Luberef signs EPC contract for Yanub Growth 2 project

Luberef signed an engineering, procurement and construction (EPC) contract with PETROJET Co. for Yanbu facility expansion (Growth II) at a total value of SAR 555 MM (USD148 MM), which aims to expand existing units at Yanbu facility to their maximum potential production capacity to 1.3 MMtpy in 2025 by increasing Group II base oils productions or introduce the production of Group III base oils, said Hydrocarbonprocessing.

This expansion will allow flexibility for the production of additional Group II and Group III Base Oils based on market demand. Saudi Aramco Base Oil Co (Luberef) has signed a contract with Egypt-based Petrojet for the expansion of its base oils capacity in Yanbu to around 1.3m tonnes/year by 2025, the producer said on Sunday.

The engineering, procurement and construction (EPC) contract signed with Petrojet is valued at Saudi Riyal (SR) 555m, the company said in a statement on the Saudi bourse, Tadawul. The Phase II expansion project aims to increase the production of Group II and introduce Group III base oils, it said.

It will also allow Luberef the flexibilty to produce additional Group II and Group III base oils based on market demand, it said. Luberef, a subsidiary of energy giant Saudi Aramco, operates two production facilities on Saudi Arabia’s west coast at Jeddah and Yanbu, producing around 1.3m tonnes/year of Group I and Group II base oils.

The company’s Yanbu facility can currently produce 282,746 tonnes/year of Group I base oil and 710,000 tonnes/year of Group II base oils, the database showed.

Luberef last week reported that its 2022 net income rose by 31.7% year on year to SR1.98bn on the back of higher margins and sales volumes.

The company had raised SR4.95bn via an initial public offering (IPO) and started trading on Tadawul on 28 December 2022.

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Russia's crude oil exports to the European Union in January fell to around 600,000 barrels per day (bpd) from 1 million bpd in December as seaborne volumes dried up except to Bulgaria, International Energy Agency (IEA) data showed, said Hydrocarbonprocessing.

The EU imposed a ban on seaborne Russian crude oil imports from Dec. 5 and G7 countries set a price cap on Russian seaborne exports at USD60 per barrel over Russia's invasion of Ukraine in February 2022. Bulgaria has secured a two-year exemption from the ban.

To offset the loss of EU trade, Russia has boosted crude exports to Asia. Its crude exports to China rose by 300,000 bpd in January to a record high of around 2.3 million bpd, the IEA said in a report published on Feb. 15. Exports to India, which increased imports of Russian crude significantly last year, were broadly steady at 1.6 million bpd.

Ghana and Indonesia emerged as new destinations for Russian crude exports in January, the IEA added. Exports to Turkey rebounded from a December low of 40,000 bpd to 180,000 bpd in January, but were still well below the average of 350,000 bpd previously.

The EU has sought to offset the loss of Russian crude with increased buying from the Middle East, West Africa, Norway, Brazil and Guyana, the IEA said. In December, Norway increased production capacity at its Johan Sverdrup oilfield to 720,000 bpd from 535,000 bpd, and its operator Equinor is looking at the possibility of boosting it to 755,000 bpd.

Sverdrup, Western Europe's largest oilfield, produces medium-heavy crude that is a suitable replacement for Russia's Urals. Landlocked Hungary plans to cooperate with Croatia to increase the capacity of the Adriatic pipeline that brings non-Russian crude to Hungary, while Bulgaria is seeking to revive a pipeline project to import crude via Greece.

We remind, Rosneft will parnter with Indonesia to contribute USD24 B on a greenfield refinery in East Java province.
The refinery will have 14 refining units for vehicle fuels as well as seven units for petrochemicals. The purpose is to construct a facility which can process heavy crude oil and high sulfur crude oil.

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CNOOC and Shell Petrochemicals Company Limited (CSPC), incorporated by China National Offshore Oil Corporation (CNOOC) and Shell, is one of the largest petrochemicals joint ventures in China, said Hydrocarbonprocessing.

Following the success and outstanding performance of their existing Phase I and II projects, CSPC Phase III will include a new 1.6-MMtpy cracker, creating one of the world’s largest and most flexible integrated complexes.

