Crude refusal: China shuns US oil despite trade war truce

MOSCOW (MRC) -- China, the world’s top oil importer, is set to start 2019 buying little or no crude from the United States despite a three-month truce in a trade scrap between the two nations, with relatively high freight costs and political uncertainty choking demand, reported Reuters.

That muted appetite means the United States, which became the world’s top oil producer this year as its shale output hit record levels, will continue to hold only a sliver of China’s market even as a wave of new refining capacity starts up there.

It also suggests that China is unlikely to use crude purchases to help plug a widening trade gap with the United States, which remains a core source of tensions between the world’s top two economies.

The US trade deficit with Beijing hit a record USD43 billion in October as its firms stockpiled inventory from China to avoid higher tariffs that may kick in next year.

"Chinese companies have little incentive to buy U.S. crude due to the wide availability of crude supplies today from Iran and Russia," said Seng Yick Tee, an analyst at Beijing-based consultancy SIA Energy.

"Even though the trade tension between China and the U.S. had been defused recently, the executives from the national oil companies hesitate to procure US crude unless they are told to do so."

China stopped US oil imports in October and November after the trade war intensified. It resumed some imports in December, but purchased just 1 million barrels, a minute portion of the more than 300 million barrels of total imports, Refinitiv data showed.

Chinese refineries that used to purchase U.S. oil regularly said they had not resumed buying due to uncertainty over the outlook for trade relations between Washington and Beijing, as well as rising freight costs and poor profit-margins for refining in the region.

Costs for shipping U.S. crude to Asia on a supertanker are triple those for Middle eastern oil, data on Refinitiv Eikon showed.

A senior official with a state oil refinery said his plant had stopped buying US oil from October and had not booked any cargoes for delivery in the first quarter.

"Because of the great policy uncertainty earlier on, plants have actually readjusted back to using alternatives to U.S. oil ... they just widened our supply options," he said.

He added that his plant had shifted to replacements such as North Sea Forties crude, Australian condensate and oil from Russia.

"Maybe teapots will take some cargoes, but the volume will be very limited," said a second Chinese oil executive, referring to independent refiners. The sources declined to be named because of company policy.

A sharp souring in Asian benchmark refining margins has also curbed overall demand for crude in recent months, sources said.

Despite the impasse on US crude purchases, China’s crude imports could top a record 45 million tonnes (10.6 million barrels per day) in December from all regions, said Refinitiv senior oil analyst Mark Tay.

Russia is set to remain the biggest supplier at 7 million tonnes in December, with Saudi Arabia second at 5.7-6.7 million tonnes, he said.

China’s Iranian oil imports are set to rebound in December after two state-owned refiners began using the nation’s waiver from US sanctions on Tehran.
MRC

Lubrizol appoints Osterman as new distributor in North America

MOSCOW (MRC) -- The Lubrizol Corporation has announced its Engineered Polymers business will extend its North American distribution channel with the appointment of Osterman and Company, Inc.as a distributor for its thermoplastic polyurethane (TPU) portfolio, as per the company's press release.

Osterman joins Entec, who currently represents the Estane TPU portfolio in North America. The move will provide customers with greater access to consultative sales engineers, faster response time and is well aligned with market trends that favor engineered plastics and more sustainable product solutions. Osterman, based in Cheshire, CT, distributes engineering and other plastics with significant territory coverage throughout North America. Osterman has a strategic infrastructure in place that is well suited to support North American customers.

The agreement, which was effective November 19, 2018, includes the following key product lines which are well-suited for today's innovative and demanding applications:

- Estane TPU polymers, the standard by which others are measured, bridge the gap between flexible rubber and rigid plastics, and can be utilized in high performance film and sheet, extrusion, blow molding, injection molding, over molding, calendaring and solution coating processes.
- Pearlthane(TM) TPU and Pearlthane(TM) ECO TPU products are ideal for extrusion, injection molding and compounding applications such as flexible films, abrasion resistant hoses, soft touch injection molded parts and more. Derived from renewable resources, Pearlthane(TM) ECO TPU delivers superior performance, even more sustainably.
- Pearlbond(TM) TPU includes products for Hot Melt Adhesives (HMA) and Reactive Hot Melts (HMPUR), typically used in automotive interior parts, textiles and footwear, bookbinding and furniture, with the ability to join a wide range of materials enabling new, innovative design freedom.
- Carbo-Rite(TM) conductive compounds provide permanent electrostatic dissipative (ESD) solutions, with high consistency from lot to lot, for today's demanding applications where reliability, value and safety matter most.
- Stat-Rite inherently static dissipative compounds set the new standard for test and design engineers requiring permanent ESD properties without compromising cleanliness, and enabling low pigment loading color options without affecting other properties.

