LG Chem, GS Caltex advance commercialization of 3HP

LG Chem, GS Caltex advance commercialization of 3HP

MRC -- South Korean chemical firm LG Chem has teamed up with GS Caltex, a major refiner in South Korea, to develop mass-production technologies of 3-hydroxypropionic acid, which is a biodegradable plastic material produced through a microorganism fermenting process of bio-materials such as glucose and unrefined glycerol derived from vegetable oil, said Plasticsandrubberasia.

3-hydroxypropionic acid (3HP) is drawing attention as a next-generation platform chemical that can be used as raw materials for a variety of materials including biodegradable plastic and super absorbent polymers used in diapers, paints, adhesives and glues, coating materials, and carbon fiber.

LG Chem used 3HP fermenting technologies to develop poly lactate 3-hydroxypropionate (PLH), a biodegradable material that can configure mechanical properties equivalent to synthetic resins. The goal is to produce a prototype by 2023.

"In this current period where carbon neutrality has become a global mega-trend, the fact that a company leading the oil refining industry and another leading the chemical industry is cooperating for the development and commercialisation of sustainable new materials has great meaning," LG Chem CEO Shin Hak-cheol said recently.

LG Chem’s fermented production technology will be combined with GS Caltex’s process facility technologies. This will accelerate entry into biodegradable materials and bio-plastic markets through the production of a 3HP prototype from 2023.

"As microplastics have become a serious environmental issue, products that quickly decompose in the natural ecosystem will be able to create sustainable value in that it will eco-friendly consumption,” said GS Caltex President Hur Sae-hong.

South Korea nurtures the white biotechnology industry that focuses on the creation and distribution of biodegradable bioplastics. White biotechnology is an area of science that is devoted to using living cells collected from yeast, moulds, microorganisms and plants, and enzymes to create products that can be easily degraded.

LG Chem is also the first company in South Korea to develop lactic acid and biodegradable polylactic acid (PLA). It also recently tied up with US-based grain company Archer Daniels Midland to set up a PLA facility in the US.

We remind, private Russian oil producer Lukoil will lend Azeri state oil firm Socar $1.5 B as part of a broader deal that will allow Socar's 200,000-barrel-per-day Turkish STAR refinery to process Russian crude again. The deal will give Lukoil another customer in close proximity to Russian ports after most European refiners stopped importing its crude to comply with European Union sanctions imposed after Moscow launched what it calls a "special military operation" in Ukraine in 2022.

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Russia's September seaborne oil product exports down vs August

Russia's September seaborne oil product exports down vs August

MRC -- Russia's seaborne oil product exports fell 2.5% in September from August to 9.456 Mmt due to seasonal maintenance of refineries and a fuel export ban late in the month, data from industry sources and Reuters calculations showed.

Russia temporarily banned exports of gasoline and ultra-low sulfur diesel (ULSD) from Sept. 21 to stabilize the domestic market. The country has suffered shortages of gasoline and diesel in recent months, and wholesale fuel prices on the domestic market have spiked to record levels.

The embargo was partially lifted in October, with Russia resuming ULSD seaborne exports, although it has kept the ban on gasoline exports and cross-border sales of diesel by railway.

In September, total fuel exports via the Baltic ports of Primorsk, Vysotsk, St. Petersburg and Ust-Luga fell 5.1% month on month to 5.035 million metric tons, data from market sources showed. Primorsk is the biggest Russian outlet for exports of ULSD.

Oil product exports via Russia's Black Sea and Azov Sea ports rose slightly last month - by 0.4% from August to 3.676 million metric tons. Fuel export supplies from the Russian Arctic ports of Murmansk and Arkhangelsk increased in September by 64.3% month-on-month to 96,500 metric tons.

Oil product export loadings at Russia's Far East ports fell by 2.9% from August to 649,100 metric tons, data from sources and Reuters calculations showed.

