Petronas sees commercial production this year at refinery

MOSCOW (MRC) -- State oil company Petronas said its massive refinery and petrochemicals complex in southern Malaysia, a USD27-billion joint venture with Saudi Aramco, will start commercial operations as planned by the end of the year, dismissing a report of a delay, reported Reuters.

The refinery’s atmospheric residue desulphurization (ARDS) unit, hit by a fire in April, will begin operation by mid-2020, Petronas said in an email late on Wednesday.

"Petronas would like to clarify that its Pengerang Integrated Complex is in the middle of start-up activities and expected, as planned, to be in commercial operations by end of 2019," it told Reuters.

Last week, Platts said the fire had delayed commissioning of Pengerang Refining and Petrochemical (PRefChem), a part of the complex, to the second half of 2020, citing Aramco’s comments in its prospectus for an initial public offering.

The project had been shut in April after fire damaged the atmospheric residue desulphurization unit.

It consists of a 300,000 barrels-per-day (bpd) oil refinery and a petrochemical complex with annual production capacity of 7.7 million tonnes.

As MRC informed earlier, in the first week of November, Saudi Aramco approached Malaysian state energy company Petronas to participate in Aramco’s IPO, Petronas said, as the Middle Eastern oil giant seeks cornerstone investors for the listing.

Besides, we remind that Saudi Aramco, which temporarily lost half of its oil production following the September 14 attacks on two key oil facilities, is running its local refineries at full capacity and is forging ahead with plans to start up new refineries. The company is also starting up a joint venture refinery in Malaysia next year. According to Aramco's bond prospectus released in April, the refining and petrochemical joint venture with Petronas - the Malaysian national oil company - collectively known as PRefChem, was supposed to start this year.

The PRefChem joint venture includes a 300,000 b/d refinery, an integrated steam cracker with capacity to produce 1.3 million mt of ethylene located in Johor, Malaysia. Aramco was supposed to provide a significant portion of PRefChem's crude supply under a long-term supply agreement. Jazan and PrefChem will help Aramco reach a gross refining capacity of 5.6 million b/d, it said in the prospectus. The company currently owns and has stakes in four refineries abroad with a total refining capacity exceeding 2 million b/d.

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.

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.
MRC

MOSCOW (MRC) -- The Nigerian government needs to end the air of uncertainty around the country's oil sector to attract much-needed investment that will bolster production, reported S&P Global with reference to ExxonMobil's statement.

The two critical Nigerian oil sector needs are certainty and business competitiveness, Paul McGrath, chairman and managing director of the ExxonMobil Nigeria producing unit, said during a meeting in Abuja with Nigeria's oil minister, Timipre Sylva, according to an oil ministry statement.

"There is nobody who doesn't want to invest in Nigeria," McGrath said.

The ExxonMobil executive, who also is chairman of the Oil Producers Trade Section, the umbrella body for oil companies operating in Nigeria, said he hoped the Nigerian oil minister would make these two critical factors priorities.

Oil companies have strongly opposed Nigeria's plans to increase taxes on its deepwater oil production after Nigeria amended the fiscal terms for existing production-sharing contracts.

That decision came as other producers in the region sweetened their fiscal terms to attract foreign investment to the beleaguered oil sector.

Angola recently improved fiscal terms for some oil contracts, giving international oil companies higher returns and opening up offshore and onshore basins.

Sylva said the amendment to the production-sharing law was "deemed necessary in recognition of the current realities in the sector."

Group managing director of state-owned Nigerian National Petroleum Corporation Mele Kyari said earlier Tuesday in Lagos that Nigeria needs the help of international oil companies to raise exploration activities if it is to increase production to its target of 3 million b/d by 2023.

Kyari said Nigeria would still hold talks with oil companies on new fiscal terms for oil exploration after recent amendments to the law.

As MRC informed before, in September 2019, ExxonMobil announced plans to spend GBP140 million over the next two years in an additional investment program at its Fife ethylene plant (UK), which has a capacity of more than 800,000 t/y.

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.

