Propane dehydrogenation plant in Korea reaches record production rate

MOSCOW (MRC) -- CB&I and SK Advanced Co. Ltd. are celebrating the record production rates and outstanding operation of a propane dehydrogenation (PDH) plant in Seoul, South Korea, as per Hydrocarbonprocessing.

The plant uses CB&I’s CATOFIN technology and Clariant’s dehydrogenation catalyst for the nameplate production of 600,000 mtpy of propylene. CB&I announced the license and basic engineering contract for this plant in March 2013.

"We congratulate SKA on achieving more than 110 percent of the nameplate production in the first year of operation," said Brian Muldoon, CB&I’s Senior Vice President of Petrochemicals. "Our proven CATOFIN propane dehydrogenation technology offers the customer both highest reliability and highest yield of any commercially available dehydrogenation technologies." SKA routinely produces over 110 percent nameplate capacity while maintaining more than a 98% on stream factor.

On March 8, 2017, a small ceremony was held at the SKA headquarters to commemorate the first anniversary of the successful operation of the PDH project. In its first year, the plant has experienced record production rates as well as record on-stream time.

As MRC informed before, in mid-May 2016, SK Advanced Co. began trial production of propylene at its PDH plant in Ulsan, South Korea. The new 600,000-t/y facility was subject to performance testing. Commercial operations were then expected to begin in the second quarter of 2016.
MRC

SOCAR announces volume of exported oil products

MOSCOW (MRC) -- In May 2017, Marketing and Economic Operations Department under the State Oil Company of Azerbaijan exported 9,996 tonnes of diesel fuel, 1,783 tonnes of aviation fuel, 6,178 tonnes of liquid pyrolysis resin, 7,746 tonnes of high-pressure polyethylene, 2,911 tonnes of propylene and 2,084 tonnes of butylene-butadiene fraction, said Trend.

Totally, SOCAR exported 262,914 tonnes of diesel fuel, 20,606 tonnes of aircraft fuel, 117 tonnes of furnace oil, 40,339 tonnes of high-pressure polyethylene, 28,100 tonnes of liquid pyrolysis resin, 12,167 tonnes of butylene-butadiene fraction and 17,700 tonnes of propylene in January – May 2017.

The world market price of ethyl gasoline was (1 ton) USD520.58, jet fuel - USD471.86, diesel - USD442.95, high-pressure polyethylene - USD1,222.50, butylene-butadiene fraction - USD635.27, liquid pyrolysis resin - USD520.58, propylene - EUR880.
MRC

Oil hits six-week low as OPEC fails to curb oversupply

MOSCOW (MRC) — Oil prices dropped to six-week lows on Thursday, under pressure from high global inventories and doubts about OPEC's ability to implement agreed production cuts, said Reuters.

Brent crude oil fell 30 cents to USD46.70/bbl, its weakest since May 5 and just above six-month lows, before recovering a little to trade around USD46.85 by 1150 GMT. US light crude was down 25 cents at USD44.48, also not far off six-month lows.

Both crude benchmarks have lost all the gains made at the end of last year after the Organization of the Petroleum Exporting Countries agreed with other big producers to cut output in an effort to prop up prices. OPEC and its allies have promised to restrict output until at least the end of the first quarter of next year to try to drain surplus supply.

But inventories are near record highs in many parts of the world, and many traders expect further price falls. "The market is in trouble," said Tamas Varga, analyst at London brokerage PVM Oil Associates. Crude prices have fallen about 12% since May 25, when OPEC agreed to extend its output limits into next year.

Despite the deal, some OPEC members, including Nigeria and Libya, have been exempt from cutting and their rising output is seen to be undermining efforts led by Saudi Arabia. "OPEC 2017 year-to-date exports are only down by 0.3 MMbpd from the October 2016 baseline," analysts at AB Bernstein wrote. OPEC's pledge was to cut some 1.2 MMbpd, while other producers including Russia agreed to bring the total reduction to almost 1.8 MMbpd.

But production in the United States, which is not part of the deal, has jumped 10% over the past year to 9.33 Mbpd. "Production growth in Libya and Nigeria and continued rig additions in the US are complicating the picture, raising doubts on OPEC's strategy," AB Bernstein said.

The US government's Energy Information Administration has raised its forecast for domestic output growth in 2017 to 460,000 bpd from a predicted decline of 80,000 bpd in December. OPEC now expects US production to increase by 800,000 bpd in 2017.

This suggests global oversupply will persist for a while. The International Energy Agency says it expects oil supplies next year to outpace demand despite consumption hitting 100 MMbpd for the first time.
MRC

Chinese traders ship jet fuel from Singapore to Europe

MOSCOW (MRC) — Chinese traders are shipping jet fuel from Singapore to Europe even as domestic demand in China is set to strengthen during summer season air travel, said Reuters.

