Japan petrochemicals sector will need to consolidate, says oil industry group

Japan's petrochemical sector will need to consolidate in response to heightened competition from emerging petrochemical complexes in China and the Middle East, the head of the country's oil industry body said on Monday, as per Reuters.

"We anticipate that the operational landscape for petrochemical equipment in Japan will prove challenging in the upcoming year, given the impending commissioning of various new complexes," Shunichi Kito, president of the Petroleum Association of Japan (PAJ), told a news conference.

For Japanese petrochemical companies already grappling with a tough earnings environment, the export of olefin like ethylene is expected to worsen, said Kito, who is also the president of oil refiner Idemitsu Kosan 5019.T.

"I believe that consolidations within the petrochemical industry, or efforts to enhance efficiency and rationalise operations, will inevitably become imperative," he said.

China is adding new petrochemical capacity despite a global glut as the country's refiners diversify from transport fuels, threatening to depress margins worldwide through 2024 as weak economic growth saps demand.

We remind, Japan-based chemical company Sumitomo Chemical has begun construction on its pilot plant to develop new process technology to manufacture propylene directly from ethanol. The development of this propylene manufacturing technology is being financed by the Green Innovation Fund of the New Energy and Industrial Technology Development Organization.

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Russian businesses are not concerned about the Industry and Trade Ministry's proposal to ban certain types of polyethylene terephthalate (PET) plastic bottles, but is worried that this measure might be expanded to encompass other types of PET packaging, food industry association Rusprodsoyuz told Interfax.

"The proposed ban of plastic bottles is not causing serious concerns among businesses, since it is unlikely to affect the business processes of food production facilities because the packaging materials that are proposed to be banned are used very rarely," Rusprodsoyuz executive director Dmitry Vostrikov said, commenting on the ministry's draft government resolution to ban certain types of PET packaging that cannot be recycled or is difficult to recycle as of September 1, 2024.

The draft resolution, posted on the regulation.gov.ru website, would ban the production and use of semitransparent PET bottles of all colors in Russia as of September, with the exception of blue, green and brown ones; nontransparent PET bottles with the exception of white ones; PET packaging made with wrap-around PVC labels; and multilayer PET bottles.

However, businesses are not happy about the actual method of imposing bans, Vostrikov said. "After all, the proposals to impose restrictions on other types of PET that have been made in recent years could have negative consequences for the sector. The path of banning types of packaging is a dead end. It is necessary to improve the technology for recycling packaging materials," Vostrikov said.

Rusprodsoyuz, Russia's largest association of producers and suppliers of all types of food products, includes more than 450 farmers, processors, distributors, logistics companies, operators of wholesale distribution centers and technology suppliers.

We remind, Sibur Holding PJSC (Moscow), Russia’s biggest producer of petrochemicals, has announced plans to transform the business management model of its plastics and synthetic rubber activities to focus on the Russian market, starting in April. Since the war in Ukraine began in 2022, Russian exporters have faced international sanctions that have limited their ability to ship products to many countries/

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Honeywell announced that Petroleos del Peru S.A., one of the largest hydrocarbon producers, refiners and distributors in Peru, will implement Honeywell cybersecurity solutions in order to help Petroperu strengthen the cyber resiliency of its refinery operations and accelerate its broader digital transformation, said Hydrocarbonprocessing.

Petroperu’s multi-year investment with Honeywell includes access to Honeywell’s cybersecurity consulting support, managed security services and world-class threat detection capabilities. Honeywell will help Petroperu further scale its operational technology (OT) cybersecurity efforts in order to improve visibility into potential cybersecurity vulnerabilities and threats across its systems.

“Cybersecurity resiliency is a crucial capability that underpins our sustainable operations as we work toward the future in the energy transition,” said Fernando Villacorta Padilla, chief controls and advanced applications engineer, Petroperu. “Honeywell’s cybersecurity services complement the innovative software solutions that it previously developed to support our digitalization initiatives and our refinery modernization project.”

Petroperu’s implementation of Honeywell’s cybersecurity solutions builds upon its prior integration of Honeywell Forge Workforce Competency solutions, which the company currently uses to train its industrial workforce regarding safer and more efficient operations. The added integration of Honeywell cybersecurity solutions will help Petroperu to further improve its operational efficiency, safety and security programs across Petroperu’s plants and refineries.

“Without strong cybersecurity capabilities, energy companies that heavily rely on technology and information systems to operate can face serious consequences, including financial losses, operational disruptions, reputational damage and environmental risks,” said Sunil Pandita, vice president and general manager of Honeywell Cyber & Connected Industrials. “While Petroperu is already at forefront of the digital transformation within the energy sector, Honeywell’s cybersecurity solutions will help Petroperu to identify and minimize potential cyber risks in near real time in order to create safer, more efficient operations that benefit both customers and employees.”

