More than 20% of global refining capacity at risk of closure due to weakening refining margins

More than 20% of global refining capacity at risk of closure due to weakening refining margins

Recent analysis by Wood Mackenzie finds that, based on forecasted 2030 net cash margins, 121 out of 465 screened refineries are at some risk of closure. This represents a cumulative 20.2 million b/d of refining capacity, or 21.6% of global 2023 capacity, said Greencarcongress.

The future viability of refinery facilities will be dependent on a combination of factors. First, refining margins will start to weaken by the end of the decade as fossil fuel demand declines. In OECD countries, transport fuel demand will start to fall from 2025, while the unwinding of free allowances for carbon emissions will also impact European net cash margins from 2030 onwards.

China will see liquid demand peak by 2027 and start to fall as the country actively electrifies its road transport. Non-OECD countries will enjoy continued demand growth beyond 2030, but their refiners will not be immune as global demand for transport fuels falls.

Although petrochemical integration can help make refineries more profitable, integrated sites account for nearly half of the global capacity at risk by 2030. Asia Pacific and Chinese facilities in particular benefit little from petrochemical integration, as petrochemical yields are often limited and mainly focused on aromatics, which is suffering from chronic oversupply.

Second, in the future carbon taxes could make up a significant portion of operating costs, depending on a given site’s specific emissions. Location will be a key factor in this respect, as in the absence of international agreement on carbon pricing, rates will vary by region.

WoodMac considered the total cost of Scope 1 and 2 emissions for refineries in the analysis, and found Europe to be most heavily impacted. Increasing carbon prices and the phasing out of free allowances, combined with a lack of planned decarbonisation investment, results in 11 sites in Europe that are considered at high risk of closure.

Third is ownership. WoodMac’s ownership ranking reflects the importance of an asset’s non-commercial factors, such as social value, on its continued operation. In general, most capacity at risk is owned by national oil companies (NOCs), independents and joint ventures (JVs). Of the three types, the future of NOC refineries is considered more secure than independent refineries and JVs, since host governments are likely to support an asset even if it is unprofitable.

Although refineries owned by international oil companies (IOCs) tend to be at lower risk, the high cost of carbon emissions in Europe mean IOC-owned facilities make up a significant portion of sites under threat in the region. Standalone sites with high emissions will typically be the first to face closure or be sold.

Fourth is the strategic value of an asset. For NOC refineries, the host government’s view on its role in the wider economy will be an important factor. Changes in a country’s net trade position if a site closes are taken into consideration, as well as an assets contribution to security of domestic supply.

Fifth are environmental investments. As stakeholder pressure grows and governments increasingly commit to the energy transition, taxes, allowances and regulations for heavy-emitting sectors including refining will be adjusted accordingly. Given that their products are inherently emissions-intensive, refiners will need to pursue broad-based strategies to limit exposure to transition risk.

We remind, INEOS said that it has completed acquisition of TotalEnergies’ 50% share in their three joint ventures, as well as some other infrastructure assets in France. The targets are Naphtachimie, Appryl and Gexaro, which were 50:50 joint ventures between INEOS and the French energy major at Lavera in southern France. Financial details of the acquisition were not disclosed.

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McDermott reaches mechanical completion on Evonik’s biosurfactants project in Slovakia

McDermott reaches mechanical completion on Evonik’s biosurfactants project in Slovakia

McDermott International Inc. (Houston) announced mechanical completion of a pioneering industrial-scale biosurfactant plant for Evonik Industries AG (Essen, Germany), said the company.

Less than two years from contract award, Evonik has achieved initial production of Rhamnolipids, a bacterial surfactant with the potential to fundamentally transform cleaning products and significantly reduce their environmental impact.

The project positions Evonik, a specialty chemicals company, as a pioneer of high-quality, sustainable biosurfactants on a commercial scale.

The scope of the contract included engineering, procurement, and construction management (EPCM) services for a new biosurfactant plant. The engineering and procurement services were executed from McDermott’s office in Brno, Czech Republic, and the construction management was performed at Evonik’s site in Slovakia.

“This is an incredible achievement, completed in a short space of time, thanks to the enduring commitment of our team and their seamless collaboration with Evonik,” said Rob Shaul, McDermott’s Senior Vice President, Low Carbon Solutions. “The high-performance Rhamnolipids significantly advance the growing biosurfactant market and are setting a precedent as part of a broader sustainable chemicals revolution, bringing sustainable cleaning and personal care products to market faster.”

McDermott was selected to partner with Evonik on the pioneering biosurfactants project in 2021.

