Yulong Petrochemical signs feedstock deal for its 400,000-bpd integrated complex with bp and Chevron

China's Yulong Petrochemical on Monday said it had signed memorandum of understanding agreements with bp and Chevron to supply its 400,000-bpd greenfield refinery in northern China, said Hydrocarbonprocessing.

Yulong Petrochemical, which is building the refinery and a 1.5-MMtpy ethylene complex in Shandong province, is aiming to start commercial operation of the whole complex by December 2024, a Shandong government official said at an investment forum in Singapore.

The new refinery in Longkou county in Shandong province is aiming to carry out test runs late this year, a Yulong executive told Reuters on the sidelines of a signing ceremony at the forum. The USD20-B Yulong project will add to two large similar-sized refinery and petrochemical complexes started late last year, in China's latest wave of refining expansion focused on petrochemical products such as plastics and chemical fiber rather than transportation fuel.

The Yulong refinery will help Shandong, China's No.3 provincial economy, scale up its fragmented refining sector, made up of some 60 small refiners, in line with Beijing's push to close inefficient plants and build large, competitive manufacturers.

The province was expected to have closed down 10 smaller refineries with combined refining capacity of more than 500,000 bpd by the end of last year to make way for the Yulong plant.

Yulong Petrochemical is 51% owned by private aluminum smelter Nanshan Group, 46.1% owned by provincial government-backed Shandong Energy Group and the remainder by two local firms.

To extend the mega complex's value chain, Longkou government told the forum that it is planning a new chemical park close to the Yulong project to produce high-end chemicals such as degradable plastics and special fibre used for high-performing sports products and safety gears.

Longkou, a county-level city south of Bohai Sea with an annual industrial output of 138.1 B yuan (USD19.83 B) last year, is also where China's state-run Sinopec is building a large regasification terminal for liquefied natural gas.

We remind, Chevron Corp. posted a record USD36.5 bn profit for 2022 that was more than double year-earlier earnings but fell shy of Wall Street estimates, undercut by an asset writedowns and a retreat in oil and gas prices.
The second largest U.S. oil producer's adjusted net profit for 2022 beat by about USD10 billion its previous record set in 2011. But USD1.1 B in writedowns in its international oil and gas operations in the fourth quarter left earnings short of forecasts for adjusted net profit of USD37.2 B.


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Neste is introducing a new Neste ReNew lubricant product family in Finland, Sweden, the Baltic countries and Poland during the first quarter of 2023, said Hydrocarbonprocessing.

The new lubricants are produced with renewable or re-refined base oils and high-quality additives. The solution offers Neste’s customers the opportunity to reduce their dependence on crude oil based products and take a step towards a more sustainable future also with their use of lubricants.

“Neste’s goal is to help customers reduce their greenhouse gas emissions by at least 20 million tons annually by 2030 with renewable and circular economy solutions. Both our corporate and private customers consider it important to curb climate change with solutions based on renewable raw materials, renewable energy and the circular economy. We can offer them a wide range of tools for this. The new Neste ReNew lubricant product family complements our offering of more sustainable solutions,” says Joni Pihlstrom leading B2B sales in Neste’s Marketing & Services business unit in Finland.

For almost forty years Neste has been researching and developing lubricants that work even in demanding conditions and increase the performance and energy efficiency of engines and hydraulics. Neste’s existing lubricant solutions cover various motor oils for light vehicles, heavy-duty vehicle and agricultural motor oils, hydraulic oils, industrial lubricants and lubricating greases. The new Neste ReNew product family containing also renewable or re-refined base oils includes high-quality motor oils for gasoline and diesel engines of cars, vans and for hybrid use, as well as universal tractor oil and hydraulic oils for agriculture and machinery.

