Restart of idled St. Croix oil refinery set for early 2020 after delay

MOSCOW (MRC) -- A USD1.6 billion plan to refurbish a long-idled Caribbean oil refinery is about 75% complete and could begin delivering fuel supplies early next year, reported Reuters with reference to company and government officials' statement last week.

The Limetree Bay Refining project is a bet on demand for low-sulfur fuels to meet a Jan. 1 global mandate for ocean-going vessels cut air pollution. The St. Croix, U.S. Virgin Islands, venture is run by private equity and commodity trading firms with oil major BP Plc (BP.L) providing crude oil and marketing the plant’s output.

Once restarted, the plant will be able to process up to 210,000 barrels per day of oil, a fraction of the 1,500-acre (607-hectare) plant’s peak capacity in the 1970s of 650,000 bpd.

Arclight Capital Partners, a Boston-based private equity firm, acquired the refinery with Freepoint Commodities in 2015. The two operate the plant’s about 34-million-barrel oil storage terminal while resurrecting part of what once was one of the world’s largest refineries.

BP has taken a larger role as delays arose due to the aged equipment’s near eight-year closure, said people familiar with the matter. Limetree Bay had hoped to complete the restart this year with two crude processing units in operation.

Instead, it will start operations early next year with one crude processing unit and may later revive a second crude unit if profits allow, Brian Lever, Limetree Bay’s chief executive, told a St. Croix senate panel on Wednesday.

BP had no immediate comment on the change.

Lever declined comment on the delays or when product deliveries could begin through an Arclight spokesman. The company continues "to make strong progress on the refinery restart," adding it now expects to put oil into processing units early next year.

Arclight and its partner aim to profit from expected high demand for low-sulfur marine fuels from the IMO 2020 mandate. It also could benefit from the summer closing of Philadelphia Energy Solutions’ 335,000-bpd refinery that supplied the US East Coast.

Kirk Callwood, executive director of St. Croix’s public finance authority, told the Senate panel that repairs will continue into December, followed by a commissioning period and then startup.

The St. Croix plant shut in 2012 facing requirements to spend some USD700 million on pollution controls and a USD5.4 million civil penalty to settle violations of the U.S. Clean Air Act that were levied on then-Hovensa, a venture between Hess Corp (HES.N) and Venezuela’s state-run oil firm PDVSA.

Negotiations on an agreement with the U.S. Department of Justice and Environmental Protection Agency to settle prior violations of the Clean Air Act are nearly complete, Lever said in prepared remarks. The company must reach agreement on the 2011 consent decree before the refinery can restart operations.

As MRC wrote previously, BP Plc resumed 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, 2019.

Besides, we remind that, in September 2019, six world's major petrochemical companies in Flanders, Belgium, North Rhine-Westphalia, Germany, and the Netherlands (Trilateral Region) announced the creation of a consortium to jointly investigate how naphtha or gas steam crackers could be operated using renewable electricity instead of fossil fuels. The Cracker of the Future consortium, which includes BASF, Borealis, BP, LyondellBasell, SABIC and Total, aims to produce base chemicals while also significantly reducing carbon emissions. The companies have agreed to invest in R&D and knowledge sharing as they assess the possibility of transitioning their base chemical production to renewable electricity.

BP is one of the world's leading international oil and gas companies, providing its customers with fuel for transportation, energy for heat and light, retail services and petrochemicals products for everyday items.
MRC

MOSCOW (MRC) -- The Abu Dhabi National Oil Company (Adnoc) has announced the signing of a broad framework agreement with China’s Rongsheng Petrochemical to explore opportunities for mutual cooperation, said English.mubasher.

Under the agreement, the two companies will consider investments in the sale of refined products from Adnoc to Rongsheng, along with downstream investment opportunities in both China and the UAE, and the supply and delivery of liquified natural gas to Rongsheng, according to a company statement released.

"This framework agreement builds on the existing crude oil supply relationship between Adnoc and Rongsheng, which we are keen to enhance. The agreement covers domestic and international growth opportunities across a range of sectors," Adnoc’s group CEO Sultan Al Jaber.

The agreement will see Adnoc’s active participation as Rongsheng’s strategic partner in refinery and petrochemical opportunities, including investment in Rongsheng’s downstream complex.

"This Framework Agreement is a key milestone in Rongsheng Petrochemical’s strategic international expansion. ADNOC is an important trading partner, and we are confident of the win-win benefits of this partnership, particularly in realising opportunities in the downstream space in Asia," Rongsheng’s chairman Li Shuirong commented.

ADNOC plans to invest USD45 billion with partners to expand its refining and petrochemical production in Ruwais. The company pumps most of the UAE's oil production of around 3 million b/d. It plans to boost its oil production capacity to 4 million b/d by 2020 and 5 million b/d by 2030.

As MRC informed in the late October, 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. 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.

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.

ADNOC is now accelerating this transformation by unveiling its plans to become a leading global downstream player. The new strategy will be supported by ADNOC’s 45 year plus legacy of a unique and open approach to partnerships, built on the UAE’s bedrock values, reliability and attractiveness. ADNOC will again look to create long term downstream partnerships, providing access to the most attractive parts of the energy value chain, to redefine ADNOC’s future growth.
MRC

MOSCOW (MRC) -- It is reported that the Vietnamese Finance Ministry has received several petitions from local companies to adjust the import duties imposed on propane and polypropylene (PP). The Ministry thereafter proposed its plans for the import duties on the mentioned products, as per CommoPlast.