We remind, private Russian oil producer Lukoil will lend Azeri state oil firm Socar $1.5 B as part of a broader deal that will allow Socar's 200,000-barrel-per-day Turkish STAR refinery to process Russian crude again. The deal will give Lukoil another customer in close proximity to Russian ports after most European refiners stopped importing its crude to comply with European Union sanctions imposed after Moscow launched what it calls a "special military operation" in Ukraine in 2022.

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Sinopec seeks rare quota swap to export more diesel, gasoline and jet fuel

Sinopec seeks rare quota swap to export more diesel, gasoline and jet fuel

MRC -- China's Sinopec Corp has applied to the government to swap some of its marine fuel export quotas for allowances to export light products such as diesel, jet fuel or gasoline, four China-based industry sources said this week, said Hydrocarbonprocessing.

Asia's largest refiner has asked to swap a quota to export 800,000 metric tons of low-sulfur fuel oil, part of the 3 million tons of marine fuel quota recently issued by Beijing, for a similar amount of allowances for light product exports, the sources said. Approval could come by the end of October, one of the sources said.

The unusual move could weigh on regional margins for oil products, which are already under pressure, by adding more supply to Asia. Gasoil refining margins have dropped by 12% since the start of October to $28.82 a barrel, while jet fuel margins have slipped 9.6% to $26.12.

For Chinese refiners, however, the higher overseas prices mean that they can sell their exports for more than in the domestic market. Exported diesel, for example, sells for at least $10 a barrel more than the domestic price, according to traders. Sinopec declined to comment on their request for the quota swap.

Exports of diesel and aviation fuel are currently more attractive than marine fuel for state-run Sinopec as China's ship refueling hub of Zhoushan is amply supplied with higher production from rival PetroChina as well as bumper imports, two Beijing-based sources told Reuters.

"Given the saturated Zhoushan market, there is little point chasing the market share there," said one of them. China restricts fuel exports via a quota system, allowing mostly state refiners in the business, under a broad policy to curb excessive refinery processing and carbon emissions. Overall exports of light products have trended lower since a 2019 peak.

With the latest quota issue in September, China has allotted 39.99 million tons of light product exports for 2023, 7% higher than in 2022, limiting room for more to be released before year-end, sources said. China's commerce ministry did not immediately respond to a request for comment on Sinopec's request or the quota outlook.

China has nearly tripled diesel exports during the first eight months of 2023 to 9.7 million tons, according to customs data. The addition of more international flights from China until the year-end will boost aviation fuel exports, traders said.

China's international airline seat numbers for October is 57% of where it was in 2019, up by 4 percentage points from September, according to aviation analytics firm OAG.

It also remains profitable to send aviation fuel to the U.S. west coast, two trading sources said. China exported 15,800 barrels per day to the region in September, Kpler shiptracking data showed.

We remind, private Russian oil producer Lukoil will lend Azeri state oil firm Socar $1.5 B as part of a broader deal that will allow Socar's 200,000-barrel-per-day Turkish STAR refinery to process Russian crude again. The deal will give Lukoil another customer in close proximity to Russian ports after most European refiners stopped importing its crude to comply with European Union sanctions imposed after Moscow launched what it calls a "special military operation" in Ukraine in 2022.

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U.S. sanctions two tanker owners for carrying Russian oil above price cap

U.S. sanctions two tanker owners for carrying Russian oil above price cap

MRC -- The U.S. on Thursday imposed the first sanctions on owners of tankers carrying Russian oil above the G7 price cap of $60 a barrel, one based in Turkey and one in the United Arab Emirates, in an effort to close loopholes on the mechanism designed to punish Moscow for the war in Ukraine, said Reuters.

The U.S., other G7 countries and Australia imposed the cap last year, seeking to reduce Russia's revenues from seaborne oil exports as part of sanctions for its invasion of Ukraine.

The cap bans Western companies from providing maritime services, including insurance, finance and shipping, for Russian seaborne oil exports sold above $60 a barrel, while seeking to keep oil flowing to markets. Caps also were imposed on Russian fuel exports.

U.S. President Joe Biden's administration placed sanctions on Turkey-based Ice Pearl Navigation SA, owner of the Yasa Golden Bosphorus, which the Treasury said carried Russian ESPO crude priced above $80 a barrel after the cap took effect in December last year.

