PrefChem shut cracker in Malaysia on technical glitch

MOSCOW (MRC) -- Pengerang Refining and Petrochemical (PRefChem) abruptly shut down its cracker in Pengerang, Malaysia last Friday, 25 October 2019, due to an unspecified technical issue, reported CommoPlast with reference to market sources.

The naphtha cracker produces 1.2 million tons/year of ethylene and 600,000 tons/year of propylene.

Sources with knowledge of the matter said that it might take roughly ten days for the cracker to come back online.

As MRC informed before, the company received commerical ethylene and propylene at its new cracker in Pengerang on 13 September, 2019.

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

PrefChem a joint venture between Malaysia's Petroliam Nasional Bhd, or Petronas, and Saudi Aramco. The Pengerang Refining development, part of Petronas’ USD27 billion Pengerang Integrated Complex, consists of a 300,000 barrels-per-day (bpd) oil refinery and a petrochemical complex with a production capacity of 7.7 million tonnes per year in the southern Malaysian state of Johor.

Petronas, short for Petroliam Nasional Berhad, is a Malaysian oil and gas company wholly owned by the Government of Malaysia. The Group is engaged in a wide spectrum of petroleum activities, including upstream exploration and production of oil and gas to downstream oil refining; marketing and distribution of petroleum products; trading; gas processing and liquefaction; gas transmission pipeline network operations; marketing of liquefied natural gas; petrochemical manufacturing and marketing; shipping; automotive engineering; and property investment.

Saudi Aramco, officially the Saudi Arabian Oil Company, is a Saudi Arabian national oil and natural gas company based in Dhahran, Saudi Arabia. Saudi Aramco"s value has been estimated at up to USD10 trillion in the Financial Times, making it the world"s most valuable company. Saudi Aramco has both the largest proven crude oil reserves, at more than 260 billion barrels, and largest daily oil production.
MRC

MOSCOW (MRC) - The U.S. oil and corn industries will continue a long-running public battle over America’s biofuels policy during a Congressional hearing about the Trump administration’s use of “secret waivers” for refineries, said Reuters.

The hearing set by the Energy and Commerce Committee will air out the grievances of two key political constituencies heading into next year’s election at a time President Donald Trump has been working hard to win them over.

Trump’s Environmental Protection Agency this month announced a change to the nation’s biofuel policy, intended to please farmers, that would increase the amount of corn-based ethanol some oil refineries must to blend next year to make up for volumes it has waived.

Under the U.S. Renewable Fuel Standard, the refining industry must blend 15 billion gallons of ethanol every year, but small individual facilities can secure exemptions if they prove compliance would cause them disproportionate economic harm.

Trump’s EPA has vastly expanded its use of the waivers, which are issued confidentially, triggering a backlash among representatives of the corn industry who claim the exemptions are lucrative handouts to Big Oil and hurt farmers by cutting ethanol blending volumes.

The move to adjust the program to make up for the waivers starting next year was intended to appease the Farm Belt, but biofuels companies have instead reacted angrily – saying the proposal failed to make up for the impact of the waiver program so far and fell short of the administration’s promises.

"It falls short of delivering on President Trump’s pledge to restore integrity to the Renewable Fuel Standard and leaves farmers, ethanol producers, and consumers with more questions than answers," Geoff Cooper, the head of the Renewable Fuels Association, said shortly after the proposal was issued.

The oil industry, meanwhile, also dislikes the proposal. Refiners see ethanol as competition for petroleum-based fuels and argue the EPA’s proposal unfairly forces big refineries to bear the burdens of their smaller competitors.

The refining industry also refutes accusations that the waivers have impacted overall demand for ethanol, arguing that the U.S. trade war with China has been a much bigger factor behind falling agricultural commodity markets.

The hearing will include testimony from the RFA, the heads of two biofuel companies, and the president of the American Fuel and Petrochemical Manufacturers refining lobby group.
MRC

MOSCOW (MRC) - Turkish state energy company Botas is looking to buy 70 cargoes of liquefied natural gas (LNG) for delivery over 2020-2023, said Reuters.

The tender was issued on Friday, one source said, two days after the United States lifted sanctions against Turkish ministries, including the energy ministry, and senior government officials.

The sanctions were imposed earlier in October in response to Turkey's military offensive in northern Syria.

The LNG tender will close on Nov. 8.

Heavily dependent on gas imports from Russia, Turkey is aiming to reduce imports from the country and diversify its gas sources. It has already reduced flows from Russia's Gazprom significantly this year, while increasing LNG purchases and gas imports from Azerbaijan.

