China's Sinopec begins construction of Luoyang ethylene project

China's Sinopec begins construction of Luoyang ethylene project

MOSCOW (MRC) -- Chin's Sinopec has begun construction of an ethylene plant and a green advanced materials base in the city of Luoyang in central China's Henan province, the state-owned refiner said, as per Reuters.

The project, which is expected to be put into operation in December 2025, is expected to produce around 3 million tonnes of refined chemicals annually, with the ethylene plant expected to produce 1 million tonnes per year, it said.

Sinopec's total planned investment in the project is 27.8 billion yuan (USD4.02 billion).

The project is aimed at reducing China's dependence on imports of high-end refined products, the statement said.

We remind, Sinopec has completed trial runs at a one million tonnes-per-year ethylene plant in the southern Chinese province of Hainan that will boost exports. The facility is part of a 28.6 billion-yuan (USD4.15 billion) complex built at the site and is the second major petrochemical plant starting this year after a similar-sized facility was announced last week by PetroChina in Guangdong province.

Oil steadies as higher inventories balance U.S debt bill progress

Oil steadies as higher inventories balance U.S debt bill progress

MOSCOW (MRC) -- Oil steadied on Thursday as a potential pause in U.S. interest rate hikes and the passing of a crucial vote on the U.S. debt ceiling bill were offset by a report of rising inventories in the world's biggest oil consumer, said Hydrocarbonprocessing.

U.S. Federal Reserve officials on Wednesday suggested interest rates could be kept on hold this month and the U.S. House of Representatives passed a bill suspending the government's debt ceiling, improving the chance of averting a disastrous default.

Brent crude futures fell 10 cents, or 0.14%, to USD72.50 a barrel by 1339 GMT while U.S. West Texas Intermediate crude (WTI) rose 7 cents, or 0.1%, to $68.16. Both benchmarks fell on Tuesday and Wednesday. "Oil markets may have been oversold in the last two trading days," said CMC Markets analyst Tina Teng. "Sentiment rebounded amid the debt bill's passage in the House and (the) Fed's rate hike pause signal."

Mixed demand indications from China, the world's biggest oil importer, have nonetheless weighed on the market, as has industry data showing a rise in U.S. crude inventories. Market sources citing American Petroleum Institute (API) figures on Wednesday said that U.S. crude inventories rose by about 5.2 million barrels last week. Government stocks data is due at 1430 GMT on Thursday.

"The current mood is one of pessimism," said Tamas Varga of oil broker PVM. "Investors have been pragmatic and risk averse of late." Also in focus is the June 4 meeting of the OPEC+ producer group, in which the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia will discuss whether or not to cut oil production further.

Four sources from the alliance told Reuters that OPEC+ is unlikely to deepen supply cuts at their ministerial meeting on Sunday despite a fall in oil prices toward USD70 a barrel. These price levels are "not at all comfortable" for OPEC+ members, said Ole Hansen, head of commodity strategy at Saxo Bank.

"Failure to deliver some price supportive action at the OPEC+ meeting this weekend could see oil prices drop further, but overall, we see the downside risk as limited with last month's production cuts yet to be fully felt and priced in," Hansen said.

We remind, Russia is leaning towards leaving oil production volumes unchanged ahead of an OPEC+ policy meeting on June 4 because Moscow is content with current prices and output. OPEC+, which groups the Organization of the Petroleum Exporting Countries with Russia and other allies, surprised the market on April 2 with further output cuts that pushed up the price of oil.

ExxonMobil signs carbon capture agreement with Nucor Corporation, reaching 5 MTA milestone

ExxonMobil signs carbon capture agreement with Nucor Corporation, reaching 5 MTA milestone

MOSCOW (MRC) -- ExxonMobil Low Carbon Solutions’ newest carbon capture and storage agreement – with Nucor Corporation, one of North America’s largest steel producers – demonstrates our continued momentum in helping industrial customers reduce emissions, said Hydrocarbonprocessing.

We will capture, transport and store up to 800,000 metric tons per year of CO2 from Nucor’s manufacturing site in Convent, Louisiana. The site produces direct reduced iron (DRI), a raw material used to make high-quality steel products including automobiles, appliances and heavy equipment.

It’s the third carbon capture agreement we’ve announced in the past seven months, following previous ones with industrial gas company Linde and CF Industries, maker of agricultural fertilizer.

It also marks a milestone – bringing the total CO2 we’ve agreed to transport and store for third-party customers to 5 million metric tons per year (MTA). That’s equivalent to replacing approximately 2 million gasoline-powered cars with electric vehicles, which is roughly equal to the total number of EVs on US roads today.

“Our agreement with Nucor is the latest example of how we’re delivering on our mission to help accelerate the world's path to net zero and build a compelling new business,” said Dan Ammann, president of ExxonMobil Low Carbon Solutions. “Momentum is building as customers recognize our ability to solve emission challenges at scale.”

The Nucor project, expected to start up in 2026, will tie into the same CO2 transportation and storage infrastructure as utilized by our CF Industries project, and supports Louisiana’s objective of reaching net-zero CO2 emissions by 2050.

