U.S. refiners face emerging glut of fuel

MOSCOW (MRC) - U.S. refiners have processed a record volume of crude in the last three months, reversing the previous shortage of distillate but leaving the country with record gasoline stocks at the end of the summer driving season, said Reuters.

Fuel availability has been helped by the absence of a direct hurricane hit on the major refining centers located on the coasts of Texas and Louisiana, in stark contrast to the refinery closures caused by Hurricane Harvey in 2017.

Refiners have carried on processing at elevated rates well after the end of the normal summer driving season and into September in order to rebuild previously depleted distillate stocks.

But the now-plentiful supply of gasoline and to a lesser extent distillate implies refiners will have to cut processing more sharply than usual over the next couple of months to avoid creating a glut of refined products.

U.S. refiners processed 17.4 million barrels per day (bpd) of oil in the week to Sept. 14, up from 15.0 million bpd in 2017 (impacted by Hurricane Harvey) and 16.6 million bpd in 2016.

Refiners produced a seasonal record 5.5 million bpd of distillate last week, up from 4.5 million bpd in 2017 and 5.0 million bpd in 2016, according to the U.S. Energy Information Administration.

Distillate stocks have risen to 140 million barrels up from a recent low of just 114 million barrels in mid-May.
Distillate inventories are now just 6 million barrels below the 10-year average compared with a deficit of 25 million barrels as recently as July 20.

Distillate availability has been improving significantly over the last eight weeks after deteriorating more or less continuously since the start of the year.

But the consequence of heavy refining activity to produce distillate has been the emergence of a potential over-supply of gasoline. Gasoline stocks remained plentiful throughout the peak summer driving season and are now at a record for the time of year.
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Engro Polymer lets contract to Tianchen for integrated PVC facility in Pakistan

MOSCOW (MRC) -- Engro Polymer and Chemicals has awarded a contract to Tianchen Corp. China for a new 100,000 t/y integrated polyvinyl chloride (PVC) plant in Pakistan, reported GV.

The company announced last December is was planning to invest over PKR 10 billion in an expansion project that would increase production capacities of PVC, vinyl chloride monomer (VCM) and other related products. Besides the new PVC facility, which will increase PVC capacity to 295,000 t/y, Engro will also debottleneck its existing VCM unit to expand VCM capacity by 50,000 t/y by the third quarter of 2020.

In addition, Engro plans to build a new 20,000 t/y caustic flaker production line, which is expected to be completed in the fourth quarter of 2018, as well as expand its sodium hypochlorite and hydrochloric acid plants by the third quarter of this year. Earlier reports also said that Engro would upgrade its caustic soda facility to membrane technology, in order to enhance efficiency and production.

As MRC informed earlier, in 2013, Engro Polymer and Chemicals Limited (EPCL) invested up to USD15 million to enhance the production capacity of PVC resin.

Engro Polymer & Chemicals Limited (EPCL) is the only fully integrated chemical complex in Pakistan. EPCL is a subsidiary of Engro Corporation, involved in the manufacturing, marketing and distribution of quality Chlor-Vinyl allied products and PVC under brand name "SABZ".
MRC

Indian oil refiner part-owned by Iranian company cancels Iran oil imports

MOSCOW (MRC) - India's Chennai Petroleum will stop processing Iranian crude oil from October to keep its insurance coverage once new sanctions by the United States against Iran go into effect, three sources familiar with the issue said, as per Reuters.

Iran's Naftiran Intertrade Co Ltd, a trading arm for state-owned National Iranian Oil Co, owns a 15.4 percent stake in Chennai Petroleum, which has two refineries with a total combined capacity of 230,000 barrels of oil per day (bpd).

In May, U.S. President Donald Trump pulled out of an international nuclear deal with Iran and announced new sanctions against the country, the third-largest producer among the Organization of the Petroleum Exporting Countries (OPEC). Washington is pushing allies to cut Iranian oil imports to zero once the sanctions on the petroleum sector startup on Nov. 4.

