Phillips 66 says capital spending could fall in 2020

MOSCOW (MRC) -- US oil refiner Phillips 66 said on Wednesday its 2020 capital spending budget could fall as much as 10% below this year’s plans, which include USD300 million for a West Coast marketing campaign, according to Hydrocarbonprocessing.

Executives at the fourth-largest US refiner by capacity said in a presentation to Wall Street analysts that next year’s outlays would range from USD3 billion to USD3.5 billion, compared with the estimated USD3.3 billion to USD3.5 billion this year.

"Phillips 66 has a consistent, proven strategy to create value for shareholders," Chief Executive Greg Garland said in New York. "Our strategic priorities of growth, returns and distributions are supported by a strong foundation of operating excellence and a high-performing organization."

The 2019 capital budget was boosted in part by USD300 million to pay for a retail-fuels joint marketing campaign with an undisclosed partner on the West Coast, executives said. Phillips markets fuels under the Phillips 66 and Union 76 brands.

"The transaction has not yet been finalized," said Phillips 66 spokesman Dennis Nuss. "We can confirm additional details once the transaction is closed."

At the high end of next year’s spending, the company would have "USD1.5 billion to USD2.5 billion for share repurchases, ahead of our expectations of USD1.2 billion," Credit Suisse analysts said in a note on Wednesday. "Another strong dividend increase for 2020 indicated (we expect a 10% hike)."

During the presentation, which was webcast, analysts questioned whether the capital budget fully reflected spending for major oil pipeline and other projects being constructed.

Garland said two major pipelines being developed were financed by shippers. Phillips 66 discloses its financing arrangements to credit rating agencies, he added, saying: "We’re completely transparent."

Phillips 66’s budget will include work on gasoline-producing fluidic catalytic cracking units (FCCU) at its Sweeny, Texas, and Ponca City, Oklahoma, refineries in 2020.

At the 265,000-barrel-per-day (bpd) Sweeny refinery south of Houston, Phillips 66 plans to continue modernizing the two FCCUs. Work at the 207,000-bpd Ponca City refinery in northern Oklahoma will focus on improving the yield from the FCCUs.

Also for 2020, the company is planning projects to produce diesel fuels from renewable resources at the 120,200-bpd Rodeo, California, refinery in the San Francisco Bay area and at the 221,000-bpd Humber, England, refinery.

As MRC reported earlier, Phillips 66 took the gasoline-making FCCU at its Bayway refinery in Linden, New Jersey, offline at midnight EST last Thursday due to a leak. There was no timeline for the restart.

We remind that US-based Phillips 66 remains open to developing another ethane cracker for its Chevron Phillips Chemical (CP Chem) joint venture, the refiner's CEO said in March 2018.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,093,260 tonnes in 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments rose from both domestic producers and foreign suppliers. The estimated PP consumption in the Russian market was 1,260,400 tonnes in January-December 2019, up by 4% year on year. Supply of almost all grades of propylene polymers increased, except for statistical copolymers of propylene (PP random copolymers).
MRC

HDPE imports in Belarus rose by 24% in 2019

MOSCOW (MRC) -- Overall high density polyethylene (HDPE) imports into Belarus decreased in 2019 by 24% year on year, reaching 68,500 tonnes. The main increase in supplies accounted on the Ukrainian producer, according to MRC's DataScope report.

According to the National Bureau of Statistics of Belarus, PE imports to Belarus rose slightly in December 2019 to 6,600 tonnes from 6,300 tonnes a month earlier. Overall HDPE imports totalled 68,500 tonnes in 2019 versus 55,500 tonnes a year earlier. Such an increase in imports was partially caused by the further resale of PE to Russia.

The key suppliers of HDPE remained producers from Russia, the total volume of imports exceeded 24,200 tonnes against 30,200 tonnes a year earlier. The second largest supplier was the Ukrainian producer, the total supply amounted to slightly more than 24,100 tonnes against 12,200 tonnes a year earlier. The third largest producer from Saudi Arabia with a key position - pipe polyethylene.

Overall Middle Eastern HDPE imports totalled 6,500 tonnes in 2019 versus 4,100 tonnes a year earlier. It is also worth noting that over the past year, more than 20,400 tonnes of HDPE were reimported from Belarus against 10,000 tonnes a year earlier.
MRC

Burckhardt Compression signs agreement for joint development of new hydrogen compression technology

MOscow (MRC) -- Burckhardt Compression is cooperating with GRZ Technologies, a spin-off of Laboratory of Materials for Renewable Energy from EPFL Lausanne, Switzerland, to develop a new hydrogen compression technology, said Hydrocarbonprocessing.

It will be deployed in hydrogen fuel stations, hydrogen energy storage systems and other applications and will make use of thermal active metal hydrides. Hydrogen is a promising energy carrier that offers carbon-neutral energy for industry and mobility.

The Static Hydrogen Compressor from Burckhardt Compression operates without moving parts but with thermal active metal hydrides. The Static Hydrogen Compressor is based on the GRZ’s HYCO laboratory scale metal hydrides compression solution that is already in use for small amounts of hydrogen. Burckhardt Compression will scale up the solution for the new, strongly developing market of hydrogen re-fueling stations and hydrogen energy storage systems. These compressors operate with metal hydrides and will be designed for high-pressure solutions of 200, 350 and 700 bar.

The noise and vibration-free compressor is hermetically sealed from the environment and therefore operates without any gas leakage and can be used in sensitive areas. As the compressor is also completely oil-free, it can be used for hydrogen energy storage purposes too. Furthermore, thanks to its minimal moving parts design, this new compressor technology will be low maintenance.

