Air Liquide to build two large ASUs to supply Methanex and other customers on the Gulf Coast

MOSCOW (MRC) -- Air Liquide said on Wednesday that it has agreed with Methanex Corp. to supply oxygen, nitrogen and utilities to its upcoming methanol plant expansion project at Geismar, Louisiana, reported Chemweek.

Air Liquide will invest more than USD270 million in two new large air separation units (ASUs) and infrastructure assets connected to its Mississippi River pipeline, and significantly increase its production capacity in the US Gulf Coast region to serve Methanex and its other customers in the industrial basin that encompases Geismar and Baton Rouge.

To support the levels of oxygen and nitrogen needed at Methanex’s third methanol plant at Geismar, as well as other customers along its Mississippi River pipeline system, Air Liquide will build two new ASUs with a capacity of 2,500 metric tons/day of oxygen each - increasing the company’s Mississippi River pipeline’s capacity by more than 25%.

The new ASUs are expected to start production in mid-2022 to support Methanex’s production of methanol.

"Air Liquide’s significant investment to support… Methanex and enhance our infrastructure in the Geismar Basin further demonstrates our global commitment to energy efficiency, our collaborative approach to meeting the needs of customers, and highlights our outlook for the robust growth of industry in the Gulf Coast region of the US," said Michael Graff, executive vice president and executive committee member of Air Liquide.

As MRC informed before, in April 2018, Air Liquide signed a new long-term agreement with LyondellBasell, one of the world’s largest plastics, chemicals and refining companies, to supply oxygen to LyondellBasell’s new large-scale petrochemical plant which will be constructed in Channelview, Texas.

Besides, in July 2019, Air Liquide signed a long-term agreement with Gulf Coast Growth Ventures (GCGV), a 50/50 joint venture between ExxonMobil and SABIC, to supply oxygen and nitrogen from its industrial gas pipeline network to GCGV’s planned ethane cracker facility located near Corpus Christi, in Texas.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,255,800 tonnes in the first seven months of 2019, up by 9% year on year. Shipments of all PE grades increased. At the same time, the estimated PP consumption in the Russian market was 796,120 tonnes in January-July 2019, up by 11% year on year. Shipments of PP block copolymer and homopolymer PP increased.
MRC

Ethan supply to Petro Rabigh expected to be cut by 20%

MOSCOW (MRC) -- Saudi Arabia's Rabigh Refining and Petrochemical Company, or Petro Rabigh, might face a further curtailment of feedstock supplies, as per the company's press release.

In a filing to the Saudi Stock Exchange or Tadawul, the company said that "based on the latest developments, the supply of ethane will be reduced by 20%".

Earlier this week, Petro Rabigh said it sees ethane gas supply cut by 8% and crude oil by 12.5%.

At present, the company is evaluating the final impact, any significant developments will be disclosed later.

As repported earlier, attacks on Saudi Aramco's Abqaiq processing facility and the Khurais field on Saturday morning have led to production cuts of around 5.7 million b/d, representing about half of the company's production capacity.

Petro Rabigh has a refinery in Rabigh with a crude processing capacity of 400,000 b/d. The company also has an ethane cracker which is able to produce 1.6 million mt/year of ethylene. Its downstream units can produce 600,000 mt/year of monoethylene glycol and 1.06 million mt/year of polyethylene.

Saudi Aramco supplies ethane and crude oil to Petro Rabigh and also owns a 37.5% stake in the company. Japan's Sumitomo Chemical owns another 37.5% stake in Petro Rabigh.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,255,800 tonnes in the first seven months of 2019, up by 9% year on year. Shipments of all PE grades increased. At the same time, the estimated PP consumption in the Russian market was 796,120 tonnes in January-July 2019, up by 11% year on year. Shipments of PP block copolymer and homopolymer PP increased.

PetroRabigh, a joint venture between Saudi Aramco and Japan's Sumitomo Chemical, has an annual output capacity of 18 million tonnes of refined products and 2.4 million tonnes of petrochemicals.
MRC

Exports of injection moulded PET chips from China to Russia grew by 34% in January-August

MOSCOW (MRC) - Exports deliveries of injection moulded PET chips from China to the Russian market increased by 34% in January-August, according to MRC DataScope survey.

Thus, exports of bottled PET from China to Russia in eight months increased by 34% to 95,600 tonnes. The share of exports of PET from China increased to 90% against 85% in the same period last year.
Imports of Chinese PET to Russia in August decreased by 41% to 7,600 tonnes against 12,800 tonnes in July. The leading Chinese suppliers to the Russian market were producers Jiangsu Sanfangxiang, Yisheng, Wankai and Sinopec.

As it was earlier said, supply of imported material in July decreased by 7% compared to July 2018 and amounted to 15,580 tonnes of PET.
Imports of PET to Russia increased to 117,840 tonnes in seven months of 2019, up 19% year on year.
MRC

PE and EG especially vulnerable to Saudi crude oil outage

MOSCOW (MRC) -- Shutdown of the Abqaiq and Khurais crude oil processing facilities in Saudi Arabia has not only taken 5.7 MMb/d of crude oil production offline - about 7% of global production - but has also cut deeply into the country's supply of petrochemical feedstocks, as per Chemweek.

