Mexican government promises refinery tenders by March

MOSCOW (MRC) -- President Andres Manuel Lopez Obrador said on Sunday that Mexico would tender out the building of a refinery near the Dos Bocas oil port by March, part of his government’s plan to try to reduce the country’s gasoline imports, reported Reuters.

In a presentation in Tabasco state, where the refinery is due to be built, the government said the new oil refinery would process 340,000 barrels per day (bpd).

The refinery, which will cost about USD8 billion, should produce 170,000 bpd of fuel, including 120,000 bpd of diesel.

Afterward, Energy Minister Rocio Nahle said the government had not decided on the format for the contract for building the refinery. She added that the reduction in crude exports in order to refine in Mexico would be gradual.

As MRC informed before, Mexico’s next government plans to build what could be the country’s largest oil refinery, with construction set to begin as soon as next year, said president-elect Andres Manuel Lopez Obrador in September 2018. The winner of July’s presidential election is seeking to end Mexico’s massive fuel imports, nearly all of which come from the United States, while boosting domestic refining during the first half of his six-year term.
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Hengli Petchem to test new oil refinery

MOSCOW (MRC) - China’s Hengli Petrochemical Group (600346.SS) will start test-running its new oil refinery in the northeastern city of Dalian on December 15, according to a company statement, slightly behind an earlier timeline of around the end of November, as per Reuters.

Once operational, Hengli will become the country’s first privately owned refinery and chemical complex. With a refining capacity of 400,000 barrels per day (bpd) of crude oil, the site will rival the largest oil refineries in China, the world’s biggest importer and second-largest consumer of oil.

“Hengli has completed building the 20 million ton per year refinery and chemical complex, with public utilities and auxiliary facilities also ripe for operations,” the firm said in a statement posted on its social media platform late on Wednesday.

Diesel fuel will first be injected into the pipes to run through the facilities, before crude oil is fed into the distillation tower about a week to 10 days later, said an industry source involved in the test operation.

A total of 500,000 tonnes of Saudi crude oil will be used for experimental operations for about 20 days, said the source, who declined to be named as not authorized to speak to press.

It normally takes several months for a new refinery to begin stable operations after test runs. Hengli has agreed to buy 130,000 bpd of crude oil from state-owned Saudi Aramco under an annual supply agreement for 2019, becoming a new major customer for Saudi Arabia which competes with Russia for the top spot in oil sales to China.

Zhejiang Petrochemical Corp, controlled by private chemical group Rongsheng Holdings, is expected to start partial test operations at some units around end of this year and early 2019 at its similar-sized complex.
MRC

Emerson acquires advanced engineering valves

MOSCOW (MRC) – Emerson announced it has acquired Advanced Engineering Valves (A.E. Valves), a leading manufacturer of innovative valve technology that helps LNG customers operate more efficiently, as per Hydrocarbonprocessing.

The transaction will enable Emerson, a global leader in automation solutions and technology, to provide its customers with the world’s broadest portfolio of valves to improve process performance and reliability. Terms of the deal were not disclosed.

The addition of A.E. Valves supports Emerson’s Main Valve Partner™ initiative to be the premier supplier of final control solutions for the LNG industry, and complements its Vanessa triple-offset valve range to create a single technology leader for process isolation in critical cryogenic and severe service applications.

Both Emerson and A.E. Valves are focused on innovating to deliver superior technology that helps customers achieve project delivery success and operational excellence in their end markets. A.E. Valves is a leader in torque-seated, friction-free, zero-leakage ball valve technology that drives performance, cost and reliability improvements over traditional ball valves. This technology is a strong complement to Emerson’s portfolio of solutions that help customers achieve Top Quartile performance.

"Adding A.E. Valves makes Emerson’s value to customers along the entire global LNG value chain even more compelling as a single, accountable partner for all of their valve needs,” said Lal Karsanbhai, executive president of Emerson Automation Solutions. “Our expanded portfolio of leading valve technology will help customers unlock greater capital efficiency and asset productivity as they embark on a wave of investment to meet rising global energy demand."

A.E. Valves is headquartered in Verviers, Belgium, and has a nearly 10-year track record as a valve manufacturer at the leading edge of innovation. Its breakthrough ball valve design creates a step change in safety, environmental and performance outcomes for the LNG industry, as well as oil and gas, chemical, and petrochemical customers.

“A.E. Valves is a natural addition for Emerson and shares the same commitment to developing value-creating solutions for our customers’ most challenging process applications,” said Ram Krishnan, group president of Emerson’s Final Control business. “This acquisition represents another important investment that builds on our final control technology portfolio to help customers unlock greater profitability and productivity in their businesses.”
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US probe cites "ineffective" safeguard in Husky oil refinery blast

MOSCOW (MRC) -- An “ineffective” safeguard failed to prevent an explosive mixing of air and fuel at a Husky Energy refinery in Superior, Wisconsin, leading to a blast and fire in the plant’s gasoline-producing unit in April, a US industrial safety group said, reported Reuters.

Air seeped through a hole in a valve within a fluidic catalytic cracking unit (FCCU), the US Chemical Safety Board (CSB) said, causing an April 26 explosion that led to a massive fire and a 24-hour-long evacuation of residents living within miles of the plant.

