After Turkmen oil breakthrough, Vitol adds products to portfolio

MOSCOW (MRC) -- Vitol, the world’s biggest oil trader, will begin exporting fuel oil and diesel from Turkmenistan via the Russian port of Novorossiisk this month, five trading sources said, capitalizing on its recent success in restarting Turkmen crude oil exports via Russia, said Hydrocarbonprocessing.

Market analysts predicted the Swiss-based trading house would struggle to execute the deal due to a lack of tankers in the Caspian Sea, most of which are controlled by SOCAR, but Vitol succeeded and is now expanding into refined products.

Turkmenistan has been selling most of its oil products to Azerbaijan or exporting it to the Black Sea market via Georgian ports. Some traders have also exported oil products via the Volga-Don shipping canal in Russia but that is typically closed from November to April due to ice.

"In December the first, test shipment (via Novorossiisk) is planned. If everything goes well, next year they expect to supply around 500,000 tonnes (of oil products)," a source familiar with the trading firm’s plan said.

Vitol declined to comment on its trading activity. According to two traders, Vitol won a tender in May to buy oil products from the Turkmenbashi refinery in Turkmenistan this year, but it took the company months to negotiate logistics. "They had to negotiate with Russia’s railways, customs, fix vessels to cross the Caspian Sea,” one of the traders said.

Shipping oil products from Turkmenistan to the Russian port of Novorossiisk on the Black Sea is quite complicated as it involves loading at Turkmenbashi, crossing the Caspian Sea, offloading in Russia’s Makhachkala port then transporting the products via rail to Novorossiisk, where they will be offloaded for seaborne exports, according to traders.

According to Russian railway data seen by Reuters, 20,000 tonnes of fuel oil and 25,000 tonnes of diesel produced in Turkmenistan are scheduled to be transported from Makhachkala railway station to Novorossiisk port this month.

As MRC informed before, test operations at a new gas chemical complex (GCC) for processing natural gas and producing polyethylene (PE) and polypropylene (PP) in the village of Kiyanly started back in August 2018. An official launch of production took place on 17 October, 2018.

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.
MRC

MOSCOW (MRC) -- Mexico's state-owned Pemex on Monday announced its first quarterly production increase in 14 years, an outcome executives attributed to the strategy of a new business plan announced in July, reported S&P Global.

In the third quarter, Pemex produced a gross 4.86 Bcf/d of gas, equivalent to a 96 MMcf/d, or 2%, increase in output compared to the second quarter, company data showed.

Crude oil production rose by 21,000 b/d over the same period to 1.694 million b/d.

On Monday's third-quarter earnings call, executives also touted the company's quarterly improvements in processing and refining, along with gains in refined products output.

Processing of wet gas, which accounts for most of Pemex's gas production, climbed about 5% from the second to third quarter, rising to nearly 2.9 Bcf/d. Dry gas output also edged up 6.8% to 2.37 Bcf/d.

Natural gas liquids production, though, fell by 5,000 b/d to 218,000 b/d.

Higher nitrogen content in Pemex's production mix saw the company's natural gas use decline to about 94% -- down from levels closer to 95% in the first and second quarters. Elevated nitrogen levels prompted a nearly 20% increase in flaring, which rose to an average 310 MMcf/d during the quarter.

Recent investments in Pemex's processing and refining business also showed results in the third quarter.

Refining throughput climbed 10% from Q2 while production of gasoline and diesel rose about 3% and 1%, respectively, over the same period.

Chief Financial Officer Alberto Velazquez said, "Pemex is on the right path," emphasizing the company's commitment to a new business strategy, first announced by Mexican President Andres Manuel Lopez Obrador in December.

That five-year business plan has called for Pemex to increase oil production to 2.7 million b/d 2024 and balance the company's budget by 2021. When the strategy was first announced, it also included an ambitious goal to grow natural gas production at Pemex to nearly 6.5 Bcf/d by 2024.

The new strategy has seen Pemex increase investment in the shallow water fields of the Gulf of Mexico this year, while simultaneously slashing the company's costs for administration, fuel distribution and fuel theft.

In the fourth quarter, the company expects to continue growing production thanks to the startup of 11 new development wells and 10 exploration wells expected to come online in November and December.

The company's new strategy, though, has also been accompanied by a decline in bottom line profitability.

