China Sept crude oil, gas imports jump ahead of winter fuel demand

MOSCOW (MRC) — China’s September crude oil imports climbed to the second highest level on record, while natural gas imports rose nearly 5%, official customs data showed on Friday, as the world’s top energy consumer shored up fuel supplies for winter, said Reuters.

For the year to date, gas imports were 48.38 MMt, up 22.3%, data from the General Administration of Customs showed. Gas arrivals last month reached 5.94 MMt, up 3.7% from a year ago and up 4.9% from August.

China is preparing to heat millions of homes with gas for the first time, which has stoked demand for LNG imports, as they are cheaper than domestic supplies.

"More demand for the clean fuel from winter heating and massive gasification projects, especially in provinces such as Hebei and Henan, will push imports to a fresh record in the fourth quarter," said Liang Jin, an analyst with commodities consultancy JLC said. Asian LNG spot prices LNG-AS have soared 57% since March to $8.50/MMBtu on growing demand for gas in the world’s second-biggest economy.

Crude oil imports C-CNIMP-PRM rose 12% in September to 37 MMt, or around 9 MMbpd, up from an eight-month month low in August, boosted by buying from China National Offshore Oil Corp’s new refinery and a fleet of independent refiners.

Year-to-date, crude buying rose 12% from a year ago to 318 MMt, or 8.5 MMbpd, a record high. “September imports were higher than expected. The support mainly comes from CNOOC’s Huizhou refinery which just started and some teapot plants returning from maintenance,” said Harry Liu, downstream expert with consultancy IHS Markit.

Liu expects imports through the fourth quarter to average about 8.6 MMbpd, with import growth to ease due to a domestic surplus of refined fuel. "The government’s fuel export quotas are having an impact on refinery throughput and subsequently on crude oil imports," he said.

Total oil product exports in September fell 11% to 3.82 MMt from a year ago and dropped 17% from August. The Commerce Ministry issued a fourth batch of refined product export quotas in late September to ease oversupply in the domestic market.

Major refiner Sinopec and PetroChina have applied for extra quotas to export more gasoline, diesel and jet fuel before the end of the year, sources told Reuters.
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Record US oil exports set to surge further

MOSCOW (MRC) — Already record US oil exports are set to surge further in the coming month as stored oil in one of the world's last areas of excess stockpiles pours into global markets, the chief executive of trading house Mercuria, Marco Dunand, as per Reuters.

The US shale oil revolution upended global energy markets, and in late September the country's oil exports hit a record 1.98 MMbpd. But Dunand said the surplus of oil in tanks meant more was likely to come. "I think the volume that's going to be exported from the US in the next two or three weeks is unprecedented in size," Dunand told the Reuters Global Commodities Summit, adding levels could hit 2.2 MMbpd.

"Looking at the vessel fixtures of recent times, I think we're going to see record exports over the next month." The United States lifted its nearly 40-yr ban on oil exports in late 2015. As US crude production continues to rise, its oil has found buyers in nearly every refining hub from Europe to Venezuela to China and India.

Dunand said after "hundreds of millions of barrels" had departed tanks and floating storage elsewhere in the world over the past year, the United States is an outlier of excess. "The US has an excess of crude stocks. Product stocks are more or less in line," Dunand said. "The rest of the world, crude stocks are more or less in line. The excess of crude stocks to rebalance the market naturally has to find its way."

In July and August, the Brent and Dubai crude contracts flipped into backwardation, a market structure in which immediate prices are higher than those in the future. This structure suggests markets are balanced or in short supply. But US crude futures remain in contango, a structure in which later prices are above the prompt level, indicating there is still a surplus.

"If you have backwardation in Dubai, backwardation in (Brent) and a contango in WTI (West Texas Intermediate crude), it's telling you that some of the WTI excess has to move to other places," Dunand said. "Some of those US barrels are going to go into Europe, and some into Asia. Asia is going to absorb a fair amount of that crude," Dunand said.

Still, he said the market was prepared to absorb the exports without significantly weighing on global price benchmarks. "The refiner will go and buy the cheapest possible barrels."


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Ineos running at 50% at 545,000 mt/year ACN Texas plant

MOSCOW (MRC) -- Ineos Nitriles is currently running two reactors at its 545,000 mt/year Green Lake plant in Texas, as per Apic-online with reference to a company source.

