PetroChina reports record interim net profit on refining surge

MOSCOW (MRC) -- State-owned energy giant PetroChina reported a record-high net profit for the first half of the year, driven by increased oil and gas output and resurgent refined fuel sales, said Hydrocarbonprocessing.

Net profit attributable to shareholders was 85.3 billion yuan ($11.70 billion), up 4.5% on the same period last year, according to a filing with the Hong Kong Stock Exchange on Wednesday. Total revenue was down 8.3% to 1.48 trillion yuan, due to a sustained fall in global oil prices after an initial spike in the immediate aftermath of Russia's invasion of Ukraine in February 2022.

The company reported realized crude oil prices of $74.15 per barrel, having slid 21.7% on the average for the same period last year.

However, PetroChina's total crude oil and natural gas equivalent output was 893.8 million barrels, representing a 5.8% increase on last year, supporting a 3.7% increase in operating profit for the group's upstream segment.

Domestic crude output rose 1.2%, whilst the development of key projects in Central Asia and the Middle East saw overseas crude production leap 27.8% over the period.

Total domestic refinery throughput for the first half was 673 million barrels, a 12.6% increase on last year when extensive COVID-19 lockdowns hammered demand for refined fuel products in the country. The group previously announced aims to raise crude throughput to 1.29 billion barrels this year, up 6.6% from 2022.

Operating profit from the group's sales segment jumped 28.4% on last year. Total sales volume of gasoline, kerosene and diesel for the period increased 12.9% to 80.7 million metric tons, with domestic sales accounting for around 74% of this.

While domestic demand for transport fuels such as kerosene and gasoline has rebounded with the removal of travel restrictions, the group saw weaker earnings from petrochemical products such as polypropylene, amid a glut of domestic supply.

Capex for the first half was 85.1 billion yuan, down 7.8% on last year. PetroChina had previously set a capex target of 243.5 billion yuan for 2023, which would represent an 11% drop on last year.

We remind, Petrochina Guangxi has entered into a license agreement with Grace to use its Unipol PP technology for its new 400 kilotons per annum single reactor line in China. With this move, Petrochina Guangxi aims to deliver higher value PP products to the local market. Grace has announced the signing of a new license with Petrochina Guangxi to develop a 400-kilotons per annum single reactor line using its Unipol PP technology.

mrchub.com

MOSCOW (MRC) -- Chinese refiners are poised to boost diesel exports in September to more than 1 MMt, drawn by lucrative margins from selling overseas and as they expect to receive more export quotas from Beijing, said Hydrocarbonprocessing.

The rise in Chinese exports could cap recent sharp gains in refining margins for the industrial and transport fuel and offset lower supplies from India and the Middle East, where several major refineries are due to shut for maintenance from September.

China's diesel exports are estimated to be 1.1 to 1.2 MMt next month, according to data compiled by two trading sources and China-based consultancies Longzhong and JLC.

That would be up from the 650,000 to 887,000 tons of diesel exported so far in August from Chinese ports, according to ship tracking data from Refinitiv and Kpler.

The difference between benchmark Singapore 10-ppm gasoil and Dubai crude oil, a profit margin for refiners known as the crack spread, has more than doubled in the past two months to $34 to $36 a barrel due to refinery issues in the U.S. and Europe, Refinitiv data showed.

Exports were initially expected to slow at the end of the third quarter as refiners planned to increase stockpiles before peak seasonal construction demand kicks in, but export margins have been too good to resist for sellers, said two China-based traders who declined to be named due to company policy.

Chinese diesel could sell for at least 200 yuan ($27.47) a ton more when exported compared to being sold domestically, a China-based trading analyst said.

Some Chinese refiners have sold September 10ppm sulfur diesel cargoes via spot tenders since last week at premiums of up to $1 a barrel to Singapore quotes on a free-on-board basis. That is up from mainly flat premiums for August cargoes.

