French refinery strike loses traction as gas stations keep fuel flowing

MOSCOW (MRC) -- A strike at French oil refineries hit shipments of oil products but did not disrupt traffic on the roads as oil companies and the government kept fuel flowing to gas stations, reported Reuters.

At the end of the second day of a four-day strike by workers at oil refineries over government pension reforms, less than 2% of France's 11,000 petrol stations had run out of fuel, petroleum lobby UFIP said.

The strike action is part of national protests against President Emmanuel Macron's pension reform plans, which has seen a month-long strike on the national rail and Paris metro systems and comes ahead of a fourth day of major demonstrations on Thursday.

Oil industry specialists said police action to unblock picketing at fuel depots and action taken by oil companies to manage oil reservoirs has prevented a repeat of 2010, when a refinery strike against then president Nicolas Sarkozy's pension reform plans lead to widespread fuel shortages nationwide.

An official at UFIP said that following the 2010 and earlier strikes at refineries, France's logistics and regulatory chain had been made more robust, making it harder for unions to twist the government's arm by squeezing fuel supply.

"The government has learned that as soon as an oil depot is blockaded, it has to send police to intervene," oil industry expert Jean-Louis Schilansky said.

Market leader Total said less than 5% of staff at its four refineries were on strike and there was no risk of fuel shortages. ExxonMobil also said disturbances were limited at its plants.

Crucially, truckers did not take part in the strike, as the government has already confirmed they can keep their rights to early retirement.

"Without the truckers, it is hard to bring France to a halt," said Jacques Percebois, a professor at Montpellier University.

Oil companies said that although trucks and pipelines were blocked by striking workers, refineries continued to operate, storing their output in onsite tanks.

Industry specialists say that if the strike were to continue into next week, some refineries may have to shut down as their capacity to store output is limited.

Union leaders said it was to soon to comment on a possible extension of the strike.

The government also has strategic stocks worth three months of consumption and can rely on increasing imports, as France already imports half of the diesel it needs.

As MRC informed before, French oil major Total said that strikes against the government’s pension reform were having no impact on its fuel supply and distribution ahead of a four-day nationwide strike in French oil refineries.

We also remind that in November 2019, Total disclosed that it is evaluating construction of a new gas cracker at its Deasan, South Korea, joint venture (JV) with Hanwha Chemical.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,904,410 tonnes in the first eleven months of 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments increased from both domestic producers and foreign suppliers. The PP consumption in the Russian market was 1,161,830 tonnes in January-November 2019, up by 7% year on year. Deliveries of all grades of propylene polymers increased, with the homopolymer PP segment accounting for the largest increase.
MRC

MOSCOW (MRC) -- Showa Denko K.K. (SDK) has decided to establish its subsidiary’s second factory in Shanghai to produce high-purity gases for electronics, said the producer.

Shanghai Showa Electronics Materials Co., Ltd. (SSE), which is SDK’s wholly owned subsidiary producing high-purity gases for electronics, acquired a right to use a site for its second factory adjacent to the First Factory for 50 years, and will establish facilities to produce high-purity nitrous oxide (N2O) and high-purity octafluorocyclobutane (C4F8) gases and a dangerous goods warehouse to stock high-pressure gases. The second factory will start its operations in the second half of 2021.

High-purity N2O is a specialty gas used to form oxidized films on surfaces of integrated circuits which will compose semiconductor chips or display panels. High-purity C4F8 is a specialty gas used for etching of those oxidized films and other micromachining processes. Due to progress in information communication technologies including 5G mobile communication technology and Chinese government’s policy to nurture high-technology industry, the market in China for semiconductor chips and display panels (e.g., organic electroluminescent display panels for TVs, etc.) is expected to expand.

The Showa Denko Group is now producing high-purity N2O at Kawasaki Plant and a site of a group company in the Republic of Korea, and high-purity C4F8 at Kawasaki Plant and SSE’s First Factory in Shanghai. In order to strengthen its adaptability to changes in needs of the market, including the need for stable supply of high-purity gases, the Group now aims to promote “local consumption of locally produced high-purity gases” further. Moreover, in the present situation where the Chinese government is strengthening regulations on chemicals, establishment and expansion of the Showa Denko Group’s dangerous goods warehouse in Shanghai to stock high-pressure gases will enable the Group to strengthen its supply chain and competitiveness. By combining its production and quality-control technologies and getting best supply system ready for customers, the Showa Denko Group will further strengthen its high-purity gas business.

