Kazakhstan to seek damages from Transneft for tainted oil

MOSCOW (MRC) -- Kazakh oil flowing via Russia to be loaded on tankers at the Baltic Sea port of Ust-Luga has been contaminated and Kazakhstan plans to seek compensation from Russian pipeline monopoly Transneft, reported Reuters with reference to a senior Kazakh energy official.

Russia’s oil export flows have been disrupted since April, when high levels of organic chloride were found in crude pumped via the Druzhba pipeline to Ust-Luga and other European countries.

Six tankers with 598,000 tonnes of tainted oil were loaded at Ust-Luga, Kazakh Deputy Energy and Mineral Resources Minister Aset Magaulov told Reuters.

"First, companies that sold the oil will talk to buyers about a discount, then ... (Kazakh pipeline operator) Kaztransoil will have separate talks with Transneft," Magaulov said.

Neither Transneft nor the Russian energy ministry replied to a Reuters request for comment.

Magaulov added that two separate tankers with 199,000 tonnes of clean Kazakh oil were loaded from Ust-Luga between May 10 and May 15. Russia’s energy ministry said earlier that clean oil had started to be loaded at Ust-Luga.

Russian Deputy Prime Minister Dmitry Kozak said on Thursday that Transneft would compensate all parties for losses incurred from contaminated oil if they could prove the damage, while the first European refinery declared force majeure.

"Based on the oil agreement with Transneft, given the fact that we supplied clean oil but it got contaminated ... there should be compensation from Transneft," Magaulov said.

Kazakhstan, which produces around 1.8 million barrels per day (bpd) of oil, is the second-biggest oil producer among former Soviet countries after Russia. Kazakhstan exports around 12 percent of its oil via Russia’s Ust-Luga.

Magaulov said a preliminary agreement had been reached with buyers under which they would take the contaminated oil at a discount. However, talks on such a discount are continuing and there is no estimate of potential compensation.

ExxonMobil, Chevron, Eni, CNPC and Lukoil are among the international companies producing oil in Kazakhstan.

The Druzhba pipeline splits in Belarus into a northern spur to Poland and Germany and a southern leg via Ukraine to Slovakia, Hungary and the Czech Republic. Only Hungary has resumed test flows to see whether its refinery equipment can withstand the contaminated oil.

Druzhba can pump 1 million bpd, or 1 percent of global oil demand. Ukraine and Belarus have said they will ask Transneft for compensation.

On Thursday, Russia’s Kozak said it would take 22 days to clean one branch of Druzhba and seven days for the other, without specifying which was which.

Meanwhile, Poland has increased seaborne oil imports and Czech refiner Unipetrol will start drawing the second batch of an emergency loan of crude from state reserves overnight.

France’s Total has suspended operations at some units of its 230,000-bpd Leuna refinery in Germany for technical checks following the Russian contamination.

Total said it was trying to manage any long-term supply complications and planned to resume operations on Saturday using crude sent via the Polish port of Gdansk.

Russian oil production remained under pressure due to the pipeline debacle. Output from May 1-16 fell to 11.156 million bpd, below the 11.18 million bpd level set in a supply-limiting deal with producer group OPEC, two industry sources said.

Before the contamination, sources indicated Moscow wanted to pump more from July along with the Organization of the Petroleum Exporting Countries, which was considering whether to raise output if Venezuelan and Iranian supply dropped further.

A panel of OPEC and non-OPEC ministers meets on Sunday in Saudi Arabia to discuss the market and make recommendations. The group, known as OPEC+, gathers in June to decide whether to renew the supply-cutting deal.

As MRC informed earlier, Belarus state oil firm Belneftekhim said in a statement on Saturday that not enough clean oil is available for the Novopolotsk refinery to work at its optimal capacity, after contaminated oil was received via the Russian Druzhba pipeline.
MRC

MOSCOW (MRC) -- Russia’s Antipinsky oil refinery does not plan to receive oil this month and has removed itself from the delivery schedule, Interfax news agency cited oil pipeline monopoly Transneft.

A London court has issued a worldwide order to freeze 225 million euros (USD252 million) in assets belonging to the oil refinery, owned by New Stream Group, Reuters reported last week.

In the late April, Russian billionaire Mikhail Gutseriyev was set to gain control over a debt-ridden Afipsky oil refinery. The refinery in southern Russia has a capacity of 6 million tons per year (120,000 barrels per day). Since last year, it has been under the management of Russia’s largest bank, Sberbank, its top lender.

JSC Antipinsky Refinery was founded in July 2004 on the territory of one of the major oil and gas producing constituents of the Russian Federation - Tyumen Region, where most of Russian oil (64%) and natural gas (91%) reserves are concentrated.
MRC

MOSCOW (MRC) -- Argentina has requested that the United States accelerate its review of anti-dumping duties it currently slaps on biodiesel imports from the South American nation, one of the world’s top exporters of the fuel,sa id Hydrocarbonprocessing.

Argentina’s Minister of Production and Labor Dante Sica, during a trip to Washington, told reporters on Friday he had asked for the “greatest speed” from U.S. counterparts to find a “quick solution towards being able to enter the market.”

Argentina, South America’s second-largest economy, had requested a review last November of U.S. tariffs imposed at the end of 2017 due to allegations of subsidies and dumping, which in effect shut off access for Argentine exporters to the U.S. market.

Sica, who met with U.S. Secretary of Commerce Wilbur Ross on Thursday, told reporters in a live press conference and by phone that the American official had “showed the greatest understanding of the importance of this issue for Argentina.”

He added, however, that Ross was nonetheless constrained by U.S. legal and technical processes.