We remind, Chinese refining giant Sinopec Corp plans to maintain steady refinery output during the second half of 2023 as domestic fuel demand recovers, after reporting a 20% decline in interim profit because of lower crude oil prices. Sinopec, the world's largest refiner by capacity, plans 127 million metric tons of crude throughput, about 5.04 million barrels per day, between July and December, versus 126.54 million tons during the first six months.

mrchub.com

MOSCOW (MRC) -- Marathon Petroleum is preparing a plan to begin restarting units at its 596,000-bpd Garyville, Louisiana, refinery, said Hydrocarbonprocessing.

The units were shut because they were closest to two giant storage tanks filled with volatile naphtha that caught fire after a chemical leak on Friday at the refinery, which is the third largest in the United States.

Marathon continues to monitor the site of the fire on the south side of the refinery for possible flare-ups, the company said in an emailed statement.

Two minor injuries were reported from the fire and 10 firefighters were treated for heat stress as they battled the blaze in high temperatures along the U.S. Gulf Coast.

We remind, Marathon Petroleum’s former refinery in Martinez, California, has been repurposed to produce renewable diesel through the company’s joint venture with Neste. The Martinez Renewable Fuels Facility is currently operating with a capacity of 260 MMgal/yr. Additional production capacity is expected to be online by the end of 2023, bringing the total capacity to approximately 730 MMgal/yr of renewable fuels.

mrchub.com

MOSCOW (MRC) -- BASF has announced plans to introduce a new production plant for water-soluble dispersants based on acrylic acid at its Dilovasi, Turkey, location, said ACA.

The company says it seeks to support its customers in the detergent, cleaning and chemical processing industry across Europe, the Middle East and Africa with this investment that will double its production capacity. The additional capacities are expected to be fully operational by the third quarter of 2023.

The water-soluble dispersants and functional additives are marketed by BASF’s Care Chemicals operating division under the brand Sokalan®. Some can facilitate dirt removal, disperse dissolved dirt in water and prevent lime deposits on laundry, dishes and in washing machines and dishwashers, and some can be used in various technical processes to prevent fouling, according to the company.

We remind, BASF, Huntsman and their Chinese partners in the joint venture Shanghai Lianheng Isocyanate Co (SLIC) complete the planned separation of their joint MDI production in Caojing. The two MDI (diphenylmethane diisocyanate) plants at the Caojing site in China will be operated independently by the two companies in the future. Huntsman, together with Shanghai Chlor-Alkali Chemical, and BASF, together with Shanghai Hua Yi (Group company) and Sinopec Shanghai Gaoqiao Petrochemical, will each take over one of the MDI plants.

mrchub.com

MOSCOW (MRC) -- LG Chem, South Korea’s top chemicals manufacturer, plans to spend Won124.6 billion (€86.9 million) to increase its water treatment material output capacity, aiming to double the business over the next 5 years, said Chemanager.

Reverse osmosis (RO) membranes are used to remove salts and other pollutants from water and are crucial in wastewater treatment units. LG Chem has decided to invest the money in a factory in South Korea with an annual capacity of 400,000 RO membranes, capable of desalinating 1.6 billion tons of water a year. That would be enough for 16 million people, about a third of South Korea's population.

“We plan to significantly raise production capacity in Cheongju, the RO membrane production base, through additional investment, to actively target the industrial (water treatment) market following the seawater desalination sector,” commented LG Chem Vice Chairman and CEO Shin Hak-Cheol.

LG Chem's RO business is expected to generate sales of ?200 billion (€139.5 million) this year. The new production complex in Cheongju, about 130 kilometers south of Seoul, will help double this figure by 2028. They also have sights on applications for the membranes outside of water treatment, namely lithium extraction and CO2 separation, both with expanding global markets.

We remind, LG Chem started its RO membrane business in 2014 by acquiring US manufacturer NanoH2O. Now they are the 2nd largest RO membrane producer worldwide. LG Chem plans to build the new plant as a smart factory with artificial intelligence and an automated production process based on digital transformation. The AI is set to detect abnormalities in manufacturing lines and control quality, ramping up production speed by more than 25% compared to the existing facilities.

mrchub.com