“The increasing demand for gases like hydrogen as a carbon-neutral energy source creates promising market opportunities for Burckhardt Compression. We are therefore monitoring and exploring these developments very closely and initiating research activities in the relevant areas of application at such an early stage,” says Marcel Pawlicek, CEO Burckhardt Compression.

As MRC infromed earlier, Saudi Aramco and Air Products inaugurated the first hydrogen fueling station in Saudi Arabia at Air Products’ new Technology Center in the Dhahran Techno Valley Science Park. The pilot station will fuel an initial fleet of six Toyota Mirai fuel cell electric vehicles with high-purity compressed hydrogen.

Aramco and Total launched their USD5-billion Amiral JV project in October 2018. The steam cracker will be fed with a mixture of 50% ethane and refinery off-gases. It will supply ethylene to a downstream 1 MMt/y polyethylene manufacturing complex and other petrochemical products. The project aims to fully exploit operational synergies with the adjacent refinery, owned by Satorp, another JV between Aramco and Total. Third-party investors, including Daelim and Ineos, will locate plants at the value park adjacent to Amiral with a combined investment of USD4 billion. A final investment decision is expected in 2021.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,093,260 tonnes in 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments rose from both domestic producers and foreign suppliers. The estimated PP consumption in the Russian market was 1,260,400 tonnes in January-December 2019, up by 4% year on year. Supply of almost all grades of propylene polymers increased, except for statistical copolymers of propylene (PP random copolymers).

Saudi Aramco is an integrated oil and chemicals company, a global leader in hydrocarbon production, refining processes and distribution, as well as one of the largest global oil exporters. It manages proven reserves of crude oil and condensate estimated at 261.1bn barrels, and produces 9.54 million bbl daily. Headquartered in Dhahran, Saudi Arabia, the company employs over 61,000 staff in 77 countries.
MRC

Siemens wins compressor contract for Calcasieu Pass LNG Project

MOSCOW (MRC) -- Siemens was awarded a contract to supply three boil-off compressor (BOG) packages for Venture Global’s Calcasieu Pass LNG Project, said Hydrocarbonprocessing.

The new LNG export facility, Calcasieu Pass, is currently under construction in southwestern Louisiana’s Cameron Parish, approximately 50 miles south of Lake Charles. Once fully commissioned, the facility is expected to produce 10 MTPA of clean liquefied natural gas that will be exported to global markets.

The LNG project is implemented by Venture Global Calcasieu Pass, LLC, a subsidiary of Venture Global LNG, Inc., a Gulf Coast LNG developer. Engineering, procurement, and construction management (EPC) are contracted to Kiewit, who selected Siemens in connection with the balance of plant scope.

Siemens’ scope of supply covers the engineering, manufacturing and testing of two centrifugal BOG compression packages and one reciprocating BOG compression package. All compressors will be directly driven by electric motors.

"Siemens has a long track record of providing cryogenic boil-off gas compressors for the LNG industry worldwide,” said Matthew Russell, Executive Vice President of LNG for Siemens. “The Calcasieu Pass LNG Project involves an innovative modular, mid-scale configuration that enables Venture Global to produce low-cost LNG with a shorter construction schedule. Siemens was able to tailor a custom solution with added flexibility to match the EPC’s project schedule and start-up sequence."

Site construction is underway, and the compression trains are expected to ship in summer and fall 2020.

As MRC informed earlier, Exxon Mobil Corp and the Papua New Guinea government must return to the negotiating table so that a USD13 billion expansion of gas production can proceed. The plan, which would double liquefied natural gas (LNG) exports from the South Pacific nation, hinges on agreements to develop two new gas fields, but PNG walked away from talks with Exxon on one of those fields last week.

As MRC wrote previously, in late September 2019, ExxonMobil Corp shut its 369,024 barrel-per-day (bpd) crude oil refinery in Beaumont, Texas because of flooding from Tropical Storm Imelda. The company also 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 (LLDPE) plant with a capacity of 727,000 tonnes per year in Beaumont.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,093,260 tonnes in 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments rose from both domestic producers and foreign suppliers. The estimated PP consumption in the Russian market was 1,260,400 tonnes in January-December 2019, up by 4% year on year. Supply of almost all grades of propylene polymers increased, except for statistical copolymers of propylene (PP random copolymers).

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

Dalian Petrochemical to take off-stream its refinery in late March

MOSCOW (MRC) -- PetroChina's Dalian Petrochemical in northeastern Liaoning province will shut for an overall maintenance over March 25-May 25, for around two months, reported S&P Global.

As MRC informed before, Asia's largest oil and gas firm PetroChina resumed construction of its oil refinery and petrochemical project in southern Chinese province of Guangdong, as the number of new coronavirus cases fell for a second straight day.

We also remind that Sichuan Petrochemical (part of PetroChina) undertook an emergency shutdown at its naphtha cracker in Sichuan province of China on July 11, 2018 owing to a gas leak at its natural gas supply pipeline. Further details on duration of the outage could not be ascertained. Located at Sichuan province of China, the cracker has an ethylene capacity of 800,000 mt/year.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,724,670 tonnes in the first ten months of 2019, up by 7% year on year. Shipments of all PE grades increased. The estimated PP consumption in the Russian market in January-October 2019 totalled 1,066,520 tonnes, up by 7% year on year. Supply of block copolymers of propylene (PP block copolymer) and homopolymer of propylene (homopolymer PP) increased, demand for statistical copolymers (PP random copolymer) decreased.

PetroChina Company Limited, is a Chinese oil and gas company and is the listed arm of state-owned China National Petroleum Corporation, headquartered in Dongcheng District, Beijing. It is China's biggest oil producer.
MRC