Oil CEOs push carbon-capture efforts ahead of climate talks

MOSCOW (MRC) -- A group of 13 major oil companies charted out a plan on Monday to promote investments in carbon capture, use and storage (CCUS), ahead of a gathering in New York, said Hydrocarbonprocessing.

Oil chiefs grappling with growing demand for action to fight climate change have looked to invest in carbon-capture and sequestration techniques that some executives, including Occidental Petroleum Corp CEO Vicki Hollub, say could make drilling carbon neutral.

With fossil fuel development growing worldwide, the oil and gas industry faces growing criticism from activists concerned about accelerating climate impacts from melting ice caps to sea-level rise and extreme weather. Scientists say the world needs to halve greenhouse gas emissions over the next decade to avoid catastrophic warming.

Carbon sequestration technology traps carbon in caverns or porous spaces underground. A number of oil and gas CEOs say the technology will be crucial to meeting goals set in the 2016 Paris agreement on climate change to reduce global emissions.

"A lot of people don't even know what CCUS is. I think the world is going to hear more and more and more about it," BP plc CEO Bob Dudley said. "I don't think we can meet the Paris goals without CCUS." The group, known as the Oil and Gas Climate Initiative (OGCI), said it aims to double the amount of carbon dioxide stored globally by 2030. The group is also taking steps to reduce methane emissions.

The group formed in 2014 to support efforts to reduce greenhouse gas emissions. Its gathering will be held on the sidelines of a climate summit, where United Nations Secretary-General Antonio Guterres says he is banking on new pledges from governments and businesses to abandon fossil fuels.

Last Friday, millions of young people flooded the streets of cities around the world to demand urgent steps to stop climate change. Many, including 16-year-old Swedish activist Greta Thunberg, have criticized governments and industries for not doing enough.

The OGCI group said in a statement that carbon-capture technologies could be expanded to more efficiently trap large amounts of carbon released by facilities such as power plants, which could then be used in oil recovery and, ultimately stored - thus, removing it from the atmosphere.

The group plans to work with others to put carbon-capture techniques into operation in the United States, United Kingdom, Norway, the Netherlands, and China. On Monday afternoon in New York, it will sign a declaration of collaboration with certain energy ministers and other stakeholders, to commit to efforts to expand carbon storage.

The companies, which include Exxon Mobil Corp, Chevron Corp and BP PLC, account for 32% of global oil and gas production. They have agreed to cooperate to accelerate reduction of greenhouse gas emissions.

Separately, almost 90 big companies in sectors from food to cement to telecommunications are pledging to slash greenhouse gas emissions, organizers said.
MRC

MOSCOW (MRC) -- Japan's Mitsui & Co has put its 40 per cent stake in the BassGas project off southeastern Australia up for sale, reported Reuters with reference to the company's statement last Thursday.

Mitsui's stake in the BassGas project, which includes the undeveloped Trefoil gas project, could be worth about AD360 million (USD244 million), according to Credit Suisse. However, a person with knowledge of the asset estimated it at about AD140 million.

Mitsui Australia's spokesman said Rothschild has been engaged to advise on the sale of the stake, which Mitsui acquired with its takeover of oil and gas producer AWE last year. The planned sale was first reported by The Australian Financial Review newspaper.

BassGas, operated by Beach Energy, has been producing gas and liquids from the Yolla field in the Bass Basin off the state of Victoria since 2006. The gas is processed at a plant onshore and supplies the Australian east coast market.

Mitsui's share of output from the project in the year ended June 2019 was about 1.1 million barrels of oil equivalent, as calculated by Reuters based on Mitsui's 35 per cent stake in Yolla and Beach's 53.8 per cent share at 1.7 mmboe.

Beach declined to comment on whether the company might be interested in the stake or would have pre-emptive rights on it, as that is confidential.

The other partner in the BassGas project is Prize Petroleum, a unit of India's Hindustan Petroleum Corp, which bought an 11.25 per cent stake in BassGas and a 9.75 per cent stake in Trefoil for AD85 million in 2014.

Prize Petroleum declined to comment.

Mitsui's move comes at the same time that Exxon Mobil Corp has put its much bigger, but ageing Bass Strait oil and gas assets up for sale, which analysts and bankers have said would be of interest to Mitsui.

Mitsui declined to comment on whether it would be interested in the Exxon assets.

As MRC wrote before, Mitsui Chemicals, a part of the Mitsui conglomerate, restarted its naphtha cracker on 11-12 Mayl, 2019, following an unplanned outage. The cracker was shut in end-April, 2019 owing to power failure. Located at Chiba in Japan, the cracker has an ethylene capacity of 600,000 mt/year and propylene capacity of 331,000 mt/year.

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.

Mitsui Chemicals is a leading manufacturer and supplier of value added specialty chemicals, plastics and materials for the automotive, healthcare, packaging, agricultural, building, and semiconductor and electronics markets. Mitsui Chemicals is a Japanese Chemicals company, a part of the Mitsui conglomerate. The company has a turnover of around 15 billion USD and has business interests in Japan, Europe, China, Southeast Asia and the USA. The company mainly deals in performance materials, petro and basic chemicals and functional polymeric materials.
MRC

MOSCOW (MRC) -- Oil major ExxonMobil Corp said on Wednesday it was looking to sell its 50% stake in the Gippsland Basin oil and gas development in Australia's Bass Strait as part of a broader review of its portfolio of assets around the world, reported Reuters.

