Vietnam largest refinery RFCC unit shut for troubleshooting

Vietnam largest refinery RFCC unit shut for troubleshooting

MOSCOW (MRC) -- Vietnam's largest refinery, Nghi Son Refinery and Petrochemical (NSRP), has shut a residual fluid catalytic cracking (RFCC) unit for "troubleshooting", two sources familiar with the matter said Reuters.

"The issue was detected earlier this week and the refinery has been fixing it," one of the sources said, adding that "the unit is expected to resume normal operations soon." Details of the problem were not immediately clear.

Calls to the refinery seeking comment were not immediately answered. The 200,000 barrels-per-day refinery is 35.1% owned by Japan's Idemitsu Kosan Co, 35.1% by Kuwait Petroleum, 25.1% by Vietnam's state oil firm PetroVietnam and 4.7% by Mitsui Chemicals Inc.

We remind, Hyundai Engineering announced that it has completed the construction of Long Son Utility Plant in Vietnam. The company held an initial acceptance ceremony for the plant with the attendance of officials, including Hong Hyun-seong, CEO of Hyundai Engineering, and Thamasak Sethadom, executive vice president of Siam Cement Group, the client of the project.

Petrobras next CEO seen overseeing strategic shift with renewables focus

Petrobras next CEO seen overseeing strategic shift with renewables focus

MOSCOW (MRC) -- The nomination of a Brazilian senator and longtime energy consultant to lead Petrobras suggests President-elect Luiz Inacio Lula da Silva wants the state-run firm to pivot to more renewable energy projects, said Reuters.

Since 2019, Petroleo Brasileiro SA has doubled down on deep, and ultra deep-water exploration and production, while also selling off less productive assets to lower its debt load. But Jean Paul Prates, nominated on Friday to be chief executive, has been advocating for higher investments in renewables.

"Petrobras is a company for the long run and cannot just keep exploring sub-salt oil and paying dividends," Prates said in a press conference this month. Prates, a senator for the past four years, will become the first politician to hold a high-ranking office at Petrobras in several years. Still, his nomination may calm investors' fears that Lula would tap a meddlesome manager to run the oil company.

Last month, Prates, a prominent voice on energy policy within Lula's Workers Party, said the new administration would not have an interventionist stance on Petrobras, had no intention of causing a "breakdown" of the company and would discuss everything with market players.

"He was the best choice considering the upcoming scenario," said a current executive, speaking on condition of anonymity while working under outgoing President Jair Bolsonaro. Petrobras shares plunged as much as 25% after Lula defeated Bolsonaro in an October vote, but have pared losses since hitting a five-month low in mid-December.

A second Petrobras source said Prates, who holds a masters degree in energy planning from the University of Pennsylvania and another one in oil economics from the French Institute of Petroleum, "knows about the sector," adding they hoped he would take a "moderate stance".

Petrobras, Prates and the transition team's press officer did not immediately respond to requests for comment. The reservoir of industry knowledge boasted by Prates, who founded an energy consulting firm three decades ago, won unlikely praise from Bolsonaro's former mines and energy minister Bento Albuquerque.

We remind, Petrobras has started output at the Itapu pre-salt field in the Santos basin via the P-71 floating production, storage and offloading vessel. The P-71 FPSO, which features a processing capacity of 150,000 barrels per day of oil and 6 million cubic metres per day of natural gas, was deployed in water depths of 2010 metres. “We were able to anticipate production of the P-71 platform, which was originally scheduled for 2023,” said Petrobras production development director Joao Henrique Rittershaussen.

China raises fuel export quotas to spur refinery output

China raises fuel export quotas to spur refinery output

MOSCOW (MRC) -- China has raised its first batch of 2023 export quotas for refined oil products by nearly half versus a year ago, said Reuters.

The quotas could encourage refiners at the world's top crude importer to process more crude and keep fuel exports at record levels in the first half, mitigating the impact of possible cuts in Russian diesel exports when European Union sanctions take effect in February.

The government has released 18.99 MMt of quotas to cover mostly gasoline, diesel and jet fuel exports, up 46% versus 13 MMt allotted a year earlier, reported by consultancies JLC and Longzhong, both of which have closely tracked Beijing's fuel quota policy in recent years.

Of the total, state-run China Petrochemical Corp (Sinopec), China National Petroleum Corp, China National Offshore Oil Company, Sinochem Group, as well as privately-controlled Zhejiang Petrochemical Corp, were granted a total of 18.73 MMt of permits, the agencies said. A refinery subsidiary of state defense conglomerate Norinco and China National Aviation Fuel Company was allotted the remainder.

The Ministry of Commerce did not respond to a request for comment. The increased quotas followed a sizable issuance of 13.25 MMt in September as the government sought to shore up its economy by encouraging refiners to step up operations and to benefit from robust export profits.

They could prompt state refiners to maintain relatively high operation rates and allow the newly started refineries to ramp up production, Mia Geng, an analyst with FGE, said. China's spare refining capacity could indirectly mitigate the deficit from the European Union's ban of Russian diesel imports from February, Citi analysts said in a note.