As outlined in our recent Low Carbon Solutions Spotlight event, we are focused on developing and deploying emissions solutions for the energy-intensive sectors of the economy, including industries like steel.

We remind, ExxonMobil Corp has started up its long-planned project to expand light crude oil processing capacity by 250,000 b/d at ExxonMobil Product Solutions Co's integrated refining and petrochemicals complex along the US Gulf Coast in Beaumont, TX, US.

Lukoil raises oil output at Iraq's West Qurna 2 to 480,000 bpd

Lukoil raises oil output at Iraq's West Qurna 2 to 480,000 bpd

MOSCOW (MRC) -- Russia's Lukoil has increased oil production at Iraq's southern West Qurna 2 oilfield by 80,000 barrels per day (bpd) to a total of 480,000 bpd, an oil official told Reuters on Thursday, said Reuters.

Production rose after the completion of the connection of 47 new oil wells which boosted production, an Iraqi oilfield official said, adding that output could reach 500,000 bpd in a short period of time if required.

The increase in Iraq's production comes as Turkey continues to halt Iraq's 450,000 bpd of northern exports through the Iraq-Turkey pipeline.

They have been halted since March 25 after an arbitration ruling by the International Chamber of Commerce (ICC).

Iraq is waiting for a final answer from Turkey regarding the resumption of the northern oil exports, which run from the semi-autonomous Kurdistan region to the Turkish port of Ceyhan.

We remind, Lukoil completes reconstruction of several units at Volgograd refinery. A large-scale reconstruction has been completed at the Volgograd refinery. The project included modernization of the CDU-VDU-5 crude distillation unit with production capacity of 3.5 MMtpy and the solvent extraction unit with production capacity of 300, 000 tpy. Over 230 core equipment items were installed and technologically outdated units were decommissioned. The share of Russia-made equipment installed during the reconstruction exceeded 70%. The construction site spanned the area of 34 thousand square metres; investments into the project exceeded 12 B roubles.

Eni bets on agri-business in Africa to expand biofuel production

Eni bets on agri-business in Africa to expand biofuel production

MOSCOW (MRC) -- Italy's Eni is investing in farming in several African and Asian countries as it aims to produce by itself around one fifth of the agricultural feedstock it will need for its biofuel business by 2025, two top executives at the energy group said, said Reuters.

Energy companies are betting on increasing demand for fuels made from vegetable oil, waste cooking oil and grease, which they say will play a key role in decarbonizing the truck, aviation and shipping sectors in coming years. To satisfy this expected demand, Eni is ramping up its bio-refining capacity and, at the same time, is expanding farming ventures to secure supplies and reduce the risk of excessive volatility in the commodity market.

"Our goal is to cover 20% of (our) biofuel production with feedstock coming from our agri-business by 2025, which is a relevant threshold since we have increased our output targets," Eni Energy Evolution Chief Operating Officer Giuseppe Ricci told Reuters in an interview. In February Eni said it targeted bio-refining capacity of more than 3 million tons per annum by 2025 and over 5 million tons by 2030, from the current 1.1 million.

This compares with forecasts by analysts at Barclays of global biofuel demand tripling to 30 million tons by the end of the decade. Eni has signed deals with several countries to identify degraded land where farmers cultivate crops that do not compete with the food supply chain.

"We have pools of local farmers who cultivate for us ... we get seeds, squeeze them and take the oil to our bio-refineries," said Guido Brusco, Eni Natural Resources chief operating officer. The oil also derives from agro-industrial waste and residues.

Around 700,000 farmers are expected to be involved in Eni's farming activities by 2026, under deals signed with Angola, Benin, Republic of Congo, Guinea Bissau, Kenya, Ivory Coast, Mozambique, Rwanda and Vietnam. Feasibility studies are under way in Italy and Kazakhstan. The business model is similar to the one Eni applies in its hydrocarbon business.

"We are replicating the vertical integration we have in other commodities and the logic is to reduce volatility, secure the raw material, and have more control over costs," Brusco said. Also following the vertical integration model, BP is considering buying stakes in biofuel feedstock producers and investing directly in farming ventures, BP head of biofuels Nigel Dunn told Reuters.

Eni says biofuels can cut net greenhouse gas emissions by between 65% to 90% compared with fossil fuels, depending on the type of raw material and the production process. "By the end of this year we will take the final investment decision over a new bio-refinery in Livorno (Italy)," Ricci said. This will add to two existing Italian bio-refineries and two potential new plants in the United States and in Malaysia.

Even if biofuels have higher costs, the fact that they can be produced with existing infrastructure make them a competitive solution to decarbonize transport, Ricci said.

We remind, Eni has launched an initiative to encourage the use of HVOlution, Eni Sustainable Mobility’s first diesel produced from 100% renewable raw materials (according to EU Directive 2018/2001 'REDII'), by its suppliers' vehicles transporting fuels to Eni Live Stations. It aims to contribute to the decarbonisation of the heavy transport sector, which involves approximately 300 vehicles in Italy’s distribution service. To date, more than 200,000 km have been covered using pure HVO, making it a major contributor to CO2 emission reduction.