Honeywell has been working with Petroperu for almost 50 years. Additionally, Honeywell provides engineering, licenses, services and technical support for three units currently in operation.

Honeywell cybersecurity solutions can help organizations to improve their OT cybersecurity defenses with vendor-agnostic solutions designed to assist in identifying, prioritizing and reducing OT cyber risks and potential vulnerabilities through advanced monitoring and detection. Learn more about Honeywell’s OT cybersecurity solutions for industrial businesses.

We remind, Honeywell announced the availability of technologies and digital solutions to enable customers in Asia Pacific to produce renewable fuels from multiple sources of renewable feedstocks. Refiners are facing market changes as the drive toward sustainability accelerates to lower greenhouse gas (GHG) emissions. It is imperative for companies to adopt ready now technologies that can help them produce low-carbon, sustainable fuels while maximizing available resources, reducing waste, and meeting their sustainability goals.

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Shantou Mingca Packaging Co Ltd and ExxonMobil Asia Pacific Research & Development Co., Ltd (ExxonMobil) announced an innovative double bubble Polyethylene-based Shrink Film solution, the next generation of Polyolefin Shrink Film, created using ultra-low density Exceed XP performance polyethylene, said Hydrocarbonprocessing.

PEF can be used to package products in a variety of shapes, such as electronics, household and personal care products, medicines, food, books and magazines, plastic utensils, and toys.

The solution's polyethylene-based structure can help converters create packaging that can be more easily mechanically recycled1 than conventional POF solutions. The recyclability of the film structure has been third party validated and certified by TUV Rheinland2.

PEF shrink film can help provide exceptional "shelf appeal" to products, making them look attractive to consumers. In addition, the PEF solution can provide a snug-fit with small and soft corners, further increasing appearance aesthetics.

It can shrink more than 70 percent upon heating and can help enable excellent shrink performance at lower temperatures.

Thanks to its low-temperature shrinkage capability, the new PEF solution can offer potential cost savings due to the shrink tunnel consuming less energy than what is needed with conventional POF solutions3. With haze as low as 2.8 percent and gloss up to 86 GU, the Exceed™ XP-based PEF offers excellent optical properties.

Exceed™ XP performance polyethylene can help to deliver outstanding softness (1% secant modulus as low as 374 MPa), with tensile strength at MD/TD as high as 100 MPa.

Similar to POF, the new PEF shrink film can be produced using double bubble technology. Converters can typically switch from their current POF formulation to the next generation conveniently with only a few adjustments to their existing POF production line, while brand owners can adopt the new solution without upgrades or changes to their packaging lines.

We remind, QatarEnergy and ExxonMobil are on track to commence LNG production at their Golden Pass LNG export terminal, situated on the US Gulf Coast near Sabine Pass, Texas, during the first half of 2025. QatarEnergy, a state-owned entity, holds a substantial 70 percent stake in the Golden Pass project, which boasts a capacity exceeding 18 million metric tons per annum (mtpa). Notably, QatarEnergy will offload 70 percent of the terminal's capacity. In parallel, ExxonMobil, a prominent US-based energy firm, possesses a 30 percent share in the venture.

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PetroChina's net profit rose 8.3% last year off record levels in 2022, as strong growth in natural gas sales and its marketing segment offset lower realised oil prices, said Reuters.

PetroChina's net profit amounted to 161.1 billion yuan($22.34 billion) in 2023, versus 148.7 billion in 2022, while revenue fell 7.0% to 3,239 billion yuan, the firm said in a filing to the Hong Kong Stock Exchange on Monday.

Operating profit for the natural gas segment more than tripled to 43.0 billion yuan from around 13.0 billion yuan, while operating profit in the marketing segment rose 66.7% on the previous year. The average realised price for crude oil fell by 16.8% compared to 2022 levels.

The national energy giant produced 937.1 million barrels of crude oil last year, or 2.57 million barrels per day, up 3.4% over the previous year (906.2 mln bbl). Natural gas output was up 5.5% at 4,932.4 billion cubic feet (bcf).

Refinery crude throughput rose 15.3% to 1,398.8 million barrels, or 3.83 million barrels per day, reversing the previous year's 1% decline due to a strong recovery in gasoline and aviation fuel demand as China dropped pandemic curbs.

PetroChina recorded a 17.3% increase in domestic sales of gasoline, diesel and kerosene combined, with domestic kerosene sales surging by 82.1% on 2022. The group's chemical new materials output increased 60.0% on last year.
The refining segment "seized the favourable opportunity of market recovery" and "improved the proportion of featured refined products and high-end chemical products," the statement said.

PetroChina forecasts this year's crude oil output to fall by 3% to 909.2 million barrels. Natural gas output is expected to increase by 4% to 5,142.6 bcf. It also aimed for a 0.3% growth in refinery output this 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.

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