Officials bet on petrochemicals investment to diversify oil and gas-dependent economy

MOSCOW (MRC) -- Azerbaijan is betting on petrochemicals investment to diversify its oil and gas-dependent economy, industry and government officals told Reuters.

Plummeting global oil prices five years ago sent the former Soviet energy producer’s economy into decline, devalued its currency and led to bankruptcies among its commercial banks. But lessons appear to have been learned as Azerbaijan has sought additional sources of revenue, investing in petrochemical plants at home and abroad as it chases the bigger margins from turning crude oil into plastics rather than oil products.

Construction has been completed on three new petrochemical plants in Azerbaijan over the past 12 months. The plants are producing polypropylene, carbamide and high-density polyethylene.

Azerbaijan also produces methanol and other petrochemicals and plans to begin construction of a new petrochemicals plant in Turkey to produce various materials in partnership with British oil major BP at the end of 2020, aiming to complete the project within three years, said BP and state-controlled Azeri oil and gas company SOCAR.

Plans to construct a second carbamide plant in Azerbaijan with Tekfen will also boost the South Caucasus country’s potential as a petrochemicals exporter.

“Azerbaijan is deliberately conducting a policy of non-oil sector development,” Vahit Akhmedov, a member of Azerbaijan’s parliamentary economic policy committee, told Reuters.

“Development of petrochemicals is one of the priorities as this sector will bring good profits and provide the country with these products.”

Oil and gas account for about 95% of Azeri exports and 75% of government revenue, with the hydrocarbon sector also generating about 40% of the country’s economic activity, making the Caspian Sea republic particularly vulnerable to a downturn in gas and crude prices.

“Rapid development of the petrochemicals sector will help us to support economic growth if the oil price falls,” said SOCAR vice president Suleyman Gasimov.

Oil output in Azerbaijan, led by BP and SOCAR’s Azeri-Chirag-Guneshli oilfields (ACG), has been stable over the past couple of years. BP and SOCAR say that ACG, which has so far produced 3.5 billion barrels of oil, has the potential to pump a further 3 billion barrels by 2050. Azerbaijan is also a major producer of gas in the region, aiming to export supplies to Europe.

“Azerbaijan’s oil and gas reserves are enough for rapid and successful development of the petrochemicals industry,” an industrial source told Reuters.

New enterprises have allowed the country to satisfy domestic petrochemicals demand while boosting exports, with Azeri officials saying total petrochemical exports are projected to reach USD241 million this year, up from USD190 million in 2018.

Its export markets for petrochemicals include Georgia, Turkey, Russia, Ukraine, Europe, China, Egypt and Israel. Other non-oil exports, including the agriculture and mining sectors, are projected to grow to USD2 billion in 2019 from USD1.7 billion last year, Azeri officials said.
MRC

Shell considers solar panels to power Singapore refinery site

MOSCOW (MRC) -- Royal Dutch Shell is considering to install solar panels to power its Bukom refining site in Singapore, a company spokeswoman told Reuters.

“We are exploring the potential of installing solar panels at our Pulau Bukom Manufacturing Site,” she said, without providing further details. The Bukom manufacturing site includes a 500,000 barrels-per-day refinery, which is Shell’s largest wholly owned refinery.

The oil and gas company has been exploring solar installations for its other sites in Singapore as part of its plans to improve energy efficiency and reduce carbon footprint.

Globally, Shell is installing solar photovoltaic panels on the roofs of seven lubricant plants in China, India, Italy, Singapore and Switzerland.

It has so far identified three manufacturing and logistics sites in Singapore’s western regions of Tuas, Jurong Island and Pandan to install a solar photovoltaic (PV) power generation system, with a combined peak capacity of about three megawatts.

The first and largest of the three Shell solar farms, which will go live next month, will have more than 6,500 panels placed above a lubricant plant in Tuas. The solar farm is expected to produce about 3,300 megawatt hours of renewable energy every year.

The generated solar energy will be used to help power operations at the Tuas lubricants plant, the company said, adding that this can result in the avoidance of a third of the greenhouse gas emissions from the plant’s electricity use which is equivalent to taking about 700 cars off the road for one year.

Installations at Shell’s sites in Pandan and Jurong Island are expected to start in late 2019 and early 2020 respectively, the company said.

Shell said as part of its efforts to try low carbon solutions, the company has signed a Memorandum of Understanding (MoU) with the Energy Market Authority of Singapore to jointly work on energy storage systems.

“This could include piloting commercially viable business models with innovative solutions that integrate storage systems and solar power to Shell’s sites in Singapore,” Shell said, declining to provide more details citing commercial confidentiality reasons.
MRC

Shell Norco, Louisiana crude unit returning to normal operations

MOSCOW (MRC) -- Royal Dutch Shell Plc is returning the crude unit (CDU) at its 225,300 barrel-per-day (bpd) Norco, Louisiana, refinery to normal operations, sources familiar with plant operations said, as per Reuters.

The 225,300-bpd CDU remained in operation while repairs were performed on a portion of the unit this morning, the sources said.

Shell spokesman Ray Fisher said planned work was continuing at the refinery, but declined to offer details.

The CDU developed a problem during operations overnight and the repairs were to correct the malfunction, the sources said.

CDUs do the initial breakdown of crude oil into hydrocarbon feedstocks for all other production units at the refinery.

Shell began a planned overhaul of the coker at the refinery in July, the sources said.
MRC

Spolana schedules turnaround at PVC plant

MOSCOW (MRC) -- Spolana has planned to undertake a planned shutdown at its polyvinyl chloride (PVC) plant, said Apic-online.

A Polymerupdate source in Europe informed that the company is likely to shut for maintenance turnaround at the plant in end-August, 2019. The plant is expected to remain off-line for about one month.

Located in Neratovice, Czech Republic, the plant has a production capacity of 135,000 mt/year.

As MRC informed earlier, in 2017, Spolana from Neratovice has been granted an approval to change the integrated permit and extend the utilization of amalgam electrolysis for the production of chlorine and caustic soda.

Spolana a.s. is one of the largest chemical manufacturing companies in the Czech Republic and the only manufacturer of PVC and caprolactam also producing sodium hydroxide and ammonium sulphate. It currently employs over 700 people.
MRC

ADNOC acquires stake in VTTI oil storage business

MOSCOW (MRC) -- Abu Dhabi National Oil Company (ADNOC) said on Wednesday it will acquire a stake in VTTI, a Vitol-backed global energy storage company, as part of changes including expanding its oil trading operations, said Reuters.

ADNOC will acquire a 10% stake in VTTI, it said in a statement, allowing it to secure storage in global export markets as well as at the port of Fujairah, a regional bunkering and storage hub in the United Arab Emirates.

After the transaction is finalised, both Vitol and IFM Global Infrastructure Fund, an investment vehicle managed by IFM Investors, will each own a 45% stake in VTTI.

As MRC informed earlier, Eni and ADNOC, Abu Dhabi’s National Oil Company, said today they closed their strategic partnership, announced in January, through which Eni acquired a 20 percent equity interest in ADNOC refining.
MRC