Guyana to sell first three cargoes of Liza crude to Shell on Dated Brent basis

MOSCOW (MRC) -- Guyana's government will sell the first three cargoes of the new Liza crude produced offshore Guyana to a trading arm of Shell on a Dated Brent basis, reported S&P Global with reference to the country's Department of Energy's statement Tuesday.

Guyana did not reveal the price and volume for the cargoes, which represent the country's share of the production. However, it said the direct sale was to Shell Western Supply and Trading and the first lift is expected to take place in February, with the loading of the three cargoes completed by mid-2020.

"The sale has been premised on a Dated Brent price basis which reflects the tradable, spot market value of crude oil," the government said in a statement.

The decision to sell the crude will provide competitive pricing that will limit the Guyanese government's exposure to market uncertainty, according to the statement.

Shell emerged the winner to buy the government's first cargoes and was selected from a group of other international oil companies.

The Guyanese government is planning a second phase for selling its crude by launching an open market search for a marketing agent that will market the country's crude entitlements from the Liza 1 field on a term basis.

It has been an eventful week regarding Guyana's offshore crude oil. An ExxonMobil-led group announced late last week that production of Liza crude had begun ahead of schedule. China's CNOOC and Hess are also partners in the Stabroek consortium.

Exxon and its partners on Monday said that they made another oil discovery called Mako, located offshore Guyana, adding to anticipated Liza production.

Liza Phase 1 is producing from the Destiny floating, production, storage and offloading facility and will peak at 120,000 b/d of oil over the next several months. Liza Phase 2, which will use the FPSO Unity, was sanctioned this year and is expected to produce up to 220,000 b/d when it comes online in mid-2022.

It's a monumental development for the small South American country, which before now has seen no oil and gas production and has no local refineries.

Liza crude is considered medium sweet with a typical gravity of 32.1 API and sulfur content of 0.51%.

As MRC informed before, Shell Singapore restarted its naphtha cracker in Bukom Island in the first week of December, following a two months maintenance shutdown since the beginning of October 2019. Thus, this cracker was taken off-stream for the turnaround on 1 October 2019. The cracker is able to produce 960,000 tons/year of ethylene and 550,000 tons/year of propylene.

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

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

Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.
MRC

MOSCOW (MRC) -- Sumitomo Chemical has invested USD2 million in Nanoscent, a startup company in Israel that develops a high-precision scent recognition IoT platform, said the company.

Through this investment, Sumitomo Chemical will work to deepen its strategic and technological collaboration with Nanoscent and create new healthcare businesses.

Nanoscent is a spin-off company from the Technion – Israel Institute of Technology in Israel. It is developing a scent recognition sensor with a chemiregistor and an IoT platform using the detected data. Nanoscent has already developed prototypes both of a portable device that can detect multiple scents in real time and an information infrastructure that accumulates and analyzes the detected data in the cloud and enables various devices, such as smartphones, to display the results. By applying machine learning to detected scent patterns by AI algorithms, the scent recognition platform could detect complex conditions, such as changes in a person’s physical condition, in addition to simply detecting scent.

Sumitomo Chemical aims to achieve the visualization of people’s physical condition, which is a key to a next-generation healthcare platform, in cooperation with Nanoscent. Sumitomo Chemical is planning to conduct field trials in order to develop a system useful for health management, where fecal scent data can identify changes in physical condition and signs of disease, and propose solutions (food, medicines, lifestyle changes, etc.) suitable to a person’s physical condition on a particular day. In addition, applicable fields of Nanoscent's technology, which can accurately detect scents or mixtures of various volatile chemical compounds, are not limited to healthcare, but are highly varied, including the detection and monitoring of hazardous substances in industrial plants and cities, and the determination and management of scents in cars. Therefore, concluding that it would contribute to the creation of next-generation businesses, Sumitomo Chemical decided to make this investment in Nanoscent.

Under its Corporate Business Plan for FY2019 to FY2021, Sumitomo Chemical has identified accelerated development of next-generation businesses as one of its basic policies, and is currently building its own innovation ecosystem to create new businesses in all four of its priority areas, which are healthcare, environmental impact reduction, food, and ICT. Sumitomo Chemical will continue efforts to gain access to unique outside technologies through open innovation-oriented interactions with start-ups, academia and others, and then combine such technological expertise with its proprietary technologies to develop new technologies or create new business domains that will help achieve a sustainable society.

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

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

MOSCOW (MRC) -- According to the American Chemistry Council (ACC; Washington, D.C), the U.S. Chemical Production Regional Index (U.S. CPRI) fell by 0.8% in November after gains the previous three months, said Chemengonline.

During November, chemical output declined across all regions, ACC says. Chemical production was mixed over the three-month period. There were gains in the production three-month moving average (3MMA) output trend of fertilizers, chlor-alkali, coatings, synthetic dyes and pigments, and industrial gases. These gains were offset by declines in the output of synthetic rubber, miscellaneous inorganic chemicals, pesticides, organic chemicals, consumer products, adhesives, other specialty chemicals, and manufactured fibers.

Nearly all manufactured goods are produced using chemistry in some form. Thus, manufacturing activity is an important indicator for chemical production. On a 3MMA basis, manufacturing activity edged lower for a third month in November, off by 0.1 percent. Output expanded in several chemistry-intensive manufacturing industries, including food and beverages, aerospace, computers, semiconductors, iron and steel products, oil and gas extraction, paper, structural panels, printing, and textile mill products.

