S-Oil to supply USD2.66 bil worth of oil products to Saudi Aramco in 2020

MOSCOW (MRC) -- S-Oil Corp, South Korea's third-biggest refiner, will supply Won 3.14 trillion (USD2.66 billion) worth of refined oil products to Saudi Aramco's trading arm this year, reported S&P Global with reference to a company official.

As per the deal with Aramco Trading Singapore, S-Oil will provide a total of 36 to 44 million barrels of oil products over January 1 to December 31, 2020, the official said.

The products include 9 to 10 million barrels of gasoil, 10 to 11 million barrels of jet fuel, 6 to 8 million barrels of gasoline, 11 to 15 million barrels of naphtha and 40,000 barrels of MTBE, the official said.

S-Oil, which is 63.4% owned by Aramco Overseas Co., a subsidiary of Saudi Aramco, imports 90% of its crude oil needs from Saudi Arabia -- mostly Arabian Light and Arabian Medium.

For 2019, the refiner provided Won 2.61 trillion worth of refined oil products, including 10 to 17 million barrels of gasoil, 9 to 12 million barrels of jet fuel, and 4 to 5 million barrels of gasoline, to Saudi Aramco.

In November 2018, S-Oil started commercial production at a residue upgrading complex and olefin downstream complex in the Onsan complex on South Korea's southeast coast.

The new facility is producing 21,000 b/d of gasoline, 405,000 mt/year of polypropylene (PP) and 300,000 mt/year of propylene oxide.

S-Oil runs three CDUs - No. 1 with 90,000 b/d, No. 2 with 240,000 b/d and No. 3 with 250,000 b/d, as well as condensate fractionation unit with a capacity of 89,000 b/d. This makes its total refining capacity 669,000 b/d.

As MRC wrote before, S-Oil, South Korean petrochemical major, has taken off-stream its residue fluid catalytic cracker (RFCC) unit for a turnaround last month. The company is likely to undertake a planned shutdown at the unit by early-July, 2020. The unit is slated to remain off-line for about two weeks. Located at Onsan, South Korea, the RFCC unit has a propylene capacity of 705,000 mt/year.

Propylene is the main feedstock for the production of PP.

According to MRC"s ScanPlast report, PP shipments to the Russian market was 457,930 tonnes in January-May 2020 (calculated by the formula production minus export plus import). Deliveris of exclusively PP random copolymer increased.
MRC

MOSCOW (MRC) -- Renewable aromatics technology firm Anellotech (Pearl River, NY) has announced R Plus Japan Ltd., a new joint venture company, will invest an undisclosed sum in the development of Anellotech’s Plas-TCat technology for recycling used plastics, said Chemweek.

Unlike the existing, multi-step processes that first liquefy plastic waste back into low value “synthetic oil” intermediate products, Anellotech’s Plas-TCat chemical recycling technology uses a one-step thermal-catalytic process to convert single-use plastics directly into basic chemicals such as benzene, toluene, xylenes (BTX), ethylene, and propylene, which can then be used to make new plastics. The technology’s process efficiency has the potential to significantly reduce CO2 emissions and energy con-sumption.

R Plus Japan was established by 12 cross-industry partners within the Japanese plastics supply chain. Member partners include Suntory MONOZUKURI Expert Ltd. (SME, a subsidiary of Suntory Holdings Ltd.), TOYOBO Co. Ltd., Rengo Co. Ltd., Toyo Seikan Group Holdings Ltd., J&T Recycling Corporation, Asahi Group Holdings Ltd., Iwatani Corporation, Dai Nippon Printing Co. Ltd., Toppan Printing Co. Ltd., Fuji Seal International Inc., Hokkaican Co. Ltd., and Yoshino Kogyosho Co. Ltd..

Suntory began collaborating with Anellotech in 2012, to develop the Bio-TCat process for making aromatics, including para-xylene, from non-food biomass (pine wood), required to make 100% plant-based polyethylene terephthalate (PET) bottles. Anellotech is leveraging and adapting its process technology for Plas-TCat, which will convert mixed plastic waste feedstocks, including composite films and other difficult-to-recycle materials, at industrial scale into the same basic chemicals (aromatics and olefins) already used to make most virgin plastics, including PET.

According to the ICIS-MRC Price Report , spot prices of Russian plants in early June approached contract prices and fell to the range of Rb72,000-74,000/tonne, CPT Moscow, including VAT. The plants Polyef, Ecopat and Senezh in early June have free material on the spot. The production of TPA at the plant in Blagoveshchensk finally returned to normal after a long period of unstable operation, according to information from market participants.
MRC

MOSCOW (MRC) -- Petrobras may need more than a year to divest its stake in Braskem, reported Chemweek with reference to Andrea Almeida, Petrobras CFO.

She said during the company’s recent webinar that Petrobras plans to give more time for potential investors to make offers for the company's assets, including for its refineries and stakes at its petrochemical and fuel distribution affiliates. The divestment of Petrobras's stake in Braskem in 2020 would be desirable but "might not be possible" as the COVID-19 pandemic has changed market conditions, she said. The company plans to close part of its refinery sales in 2021. In December, Roberto Castello Branco, CEO of Petrobras, said that he wants to sell the company’s stake in Braskem within a year. Petrobras owns 32.15% of Braskem.