The board said 36 people sought medical treatment after the blast, including 11 working at the refinery. The plant was undergoing maintenance at the time.

Air seeped through a hole in a valve within a fluidic catalytic cracking unit (FCCU), the US Chemical Safety Board (CSB) said, causing an April 26 explosion that led to a massive fire and a 24-hour-long evacuation of residents living within miles of the plant.

The board said 36 people sought medical treatment after the blast, including 11 working at the refinery. The plant was undergoing maintenance at the time.

Husky, according to the CSB, had only considered a failure of the valve when locked open, not a failure when it was closed, according to an updated report the board presented of its months-long investigation at a meeting Wednesday in Superior.

The failures leading to the Superior refinery explosion were similar to those that caused a 2015 explosion in an FCCU at a Torrance, California, refinery then owned by Exxon Mobil Corp. Exxon sold the refinery to PBF Energy in 2016.

"Prior to both incidents, the process hazard analyses identified scenarios in which hydrocarbons flowed into the air side of the FCCU and vice versa due to a failure of the spent catalyst slide valve (SCSV), but the safeguards listed to protect against those scenarios were ineffective," the board said.

The CSB, created by the US Clean Air Act, has no regulatory or enforcement authority but is charged with determining the causes of chemical plant explosions and fires and making recommendations to government and industry.

"Given the similarities between these two incidents, the CSB will be examining areas of further improvement that need tobe taken by industry," the board said.

FCCUs use a fine, silica catalyst in high heat to make gasoline from gas oil and the passage of the sand-like catalyst over the slide valve at the Superior refinery wore a hole in it.

A mixture of air and hydrocarbon within the unit can easily find an ignition source in the 1,300 degree Fahrenheit (715 Celsius) operating temperature of the FCCU.

The Husky refinery was shut after the April explosion. Husky expects to restart production at the plant in 2020.

Most CSB investigations take up to a year to complete.

As MRC informed previously, Canadian oil and gas producer Husky Energy Inc said this autumn it had made an unsolicited bid to acquire rival MEG Energy Corp in a deal valued at USD5 billion including debt. The combined company would have total production of more than 410,000 barrels of oil equivalent per day (boepd) and refining and upgrading capacity of about 400,000 barrels per day (bpd).
MRC

Global specialty chemicals company Perstorp to sell its Capa business to Ingevity

MOSCOW (MRC) -- Perstorp, a global leader in specialty chemicals, has announced it has agreed to sell Capa, its caprolactone business, including the production site in Warrington, to Ingevity for approximately EUR590 million, as per the company's press release.

The business has annual revenues of approximately EUR150 million.

Under Perstorp’s leadership during the last 10 years, Capa’s operating margins have increased by almost 50% by investing in production and new product lines, which in turn have increased both the customer base and the geographic reach. This has made Capa a highly attractive asset, gaining interest among several potential buyers of which Ingevity now will be the new owner to continue to develop the long-term value of the business. Ingevity will acquire Perstorp UK Ltd including Perstorp’s entire caprolactone business.

The sale of Capa will unlock significant value and is in line with Perstorp’s track record of successful divestments such as most recently the BioFuels Business and in 2017, the Belgian site in Gent.

It will furthermore enable the Perstorp Group to focus its business opportunities and future growth prospects on its Polyol, Oxo and Feed businesses, maximizing opportunities such as:

- further building leadership in the polyol business;
- expand the markets for phthalate free plasticizer Pevalen;
- expand the markets for products within the animal nutrition area;
- establishing its pro-environment solutions as the first choice (certified products based on renewable raw materials.

Jan Secher, President and CEO of Perstorp, commented: "We have a strong track record in delivering optimum value from our businesses. Capa is an excellent proof of this and where the business will continue to have a bright future. This sale realizes the significant value of the asset, simplifies Perstorp Group, strengthens our balance sheet and allows us to focus our future investment and innovation in attractive high growth segments. Our strategy remains to leverage Perstorp’s superior positions and expertise in chemistry and engineering to drive innovation and provide our customers with solutions that advance everyday life."

The transaction is subject to certain regulatory approvals and other customary closing conditions, and Perstorp expects to close the transaction in the first quarter of 2019.

HSBC Bank plc acted as financial adviser and Allen & Overy acted as legal counsel to Perstorp.

As MRC wrote previously, in December 2017, Perstorp announced world’s first portfolio of renewable alternatives to the essential polyols Pentaerythritol (Penta), Trimethylolpropane (TMP), and Neopentyl glycol (Neo). The product portfolio will be globally launched at China Coat. The launch is a response to the fast growing global need for more sustainable Coatings, Resins and Synthetic Lubricants to mention a few. This means that Perstorp is the only chemical company in the world to offer all three essential polyols Penta, TMP and Neo in both traditional and renewable forms.

Perstorp is one of the world leaders in various sectors of the specialty chemicals market, it's pioneer in formalin chemistry, plastics and surface materials. Perstorp was founded in 1881 and is controlled by PAI partners,a major European private equity company. The company has around 1,500 employees in with 22 production plants in Europe, Asia and North America.
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