Dow signs supply agreement for bio-plastic materials

U.S. chemical maker Dow Inc said on Thursday it had signed a long-term supply agreement with bio-conversion company New Energy Blue for plastic materials made from corn residue, in a bid to move towards renewable energy sources for production, said Reuters.

"This collaboration can help redefine how we source raw materials for our products, allowing us to expand to include renewable feedstocks," said Dow Global Sustainability Director Manav Lahoti.

As part of the agreement, Dow will support the designing of New Energy's upcoming facility in Iowa, that is expected to process 275 kilotons of corn stalks and leaves per year to produce ethanol. Nearly half of this ethanol will be turned into bio-based ethylene feedstock for Dow products.

Ethylene, which is generally made from naphtha, is a basic feedstock for petrochemicals that are processed into products such as plastics.

Dow aims to reduce its fossil fuel sourcing for production and subsequent greenhouse gas emissions by using bio-plastic made from agricultural residues, the company said. The agreement also gives Dow similar commercial supply options for the next four future New Energy Blue projects.

In April, Dow announced a partnership with industrial gas maker Linde Plc (LIN.DE) for clean hydrogen and nitrogen supply for a proposed net-zero carbon emissions ethylene and derivatives complex in Canada.

We remind, Dow reported a net loss of USD73m for the first quarter (Q1) on a slump in volumes and sales prices in key segments and important geographies. Net sales for the largest US chemical company were down 22% at USD11,851m reflecting, Dow said, declines in all its operating segments driven by lower macroeconomic activity.

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An "abnormal" rise in imports of biodiesel classified as waste-based has hit rapeseed prices in Europe, vegetable oil industry group FEDIOL said, calling for an investigation into the authenticity of these biofuel imports, said Hydrocarbonprocessing.

Rapeseed is the European Union's main oilseed crop and rapeseed oil produced from crushing the crop is widely used in making biodiesel fuel. The EU has also encouraged the production of biodiesel made with waste oils and fat as part of targets for renewable energy use.

"The magnitude of biodiesel imports' growth is such that it raises questions as to the authenticity of their classification as originating from waste streams," FEDIOL said in a statement on Thursday. EU rapeseed oil prices have fallen by over 30% in the past five months, leading to a similar-sized fall in rapeseed prices, the group said.

"These trends cannot be explained by other market developments and are a signal that there is abnormal market behavior," it said. FEDIOL could not immediately provide more details on EU biodiesel imports.

Traders have cited talk of biodiesel imports as a factor in the sharp drop in rapeseed markets, though they have also stressed large rapeseed supplies in Europe and biofuel policy changes as pressuring prices after record highs last year following Russia's invasion of Ukraine.

EU imports of vegetable oils, meanwhile, are down sharply this season, partly due to a shift away from using palm oil in biodiesel due to deforestation concerns.

We remind, Asian countries remain the lead destinations for Russian vacuum gasoil (VGO) and fuel oil exports after the European Union's embargo, traders said and Refinitiv data showed. "Pretty stable flows for refining and bunkering", one trader said. According to Refinitiv data, China and India, which became main importers of embargoed Russian oil, were respectively accounting for about 2.6 million tons and 2.1 million tons of exports of dirty oil products from Russian ports since the start of the year, buying fuel oil and VGO for further processing at their refineries.

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Kazakhstan's oil exports to Germany via Russia's Druzhba pipeline are expected to reach 100,000 tons in May, said Reuters.

That is up from 90,000 tons of Kazakh crude delivered to Germany via Druzhba in the entire February to April period, Reuters data shows. KazTransOil had planned to deliver 100,000 tons of crude to Germany in April, but only supplied 50,000 tons.

In February, it shipped 20,000 tons of crude to Germany via Druzhba, the first such shipment ever, replacing Russian supplies for German refineries. The European Union has pledged to stop buying Russian oil via maritime routes from Dec. 5 as part of wider sanctions over Ukraine.

The Soviet-built Druzhba pipeline remains exempt from sanctions, but Germany's refineries in Leuna and Schwedt, connected to the pipeline, have not ordered any Russian crude for this year.

