China sets tariff on U.S. LNG just as exports ramp up

MOSCOW (MRC) - China has set a 10 percent tariff on imports of U.S. liquefied natural gas just as trade of the super-chilled fuel between the two nations started to ramp up and exports from new terminals on the U.S. Gulf Coast are poised to begin, Reuters.

Beijing announced on Tuesday it would tax thousands of U.S. products worth USD60 billion in retaliation for tariffs imposed by U.S. President Donald Trump as the trade war between them escalated.

China became the world’s second-largest importer of LNG last year, behind Japan and ahead of South Korea, driven by a push to convert to cleaner gas from coal generation energy.

At the same time, the United States is poised to become a major exporter with the majority of LNG supply growth in coming years from new terminals being planned or built now.

China imported 1.6 million tonnes of the 14.9 million tonnes of LNG that has been exported from the United States so far this year, according to Thomson Reuters data.

Analysts and traders have said that although China is a huge buyer of LNG especially in the run-up to and during winter, it should easily find supplies from other large exporters such as Qatar and Australia.

State-owned Qatargas said this month it had signed a 22-year deal to supply a unit of PetroChina with 3.4 million tonnes a year.

For U.S. companies developing LNG export terminals such as Cheniere Energy, Sempra and Kinder Morgan , the tariff casts doubt over their projects’ final investment decisions (FIDs), which trigger construction of facilities.

"It’s a problem for Cheniere as it makes their LNG uncompetitive in China," Noel Tomnay, vice president for gas and LNG consulting at Wood Mackenzie, told Reuters on the sidelines of an industry event in Barcelona, Spain.

"But the biggest problem is for all those U.S. LNG projects trying to get FID. China would be the biggest market for all of them. While these tariffs last, it’s unlikely they can take off. That’s a potential opportunity for non-U.S. projects (e.g. Canada) to go ahead."

Four new U.S. terminals and one extension will come onstream in stages over the next two years. Once they run at capacity, they will constitute 60 percent of all new supplies expected to be added to the global market by 2023.
MRC

MOSCOW (MRC) -- John Crane, a global leader in rotating equipment solutions, today launched its latest gas seal technology designed to be retrofitted into centrifugal compressors with oil seals to significantly lower operating costs, improve reliability and reduce methane emissions by up to 95 percent, said Hydrocarbonprocessing.

The Aura™ 120 Narrow Section gas seal enables the latest John Crane gas seal technology to be fitted into a larger percentage of older equipment, bringing with it the benefits of non-contacting design. Gas seal technology eliminates the need for oil lubrication associated with contacting seals and the resulting need to address harmful emissions entrapped in the oil. In the natural gas sector, centrifugal compressors equipped with oil seal technology are generally acknowledged as the leading source of methane emissions offshore and the fourth most significant onshore.

"Our expertise in this area has recently led to the development of a lifecycle cost calculator (LCC) that provides a full analysis of the economic case for retrofit from oil seals to gas seals against the next best alternatives," said John Crane Global Product Manager Paul Hosking. "Gas seal technology is proven to reduce the level of damaging methane emissions that are vented or flared into the atmosphere."

John Crane’s LCC takes operational data from rotating equipment and compares the total lifecycle costs of the oil seal operation?including emissions?with the option of capturing the methane and routing to a flare device, capturing the methane and routing for another purpose, and retrofitting to gas seal technology.

John Crane identified four typical scenarios where oil seals are still in use and examined the economic benefits. In all scenarios, converting to gas seal technology provides economic payback, particularly when there is no spare compression and the operator owns the natural gas flowing through the compressor.

Earlier this year, John Crane was invited by a United Nations (UN) panel to showcase how the firm’s technology is reducing methane emissions in sectors of the natural gas industry. The panel is examining the critical role gas will play in achieving the international organization’s Sustainable Development Goals.
MRC

MOSCOW (MRC) -- INOVYN has today announced its intention to increase production of general purpose PVC at its Jemeppe Site, Belgium, said the company.

The new investment, which will deliver a further 200ktes of capacity at the Site, is to meet growth in demand across the building and construction, electronics, packaging, food protection, water and energy sectors. The first phase of the expansion programme is to be operational in 2020.