Jim Harbert, North American sales manager for Lubrizol Engineered Polymers, comments, "It is exciting to work with Osterman. They bring in-depth knowledge of the engineering plastics markets in North America, as well as a knowledgeable salesforce and technical support team. Combined with Lubrizol's innovative and durable TPU solutions for specialized wire and cable, consumer, industrial and automotive applications, this further enhances our ability to work closely with customers, helping them solve difficult problems to drive innovation and growth."

As MRC reported before, in early 2018, Lubrizol announced the selection of Apta, Vinmar Group, as new distributor for its TPU portfolio throughout Brazil.

The Lubrizol Corporation, a Berkshire Hathaway company, is an innovative specialty chemical company that apart from its production develops and supplies technologies to customers in the global transportation, industrial and consumer markets. Lubrizol is providing innovative solutions for its customers high-performance application needs and remains committed to ongoing investment in its CPVC capabilities that support future growth. With headquarters in Wickliffe, Ohio, Lubrizol owns and operates manufacturing facilities in 17 countries, as well as sales and technical offices around the world. Founded in 1928, Lubrizol has approximately 8,000 employees worldwide.
MRC

Thyssenkrupp to support JSW in improving environmental standards and efficiency in coke production

MOSCOW (MRC) -- Thyssenkrupp Industrial Solutions and Jastrzbska Spolka Wglowa (JSW), one of the largest European coke producers based in Poland, have entered into a long-term strategic alliance, said Hydrocarbonprocessing.

Under the technological agreement, thyssenkrupp will support JSW’s strategy to improve the sustainability and efficiency of its coking plants and to enable the production of environmentally friendly by-products.

The agreement was signed during the 2018 United Nations Climate Change Conference (COP24) in Katowice, Poland, in mid-December. Dr. Uwe Boltersdorf, CEO of the business unit Industrial Specialties of thyssenkrupp Industrial Solutions: “We are very happy to collaborate with JSW and to support them to further develop their coking plant facilities. Due to increasing environmental awareness and regulation, it will become more and more important for coke producers to minimize the impact on their natural environment.

Based on our extensive expertise in the coke plant industry, we enable operators to optimize existing plants by applying the latest technologies and integrated operation concepts.” Combining more than 140 years of experience, thyssenkrupp Industrial Solutions is a market leader in coke plant technologies. The plant engineering and construction specialist has continuously developed solutions to make coke production more efficient and sustainable. These include, for example, technologies for the reduction of emissions like nitrogen oxides (NOx), sulphur oxides (SOx) and aromatic compounds as well as solutions to lower both investment and operating costs.

In recent years, thyssenkrupp continued its developments to optimize the cleaning of coke oven gas in order to facilitate the cogeneration of clean byproducts such as hydrogen, sulfur derivatives and aromatic hydrocarbons.As one of the leading European coke producers, JSW is continuously strengthening its environmental efforts. Therefore the company intends to modify its existing assets base in Poland to improve both production efficiency and capacities as well as its environmental footprint.

In order to diversify its portfolio, JSW is taking intensive actions to implement technologies for the production of high value by-products such as for the separation of hydrogen from coke-oven gas. Under the terms of the agreement, both companies will cooperate to apply thyssenkrupp’s technologies and knowledge to the assets of JSW in Poland in order to support the strategic transformation of JSW.

The agreement will enable the implementation of pioneer technological solutions that will set new standards in coke plants operated by JSW.
MRC

PRTC to launch several catalyst plants by 2020

MOSCOW (MRC) -- The CEO of Petrochemical Research and Technology Company (PRTC) said the company was planning to inaugurate five catalyst production plants by the next two years, as per NIPNA.

Catalysts are regarded as strategic items which have wide usage in petrochemical operations.

In a meeting with the CEO of National Petrochemical Company (NPC), Ali Pajouhan, PRTC CEO, said the company had signed 13 deals for commercialization of products which also included catalyst production deals.

He revered eye-catching support of NPC for PRTC and protectionism, adding PRTC achievements were applied and functional in the industry but took some time to become profitable.
The official further added that PRTC was planning to launch 5 catalyst production plants which would come on-stream by the next two years.

EHRAN (NIPNA) -- The CEO of Petrochemical Research and Technology Company (PRTC) said the company was planning to inaugurate five catalyst production plants by the next two years.
Catalysts are regarded as strategic items which have wide usage in petrochemical operations.