Argentine exports of biodiesel to the United States before anti-dumping measures came into effect totaled some $1.5 billion per year, which in 2016 was a quarter of the total value of Argentine exports to the United States, official data show.

Argentina’s biodiesel sector in recent years has been hit by trade sanctions for allegations of unfair competition.

In February, the European Union, which had also imposed tariffs on the country’s biodiesel, authorized eight Argentine-based producers to export the fuel to the bloc without paying duties as long as they agreed to a minimum set price.
MRC

MOSCOW (MRC) -- Russia’s state pipeline monopoly Transneft will compensate all parties for losses incurred from contaminated oil, but they must prove the damage, a government official said, as the first European refinery declared force majeure, as per Hydrocarbonprocessing.

Russia’s oil export flows have been disrupted since April when high levels of organic chloride were found in crude pumped via the Druzhba pipeline to the Baltic port of Ust-Luga and other European countries.

The Druzhba pipeline splits in Belarus into a northern spur to Poland and Germany and a southern leg via Ukraine to Slovakia, Hungary and the Czech Republic. Only Hungary has resumed test flows to see if its refinery equipment can withstand the contaminated oil.

Druzhba can pump 1 million barrels of oil per day (bpd) or the equivalent of 1 percent of global oil demand.

Transneft has repeatedly said that oil firms which use chloride to boost oil output were to blame for contamination, but on Thursday, Russia said Transneft would foot the bill.

“Of course - and sadly - Transneft,” Russian Deputy Prime Minister Dmitry Kozak told reporters when asked who would pay after a meeting with his Belarusian counterpart Igor Lyashenko in Moscow. Transneft head Nikolai Tokarev also attended the meeting.

Ukraine and Belarus both said they will ask Transneft for compensation. Stoppage of oil flows not only affects refineries but also budget revenues from a loss of transit fees.

Kozak said on Thursday that Russia had not yet calculated the cost of the damage and it would take three to four weeks to do so. “This is not a judicial dispute, we will find a compromise,” Kozak said. “Everyone who can prove real losses will, of course, be compensated."

He said Poland, Ukraine, Hungary and Slovakia were currently waiting and had not yet issued demands for compensation.

According to traders, while Druzhba remains shut, Russia is losing $80 million a day. For the buyers of an estimated 19 million barrels of contaminated crude which is stuck in the pipeline and loaded on tankers, it’s a $1.2 billion question.

Earlier it was written, Kazakh oil flowing via Russia to be loaded on tankers at the Baltic Sea port of Ust-Luga has been contaminated and Kazakhstan plans to seek compensation from Russian pipeline monopoly Transneft.
MRC

MOSCOW (MRC) -- thyssenkrupp’s Industrial Solutions business area has received a new order for the construction of a fertilizer plant in Poland, said Hydrocarbonprocessing.

The customer for the project is ANWIL, a subsidiary of PKN ORLEN, one of the largest oil industry corporations in Central and Eastern Europe from Poland. The new facilities for the production of 1,265 metric tons of nitric acid and 1,200 tons of ammonium nitrate per day will be located in Wloclawek, some 200 km northwest of Warsaw, at an existing chemical and fertilizer complex. thyssenkrupp’s patented EnviNOx process will be used to remove green house gases from nitric acid production.

"More than ever, the chemical industry faces the challenge of growing profitably and at the same time protecting the climate. With the realization of this new, low-emission plant in Poland, ANWIL and thyssenkrupp are making an important contribution,” says Sami Pelkonen, CEO Chemical & Process Technologies at thyssenkrupp Industrial Solutions. “We look forward to our further cooperation and are proud to bring decades of plant engineering and process know-how into the project."

The order includes the provision of technology licenses and the engineering, procurement and construction (EPC) of the new facilities. The contract value is in the lower three-digit million euro range. The project is a substantial part of a larger investment program implemented by ORLEN to expand its fertilizer portfolio and open up new value chains in the petrochemical industry. By 2022, ORLEN aims to increase its fertilizer production capacity in Wloclawek by 50 percent to 1.461 million tons per year to meet growing demand.

“With thyssenkrupp, we have found a reliable partner for our investment project. The company combines extensive plant engineering experience with efficient technologies that meet and exceed the highest environmental standards. Together, we will drive growth and sustainable development of the chemical industry in Poland”, said Agnieszka Zyro, CEO at ANWIL S.A., at the signing ceremony.

Combined removal of N2O and NOx greenhouse gases with EnviNOx

thyssenkrupp's patented, world-leading EnviNOx technology for greenhouse gas reduction will be utilized to treat tail gases from nitric acid production. The process converts environmentally harmful laughing gas (N2O) and other nitrogen oxides into nitrogen, oxygen and water with the aid of a special catalyst. This will reduce the annual emissions of the new plant by around 3,200 tons of laughing gas and 1,000 tons of nitrogen oxide per year.

Since the global warming potential of laughing gas is estimated to be around 310 times greater than that of carbon dioxide (CO2), this corresponds to a CO2 reduction of about 1 million tons CO2 per annum. Today, more than 20 EnviNOx systems are already contributing to a more climate-friendly production of nitric acid worldwide, while more are under construction.

As MRC informed earlier, Thyssenkrupp AG said Monday that it has received a large order from Egypt's El Nasr Company for Intermediate Chemicals to design and build a fertilizer complex. The German engineering group said the order value is several hundred million euros. Thyssenkrupp said the new complex will be built around 100 kilometers (62 miles) southeast of Cairo and should begin operations in 2022. The complex is expected to be operational in 2022 and will have an annual production of up to 440,000 tonnes of ammonia, 380,000 tonnes of urea and 300,000 tonnes of calcium ammonium nitrate (CAN).
MRC