

We remind, LyondellBasell announced that CNOOC and Shell Petrochemicals Company Limited (CSPC), a 50:50 joint venture incorporated by CNOOC Petrochemicals Investment Co., Ltd. and Shell Nanhai B.V., has selected LyondellBasell’s Spherizone process technology. The Spherizone process technology will be used for a 500 kiloton per year (KTA) polypropylene line located in Huizhou, Guangdong, P.R. of China.

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Italy is urging Lukoil to keep supporting its refinery in Sicily until the government brokers a sale, two sources close to the matter told Reuters on Thursday, as looming European Union sanctions against Moscow threaten the plant's survival, said Reuters.

A European embargo on seaborne Russian oil comes into effect on Dec. 5 and the Italian government pledged to rescue the ISAB plant, which accounts for a fifth of Italy's refining capacity and employs about 1,000 workers.

The plant has had to rely solely on Russian oil provided by Lukoil after its creditor banks halted financing and stopped providing guarantees needed to buy oil from alternative suppliers.

As talks to sell the plant to a non-Russian buyer drag on, sources have said Rome is pushing on Lukoil's Litasco, which owns the refinery, to provide oil and financing beyond the December deadline.

Reuters reported last month that Litasco had moved part of it operations to Dubai in an effort to elude sanctions that will soon prevent European and Swiss entities from buying Russian seaborne crude oil.

A third source said the ISAB refinery is not planning to halt operations on Dec. 5, though time is running out. The plant refines about 1 million tonnes of crude a month and would not be able to carry on for long without fresh oil supplies.

State-backed financing to support the refinery is still an option being discussed, but banks remain reluctant to deal with a Russian entity, one of the sources said, despite Lukoil and Litasco not being subject to European sanctions.

A meeting involving refinery and government representatives will take place in Rome on Friday, with unions warning a shutdown of the plant would have devastating effects on one of Italy's most depressed regions.

"We will ensure that the plant remains operational," Industry Minister Adolfo Urso said on Thursday without detailing the government's plans. Litasco this month rejected a preliminary bid from U.S. fund Crossbridge.

Urso said the government would be ready to use its special powers to block a foreign takeover of the refinery to protect national interests.

We remind, Lukoil finished construction of a Petroleum Residue Recycling Facility with production capacity of 2.1 million tonnes per year at its LUKOIL-Nizhegorodnefteorgsintez LLC refinery. The facility is comprised of a delayed coking unit, diesel fuel and gasoline hydrotreatment unit, fractioning column, hydrogen and sulphur production unit, as well as infrastructure facilities.

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MRC) -- Saudi Aramco said it plans to invest in a USD7 B project to produce petrochemicals from crude oil at its South Korean affiliate S-Oil Corp's refining complex in the port city of Ulsan, said Reuters.

The project, named Shaheen, is the Saudi company's biggest investment in South Korea and will mark the first commercial use of Aramco and Lummus technology to produce chemicals from crude, Aramco said in a statement.

The construction of the complex, to produce up to 3.2 MMtpy of petrochemicals, will begin in 2023 and be completed by 2026, Aramco said. The chemicals-to-crude unit will have a capacity of 46,000 bpd while the capacity of the cracker unit is 1.8 MMtpy.

Saudi Aramco owns more than 60% of S-Oil. On completion of the project, S-Oil's chemical yield, by volume, could almost double to 25%, Aramco said.

Global petrochemical demand growth is "anticipated to accelerate, driven in part by rising consumption from Asia’s emerging economies," Chief Executive Amin Nasser said in the statement, which coincided with Saudi Arabian Crown Prince Mohammed bin Salman's visit to South Korea on Thursday.

Asia's petrochemical sector has faced headwinds this year as slower demand from China forced cracker operators to cut output. "Eventually demand continues to grow ... you will at some point need a wave of petchems to meet that demand," Armaan Ashraf, global head of NGLs at consultancy FGE, said.

The project provides an outlet for Saudi oil while improving S-Oil's long-term competitiveness as gasoline demand is expected to decline as electric vehicle use increases, analysts said. "The Shaheen project will increase chemical yields while reducing operating costs, thus making it more competitive especially in a low-margin environment," Refinitiv analyst Chua Sok Peng said.

The companies first signed a memorandum of understanding in 2019 for the Ulsan project, which was then valued at USD6 bn.

As per MRC, Saudi Aramco has told at least four refinery customers in North Asia they will receive full contract volumes of crude oil in December. The producer is maintaining a steady supply to Asia despite the decision by the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, known as OPEC+, to lower the group's output target by 2 MMbpd starting this month.

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