In the third quarter, Pemex reported a net loss of nearly 88 billion pesos (USD4.6 billion), significantly more than the 53 billion peso (USD2.7 billion) net loss in Q2. In the third quarter last year, Pemex reported net positive income of 27 billion pesos (USD1.4 billion).

As MRC wrote previously, in 2016, Pemex shut its steam cracker at its Cangrejera complex for maintenance on February 15. The cracker was idle for about 14 days. The conducted repairs at the cracker were a part of planned maintenance.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,724,670 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.

Pemex, Mexican Petroleum, is a Mexican state-owned petroleum company. Pemex has a total asset worth of USD415.75 billion, and is the world's second largest non-publicly listed company by total market value, and Latin America's second largest enterprise by annual revenue as of 2009. Company produces such polymers, as polyethylene (PE), polypropylene (PP), polystyrene (PS).
MRC

MOSCOW (MRC) -- Linde announced that it has signed a memorandum of understanding (MoU) with Baowu Steel Group's new subsidiary, Baowu Clean Energy Ltd, to jointly cooperate on research and development to further develop China's hydrogen market for industrial and mobility applications, said Chemicalonline.

The two companies will work together to increase the accessibility of hydrogen to industries and advance the acceptance of hydrogen mobility solutions in China. Under the agreement, Linde and Baowu Clean Energy will also explore the option to invest in liquid hydrogen plants and infrastructure.

"We are delighted to build on our long-term partnership with Baowu Group with this latest cooperation to accelerate the development of hydrogen infrastructure and solutions for mobility and other industrial applications. Linde with its technology leadership in hydrogen is delighted to be the strategic partner for the Baowu Group as we work together to make hydrogen accessible for users across China," said Sanjiv Lamba, EVP & CEO Asia Pacific for Linde.

"This agreement with Linde marks an important new milestone in our long and successful partnership. Linde's expertise in hydrogen technology and solutions gives us the confidence that together we can transition to a cleaner low-carbon future for China," said Mr Guo Bin, Deputy General Manager, Baowu Steel Group.

Linde is a member of the global Hydrogen Council and the China Hydrogen Alliance which promotes hydrogen to help meet climate goals. The strategic agreement with Baowu follows Linde's recent joint venture with ITM Power and underscores the company's continued focus on delivering sustainable solutions in support of the global transition to cleaner energy.

Baowu Clean Energy is a subsidiary of Baowu Steel Group, one of the world's largest steel manufacturers. It was founded on 15 November 2019 to implement the Group's cleaner energy vision. The company will focus on the development of the hydrogen ecosystem in China, from production, to storage and distribution infrastructure and mobility concepts.

As MRC wrote previously, German chemical company BASF and The Linde Group’s Engineering Division are collaborating to serve natural gas processing applications using BASF’s absorbent technology and Linde’s adsorption and membrane technology. With the combined capabilities of materials expertise from BASF and engineering expertise from Linde, the two companies are well positioned to expand their global leadership position in natural gas applications. The collaboration is a strong signal to the natural gas industry and will open access to previously inaccessible gas compositions for treatment.

In June 2017, the heads of TAIF Group and Linde AG, the German holding, signed a memorandum of strategic cooperation for the period up to 2025 and a total investment of up to 12 billion euros. The document implies contracts on gas separation, industrial gases, but most importantly — on four stages of the construction of a new ethylene complex in Tatarstan.

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.

MRC

MOSCOW (MRC) -- Honeywell UOP has been chosen by Dayuewan (Zhuhai) Petrochemical Co. to supply a range of technologies to upgrade heavy fuel oil into higher value petrochemical products at Dayuewan's complex in Gaolan Port Economic Zone, Guangdong Province, China, as per Apic-online.

Honeywell will provide basic engineering and technology licensing, as well as technical and start-up services for the project, which includes a 1.4-million-t/y Uniflex MC slurry hydrocracking unit to upgrade the heavy fuel oil into light oil products. This will be fed to a Unicracking unit to produce naphtha for a CCR Platforming unit.

The project also includes three Polybed pressure swing adsorption (PSA) units to supply high-quality hydrogen for the Uniflex process. The PSA units are designed to generate 320,000 cu m/hr of hydrogen.