PBF Energy Inc. is a petroleum refiner and supplier of unbranded transportation fuels, heating oils, lubricants, petrochemical feedstocks, and other petroleum products. Headquartered in Parsippany, New Jersey, the company's refineries include facilities in Chalmette, Louisiana, Toledo, Ohio, Port of Paulsboro in Gibbstown, New Jersey, the Delaware City Refinery in Delaware City, and the former ExxonMobil refinery in Torrance, California. PBF produces a range of products including gasoline, ultra-low-sulfur diesel (ULSD), heating oil, jet fuel, lubricants, petrochemicals and asphalt.
MRC

MOSCOW (MRC) -- China’s record crude imports in October were matched by healthy processing rates at refineries, but even so the country still seemed to be stockpiling oil at a blistering pace, reported Reuters.

China imported 10.72 million barrels per day (bpd) last month, up 11.5% from the same month in 2018 and eclipsing the previous high of 10.64 million bpd from April.

The world’s largest crude importer brought in 9.95 million bpd in the first 10 months of the year, up 10.5% from the same period in 2018.

But the strong growth in crude imports has largely been matched by record refinery runs, with 13.62 million bpd being processed in October, just below September’s record 13.75 million bpd.

For the first 10 months of the year, Chinese refiners processed 12.90 million bpd, up 6.4% from the same period in 2018.

China doesn’t provide regular data on the flow of crude into strategic and commercial storage, but an estimation can be made by looking at the total amount of crude available from imports and domestic output, and then subtracting the amount processed by refiners.

Domestic crude production in October was the equivalent of 3.79 million bpd, which together with imports gives a total of 14.51 million bpd of available oil.

Taking away the refinery throughput of 13.62 million bpd leaves about 890,000 bpd of crude that most likely flowed into commercial and strategic storage.

For the first 10 months of the year, total available crude was 13.78 million bpd, and refinery runs were 12.90 million bpd, leaving a gap of 880,000 bpd available for stockpiling.

Coincidentally, China’s increase in crude imports for the first 10 months of the year from the same period in 2018 is about 898,000 bpd.

The flow into storage only becomes important when China starts to pare back its crude purchases for the strategic petroleum reserve as it closes in on reaching the International Energy Agency (IEA) recommended level of 90 days of import cover.

This could be sooner than the market may currently anticipate, given the National Energy Administration said in September it has about 80 days of oil in storage, both commercial and strategic.

On that basis, a target of 90 days storage could be reached in the first quarter of 2020, although Beijing has yet to definitively say at what level it would stop adding to reserves.

Given that China is currently accounting for almost 90% of the IEA’s forecast total expected growth in global crude demand in 2019 of 1 million bpd, a scaling back of imports for storage may have serious consequences for the strength of world demand.

Another factor worth noting is that the rise in refinery runs has led to higher exports of refined products, albeit at a somewhat slower pace than the gain in processing.

Exports of refined fuels in the first 10 months of the year were 52.75 million tonnes, up 9.3% from the same period in 2018.

A breakdown by product isn’t yet available for October, but data for September showed that in the first three quarters of the year exports of gasoline.

It’s possible the strong crude imports and refinery runs in October will show up in higher exports of refined fuels this month and in December as Chinese refiners seek to use up export quotas amid soft domestic fuel demand growth.

Certainly refining margins in Asia are coming under pressure, with a typical Singapore refinery currently making just 47 US cents per barrel of profit, compared to the moving 365-day average of USD4.18 a barrel.
MRC

MOSCOW (MRC) – Clariant is introducing a new antimony-trioxide-free system for molding and laser-marking thermoplastic urethane (TPU) ear tags used for identifying cattle and other livestock, said the company.

Working with Coherent, Inc., one of the world’s leading laser technology companies, Clariant was able to develop an additive masterbatch that, when added to the TPU commonly used to mold ear tags, makes the polymer more receptive to the near-infrared laser light from Coherent laser markers. It does so without antimony trioxide (ATO), the ingredient most commonly used to facilitate laser marking of TPU. Instead of ATO, which is classified by ECHA (European Chemical Agency) as Carc. 2, H351 (suspected of causing cancer by inhalation), the Clariant additive masterbatch uses another metalloid chemical plus a special enhancing agent. The proprietary solution is currently pending patent approval.

