After summer of discontent, China's teapot refineries ramp up oil imports

MOSCOW (MRC) - China’s independent refiners have ramped up their foreign oil buying after returning from prolonged summer maintenance to gear up for rising winter fuel demand, a sign that the financial pain from taxes and higher crude prices have ebbed for now, as per Hydrocarbonprocessing.

The pick-up in imports by private refiners often called "teapots", has boosted the physical prices of Middle Eastern and Russian oil to their highest in months.

Their return to the market also comes as margins have improved after their extended shutdowns helped drain a glut of diesel and gasoline, boosting domestic fuel prices.

The independents imported 6 million tonnes, or 1.4 MMbpd of crude in August, up 40 percent from July and 10 percent higher from the same period last year, Thomson Reuters Oil Research and Forecasts data showed. Their July purchases were the second-lowest on record for data going back to October 2016, as refiners shut or suspended operations due to a toxic mix of sinking diesel demand, higher crude prices and new tax rules.

The calculation does not include purchases from large private refiners Hengli Petrochemical and Rongsheng Group. The teapots account for about one-fifth of the nearly 9 MMbpd of crude oil imported into China, the world’s biggest oil importer.

"Our bookings of heavy crude increased in August and September as we came back from a 20-day-long maintenance in July," said a manager with a Dongying-based independent refiner who declined to be identified as he is not authorized to speak to the media.

"Margins have been negative for a while, but we finally booked profit in August," he said, adding that higher refined products prices encouraged more refineries to return from maintenance.

Sustained buying from China’s independents will add to global demand at the same time there are looming supply disruptions expected from major producers such as Venezuela and Iran. The surge in demand should boost benchmark futures prices. It will also allay worries about weaker demand as China’s economic growth has stumbled.

"Crude demand in September will further pick up from August because independents are going to ramp up for winter production in the fourth quarter," said Zhou Guoxia, an analyst with oil consultancy JLC, adding that the industry has been haunted by tight credit and more scrutiny on their tax practices.
MRC

MOSCOW (MRC) -- Idemitsu Kosan Co has taken off-stream its styrene monomer (SM) plant for a maintenance turnaround, as per Apic-online.

A Polymerupdate source in Japan informed that the company has commenced turnaround at the plant on August 24, 2018. The shutdown is likely to last for around five weeks.

Located in Tokuyama, Japan, the SM plant has a production capacity of 340,000 mt/year.

As MRC wrote previously, Japan's Idemitsu Kosan shut its naphtha cracker for a maintenance turnaround in Japan from September 20, 2017, to end-October 2017. Located at Chiba in Japan, the cracker has an ethylene production capacity of 375,000 mt/year.

Idemitsu Kosan is a Japanese petroleum company. It owns and operates oil platforms, refineries and produces and sells petroleum, oils and petrochemical products. The company runs two petrochemical plants in Chiba and Tokuyama. The two naphtha crackers can produce up to 997,000 tonnes of ethylene per year.
MRC

MOSCOW (MRC) --TechnipFMC has been awarded by Long Son Petrochemicals Co., a contract for the licensing, engineering, procurement, construction, commissioning and start-up of Vietnam’s first olefins(2) plant on Long Son Island, Ba Ria-Vung Tau province, Vietnam, as per Hydrocarbonprocessing.

Designed as a flexible feed cracker, the olefins plant can utilize both naphtha and LPG(3) feeds to produce olefins of up to 1.6 million tons per year depending on the feedstock mix. The olefins will help meet Vietnam’s rising demand for petrochemical products. The plant will also include proprietary licensed units(4) and will be based on TechnipFMC’s proprietary ethylene technology.

TechnipFMC is executing the project in a consortium with SK Engineering & Construction Co., Ltd. of South Korea. TechnipFMC is the leader of the consortium and, as a global company, will execute all engineering, as well as the procurement of critical equipment from its operating centers located in Houston, USA, Rome, Italy and Kuala Lumpur, Malaysia.

Nello Uccelletti, President of TechnipFMC’s Onshore/Offshore business, commented: "Our reliable proprietary ethylene technology and proven engineering, procurement and construction capabilities were key factors in this important, highly competitive award and confirms our leadership in this market. TechnipFMC will ensure, with SK Engineering & Construction, that this ambitious mega project is successfully delivered on time and on budget, meeting the highest safety and quality standards".

The contract adds on to the remarkable list of TechnipFMC’s references of onshore achievements in Vietnam, in particular the country’s very first oil refinery, the Dung Qu?t Refinery and the Phu My Fertilizer Complex.
MRC

MOSCOW (MRC) -- BP Plc said on Tuesday that its joint-venture 155,000-barrel-per-day (bpd) Toledo, Ohio, refinery was returning to normal operation following an unplanned outage earlier on Tuesday, as per the company's press release.

BP also said a shelter-in-place advisory to some residents of the Toledo suburb of Oregon, Ohio, had been lifted.

Energy industry intelligence service Genscape said excess emissions were observed from a sulfur recovery unit at the refinery late on Tuesday morning.

As MRC reported before, British oil and gas company BP will increase investment in the United States after the lowering of tax rates under President Donald Trump, Chief Executive Bob Dudley said in early February, 2018.
MRC

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