Shell Catalyst & Technologies’ (SC&T) unique technologies and catalysts have been chosen again to enable this major growth project, due to their competitive advantages and reliable performance. In Phase III, some of Shell’s technologies, including SMPO, PODer and EOEG, will be deployed for the third time in CSPC with the latest state-of-the-art designs in terms of energy efficiency, scale, and flexibility. Particularly on ethylene oxide/glycols (EO/EG) production, the unique OMEGA technology has once again been elected due to its high yield and energy performance. In addition, CSPC will build the largest linear alpha olefins (LAO) plant ever designed as part of a joint venture. The LAO are being licensed from Shell for the first time. The rest of the process includes the Higher Olefins and Derivatives (HODer) value chain.

“We are very pleased to further support the growth of CSPC which is a world-scale asset,” said Seng Yee Loh, VP Sales Asia Pac with SC&T. “The design and operation for CSPC includes SC&T’s technologies and catalysts. The collaboration with the local team will produce operational efficiencies and is expected to help bring economic benefits to the facility."

Roelof Heezen, CSPC Manufacturing Director said “We appreciate Shell Catalysts & Technologies support with the complexities of this project. The reliability of SC&T’s technologies in combination with their advanced catalysts has us confident in the strong results we will see at our chemical complex."

We remind, Shell Chemical Appalachia LLC announced it has commenced operations of its Pennsylvania Chemical project, Shell Polymers Monaca (SPM). The Pennsylvania facility is the first major polyethylene manufacturing complex in the Northeastern United States and has a designed output of 1.6 MMt annually.

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Austrian energy and chemicals major OMV has decided to explore the possibilities of selling its upstream exploration and production (E&P) assets in the Asia-Pacific region, said the company.

Executive Board of OMV has decided to explore the possibilities of selling the E&P assets in the Asia-Pacific region and to initiate the related sales process for the potential divestment of its 50% stake in the issued share capital of SapuraOMV Upstream Sdn. Bhd. in Malaysia and 100% of the shares in OMV New Zealand Limited. A potential divestment aims at optimizing the E&P portfolio in line with the OMV Strategy 2030.

As part of the sales process, OMV, in coordination with competent regulators and governmental authorities, will invite potentially interested parties, in a first step, to submit expressions of interest and, in a second step, to submit binding offers. The sales process is expected to take place over the next months. A potential sale is still subject to the approval of the Supervisory Board of OMV and competent governmental authorities.

We remind, OMV has announced its new corporate structure, designed to fully enable the delivery of Strategy 2030. OMV’s new strategy evolves around its long-term goal of becoming a net-zero company by 2050 at the latest and driving its transition towards becoming a leading integrated sustainable fuels, chemicals and materials company. At the same time, OMV is striving to become a global leader in circular economy solutions and will also build a low-carbon business in the energy sector, which includes geothermal energy and carbon capture and storage (CCS) in particular.

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Vencorex is investing in its Freeport site in Texas to meet the rising demand for specialty aliphatic isocyanates used in the production of low VOC polyurethane coatings and adhesives, said Coatings.specialchem.

The kick-off ceremony for the investment project, part of the Vencorex growth strategy in North America, took place in June 2022 in the presence of several executive members of Vencorex and its shareholder, PTT GC Group.

“This project will bring additional supply reliability to fulfill the growing demand for specialty aliphatic polyisocyanates in the US market. It shows our commitment to enhancing regional production” said Xavier Fournier, President of Vencorex.

“It also contributes to strengthen Vencorex’ position in the North American market and to better serve our customers with local sourcing of specialty materials” stated Jason Williams, sales director, North America at Vencorex US, Inc.

The new facility is expected to become operational in the second half of 2023.

We remind, PTT Global Chemical (PTTGC) has acquired a stake of 9.18% in France-based Vencorex Holding for an unknown sum as it continues to buy additional assets that highlight value-added products. With the share acquisition from Perstorp Holding AB, PTTGC will gain 100% ownership of Vencorex. The deal is made via GC Inter BV (a wholly-owned offshoot of PTTGC). Payment was carried out on 30 Jun 2022.

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