HDPE production in Russia decreased by 0.7% in January-July

MOSCOW (MRC) - Production of high density polyethylene (HDPE) in Russia decreased to about 573,100 tonne in the first seven months of 2017, down 0.7% year on year. Gazprom neftekhim Salavat and Nizhnekamskneftekhim showed a decrease in production, according to MRC ScanPlast report.

July HDPE production in Russia decreased to 72,700 tonnes, while in June it was 95,100 tonnes. Such a significant decrease in the output was mainly caused by the scheduled shutdown for maintenance at Gazprom neftekhim Salavat and by Nizhnekamskneftekhim's switch for LLDPE production. Overall HDPE production reached 573,100 tonnes in the first seven months of the year, compared to 577,200 tonnes a year earlier. Kazanorgsintez and Stavrolen's higher output did not allow to offset the reduction in production at the other two plants.

Structure of HDPE production over the reported period looked as follows.

Russia's July HDPE production at Kazanorgsintez increased to 46,800 tonnes from 46,700 tonnes a month earlier. The producer's total HDPE production was 316,300 tonnes in the first seven months of the year, up 13% year on year.

July HDPE production at Stavrolen reached about 25,900 tonnes against 26,000 tonnes in June. Stavrolen plans to shut its capacity for two months of maintenance works for the modernisation of part of the facilities from 1 September. The plant's HDPE output reached 168,200 tonnes in the first seven months of 2017, up by 8% year on year.

Gazprom neftekhim Salavat shut its capacity for long-term preventive maintenance from 1 July; June production of HDPE at the Salavat enterprise amounted to about 10,000 tonnes. Thus, overall HDPE production at Gazprom neftekhim Salavat reached 51,500 tonnes in the first seven months of 2017, down by 20% year on year. Such a noticeable decrease in the volume of output was a result of long preventive maintenance, whereas last year the company worked without long-term turnaround.

Nizhnekamskneftekhim in late June, switched to the production of linear polyethylene and plans to resume the production of HDPE only in early September. HDPE production at the Tatar plant was 12,500 tonnes over an incomplete month of work. Overall HDPE production at the plant in January-July was 37,100 tonnes compared with 77,700 tonnes year on year. Such a significant reduction in output was a result of the growth in the share of linear polyethylene in total production.


MRC

Major turnaround at Neste refinery to complete planned production structure change

MOSCOW (MRC) -- In mid-August, Neste will begin a two-month shutdown at its refinery in Naantali, Finland. The major turnaround will complete the plan first introduced in 2014 to implement closer integration of the operations of the two Finnish refineries under uniform management, said Hydrocarbonprocessing.

The Finnish refinery operations of Neste consist of four production lines at the Porvoo refinery, and one in Naantali.

"With the ongoing investment program, we're aiming for an additional margin of at least $5.5/bbl after the ongoing strategic investments in Porvoo and Naantali are completed," said Matti Lehmus, Executive Vice President of Oil Products at Neste. "The production structure will be revamped to decrease the importance of heavy fuel oil and to increase the proportion of more valuable products."

In the future, the Naantali production line will produce gasoline, diesel oil and special products, including solvents and bitumen. Naantali also produces important feedstocks such as vacuum gas oil for the Porvoo refinery's production lines. Naantali's terminal capacity will be used to distribute products produced in Porvoo and Naantali.

Planned major turnarounds are significant projects for the maintenance of the refinery's competitiveness, safety and reliability, and they are carried out every four to five years. Furthermore, statutory pressure equipment inspection and maintenance require scheduled shutdowns. The previous major turnaround at Naantali took place in 2012. The impending turnaround will be the most extensive ever carried out at the Naantali refinery.

The multinational project will have a total of about 30 different nationalities among the contractors. The maximum workforce active at any one time will be 1,500.

The Naantali turnaround with the related investments aims to improve the competitiveness of the Finnish refinery operations of Neste. The total cost of the turnaround will be around EUR 90 MM. The sum consists of investments related to the turnaround, maintenance investments made at the same time, and the value of lost production. Work related to the change of production structure at the Naantali refinery has already been carried out for more than 700 days during production operations with no lost workday injury cases.
MRC

Rosneft plans to close Essar deal in coming days

MOSCOW (MRC) — Russia's Rosneft plans to close the deal to buy a stake in India's refiner Essar Oil in the coming days, Pavel Fyodorov, Rosneft first vice-president, told a conference call on Tuesday, as per Reuters.

He added that Rosneft had made around USD6 B in pre-payments to Venezuelan state company PDVSA and had no immediate plans to make any further advance payments soon.

In 2015, Rosneft signed a preliminary agreement with the Essar group, controlled by the Ruias, to buy a 49% stake in Essar Oil’s Vadinar refinery and supply 100 million tonnes of oil to the latter for the next 10 years.

Rosneft became Russia's largest publicly traded oil company in March 2013 after the USD55 billion takeover of TNK-BP, which was Russia’s third-largest oil producer at the time.
MRC

Shell says restarting units at Pernis oil refinery

MOSCOW (MRC) — Royal Dutch Shell said on Tuesday it was restarting a number of units at Europe's largest oil refinery in the Netherlands following a 10-day outage, said Reuters.

The phased restart of the 404,000 bpd Pernis refinery is expected to weigh on refining margins in the region which rose sharply in the wake of the outage, caused by a fire at a power unit and a subsequent hydrogen fluoride leak.

Shell is currently restarting a number of units at the refinery near Rotterdam, a company spokesman said. Restarting a refinery of this size, which includes dozens of units, can be a complicated process and units often trip in the process.

It was unclear how long the restart process will take, but it comes slightly ahead of Shell's initial expectations of two weeks.

"Complete restart will take place in a structured and controlled way," the oil major said in an emailed statement, without identifying which units were resuming operations.

Refining margins were expected to weaken in the short term once the Pernis refinery resumes production and as large volumes of diesel imports reach the continent, said Robert Campbell, head of oil products markets analysis at Energy Aspects.

"This avoids some of the worst case scenario in the Amsterdam-Rotterdam-Antwerp refining hub but (maintenance) work is still significant in the autumn," Campbell said, which will support refining margins then.

The restart comes after Shell engineers were able to restore some of the power through alternative sources, according to industry sources.

No production units were damaged by the fire but some catalysts, used in upgrading units, will require replacing, according to the sources.
MRC

KBR signs agreement with Saudi Aramco to expand in-kingdom localization efforts

MOSCOW (MRC) -- KBR, Inc. has entered into a Memorandum of Understanding (MoU) with Saudi Aramco to expand and develop KBR's services for Saudi Aramco in line with the Kingdom of Saudi Arabia's (KSA) localization objectives, said Hydrocarbonprocessing.

The MoU and initiative is in line with Saudi Aramco's In-Kingdom Total Value Add (IKTVA) initiative that aims to double the percentage of locally produced energy-related goods and services to 70% of the total spent by 2021.

The MoU also seeks to encourage Saudi Aramco's in-Kingdom and worldwide partners across the supply chain to maintain their commitment to invest in the Kingdom and leverage the huge opportunities for growth of businesses, resources and utilize the available local skills.

KBR has partnered with clients around the world to create successful local training programs, while employing qualified local nationals on projects. KBR continues to expand upon these efforts in the Kingdom. For example, KBR provided engineering, design, project management, operations and maintenance services for the Sadara project in Jubail, the largest petrochemical complex ever built in a single phase. This project alone created thousands of jobs for both Saudi and US engineers, project managers, and other employees.
MRC