Canadian ultra-cheap natural gas drives hopes of petrochemical boom

MOSCOW (MRC) -- Canada’s gas-rich province of Alberta is looking to recreate the building boom spreading along the US Gulf Coast, where inexpensive natural gas generated billions of dollars in investment by petrochemical companies, reported Reuters.

The adoption by drillers of fracking technology to unlock oil and gas from shale rock expanded US production dramatically starting a decade ago. That abundance has generated USD194 billion since 2010 in announced capital investment to build or expand US chemical plants that use gas to make plastics, fertilizer and fuel, according to the American Chemistry Council.

Alberta hopes to do the same thing, turning prices that are about one-third those at the US Gulf Coast into a competitive advantage to attract petrochemical companies. Such investment would provide a badly needed market for oil and gas within the landlocked province, where energy companies struggle to reach buyers farther away.

Alberta in 2016 launched incentives to diversify its oil-based economy. Two projects, including Inter Pipeline Ltd’s planned CUSD3.5 billion (USD2.7 billion) petrochemical plant near Edmonton, have been approved to share CD500 million in royalty credits.

Alberta solicited bids for a second subsidy round in June.

"They’re getting all kinds of expressions of interests," David Podruzny, vice-president of business and economics at the Chemical Industry Association of Canada, said in an interview.

As attractive as cheap gas is, skeptics say Alberta’s incentives fall short of those in the US Gulf, and the province also has the disadvantages of higher costs and inadequate infrastructure.

But companies are chasing opportunities even without government help.

CF Industries Holdings Inc is boosting ammonia fertilizer production by 150,000 short tons annually at its Medicine Hat, Alberta, plant starting later this year. The lower cost allows it to ship farther than usual, to farmers in the corn-growing U.S. state of Iowa.

"At times it’s free," said Bert Frost, CF’s senior vice-president of sales, of Alberta’s gas. "We have the lowest-cost gas in the world today."

Fertilizer producer Nutrien Ltd has begun analyzing a potential expansion in Alberta, Chief Executive Chuck Magro said. He expects the abundance of cheap gas to persist, even if the USD40 billion LNG Canada terminal for liquefied natural gas is built in coming years, creating a new export outlet.

"Our analysis is you would need to build several (LNG terminals) before we would see much higher gas prices," he said in an interview this month. "I’m quite bearish for natural gas in Western Canada for the foreseeable future."

Methanex Corp, which makes a liquid chemical called methanol, is considering a second plant in Medicine Hat, said Paul Daoust, vice-president for North America.

Canada is the world’s fifth-largest gas producer, but much of the gas it used to sell into the Northeastern United States has been displaced by expanding US supplies.

An incentive program spanning up to a decade and competitive with what is available along the US Gulf Coast is necessary to offset Alberta’s higher capital costs, said Lori Kent, executive director of Resource Diversification Council.

Insufficient pipeline infrastructure is also holding the province back, said John Rogers, senior vice-president at credit ratings agency Moody’s.

Low prices have been a hardship for gas producers, and prolonged weakness could force them to reduce supplies.
Crew Energy Inc has already shut in dry gas wells this year, said Chief Executive Dale Shwed.

"If companies are not going to make money producing gas and selling it, they’re not going to drill for it," Shwed said.

We remind that, as MRC informed before, in December 2017, Jacobs Engineering Group Inc. was awarded a contract by Canada Kuwait Petrochemical Corporation (CKPC) to provide front-end engineering design (FEED) services for a proposed greenfield, integrated propane dehydrogenation and polypropylene facility located in Sturgeon County, Alberta, Canada.
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MOSCOW (MRC) -- Invista’s technology and licensing group, Invista Performance Technologies (IPT), and Fujian Billion Petrochemicals Co., Ltd. have reached an agreement to license INVISTA’s latest purified terephthalic acid (PTA) process technology for a new PTA line, as per Hydrocarbonprocessing.

The PTA line will have a design capacity of 2.5 million metric tonnes per year and will be installed in Fujian Province, China.

"We are honored that our advanced, industry-leading P8 technology has been selected. Our demonstrated ability to deliver a fast schedule and the fact that our technology is proven were key factors in our selection. This represents a new chapter for deployment of Invista’s P8 PTA technology aimed at creating competitive advantage for our global customers," Mike Pickens, IPT president said.

A kick-off meeting was successfully held in the week of August 13, 2018. The targeted project start-up date would be in August 2020.

As MRC wrote previously, in May 2018, Invista Performance Technologies (IPT) announced the success of its latest P8 PTA technology deployed on Jiaxing Petrochemical’s second PTA Line.

IPT’s P8 PTA technology is available as a licence package from Invista Performance Technologies.
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MOSCOW (MRC) -- Sinopec Maoming Petrochemical has restarted its No. 2 low density polyethylene (LDPE) unit in Guangdong, according to Apic-online.

A Polymerupdate source in China informed that the unit has recently resumed production following a brief maintenance. The unit was shut on August 22, 2018.

Located at Guangdong in China, the No. 2 unit has a production capacity of 280,000 mt/year.

As MRC informed previously, Sinopec Maoming Petrochemical conducted a brief turnaround at its LDPE unit No. 1 on 1-2 September, 2017. Located at Guangdong in China, the unit has a production capacity of 120,000 mt/year.

Sinopec Maoming Petrochemical Company (Maoming Company) - a subsidiary of Sinopec- is located in Maoming, Guangdong and was founded in May 1955. The company now has a crude oil processing capacity of 13.5 million t/a and an ethylene production capacity of 1 million t/a. Maoming Company has turned out to be a large-scale integrated refining and chemical enterprise with refining as the leading business and petrochemical sector as the mainstay.

