SINOPEC commits to production capability of low-sulfur marine fuel oil by 2020

MOSCOW (MRC) -- Sinopec has announced the production capability of 10 million and 15 million tons of low-sulfur marine fuel oil in 2020 and 2023, according to Hydrocarbonprocessing.

By January 1, 2020, Zhoushan and other China major ports will be fully covered with SINOPEC product availability, and more than 50 key overseas ports, including Singapore, will be covered with SINOPEC supply ability. The commitment will contribute 600,000 tons of sulfur oxide emissions reduction, equivalent to shutting down over 64 million National IV Standard trucks for a year.

Shipping emissions have become one of the major sources of air pollution in port cities and coastal areas. Data shows while a 10,000 TEU container vessel sails with a 70% load for 24 hours, it produces the equivalent amount of PM2.5 against 210,000 National IV Standard trucks. The IMO appointed research institute has forecasted that the global shipping industry is estimated to consume around 300 million tons of marine fuels in 2020. From January 1, 2020, MARPOL ANNEX VI has nailed the global sulfur-cap on marine fuels at 0.5%, down from the current 3.5%, which is 86% less than current emissions.

The sulfur-cap evokes revolutionary changes to the global shipping industry. The globalenvironment is expected to be improved fundamentally in the aspects ranging from port cities to atmosphere and oceans. Meanwhile, the major refiners are confronting opportunities and challenges. As a Category A Council Members of the IMO, China has marched a pioneer step and advanced one year ahead in implementing sulfur emission control in China's costal areas since January 1st 2019.

SINOPEC actively promotes greener development in the global shipping industry and contributes to the "China Solution". SINOPEC has launched a project in production research and development of the greener low-sulfur marine fuel oil in 2017. In the aspect of production, 10 SINOPEC refineries located in coastal cities have been projected to produce low-sulfur marine fuel oil. Shanghai, Jinling and Hainan, locations of some of the 10 refineries, have successively produced the IMO compliant marine fuel earlier this year. In the aspect of supply network development, the supply chain of SINOPEC's own refined low-sulfur marine fuel oil has already been established in Shanghai and Zhejiang. Prior to January 1, 2020, China's major ports will be covered with SINOPEC's features such as regulatory compliance, sustainable availability, and environmental concern. Simultaneously, the supply chain will reach Singapore, Hambantota, ARA areas and up to 50 key overseas ports around the globe.

SINOPEC has the responsibility, the capability and the advantages to scale up the production and supply of low-sulfur marine fuel oil. "Reduction of shipping emissions is one of the key factors in the Blue Sky Protection Campaign," said Mr.Lv Dapeng, the spokesman of SINOPEC. "The production and supply of low-sulfur marine fuel oil is a green initiative that benefits the whole world and requires concerted global action." Being the largest oil refining company, SINOPEC has advanced refining technology along with the advantage of having main refineries close to the consumption market along the coast and the river. Therefore, SINOPEC has the ability and advantages in realization of the large-scale production of low-sulfur marine fuel oil and is committed to the prevention and reduction of marine and air pollution in China and the world.

SINOPEC has completed the development layout of the low-sulfur greener marine fuel oil supply network globally. Mr. Liu Zurong, the executive director and party secretary of SINOPEC Fuel Oil Sales Co., Ltd (Sinopec Fuel Oil), said that SINOPEC Fuel Oil is the professional business arm with expertise in the global marine fuel business of SINOPEC. A well-established business network that covers China's coastal ports has been set up. Meanwhile, the supply capacity of up to 40 major ports abroad has been developed. SINOPEC adheres to the principle of "every drop of oil counts", with strict quality control in production, making SINOPEC a quality standard leader.

Furthermore, the Great Wall lubricate oil, a sub-brand of SINOPEC, has launched auxiliary products in compliance with SINOPEC low-sulfur marine fuel oil, which has obtained the OEM certification from international marine diesel engine manufacturers.

As MRC reported before, 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. Thus, Sinopec, 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. The SinoCan Global refinery would cost CD8.5 billion, with a financing plan still to be worked out.