As per MRC, Showa Denko K.K. in March 2018, it stopped production at a cracking unit in Oita (Oita, Japan) for preventive maintenance. Maintenance at this enterprise with a capacity of 691 thousand tons of ethylene per year continued until April 19, 2018.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,904,410 tonnes in the first eleven months of 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments increased from both domestic producers and foreign suppliers. The PP consumption in the Russian market was 1,161,830 tonnes in January-November 2019, up by 7% year on year. Deliveries of all grades of propylene polymers increased, with the homopolymer PP segment accounting for the largest increase.

Showa Denko K.K. Mainly engaged in the petrochemical business. The company's petrochemical division produces and markets industrial gases, olefins, organic chemicals, and others.
MRC

MOSCOW (MRC) -- TechnipFMC has won a contract from Greece’s Motor Oil Hellas (MOH) to provide engineering, procurement and construction management (EPCm) services for a new naphtha production complex at MOH’s Corinth refinery near Athens, said the company.

As part of the contract, TechnipFMC will deliver engineering, procurement, and construction management (EPCM) services for the proposed 22,000-b/d naphtha complex, which will include a naphtha hydrotreating unit, a platforming unit, and an isomerization unit, the service provider said.

The project also involves upgrading existing but unidentified utilities and offsite units to meet the requirements of the new complex, according to TechnipFMC.

Once completed, the complex will enable MOH to increase its production of Euro 5-quality gasoline as part of the operator’s strategy to expand production of clean fuels.

Valued at between USD75-250 million, the EPCM contract follows MOH’s previous award to TechnipFMC for execution of front-end engineering design on the naphtha complex, which has been already been completed, the service provider said.

On May 29, privately held MOH’s board of directors approved construction of the naphtha treatment complex at total budgeted expenditure of EUR310 million.

The new complex, which will contribute to the refinery’s increased production of cleaner fuels as well as kerosine and hydrogen, is scheduled to be completed by yearend 2021, MOH said.

As MRC informed informed earlier, TechnipFMC been awarded a large reimbursable contract by ExxonMobil for detailed engineering, procurement, and construction for the recently announced crude expansion project in Beaumont, Texas, USA. The awarded scope covers the addition of four new units – atmospheric pipe still, kerosene hydrotreater, diesel hydrotreater and benzene recovery at ExxonMobil’s Refinery.

In December 2019, ExxonMobil halted PE production at its site in Notre Dame de Gravenchon, France due to commercial reasons, without providing further details.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,904,410 tonnes in the first eleven months of 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments increased from both domestic producers and foreign suppliers. The PP consumption in the Russian market was 1,161,830 tonnes in January-November 2019, up by 7% year on year. Deliveries of all grades of propylene polymers increased, with the homopolymer PP segment accounting for the largest increase.
MRC

MOSCOW (MRC) -- Two Russian oil firms controlled by the family of tycoon Mikhail Gutseriyev plan to increase supplies to Belarus to 750,000 tons this month, three oil industry sources told Reuters, after supplies were hit by an energy spat between Moscow and Minsk.

The supply of oil from Russia to Belarus was abruptly halted on Jan. 1 with companies including Rosneft, Gazprom Neft, Lukoil and Surgutneftegaz suspending deliveries as Moscow and Minsk argued over contract terms.

The Gutseriyev family's oil firms Russneft and Neftisa restored supplies to Belarus late on Jan. 4, the only companies to do so, while others continue trying to reach an agreement on new supply terms with state-run Belneftekhim, which controls Belarus' two refineries.

The three sources, who are familiar with the oil supply schedule, said the Russian Energy Ministry, which oversees the oil export quotas, has granted the companies permission to export 650,000 tons via Transneft's oil pipeline system and 100,000 tons by rail in the January-March period.