We remind, Evonik has launched a highly sustainable new catalyst product, Octamax, that improves sulfur removal performance for refinery fuel. The technology consists of uniquely selected NiMo and CoMo catalysts regenerated and enhanced at optimal conditions for use in cracked gasoline hydrodesulfurization units.

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Sanyo Chemical makes notice of withdrawal from SAP business in China; expects extraordinary loss

Sanyo Chemical makes notice of withdrawal from SAP business in China; expects extraordinary loss

Sanyo Chemical makes notice of withdrawal from SAP business in China; expects extraordinary loss, said Nonwovens.

Sanyo Chemical Industries, Ltd. hereby announces that, based on resolutions adopted at the meetings of its Boards of Directors held on March 25, 2024, the Company has resolved to withdraw from the superabsorbent polymer business and the cease production of surfactants and urethane resin products in Nantong, Jiangsu Province, China as part of the structural reform under the ” New Medium-Term Management Plan 2025? initiated in fiscal year 2023.

Based on this resolution, the Company is considering the transfer of all the equity interests of San-Dia Polymers (Nantong) Co., Ltd., a wholly owned by its consolidated subsidiary SDP Global Co., Ltd. to another company. The Company has also resolved to dissolve the related consolidated subsidiaries involved in these businesses, SDP, SDP GLOBAL (MALAYSIA) SDN. BHD., and Sanyo Kasei (Nantong) Co., Ltd., as follows. In addition, the Company also announces that it expects to record an extraordinary loss as a result of this Business Withdrawal.

We remind, INEOS said that it has completed acquisition of TotalEnergies’ 50% share in their three joint ventures, as well as some other infrastructure assets in France. The targets are Naphtachimie, Appryl and Gexaro, which were 50:50 joint ventures between INEOS and the French energy major at Lavera in southern France. Financial details of the acquisition were not disclosed.

mrchub.com

Japan's Kuraray plans Singapore plant for packaging that cuts food waste

Japan's Kuraray plans Singapore plant for packaging that cuts food waste

Japanese plastic maker Kuraray will construct a USD410 million plant in Singapore under plans announced Tuesday, aiming to boost output of a packaging material that helps to reduce food waste, said Indianchemicalnews.

The new plant will produce EVOH, a proprietary resin that helps block oxygen and prevent food from spoiling. Operation will begin at the end of 2026, marking Kuraray's first time producing the material in Southeast Asia.

Kuraray expects efforts to fight food waste to grow in the region. The company plans to leverage its client network and supply chains it has established in the region from producing polyvinyl alcohol, a water-soluble resin, in Singapore.

The new plant will have a front-end capacity of 36,000 tonnes per year and a back-end capacity of 18,000 tons per year. The company intends to make further investments as early as fiscal 2026 to expand capacity.

Kuraray currently produces 103,000 tonnes of EVAL annually across Japan, the U.S. and Belgium. It is planning expansions in the U.S. and Belgium as well, with the goal of boosting global capacity by around 30% by the end of 2026.

We remind, Kuraray Co. (Tokyo) announced that construction of a new plant for isoprene-related businesses has been completed and will soon start operations in stages. The construction was undertaken by Bangkok-based subsidiaries Kuraray GC Advanced Materials Co., Ltdand Kuraray Advanced Chemicals (Thailand) Co., Ltd.

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INEOS completes acquisition of TotalEnergies’ petrochemical assets in Lavera, France

INEOS completes acquisition of TotalEnergies’ petrochemical assets in Lavera, France

INEOS said that it has completed acquisition of TotalEnergies’ 50% share in their three joint ventures, as well as some other infrastructure assets in France, said the companies.

The targets are Naphtachimie, Appryl and Gexaro, which were 50:50 joint ventures between INEOS and the French energy major at Lavera in southern France. Financial details of the acquisition were not disclosed.

The deal includes one of Europe’s largest steam crackers which can produce 720,000 tonnes/year of ethylene under Naphtachimie; an aromatics business with a 270,000 tonne/year capacity under Gexaro; and a 300,000 tonne/year polypropylene (PP) business under Appryl.

INEOS also acquired a naphtha storage, as well as other infrastructure assets, including part of TotalEnergies’ ethylene pipeline network in France.

INEOS will now fully integrate the Naphthachimie, Gexaro and Appryl petrochemical businesses, assets and infrastructure into INEOS Olefins & Polymers South at Lavera in southern France, the company said.

Gexaro, which is located on the Lavera refinery site will continue to be operated by Petroineos.

We remind, that TotalEnergies’ plans to sell its stake in petrochemical assets in Lavere became known last summer.

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