Groups vying for refinery prepare to visit fire-damaged site

MOSCOW (MRC) -- Groups vying for the idled Philadelphia Energy Solutions oil refinery have entered the second phase of the bidding process and are gearing up for visits to the plant, according to Hydrocarbonprocessing with reference to sources.

Roughly a dozen parties are in the running to buy the refinery, a source familiar with the situation said, pitching various uses for the fire-damaged facility that has been used to store and process fossil fuels for the last 150 years.

The effort began after PES closed its refinery and filed for bankruptcy on July 21, following a colossal blaze at one of its most dangerous fuel-producing units.

Whoever wins the auction to purchase the 1,300-acre site will hold the keys to reopen the largest and oldest East Coast oil refinery or repurpose all or part of it for another use.

Prospective buyers are seeking answers to a host of unanswered financial and legal questions, including potential environmental cleanup costs and uncertainty around insurance proceeds.

Groups in the bidding process are being given more information about PES’ finances and operations and are expected to tour the site, three sources familiar with the plans said. They have also been asked to submit more detailed proposals, as opposed to limited initial bids, by late November.

While the sale process is moving ahead, PES recently detailed in a court filing a way in which it could reorganize the company if it is able to reach agreements with creditors to swap debt obligations for shares in the company.

Such a move could avert a sale, according to the documents, which were filed on Thursday in the US Bankruptcy Court for the District of Delaware.

PES has told buyers it reserves the option not to sell the plant after final bids are submitted.

Along with basic purchase price questions, bidders are being asked what, if any, portion of future insurance payouts tied to the blaze they would need to close a deal, the sources said. They have also been asked what percentage of any award they would require if PES wins its multi-hundred-million-dollar lawsuit against the federal government over excise taxes.

Parties that have publicly declared their pursuit of the PES complex include a group led by onetime PES Chief Executive Officer Philip Rinaldi, which has proposed restarting the full 335,000 barrel-per-day refinery and adding renewable natural gas production.

Philadelphia-based S.G. Preston pitched a renewable diesel and renewable jet fuels operation that would use a portion of the plant’s processing and logistics infrastructure.

Real estate developers, including Industrial Realty Group LLC and Alterra Property Group LLC, have also made early bids, the sources familiar with the plans said.

Outstanding questions include who is still working for PES, after it laid off most of its pre-fire workforce of 1,000 people, and the cost of maintaining water treatment systems so that rain and melted snow contaminated on-site do not stream into the nearby Schuylkill River, sources familiar with the plans said.

Prospective buyers must also contemplate the costs and responsibility for cleaning up PES land, especially if the winning bidder uses the site for something other than refining.

Soil and water at the PES site have been contaminated by more than a century of hydrocarbon releases, and chemicals harmful to human health, such as benzene, have been detected on the compound, according to the Pennsylvania Department of Environmental Protection.

PES is currently responsible for cleanup costs for contamination that happened after 2012, when the company was formed. Previous refinery owners are charged with clearing earlier contamination.
MRC

MOSCOW (MRC) -- Lotte Chemical is likely to shut its polyethylene terephthalate (PET) line for a turnaround, as per Apic-online.

A Polymerupdate source in South Korea informed that the company has planned to halt operations at the plant in end-October, 2019. The plant is intended to remain off-line for about one or two weeks.

Located at Ulsan, South Korea, the PET plant has a production capacity of 180,000 mt/year.

The company has three lines at its site in Ulsan with a total capacity of 450,000 mt/year.

As MRC wrote previously, in October 2015, Lotte Chemicals conducted maintenance at its PET plant in Ulsan for a period of around two weeks. Located in Ulsan, South Korea, the plant has a production capacity of 450,000 mt/year.

According to MRC's DataScope report, Chinese bottle grade PET deliveries to Russia increased 34% in the first eight months of 2019 to 95,600 tonnes. China accounted for 90% of the total imports, compared to 85% a year earlier.
August imports of material from China decreased by 41% to 7,600 tonnes from 12,800 tonnes in July. Jiangsu Sanfangxiang, Yisheng, Wankai and Sinopec were the leading Chinese suppliersof material to the Russian market.

Lotte Chemical Titan produces Malaysia's most comprehensive portfolio of olefins and polyolefins which contribute to the enhancement of everyday life. Lotte Chemical Titan's production site in Malaysia consists of eleven process facilities, two co-generation plants and three tank farms. They are located on 2 sites in Pasir Gudang and Tanjung Langsat in the state of Johor. In 2006, Lotte Chemical Titan acquired PT Lotte Chemical Titan Nusantara, Indonesia’s first and largest polyethylene plant in the country. This acquisition boosted the polyolefins capacity by approximately 50%, thus making the company one of the largest producers in South East Asia. Lotte Chemical Titan was acquired by Lotte Chemical Corp., forming part of the Lotte conglomerate of Korea, in 2010. The company thus became one of Lotte Chemical Corp.’s largest overseas subsidiaries.
MRC

MOSCOW (MRC) -- Zhong An United Coal Chemical Co has restarted its polypropylene (PP) unit following an unplanned outage, as per Apic-online.

