HDPE production in Russia dropped by 5% in Jan-Sep 2019

MOSCOW (MRC) -- Russia's production of high density polyethylene (HDPE) totalled 695,200 tonnes in the first nine months of 2019, down by 5% year on year. Three producers out of four reduced their output, according to MRC's ScanPlast report.

September total HDPE production in Russia decreased to 45,900 tonnes, whereas this figure was 84,300 tonnes a month earlier. Lower output was caused by the shutdowns for maintenance at Stavrolen and Kazanorgsintez's production capacities. Thus, overall HDPE output reached 695,200 tonnes in January-September 2019, compared to 731,700 tonnes a year earlier. A slight increase in Kazanorgsintez's production could not offset the decrease in the three other producers' output.

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

Kazanorgsintez's total HDPE production fell to 32,200 tonnes in September from 50,800 tonnes a month earlier. The Kazan producer shut down its production for a turnaround from 26 September to 20 October. The Kazan plant's overall HDPE output reached 401,500 tonnes in January-September 2019, up by 1% year on year.

Stavrolen produced 3,400 tonnes last month, compared to 28,200 tonnes in August, the Budyonovsk producer shut its production capacities for maintenance from 6 September to 18 October. The plant's overall output reached 214,200 tonnes over the stated period, down by 4% year on year.

Gazprom neftekhim Salavat increased its capacity utilisation in September, the plant's total production grew to 10,200 tonnes from 5,400 tonnes a month earlier. The low output in the last month of summer was caused by the delayed completion of the maintenance works. The Bashkir plant's overall HDPE production reached 77,000 tonnes in the first nine months of 2019, down by 14% year on year. We remind that the Salavat producer did not take off-stream its production capacities for maintenance last year.

Nizhnekamskneftekhim produced exclusively linear low density polyethylene (LLDPE) over the stated period.

MRC

MOSCOW (MRC) -- The United States is extending an exemption from its sanctions on Venezuela for Nynas, a joint venture between state oil company PDVSA and Finnish biofuel producer and oil refiner Neste, reported Reuters with reference to the Treasury Department's statement.

The license, which was set to expire on Oct. 25, was extended for six months to April 14, 2020, the department said in an updated general license posted to its website.

As MRC informed before, in August 2019, a Venezuelan oil joint venture with a state-owned Chinese company has started an expansion project to boost output to 165,000 barrels per day (bpd), President Nicolas Maduro said, from a current capacity of 110,000 bpd. Sinovensa, owned by PDVSA subsidiary Venezuelan Petroleum Corp (CVP) and China National Petroleum Corp (CNPC), produces extra-heavy Orinoco crude and blends it with lighter oil to produce medium-grade Merey.
MRC

MOSCOW (MRC) -- The Trump administration, in an effort to mend fences with the powerful corn lobby, proposed a new formula to boost biofuels demand, but the proposal instead only provoked more consternation from the industry, said Hydrocarbonprocessing.

Corn and soybean farmers have been angered by the U.S. Environmental Protection Agency’s decision to greatly expand the number of exemptions given to smaller refiners from blending biofuels into the nation’s gasoline pool. They argue the expansion undercuts demand.

In response, the Trump administration has been negotiating for several months to find a way to boost demand for biofuels to satisfy farmers and rural voters. However, the proposed rule, issued in a supplemental notice by the EPA, was met with harsh criticism because it bases the biofuels volumes required for blending on U.S. Energy Department estimates - rather than actual exemptions.

"Only 11 days after President Trump’s landmark announcement, the EPA proposal reneges on the core principal of the deal,” said Iowa Renewable Fuels Association Executive Director Monte Shaw. “Instead of standing by President Trump’s transparent and accountable deal, EPA is proposing to use heretofore secret DOE recommendations that EPA doesn’t have to follow."

The refining industry is required by law to blend ethanol and other biofuels into the nation’s gasoline under the nation’s Renewable Fuel Standard (RFS). As part of the RFS, EPA can exempt small refineries if they prove compliance would cause disproportionate economic hardship. Facilities owned by oil majors Exxon Mobil Corp and Chevron Corp are among those to secure recent exemptions. Farmers who supported Trump heavily in his 2016 campaign have been frustrated with this, along with the ongoing U.S.-China trade war.

Trump promised in early October to boost demand for fuels like ethanol. During the negotiations, it appeared the biofuels industry had won a concession that would require refiners who are not exempt from the rules to blend the additional gallons of ethanol and other fuels that smaller facilities did not.

The proposed plan would calculate the volume of biofuels U.S. refiners have to blend by using a three-year average of exempted gallons as recommended by the Department of Energy, the Environmental Protection Agency said. “The supplemental notice contains a never-before-discussed proposal to estimate small refinery exemptions, with no assurance that the estimate will come close to actual exemptions,” the National Biodiesel Board said in a statement.

Oil companies were not happy either. They have consistently resisted measures to expand the biofuels market, which they view as a competitor. Refiners complain that the requirements under the RFS cost them greatly, and that having refiners make up for those who are granted exemptions would be an additional harm.

“There is simply no logic in forcing complying refineries to bear the burden of decisions outside of their control,” said Frank Macchiarola, vice president of downstream and industry operations at industry group the American Petroleum Institute.

The EPA, in its supplemental notice, acknowledged there is uncertainty in projecting exempted volumes for 2020. The plan would not change proposed volumes for 2020 and 2021, EPA said. In July, the EPA called for the refining industry to add 20.04 billion gallons of biofuels, including 15 billion gallons of ethanol, into fuel in 2020.