Last year Russian oil pipeline operator Transneft said KazTransOil had requested an additional 1.2 million tons of capacity on the Druzhba pipeline for 2023 to facilitate extra oil shipments to Germany.

We remind, Sinopec and Kazakh state-owned oil and gas company KazMunayGaz have agreed key terms for a potential investment in a polyethylene plant in Kazakhstan's western Atyrau region. A final decision on the proposed investment will be made in 2024, the statement said. The agreement was signed on the sidelines of the ongoing China-Central Asia Summit in Xian in China's Shaanxi province, where China's president Xi Jinping is meeting with the leaders of five ex-Soviet countries to discuss enhanced cooperation in a range of fields, including energy.

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Asian countries remain the lead destinations for Russian vacuum gasoil (VGO) and fuel oil exports after the European Union's embargo, traders said and Refinitiv data showed, said Hydrocarbonprocessing.

"Pretty stable flows for refining and bunkering", one trader said. According to Refinitiv data, China and India, which became main importers of embargoed Russian oil, were respectively accounting for about 2.6 million tons and 2.1 million tons of exports of dirty oil products from Russian ports since the start of the year, buying fuel oil and VGO for further processing at their refineries.

Singapore and Malaysia also hit the top five destinations for fuel oil and VGO of Russian origin with almost 3.5 million tons in total, while Turkey and Saudi Arabia received about 1.6 million tons each, Refinitiv data showed. Fujairah, key transit and blending hub for oil products in the United Arab Emirates, accepted almost 1.4 million tons of fuel oil and VGO since the start of this year.

In February 2023, the EU introduced a full ban on supplies of Russian oil products, but Russian fuel oil and VGO had already been diverted elsewhere as restrictions were applied partially in August 2022. Asia and the Middle East and also ship-to-ship (STS) loadings became the most popular ways to bypass sanctions since then.

STS loadings near the Greek port of Kalamata have attracted from Russia the biggest dirty oil products volumes, which surged to 8 million tons in 2022 and totaled almost 2.7 million tons from the beginning of 2023. Traders said those cargoes mostly end up in Asia. "(The main destinations were) China, Singapore and some cargoes went to India," one trader added.

Russia also exports small amounts of dirty oil products to Africa, mostly to Senegal, which has bought about 114,000 tons of Russian fuel oil this month, according to Refinitiv.

We remind, Czech Republic can cover its oil needs through shipments via the Transalpine Pipeline (TAL) pipeline from 2025, Prime Minister Petr Fiala said on Tuesday after the country signed a deal to boost capacity along the link.
The Czech government is looking to eliminate all dependence on Russian oil in the coming years, and thus end its exemptions from a European Union ban on imports from Moscow last year. Czech refineries are owned by Polish state-controlled refiner PKN Orlen, which said in April it terminated a contract for Russian oil supplies for its Polish refineries.

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Industrial gases maker Air Products and Chemicals said on Thursday it had signed a USD1 bn deal with the Republic of Uzbekistan government and Uzbekneftegaz JSC to acquire, own and operate a natural gas processing facility in the country, said Hydrocarbonprocessing.

The 1.5 million ton per year natural gas-to-syngas industrial complex is a part of state-owned energy company Uzbekneftegaz, the company said.

Syngas, or synthesis gas, can be used for heating applications, generating power, or making hydrogen, ammonia, methanol, and synthetic hydrocarbon fuels.

Under the deal, Air Products will acquire, own and operate two large-scale air separation units, two large-scale auto-thermal reforming units, and a hydrogen production unit within the Uzbekistan GTL complex and supply oxygen, nitrogen, hydrogen and syngas under a long-term contract.

We remind, Air Products’ Board of Directors today announced an amendment to the employment agreement with Air Products’ chairman, president and chief executive officer, Seifi Ghasemi, further extending his term. The Company has entered into a new amended agreement that will initially extend Ghasemi’s employment term to September 30, 2028. On September 30, 2024 and each year thereafter, the contract term will automatically renew to be a five-year term unless either party terminates the agreement at the latest, four years ahead of its then expiration date.

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