Vietnam largest refinery to fix leaking RFCC unit by January 15

Vietnam's largest oil refinery will complete repairs needed to fix a technical problem at its residual fluid catalytic cracking (RFCC) unit by Jan. 15, two refinery sources said Reuters.

The 200,000-barrel-per-day Nghi Son Refinery and Petrochemical had a leak at the RFCC unit, the government said on Friday, adding the problem would reduce the refinery's output by 20%-25%.

Nghi Son, which provides more a third of Vietnam's petroleum needs, is one of only two oil refineries in the country.

"We will restart the unit immediately after," one of the sources said of the repairs, declining to be named because they were not authorized to speak to media. Reuters first reported the unit's shutdown late last month.

"The refinery will operate at 100% to 110% of its capacity to compensate for the shortfall," the same source added. The information was confirmed by a second source.

We remind, the output from Vietnam's largest oil refinery is expected to fall by 20%-25% during the first 10 days of January as its residual fluid catalytic cracking (RFCC) unit has been shut down due to a technical problem. The 200,000-bpd Nghi Son Refinery and Petrochemical has a leak at the RFCC unit, the government said in a statement.

Nghi Son 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.

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Industries helping the world shift to net-zero emissions could be worth USD10.3 T to the global economy by 2050, sustainable development consultancy Arup and economics advisory firm Oxford Economics said in a report on Tuesday, as per Reuters.

From heatwaves to floods, extreme weather events are not only costly but increasingly causing upheaval across the globe, pushing governments and industries to seek to cut greenhouse gas emissions and mitigate climate change.

"As economists, we have to be honest about the fact that mitigating climate change will be expensive," Oxford Economics' Chief Executive Adrian Cooper said in a statement. "But the transition to a carbon-neutral global economy also presents compelling opportunities."

The analysis showed emerging new markets for carbon-neutral goods and services that help reach the Paris Agreement net-zero target will be worth USD10.3 trillion, or about 5% of projected gross domestic product (GDP), by mid-century.

"This includes the direct contribution to GDP of electric vehicles manufacturing, renewable power generation, clean energy equipment manufacturing, renewable fuels and green finance; plus the activity supported across global supply chains," the report stated.

It also showed, as industries shift to clean power amid a global energy supply crisis, that resulting disruptions will create new competitive opportunities for companies able to adapt quickly to changing demands.

Arup and Oxford Economics found the green transition would lead to substantial productivity gains from climate change mitigation compared to "a world in which climate change has been left unchecked, or poorly tackled".

A scenario analysis by Oxford Economics suggested a failure to act could damage global GDP by around 5% by 2050. In 2021, it said the cost of weather-related interruptions to economic activity had already reached USD233 B.

"This report shows the green transition is not a burden on the global economy, but a substantial opportunity to bring about a greater and more inclusive prosperity," Arup Global Strategy Skills Leader Brice Richard said.

We remind, 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. 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.

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Sika performed well against an increasingly difficult economic backdrop and – with CHF 10.49 billion in sales – the company exceeded the CHF 10 billion mark for the first time, said the company.

This corresponds to a substantial increase of 15.8% in local currencies compared to the previous year. The currency effect came to –2.4%, with the softening US dollar and the continued weak euro particularly impacting this development. The acquisition effect was 2.5%.

Rising raw material prices around the globe were a prominent feature of 2022, as was a deceleration in the construction sector in the second half of the year, which was mostly due to high inflation and associated interest rate hikes. Sika was able to raise prices for products and solutions accordingly, and also made use of targeted growth opportunities. Overall, the global construction sector is being shaped by several megatrends including climate change, automation, digitalization, as well as demand for easy-to-apply products. With its broad product portfolio, Sika is ideally positioned to offer its customers technologies that allow them to reduce their carbon footprint while facilitating long-lasting, resource-efficient construction. In addition, Sika is benefiting from global, state-driven economic support programs that are fueling infrastructure expansion.

The EMEA region (Europe, Middle East, Africa) reported a sales increase in local currencies of 8.3% in 2022 (previous year: 16.1%). Sika’s distribution business, which includes product distribution via home improvement stores, builders’ merchants, and online platforms, saw a decline in volume. The extraordinarily high demand during the COVID-19 pandemic normalized again, moving back into line with pre-pandemic years. In contrast, volumes in the project business, which accounts for around 60% of sales in the region, witnessed only a slight drop. Economic stimulus programs and substantial investments in the transition of the energy sector support Sika’s business activities even in declining markets. The region’s strongest growth rates were recorded in the countries in Africa and the Middle East, which once again achieved double-digit sales growth.

