Russia's gasoline production falls owing to accident at Lukoil's Nizhny Novgorod refinery

There has been a decline in the production of motor gasoline owing to unscheduled repairs on one of the catalytic cracking units at the Lukoil-Nizhegorodnefteorgsintez refinery in Nizhny Novgorod, Russia's Energy Ministry said in a statement, as per Interfax.

The Energy Ministry and oil companies at the operational headquarters have developed measures to continue the uninterrupted supply of fuel to the domestic market while Lukoil-Nizhegorodnefteorgsintez undergoes repairs.

"The participants at the operational headquarters have emphasized that the needs of the domestic market would be met by reducing export supplies and redirecting the existing resources of other market participants," the Energy Ministry said.

"The production of motor gasoline at Russian enterprises fully meets all the needs of the domestic market. Inventories total nearly two million tonnes, which is more than enough to meet demand," the Energy Ministry said.

The company has already developed a plan to eliminate the problems as soon as possible.

We remind, Romania's Petrotel Lukoil refinery, owned by Russia's Lukoil, will shut for one month from Wednesday for planned maintenance works, online news website Profit.ro reported. Lukoil's Romanian unit has a relatively small market share compared to bigger refineries in the country. The refinery uses alternative fuel supplies and is not affected by a ban on Russian imports.

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The production of Kia components will be localized in the Kostanay region, said Kumar Aksakalov, the governor of the region, said Chemanalyst.

The cost of the localization project is estimated at 13 billion tenge or $28.7 million at the current rate, Aksakalov said at a meeting with President Kassym-Jomart Tokayev on Thursday.

The governor also informed the president that SaryarkaAvtoProm LLP had launched a 23 billion tenge project for the assembly of 30,000 Chevrolet Onix cars per year.

In August 2023, the Kazakh government formed a partnership with South Korea, launching Kia Qazaqstan. This joint venture will oversee the construction of a new Kia manufacturing facility in Kostanai. This initiative represents the beginning of Kazakhstan's first automotive localization center and a step forward in training specialized technical personnel.

Construction of the Kia manufacturing facility in the Kostanai region started in November 2023. Investment in the project totals 90 billion tenge. The new plant aims to create 1,500 highly paid jobs and will have the capacity to produce 70,000 cars annually.

The construction is expected to be completed by 2024, followed by the installation of equipment. The pilot launch of the plant is slated for the first quarter of 2025, with full production commencing in the second quarter. The construction of the auto component plant is the next stage of the project.

The completely knocked down assembly (CKD) of Kia's Sportage cars was launched at Allur's automobile plant in the Kostanai region in January 2023.

Allur is a shareholder of SaryarkaAvtoProm LLP, Kazakhstan's largest auto manufacturer, as well as an official distributor, manufacturer, and official dealer of JAC, Ankai, Yutong, Chevrolet, manufacturer of Niva Chevrolet, UAZ, MAN.

We remind, The storm preemption system in Novorossiysk may be changed to minimize downtime for oil transshipment. "The storm factor complicates operations very seriously. We requested statistics on storms over the last 15 years. Whereas before 2017 there were 60-75 storm days on average, last year there were 111, and this year there are 118. That is, the port is forced to work intermittently. But there is not only oil there, but also other cargoes," Transneft President Nikolay Tokarev said in an interview with the corporate journal Pipeline Oil Transportation.

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The estimated production volumes for December 2023 released by the Grupa Azoty Group indicate that nitrogen fertilizer production at Group companies will be nearly the same as in November, with estimated volumes for December at 281 thousand tonnes compared to 282 thousand tonnes for November, said the company.

OXO production also remains relatively stable, with an estimated 11 thousand tonnes in December compared to 13 thousand tonnes in November.

According to estimates, Group companies produced 54 thousand tonnes of compound fertilizers in December versus 62 thousand tonnes in November. Polyamide and pigment production stayed at November levels in December, at 8 thousand tonnes and 2 thousand tonnes, respectively. Specialty fertilizers and urea, however, reported lower estimated volumes in December, with 17 thousand tonnes for specialty fertilizers compared to 26 thousand tonnes in November, and 74 thousand tonnes for urea versus 92 thousand tonnes in November.

‘As expected, production levels in nitrogen fertilizers and the OXO segment remained stable in December. However, the continuous influx of low-cost products from Asia into the European Union is consistently affecting estimated production volumes in plastics and urea. This remains a significant challenge for all European manufacturers in the industry,’ said Tomasz Hinc, President of the Management Board of Grupa Azoty S.A.

We remind, Grupa Azoty S.A. has received state aid under the ‘Aid to energy-intensive industries related to natural gas and electricity prices in 2023’ programme administered by the National Fund for Environmental Protection and Water Management. The amount of the financial support granted to Grupa Azoty S.A. is PLN 12m, with compensation for the Grupa Azoty Group companies totalling PLN 173m.

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Americas Styrenics (AmSty), the preeminent producer of polystyrene (PS) in the United States, is gearing up to temporarily cease styrene production at its facility in St. James, Louisiana, for scheduled maintenance starting January 21, said Chemanalyst.

This production unit, boasting an annual capacity of 503 thousand tons of styrene, is expected to remain inactive until approximately February 23.

This strategic decision aligns with AmSty's commitment to maintaining operational efficiency and product quality through routine maintenance measures. The temporary shutdown is a proactive step aimed at ensuring the facility's long-term reliability and adherence to industry standards.

