Indonesia bets big on biodiesel to limit costs of oil imports

MOSCOW (MRC) - Indonesia plans to require all diesel fuel used in the country contain biodiesel starting next month to boost palm oil consumption, slash fuel imports, and narrow a yawning current account gap, as per Hydrocarbonprocessing.

While the proposal has been welcomed by the palm oil industry and government, it has raised concerns among the automobile industry the fuel could impact engine performance.

Environmentalists fear the boost to local palm oil consumption will hasten Indonesia's already fast spreading deforestation.

The following explains some of the issues surrounding the drive to increase biodiesel usage.

Indonesia currently imports around 400,000 barrels per day of crude oil and a roughly similar amount of refined products, which makes Southeast Asia's largest economy vulnerable to the sort of increases in global crude prices seen over the past year.

With the current account deficit estimated to grow by USD8 billion in 2018, the plan is to cut diesel imports by mandating that all diesel consumers, including power plants and railways, use biodiesel that contains 20 percent bio-content (B20), typically palm oil. Officials estimate this will save Indonesia around USD6 billion per year.

The programme will increase domestic consumption of palm oil in the world's largest producer of the edible oil, providing a market for output that has climbed by 35 percent over the past five years.

In Indonesia, the biocomponent in biodiesel consists of fatty acid methyl esters (FAME) made from palm oil.

Indonesia has 26 FAME producers, including units of palm oil giants like Sinar Mas Group, Wilmar, and Musim Mas, according to the Indonesian Biofuels Producers Association (APROBI). FAME is supplied to fuel distributors including Pertamina, blended with petroleum-based diesel and sold to end-users.

Currently, only around one-quarter of Indonesia's FAME production capacity is utilized, and the new programme could raise this to up to 50 percent, said Togar Sitanggang, a senior official at the Indonesia Palm Oil Association (GAPKI).

The government has said it will provide incentives to biodiesel producers but has not provided details.
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MOSCOW (MRC) -- Schneider Electric, the leader in the digital transformation of energy management and automation, released EcoStruxure Field Device Expert, an application that improves how engineers commission, configure and maintain field devices throughout the lifecycle of the plant, as per Hydrocarbonprocessing.

Field Device Expert’s Intelligent Commissioning Wizard completely automates detection, configuration, commissioning and testing of HART field instrumentation connected to an EcoStruxure Foxboro distributed control system (DCS). Automatic binding and configuration of HART devices has been shown to reduce commissioning schedules by more than 75 percent, leading to faster time to profit.

Traditional, manual device commissioning methodology is manpower intensive, making it error-prone, time-consuming and expertise dependent. By automating the configuration and commissioning process, Field Device Expert drastically changes automation project execution by minimizing hardware dependencies and custom engineering and offers more flexibility in the design, timing and sequence of activities. For example, with traditional commissioning methods, it can take up to 50 minutes to configure each asset. Field Device Expert’s Intelligent Commissioning Wizard shortens that time to 15 minutes, which is a 70 percent reduction. Once the plant is operating, Field Device Expert continues to ease field device configuration and condition monitoring throughout the plant lifecycle which means restarts?like those that occur after a maintenance turnaround or any shutdown?are also faster and easier.

As part of Schneider Electric’s EcoStruxure architecture and platform, Field Device Expert improves efficiency, safety, productivity and profitability. EcoStruxure is Schneider Electric’s open, interoperable, IoT-enabled system architecture and platform and delivers enhanced value around safety, reliability, efficiency, sustainability and connectivity.
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MOSCOW (MRC) - Mexican conglomerate Alfa said that its net profit more than doubled in the second quarter compared to the year-earlier period, helped by a record quarter at its petrochemicals unit Alpek, as per Reuters.

Alfa, which has units in industries such as food packaging and car parts, said net profit was 3.59 billion pesos (USD180 million) between April and June, compared to 1.37 billion pesos last year. Revenue rose 19 percent to 93.7 billion pesos.

The results were helped by petrochemicals unit Alpek, which benefited from higher oil and raw materials prices, as well as the consolidation of Brazil’s Petroquimica Suape and Citepe, the company said.

Alpek’s earnings before interest, tax, depreciation and amortization (EBITDA) hit a record high, according to the company.

Earlier this year, the company said it had teamed up with Thailand’s Indorama Ventures (IVL.BK) and Taiwan’s Far Eastern to buy a chemical plant in Corpus Christi, Texas, as well as other assets.

Alfa said it was in the process of getting government approvals for the operation.

As MRC informed before, in late December 2016m, Petrobras said its board had approved the sale of two petrochemical companies, Petroquimica Suape and Citepe, to Mexico's Alpek SAB de CV for USD385 million.

Headquartered in Rio de Janeiro, Petrobras is an integrated energy firm. Petrobras' activities include exploration, exploitation and production of oil from reservoir wells, shale and other rocks as well as refining, processing, trade and transport of oil and oil products, natural gas and other fluid hydrocarbons, in addition to other energy-related activities.

Alpek is the petrochemicals unit of Mexican conglomerate Alfa.
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MOSCOW (MRC) -- DowDuPont Inc said it expects higher raw material costs to hit all its units for the rest of the year even as an uptick in its agriculture business helped the U.S. chemicals producer beat Street estimates for the fourth straight quarter, as per the company's press release.

"We see some discrete headwinds, most notably currency fluctuations, particularly in agriculture, and higher raw materials costs in all three divisions," Chief Financial Officer Howard Ungerleider said.

Dow and DuPont completed their USD130 billion merger last September to form DowDuPont. It will create three separately traded companies next year, splitting into companies that look at agriculture, plastics and specialty products.

On a conference call with analysts, CEO Ed Breen said trade tensions have increased volatility in agricultural commodity prices.

"U.S. soybean exports that normally go to China are simply being shifted to other countries."

Last month, Washington imposed tariffs on USD34 billion of Chinese imports. In return, China levied taxes on the same value of products from the United States, including soybeans and sorghum. Traders rushed shipments of U.S. soy to China before the tariff took effect on July 6.

However, the company, which has global operations and often sources materials locally, does not expect any tariff-related impact on overall business this year.

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MOSCOW (MRC) -- Shenhua Ningxia Coal Industry Group (SNCG), a subsidiary of Shenhua Group, one of the largest petrochemical producers in China, has shut one of its two polypropylene (PP) units for a maintenance turnaround, as per Apic-online.

A Polymerupdate source informed that the company has halted operations at the unit on August 2, 2018. The unit is likely to restart in mid-August, 2018.

Located at Ningxia province of China, the PP plant comprising of two units have a production capacity of 200,000 mt/year each.

As MRC informed earlier, on March 29, 2018, SNCG restarted its HDPE/LLDPE swing plant following an unplanned outage. The plant was shut on March 1, 2018 on account of the fire occcured in ethylene tank on February 28, 2018. Located at Ningxia province of China, the HDPE/LLDPE swing plant has a production capacity of 450,000 mt/year.

Shenhua Ningxia Coal Industry Group Co., Ltd. engages in coal mining and washing, coal deep processing, coal chemical industry, electric power, real estate, and other businesses.
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