Petro Rabigh to shut LDPE plant for maintenance in late February

MOSCOW (MRC) -- Saudi Arabia’s Rabigh Refining and Petrochemical (Petro Rabigh) is planning to shut its low density polyethylene (LDPE) plant in Rabigh, Saudi Arabia for maintenance in late February, 2020, reported NCT with reference to sources familiar with the matter.

At present the restart dates of this LDPE plant with the capacity of 160,000 tons/year could not be ascertained.

Petro Rabigh also operates No. 1 and 2 linear low density polyethylene (LLDPE) units at the same location with a combined capacty of 600,000 tons/year.

Besides, the company has here a 300,000 tons/year high density polyethylene (HDPE) unit.

Sources also said they expect no impact on supplies during the shutdown.

According to MRC's ScanPlast report, December estimated LDPE consumption virtually remained in Russia at the level of November - about 54,580 tonnes. Lower imports were offset by a decrease in export sales. Russia's estimated LDPE consumption totalled 593,660 tonnes in 2019, up by 9% year on year. Some producers' LDPE exports decreased, whereas imports grew by 25%.

PetroRabigh, a joint venture between Saudi Aramco and Japan's Sumitomo Chemical, has an annual output capacity of 18 million tonnes of refined products and 2.4 million tonnes of petrochemicals. Thus, the complex currently has a cracker to produce 1.6-million t/y of ethylene, as well as downstream production of polyethylene, polypropylene, propylene oxide, ethylene glycol and butene-1.
MRC

MOSCOW (MRC) -- Reliance Industries Ltd (RIL) is planning to expand Dahej Manufacturing Division (DMD), a petrochemical and downstream manufacturing unit, with an investment of Rs 5,100 crore (USD700 million), according to Kemicalinfo.

"Dahej petrochemical manufacturing facility is proposing to set up the new plants and facilities, which includes manufacturing of Ethylene Dichloride (EDC), CHDM, PET-G, establishing New incinerator in VCM unit, separation of hydrogen as a product in CA plant and CO2 recovery unit in EO-EG unit. These plants will be located within the existing RIL DMD spread over 700 hectares," the company said.

EDC is used a raw material for manufacturing Vinyl Chloride Monomer (VCM), which is used in making polyvinyl chloride (PVC).

The proposed EDC plant will meet the feedstock requirement of an initial plant which will produce 500,000 tons per year of Vinyl Chloride Monomer (VCM)/ polyvinyl chloride (PVC). The Dahej site has an existing 360,000 tons per year of VCM/PVC capacity and has approvals to build a new VCM/PVC plant of 1.2 million tons per year capacity.

According to the company, DMD will produce 200,000 ton per year of PET-G post expansion of the facility. PET-G or Polyethylene Terephthalate (with a glycol modification) is among the most common polymers used currently. It is used to make water bottles, food packets and other common plastic items.

DMD will also produce 50,000 ton per year of Cyclohexanedimethanol (CHDM), a key raw material used for producing PET-G as well as various other polymers. Amidst a global shift towards renewable energy and electric mobility, RIL is implementing a strategy to transform itself from a primary producer of fuels to chemicals.

In November 2019, RIL announced its plan on an oil-to-chemical strategy that involves setting up crude-to-chemical projects adjacent to the existing Jamnagar refinery and petrochemical complex at a cost of USD9.75 billion.

The company also plans to remove production bottlenecks at its flagship Vadodara Manufacturing Division (VMD) at a cost of Rs 2,270 crore (USD319 million).

RIL’s petrochemical production rose to 9.9 million ton during the quarter ended December 2019, as compared to 9.7 million ton produced in the corresponding quarter a year ago.

As MRC reported earlier, RIL undertook an unplanned shutdown at its PVC plant in Hazira in H2 December 2018, owing to technical issues. The unplanned outage was expected to remain in force for around two weeks. Located at Hazira in the western Indian state of Gujarat, the plant has a production capacity of 360,000 mt/year.

According to MRC's ScanPlast report, January prices of Russian emulsions and suspensions for domestic consumers remained at the level of December. Russia's estimated consumption of unmixed PVC was about 972,920 tonnes in January-December 2019, up by 4% year on year. The Russian emulsion and suspension PVC markets showed an increase in supplies. Last month's estimated consumption of SPVC (excluding exports to Belarus) decreased to 64,430 tonnes from 67,430 tonnes in November.

Reliance Industries is one of the world's largest producers of polymers. The company produces polypropylene, polyethylene and polyvinyl chloride and other petrochemical products.
MRC

MOSCOW (MRC) -- Brazil’s state-controlled oil company Petrobras and unions representing the firm’s oil workers reached an agreement to end a partial strike, reported Reuters with reference to a judge at the country’s highest labor court.

As MRC wrote earlier, the chief executive of Brazilian state-run oil firm Petroleo Brasileiro said in December 2019 he wants to sell the company's stake in petrochemical company Braskem within 12 months.

We also remind that Braskem is no longer pursuing a petrochemical project, which would have included an ethane cracker, in West Virginia. And the company is seeking to sell the land that would have housed the cracker. The project, announced in 2013, had been on Braskem's back burner for several years.