For propane, with HS code 2711.12.00, the petition called for a reduction from the current 2% to 0%. However, the Ministry informed that the existing local supply can fulfill up to 45% of the domestic demand and that the duties have been adjusted from 5% to 2% on 1 January 2018, therefore, no changes would be made for the time being.

Meanwhile, by 2020, Vietnam would have three PP producers with a total output of approximately 850,000 tons per annum, meeting about 71% of domestic consumption. To encourage local companies to use locally produced cargoes and reduce the dependency on import materials, the Ministry proposed to increase the import duties from 3% currently to 5% in 2020.

However, the Ministry has yet to issue any official circular while continue collecting feedback from the industry.

As MRC informed earlier, Binh Son Refining and Petrochemical took a PP plant in Vietnam off-stream for a maintenance turnaround in June 2017 for a period of around 7 weeks. The exact date shutdown could not be ascertained. Located in Vietnam,the plant has a production capacity of 150,000 mt/year.

According to MRC's ScanPlast report, the estimated PP consumption in the Russian market was 976,790 tonnes in January-September 2019, up by 4% year on year. Shipments of PP block copolymer and homopolymer PP increased
MRC

MOSCOW (MRC) -- Indian Oil Corp, the country’s top refiner, is considering importing Russian oil, its chairman Sanjiv Singh said, as the company aims to diversify its oil import sources, reported Reuters.

India, the world’s third-biggest oil importer and consumer, ships in about 60% of its overall crude needs from the middle eastern countries. The nation is gradually tapping new sources to hedge itself against geopolitical risks.

Indian state refiners - IOC, Hindustan Petroleum Corp Ltd , Bharat Petroleum Corp Ltd and Mangalore Refinery and Petrochemicals Ltd - hardly buy Russian oil as high transportation costs make the crude costly compared to the grades in Middle East.

"We are exploring all options, we are discussing," Singh said, when asked if his company would sign a term contract with Russian companies.

As MRC wrote previously, Indian Oil Corp conducted turnaround at its naphtha cracker in India from early September 2019 to early October 2019. Located in Panipat, in the northern Indian state of Haryana, the cracker has an ethylene production capacity of 857,000 mt/year and propylene capacity of 425,000 mt/year.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,589,580 tonnes in the first nine months of 2019, up by 7% year on year. Shipments of all PE grades increased. The estimated PP consumption in the Russian market was 976,790 tonnes in January-September 2019, up by 4% year on year. Shipments of PP block copolymer and homopolymer PP increased.

Indian Oil Corporation Limited, or IndianOil, is an Indian state-owned oil and gas corporation with its headquarters in New Delhi, India.
MRC

MOSCOW (MRC) -- Clariant’s Catalysts business unit has opened a new office in Jakarta. This third location for Engineering Services in Asia-Pacific (APAC) brings the global total to 16 offices, said the company.

The expansion is aimed at enhancing regional support, particularly in the southern APAC countries, with a focus on catalysts for ethylene and styrene and syngas applications, as well as distillate upgrading, hydrogenation, and oxidation.

Inaugurated in September, the new office is based at Clariant’s site in Tangerang, near Jakarta, Indonesia. The catalyst specialists appointed for the office will work closely with regional colleagues. Clariant already operates a joint-venture catalyst production facility near Jakarta, in Cikampek.

Stefan Heuser, Senior Vice President & General Manager Business Unit Catalysts at Clariant, commented on the development, stating, "APAC is a vast region with a wide distribution of customers having diverse requirements and applications. The investment brings value to our customers’ businesses, as it allows us to work more closely on their challenges, and respond more quickly with optimal solutions."

The new office is based at Clariant’s site in Tangerang, near the capital city of Jakarta. Clariant operates a joint-venture catalyst production facility near Jakarta, in Cikampek.

As MRC informed earlier, Clariant announced that it has been awarded a contract by Dongguan Grand Resource Science & Technology Co. Ltd. to develop a new propane dehydrogenation unit in cooperation with CB&I. The Dongguan plant will be one of the largest single-train dehydrogenation units in the world. Clariant's technology partner CB&I will base the plant's design on its Catofin® catalytic dehydrogenation technology, which uses Clariant's tailor-made Catofin catalyst and Heat Generating Material (HGM).

Propylene is the main feedstock for producing polyprolypele (PP).

According to MRC's ScanPlast report, the estimated consumption of PP in the Russian market totalled 694,210 tonnes in January-June 2019, up by 14% year on year. The supply of propylene block copolymers (PP-block) and propylene homopolymers (PP-homo) increased.

Clariant AG is a Swiss chemical company and a world leader in the production of specialty chemicals for the textile, printing, mining and metallurgical industries. It is engaged in processing crude oil products in pigments, plastics and paints. Clariant India has local masterbatch production activities at Rania, Kalol and Nandesari (Gujarat) and Vashere (Maharashtra) sites in India.
MRC