Taiwan Formosa to trim refinery runs; raise naphtha cracker output

MOSCOW (MRC) -- Taiwan’s Formosa Petrochemical Corp will operate its Mailiao refinery at about 90% capacity, down by about 6 percentage point from June but fully restore throughput at its naphtha crackers, company spokesman K.Y. Lin said, as per Hydrocarbonprocessing.

Formosa operates a 540,000 barrels-per-day (bpd) refinery at Mailiao, making that one of Asia’s ten largest refineries by capacity.

Weak gasoline margins have prompted the refiner to trim gasoline supplies this month and this would affect its overall average refining throughput as a result, Lin said.

Formosa, Asia’s top naphtha importer, also operates three naphtha crackers which have a total capacity of 2.93 million tonnes per year of ethylene, a building block for plastics.

But it reduced the average throughput of the naphtha crackers to about 95% of total capacity in June because of weaker demand for ethylene caused by maintenance at downstream units, he said.

“The plan is to restore the cracker runs to 100% this month but this is subjected to downstream demand,” said he said.

As MRC informed earlier, Formosa Petrochemical Corp will raise the throughput at its crude oil refinery during the second-half of April after finishing maintenance at a crude unit. Formosa’s Mailiao refinery, which can process 540,000 barrels per day (bpd) of crude, will raise its throughput to over 82 percent from 70 percent currently, K.Y. Lin, a company spokesman said.

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).
MRC

MOSCOW (MRC) -- Brazilian state-run oil firm Petrobras believes three types of companies, including domestic fuel distribution companies such as Raizen, could be interested in purchasing its refineries, said Reuters.

Speaking at an event in Rio de Janeiro, Petrobras Chief Institutional Relations Officer Roberto Furian Ardenghy said fuel distribution firms, oil producers with operations in Brazil and trading firms could buy some refineries it has on the block.

“Today, we’re looking at three segments that could be interested in our facilities. The first segment is distributors, our friends at Raizen, and other companies that are here,” Ardenghy said.

Petrobras is planning to sell off eight of its refineries in a process Chief Executive Roberto Castello Branco has said could raise USD15 billion. Castello Branco on Thursday said one of the refineries could be sold by the end of the year.

The possible buyers Ardenghy mentioned are essentially those forecast by analysts. Glencore PLC and Vitol SA , both active in commodities trading, recently entered the fuel distribution business in Brazil.

Raizen, Brazil’s second largest fuel distribution company, is a joint venture between Royal Dutch Shell PLC and Brazil’s Cosan SA. The company declined to comment.

In June 2019, Petroleo Brasileiro SA said it signed a deal with local antitrust regulator CADE regarding the proposed sale of some of its refining installations. According to a securities filing, the company said the agreement will allow for increased competition in Brazil’s refining sector, by attracting new players to the business.

Headquartered in Rio de Janeiro, Petrobras is an integrated energy firm. Petrobras' activities include exploration, exploitation and production of oil from reservoir wells, shale and other rocks as well as refining, processing, trade and transport of oil and oil products, natural gas and other fluid hydrocarbons, in addition to other energy-related activities.
MRC

MOSCOW (MRC) -- Saudi Arabia’s state oil giant Aramco has set its July propane price at USD375 a ton, down from USD430 in June, said Reuters.

The price provides a benchmark against which Middle East sales of liquefied petroleum gas (LPG) to Asia are priced.

It set its July butane price at USD355 a tonne, down from USD415 in June.

As MRC informed earlier, Saudi Aramco and Air Products inaugurated the first hydrogen fueling station in Saudi Arabia at Air Products’ new Technology Center in the Dhahran Techno Valley Science Park. The pilot station will fuel an initial fleet of six Toyota Mirai fuel cell electric vehicles with high-purity compressed hydrogen.
MRC

MOSCOW (MRC) -- A refined products supply gap on the US East Coast created by a massive fire at a Philadelphia refinery in late June will be filled by shipments from the Gulf Coast region and Europe, reported Reuters with reference to market sources.

The fire completely destroyed the alkylation unit at Philadelphia Energy Solutions Inc’s oil refinery, the largest refinery on the East Coast.

The destruction of the unit, coupled with damage from the fire that ripped through the 335,000 barrel-per-day (bpd) refining complex, could force the 200,000 bpd Girard Point section of the two-section complex to remain shut for an extended period.

PES has since declared a force majeure on some gasoline deliveries, sources said.

Details on the extent of the damage and the amount of supply affected remain unclear, calling into question how much supply actually needs to be sent to the region.

Even when Girard Point restarts, it will run at reduced rates due to the loss of the alkylation unit, two sources told Reuters on Sunday. It could take several years for the company to rebuild the unit.

The arbitrage to ship from Europe to the East Coast has opened further since the fire, market participants said.

However, the arb did not open as wide as some expected because several vessels previously had been fixed and because of high inventories in the United States, according to data intelligence firm Kpler.

Gasoline loadings out of Europe from June 24 to June 30 currently total 535 kilotonnes, a 16.5% increase week-on-week, Kpler data showed.

Additionally, the largest US products pipeline, Colonial Pipeline, which connects Gulf Coast refineries with markets across the southeastern and eastern United States, has additional capacity available into its Linden, New Jersey delivery point, the company said in a statement.

The Gulf Coast currently has ample supply. Gasoline stockpiles totaled 84.6 million barrels in early June, the highest on record seasonally, according to US Energy Information Administration data.
MRC

MOSCOW (MRC) -- S & B Engineers and Constructors, Ltd. (S & B) announced that it was selected by LyondellBasell to perform construction for a portion of the PO/TBA Project, which will install the world’s largest propylene oxide (PO) and tertiary butyl alcohol (TBA) plant, as per Hydrocarbonprocessing.

The PO/TBA Project, which represents the single-largest capital investment in the client’s history, will be split into two main facilities: a PO/TBA plant to be located in Channelview, Texas and an ethers unit to be located in Pasadena, Texas.

Under the contract, S & B is constructing the new 34-acre ethers unit at LyondellBasell’s Bayport Complex in Pasadena. The ethers unit will convert TBA into two high-octane fuel additives which will be blended in gasoline to reduce emissions.

"S & B is honored to be trusted by the client with such an important and historic project," said Tommy Collins, Executive Vice President and COO of S & B. "We are proud to play a part in LyondellBasell’s major US Gulf Coast organic growth program, which will bring significant economic benefits and job growth to Houston, S & B’s hometown since 1967."

The work is being executed using S & B’s Managing with Certainty execution philosophy, including our industry-leading project management system (iPIMS) and innovative Integrated Project PlanningTM toolset.

As MRC wrote previously, in August 2016, LyondellBasell made the final investment decision to build a high density polyethylene (HDPE) plant on the US Gulf Coast. The plant will have an annual capacity of 1.1 billion pounds (500,000 metric tons) and will be the first commercial plant to employ LyondellBasell's new proprietary Hyperzone PE technology. The start-up of the new plant is scheduled for 2019.

LyondellBasell is one of the largest plastics, chemicals and refining companies in the world. Driven by its 13,000 employees around the globe, LyondellBasell produces materials and products that are key to advancing solutions to modern challenges like enhancing food safety through lightweight and flexible packaging, protecting the purity of water supplies through stronger and more versatile pipes, and improving the safety, comfort and fuel efficiency of many of the cars and trucks on the road. LyondellBasell sells products into approximately 100 countries and is the world's largest licensor of polyolefin technologies.
MRC