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).

Headquartered in Rio de Janeiro, Petrobras is an integrated energy firm. Petrobras' activities include exploration, exploitation and production of oil from reservoir wells, shale and other rocks as well as refining, processing, trade and transport of oil and oil products, natural gas and other fluid hydrocarbons, in addition to other energy-related activities.
MRC

MOSCOW (MRC) -- Abu Dhabi National Oil Co. (ADNOC), the UAE's biggest oil producer, awarded two contracts for USD1.65 billion to a Petrofac-led group to develop the Dalma ultra-sour natural gas project as the emirate seeks gas self-sufficiency, reported S&P Global.

The Dalma Gas Development project, which is set to produce 340 million standard cubic feet/day of gas, will be completed in 2022, ADNOC said in a statement on Tuesday. Dalma is part of the Ghasha mega-project that is expected to produce over 1.5 bscf/d of gas when it comes on stream around the middle of this decade. Two contracts were awarded to UK-based Petrofac and a joint venture between Petrofac and Sapura Energy of Malaysia.

"The Ghasha project has the potential to meet nearly 20 percent of the UAE's gas demand by the second half of this decade," ADNOC said. "In addition, more than 120,000 barrels per day of oil and high-value condensates are expected to be produced when the project is fully on stream."

ADNOC, which is currently producing 10.5 bscf/d, is aiming to help the UAE become self-sufficient in gas production. The UAE currently imports gas from Qatar and the emirate of Dubai buys LNG from international markets. ADNOC produces about 3 million b/d of crude oil.

The Ghasha concession is made up of the Hail, Ghasha, Dalma, Nasr, SARB, Bu Haseer, Shuweihat and Mubarraz offshore sour gas fields in Abu Dhabi. ADNOC holds the majority stake in the concession, with Italy's Eni, Germany's Wintershall, Austria's OMV and Russia's LUKOIL holding the remainder.

As MRC informed earlier, in late July 2019, ADNOC said its Ruwais Refinery West Cracker was offline for maintenance.

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

MOSCOW (MRC) -- Royal Dutch Shell and Total both applied for environmental permits to drill in offshore blocks acquired during Brazil's 16th bid round held last year, reported S&P Global with reference to documents published Wednesday by federal environmental regulator IBAMA.

Shell applied to tap up to six wells in the Campos Basin C-M-659 block that could also include up to four well-formation tests, according to IBAMA. In addition, Shell wants to drill up to three wells in the C-M-713 block that could also include up to two well-formation tests. Shell expects to start the campaign in 2022-2024, IBAMA said.

Total, meanwhile, applied to drill up to five wells in the Campos Basin C-M-541 block, including two exploration wells and three evaluation wells, IBAMA said. The campaign could also include up to four well-formation tests, IBAMA said.

The two companies signed the concession contracts for the blocks on Friday, making the turnaround time less than a week.

The quick turnaround underscored the aggressive path international oil companies have taken since Brazil started holding regular sales of acreage under concession and production-sharing contracts in 2017, including making terms more competitive with rival sales in Mexico and the US Gulf of Mexico. Many winning bid groups from the recent licensing rounds have submitted requests for drilling permits and other administrative tasks nearly immediately after signing contracts, demonstrating the desire to move quickly to explore regions where a single well can pump as much as 50,000 b/d of oil equivalent. Among the changes made, Brazil allowed international oil companies to operate subsalt fields sold under production-sharing contracts and reduced requirements to use locally produced goods and services in exploration and development.

The changes made Brazil one of the world's hottest frontiers, with oil companies agreeing to record-setting signing bonuses and profit-oil guarantees to expand exploration portfolios over the past three years. That streak ended in November, when companies balked at paying sky-high signing bonuses for subsalt production-sharing areas and complicated negotiations to reimburse Petrobras for investments made at oil fields in the transfer-of-rights areas.

Brazil may eventually end the subsalt polygon that requires production-sharing agreements as well as Petrobras' preferential right to hold at least a 30% operating stake in the fields, with several bills working through Congress at the moment.

Shell, which is Brazil's second-largest oil and natural gas producer after state-led oil company Petrobras, holds a 40% operating stake in the C-M-659 block. Chevron retains a 35% minority share, with Qatar Petroleum owning 25%. The companies paid Real 714 million (USD163 million) for the development rights, including a commitment to drill at least one well.

As MRC wrote before, Royal Dutch Shell, which plans billions of dollars in spending on shale drilling projects, boosted output in the top US shale field to 250,000 barrels per day in December, 2019. Shell plans to spend about USD3 billion per year for the next five years on shale projects.

We also remind that Shell Singapore restarted its naphtha cracker in Bukom Island in early December 2019, 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 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).

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.

Total S.A. is a French multinational oil and gas company and one of the six "Supermajor" oil companies in the world with business in Europe, the United States, the Middle East and Asia. The company's petrochemical products cover two main groups: base chemicals and the consumer polymers (polyethylene, polypropylene and polystyrene) that are derived from them.
MRC