China Petroleum & Chemical Corporation, or Sinopec Limited is a Chinese oil and gas company based in Beijing, China. It is listed in Hong Kong and also trades in Shanghai and New York . Sinopec is the worlds fifth biggest company by revenue.
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MOSCOW (MRC) -- China Petroleum & Chemical Corp , the country’s largest refiner, reported its best quarterly profit in years on strong upstream and refining business, and said it expects higher fuel sales in the second half, as per Reuters.

Known as Sinopec, the company said in a statement late on Sunday that first-half net income was 41.6 billion yuan (USD6.05 billion), up 54 percent from the same period a year. That marks its best first-half performance since it listed 18 years ago, a company spokesman said on Monday, topping its own forecast of 50 percent profit growth, issued late in July.

The company doesn’t give a breakdown for second-quarter results. But according to Reuters calculations based on Sinopec’s first-quarter earnings, April-June net income climbed to 22.8 billion yuan from 18.8 billion yuan in the first three months of the yea, the highest since at least the start of 2013.

The stronger earnings came after oil topped USD80 a barrel in May for the first time since 2014, boosted by OPEC-led output cuts and falling Venezuelan and Libyan output, as well as by an imminent drop in Iranian exports as U.S. sanctions return.

Sinopec’s bumper results also come as state oil refiners have exported record volumes of diesel and gasoline, grabbing a bigger share of the market as smaller, independent refiners struggle with tough new taxes, a government-led environmental crackdown and crippling costs from the higher crude oil.

Total revenue in the first six months of the year rose to 1.3 trillion yuan, up 12 percent from a year earlier, amid higher crude prices, rising natural gas production and stronger fuel margins, the statement said.

Second-quarter revenue was 679 billion yuan, according to Reuters calculations. Still, Sinopec warned on Sunday processing rates for crude to stay flat in the second half of 2018, amid an oversupply of refined fuels.

The company said it will process 121 million tonnes of crude oil in the second half of the year, the same as in the first half, and its domestic fuel sales will be 90.5 million tonnes, compared to 88.45 million tonnes in the first half, it said in a statement to the Shanghai Stock Exchange.

"Sinopec ramped up efforts to sell fuel in domestic market by giving a discount especially for diesel in the second quarter. The discounts have boosted sales volume but hurt revenue," Eyebright Securities said in a research note last week after the company gave a results forecast.

Crude oil production in the first half fell 1.6 percent from the same period a year earlier to 143.6 million barrels while natural gas output was up 5.3 percent from a year earlier to 476.2 billion cubic feet, Sinopec said. Sinopec will produce 146 million barrels of crude oil in the second half of 2018, it said.

Refined product sales in the first half were down 2.1 percent from the same period a year earlier. Chinese offshore oil and gas company CNOOC Ltd last week reported its best profits since 2015.

China’s largest oil producer PetroChina, will publish their final first-half results on Aug. 30.

As MRC reported earlier, Sinopec Shanghai Petrochemical conducted maintenance works at its low density polyethylene (LDPE) unit in Shanghai from 26 February, 2018, to 26 March, 2018. Thus, the turnaround at the plant lasted for one month. Located at Shanghai in China, the LDPE unit has a production capacity of 100,000 mt/year.

China Petroleum & Chemical Corporation, or Sinopec Limited is a Chinese oil and gas company based in Beijing, China. It is listed in Hong Kong and also trades in Shanghai and New York . Sinopec is the worlds fifth biggest company by revenue.
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MOSCOW (MRC) -- GN Thermoforming winning new orders for its new GN800 unit
The Chester, N.S.-based company has received multiple orders from Canadian and American processors for its new GN800 Thermoformer, and expects further increased business activity over the next several months in the U.S, Mexico, and the Caribbean, as per Canplastics.

On the heels of what it calls a “highly successful” NPE2018 trade show in May, Chester, N.S.-based GN Thermoforming Equipment has received multiple orders from Canadian and American processors for its new GN800 Thermoformer.

According to Jerome Romkey, GN’s vice president of sales and foreign operations, GN has received orders for six GN800 units so far and expects further increased business activity over the next several months in the U.S, Mexico, and the Caribbean.

Targeted for food, medical, and industrial packaging, the GN800 offers many standard features including forming capability of five-inches above and below the sheet line, in-mold-cut capability, auto-grease, heavy-duty bearings in the toggle system, and high-efficiency SOLAR heaters.

Additionally, the GN800 has a forming area of 830 mm by 570 mm (31.5-inches by 22.4-inches). The cutting force of the forming and cutting stations is 75 tons. The GN800 also has additional space between the forming and cutting stations, providing extra cooling time when running heavier gauge materials or PP. The GN800 features a standard oven that is four times the index length of the forming area. The unit also features independent top and bottom servo-plug drives for better material distribution. The GN800 handles sheet widths up to 880 mm (34.6-inches), and can run sheet thicknesses ranging from 0.25 mm (0.010-inches) to 1.5 mm (0.060-inches). The unit comes fully equipped and handles all thermoformable grades of PET, OPS, HIPS, PLA, PP, and PVC.

“Overall, traffic was down at our booth at NPE2018 but we were pleased to see that the quality of attendees was superior to previous shows,” Romkey said. "It was a great show because we had a targeted group of visitors – they were at NPE for a reason and interested in buying."

GN manufactures roll-fed thermoformers for the production of high-quality plastic packaging. The company’s operation also includes a technical service and sales centre in Jihlava, Czech Republic.
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