The amount is around half of the roughly 1.5 million tons of Russian oil Belarus consumes per month, with the sources saying Russneft and Neftisa were stepping in to maintain minimum levels of oil refining in the country, Russia's ex-Soviet neighbor with which Moscow is seeking deeper political and economic integration.

The sources added that Russneft and Neftisa planned to deliver all 750,000 tons this month, noting that the amount includes the 130,000 tons Russneft had already agreed earlier this month to supply to Belarus.

Belarusian President Alexander Lukashenko, with whom Gutseriyev has traditionally had strong ties, said on Thursday that Moscow and Minsk had failed to reach a deal as Russia had asked for an oil price higher than the global average.

It was not clear at what price and under what conditions Russneft and Neftisa were supplying the oil to Belarus.

Spats between Moscow and Minsk have in the past led to the disruption of supplies to Europe, which gets 10% of its oil from Russia via Belarus' Druzhba pipeline transit link. Transit along the pipeline has continued uninterrupted so far this year.

Russneft and Neftisa would need to redirect oil flows from the domestic market and their exports to other destinations in order to ship additional volumes to Belarus, the sources said.

Russneft and Neftisa are part of a wider Safmar group of companies controlled by the Gutseriyev family, which also includes three mid-sized oil refineries in Russia and a wide range of other assets from retail to real estate.

In a statement to Reuters on Thursday, Safmar said that its oil companies produce a total of 18 million tons of oil a year, enabling it to ensure supplies both to the domestic market and Belarus in the "full amount according to a schedule approved by the Russian Energy Ministry".

The Russian Energy Ministry and Transneft did not reply to Reuters requests for comment.
MRC

MOSCOW (MRC) -- Effective January 1, 2020; 100% of the polyethylene terephthalate (PET) production facilities in Wilton, United Kingdom, formerly known as Lotte Chemical UK Limited, have been acquired by a subsidiary of Alpek, S.A.B. de C.V. (Alpek), said the company.

The new business will operate under the Alpek Polyester family of businesses as the legal entity "Alpek Polyester UK Ltd". The Alpek Polyester family is excited about the addition of the Alpek Polyester UK – Wilton Site as the acquisition marks the first PET production capacity outside of the Americas.

The acquisition aligns with Alpek’s growth strategy, creating substantial value by integrating the assets and expanding the global footprint of the Alpek Polyester business to a worldwide PET capacity of over 2.8 million tons, across 6 countries and 15 facilities with over 4,800 dedicated employees.

Alpek Polyester’s goal is to continue PET production onsite and to meet or exceed the requirements of customers and the market. Our team is focused on executing a seamless transition and integration to capitalize on existing momentum and capture synergies.

Alpek Polyester looks forward to continuing the valued relationships that are currently in place with you through the Wilton Site. We look forward to building upon those relationships.

Effective January 1 2020 Alpek Polyester UK Ltd. will assume all responsibilities for the Wilton Site and will begin the transition to Alpek Polyester processes and strategies. During the transition period:
PET Resin sales contacts for the Wilton Site will remain the same. All sales orders will be executed with Alpek Polyester.
All PO inquiries should continue to be directed to the current procurement contact that you have been utilizing at the Wilton Site.
All Payments for purchased PET Resins should be directed to Alpek Polyester UK Ltd.
All Purchase Orders (POs) for the Wilton Site to suppliers will be issued by Alpek Polyester UK Ltd.

As MRC informed earlier, Alpek signed a deal to fully acquire a British plant from Lotte Chemical UK Limited. The plant, a unit of South Korea’s Lotte Chemical, has the capacity to produce 350,000 tonnes of polyethylene terephthalate (PET) per year and is located at Wilton, Teesside.

As per MRC ScanPlast, imports of PET chips into Russia increased by 13% in eleven months of this year compared to the same time a year ago and reached 130,800 tonnes compared to 116,100 tonnes (excluding supplies from Belarus over the past two months). Russia's PET imports almost doubled to 12,300 tonnes in November against 6,300 tonnes in October; last November, material imports amounted to 8,200 tonnes. The share of Chinese material was 78% (9,600 tonnes) in November versus 92% (5,800 tonnes) a month earlier.
MRC