Saudi attack leads to biggest oil supply loss

MOSCOW (MRC) -- An attack on Saudi Arabian oil facilities has caused the biggest supply disruption in absolute terms in the last five decades, reported Reuters with reference to International Energy Agency figures.

Saturday's attack will cut the kingdom's output by 5.7 million barrels per day (bpd), according to a statement from state-run oil company Saudi Aramco. It is not yet known how long it will take to restart the production.

Before this, the biggest known disruption, of 5.6 million bpd, was prompted by the 1979 Iranian revolution. The chart shows the current loss against selected earlier disruptions, according to International Energy Agency figures.

In percentage terms, the Iranian loss was larger as 5.6 million bpd amounted to about 9 percent of world demand at that time, while the Saudi disruption amounts to over 5% of current oil consumption.

Saudi Aramco emergency crews contained fires at its plants in Abqaiq and Khurais, as a result of terrorist attacks with projectiles. These attacks resulted in production suspension of 5.7 million barrels of crude oil per day.

After visiting the incident locations, Amin H. Nasser, Saudi Aramco President & CEO, said: "We are gratified that there were no injuries. I would like to thank all teams that responded timely to the incidents and brought the situation under control. Work is underway to restore production and a progress update will be provided in around 48 hours."

The company will release additional information as it becomes available.
MRC

U.S. biodiesel production capacity data

MOSCOW (MRC) -- The U.S. Energy Information Administration (EIA) released its first annual U.S. Biodiesel Plant Production Capacity Report, as per Hydrocarbonprocessing.

The report includes the total biodiesel production capacity for all operating plants in both million gallons per year (gal/y) and barrels per day (b/d) as of January 1, 2019. The names of the reporting plants are organized by Petroleum Administration for Defense Districts (PADD). Like the Ethanol Plant Production Capacity Report, EIA plans to update the report annually.

Annual production capacity refers to the volume of fuel that can be produced in a calendar year under normal operating conditions, assuming normal downtime for maintenance. Reported production capacity totals include all active plants, which includes those that are temporarily inactive.

Active plants are those plants that have produced or sold biodiesel during the reporting month. Temporarily inactive plants are those plants that have not produced or sold biodiesel during the reporting month but have not permanently ceased operations. Plants may report as temporarily inactive when they are down for maintenance or idled during times of low operating margins.

The 2019 U.S. Biodiesel Plant Production Capacity Report shows 102 operating biodiesel plants with 2.6 billion gal/year in biodiesel production capacity, or 167,000 b/d. More than half of the nation’s biodiesel production capacity is in the Midwest (PADD 2) region, led by states such as Iowa, Missouri, and Illinois. Of the top 15 biodiesel-producing states, 9 are located in the Midwest.
MRC

Kazakhstan oil exports to China fall by 22% in Jan-July

MOSCOW (MRC) -- Kazakhstan's oil exports to China fell by 22% in January-July from the same period a year ago reflecting a rise in domestic consumption, reported Reuters with reference to data as of late August.

Data from a Kazakh state-owned energy monitor showed the supplies via the Atasu - Alashankou pipeline, the only oil exporting route between the two countries, reached 625,783 tonnes in January - July.

In July, it fell to 37,470 tonnes from 89,925 tonnes in June.

Kazakhstan still plans to increase oil exports to China. It expects to boost oil supplies to its neighbour to 6-7 million tonnes a year from just 1 million tonnes, starting from the second half of 2020.

Kazakh oil exports to China fell to 1.3 million tonnes last year from a peak of 11.8 million tonnes in 2013. This was due to the declining output of oilfields in northwestern and southern Kazakhstan - many of which are operated by Chinese companies.

As MRC informed before, Kazakhstan plans to cut its oil exports by around 2% this year to 71 million tons, its energy ministry told Reuters in March 2019,, mainly at the expense of China, amid a production decline. This is down from 72.5 million tonnes Kazakhstan exported overseas in 2018.
MRC

MEGlobal inaugurates MEG plant in Texas

MOSCOW (MRC) -- MEGlobal inaugurated its 750,000-metric ton/year ethylene glycol (EG) unit at Oyster Creek, Texas on 10 Septmber. The plant is in final start-up stages and expected to produce on-spec product within 30 days, reported Chemweek with reference to officials' statement.