In a meeting with the CEO of National Petrochemical Company (NPC), Ali Pajouhan, PRTC CEO, said the company had signed 13 deals for commercialization of products which also included catalyst production deals.

He revered eye-catching support of NPC for PRTC and protectionism, adding PRTC achievements were applied and functional in the industry but took some time to become profitable.
The official further added that PRTC was planning to launch 5 catalyst production plants which would come on-stream by the next two years.

MRC

Sempra Energy subsidiary, Polish Oil & Gas Co. to export U.S. LNG to Europe

MOSCOW (MRC) -- Port Arthur LNG, LLC, a subsidiary of Sempra Energy, and the Polish Oil & Gas Company (PGNiG) announced they have entered into a definitive 20-year sale-and-purchase agreement for liquefied natural gas (LNG) from the Port Arthur LNG liquefaction-export facility under development in Jefferson County, Texas, as per Hydrocarbonprocessing.

Today's announcement is an important milestone as Sempra Energy pursues its long-term goal of exporting 45 million tonnes per annum (Mtpa) of North American LNG. "This agreement marks an important step toward Poland's energy independence and security," said U.S. Secretary of Energy Rick Perry. "As demonstrated with the launch of the Strategic Dialogue on Energy in Poland last month, the Trump Administration remains committed to increasing energy diversity, advancing energy security, strengthening national security, and creating a future of prosperity and opportunity in Poland and throughout the region."

"This agreement with PGNiG represents an important expansion of our portfolio of contracts for LNG exports and major step forward in the development of our Port Arthur LNG project," said Jeffrey W. Martin, chairman and CEO of Sempra Energy. "Last month, we began the commissioning phase of our Cameron LNG liquefaction-export facility in Louisiana. This agreement, along with the great progress on Cameron LNG, continue to validate our growth strategy as we advance our vision to become North America's premier energy infrastructure company."

"Our activities show that we consistently implement our strategy," said Piotr Wozniak, president of the management board of PGNiG. "Another long-term contract not only allows us to develop LNG portfolio with a view to delivering to Poland, but it gives us, in the near future, the possibility of trading in LNG purchased on a global scale. I am glad that Sempra Energy is among our American partners. I am convinced that we will have good long-term cooperation."

While financial terms were not disclosed, the agreement is for the sale and purchase of 2 Mtpa, or approximately 2.7 billion cubic meters per year (after regasification) – enough natural gas to meet about 15 percent of Poland's daily needs. The agreement is subject to certain conditions precedent, including Port Arthur LNG making a final investment decision.

Under the agreement, LNG purchases from Port Arthur LNG will be made on a Free-On-Board basis, with PGNiG responsible for shipping the LNG from the Port Arthur terminal to the final destination. Port Arthur LNG will manage gas pipeline transportation, liquefaction processing and cargo loading, giving PGNiG flexibility in cargo management. PGNiG plans to deliver cargos to domestic customers in Poland or trade LNG on the global market, once operations commence.

In addition to the PGNiG agreement, Sempra Energy signed a Memorandum of Understanding (MOU) with Korea Gas Corporation last year for potential participation in the Port Arthur LNG project. Sempra Energy has partnered with Mitsubishi, Mitsui & Co. LTD. and Total S.A. on the construction of the Cameron LNG liquefaction-export project in Hackberry, La. The first phase of this project is currently being commissioned and with the expectation that LNG will be produced from all three liquefaction trains in 2019.

Sempra Energy also has an MOU with Total, S.A. for some export capacity at Cameron LNG Phase 2 and Heads of Agreements (HOAs) with Mitsui & Co. LTD., Tokyo Gas Company and Total, S.A. for all of the export capacity at Energia Costa Azul Phase 1 in Baja California, Mexico. An MOU and HOA define terms and conditions of contracts to be negotiated and do not commit any party to enter into a definitive agreement.

The Port Arthur liquefaction-export facility is proposed to include two natural gas liquefaction trains capable of processing approximately 11 Mtpa of LNG; up to three LNG storage tanks; two marine berths, and associated facilities. The Port Arthur liquefaction-export facility is scheduled to receive its final environmental impact statement from the Federal Energy Regulatory Commission next month. Earlier this year, Bechtel was selected by Port Arthur LNG to serve as the engineering, procurement, construction and commissioning contractor for the facility, subject to reaching a definitive agreement.

Development of the Port Arthur LNG liquefaction facility is contingent upon obtaining additional customer commitments, completing the required commercial agreements, securing all necessary permits, obtaining financing, incentives and other factors, and reaching a final investment decision.
MRC