United India Insurance has informed Chennai Petroleum that its new annual policy that is set to take effect from October will not cover any liability related to processing crude from Iran, the three sources said. This has forced the refiner to cancel a scheduled loading of 1 million barrels in October, they said.

Indian insurers do not fall directly under the sanctions but need to hedge their own risk on the Western reinsurance market, which will not accept Iranian exposure.

"It is quite complicated.. reinsurers are quite apprehensive about extending cover for Chennai Petroleum," said one of the sources, who asked not to be identified because of the sensitivity of the issue.

Chennai Petroleum's reduced demand will further cut India's imports from Iran to about 10 million tonnes in October, lower than previous estimates reported by Reuters.
MRC

IMCD to acquire European speciality chemicals distributor Velox

MOSCOW (MRC) -- IMCD N.V. has announced that it has signed an agreement to acquire 100 % of the outstanding shares of Velox GmbH, a European distributor with a focus on raw material specialities and solutions for the plastics, composites, additives, rubber, and paints & coatings industries with headquarters in Hamburg, Germany, as per GV.

The transaction is subject to regulatory approval. Financial details were not disclosed.

Velox was established in 1993 and today has an extensive commercial network across Europe and long-standing relationships with global suppliers in the plastics, composites and other specialities markets. With approximately 225 employees in 18 countries, the company generated EUR 155 million revenue and a normalised EBITDA of EUR 5.4 million in 2017.

Piet van der Slikke, CEO of IMCD, commented: "This acquisition enables IMCD to further strengthen its position as distributor of speciality plastics and additives. Our portfolios very well complement each other, and we expect to be able to create more value for our suppliers and customers."

Francois Minec, General Manager of Velox added: "Joining IMCD will provide Velox with excellent opportunities to further develop and execute its strategy as a leading distributor to the plastics- and composite industries."

As MRC informed previously, in 2013, Arkema appointed Velox GmbH, Hamburg, Germany, as its exclusive distributor for the medical business development in Europe.
MRC

Wintershall of BASF to invest EUR2bn on Norwegian Continental Shelf fields

MOSCOW (MRC) -- German crude oil and natural gas producer Wintershall has revealed its intentions to invest about EUR2bn in exploration and development activities on its offshore Norwegian fields from 2017 to 2020, as per EnergyMarketPrice.

An announcement in this connection was made by the company’s CEO Mario Mehren during the Offshore Northern Seas (ONS) conference in Stavanger, Norway.

Mehren hinted that it was in the best interests of Europe to invest in working closely with reliable and proven supply countries, particularly Norway and Russia, for future energy security.

Mehren said: "Europe needs to be aware of its strengths and must tackle the new political and economic challenges in concert. Only through closely collaborating with our neighbors can we guarantee supply security today and in the future."

Wintershall plans to allocate nearly 35% of its global exploration budget on Norway. The German energy company currently holds more than 50 licenses in the country.

Wintershall, which had submitted a plan for development and operation (PDO) for the Nova field in North Sea to Norway’s Ministry of Petroleum and Energy in May, is expected to invest about EUR1.1bn alongside its partners in the offshore Norwegian project.

The Nova field, whose recoverable reserves are projected to be about 80 million barrels of oil equivalent, is expected to be brought into production in 2021.

In last December, Wintershall alongside its partners Petoro and Spirit Energy started production from the NOK15.3bn (USD1.85bn) Maria field in the southern Norwegian Sea.

Wintershall, which is owned by German chemical giant BASF, is also in the process of completing a merger with DEA, a subsidiary of LetterOne. The combined Wintershall DEA company is expected to be among the top five oil and gas producers in Norway, claimed Wintershall.

As MRC wrote before, in December 2017, BASF and LetterOne signed a letter of intent to merge their respective oil and gas businesses in a joint venture, which would operate under the name Wintershall DEA.
MRC