A Polymerupdate source in China informed that the company resumed operations at this unit on October 15, 2019. The unit was shut owing to technical issues on October 6, 2019.

Located at Huainan, Anhui province, China, the PP unit has a production capacity of 145,000 mt/year.

As MRC wrote before, Zhong An United Coal Chemical Co restarted its PP unit on August 24, 2019, following an unplanned outage. The plant was shut owing to technical issues on August 10, 2019.

According to MRC's ScanPlast report, 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.

Zhongan United Coal Industry Chemical Co. Ltd. mines, processes, manufactures, and distributes coal products. The сompany produces brown coal products, bituminous coal products, hard coal products, coking coal products, and other related products. Zhongan United Coal Industry Chemical markets its products throughout China.
MRC

MOSCOW (MRC) -- Asia is set to lead capacity growth in the global Acrylonitrile-Butadiene-Styrene (ABS) industry from planned and announced projects between 2019 and 2023, contributing around 74% of the global growth by 2023, says GlobalData.

Asia is expected to have a new-build and expansion ABS capacity of 0.90 million tonnes per annum (mtpa) from five planned and announced projects.

Dayanand Kharade, Oil and Gas Analyst at GlobalData, says: “In Asia, the capacity growth of ABS will be mainly from China, which is expected to account for around 85% of the region’s capacity."

GlobalData identified the Middle East as the second highest region in terms of capacity additions in the global ABS industry. The region will add a new-build capacity of 0.20 mtpa from a planned project. The entire capacity additions will be from, ‘Jam Petrochemical Company Assaluyeh ABS Plant’, which is expected to start operations in 2019.

North America and Europe are the other two regions, together adding a new-build ABS capacity of 0.12 mtpa by 2023. The entire capacity addition from North America will be from an announced project, ‘INEOS Styrolution Mexicana Altamira ABS Plant’ while from Europe, the entire capacity additions will be from a planned project, ‘INEOS Styrolution France Wingles ABS Plant’.

According to the ICIS-MRC Price Report, because of low prices in Asia in August, ABS imports to Russia amounted to 3.600 tonnes compared to 2,800 tonnes a month earlier and 2,700 tonnes in August last year. According to the results of January - August, the import of ABS in the Russian Federation did not change relative to the same period last year and amounted to 21,900 tonnes.
MRC

MOSCOW (MRC) -- A small earthquake hit operations at two oil refineries in Martinez, California, reported Reuters with referenece to the companies' statement.

Marathon Petroleum Corp said it was working to return its 161,500-barrel-per-day refinery to normal operations following a quake centered in nearby Pleasant Hill, with a magnitude of 4.5.

The company confirmed an upset, or malfunction, resulting from the quake but said it did not result in any “known spills or releases” or injuries.

"Marathon Petroleum personnel are working to assess the integrity of equipment to ensure a safe restart and return to normal operations," the company said in a statement.

Marathon had earlier reported the shutdown of multiple units because of the earthquake in a filing with the state pollution regulator. "No off-site consequences are anticipated," the filing said.

Energy intelligence service Genscape earlier reported that a 37,000-bpd hydrocracker, 26,000-bpd catalytic reformer, 40,000-bpd hydrotreater, 14,000-bpd alkylation unit and a hydrogen plant were shut at the plant because of the incident.

Nearby, Royal Dutch Shell Plc said some equipment had been temporarily affected at its 156,400-barrel-per-day (bpd) refinery in Martinez, but that operations were now normal.

There were no major damages or injuries due to the quake in the Bay Area, local media reported.

A magnitude 4.5 quake is relatively small for earthquake-prone California, which lies on the San Andreas Fault.

As MRC informed earlier, Royal Dutch Shell Plc has restarted the hydrocracker at its 225,300 barrel-per-day (bpd) Norco, Louisiana, refinery. The 40,000 bpd hydrocracker was shut on Sept. 9 for a planned month-long overhaul. A longer than expected restart of the unit stretched the outage to six weeks. Shell also conducted maintenance works at its cracker in Norco with the capacity of 840,000 tonnes of ethylene per year over the stated period.

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.

Royal Dutch Shell plc is incorporated in England and Wales, has its headquarters in The Hague and is listed on the London, Amsterdam, and New York stock exchanges. Shell companies have operations in more than 70 countries and territories with businesses including oil and gas exploration and production; production and marketing of liquefied natural gas and gas to liquids; manufacturing, marketing and shipping of oil products and chemicals and renewable energy projects.
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