Refinery run cuts help tighten supply

MOSCOW (MRC) -- Asian refining margins for gasoil have climbed to their highest in eight months as some regional refinery issues and run cuts have tightened supplies, while firmer domestic demand in South Korea has led to a drop in exports from the country, according to Hydrocarbonprocessing.

Strong margins for middle distillates have underpinned overall profits for Asian refiners. Gasoil margins are also expected to find support from demand to meet new rules requiring lower sulfur for ship fuel that will likely consist of low-sulfur gasoil.

Refining margins, also known as a crack spread, for gasoil with 10 parts per million (ppm) sulfur content rose to $17.06 a barrel over Dubai crude on Monday, their highest since Nov. 19.

Cracks for the benchmark gasoil grade, which have soared over 21% since end-May, are currently at their strongest seasonal levels in the past six years, Refinitiv data showed.

"Singapore inventories are lower, Vietnam’s Nghi Son oil refinery is operating at reduced rates, while Philippine oil refiner Petron’s come-back has got delayed," a Seoul-based trader said.

"Petron refinery started turnaround in early May and was supposed to come back to normal by June, but is not back yet. Also, exports from Korea might be lower in August due to tax issues. Even if small individually, the impact could be substantial when all these are united," he added.

A Petron Corp trader based in Singapore refused to discuss the refinery turnaround when contacted by Reuters because the matter is confidential.

The Nghi Son oil refinery was restarted earlier this month after the plant’s fluid catalytic cracking unit went down, disrupting operations at the 200,000-barrel-per-day refinery.

South Korean consumers are ramping up gasoil purchases before an ongoing tax cut on transportation fuel in the country expires in August, two gasoil traders and a broker said.

South Korea had initially cut domestic transport fuel taxes by 15% for six months in November, later extending the cuts for four months but lowering it to 7%.

Gasoil exports from South Korea in June were at 1.9 million tons, about 8% lower from May, Refinitiv data showed. June gasoil exports from Japan and India were also down about 54% and 4%, respectively, from the previous month.

Meanwhile, Singapore middle distillate stocks eased to a two-week low of 10.7 million barrels in the week to July 17, Enterprise Singapore data showed on Thursday.

The gasoil margins, however, might briefly lose steam over the next few weeks as India and China are expected to export more supplies, at least two Singapore-based middle distillates traders said on Tuesday.

Diesel demand typically takes a hit during monsoon months in India as heavy rainfall and floods curtail demand for the transportation fuel, while China’s crude throughput has climbed to a record in June, following start-up of two new, large refineries.
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MOSCOW (MRC) -- Jiutai Energy Group has undertaken an emergency shutdown at its methanol-to-olefins (MTO) plant in Erods, Inner Mongolia, as per Apic-online.

A Polymerupdate source in China informed that the company has halted operations at the plant on July 21, 2019 owing to mechanical issues. The plant is likely to remain off-line for about 4-5 days.

Located in Inner Mongolia, the MTO plant has an ethylene capacity of 150,000 mt/year and propylene capacity of 200,000 mt/year.

As MRC informed earlier, China’s Jiutai Energy (Zhungeer) Co. Ltd. licensed Honeywell’s UOP MTO technology to convert methanol from coal into key plastics building blocks. Jiutai will produce 600,000 tpa of ethylene and propylene at its facility in Ordos City, Inner Mongolia Province, China. In addition to technology licensing, Honeywell’s UOP provided basic engineering, catalysts, adsorbents, specialty equipment, technical services and training for the project, which was initially to start up in 2014, but was launched earlier this year.
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MOSCOW (MRC) -- To combat imminent global economic headwinds, KBC (A Yokogawa Company) announced it has been awarded Profit Improvement Programs (PIP) for three oil refineries in the Gulf Cooperation Council (GCC) region, as per Hydrocarbonprocessing.

The PIPs, which are focused on improving techno-economic aspects of refinery operations, will deliver improved safety, reliability and profitability outcomes that enhance triple bottom line performance.

The World Bank projects global economic growth to soften in 2019 to 2.9 percent; a 10-year low. This is based on forecast weakening of international trade and manufacturing activity, elevated trade tensions, and substantial financial market pressures (being experienced) in some large emerging markets. Therefore, Middle Eastern refineries are embarking on value chain optimization efforts to increase asset productivity and associated supply chain efficiency, thereby boosting resilience to market volatility.

Via the PIP, KBC will identify and implement a series of on-site productivity and efficiency improvements across each of the refineries focusing on capacity utilization, molecular management, yield improvement, corrosion and fouling mitigation and energy efficiency.