As MRC informed earlier, the Trump administration is close to finalizing a package of measures to adjust the policy mandating the use of biofuels, two sources familiar with the matter said and is aiming to get the final deal signed by President Donald Trump.
MRC

MOSCOW (MRC) -- Sinopec SABIC Tianjin Petrochemical Co. (SSTPC), a 50-50 joint venture of Sinopec and SABIC, have recently begun construction on an ethylene expansion project in Tianjin Province, China, Reuters reported.

The project will boost the company's ethylene capacity to 1.3-million t/y from 1-million t/y currently. Cost and a schedule for the project were not given.

SSTPC is also currently building a 260,000-t/y polycarbonate plant in Tianjin, which is scheduled to be operational by 2020.

In addition to the ethylene cracker and polycarbonate plant, the joint venture operates a 450,000-t/y polypropylene unit, 300,000-t/y high-density polyethylene (PE) plant, 300,000-t/y linear low-density PE unit, 40,000-t/y ethylene oxide and 360,000-t/y ethylene glycol facility, 350,000-t/y phenol/acetone plant, 200,000-t/y butadiene extraction and 120,000-t/y methyl tertiary butyl ether combination unit, and 650,000-t/y pyrolysis gasoline hydrogenation unit.

As MRC wrote before, Sinopec Sabic Tianjin Petrochemical Co. (SSTPC) started up a 1-million-t/y ethylene cracker in Tianjin, China, in 2010.

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.

China Petrochemical Corporation (Sinopec Group) is a super-large petroleum and petrochemical enterprise group established in July 1998 on the basis of the former China Petrochemical Corporation. Sinopec Group"s key business activities include the exploration and production of oil and natural gas, petrochemicals and other chemical products, oil refining.

Saudi Basic Industries Corporation (Sabic) ranks among the world"s top petrochemical companies. The company is among the world"s market leaders in the production of polyethylene, polypropylene and other advanced thermoplastics, glycols, methanol and fertilizers.
MRC

MOSCOW (MRC) -- The Abu Dhabi National Oil Company (ADNOC), Adani Group (Adani), BASF SE (BASF) and Borealis AG (Borealis) have signed a Memorandum of Understanding (MoU) to engage in a joint feasibility study to further evaluate a collaboration for the establishment of a chemical complex in Mundra, Gujarat, India, as per Hydrocarbonprocessing.

This is the next step of BASF’s and Adani’s investment plans as announced in January 2019. With the inclusion of ADNOC and Borealis as potential partners, the parties are examining various structuring options for the chemical complex that will leverage the technical, financial and operational strengths of each company. The total investment is estimated to be up to USD4 billion.

The collaboration includes evaluating a joint world-scale propane dehydrogenation (PDH) plant to produce propylene based on propane feedstock to be supplied by ADNOC. Propylene will be partially used as feedstock for a polypropylene (PP) complex, owned by ADNOC and Borealis, based on proprietary state-of-the-art Borealis Borstar technology.

The PP complex will be the first overseas production joint investment by ADNOC and Borealis as part of a strategic framework with their current joint venture Borouge. Furthermore, propylene will be the key raw material for the previously announced acrylics value chain complex comprising glacial acrylic acid (GAA), Oxo-C4 (butanols and 2-ethylhexanol), butyl acrylate (BA) and potentially other downstream products as part of a joint venture of BASF and Adani in which BASF holds a majority.

The designated site is planned at Mundra port in Gujarat, India, and the products are predominantly for the Indian market, serving a wide range of local industries, including construction, automotive and coatings.

The chemical complex in Mundra is intended to be entirely supplied from renewable energy resources. The partners are evaluating co-investment in a wind and solar park with the plans at an advanced stage of development. If realized, this would be the world’s first CO2-neutral petrochemical site to be fully powered by renewable energy, fully in line with the partners’ commitment to sustainability and energy efficiency.

Commenting on the MoU signing, Dr. Sultan Al Jaber, UAE Minister of State and ADNOC Group CEO, said: "This exciting collaboration is in line with ADNOC’s strategy to foster mutually beneficial partnerships. As a value-adding partner, ADNOC will play a crucial role as the propane feedstock supplier to this project. As the fastest growing global energy market, India is crucial to our international growth ambitions in the downstream sector. As such, this project allows ADNOC and its partners to capture the promising growth in the Indian polyolefins market."

Gautam Adani, Chairman of the Adani Group, stated: "We are very pleased to collaborate with our international partners to establish a Chemical Manufacturing Complex at Mundra Port. We stand committed to the ‘Make in India’ initiative and serve the larger purpose of aligning growth opportunities with creation of goodness for the nation."

"BASF remains committed to investing in India’s growth. We will play a key role in driving this joint collaboration which is also pioneering in terms of sustainability. We look forward to working together with our partners in establishing a chemical cluster in Mundra and to supplying the Indian market with high-quality downstream products," said Dr. Martin Brudermueller, Chairman of the Board of Executive Directors of BASF SE.

Alfred Stern, CEO of Borealis, added: "This partnership is a unique opportunity to strengthen our PP presence in India with proprietary Borealis Borstar PP technology and to create value and tangible benefits through innovation for customers across multiple industries."

The partners aim to finalize the joint feasibility study by the end of Q1 2020. Production is intended to commence in 2024.

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.

BASF is the leading chemical company. It produces a wide range of chemicals, for example solvents, amines, resins, glues, electronic-grade chemicals, industrial gases, basic petrochemicals and inorganic chemicals. The most important customers for this segment are the pharmaceutical, construction, textile and automotive industries.

Borealis is a leading provider of innovative solutions in the fields of polyolefins, base chemicals and fertilizers. With headquarters in Vienna, Austria, Borealis currently employs around 6,500 and operates in over 120 countries.
MRC