Ecuador president demands probe into predecessors oil projects

MOSCOW (MRC) - Ecuador’s President Lenin Moreno asked the country’s prosecutor to probe USD4.9 billion (3.9 billion pounds) of oil-related infrastructure projects, alleging that the OPEC nation’s money was looted during the decade-long tenure of his leftist predecessor, said Reuters.

Moreno said there were massive cost overruns, operational failings and non-transparent bidding processes at the five projects built during Rafael Correa’s presidency, including a USD2.2 billion upgrade to the Esmeraldas refinery."Nearly $5 billion of Ecuadoreans’ money, when it should have cost half that,” Moreno said in a national broadcast. “This theft of public funds cannot go unpunished."

Moreno took office in May 2017 after earning Correa’s endorsement during the campaign, but the two later fell out over Moreno’s market-friendly policies.

Last year, Moreno asked a United Nations unit to conduct a technical and economic review of the five projects undertaken by the previous administration.

Correa has denied allegations of corruption in his administration, calling them a political smear campaign. He lives in Belgium and has not returned to Ecuador since a judge last year ordered that he be jailed as part of a case involving the kidnapping of a lawmaker, in which he denies involvement.

The other projects Moreno mentioned included a natural gas liquefaction plant, a seaport, a fuel distribution centre, a pipeline and a partly-built refinery that has run out of financing after receiving some USD1.5 billion in investment.
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MOSCOW (MRC) -Italy’s 200,000 barrel per day Milazzo oil refinery shut one of its two crude distillation units as bad weather prevented oil tankers from reaching the port, a spokesman for the refinery said, as per Reuters.

“There are no technical problems,” the spokesman said, adding the unit could be restarted on Friday if the weather improves.

The refinery is operated through a joint venture between Eni and Kuwait Petroleum Italy.
MRC

MOSCOW (MRC) – Alpek, S.A.B. de C.V. announced that Corpus Christi Polymers LLC, has successfully completed the previously announced acquisition of the Corpus Christi Project from M&G USA Corp. and its affiliated debtors (“M&G”) for an aggregate amount of U.S. D1.199 billion in cash and other capital contributions, said Hydrocarbonprocessing.

The Corpus Christi Project assets include the integrated PTA-PET plant under construction in Corpus Christi, Texas, certain M&G intellectual property, and a desalination/boiler plant providing water and steam to the site.

When completed, the Corpus Christi plant is expected to have a nominal capacity of 1.1 million and 1.3 million metric tons per year of PET and PTA, respectively.

Following the acquisition of the Corpus Christi Project, and pursuant to the terms of CC Polymers (JV):

• Alpek, Indorama, and Far Eastern will provide resources to CC Polymers to complete the project in the most efficient and cost effective way. A timeline and estimated investment for the project’s completion will be provided at a later stage.

• Alpek, Indorama and Far Eastern will each have the right to receive one third of the capacity of PTA and PET produced at the Corpus Christi Project upon completion. Also, each party will independently procure its raw materials and will independently sell and distribute their corresponding PTA and PET, among other rights and obligations.

Alpek made total contributions of U.S. D266 million in cash and U.S. D133 million non-cash for the closing of the transaction. Alpek’s non-cash contribution is associated to a portion of its secured claim with M&G, arising under the Corpus Christi Capacity Reservation Agreement (“2L Claim”). Alpek will also obtain U.S.D67 million in cash for the remainder of its 2L Claim, subject to certain conditions.
MRC

MOSCOW (MRC) -- Beginning January 1, 2020, the International Maritime Organization’s (IMO) new regulations limit the sulfur content in marine fuels used by ocean-going vessels to 0.5% by volume, a reduction from the previous limit of 3.5%, said Hydrocarbonprocessing.

The change in fuel specification is expected to put upward pressure on diesel margins and modest upward pressure on crude oil prices in late 2019 and early 2020. EIA’s analysis indicates that the price effects that result from implementing this new standard will be most acute in 2020 and will diminish over time.

Residual oil—the long-chain hydrocarbons remaining after lighter and shorter hydrocarbons such as gasoline and diesel have been separated from crude oil—currently comprises the largest component of marine fuels used by large ocean-going vessels, also known as bunker fuel. Marine vessels account for about 4% of global oil demand.