“Lubricants play a role in reducing carbon footprint. The new Neste ReNew lubricants are a drop-in solution with which one can replace most lubricants of corresponding performance. Adopting these more sustainable alternatives is therefore easy. With their choice of lubricants, our customers can take a step towards a more sustainable future and ensure high performance of vehicles and machinery at the same time,” says Pihlstrom.

We remind, Neste posted strong revenue and profit growth in its renewable fuels business even as its Chief Executive flagged the long-term need for new raw materials amid growing European demand for sustainable jet fuel.

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British energy company BP said it would invest nearly USD2 billion to develop a hydrogen hub in the Valencia region of Spain using its Castellon refinery as a foundation, said the company.

BP unveiled plans to build up its electrolysis capacity at Castellon to produce so-called green hydrogen. Hydrogen production is described using a color spectrum and the most common form in use today is grey hydrogen, which splits methane (CH4) into its elemental components of carbon and hydrogen.

Green hydrogen draws on an electric current generated from renewable energy to split water (H2O) into hydrogen and oxygen and BP said that would replace the grey hydrogen already in production at Castellon.

We remind, Johnson Matthey (JM) and bp announced that their co-developed, award-winning Fischer Tropsch (FT) CANS technology has been selected by Strategic Biofuels for their project which aims to produce the world’s lowest carbon footprint liquid fuel. The technology has been licensed to Strategic Biofuels, a leader in developing negative carbon footprint biofuels plants, for the company’s Louisiana Green Fuels project (LGF) in Caldwell Parish, Louisiana.

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Huntsman completed the USD593m sale of its Textile Effects division to Archroma, a company owned by the private-equity firm SK Capital Partners, said the company.

Archroma was set up by SK Capital Partners in 2013 after acquiring the textile chemicals, paper specialties and emulsions businesses from Swiss producer Clariant in 2013. It has about 3,000 employees in 25 facilities globally.

Its textile specialties, paper solutions and emulsion product segments are managed from Singapore, Switzerland and Brazil, respectively. SK Capital agreed to assume an estimated USD125m pension liabilities as part of the acquisition.

Huntsman expects proceeds will be USD540m after taxes. The sale leaves Huntsman with three business segments. Polyurethanes produces methylene diphenyl diisocyanate (MDI), polyols and thermoplastic polyurethanes (TPUs).

Performance Products makes amines and maleic anhydride (MA). Advanced Materials produces epoxy resins and other thermoset resins. The following chart shows the segments' share of 2022 revenue.

We remind, Huntsman Corporation announced that it has secured all regulatory approvals required to complete the sale of its textile effects division to Archroma, a portfolio company of SK Capital Partners. Both parties expect the transaction to close 28 February. The agreed purchase price was USD593m in cash plus assumed pension liabilities, and Huntsman expects the net after tax cash proceeds to be approximately USD540m before customary post-closing adjustments.

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Chevron announced that it will target share buybacks of USD10-20bn/year, said the company.

The company's “high return production growth” was supporting growing shareholder distributions, the US energy and chemicals major said.

“We’re growing energy supply, lowering carbon intensity and returning more cash to shareholders,” said CEO Mike Wirth.

Last month, Chevron’s board authorised a USD75bn share buyback programme, effective 1 April, with no fixed expiration date. The programme replaced a previous share repurchase authorisation of USD25bn.

The Biden administration has been critical of share buybacks, and in his recent State of the Union address President Biden proposed quadrupling the tax on corporate stock buybacks.

The government wants oil companies to invest in raising production to help bring down oil and gasoline prices, rather than buying back shares.

We remind, Chevron Corp. posted a record USD36.5 bn profit for 2022 that was more than double year-earlier earnings but fell shy of Wall Street estimates, undercut by an asset writedowns and a retreat in oil and gas prices.
The second largest U.S. oil producer's adjusted net profit for 2022 beat by about USD10 billion its previous record set in 2011. But USD1.1 B in writedowns in its international oil and gas operations in the fourth quarter left earnings short of forecasts for adjusted net profit of USD37.2 B.

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