The U.S. also imposed sanctions on UAE-based Lumber Marine SA, owner of the SCF Primoyre, which the Treasury said was carrying Novy Port Russian crude above $75 per barrel.

Both tankers, which conducted port calls in Russia, used U.S.-based service providers while transporting the Russian origin oil, the Treasury said.

"Because of the actions we're announcing today, and the further actions we will take in the coming weeks and months, these costs will continue to rise and Russia's ability to sustain its barbaric war will continue to weaken," a senior Treasury official, speaking on condition of anonymity, told reporters in a call.

Turkey's Yasa Holding, operator of the Golden Bosphorus, said the vessel is currently under time-charter for 3-5 months with Exxon Mobil.

Yasa added the company had necessary documentation from major London insurers for it to carry Russian origin cargoes and that it has been company policy for more than a year to not carry Russian crude.

Global oil prices have risen to around $85 a barrel in recent months on production cuts and thin world spare production capacity. That has helped to limit the efficacy of the cap, but actions to toughen enforcement will make it more effective, according to people who advised the Treasury.

The International Energy Agency (IEA) said on Thursday that preliminary estimates showed Russian crude oil exports last month stood at 4.9 million bpd, down about 100,000 barrels per day from the May-June average. But it also said Russia's total exports of crude oil and products in September rose by 460,000 bpd to 7.6 million bpd, with crude accounting for 250,000 bpd of the increase.

We remind, private Russian oil producer Lukoil will lend Azeri state oil firm Socar $1.5 B as part of a broader deal that will allow Socar's 200,000-barrel-per-day Turkish STAR refinery to process Russian crude again. The deal will give Lukoil another customer in close proximity to Russian ports after most European refiners stopped importing its crude to comply with European Union sanctions imposed after Moscow launched what it calls a "special military operation" in Ukraine in 2022.

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Russia will never be seen as reliable energy supplier, U.S. energy official says

Russia will never be seen as reliable energy supplier, U.S. energy official says

MRC -- U.S. Assistant Secretary for Energy Resources Geoffrey Pyatt said on Friday Russia would never again be viewed as a reliable energy supplier, a day after Washington imposed fresh sanctions on Moscow because of its war in Ukraine, said Reuters.

Speaking at an online briefing ahead of next week's U.S.-Japan Energy Security Dialogue, Pyatt also said the United States and its partners in the Group of 7 were committed to denying Russia any energy revenues.

The United States on Thursday imposed the first sanctions on owners of tankers carrying Russian oil priced above the G7's price cap of $60 a barrel, in an effort to close loopholes in the mechanism. "It's very clear to me that Russia is never again going to be viewed as a reliable energy supplier," Pyatt told reporters.

"In the case of our G7 partners in particular, we are also committed to work jointly to deny Russia future energy revenues, and target in particular investments and projects growing Russia's future energy revenue," he added.

Russia has played down the impact of Western sanctions, saying they are used by the United States to eliminate Moscow as a competitor in global energy supplies. Asked about purchases of Russian liquefied natural gas (LNG) by some Asian countries, Pyatt said that unlike oil, gas exports were not covered by Western sanctions "so this is a matter of how different countries accommodate their energy mix and seek to reduce their exposure to Russia, to Russian supplies".

In September, the United States issued fresh sanctions related to Russia's Novatek-led Arctic LNG 2 project in which two Japanese energy firms - Mitsui and JOGMEC - are shareholders. The sanctions do not apply to the project itself nor to its shareholders, but a Japan government source had said they could complicate how Mitsui and JOGMEC provide support for the project and could also delay production.

We remind, private Russian oil producer Lukoil will lend Azeri state oil firm Socar $1.5 B as part of a broader deal that will allow Socar's 200,000-barrel-per-day Turkish STAR refinery to process Russian crude again. The deal will give Lukoil another customer in close proximity to Russian ports after most European refiners stopped importing its crude to comply with European Union sanctions imposed after Moscow launched what it calls a "special military operation" in Ukraine in 2022.

mrchub.com