China Aviation Oil (Singapore), subsidiary of state-owned China National Aviation Fuel Group, and Unipec, trading arm of state oil major Sinopec, have provisionally booked vessels to ship jet fuel west, three industry sources familiar with the matter said.

Sinopec's Hong Kong unit was also seeking jet fuel barrels in oil price agency S&P Global Platts' trading period known as market-on-close (MOC) this week, traders said. The company seldom participates in the MOC process.

The shipments could end up tightening the Asian jet fuel market and lifting prices, but for now, according to one of the sources, trade is profitable into Europe.

Refinery maintenance and peak summer demand for airline travel is already absorbing jet fuel supply in China, which could be why Chinese traders are shipping barrels from Singapore instead, said a source familiar with the Chinese market.

"The summer holidays are approaching so (China's) jet fuel demand is going up, plus there are at least three refineries having maintenance so could explain why the sudden interest (for barrels from Singapore)," the source added.

Phone calls to CAO and Sinopec offices in Singapore and Beijing went unanswered. CAO has chartered the SKS Dokka to ship 90 Mt of jet fuel to load from Singapore on June 20, bound for the United Kingdom or European continent (UKC), according to shipping data from Thomson Reuters Eikon and shipbrokers.

The ship is currently docked at Malaysia's Sungai Udang port, the Eikon data shows. Unipec has provisionally booked the Captain Paris to ship 80 Mt of jet fuel from Singapore to UKC to load on June 22, a Singapore-based shipbroker said.

Unipec had initially tried to book another vessel but failed due to berthing restrictions. It is planning to charter a second vessel to ship jet fuel in the same route, sources have said.

If the cargoes are successfully fixed, jet fuel shipments from Singapore to Europe will hit at least 240 Mt in June, the highest monthly volumes for this year and more than six times the volumes shipped in May, data from trade development agency International Enterprise showed.

Unipec and CAO seldom ship jet fuel from Singapore, traders said. They could also be trying to sell excess cargoes they bought in Singapore recently, one of them said.

CAO and Unipec have snapped up at least 2.97 MMbbl, or about 400 Mt, of jet fuel in Singapore from the start of June, traders said.
MRC

Mercuria, PetroChina selling fuel oil stored offshore Singapore, Malaysia

MOSCW (MRC) — Independent trading house Mercuria and Chinese state oil giant PetroChina are selling fuel oil stored in vessels off Singapore and southern Malaysia on strong demand from the shipping and power sector, said Reuters.

The number of vessels storing fuel oil has halved from a month ago as Mercuria and PetroChina may have resold cargoes purchased over March to May, the sources said. Geneva-based Mercuria and PetroChina bought over 6 MMt of fuel oil over those months in oil pricing agency S&P Global Platts' trading period known as market-on-close (MOC).

Their deals made up nearly three-quarters of the volumes traded in that period, according to data compiled by Reuters.

It is unusual for traders to store fuel oil in vessels when the market is backwardated, a term used to describe a price structure where prompt prices are higher than those in forward months, the sources said. "Nobody floats when the market is backwardated as you can't cover the cost of storage, so this is quite unusual," a Singapore-based fuel oil trader said.

Mercuria did not answer calls to its Singapore office, while PetroChina did not immediately respond to emailed questions.

The volumes the two purchased over March to May were stored in eight or nine tankers, including very large crude carriers (VLCCs) and Aframaxes, traders said. The companies are now starting to resell the cargoes, and the number of vessels storing fuel oil have reduced to about three or four VLCCs, another Singapore-based fuel oil trader said.

Mercuria may have already resold all its cargoes, a trader with an European oil firm said. Demand for fuel oil for bunkers, or shipping fuel, has been healthy even though sales dipped in May, the first Singapore-based trader said.

Singapore sales of marine fuels in May fell to 4.181 MMt, down 4.2% from a year ago, data from the Maritime and Port Authority of Singapore (MPA) shows.

The cash premium of bunker fuel sold to ships, however, has been trading at higher than usual levels, indicating that demand for fuel oil is still strong, the first trader said.

The sales from storage also come ahead of an expected seasonal tightening of exports from the Middle East as over the summer countries in the Gulf use fuel oil for power generation as air conditioning use increases.

Margins for fuel oil in Europe have also outperformed cleaner fuels such as diesel and gasoline following the OPEC-led decision to cut output, which has limited supplies of heavier and sour crude oil grades that yield more fuel oil, also cutting supply.
MRC