Matrix awarded five-year Shell refinery contract

MOSCOW (MRC) -- Matrix Service Co. has announced that its subsidiary Matrix Service Inc. has been awarded a five-year contract as the primary onsite mechanical services contractor at the Shell Puget Sound Refinery, providing a variety of embedded services including daily onsite maintenance, small capital projects, and turnaround support, said Hydrocarbonengineering.

“We are very proud of our long-standing relationship and history of service to Shell, which has included turnaround, tank repair and industrial cleaning services at a number of its refineries, including Shell Martinez, Shell Deer Park, Shell Puget Sound and the Shell Carson Complex,” said Matrix Service Company President and CEO John R. Hewitt.

“We look forward to expanding the services we provide to Shell to include routine mechanical maintenance services and appreciate their continued trust as demonstrated by the award of this important multi-year contract. We share the commitment Shell has to world-class safety and look forward to providing continued service excellence to support their business objectives.”
MRC

MOSCOW (MRC) -- China’s crude oil imports from Malaysia stood near record levels in July, customs data showed, with traders and a tanker-tracking analyst citing oil either transshipped from Venezuela or blended with Venezuelan crude for the unusual growth, reported Reuters.

Crude imports from Malaysia rose to 1.35 million tons last month, more than double from a year earlier, data from China’s General Administration of Customs showed.

That was just below the previous record set in May of 1.38 million tonnes, triple the average monthly volume in the first four months of 2019.

Imports for the first seven months of 2019 totalled 5.64 million tonnes, versus 5.17 million tonnes a year earlier.

Emma Li, analyst with Refinitiv Oil Research, estimated that about 500,000 tonnes of the Malaysian supplies arriving in July were transshipped from Venezuelan crude supplied by Russian state oil firm Rosneft.

The growing supplies of Venezuela-originated oil come after the Russian firm stepped in as the top trader of Venezuelan crude as traditional dealers like Vitol and Trafigura avoided dealing directly with Venezuelan state firm PDVSA for fear of breaching secondary US sanctions.

Venezuelan crude, mainly heavy grade Merey, was either blended or moved into other vessels at Malaysia’s transshipment hub of Linggi and Tianjung Bruas, and renamed in new grades such as Singma and Mal Blend, according to Refinitiv Oil Research.

Rosneft did not respond to a Reuters’ request for comment.

Most of these cargoes found a home in east China’s Shandong province, a hub for China’s independent refineries, as well as the port of Tianijn in north China.

“About four to five refineries in Shandong have been taking Malaysian blends which look like Venezuelan oil with similar specifications,” said an executive with one Shandong independent refiner.

Prior to May, China’s imports of Malaysian crude were mostly of one grade, Nemina, blended from West African crudes, and went to primarily one buyer, state trader ChemChina, according to Refinitiv’s Li.

Only a fraction of Malaysia’s locally produced crude oil, which typically is light and of lower sulphur content and thus more pricey, moves to China.

The surge in Malaysian exports contrasted with a fall in total crude oil production by its dominant oil and gas producer Petronas, which recorded a 1.3% drop year-on-year to 2.4 million barrels of oil equivalent (boe) per day in the first quarter.

Petronas did not give its output in Malaysia.

As MRC wrote before, in December 2018, Indonesian state energy company PT Pertamina signed an engineering, procurement and construction (EPC) contract to upgrade Balikpapan refinery. Balikpapan refinery upgrade started construction early 2019. First stage of Balikpapan upgrade is scheduled for operation in 2021 to produce Euro V standard fuel, and stage 2 in 2022 to convert its use to process sour crude, from currently processing medium heavy crude.
MRC

MOSCOW (MRC) -- Brazilian petrochemical producer Braskem is no longer pursuing a petrochemical project, which would have included an ethane cracker, in West Virginia, reported Plastemart.

And the company is seeking to sell the land that would have housed the cracker.

"Due to a number of recent inquiries about its site in Parkersburg, Braskem has engaged a financial advisor to help evaluate strategic alternatives for the site," the company said, declining further comment.

The project, announced in 2013, has been on Braskem's back burner for several years.

In May 2018, Mark Nikolich, CEO of Braskem's US arm, Braskem America, said the project remained on hold pending progress on infrastructure, such as pipelines. The company had not found the right risk profile by that time, he said last year. Since then, Braskem has faced multiple other challenges. The company is facing fallout from a government report that linked its salt mining operations in Brazil to geological damages, leading to one cash freeze of RD3.7 bln (USD973 mln) and a lawsuit seeking a second freeze of RD2.5 bln (USD657 mln).