"Our observation is that global forecasts for refined products are being revised down, especially gasoil / diesel, gasoline and fuel oil cracks," explains Andrew Howell, CEO of KBC. "KBC's PIP campaigns are vital for assuring capital efficiency by developing the necessary operational flexibility and identifying strategic investments so that return on capital employed targets can be easily and routinely exceeded."

As MRC reported before, Yokogawa Electric Corporation has recently announced that it has been selected by ExxonMobil to be the Open Process Automation (OPA) system integrator responsible for establishing the company’s OPA Test Bed. Development work and experiments conducted on the Test Bed will support ExxonMobil’s effort to move towards a standards-based, open, secure and interoperable process control architecture.
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MOSCOW (MRC) -- ExxonMobil said it has signed collaboration agreements with six other companies to accelerate the development of Open Process Automation (OPA) systems, according to Hydrocarbonprocessing.

The companies currently included in this collaboration are Aramco Services Company, BASF, ConocoPhillips Company, The Dow Chemical Company, ExxonMobil Research and Engineering Company, Georgia-Pacific LLC and Linde PLC.

Advances in computer hardware, software, networking and security, coupled with increasing global competition and cybersecurity risks, have driven the process industry to consider ways to update the design and maintenance of process automation systems, which serve as the eyes and ears inside industrial manufacturing facilities.

The ultimate goal of this collaboration is to accelerate the creation of a standards-based, open, interoperable, and secure automation architecture that addresses both the technical and commercial challenges of current systems. This transformation is imperative for the competitiveness of both end-users and suppliers in this new digital age.

A test bed is being developed for use and testing by the collaboration partners for the OPA systems, which will act as the foundation for testing the performance and operation of individual components and standards. Once the test bed is fully functional, the collaboration partners will nominate and prioritize new components, standards, and system features to be added and tested. ExxonMobil’s OPA systems test bed is targeted to be operational by year-end 2019.

The results from the test bed will be shared with all collaboration partners and the learnings will support independent field trials. All partners are encouraged to develop their own independent field trials.

The collaboration partners are members of the Open Process Automation Forum (OPAF), a group established by The Open Group, with the purpose of identifying and selecting standards to be used for OPA technology and systems. The Open Group works with customers and suppliers of technology products and services, and with consortia and other standards organizations to capture, clarify, and integrate current and emerging requirements, establish standards and policies, and share best practices.

As MRC wrote earlier, in October 2017, ExxonMobil Chemical Company commenced production on the first of two new 650,000 tons-per-year high-performance polyethylene (PE) lines at its plastics plant in Mont Belvieu, Texas. The full project, part of the company’s multi-billion dollar expansion project in the Baytown area and ExxonMobil’s broader Growing the Gulf expansion initiative, will increase the plant’s PE capacity by approximately 1.3 million tons per year.

ExxonMobil is the largest non-government owned company in the energy industry and produces about 3% of the world's oil and about 2% of the world's energy.
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MOSCOW (MRC) -- Chevron Lummus Global (CLG) has been awarded the license and engineering contracts for a 270 TMTPA (thousand metric tons per annum) Lubricants Base Oil plant at Indian Oil Corporation Ltd.’s Haldia Refinery in West Bengal, India, as per Hydrocarbonprocessing.

The plant will use CLG’s ISODEWAXING and ISOFINISHING technologies.

The Haldia unit will be designed to produce mainly premium API Group III base oils by processing unconverted oil from an upstream hydrocracking unit. Growth is projected in India’s base oil market, and the new unit will help reduce dependence on imported base oils.

CLG’s lubricants technologies provide worldwide licensees with vast commercial experience, superior performance, and optimum utilization of existing assets.

As MRC reported before, Nghi Son Refinery & Petrochemical LLC (NSRP) - a joint venture between PetroVietnam, Idemitsu Kosan, Kuwait Petroleum Europe, and Mitsui Chemicals has recently started up a large residuum hydrodesulfurization (RHDS) unit at its new 200,000 barrels per day refinery in Thanh Hoa Province in northern Vietnam. The 105,000 barrels per day RHDS unit started up in May 2018 and passed performance guarantees in December 2018,

Chevron Lummus Global (CLG), a joint venture between Chevron U.S.A. Inc. and McDermott, is a leading process technology licensor for refining hydroprocessing technologies and alternative source fuels, as well as a global leader in catalyst system supply. CLG offers the most complete bottom-of-the-barrel solution for upgrading heavy oil residues. Our research and development experts are continuously seeking advancements in technology and catalysts that will improve operating economics for your next project.
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