"We believe there were ample quotas available to keep Chinese exports at record-high level into first half of 2023, although a gradual decline seems likely from second half on a pickup in mobility and jet fuel demand on China reopening," they said. The bigger quotas also reflected weak domestic fuel consumption as a surge in COVID-19 infections, following the relaxation of virus control measures, crimped travel and economic activity, a trader said.

We remind, INEOS and SINOPEC have completed two of the four significant petrochemical deals announced earlier this year. The two deals are: SECCO joint venture. INEOS has acquired 50% of Shanghai SECCO Petrochemical Company Limited. ABS joint venture. INEOS and SINOPEC have also established a 50:50 joint venture for ABS (Acrylonitrile Butadiene Styrene), based on INEOS’ world leading proprietary ABS Technology.

Germany energy crisis powers hydrogen switch

Germany energy crisis powers hydrogen switch

MOSCOW (MRC) -- From the moment Russian gas exports to Germany were first disrupted in June, German firm Kelheim Fibers began casting around for alternative options to keep its engines running, said Reuters.

As a result, the Bavarian-based firm, whose fibers are used in anything from teabags to tampons, will be able to use heating oil instead of gas starting mid-January. The downside is that will increase carbon emissions and for the longer term, the firm is considering a switch to hydrogen, which is a much cleaner energy source provided it is produced using renewable power.

"We want to be one of the first large companies in Bavaria to switch to hydrogen," Craig Barker, managing director of the 87-year-old firm, told Reuters. Energy costs account for over 60%-70% of the company's variable expenses, overtaking that of its main raw material, Barker said.

Kelheim Fibers is one of many small and medium-sized companies that form the backbone of Europe's biggest economy, and that are seeking to diversify their energy mix to maintain output. Russia's reduction of gas supplies to Germany following Moscow's invasion of Ukraine in February, has forced Berlin to reactivate or extend the lifespan of its coal-fired power plants, putting greenhouse emissions targets in jeopardy.

However, ifo economist Klaus Wohlrabe said the crisis could eventually lead to greener production. "Relying on fossil fuels for the long term has proven to be a risky path. So in the medium term, at least, companies have no choice but to reorientate themselves," Wohlrabe said.

Kelheim Fibers, which has so far covered 85% of energy needs with gas, is in talks with stakeholders over hydrogen imports with an expected annual consumption of about 30,000 tons, starting from 2025, Barker added. "We definitely need infrastructure," he said, adding that a pipeline will be needed to connect to the German refinery Bayernoil and a port to cover the demand the company cannot meet from domestically produced hydrogen.

Earlier this month, Germany's Economic Affairs Ministry approved the construction of the country's first hydrogen pipeline network. It also announced an action plan to support small and medium-sized companies as they switch to climate-neutral production, including expanding hydrogen infrastructure.

More is required to accelerate investments in hydrogen, including a Hydrogen Act to cut bureaucracy and regulate the hydrogen ramp-up quickly, utility industry association BDEW said earlier this month.

"2023 must provide new impetus for investments in renewable energies, hydrogen, hydrogen-capable gas-fired power plants and energy networks," BDEW president Kerstin Andreae said.

We remind, Evonik has concluded the divestment of its triacetonamine (TAA) derivatives business to Italian chemical company Sabo. Financial details were not disclosed. The deal had been announced in October. Production sites in Marl, Germany and Liaoyang, China as well as 250 employees were included in the transaction.

Russia freezes Linde assets worth USD488 mln

Russia freezes Linde assets worth USD488 mln

MOSCOW (MRC) -- A Russian court has ordered nearly USD500 mln of assets belonging to German industrial gases company Linde to be frozen at the request of a Russian joint venture building a gas complex at the Baltic Sea port of Ust-Luga, court filings showed, said Reuters.

RusKhimAlyans, the joint venture which is 50% owned by Russia's Gazprom, asked the Court of Arbitration of St Petersburg and the Leningrad Region to freeze Linde assets worth USD488 mln as a preventative measure.

In 2021, Linde and Renaissance Heavy Industries signed an engineering, procurement and construction (EPC) contract with Gazprom and its partners for the Ust-Luga gas complex. Linde notified the customer in May and June 2022 that it had suspended work under the contract due to European Union sanctions imposed after Russia's invasion of Ukraine.

RusKhimAlyans alleges, according to the document, that EU sanctions ban supplying equipment for the LNG plant but do not cover equipment required for the other part of the Ust-Luga complex - a gas processing plant.

RusKhimAlyans intends to apply to the Hong Kong International Arbitration Centre to recover advance payment and losses worth around 972 MM euros (USD1 bn) and 7.6 B roubles, according to the court filings.

Linde did not immediately respond to an email seeking comment.

We remind, Linde, the world’s largest industrial gases company, said on Tuesday it has started producing green hydrogen at its facilities in Greece. Green hydrogen is made from water by electrolysis using renewable wind and solar power. The U.S.-German company, which supplies gases such as oxygen, nitrogen and hydrogen to factories and hospitals, said it was the first green hydrogen production in Greece. Hydrogen is key in Europe’s energy transition to a sustainable environment and net zero emissions by 2050.