Compared with November 2018, U.S. chemical production was off by 1.9 percent on a year-over-year basis, the sixth consecutive month of Y/Y decline. Chemical production was lower than a year ago in all regions, with the largest year-ago declines in the Gulf Coast and Midwest regions, ACC says.

As MRC informed earlier, Russia's output of chemical products dropped by 3.2% in November 2019 month on month.
However, production of basic chemicals increased by 3.6% in the first eleven months of 2019, according to Rosstat's data. According to the Federal State Statistics Service of the Russian Federation, the largest increase in production volumes on an annualized basis accounted for mineral fertilizers and polymers in primary form. Last month, 255,000 tonnes of ethylene were produced versus 210,000 tonnes in October; by November, Russian producers had completed all their scheduled works. Thus, 2,721,000 tonnes of this olefin were produced in January-November 2019, up by 0.3% year on year.
MRC

MOSCOW (MRC) -- US crude oil inventories likely extended their slide last week amid an uptick in refinery demand and strong export activity, S&P Global analysis showed Monday.

Commercial crude stocks are expected to have fallen 3 million barrels to around 443.8 million barrels during the week ended December 20, according to analysts surveyed by Platts Monday. The draw would pare the nationwide supply overhang for a second week, leaving stocks around 2.4% above the five-year average of US Energy Information Administration data.

The EIA inventory report is delayed until Friday due to the midweek Christmas holiday.

Crude inventories typically decline this time of year as refiners come back from fall turnaround work. But refiner activity has been historically weak lately, and instead recent crude draws have been predicated in large part on exports.

Refiners are expected to have raised utilization rates around 0.5 percentage point to 91.1% of total capacity last week, analysts said. The expected uptick would still leave run rates 2.4% below the EIA five-year average and more than 4% under year-ago levels. Approximately 1.34 million b/d of crude distillation capacity was slated to be offline last week for turnaround work, up from just 862,000 b/d offline during the same period last year, S&P Global Platts Analytics data showed.

Exports are expected to remain steady at around 3.6 million b/d last week, data from cFlow, Platts trade flow software showed. US exports were at an eight-week high 3.63 million b/d during the week prior, EIA data showed.

Export volumes to Europe slipped 4.84 million barrels to 8.47 million barrels last week, snapping three consecutive weeks of higher transatlantic flows, cFlow data showed. This decline was mostly matched by a 3.25 million-barrel uptick in Asia-bound volumes to 8.48 million barrels.

US exports to Singapore jumped to 2.77 million barrels last week, up from zero the week prior, according to cFlow. Exports to Singapore have significantly strengthened in the final weeks of 2019. To date in December they just shy of 4 million barrels to date in December and reached 4.33 million barrels in November, according to cFlow, compared with zero barrels in October and just 721,000 barrels in September.

Attractive refining margins for US light sweet crudes in Singapore is likely to support continued exports to the Asian refinery hub in the coming weeks. Margins for Platts WTI MEH and Eagle Ford crudes in Singapore have averaged at USD2.74/b and USD2.77/b to date in December, according to Platts Analytics data, compared with minus USD2.96/b for North Sea Forties and minus USD3.92/b for Arab Light.

Analysts expect nationwide gasoline stocks to have risen 1.5 million barrels last week to 238.8 million barrels, and distillate inventories to edge about 200,000 barrels higher to 125.3 million barrels. The expected build would leave gasoline stocks about 5.2% above the five-year average, while distillate inventories are expected to hold at around 7.4% under the five-year average.

Product stocks have steadily built as refiners have returned from maintenance, but so far this growth has been tempered by strong demand. Total refined product supplied during the week ended December 13 jumped 3.4 million b/d to 21.8 million b/d, EIA date showed, around 3.3% stronger than the five-year average for this time of year.
MRC

MOSCOW (MRC) -- Sumitomo Chemical has completed construction of two catalyst manufacturing lines in its Chiba Works location (Ichihara, Chiba) to meet the demand of companies licensing its polypropylene (PP) and propylene oxide (PO) manufacturing technology, in order to enhance its licensing business, said the company.

Sumitomo Chemical’s PP production technology has a proven track record of successful operations at various locations in the world, such as the Company’s Chiba Works in Japan and licensee companies overseas, including its affiliates, namely, The Polyolefin Company (Singapore) Pte Ltd and Petro Rabigh in Saudi Arabia, offering high quality products while maintaining stable plant operation over a period of time. As far as PO is concerned, the Company's production technology is based on a PO-only process, in which PO alone is manufactured without any accompanying coproducts by recycling cumene. The cumene method, which Sumitomo Chemical was the first in the world to commercialize, has the distinct advantage of achieving a high PO yield, when combined with the use of the Company's proprietary high-performance epoxidation catalyst, while ensuring superior stability in plant operation. It was licensed to S-OIL Corp. of South Korea and a subsidiary of PTT Global Chemical Public Company Limited of Thailand, in addition to the company’s affiliate Petro Rabigh. Furthermore the company signed a technology licensing agreement with Bharat Petroleum Corporation Limited of India in July 2019.

Sales of catalysts to licensing partners are expected to generate stable revenue that is unlikely to be affected by the market environment, as demand increases as more technology licensing agreements are signed. Sumitomo Chemical is committed to sustaining revenue by not only obtaining one-time technology licensing fees, but also through the sale of catalysts and providing technical support after licensing.

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

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

Sumitomo Chemical intends to work with its global licensing partners and expand the business portfolios in its Petrochemicals & Plastics Sector.
MRC