China's oil production rises to 208 MMt in 2023

China's crude oil production rose to 208 MMt in 2023, equivalent to 4.16 MM bpd, said Hydrocarbonprocessing.

The figure, which according to Reuters' calculations is a 1.6% increase on 2022 output levels, represents an anticipated slowdown in production growth, as China's national oil companies are pushed to tap deeper, more challenging reserves to boost production.

China's domestic oil production averaged 2% annual growth between 2018 and 2022, Reuters records show, as Beijing has sought to step up output amid an energy security drive.

Oil production in China fell by around 12% between 2015 and 2018, as output at mature onshore fields slipped.

Offshore production has accounted for more than 60% of the country's production increases for the last four years, the CCTV report said.

Domestic natural gas production reached 230 billion cubic meters in 2023, the CCTV report said, representing a 5.6% increase over 2022 levels.

We remind, Oil and fuel tanker traffic in the Red Sea was stable in December, even though many container ships have rerouted due to attacks by Iran-aligned Houthi militants, a Reuters analysis of vessel tracking data showed. The attacks have driven up shipping costs sharply along with insurance premiums but have had less impact than feared on oil flows, with shippers continuing to use the key East-West passage. The Houthis, who have said they are targeting Israel-bound vessels, have largely attacked non-petroleum goods shipments.

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Shanghai Secco Petrochemical, a significant player in China's petrochemical industry, has announced the restart of operations at its cracking unit located in Shanghai, following a period of maintenance, said Chemanalyst.

The facility, boasting an annual capacity of 1.2 million tons of ethylene and 540 thousand tons of propylene, had been closed for scheduled maintenance since early December.

The cracking unit plays a crucial role in the company's production process, transforming raw hydrocarbons into valuable products such as ethylene and propylene. These compounds serve as the primary raw materials for the manufacture of polyethylene (PE) and polypropylene (PP), respectively.

The swift resumption of operations at this unit exemplifies Shanghai Secco Petrochemical's commitment to maintaining operational efficiency and meeting its production targets. The company's ability to swiftly carry out essential maintenance and promptly resume production is a testament to its robust management and operational strategies.

In addition to the recent maintenance of the cracking unit, Shanghai Secco Petrochemical has also announced plans for scheduled maintenance on its linear low-density polyethylene (LLDPE) production lines No. 1 and No. 2 in Shanghai. The company operates two lines at this site, each with a capacity of 400 thousand tons of LLDPE per year.

The scheduled maintenance for Line No. 1 is set to take place from September 9 to 19, 2024. For Line No. 2, the maintenance work is slated for October 10 to October 20, 2024. These planned shutdowns are part of the company's routine maintenance strategy to ensure the smooth running and longevity of its equipment and facilities.

Polyethylene and polypropylene are widely used types of plastics, known for their versatility, durability, and cost-effectiveness. They find applications across various sectors, including packaging, automotive, construction, and medical devices, among others. As such, the efficient operation of facilities producing these raw materials is critical to meet the global demand for these polymers.

The resumption of the cracking unit's operations is a significant development for Shanghai Secco Petrochemical. It ensures the continued production of key petrochemical products and reaffirms the company's position as a leading player in China's petrochemical industry.

Furthermore, the operational status of large-scale production facilities such as the Shanghai cracking unit can have broader implications for the petrochemical industry. It can impact market dynamics, including the availability and pricing of polyethylene and polypropylene.

The successful completion of maintenance and the recommencement of operations at the Shanghai cracking unit mark a positive development for Shanghai Secco Petrochemical. With the facility back online, the company is well-equipped to continue meeting the ongoing demand for vital petrochemical products, thereby contributing to various industries worldwide. As the global demand for plastic products continues unabated, the role of petrochemical facilities like the Shanghai cracking unit remains as critical as ever.

We remind, Sinopec Maoming Petrochemical, a subsidiary of the globally renowned energy and chemical giant Sinopec, took a strategic measure on December 23 by halting the production of High-Density Polyethylene (HDPE) in Maoming, China, for scheduled maintenance. This decision, aimed at ensuring the optimal functioning of the facilities, entails the temporary cessation of HDPE production with a notable capacity of 400 thousand tons. The production hiatus is anticipated to last until January 17 of the upcoming year.

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Brenntag has opened a new mixing and blending facility in Vietnam, the German chemicals distributor said.

The facility in Dong Nai is close to Brenntag's last mile operations, a regional tollgate with bulk storage tanks with capacities of over 21,000 cubic metres, and a jetty catering to vessels with deadweight tonnage capacity of up to 50,000, it said in a statement.

"The site will serve as a hub for the mixing, blending, drumming, and packaging of a wide range of chemical products," Brenntag added.

"In the next expansion phase, we will also be offering water-based solutions by the end of 2024.”

We remind, Brenntag has sold the coagulant manufacturing business of its US-based Brenntag Southwest affiliate to USALCO. The coagulants business in Houston, Texas, serves a diverse group of municipal and commercial water treatment customers in Texas. Brenntag is a distributor of coagulants and other water treatment chemicals, but manufacturing is not core to its strategy, Tom Crain, president of Brenntag Southwest, said.

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Japanese shipping company Mitsui O.S.K. Lines, Ltd. (MOL) has signed a time charter contract for the ammonia carrier Green Pioneer with Yara Clean Ammonia Switzerland, a group company of Yara International ASA, the world’s largest nitrogen fertilizer manufacturer, said Offshore-energy.

The 2010-built vessel was delivered on December 25, 2023, and is expected to be engaged in the transportation of ammonia, mainly in the Pacific region.

Ammonia is now mainly used as a raw material for fertilizers, but it is expected to see a significant increase in demand in the future as a next-generation clean energy that does not emit carbon dioxide when burned, such as mixed burning in coal-fired power plants and use as a hydrogen carrier.

MOL and the Yara Group have been working together since the signing of a memorandum of understanding on decarbonization projects including ammonia area in 2022, and the conclusion of this regular charter contract is one of the achievements resulting from that agreement.

In 2022, MOL and compatriot shipbuilders Tsuneishi Shipbuilding and Mitsui E&S Shipbuilding launched a joint project aimed at developing and building an ocean-going liquefied gas carrier that will use ammonia as its main fuel.

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Novatek has received Russian patents for large-capacity technologies for the production of low-carbon ammonia and ammonia cracking with pure hydrogen, said Interfax.

The production technology of low-carbon ammonia was developed by Novatekom in collaboration with Russian design institutes and is based on the method of steam reforming of natural gas. Patented technological solutions allow for technological production line performance of more than 1 million tonnes of low-carbon ammonia per year. Energy efficient technological solutions were used to reduce the carbon trace, and more than 90% of carbon dioxide with subsequent underground storage is stipulated, the press release says.

The large -capacity technology of ammonia cracking is an important step in creating a production chain where the resulting pure hydrogen can be delivered to end consumers at a competitive and affordable price.

We remind, in the previous month, the United States imposed sanctions on Arctic LNG 2, a liquefied natural gas (LNG) initiative spearheaded by the Russian company Novatek. In response to the potential repercussions of these sanctions, foreign stakeholders opted to suspend their involvement in the project. This involved relinquishing their obligations for financing and the execution of offtake contracts for the LNG plant.

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