MEGlobal to start shipping commercial lots of MEG from its new plant in Texas to international markets by end-November

MOSCOW (MRC) -- MEGlobal plans to start shipments of commercial production from its new 750,000-metric ton/year ethylene glycol (EG) unit at Oyster Creek, Texas, to international markets by late November 2019, reported S&P Global.

The plant was inaugurated on 10 September 2019 and was in its final start-up stages and expected to produce on-spec product within 30 days.

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.

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 reached 62,540 tonnes in August 2019, up 9% year on year. The estimated consumption of PET in the Russian market increased in January-August 2019 to 493,240 tonnes, up by 12% year on year.

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

MOSCOW (MRC) -- Indorama Ventures' ethylene oxide/monoethylene glycol operation in Clear Lake, Texas, has resumed full rates after a September fire at another company's facility interrupted the provision of utility services, reported S&P Global with reference to a source familiar with company operations.

"The fire was not in the EO/EG unit and did no damage to our plant," the source said in an email late Thursday. "We are currently at full operating rates."

The September 21 fire damaged a carbon monoxide unit at Celanese's Clear Lake complex, prompting a shutdown of the company's 1.7 million mt/year fairway methanol unit as well as 300,000 mt/year vinyl acetate monomer (VAM) and 1.3 million mt/year acetic acid units. Celanese announced earlier this week the methanol unit had restarted, and the company aimed to restart the VAM and AA units in October.

The fire's interruption of utility service affected Indorama's nearby Clear Lake facility, temporarily disrupting output until such service was restored at the Celanese complex. An Indorama spokesman was not immediately available for comment Friday.

The cause of the Celanese fire is under investigation, and no injuries were reported.

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

According to ICIS-MRC Price report, New Polymers Senege, one of the Russian producers of PET chips, shut production at its polyethylene terephthalate (PET) plant for scheduled maintenance on 1 October. The plant's source said the shutdown would last for about one month. The exact date of the completion of the turnaround was not disclosed.

Indorama Ventures Public Company Limited, listed in Thailand, is one of the world's leading petrochemicals producers, a global manufacturing footprint with 59 sites in 20 countries across Africa, Asia, Europe and North America. The company's portfolio is comprises necessities and high value-added (HVA) categories of polymers, fibers, and packaging. Indorama Ventures has approx. 19,000 employees worldwide and consolidated revenue of USD 10.7 billion in 2018. The company is listed in the Dow Jones Sustainability Index (DJSI).
MRC

MOSCOW (MRC) -- Ras Lanuf Oil and Gas Manufacturing Company, a subsidiary of Libya’s National Oil Corporation (NOC), announced in a press release that it has resumed production at its PE unit in Ras Lanuf, Libya after having been shut since 2013, reported NCT.

The company said that the 160,000 tons/year plant restarted after the completion of maintenance works and extensive equipment repairs at its various utilities units, including water treatment units, power production units and shipping units at Ras Lanuf Port.

Around 60% of the plant’s output is expected to be exported in the long-term.

The company also announced that a second PE production line will be operational by May 2020.

As MRC informed earlier, in August 2019, Rasco received the first shipment of ethylene gas at its port as part of in efforts to restart its ethylene production. The company reported then that the tanker Stella Kosan had docked with the first shipment of about 4,000 metric tons of ethylene gas, which it said would be the first of numerous planned shipments needed to fill the ethylene tank at the cryogenic (freezing) area. These feedstock shipments will supply the polyethylene (PE) plant in preparation to re-start the plant "‘within next few days’", Rasco said in August.

The Ras Lanuf ethylene plant were inactive since 2011, and the PE plant was suspended since 2013.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,436,390 tonnes in the first eight months of 2019, up by 9% year on year. Shipments of all PE grades increased.
MRC

MOSCOW (MRC) -- Asian oil refiners are grappling with a jump in global freight rates that shows no sign of abating, driving up costs of crude imports from all regions in the fourth quarter, according to Hydrocarbonprocessing with reference to industry officials.

The cost of shipping crude from the Americas, Europe, Africa, and the Middle East to Asia has surged over the past two weeks as companies shunned nearly 300 tankers on fears of violating sanctions against OPEC members Iran and Venezuela.

Higher freight rates and a jump in crude premiums after the Saudi oil attacks in mid-September have so far added about USD3 a barrel to November-lifting oil cargoes from the Middle East to China, trade and shipping sources said.

Oil tanker freight rates are expected to keep rising while COSCO Dalian's ships remain under sanctions, the sources said. The United States imposed sanctions on units of the Chinese shipper, alleging involvement in ferrying crude out of Iran.

"We've been in a net loss for most months so far this year, and the fourth quarter doesn't look good either, as premiums for Middle Eastern grades are high and freight rates have more than doubled," an official with a Chinese state-owned refinery said.

Refining margins in China will remain squeezed at least in the near term as its domestic fuel pricing tracks only the weighted average of global benchmark Dubai, West Texas Intermediate and Brent prices, excluding premiums and freight costs, he said.

In contrast, Indian refiners want refined fuel cracks to gain further to offset the impact of rising freight as pump prices of gasoil and gasoline are linked to their benchmarks in the Arab Gulf and Singapore.

"If this freight rate is not compensated by an increase in product cracks, then it is going to affect margins," said R. Ramachandran, head of refineries at India's Bharat Petroleum Corp.

The increase in shipping rates has also dented Asia's demand for arbitrage supplies from the United States, West Africa, and Europe.

"A West African oil shipping fixture that we used to do for USD3 million to USD4 million has gone up to USD8 million to USD9 million," a source at one of the Indian refineries said.