Removing sulfur from residual oils or upgrading them to more valuable lighter products such as diesel and gasoline can be an expensive and capital-intensive process. Refineries have two options with regard to residual oils: invest in more downstream units to upgrade residual oils into more valuable products or process lighter and sweeter crude oils in order to minimize the production of residual oils and the sulfur content therein.

EIA forecasts that the implementation of the new IMO fuel specification will widen discounts between light-sweet crude oil and heavy-sour crude oil, while also widening the price spreads between high- and low-sulfur petroleum products. In the January STEO forecast, Brent crude oil spot prices increase from an average of $61 per barrel (b) in 2019 to USD65/b in 2020 with about USD2.50/b of this increase being attributable to higher demand for light-sweet crude oils priced off of Brent.

The expected increased premium on low sulfur fuels will likely mean higher diesel fuel refining margins, which EIA forecasts will increase from an average of 43 cents per gallon (gal) in 2018 to 48 cents/gal in 2019 and 65 cents/gal in 2020. Motor gasoline margins averaged 28 cents/gal in 2018 and are expected to increase slightly to an average of 29 cents/gal in 2019 and 33 cents/gal in 2020.

As refiners maximize production of diesel fuel, distillate fuel refinery yields are forecast to increase from an average of 29.5% in 2018 to 29.9 % in 2019 and 31.5% in 2020, while motor gasoline yields fall from an average of 46.9% in 2018 to averages of 46.5% in 2019 and 45.6% in 2020. Residual fuel yields decrease from an average of 2.4% in 2018 to an average of 2.2% in 2020. Refinery runs are expected to increase from an average of 17.2 million barrels per day (b/d) in 2018 to a record level of 17.9 million b/d on average in 2020, so small changes in refinery yields can have large implications for the volumes of petroleum products produced.

Because of the numerous and diverse set of decision makers involved in complying with the regulations and the global nature of the regulation, significant uncertainty exists regarding the forecast outcomes of the regulation. EIA’s This Week in Petroleum article published tomorrow afternoon will go into more detail on EIA’s outlook for how the new sulfur specifications will affect crude oil and petroleum product markets through the end of 2020. On Thursday, January 24, EIA will release its Annual Energy Outlook 2019 with projections through 2050, which will reflect the long-term implications of the new sulfur requirements.
MRC

MOSCOW (MRC) -- Clariant, a world leader in specialty chemicals, has announced that it has signed a Memorandum of Understanding (MoU) with Saudi Kayan, a Saudi joint stock company leading in the field of chemicals, polymers and specialty products, as per the company's press release.

As defined by the MoU, both parties have agreed to evaluate the formation of a joint venture with the aim of establishing a manufacturing facility for alkoxylates. This facility is planned to combine Clariant’s alkoxylates production technology with Saudi Kayan’s raw materials and would therefore be based within Saudi Kayan’s Petrochemical Company complex in Jubail Industrial City, Saudi Arabia.

Alkoxylates are a downstream product of ethylene oxide and are used in a variety of specialty applications in Clariant’s home care, personal care and industrial applications segments.

Saudi Kayan is an affiliate of Saudi Basic Industries Corporation (SABIC). SABIC is also Clariant’s largest strategic anchor shareholder with a 24.99% stake. This MoU between Clariant and Saudi Kayan is a part of the further evaluation of additional collaborative businesses opportunities between Clariant and SABIC, as previously communicated by both parties.

As MRC wrote before, in March 2017, Clariant was awarded a contract by Dongguan Grand Resource Science & Technology Co. Ltd. to develop a new propane dehydrogenation unit in cooperation with CB&I. The project includes the license and engineering design of the unit, which is to be built in Dongguan City, Guangdong Province, China. The Dongguan plant will be one of the largest single-train dehydrogenation units in the world. Clariant's technology partner CB&I will base the plant's design on its Catofin catalytic dehydrogenation technology, which uses Clariant's tailor-made Catofin catalyst and Heat Generating Material (HGM).

Clariant AG is a Swiss chemical company and a world leader in the production of specialty chemicals for the textile, printing, mining and metallurgical industries. It is engaged in processing crude oil products in pigments, plastics and paints.
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