The Gippsland Basin joint venture, off the state of Victoria, has long been the mainstay oil and gas supplier into southeastern Australia, but output from the fields is in decline.

Operator Exxon's 50-50 joint venture partner in the assets is global miner BHP Group. BHP declined to comment on whether it might sell its own stake or whether it would be interested in buying Exxon's assets.

"ExxonMobil will be testing market interest for a number of assets worldwide, including its operated producing assets in Australia, as part of an ongoing evaluation of its assets," the company said in an emailed statement.

"No agreements have been reached and no buyer has been identified," the company said in the statement. It said operations would continue as normal throughout the effort to sell the assets, without disclosing any targeted value for a deal.

The statement was released after the Gippsland Times newspaper reported the company's workers in Gippsland had been told by ExxonMobil Australia chairman, Nathan Fay, that the assets were on the market.

BHP said in an emailed comment that it had been notified by Exxon of the latter's plan to put its interests in the Gippsland Basin joint venture (GBJV) up for sale.

"BHP recognises the importance of GBJV to the reliable supply of gas in to the east coast domestic market and we remain committed to maintaining that supply," a BHP spokesman said in an emailed comment.

Exxon's other producing asset in Australia is a 25% stake in the giant Gorgon liquefied natural gas project in Western Australia, which is not part of the sale process.

As MRC informed before, ExxonMobil Corp shut the chemical plant at its Beaumont, Texas, refining and petrochemical complex on Thursday morning, 19 September, because of flooding from Tropical Storm Imelda.

The company operates a cracker with a capacity of 830,000 mt of ethylene and 195,000 mt of proplyelen per year, low density polyethylene (LDPE) plant with a capacity of 236,000 mt per year and linear low density polyethylene plant with a capacity of 727,000 tonnes per year.

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.

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.
MRC

MOSCOW (MRC) -- Imports of SIBUR-Khimprom's expandable polystyrene (EPS) to Ukraine fell in January-August 2019 by 18% year on year to 11,600 tonnes, according to MRC's DataScope report.

This figure was at 14,100 tonnes in the first eight months of 2018.

The share of Russian material of SIBUR-Khimprom was 50% in the total EPS shipments to Ukraine over the stated period versus 60% in January-August 2018.

Russian material accounted for 49% (1,700 tonnes) in the total EPS imports last month versus 54% (1,900 tonnes) a month earlier and 52% in August 2018.

EPS shipments to the Ukrainian market did not change year on year in January-August 2019, totalling 23,300 tonnes.

MRC

MOSCOW (MRC) -- Russia's overall production of polypropylene (PP) rose in the first eight months of 2019 by 2% year on year to 973,700 tonnes. Only one producers out of seven reduced the capacity utilisation, according to MRC ScanPlast.

August PP production in the country decreased to 119,000 tonnes, compared with 122,700 tonnes in July; SIBUR Tobolsk decreased their capacity utilisation. Russia's overall PP production reached 973,700 tonnes in January-August 2019, compared to 954,100 tonnes a year earlier. Only Poliom reduced production volume, and the largest increase in output was shown by Tomskneftekhim.

The structure of PP production by plants looked the following way over the stated period.

SIBUR Tobolsk reduced its capacity utilisation in August, its total production fell to 32,900 tonnes from 37,600 tonnes a month earlier. The Tobolsk plant's total PP production reached 319,900 tonnes in the first eight months of 2019, which corresponds to last year's figure.

Poliom (Titan Group) last month produced about 19,500 tonnes of polypropylene, compared with 18,900 tonnes in July. Total PP production at the plant over the reported period was about 146,600 tonnes, down 1% year on year.

Nizhnekamskneftekhim produced 18,500 tonnes of propylene polymers in August versus 18,800 tonnes a month earlier. The Nizhnekamsk plant's overall output of polymer exceeded 143,300 tonnes in the first eight months of 2019, compared to 142,400 tonnes a year earlier.

Tomskneftekhim last month produced about 12,500 tonnes against 12,000 tonnes a month earlier. Total PP production by the producer increased to 99,300 tonnes in January-August 2019, up 8% year on year.

August PP production at Ufaorgsintez reached about 11,500 tonnes from 11,800 tonnes a month earlier. The Ufa plant's overall output of polymer reached 89,900 tonnes in January-August 2019, up 1% year on year.

NPP Neftekhimiya (Kapotnya) produced about 13,000 tonnes last month, compared to 12,200 tonnes in July. The plant's overall PP output reached 96,200 tonnes over the stated period, up 7% year on year.

Stavrolen (LUKOIL) reduced its capacity utilisation in August, the plant's total production of propylene polymers was 11,100 tonnes versus 11,400 tonnes a month earlier. The Budenovsk plant's overall output of propylene polymers increased in the first seven months of 2019 to 78,600 tonnes from 74,100 tonnes a year earlier.


MRC