"We are currently operating 50% and we are currently operating two reactors," he said. He declined to give further details or confirm any future plans.

Several market participants said they expect Ineos to start running the whole plant this week. The plant began at the end of September.

Ineos declared force majeure on acrylonitrile from its Green Lake plant early September after disruption by Hurricane Harvey.

As MRC informed before, in September 2016, Ineos Enterprises completed the sale of Ineos Styrenics, its Expandable Polystyrene Business (EPS), to Synthos S.A. for EUR80m. The sale of the Styrenics business included manufacturing sites at Wingles and Ribecourt in Northern France and Breda in the Netherlands. The three production sites are supported by its technology Centre in Breda, including a research laboratory and pilot plant facilities.

Ineos Group Limited is a privately owned multinational chemicals company consisting of 15 standalone business units, headquartered in Rolle, Switzerland and with its registered office in Lyndhurst, United Kingdom. It is the fourth largest chemicals company in the world measured by revenues (after BASF, Dow Chemical and LyondellBasell) and the largest privately owned company in the United Kingdom.
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Petrochina expresses interest in Iraqs Nassiriya refinery

MOSCOW (MRC) — Petrochina has expressed interest in developing the Nassiriya oil refinery in southern Iraq, the oil ministry said in a statement on Friday, as per Reuters.

A Petrochina executive expressed the company’s interest at a meeting with Oil Minister Jabar al-Luaibi in Baghdad. The refinery is part of a larger project to develop the Nassiriya region’s oil and gas reserves.

The plan provides for increasing the fields’ output and the processing of their production at the new Nassiriya refinery, and to recover the associated gas to supply power stations or process it for exports.
MRC

AkzoNobel on way to doubling capacity at organic peroxides plant in China

MOSCOW (MRC) -- AkzoNobel’s Specialty Chemicals business has entered the next phase of a major expansion at its organic peroxides facility in Ningbo, China, which will increase production capacity by more than 100% by the third quarter of 2018, as per the company's press release.

The company’s Ningbo site produces dicumyl peroxide (DCP), an organic peroxide used as a crosslinking agent in the manufacture of polymers. Capacity at the site was boosted by 40% in August, following the completion of an initial project, and is set to double to a capacity of 38,000 tons per year.

"The market for DCP is strong and continues to grow globally," says Johan Landfors, Managing Director of AkzoNobel’s Polymer Chemistry business. "This new expansion is necessary to meet that demand, and is also a visible demonstration of the company’s continued commitment to invest in the future of the Specialty Chemicals business."

DCP is used in the production of a variety of polymers that need to have exceptional durability. These polymers can be found in many different products, including shoe soles – a market which is growing significantly, especially in developing countries. DCP is also used in polymers for insulating high voltage cables, which are increasingly in demand for upgrading electricity networks, connecting offshore wind parks and other sources of renewable energy.

"The continued development in Ningbo is a clear sign to our customers that we are dedicated to retaining our leadership position in the organic peroxides industry," adds Werner Fuhrmann, AkzoNobel’s Executive Committee member responsible for Specialty Chemicals. "By continuing to invest in our production sites and focusing on operational excellence, we will be better positioned to accommodate the growth of our customers."

More than 500 people are employed at the Ningbo site, which houses manufacturing plants for several of AkzoNobel’s Specialty Chemicals businesses. AkzoNobel’s Ningbo DCP plant is the largest of its kind in the world.

As MRC informed before, in Decmeber 2016, AkzoNobel finalized the acquisition of BASF’s global Industrial Coatings business, which supplies a range of products for industries including construction, domestic appliances, wind energy and commercial transport, strengthening its position as the global number one supplier in coil coatings. The transaction includes relevant technologies, patents and trademarks, as well as two manufacturing plants in the United Kingdom and South Africa. Completing this transaction also positions AkzoNobel as a full service coatings provider for the protection and maintenance of wind turbines, providing essential protection to wind power stations around the globe.

Akzo Nobel N.V., trading as AkzoNobel, is a Dutch multinational, active in the fields of decorative paints, performance coatings and specialty chemicals. Headquartered in Amsterdam, the company has activities in more than 80 countries, and employs approximately 55,000 people.
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