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polyprolypele (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption was 1,081,100 tonnes in the first half of 2019, up by 8% year on year. Deliveries of all PE grades increased. Meanwhile, the estimated consumption of PP in the Russian market totalled 694,210 tonnes in January-June 2019, up by 14% year on year. The supply of propylene block copolymers (PP-block) and propylene homopolymers (PP-homo) increased.

Braskem S.A. produces petrochemicals and generates electricity. The Company produces ethylene, propylene, benzene, toluene, xylenes, butadiene, butene, isoprene, dicyclopentediene, MTBE, caprolactam, ammonium sulfate, cyclohexene, polyethylene theraphtalat, polyethylene, and polyvinyl chloride (PVC).
MRC

MOSCOW (MRC) -- Chinese chemical manufacturer Zhejiang Satellite Petrochemical Co will start building its planned USD4.2 billion petrochemical plant next month, following provincial approval for it to use U.S. ethane as feedstock, a company official said, as per Hydrocarbonprocessing.

Zhejiang Satellite Petrochemical Co Ltd's plant will be the second China-based petrochemical facility aiming to cash in on cheap and abundant U.S. ethane unlocked by the shale revolution in North America, analysts said.

The approval from the Jiangsu provincial government in early August comes amid an escalating trade war between Beijing and Washington, which led to a tariff being imposed on U.S. crude oil for the first time last week.

China imposed an extra 5% tariff on ethane last September, taking total import duties to 7%. Even so, ethane from U.S. shale gas offers much fatter margins for producers of ethylene than conventional plants that process naphtha into ethylene, said Kelly Cui, senior analyst with Wood Mackenzie.

The United States is the world's only source of an abundant surplus of the natural gas liquid, analysts said.

Last week, Singapore's SP Chemicals started a 650,000 tonnes per year (tpy) ethylene plant in Taixing in Jiangsu province that partly processes U.S. ethane supplied under a long-term agreement, according to local media and analysts.

"This is the first entirely gas-based cracker to begin operating in China and also the first to import U.S. ethane as a feedstock," said Woodmac's Cui.

Zhejiang Satellite will start construction in September on a 1.25 million tonnes per year (tpy) ethylene plant in Lianyungang in Jiangsu province, Ding Liping, an investor relations officer, told Reuters by phone.

"This is the company's phase-one investment for a total of 2.5 million tonnes per year ethylene production facilities that will process fully U.S. ethane," said Ding, adding that construction was expected to take about a year.

The company, headquartered in Jiaxing in east China's Zhejiang province, will then begin an expansion program to double output to 2.5 million tpy, she said.

The plant is expected to receive its first ethane from U.S. firm Energy Transfer Partners L.P. in the fourth quarter of 2020 under a supply agreement lasting more than 10 years, with annual supplies of about 3 million tonnes, said Ding.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polyprolypele (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption was 1,081,100 tonnes in the first half of 2019, up by 8% year on year. Deliveries of all PE grades increased. Meanwhile, the estimated consumption of PP in the Russian market totalled 694,210 tonnes in January-June 2019, up by 14% year on year. The supply of propylene block copolymers (PP-block) and propylene homopolymers (PP-homo) increased.

Zhejiang Satellite, with a market capitalization of 14 billion yuan ($1.97 billion), is China's largest producer of acrylic acid, a chemical used in making paints and wrapping tapes, where demand has grown sharply due to e-commerce.
MRC

MOSCOW (MRC) -- SK Global Chemical's is likely to shut its linear low density polyethylene (LLDPE) plant, as per Apic-online.

A Polymerupdate source in South Korea informed that the company has schedules to start turnaround at the plant on September 17, 2019. The plant is slated to remain under maintenance for about two weeks.

Located in Ulsan, South Korea, the LLDPE plant has a production capacity of 210,000 mt/year.

As MRC reported earlier, in December 2017, SK Global Chemical completed its acquisition of Dow Chemical’s packaging product business. SK Global Chemical, the chemical unit of SK Innovation, signed a deal with Dow Chemical to acquire the US chemical firm’s polyvinylidene chloride (PVDC) unit last October. PVDC is used for clear film packaging including plastic food wrap. With the deal completed, SK Global Chemical now has full control of properties previously owned by Dow Chemical. They include Michigan-based facilities, related technologies and intellectual assets, as well as the trademark right to the plastic wrap brand Saran.

According to MRC's ScanPlast report, LLDPE shipments to the Russian market increased in the first seven months of 2019 by 8% year on year to 234,130 tonnes. Local producers increased their production by 24%.

SK Global Chemical is a pioneering petrochemical company in Korea, being the first in the country to build a naphtha cracking facility in 1972. Through continuous facility investment, R&D and technological improvement, the company has maintained its position as the leader of the petrochemical industry in Korea.
MRC