“With a growing global market for EG products, it will provide us with greater flexibility to satisfy our customers’ needs while capitalizing on the US shale gas opportunity,” says Ramesh Ramachandran, president and CEO of Equate, MEGlobal’s parent. Equate is a joint venture between Kuwait Petroleum’s Petrochemical Industries Company (PIC) and Dow, which each own a 42.5% stake. Boubyan Petrochemicals Co. has a 9% ownership and Qurain Petrochemical Industries owns 6%.

The plant, Equate’s first in the United States, has capacity for 700,000 metric tons/year of monoethylene glycol (MEG) and 50,000 metric tons/year of diethylene glycol (DEG). Total investment was USD2 billion, including a capital contribution to Dow that secured ethylene feedstock supply at producer economics.

EG demand continues to grow at more than 5%/year led by polyethylene terephthalate (PET) and polyester fiber, which combined account for roughly 85% of MEG demand.

EG prices have weakened in the past year and US supply has lengthened with new plants starting up this year Lotte and Sasol, which have both recently started separately world scale units at Lake Charles, Louisiana.

"You have to acknowledge recent [margin erosion], but if you look at fundamentals of EG, the end uses are PET bottles and polyester fiber," Ramachandran says. Polyester growth has been 5-7.5%/year and PET also demand remains strong, he adds. "If you believe in GDP growth, polyester demand is going to grow. If you look at the capacity that it's coming on, including ours, it barely keeps up with what the market growth is."

Equate and MEGlobal also have EG production in Alberta, Canada as well as Kuwait. The global production footprint is an advantage given recent trade tensions. US EG exports to China are challenged by 25% tariffs but MEGlobal can export US production to Latin America and India while Canadian and Kuwait product will target China.

MEG is one of the main feedstocks for the production of polyethylene terephthalate (PET).

According to MRC's ScanPlast report, Russia;s estimated PET consumption decreased in July 2019 by 4% year on year. 428,790 tonnes of PET were processed in Russia over January-July 2019. Russia's PET production was 44,430 tonnes in July.

MEGlobal is a world leader in the manufacture and marketing of merchant monoethylene glycol and diethylene glycol (EG). Established in July 2004, the company is a joint venture between The Dow Chemical Company and Petrochemical Industries Company of Kuwait and is headquartered in Dubai, United Arab Emirates. With approximately 200 employees worldwide, MEGlobal serves customers around the world, and has production facilities in Fort Saskatchewan and Prentiss, Alberta, Canada.
MRC

Penoplex resumes GPPS production in Kirishi

MOSCOW (MRC) -- Penoplex, Russia's largest producer of extruded polystyrene foam, began resuming its general purpose polystyrene (GPPS) production at the Kirishi plant on 13 September, the company's sources told MRC on Friday.

They said the company would completely restart production on 14 September and Penoplex would use the first produced lots of XPS boards for the needs of its own production.

This plant with a capacity of 50,000 tonnes of GPPS per year was shut for maintenance on 5 August 2019 and was supposed to return to operation on schedule - on 5 September, according to ICIS-MRC Price report. However, the company was forced to postpone the restart of production due to the lack of feedstock - styrene monomer (SM).

As reported earlier, the first lots of feedstock had already begun to arrive at the plant in the first week of September, therefore, an approximate deadline for launching the Kirishi plant's polystyrene (PS) production was then scheduled for September 15-18.

As also reported previously, there was an acute shortage of material, including GPPS, in the Russian PS market in late August, which was partially caused by the outage at the Kirishi plant.

Penoplex is a large Russian producer of polymer-based building and decorative materials. The company began its activity in 1998 with the launch of Russia's first line for the production of heat-insulating materials from extruded polystyrene foam under the PENOPLEX trademark. The company has eight production sites, seven of which are located in Russia and one - in the Republic of Kazakhstan (Almaty region), with a total production capacity of 4 million cubic metres.
MRC