The Clariant ear-tag system produces high contrast images at marking speeds at least as high as those associated with tags containing ATO additives, thus offering an easy, more sustainable alternative for ear-tag production. The Coherent PowerLine F 100 W air-cooled laser marker did the actual marking. The PowerLine F Series laser sub-systems combine fiber laser technology with beam processing and software, providing high speed, precision, flexibility and user-friendliness.

Compared to printing, laser marking is a superior process for creating bar codes, text and other identifying marks on animal tags. However, unmodified TPU is essentially transparent to near-infrared laser light, so the carbonization and/or foaming reaction required to make a laser mark does not occur. The new Clariant additive – supplied as a concentrated masterbatch for dosing into virgin polymer at a rate of 2 – 4% – helps the laser create easily readable, scannable, and permanent laser markings that cannot be washed away or dissolved by solvents or oils.

Ear tags are in everyday use around the world. In the European Union, all cattle are required by law to have official ear tags in both ears to enable computerised location tracking. The tags are typically large and carry a lot of information, so it is important that the Clariant additive allows the laser to create high-quality images quickly. Tags may combine laser markings and RFID inserts to simplify the collection of tracking information.

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

MOSCOW (MRC) -- Mangalore Refinery and Petrochemicals (MRPL), the downstream subsidiary of Oil and Natural Gas Corporation (ONGC) is planning to make an investment of Rs 31,073 crore to undertake expansion, said Projectstoday.

MRPL will expand its flagship 16 million tpa refinery to 18 million tpa and focus on integration of production streams for petrochemicals like ethylene, propylene and butane.

The project is currently facing challenges including processing of heavier and sulphur rich crude, strict environmental regulations, enhanced product specifications for sulphur and aromatics, evolving regional supply and demand dynamics for diesel versus petrol, among others.

MRPL also plans to undertake capacity expansion of its second crude oil distillation unit (CDU) to 9.7 million tpa from 7.2 million tpa currently, conversion of visbreaker (VBU) into a 0.7 million tpa CDU for swing operations for processing high sulphur or heavy crude directly and utilisation of CDU-I and CDU-III at present capacities.

The idea is to utilise maximum crude processing capacity available in primary units. MRPL processes over 17 grades of crude and mainly relies on 4,117 kilo tpa of Iran Heavy, Arab Heavy (3,520 kilo tpa), Mangala (2,015 kilo tpa), Das blend (1,245 kilo tpa), Mumbai High (1,100 kilo tpa), and Soroosh crude (738 kilo tpa), among others.

The proposed hybrid configuration indicates that the company will increase its reliance on seven crude grades including Arab Heavy (5,000 kilo tpa), Soroosh crude (3,000 kilo tpa), Iran Heavy (2,000 kilo tpa), Mangala (2,000 kilo tpa), Arab Light (2,000 kilo tpa), Basrah Light (2,000 kilo tpa), Basrah Heavy (1,500 kilo tpa) and Merey crude (500 kilo tpa).

The company has already started petrochemical production by adding a polypropylene unit and the current refinery complex is integrated to an aromatic complex designed to produce 9,00,000 tpa of paraxylene.

As MRC informed earlier, in September 2019, MRPL restarted operations at the refinery with downstream units after scheduled maintenance works.

As MRC wrote before, in June 2015, MRPL successfully commenced commercial production of PP from its polypropylene plant as part of its phase-III refinery expansion and upgradation project in Mangaluru. The plant has a capacity to produce 4,40,000 tonnes of PP per annum. Feedstock for the PP plant - polymer grade propylene - is being produced from upstream petrochemical fluidised catalytic cracking unit of the refinery. Technology provider for the PP plant is Novolen of Germany. The plant has been engineered and constructed by Engineers India Ltd.

Mangalore Refinery and Petrochemicals Limited (MRPL), is an oil refinery at Mangalore and is a subsidiary of ONGC, set up in 1993. The refinery is located at Katipalla, north from centre of Mangalore city. The refinery was established after displacing five villages of Bala, Kalavar, Kuthetoor, Katipalla, and Adyapadi.
MRC