China March refinery runs ease off record, crude output accelerates

MOSCOW (MRC) -- Refinery output in China, the world’s second-largest oil consumer, eased from record highs in March after maintenance shutdowns offset production from a new mega refinery, reported Reuters.

Refinery throughput in March rose 3.2 percent from a year earlier to 53.04 million tonnes, or 12.49 million barrels per day (bpd), data from the National Bureau of Statistics showed on Wednesday.

For the first quarter, crude runs rose 4.4 percent on a year earlier to 155.37 million tonnes, or 12.6 million bpd.

March throughput was down from record rates in the January to February period at 12.68 million bpd.

A number of Chinese refineries, including China National Offshore Oil Corp’s Huizhou refinery and Sinopec Corp’s Changling refinery, were closed last month for maintenance, which peaks during the second quarter before demand rises in the third quarter.

But privately-run Hengli Petrochemical’s new 400,000-bpd refinery in Dalian entered full commercial operations in late March, bolstering overall throughput.

For the month, China pumped 16.54 million tonnes of crude oil or 3.89 million barrels per day, up 2.1 percent from a year ago and the highest daily level in at least a year.

The increases showed that efforts by state-run oil firms to accelerate domestic drilling paid off, halting the decline in the country’s output over the past three years.

Natural gas output last month rose 9.8 percent to 15.1 billion cubic meters (bcm), a touch below December’s record 15.3 bcm.

For the first quarter, gas production rose 9.4 percent to 44 bcm.

As MRC wrote earlier, in September 2018, China's Sinopec Corp joined a group planning to build an oil refinery in Alberta, an enterprise that would strengthen demand for the Canadian province's heavily discounted crude. State-owned Sinopec, formally known as China Petroleum & Chemical Corp, along with an Alberta indigenous group, China State Construction Engineering Corp and Alberta management company Teedrum, plan to build a refinery to process 167,000 barrels per day of crude into gasoline and other products.
MRC

China keeps buying crude oil for storage, but difficulties loom: Russell

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, said 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 $71.62 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 $86.29 a barrel in early October and the year’s low of USD50.47 on Dec. 24.
MRC

BPCL resumes naphtha exports from Kochi

MOSCOW (MRC) -- India’s Bharat Petroleum Corp Ltd (BPCL) has sold a naphtha cargo out of Kochi for the first time this year after cancelling two earlier sales tenders, as per Hydrocarbonprocessing with reference to industry sources.

BPCL sold 35,000 tonnes of naphtha for May 2-3 loading from Kochi to Japanese trader Petro-Diamond at a premium of about USD16 a tonne to its own price formula on a free-on-board (FOB) basis.

It skipped exporting the fuel from Kochi for January and April 2019 loading and cancelled sales tenders for February and March cargoes.

BPCL also exports naphtha from Mumbai.

Indian naphtha exports have been low this year due to domestic demand and India’s refineries either undertaking maintenance or upgrading their facilties to prepare for Euro VI-compliant fuels.

India’s February 2019 naphtha exports came in at 430,000 tonnes, according to official data, the lowest monthly exports since October 2015.

As MRC reported earlier, BPCL plans to build a USD3 billion petrochemical unit to serve the Mumbai region, a company official said in March 2018, to profit from the country's expected surge in demand for petrochemicals as its economy expands. BPCL's expansion is part of a national plan to spend USD35 billion on petrochemical production in order to meet the expected increase in consumption of the chemicals for products including plastics, paints and adhesives. India currently only produces about 20 million tonnes a year of petrochemicals, less than the 40 million tonnes of demand expected for the 2017/18 financial year.
MRC

Pretium Packaging acquires injection molder Olcott Plastics

MOSCOW (MRC) -- In a bid to boost its injection molding and personal care/beauty offerings, plastic container and closure maker Pretium Packaging has acquired Olcott Plastics Inc. for an undisclosed amount, said Canplastics.

The deal is also designed to allow St. Charles, Ill.-based Olcott to offer blow molded containers and a national footprint to its customers.

Founded in 1969, Olcott specializes in injection molding and decorating of single- and double-wall PP jars, as well as injection molding and lining of PP closures.

"Joining forces with Pretium is a perfect fit for the next chapter of Olcott Plastics,” Olcott co-owners Joseph and John Brodner said in a statement. “We are excited to be able to offer our customers a broader product portfolio and national footprint while continuing to provide the same level of service they are accustomed to receiving from Olcott. We believe this transaction will be beneficial to both our customers and employees."

This is the sixth acquisition by Chesterfield, Mo.-based Pretium since its 2016 purchase by San Francisco-based private equity firm Genstar Capital LLC.

Pretium manufactures approximately two billion PET and HDPE containers annually from its 17 locations across the U.S. and Canada.
MRC

Formosa experiences explosion at aromatics facility in Yunlin County

MOSCOW (MRC) -- Formosa Chemicals and Fibre Corp. (FCFC), a subsidiary of Formosa Plastics Group (FPG), experienced an explosion on 7 Apr. 2019 at its aromatics facility in Mailiao Township, Yunlin County, Taiwan, as per Apic-online with reference to several local news reports.

The explosion was caused by a cracked pipeline leaking liquefied petroleum gas. No casualties were reported.

FCFC was fined about USD162,000 by the county government due to the violation of air pollution regulations.

Separately, following the explosion, members of the legislature's Social Welfare and Environmental Hygiene Committee insisted that government agencies improve the disaster alert system and set up a national-level petrochemical disaster response center, the Taipei Times reported.

As MRC informed before, in March 2018, Formosa Petrochemical Corp (FPCC) undertook an emergency shutdown at its No. 1 cracker in Mailiao. The company halted operations at the cracker on March 19, 2018 owing to technical issues. The plant remained off-line for around one day. Located at Mailiao in Taiwan, the No. 1 cracker has an ethylene production capacity of 700,000 mt/year, propylene production capacity of 350,000 mt/year and butadiene production capacity of 109,000 mt/year.

Formosa Petrochemical is involved primarily in the business of refining crude oil, selling refined petroleum products and producing and selling olefins (including ethylene, propylene, butadiene and BTX) from its naphtha cracking operations. Formosa Petrochemical is also the largest olefins producer in Taiwan and its olefins products are mostly sold to companies within the Formosa Group. Among the company's chemical products are paraxylene (PX), phenyl ethylene, acetone and pure terephthalic acid (PTA). The company's plastic products include acrylonitrile butadiene styrene (ABS) resins, polystyrene (PS), polypropylene (PP) and panlite (PC).
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