Sinopec Corp. is one of the largest scale integrated energy and chemical company with upstream, midstream and downstream operations. Its principal business includes: exploring, developing, producing and trading crude oil and natural gas; producing, storing, transporting and distributing and marketing petroleum products, petrochemical products, synthetic fiber, fertilizer and other chemical products. Its refining capacity and ethylene capacity rank No.2 and No.4 globally. Sinopec listed in Hong Kong, New York, London and Shanghai in August 2001. Sinopec Group, the parent company of Sinopec Corp., is ranked the 5th in Fortune Global 500 in 2012.
MRC

US refiners warn: Mexico tariffs could result in higher fuel prices

MOSCOW (MRC) -- US refiners warned the Trump administration that tariffs on imports from Mexico could deliver a punishing blow to refiners and raise the cost of gasoline just as the US driving season kicks into high gear, reported Reuters with reference to sources familiar with the discussions.

The United States imports over 650,000 barrels of crude per day from Mexico, about 10% of total crude imports, according to US government data. Refiners are also worried that Mexico could retaliate with tariffs on its imports of US fuel, a major source of revenue for the US industry.

"If these tariffs take hold, particularly if they’re able to get up to 25%, that could really impact the overall competitiveness of the US refining industry," said Chet Thompson, Chief Executive of the American Fuel and Petrochemical Manufacturers trade association. The group has had discussions with the administration and Congress on the issue, Thompson said.

Mexico’s oil is heavy and refiners need it to blend with lighter US oil to produce diesel fuel, gasoline and other products. Tariffs would drive up the cost of those imports - and Trump has said he would increase levies by 5% monthly until they reach 25% in October.

Mexico is a prime supplier of heavy crude, which has been harder to come by since the United States imposed sanctions on Venezuela in January.

Gasoline prices have remained subdued as global oil prices have declined due to worries about worldwide economic demand. But without enough heavy crude, US refineries could run plants at lower rates to save money if heavy crude feedstock becomes too costly, lobbyists said.

"The heavy crude market is tight and it’s only Mexico at the moment. The tariff would essentially make the crude uneconomical and we may have no choice but to consider run cuts," said one Washington-based refinery lobbyist.

Refiners have said that could drive up the price of gasoline at the pump, just as American drivers take to the road in the period of the highest gasoline demand in the United States. International crude prices are near a six-month low, so any rise in gasoline prices is unlikely to be prohibitive.

Right now a regular gallon of gasoline in the United States averages USD2.80, according to the American Automobile Association, but it tends to rise in the summer months.

“We are trying to educate the administration on what this means for gas prices,” the lobbyist said.

The potential for tariffs has alarmed lawmakers of both major US parties, including members of Congress from Texas, a reliably Republican state that voted for Donald Trump in 2016 but depends on the oil industry and cross-border trade with Mexico, which accounts for 39 percent of the state’s exports, according to the Texas-Mexico Trade Coalition.

"We shouldn’t be imposing tariffs on Mexico," said Senator Ted Cruz, Republican of Texas. He told Reuters that Republican senators "had a vigorous and frank discussion" with White House officials on the issue.

Texas has 5.7 million barrels of daily refining capacity, more than any other state.

US refiners are also concerned about retaliatory actions by Mexico, which buys about one-quarter of US refined product exports. In March, Mexico bought about 1.3 million bpd of oil products from the United States, according to US Energy Department data.
MRC

Pucheng Clean Energy restarts CTO plant

MOSCOW (MRC) -- Pucheng Clean Energy Chemical Company has resumed operations at its Coal-to-olefins (CTO) plant, as per Apic-online.

A Polymerupdate source in China informed that the company has completed turnaround at the plant in early-June, 2019. The plant was shut for maintenance on May 13, 2019.

Located at Weinan, Shaanxi, China, the CTO plant has an ethylene production capacity of 300,000 mt/year and propylene capacity of 400,000 mt/year.

As MRC reported earlier, on May 28, 2018, Pucheng Clean Energy restarted its PP plant following an unplanned shutdown. The plant remaind off-line for around one week owing to technical issues. Located at Shaanxi province in China, the plant has a PP production capacity of 400,000 mt/year.