This is in addition to an ongoing investment to increase specialty PVC production at Jemeppe, which forms part of INOVYN’s previously announced pan-European growth strategy.

These major investments will be complemented by an associated step increase in VCM capacity at the Site.

Comments Chris Tane, CEO INOVYN: "As one of the most competitive manufacturing units in Europe, these investments will reinforce Jemeppe as a world-class facility.

"The investment strategy for our PVC businesses, in which Jemeppe will play a vital role, will help to accelerate INOVYN’s global growth whilst reinforcing our leading market positions in Europe. Our focus is to drive innovation to create new markets for PVC, and in doing so deliver global competitive advantage for our customers across all industry sectors."

The announcement was made during a visit to Jemeppe Site by Minister-President of Wallonia Willy Borsus.

Commented Minister-President Borsus: “INOVYN’s ambitious plans are very welcome news and a further demonstration of the Company’s long-term commitment to innovation. I was very impressed to see the Company’s state-of-the-art RT&E Centre at the Site, which underpins the Company’s European growth programme."

Concludes Chris: “By the end of the decade, INOVYN will have invested in the region of €1 billion across its European assets through a range of safety, sustainability and innovation-led projects including its complete transition from mercury to membrane cellroom production."
MRC

MOSCOW (MRC) -- Fujian Refining & Petrochemical (FREP) has undertaken an unplanned shutdown at its No.3 polypropylene (PP) plant in Fujian Province, as per Apic-online.

A Polymerupdate source in China informed that the company has halted operations at the plant on September 18, 2018 owing to a technical glitch. The plant is likely to remain off-line for around one week.

Located in Fujian province, China, the No. 3 PP plant has a production capacity of 220,000 mt/year.

The company also operates other two PP plants at the same location with production capacity of 120,000 mt/year and 360,000 mt/year.

FREP is a joint venture between Fujian Petrochemical Co. (50%), ExxonMobil China Petroleum and Petrochemical Co. (25%) and Saudi Aramco Sino Co. (25%). Fujian Petrochemical is a 50:50 JV between Sinopec and the Fujian provincial government.
MRC

MOSCOW (MRC) -- Russia's production of high density polyethylene (HDPE) totalled 652,500 tonnes in January-August 2018, up 1% year on year. At the same time, not all Russian producers raised their output of HDPE, according to MRC's ScanPlast report.

August total HDPE production grew to 81,500 tonnes in Russia, whereas this figure was 79,600 tonnes a month earlier; Gazprom neftekhim Salavat and Stavrolen increased their capacity utilisation. Overall HDPE production reached 652,500 tonnes in the first eight months of 2018, compared to 647,100 tonnes a year earlier. At the same time, Nizhnekamskneftekhim and Kazanorgsintez reduced their output.

The structure of HDPE production by plants looked the following way over the stated period.

Kazanorgsintez's total HDPE production dropped to 46,400 tonnes in August from 48,800 tonnes a month earlier. The Kazan plant's overall HDPE output totalled 357,400 tonnes in January-August 2018, down by 2% year on year. Lower output was caused by the resumption of the plant's linear low density polyethylene (LLDPE) production.

Stavrolen produced 24,500 tonnes last month versus 21,800 tonnes in July. The plant's overall HDPE output reached 197,400 tonnes in the first eight months of 2018, up by 2% year on year.

Gazprom neftekhim Salavat increased its capacity utilisation in August, the plant produced 10,600 tonnes last month, compared to 9,000 tonnes a month earlier. The Bashkir plant's overall HDPE production reached 79,900 tonnes in the first eight months of 2018, up by 51% year on year. Such a high amount of growth in the plant's output was caused by the absence of a long shutdown for maintenance this year, in 2017, the company took off-stream its production capacities for a turnaround in July-August.

Nizhnekamskneftekhim produced HDPE only in April and May and plans to resume its HDPE production for a short period in the 20-s September. Thus, Nizhnekamskneftekhim production only 17,700 tonnes over the incomplete two months of the year versus 37,300 tonnes a year earlier.

MRC