Sika moved to a new site in the East African country of Tanzania in 2022, and is now manufacturing mortar products in Dar es Salaam on top of concrete admixtures. It also extended its facility in Western Africa’s Ivory Coast. This site is now double its previous size, enjoying not only additional manufacturing facilities but also new warehousing capacities, office space, and laboratories.

The Americas region recorded growth in local currencies of 27.5% (previous year: 21.0%). Sika generated a large part of this growth from projects in the US infrastructure segment, which saw siginifcantly higher activity in 2022 compared to the previous year. Construction work focused on the modernization and expansion of subway lines, bridges, tunnels, and freeways. High demand also stemmed from investments in commercial construction projects, including stadiums and data centers. In addition, the USA is investing heavily in reshoring, which involves bringing industrial know-how back to the United States from Asia and constructing new manufacturing plants. This opens up new business opportunities for Sika. Construction activity in large parts of the US was affected by the severe winter storms in December, which also disrupted the deliveries of some Sika products.

We remind, Sika is opening a new plant for liquid membranes and mortar production in Chongqing, a city in southwestern China with 30 million inhabitants. By commissioning the new plant, Sika is expanding its position in this rapidly growing metropolitan area, which is set to become even more important as China is creating the Chengdu-Chongqing business district with almost 100 million inhabitants.

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Chevron Corp's first cargo of Venezuelan crude after a U.S. license received in November has departed from a ship-to-ship transfer hub near Aruba to its Pascagoula, Mississippi refinery, according to shipping data seen by Reuters.

Chevron received authorization last year from the U.S. Treasury Department to revive oil output and expand operations in Venezuela as part of Washington's efforts to encourage political dialogue towards a presidential election in the South American nation.

State-run oil company PDVSA allocated Chevron the first crude cargo this month, which was loaded at Venezuela's Jose terminal last week, according to shipping data and documents.

Chevron's tanker Caribbean Voyager this week transferred the 500,000-barrel cargo of Hamaca heavy crude it had loaded in Venezuela to Malta-flagged vessel Sealeo at a ship-to-ship hub near the Caribbean island of Aruba, Refinitiv Eikon tanker monitoring data showed.

The Sealeo is scheduled to arrive in Chevron's Pascagoula refinery on Jan. 15, according to the Eikon data. A separate Venezuelan crude cargo chartered by Chevron on tanker Kerala was on Tuesday at Maracaibo Lake's navigation channel, where lack of dredging and a stranded vessel are creating limitations for ship transit.

Chevron confirmed shipping activities in Venezuela commenced this month and said the company is focused on "operating safely and reliably" after restarting operations at its affiliated joint ventures in December.

"We continue to conduct our business in compliance with all laws and regulations where we operate, as well as the sanctions framework provided by the U.S. Office of Foreign Assets Control," it added in a release to Reuters.

We remind, Chevron Corp plans to export this month its first cargo of Venezuelan crude to its Pascagoula, Mississippi refinery following a U.S. license granted last year. The 500,000-barrel cargo of Hamaca heavy crude, to be loaded at state-run PDVSA's Jose port, comes from the Petropiar oil joint venture operated by both companies.

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China issued a second batch of 2023 crude oil import quotas, raising the total for this year by 20% compared to the same time last year, said Hydrocarbonprocessing.

According to the document from the Ministry of Commerce, 44 companies, mostly independent refiners, were given 111.82 MMt in import quotas in this round.

Combined with the 20 MMt in 2023 quotas granted to 21 refineries in October, that takes the total for this year to 131.82 MMt, up from the 109.03 MMt issued in the first batch for 2022. The second batch of quotas for 2022 was released in June last year.

China, the world's biggest oil importer, allocated some 2023 quotas earlier than usual to shore up the sluggish economy by encouraging refiners to boost operations.

Zhejiang Petrochemical Corp (ZPC), which operates China's biggest privately-owned refinery site, was granted the largest quota of this batch at 20 MMt, on par with last year's issuance, according to the documents.

Hengli Petrochemical received a quota of 14 MMt and Shenghong Petrochemical's newly started 320,000 barrels-per-day refinery received 8 MMt. Hengli won a quota of 4.83 MMt in the first batch in October.

China's Commerce Ministry did not immediately respond to a faxed request for comment. "The issuance is largely in line with market anticipation, and it suggests that Beijing is trying to boost economy by allowing refineries to ratchet up operation," a Singapore-based oil trader said.

Global oil futures benchmarks Brent and West Texas Intermediate both gained than $2 a barrel on Monday, on optimism for future fuel demand as China dropped its zero-COVID restrictions and began unfettered travel across its borders.

We remind, China has raised its first batch of 2023 export quotas for refined oil products by nearly half versus a year ago. 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.

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