Record shipping rates and a narrowing Brent-WTI price spread have shut the arbitrage window for US crude to Asia.

Very large crude carrier (VLCC) freights for West African crude to China and India have more than doubled.

An official at Indian Oil Corp said the Brent-WTI spread had to be at least $6 a barrel for US crude to flow to India but higher freight had further upset the economics.

"Refiners are looking at buying more short-haul oil, but Middle Eastern oil is mostly limited by OPEC quotas so there is not much choice for us," the IOC official said.

BPCL's Ramachandran said the impact of higher freight rates would be accentuated for long-distance cargoes from the United States and Africa unless product cracks rose or oil prices dropped to make those crudes attractive.

The cost of sending a VLCC from the US Gulf Coast to South Korea, Asia's top buyer of US oil, hit a record USD14 million last week.

"If freight rates stay this high - and they are unusually high because of this issue over sanctions - then US crude prices have to fall, to get the Brent-WTI spread to widen to accommodate exports," Morningstar analyst Sandy Fielden said.

The heads of Gunvor and Vitol said this week that ships queuing to install scrubbers, units that remove sulphur from shipping fuel, had added to the tightness as the process sometimes kept vessels out of the water for a month or more.

Oil traders have also held back offers to deliver spot crude to eastern China's Shandong, home to most of the independent refiners that account for a fifth of the country's imports.

"It's hardly worth trying to offer something now if you're showing dated Brent plus USD6 or USD7 including freight. It's just getting silly," a West African trader said.

Asian refiners hope product margins will rise due to stronger demand from a switch to cleaner fuels in 2020 and cover the rise in crude costs.

Some are skeptical, however, because of sluggish demand.

"Expectations were high that refining margins would improve from the fourth quarter," said an official at the Korea Petroleum Association, which represents South Korean refiners.

"But recently there have been some concerns that this would be limited because not every country is implementing the new shipping fuel rules," the official said.

Refinitiv analyst Ehsan Ul Haq said: "Higher landed cost of crude will have a negative impact on refining margins unless refined product prices rise."

"But given sluggish demand, it looks unlikely that product cracks will rise further," he added.

As MRC reported earlier, in February 2017, state-run Bharat Petroleum Corp. Ltd (BPCL) announced plans to set up a petrochemicals unit at its Bina refinery in Madhya Pradesh as part of its Rs25,000 crore expansion plan for the refinery. The petrochemical unit, which will include a 1.5 mln tpa naphtha cracker, was expected to cost Rs6,000-7,000 crore.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,436,390 tonnes in the first eight months of 2019, up by 9% year on year. Shipments of all PE grades increased. At the same time, the PP consumption in the Russian market was 909,260 tonnes in January-August 2019, up by 10% year on year. Shipments of PP block copolymer and homopolymer PP increased.
MRC

MOSCOW (MRC) -- French oil major Total will acquire a 37.4% stake in Indian gas company Adani Gas Ltd, and set-up a joint venture for marketing natural gas in India and Bangladesh, reported S&P Global with reference to the company's statement Monday.

The deal underscores the growing LNG markets in South Asia that have attracted interest from global oil majors to commodity trading houses, on the back of rapid industrialization and urbanization.

Adani Gas is one of the four largest distributors of city gas in India of which Adani Group holds 74.8% and of which Total will acquire 37.4%, the statement said.

"To reach a 37.4% shareholding in Adani Gas Limited in accordance with Indian stock market regulations and subject to regulatory approvals, Total will initially launch a tender of offer to public shareholders to acquire up to 25.2% of equity shares before buying the remaining shares from Adani," Total said in a statement.

Total said as part of its strategy to develop new gas markets it was expanding its partnership with the Adani Group, the parent company of Adani Gas. The partnership includes two imports and regasification LNG terminals -- Dhamra in East India and potentially Mundra in the West, it said.

"As part of this partnership, Total will bring its LNG and retail expertise and will supply LNG to Adani Gas Limited. Total and Adani will also establish a joint venture to market LNG in India and Bangladesh," it added.

Adani Gas aims to expand its distribution of gas in the next 10 years through its 38 concessions covering 7.5% of the Indian population and market natural gas to industrial, commercial and domestic customers, targeting 6 million homes as well as through 1,500 retail outlets of natural gas for vehicles, the statement said.

Total said taking into account its divestiture of the Hazira terminal in early 2019, its partnership with Adani represents a net acquisition cost of around $600 million over 2019-2020.

In 2018, Shell had acquired a 26% equity in the Hazira LNG and Port venture in India from Total.

Natural gas is currently 7% of India's energy consumption, but it has grown over the last 3 years by more than 5% per annum, supported by government policy to increase the share to 15% by 2030, and develop domestic use of gas in cities and as fuel for vehicles.

As MRC wrote before, last Wednesday, France's Feyzin refinery was in the process of halting units and the steam cracker is running at reduced rates. Local media reported earlier that the refinery had been halting operations since Monday due to a strike. The company said it regrets the decision by labor unions to call a strike while discussions are ongoing with refinery staff about a planned indefinite closure of a unit due to lower product demand.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,436,390 tonnes in the first eight months of 2019, up by 9% year on year. Shipments of all PE grades increased. At the same time, the PP consumption in the Russian market was 909,260 tonnes in January-August 2019, up by 10% year on year. Shipments of PP block copolymer and homopolymer PP increased.

Total S.A. is a French multinational oil and gas company and one of the six "Supermajor" oil companies in the world with business in Europe, the United States, the Middle East and Asia. The company's petrochemical products cover two main groups: base chemicals and the consumer polymers (polyethylene, polypropylene and polystyrene) that are derived from them.
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