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Kazakhstan halts contaminated oil from spreading outside country

January 30/2020

MOSCOW (MRC) -- Kazakhstan has contained the spread of contaminated oil within its borders by reducing exports to China and altering the schedule of supplies to domestic refineries, reported Reuters with reference to energy ministry and pipeline operator KazTransOil.

Kazakhstan suspended its oil exports to China earlier this month after organic chlorides contamination was found in crude supplied by a Kazakh producer less than a year after the "dirty oil" crisis in neighboring Russia.

Unlike the Russian Druzhba pipeline problems in April last year, when 5 million tonnes of oil were contaminated with organic chlorides, the origin this time was Kazakh oilfields and the volumes were much less, at around 150,000 tonnes.

KazTransOil told Reuters that organic chlorides content in oil at major pipelines, including the Russia-bound Atyrau - Samara pipeline, was within allowed levels.

Trading sources said Kazakhstan had also reduced its plans for oil transit via Russia by 100,000 tonnes in February.

On Tuesday, Kazakh Deputy Energy Minister Murat Zhurebekov said oil exports to China had not yet been restored. The authorities have also been working on plans for dirty oil utilization. It could be diluted by cleaner oil, shipped off by rail or sent to inventories, market sources said.

The contaminated oil crisis has also hit supplies to Kazakh domestic refineries. KazTransOil has reviewed shipment plans for the Shymkent and Pavlodar oil refineries, it said without providing any details on volumes.

Trading sources said the Shymkent refinery would slightly reduce its oil throughput to 395,000 tonnes this month from an initially planned 400,000 tonnes.

At the same time, Atyrau refinery will process extra 30,000 tonnes from the planned 486,200 tonnes.

As MRC informed before, South Korea's LG Chem said in January 2016, it had decided to drop a plan to jointly build a USD4.2-billion petrochemical complex in Kazakhstan, citing a prolonged slump in oil prices and a sharp increase in facility investments. In 2011, the chemical company said it would construct the complex near the western Kazakh city of Atyrau as part of a 50-50 joint venture with two Kazakh companies. The plan involved building ethylene and polyethylene plants with annual capacities of 840,000 tonnes and 800,000 tonnes, respectively. The project was announced in 2013.

Ethylene and propylene are feedstocks for producing 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.
Author:Margaret Volkova
Tags:PP, PE, crude and gaz condensate, homopolymer PP, propylene, ethylene, petrochemistry, LG Chem, Kazakhstan, China, Russia, South Korea.
Category:General News
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