"This project will enable Dayuewan to substantially modernize its operations by transformation and upgrad-ing," noted Henry Liu, vice president and general manager of Honeywell Performance Materials and Technologies Asia Pacific.

"This combination of technologies are designed as an integrated operating block to maximize product yields, but with lower capital and operating expense than standard configurations."

As MRC reported earier, Fujian Meide Petrochemical Co. Ltd, a wholly-owned subsidiary of China Packing Group Company Ltd, will utilize the Honeywell Process Reliability Advisor for prescriptive monitoring of on-purpose propylene at its new UOP C3 Oleflex unit in Fuzhou, Fujian Province, China. The plant is designed to convert propane into 660,000 t/y of propylene. Status of the facility could not be confirmed.

Propylene is a feedstock for the production of polyprolypele (PP).

According to MRC's ScanPlast report, 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.

Honeywell is a global diversified technology and manufacturing company with a wide range of aerospace products and services, control, sensing and security technologies for buildings, homes and industry, turbochargers, automotive products, specialty chemicals, electronic and advanced materials, process technology for refining and petrochemicals and energy efficient products and solutions for homes, business and transportation.
MRC

MOSCOW (MRC) -- Japan's largest refiner JXTG Nippon Oil & Energy will be renamed ENEOS Corp. in June next year as part of a wider re-organization of the parent company JXTG Holdings as it prepares to adopt to a changing business environment centered on transition towards low carbon intensity and more holistic energy offerings, reported S&P Global.

The move, which will also involve renaming the parent company to ENEOS Holdings upon approval at its annual shareholders meeting in June 2020, comes as it strives to be a more comprehensive energy and materials company under its 2040 vision announced in May, JXTG Holdings said Thursday.

JXTG's renaming will be the latest in a growing trend in the global oil industry facing the need to broaden energy portfolios as well as to make greater efforts toward a low carbon society.

The new corporate name of ENEOS was coined from a combination of the words energy and neos, which means new in Greek, joins a growing bandwagon of traditional oil companies looking to reinvent themselves as drivers of low-carbon sustainable energy.

This development will also be the first for the Japanese company, which currently has a combined 1.93 million refining capacity, to drop Nippon Oil from the English trade name of the downstream arm since the establishment of Nippon Oil in 1888.

The company, however, will keep the trade name of JX Nippon Oil & Gas Exploration Corp. and JX Nippon Mining & Metals Corp for its respective E&P and metals businesses.

ENEOS, meanwhile, has been used as a brand name for the group's energy businesses since its introduction as a brand name for service stations in 2001, and it is now used as a brand name at about 13,000 service stations in Japan.

Announcing its 2040 vision in May, JXTG Holdings said it aims to be a leading energy and materials company in Asia and intends to seek growth in areas including petrochemicals, power generation and hydrogen businesses while keeping its refining, E&P and metals businesses as its foundation.

Among its foundation businesses, the company intends to further optimize refining operations to ensure stable oil products supply as well as looking to enhance its gas businesses to meet growing demand in Asia toward 2040.

Most recently, JXTG Nippon Oil & Energy and Mitsubishi Chemical jointly announced on November 7 that they were forming a joint venture in the Kashima complex on the east coast to consider ways to optimize operations for refining and petrochemical production.

Under the 50:50 joint venture, JXTG and Mitsubishi Chemical will look at how the companies can boost competitiveness further by effectively using feedstocks for gasoline and petrochemical production in the Kashima complex, the companies said.

JXTG currently supplies naphtha via pipeline from the 197,100 b/d Kashima refinery to Mitsubishi Chemical's steam cracker in the Kashima complex. JXTG's Kashima refinery also has a 35,100 b/d condensate splitter.

As MRC informed earlier, JXTG Nippon Oil & Energy has brought on-stream its fluid catalytic cracker (FCC) unit on 19 November 2019. The unit was shut for maintenance, on September 10, 2019. Located at Mizushima, Japan, the FCC unit has a propylene capacity of 93,000 mt/year.

Propylene is a feedstock for the production of polyprolypele (PP).

According to MRC's ScanPlast report, 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.

JXTG Holdings was formed as a result of a merger between JX Holdings and TonenGeneral in April 2017. This followed the establishment of JX Holdings as a result of the merger between Nippon Oil and Nippon Mining Holdings in April 2010.