Chinese refiner Hengli hires crude trader in Singapore

MOSCOW (MRC) -- Chinese private refiner Hengli Group and its partner state-owned Sinochem Corp have hired a crude oil trader at their Singapore office ahead of Hengli’s refinery start-up in the fourth quarter, reported Hydrocarbonprocessing with reference to several trade sources.

Former Itochu trader Kevin Ng will be joining Hengli Oilchem in October to procure crude oil and trade derivatives, they said.

Hengli OilChem, 80 percent owned by Hengli and 20 percent by Sinochem, officially opened in Singapore in June and is responsible for procuring crude, selling products and petrochemicals and conducting third-party trading.

Hengli has so far bought Brazilian and Saudi crude for trial runs at its new refinery expected in October.

The 400,000 barrels-per-day (bpd) refinery in the northeastern port city of Dalian will be one of the five largest refineries in China and a major crude oil buyer.

As MRC informed before, on 14 August 2018, Hengli Petrochemical restarted operations at its no.1 purified terephthalic acid (PTA) plant at Dalian, following a planned maintenance turnaround. The plant was taken off-stream on August 1, 2018. Currently, the plant is operating at 80-85% production capacity rates. Located at Dalian in China, the plant has a production capacity of 2.2 mmt/year.
MRC

MOSCOW (MRC) -- A fire broke out at a Plains All American Pipeline crude storage tank east of Wichita Falls, Texas, the company said, as per Reuters.

The fire was limited to a single storage tank at the Wichita Falls Station, the company said, and none of its workers were missing. Plains did not say if there were injuries but did say that first responders were on site.

Plains did not specify whether the fire had affected any other operations. Wichita Falls is a crude injection point in North Texas along Plain’s Basin Pipeline, which runs from the Permian Basin that to the oil storage hub at Cushing, Oklahoma.

The Basin pipeline was shut briefly, according to market intelligence firm Genscape, though the cause was unclear. Flows on the pipeline resumed to a rate of nearly 410,000 barrels per day (bpd) after power consumption increased at about 1:00 p.m. ET, Genscape said in a notice.

Pipeline flow averaged about 365 Mbpd this week thus far and the Basin pipeline has a capacity of 450 Mbpd, Genscape said.

News of the pipeline closure contributed to weakness in West Texas Intermediate at Midland WTC-WTM crude differentials during the day, traders and brokers said.

WTI Midland traded as much as USD18 a barrel below U.S. crude futures early in the session, the biggest discount since late 2012. Prices recovered to last trade at a USD16.75 a barrel discount, dealers said. On Monday, WTI at Midland traded near USD15 a barrel under Cushing.

"Plains really hasn’t said much to the shippers so unless it’s going to be shut for a while, I don’t think there’ll be much market impact," said one trader who buys oil off the pipeline.

Plains did not respond to a request for comment on the Basin pipeline closure.
MRC

MOSCOW (MRC) -- South Korea-based S-Oil Corp., wholly owned by Saudi Aramco, is conducting a feasibility study into building a mixed feed cracker and downstream olefins units, as part of a phase II petrochemical project near its Onsan Refinery in South Korea, according to Apic-online.

The project would involve an investment of more than KRW 5-trillion in a 1.5-million-t/y steam cracker, which would produce ethylene and other basic petrochemicals from naphtha and off-gas burned as fuel in the refinery.

The downstream units would include the production of polyethylene and polypropylene.

If approved, the project is expected to drive S-Oil's sustainable growth by diversifying its business portfolio, sharpening competitiveness and building a more stable income structure, the company noted.

"The project will significantly benefit the economy too, as it will create 2.7-million man-days during construction, 400 regular jobs, reinvigorate the construction sector and increase exports," said S-Oil.

As MRC reported earlier, in April 2018, S-Oil Corp. completed construction of its residue-upgrading complex (RUC) and olefin downstream complex (ODC), which will help enhance its competitiveness by producing more high value-added products. Othman Al-Ghamdi, chief executive of S-Oil, said that the company will focus this year on successfully completing its residue upgrading and capacity expansion project that is underway at its Onsan refinery complex in Ulsan in southern coast. The KRW 4.8 trillion (USD 4.46 billion) RUC/ODC project involves building a facility that produces high-valued chemical products such as propylene and gasoline using residues left after refining crude oil, and then using propylene to product polypropylene and propylene oxide.
MRC

MOSCOW (MRC) -- Global energy trader Gunvor Group has put on hold plans to upgrade its Rotterdam refinery that intended to make the plant more competitive ahead of new global rules on shipping fuel quality, it said, citing market conditions, as per Reuters.

Global oil and shipping companies are looking at options to cope with the new standards that come into effect in 2020.

The U.N. International Maritime Organization (IMO) will ban ships using fuel with a sulfur content higher than 0.5 percent, compared to 3.5 percent now, unless a vessel has the equipment to clean up its sulfur emissions.

Few ships have so-called scrubbers to clean up emissions and demand for cleaner marine gasoil is expected to jump at the expense of fuel with high sulfur content.

Refiners are working to adapt and stay competitive. Analysts say upgrading a refinery with a capacity of around 88,000 barrels per day, like Gunvor’s Rotterdam plant, could cost hundreds of millions of dollars. Larger plants may face a bill of USD1 billion.

"The price environment and other relevant economics have changed considerably since Gunvor first began exploring the concept a year ago," the company said, referring to the upgrade facility, known as a delayed coker unit.

Dutch newspaper Het Financieele Dagblad first reported the delay, citing an internal company memo. The firm acquired a significant amount of storage when it bought the 88,000-barrels-per-day refinery from Kuwait Petroleum International in 2016.

Last year, it sold its stake in crude oil storage at the nearby Maasvlakte Olie Terminal to Saudi Aramco Overseas Co. It plans to sell its stake in the Stargate storage terminal as well but Gunvor told Reuters these efforts were now also on hold.
MRC

MOSCOW (MRC) -- Wood hasrecently provided technical support for Equinor’s liquefied natural gas (LNG) facility at Melkoya Island, Norway, as part of a new contract secured under an existing master services agreement, as per Hydrocarbonprocessing.

Hammerfest LNG is Europe’s largest LNG liquefaction plant and uses gas from the Snohvit development in the Barents Sea. The plant has the capacity to produce 4.3 million tonnes per annum of LNG.

As part of the scope of work, Wood’s process technology & consulting team carried out a study phase assessment of onshore compression, additional LNG processing capacity and electrification of the facility. The study looked at the use of modular applications in brownfield environments to ensure a balance between safety, layout, construction and process constraints.

Bob MacDonald, CEO of Wood's Specialist Technical Solutions business, said: "Wood has a longstanding working relationship with Equinor. We look forward to continuing this partnership by helping the team evaluate and realize opportunities for the continued operation of Hammerfest LNG at a plateau and into the foreseeable future through the potential investment of new facilities."

Geir A. Owren, project director at Equinor, said: "We are looking forward to working together with Wood as part of this study which aims to find effective solutions for the continued success of Hammerfest LNG."

As MRC wrote before, in October 2017, Wood was awarded a new multi-million dollar contract by Total, supporting their Lindsey Oil Refinery located in North Killinghome, Lincolnshire, UK. The 5-yr contract is to provide onshore maintenance services and includes the option to be extended up to 2 yr.
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