Earlier reports indicated that AmSty, the largest PS manufacturer in the United States, had successfully resumed polystyrene production in St. James on May 30 following scheduled repairs. The facility, with an impressive annual capacity of 1.05 million tons of polystyrene, had undergone a temporary closure from April 29 to May 30, 2022.

In the broader landscape of PS production in the United States, major players include INEOS Styrolution, Americas Styrenics, Total, and SABIC Innovative Plastics. Americas Styrenics holds a significant position as the leading PS manufacturer in the country, boasting five production plants with a combined capacity of 758 thousand tons per year. Following closely is INEOS Styrolution, the second-largest producer of polystyrene in the United States, with a total capacity of 740 thousand tons per year. Total Petrochemicals secures the third position among leading PS producers in the United States, operating the world's largest production complex for substations in Carville, with an annual capacity of 658 thousand tons.

This temporary shutdown in styrene production at the St. James facility is a testament to the dynamic nature of industrial operations, where routine maintenance plays a pivotal role in sustaining optimal performance. The scheduled hiatus allows AmSty to conduct essential maintenance activities, ensuring the facility's adherence to safety regulations, environmental standards, and overall operational excellence.

As the largest PS manufacturer in the United States, AmSty remains a key player in the global polymer market. The company's commitment to periodic maintenance not only reflects a dedication to product quality but also emphasizes its role in ensuring the stability of the supply chain.

Looking ahead, once the maintenance activities are successfully concluded, the facility is expected to resume styrene production, contributing to the overall capacity of AmSty's PS production network. The strategic timing of the shutdown minimizes potential disruptions and aligns with industry best practices for ensuring sustained operational efficiency.

We remind, Americas Styrenics (AmSty), Houston, as signed a memorandum of understanding with The Woodlands, Texas-based Encina Development Group that enables AmSty to purchase up to 250,000 tons per year of circular feedstocks from Encina’s facilities. Encina produces circular materials using advanced recycling technology that works at the molecular level. AmSty also has signed a formal long-term offtake agreement for the purchase of circular feedstocks from Encina’s first U.S. commercial plant in Point Township, Pennsylvania, which is expected to begin production in early 2025.

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China's leading petrochemical giant, Rongsheng Petrochemical, is set to embark on a substantial expansion of petrochemical products at the onset of the new year, said Chemanalyst.

This ambitious venture, encompassing intermediate raw materials and synthetic resins, poses a significant challenge to Korean petrochemical companies, given the overlap with their primary product lines.

Sources within the petrochemical industry revealed on January 10 that Rongsheng Petrochemical plans to invest a staggering $12.2 billion in a refinery and petrochemical project located in China's Zhoushan Islands. The key components of this expansive project include the construction of a three-million-tons-per-year catalytic cracking unit, a one-million-tons-per-year separation unit, and a 600,000-ton-per-year aromatics extraction plant.

Emphasizing its commitment to a diversified petrochemical complex, Rongsheng Petrochemical detailed its plans to achieve an annual production capacity of 300,000 tons of refined ethylene oxide (EO), one million tons of ethylene vinyl acetate, and 200,000 tons of polyolefin elastomer (POE). Additionally, the complex aims to produce 400,000 tons of phenol, 250,000 tons of acetone, 400,000 tons of propylene oxide (PO), 800,000 tons of styrene monomer, 500,000 tons of 1,4-butanediol, and 120,000 tons of isobutylene annually. The project also includes the installation of a carbon dioxide capture unit with a capacity of 150,000 tons per year.

The Chinese giant plans to establish production facilities capable of manufacturing 1.2 million tons of acrylonitrile butadiene styrene (ABS), a durable and versatile material widely used in the exteriors of electronic products. This move directly competes with Korean companies, including LG Chem, Lotte Advanced Materials, and Kumho Petrochemical, who have been major players in the ABS business. Rongsheng Petrochemical's strategic initiative also involves the construction of two facilities dedicated to polycarbonate production, aiming for a combined output of 520,000 tons. The competition in the ABS business intensifies with analysts speculating that LG Chem might lose its global leadership position to Taiwanese and Chinese counterparts.

The Korean petroleum industry has been grappling with a heightened sense of crisis since the beginning of the year, exacerbated by strategic shifts in major players. In a significant move, Lotte Chemical divested all its general-purpose petrochemical production plants in China during 2023. The decision was driven by China's aggressive expansion of general-purpose petrochemical plants, which eroded the price competitiveness of these facilities. Lotte Chemical's response involves a strategic reorganization to focus on increasing the production of high-value-added products, reflecting the industry's adaptation to changing market dynamics.

The trajectory of Rongsheng Petrochemical's ambitious expansion and its impact on the Korean petrochemical sector underscores the dynamic nature of the global petrochemical industry. The colossal investments and strategic moves by major players such as Rongsheng Petrochemical are reshaping the competitive landscape, leading to intensified competition and a re-evaluation of business strategies within the industry. As these developments unfold, industry stakeholders will closely monitor the evolving dynamics and position themselves strategically to navigate the challenges and capitalize on emerging opportunities in the dynamic petrochemical market.

We remind, Jiangsu Sopo Chemical in China is strategically planning to establish a comprehensive vinyl acetate monomer (VAM) and ethylene vinyl acetate (EVA) monomer project in Zhenjiang, Jiangsu province. The ambitious project will unfold in two stages, beginning with the construction of a VAM production plant with a substantial capacity of 330 thousand tons per year.

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