Botas buys LNG on a long-term basis from Nigeria and Algeria. The contract with Nigeria expires in 2021, while a deal with Algeria's Sonatrach runs until late 2024. There is also a mid-term contract with Qatargas expiring next year.

As it was informed earlier, Russia canceled the USD40 bn South Stream pipeline project to transport gas to southern Europe via Bulgaria due to objections from the EU. It instead named Turkey as its preferred partner for installing
an alternative undersea pipeline with a capacity of 63 bn cubic metres/y (bcm). The chief executive of the state-controlled gas exporter Gazprom said that Russia would give Turkey a 6% discount on its gas imports for 2015 and
will supply it with 3 bcm more than in 2014. Gazprom has inked a memorandum of understanding with Turkey-based Botas to install the pipeline that will cross the Black Sea to Turkey.
MRC

MOSCOW (MRC) -- Work is underway to build a new petrochemical plant for BP and Socar Turkey in Aliaga city in Izmir Province, Chief External Affairs Officer at SOCAR Turkey Energy Murat LeCompte said in an interview with Trend.

The chief external affairs officer reminded that an agreement on the construction of a new petrochemical plant was signed between SOCAR and BP in late 2018.

"According to the agreement, both companies, each with a 50-percent-share in the new project, decided to launch its implementation," LeCompte said. "The preliminary engineering and design work has been carried out since the moment of the signing of the agreement. Today, these operations are underway. The operations are planned to be completed till late 2019."

"The work on the territory will begin in 2020," the chief external affairs officer said. "Afterwards, other work, including the preparation of a production sharing agreement, will be carried out. Then financing issue must be resolved."

"In particular, the issue of financing through the company's own funds or a loan will be discussed," LeCompte said. "The exact amount of investments in the project is unknown. This issue will be resolved next year after the final decision on investments is made."

"The amount worth USD1.8 billion was voiced during the preliminary discussions," the chief external affairs officer said. "This figure may increase or decrease while making the final decision."

"If the final investment decision can be made in 2020, then the foundation of the future plant will be laid that year," LeCompte said. "Proceeding from the fact that the construction will last for 3-4 years, the plant can be put into operation in 2023-2024."

The chief external affairs officer added that the new petrochemical plant will bring great benefits.

"This project is important not only for SOCAR and BP, but also for Turkey," LeCompte added. "Presently, Turkey imports 80 percent of the petrochemical products, spending USD11.5 billion a year. After putting a new plant into operation, this figure may be reduced to USD5.5 billion. Therefore, this project will make a great contribution to the Turkish economy."

As MRC reported earlier, BP Plc is expected to resume operation at its small gasoline-producing fluidic catalytic cracking unit (FCCU) at its 430,000 barrel-per-day (bpd) Whiting, Indiana, refinery in late October after about a month of the overhaul. The company began a planned overhaul of the small FCCU on 19 September.

PTA is used to produce polyethylene terephthalate (PET), which is used in the manufacturing of plastic bottles, films, packaging containers, in the textile and food industries.

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.

SOCAR, which is keen on expanding operations in the retail oil products market abroad, is involved in exploring oil and gas fields, producing, processing, and transporting oil, gas, and gas condensate, marketing petroleum and petrochemical products in the domestic and international markets, and supplying natural gas to industry and the public in Azerbaijan.
MRC

MOSCOW (MRC) -- Lotte Chemical Titan Holding Berhad has approved the proposed divestment of its 49% equity interest in a new ethylene project in Cilegon, Indonesia to its major shareholder, Lotte Chemical Corporation, reported NCT with reference to the Malaysian company's statement.

The divestment brings Lotte Chemical Titan’s parent company as a joint venture partner to help fund its MYR18 billion (USD4.3 billion) project, which is officially known as the Lotte Chemical Indonesia (LCI) New Ethylene Project or the "LINE Project".

The new integrated complex is expected to boost the company’s production capacity by around 80%, with a naphtha cracker of 1 million tons/year ethylene capacity and other related downstream petrochemical facilities.

In December 2018, the company held a groundbreaking ceremony for the project.

As MRC informed earlier, Lotte Chemical Titan plans to add a naphtha-fed steam cracker with an ethylene production capacity of 1 million mt/year to its petrochemical facility in Merak of Banten province, Indonesia, by 2023, making it an integrated petrochemical complex.

The company currently has two high density polyethylene plants and one linear low density polyethylene plant at the same site, with a total production capacity of 450,000 mt/year.

Ethylene is a feedstock for producing polyethylene (PE).

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.

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