Saudi Aramco to buy Shell stake in Saudi refining JV

MOSCOW (MRC) -- Saudi Aramco plans to buy Royal Dutch Shell’s 50 percent stake in Saudi refining complex SASREF, a joint venture between the firms, as per Hydrocarbonprocessing with reference to two sources.

One of the sources said an agreement has been reached between Aramco and Shell.

Aramco and Shell declined to comment.

Saudi Aramco Shell Refinery Co (SASREF), based in Jubail Industrial City in Saudi Arabia, has a crude oil refining capacity of 305,000 barrels per day (bpd).

Shell has sold over USD30 billion of assets in recent years as it shift its focus to lower carbon businesses such as natural gas and petrochemicals.

Energy Intelligence first reported the stake purchase plan earlier on Wednesday.

As MRC informed before, in October 2018, state oil giant Saudi Aramco signed an agreement to invest in a refinery-petrochemical project in eastern China, part of its strategy to expand in downstream operations globally. Zhejiang Petrochemical, 51 percent owned by textile giant Zhejiang Rongsheng Holding Group, is building a 400,000-barrels-per-day refinery and associated petrochemical facilities that was expected to start operations by the end of last year.

Saudi Aramco, officially the Saudi Arabian Oil Company, is a Saudi Arabian national oil and natural gas company based in Dhahran, Saudi Arabia. Saudi Aramco"s value has been estimated at up to USD10 trillion in the Financial Times, making it the world"s most valuable company. Saudi Aramco has both the largest proven crude oil reserves, at more than 260 billion barrels, and largest daily oil production.
MRC

China keeps buying crude oil for storage, but difficulties loom

MOSCOW (MRC) -- China appears to have kept the flow of crude into strategic and commercial storage facilities at high levels in the first quarter, even as the price of oil climbed, as per Reuters.

While China doesn’t release detailed statistics of its strategic petroleum reserve (SPR) and commercial stockpiles a rough idea can be gleaned by looking at refinery throughput numbers and the volume of domestic and imported crude.

Refineries processed 12.6 million barrels per day (bpd) of crude in the first quarter, according to official data released on Wednesday, up 4.4 percent from the three months to end-December, and also up by the same margin from the year earlier quarter.

Crude imports in the January-March period were 9.83 million bpd, while domestic output was 3.84 million bpd, giving a total of 13.67 million bpd.

Subtracting the refinery throughput from the total crude available leaves a gap of 1.07 million bpd, and it’s this oil that has likely found its way into either SPR or commercial storage tanks.

The same calculation for the December quarter showed a gap of 950,000 bpd, implying that China has upped the amount of crude being stored by around 57,000 bpd in the first quarter of 2019 from the last quarter of 2018.

The increase of storage flows came as crude prices started to climb, with global benchmark Brent gaining 33 percent from the end of last year to a close of USD71.62 a barrel on Wednesday.

It’s worth noting that cargoes that arrived in China in January and February would have been fixed at a time when crude prices were still dropping, with Brent sliding 45 percent between its 2018 peak close of USD86.29 a barrel in early October and the year’s low of USD50.47 on Dec. 24.

It’s still speculation as to whether the recent surge in crude prices will result in slower inflows into storage in China, although the gap between refinery output and total crude available did narrow in March to about 690,000 bpd.
MRC

US crude stockpiles drop unexpectedly in mid-April

MOSCOW (MRC) -- US crude oil stockpiles fell unexpectedly last week as imports dropped, while gasoline and distillate inventories decreased less than forecasts, reported Reuters with reference to the Energy Information Administration.

Crude inventories fell by 1.4 million barrels in week to April 12, compared with analysts’ expectations for an increase of 1.7 million barrels. A majority of the decline came from the Midwest region, where inventories fell 2.4 million barrels to 135.3 million barrels.

Net US crude imports fell last week by 659,000 barrels per day (bpd).

Crude stocks at the Cushing, Oklahoma, delivery hub for US crude futures fell by 1.54 million barrels, EIA said.

Oil prices edged higher on the day as the markets focused on the inventory declines across the energy complex. US gasoline prices were up nearly 1 percent near the highest levels since October.

Gasoline stocks fell by 1.2 million barrels, less than analysts’ expectations in a Reuters poll for a 2.1 million-barrel drop.

Distillate stockpiles, which include diesel and heating oil, fell 362,000 barrels, also not as much as forecasts for a 846,000-barrel drawdown, the EIA data showed.