The ethylene chain, particularly polyethylene (PE) and ethylene glycol (EG), will be most affected, according to analysts at IHS Markit.

The two facilities, owned by Saudi Aramco, were attacked by drones or missiles early on 14 September and subsequently shut down to limit damage.

"Shale has created a sense that there is security - we have too much supply, that there’s abundance, and so on," says Roger Diwan, vice president/financial services at IHS Markit. "We have lost that. It’s back to risk. We need to think of oil in the age of drones and missiles, and that any facility can be hit in the Middle East….We have basically no facilities in the Middle East that are safe now. Abqaiq was a very well-defended piece of infrastructure, and it’s gone."

Multiple Saudi chemical producers have already reported sharp cutbacks in feedstock supply, including Sadara (16%), Yansab (30%), Saudi Kayan (50%), Tasnee (41%), and Sipchem (40%).

"It's a little uncertain on the prioritization of where the feedstocks will go, in terms of how much to chemicals versus meeting other domestic needs," says Dewey Johnson, vice president/base chemicals market research at IHS Markit. “If you pro-rate the production outage at 50%, and said at the moment that 50% of Saudi capacity is hampered, the largest impacts would be in ethylene, polyethylene, and ethylene glycol."

Saudi Arabia has 18 million metric tons/year (MMt/y) of ethylene production capacity, or about 10% of the global total, Johnson noted. "Ethylene is only a few percentage points away from being balanced to tight," notes Johnson. "So how much of that capacity is available or taken off line is critically important."

Saudi Arabia is likewise a major producer of ethylene derivatives, with about 6% of the world's capacity to produce PE, and 16% of the world's capacity to produce EG, key feedstock for polyethylene terephthalate (PET), used to make polyester and PET resin. The country's influence on the global market for these derivatives is further amplified by its export position. In 2018, Saudi Arabia supplied nearly 8% of the world's PE requirements and a whopping 23% of its EG requirements.

The country holds 5% of global propylene production capacity and, downstream, about 9% of the world's polypropylene (PP) capacity. It also accounts for about 5% of global methanol capacity.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,255,800 tonnes in the first seven months of 2019, up by 9% year on year. Shipments of all PE grades increased. At the same time, the estimated PP consumption in the Russian market was 796,120 tonnes in January-July 2019, up by 11% year on year. Shipments of PP block copolymer and homopolymer PP increased.
MRC

Saudi Arabia to restore oil output fully by end of September

MOSCOW (MRC) -- Saudi Arabia will restore its lost oil production by the end of September and has managed to recover supplies to customers to the levels they were at prior to weekend attacks on its facilities by drawing from its huge oil inventories, as per Hydrocarbonprocessing.

Energy Minister Prince Abdulaziz bin Salman said on Tuesday that average oil production in September and October would be 9.89 million barrels per day and that the world's top oil exporter would ensure full oil supply commitments to its customers this month.

"Over the past two days we have contained the damage and restored more than half of the production that was down as a result of the terrorist attack," Prince Abdulaziz told a news conference in the Red Sea city of Jeddah.

He said the kingdom would achieve 11 million bpd capacity by end of September and 12 million bpd by end of November.

"Oil supplies will be returned to the market as they were before 3:43 a.m. Saturday," he said, adding that state oil giant Aramco had emerged "like a phoenix from the ashes" after the attack.

He was referring to attacks on Saturday on state-owned oil company Saudi Aramco's plants in Abqaiq and Khurais, including the world's largest oil processing facility, which shut down 5.7 million barrels per day, which is more than half of Saudi Arabia's production, or 5% of global output.

Aramco's Chief Executive Amin Nasser said the company, which is preparing for an initial public offering (IPO), was still in the process of estimating repair work but that it was "not that significant," given the company's size.

"We should be at our production (level) before the attacks on our facility by the end of September," Nasser told the same news conference.

Aramco had put out 10 fires in the span of seven hours after the "huge" assault, Nasser said.

He said the company was in the process of bringing back oil refining to full capacity and that there were enough crude products to supply the local markets. Aramco's crude oil inventories are more than 60 million barrels, he said.

Speaking at the same news conference, Aramco's Chairman Yasser al-Rumayyan, said Aramco's IPO would be ready within the coming 12 months and that the kingdom was committed to the listing.

Rumayyan said the IPO would "continue as it is" despite weekend attacks and that timing would depend on market conditions.

Prince Abdulaziz said Riyadh did not yet know who carried out the strikes or why, adding Saudi Arabia would keep its role as a secure supplier of global markets. He said stricter measures needed to be taken to prevent further attacks, but did not elaborate.

The foreign ministry has said that preliminary investigations indicated Iranian weapons were used in the assault, which authorities initially said involved drones.

As MRC reported before, a number of Saudi Arabia's companies, such as Tasnee, Sadara, Advanced Petrochemical and Saudi Kayan, announced a curtailment of feedstock to their petrochemical plants, including polyethylene (PE) and polypropylene (PP) facilities, by an average of 30-50% due to the attacks on key Saudi Aramco facilities on Saturday.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,255,800 tonnes in the first seven months of 2019, up by 9% year on year. Shipments of all PE grades increased. At the same time, the estimated PP consumption in the Russian market was 796,120 tonnes in January-July 2019, up by 11% year on year. Shipments of PP block copolymer and homopolymer PP increased.
MRC