Besides, Pucheng Clean Energy shut this PP plant for an unplanned maintenance from 21 October to 12 November, 2018.
MRC

Oil jumps 2% as possible delay of U.S. tariffs on Mexico boosts equities

MOSCOW (MRC) -- Oil prices jumped more than 2%, reversing course after falling to near five-month lows in the previous session, following a report that the United States could postpone tariffs on Mexico, reported Reuters.

Brent crude futures settled at USD61.67 a barrel, gaining USD1.04, or 1.7%. US West Texas Intermediate crude futures settled at USD52.59 a barrel, up 91 cents, or 1.8%. The benchmarks both rallied more than 2% in post-settlement trade.

US stocks, which oil prices tend to follow, spiked after Bloomberg News reported the United States is considering a delay in the tariffs as talks continue.

"There’s talk now that the US might not put on the Mexico tariffs, and that’s pushed equities up, and you’ve got a little bit of short covering based on that statement," said Dominick Chirichella, director of risk management and advisory services at EMI DTN in New York.

Prices had been near flat most of the session as sentiment remained dim on fresh signs of a stalling global economy and ongoing concerns about US crude supply growth.

On Wednesday, Brent and WTI hit their lowest levels since mid-January at USD59.45 and USD50.60, respectively, after US crude production hit a new record high and stockpiles hit their highest since July 2017.

Both Brent and US crude are in bear-market territory, having lost more than 20% from peaks reached in late April.

Signals of slowing global economic activity have increased in recent months, fueled by trade tensions between the United States and China, the world’s top two energy consumers.

US President Donald Trump, in his latest public comments about the trade war, said he would likely decide on more China tariffs at the end of June, which followed his overnight threat to put tariffs on “at least” another USD300 billion worth of Chinese goods.

Prices rallied strongly in the first five months of the year to a high of nearly USD75 a barrel, supported by supply curbs by the Organization of the Petroleum Exporting Countries and some allies including Russia. Supply has also been limited by US sanctions on oil exports from Iran and Venezuela.

Members of the OPEC+ group are set to discuss whether to extend their supply curbs further later this month.

President Vladimir Putin said on Thursday that Russia had differences with OPEC over what constituted a fair price for oil but said Moscow would take a joint decision with OPEC colleagues on output at a policy meeting in the coming weeks.
MRC

SIBUR and the Silk Road Fund sign agreement to enhance cooperation

MOSCOW (MRC) -- SIBUR and the Silk Road Fund entered into an agreement to enhance cooperation. The signing ceremony was attended by Xi Jinping, President of the People's Republic of China, and Vladimir Putin, President of the Russian Federation, said the producer on its site.

The agreement was signed by Dmitry Konov, Chairman of the Management Board at SIBUR Holding, and Wang Yanzhi, President at Silk Road Fund Co, Ltd.

Under the arrangement, the parties will be looking into investment opportunities to develop relations between Northeast China and Russia’s Far East, sharing information about market opportunities in Central Asia, Middle East and other regions, and coordinating efforts for potential joint investments in petrochemical projects.

"The agreement testifies to the strong investment appeal of petrochemistry as an industry that creates cutting-edge and green materials for construction, healthcare, car making, food, and other areas. Enhanced cooperation with the Silk Road Fund will help to grow economic ties between Russia and China," said Dmitry Konov, Chairman of the Management Board at SIBUR Holding.

As MRC wrote before, in June 2018, SIBUR said its plans to build a gas chemical complex in Russia's Far East will require preliminary investments of up to USD8 billion and it is still looking for Asian partners. SIBUR said a year ago that it had been in talks with a number of Chinese investors about participating in the project to build the complex in Amur.

SIBUR is a uniquely positioned vertically integrated gas processing and petrochemicals company. We own and operate Russia’s largest gas processing business in terms of associated petroleum gas processing volumes and are a leader in the Russian petrochemicals industry. As of 31 March 2014, SIBUR operated 27 production sites located all over Russia, had over 1,400 large customers engaged in the energy, chemical, fast moving consumer goods (FMCG), automotive, construction and other industries in approximately 70 countries worldwide and employed over 27,000 personnel.
MRC