"With the refinery runs coming in a little higher, this is a very supportive report," said Phil Flynn, an analyst at Price Futures Group in Chicago.

Refinery crude runs fell by 22,000 barrels per day, EIA data showed. Refinery utilization rates edged up 0.2 percentage point to 87.7 percent of total capacity.

"We still saw a big build in Gulf Coast crude supplies, so it shows you there are still some issues on the Gulf Coast a little bit. We’re easing but not as much as you might think," Flynn said.

Last week, Lyondell Basell Industries was holding production 9 percent below the 263,776-bpd capacity of its Houston refinery because of shipping restrictions following a late March chemical spill in the Houston Ship Channel.

Royal Dutch Shell’s 275,000 bpd joint-venture Deer Park, Texas, refinery returned to normal production late last week after cutting production and came within days of shutting down due to constrained crude shipments.
MRC

Investment firm Graham Partners acquires fourth thermoforming company

MOSCOW (MRC) -- Private equity firm Graham Partners has bought its fourth U.S.-based thermoforming company with the acquisition of James L. Villa Inc., of Oldsmar, Fla., said Canplastics.

The terms of the deal have not been disclosed. The James L. Villa purchase comes on the heels of Graham Partners’ acquisition of platform company EasyPak near the end of 2017 and subsequent purchases of Tray-Pak Corp. and Nuconic Packaging LLC.

In a statement, Newtown Square, Pa.-based Graham Partners said that it considers thermoformed packaging to be an “attractive niche market” that is benefiting from increasing consumer demand for sustainable packaging options and freshly prepared, on-the-go meals.

Founded in 1979, James L. Villa is a third-generation family owned and operated business that specializes in custom thermoformed and injection molded packaging for fresh food products in supermarkets.

The addition of that business will enable EasyPak to strategically expand into the southeast while providing additional customization capabilities and scale to EasyPak’s business, Graham Partners said. "James L. Villa boasts an impressive roster of loyal, long-term customers in the grocery channel,” said Dave Furstoss, CEO of EasyPak. “We are excited to partner with the business to expand our thermoformed platform presence in the southeast. We initially acquired EasyPak with the intention to build a top-tier mid-sized thermoformer. With three subsequent complementary acquisitions completed to date, we are well on our way to achieving this vision."
MRC

PetroChina to build three new HDPE units using LyondellBasell technology

MOSCOW (MRC) -- LyondellBasell (Rotterdam, the Netherlands) announced that PetroChina will use the LyondellBasell Hostalen “Advanced Cascade Process” (Hostalen ACP) technology to produce 1,100,000 metric tons per year (m.t./yr) of high-density polyethylene (HDPE) capacity, said Chemengonline.

Licensor selection has been done by China HuanQiu Contracting & Engineering Co., Ltd. (HQC), a wholly owned subsidiary of PetroChina. The low-pressure slurry process technology will be used for a 300,000-m.t./yr high density polyethylene (HDPE) unit to be built in Korla City, Xinjiang Province, a 400,000-m.t./yr plant in Jieyang City, Guangdong Province and a 400,000-m.t./yr plant in Yulin City, Shaanxi Province in the P.R. China.

With these new capacity additions, LyondellBasell has licensed over 7,700,000-m.t./yr of benchmark multi-modal HDPE resins.

“LyondellBasell is pleased to further strengthen our long-standing relationship with PetroChina by licensing three new HDPE plants in China,” said Jim Seward, vice president technology business, sustainability at LyondellBasell. “PetroChina’s selection again confirms the trust customers have in our advanced polyolefins technology."

Mr. Liu Jun, vice president of PetroChina Refining & Chemicals Company stated: “The market demands high-performance HDPE products and LyondellBasell’s multi-modal technology effectively meets these needs. Selecting LyondellBasell’s low-pressure slurry process for our petrochemical growth projects will enable us to produce high-quality products on a very sustainable, reliable and economical basis."

Mr. Wang Zhuoyan, vice president of HQC stated: “The licensor has been selected through an international bidding process. We trust in LyondellBasell’s ability to deliver world-class technology and we believe that successful cooperation can bring sustainable, long-term economic benefits to the PetroChina companies."

The PetroChina HDPE plants will commence operations using Avant Z 501 and Avant Z509-1 catalysts to produce a full range of multi-modal HDPE products.
MRC