Petrobras last week received binding offers for its Bahia refinery, the first refining unit it plans to sell. REPAR in southern Parana state will be the next to go to the market in the coming weeks, according to Castello Branco.

Separately, some 10,000 Petrobras employees, 22% of the company’s workforce, have accepted voluntary redundancy, the CEO said. In a webinar hosted by Brazilian newspaper Valor Economico, Castello Branco said the deadline for employees to sign up for the program was Tuesday. Some have already left, while most will leave the company later this year or in 2021.

As MRC informed 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.

Besides, 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 595,170 tonnes in the first five month of 2020, up by 10% year on year. Deliveries of all ethylene polymers, except for linear low density polyethylene (LLDPE), rose partially because of an increase in capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market was 457,930 tonnes in January-May 2020 (calculated by the formula production minus export plus import). Deliveris of exclusively PP random copolymer increased.

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.

Braskem S.A. produces petrochemicals and generates electricity. The Company produces ethylene, propylene, benzene, toluene, xylenes, butadiene, butene, isoprene, dicyclopentediene, MTBE, caprolactam, ammonium sulfate, cyclohexene, polyethylene theraphtalat, polyethylene, and polyvinyl chloride (PVC).
MRC

MOSCOW (MRC) -- Liquefied petroleum gas (LPG) intake by coastal steam crackers in northwest Europe plunged to a three-year low in June, although a widening discount of propane to naphtha has drawn a fresh deluge of US imports to the region for July, reported Chemweek.

LPG intake as petrochemical feedstock was an estimated 280,000 metric tons in June, down by 32% from May, and at its lowest level since August 2017 when intake hit 258,000 metric tons. US LPG imports in June were 66,000 metric tons, up from a year-to-date low of 32,000 metric tons in May, but down 75% year on year.

Overall volumes of LPG cargo trade remain depressed, dropping 22% from May’s total to 580,000 metric tons in June, the lowest in OPIS-IHS Markit records, and in contrast to 810,000 metric tons traded in June 2019.

Petrochemical operators fell back to local North Sea-supplied LPG, with 190,000 metric tons sourced from the region, equivalent to 68% of the total intake for the month, compared to 81% in May. The remainder of the feedstock intake in June saw 23% from the US East Coast, up from 8% in May, and none from the US Gulf Coast, the second month running that this has occurred. Supply from the Russian Baltic made up 9% of total feedstock intake.

Meanwhile, LPG exports out of northwest Europe at 180,000 metric tons were over three times more than the same month last year, with cargoes moving to North Africa, the eastern Mediterranean—112,000 metric tons to Turkey alone—and to the US East Coast. The retail and refining sector intake was down by 50,000 metric tons to 115,000 metric tons in June.

A surge of import cargoes are programmed to arrive in northwest Europe in July, with 22,000 metric tons noted during mid-June rapidly escalating to 290,000 metric tons by month-end. “That is a hefty chunk of imports,” one broker remarks. “(I) would expect some second-half (July) arrivals to come into the mix ... still early days,” comments another market source. Sailing times from the US East Coast and US Gulf Coast to northwest Europe require 10 days and 14 days, respectively.

As MRC wrote previously, unplanned outages at Sabic's Wilton, UK, cracker and Borealis' Stenungsund, Sweden, cracker may cause availability shortages in the European propylene coastal market. The Wilton cracker, which has an annual propylene capacity of 415,000 mt was shut on June 17 due to technical issues and was off-line for another two weeks. Borealis' Stenungsund cracker unit has remained offline longer than initially anticipated, after it was shut following a force majeure declaration at the site on May 11. Sources said that the unit has been offline longer than initially expected with no confirmed startup date.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 595,170 tonnes in the first five month of 2020, up by 10% year on year. Deliveries of all ethylene polymers, except for linear low density polyethylene (LLDPE), rose partially because of an increase in capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market was 457,930 tonnes in January-May 2020 (calculated by the formula production minus export plus import). Deliveris of exclusively PP random copolymer increased.
MRC

MOSCOW (MRC) -- US crude oil stockpiles dropped sharply from record highs, as refining activity picked up and imports fell, reported Reuters with reference to the Energy Information Administration's statement.

Crude inventories fell by 7.2 million barrels in the week to June 26 to 533.5 million barrels, compared with analysts’ expectations in a Reuters poll for a 710,000-barrel drop. Inventories are down from an all-time record of 540.7 million barrels set in mid-June, but remain 15% higher than the five-year average for this time of year.

Net US crude imports fell last week by 506,000 barrels per day, the EIA said. Imports had been elevated in recent weeks due to a flood of shipments arriving from Saudi Arabia that were booked as the kingdom boosted activity in April. Saudi imports came to 826,000 bpd in the most recent week, their lowest in six weeks.

“As OPEC+ continues to cut, the probability of reduced imports into the United States will remain,” said Tony Headrick, energy markets analyst at CHS Hedging.

Refinery crude runs, meanwhile, rose by 193,000 bpd and refinery utilization rates rose by 0.9 percentage point to 75.5% of overall capacity, the data showed.

Demand slipped in the most recent week, and the four-week average of product supplied still showed that figure off by 16% from the year-ago period.

Gasoline supplied was down by 15% from a year earlier, and traders worried that surging coronavirus cases in the United States would cut off the steady rebound in demand from April and May’s slump.

Crude futures were higher, but retraced some gains from prior to the data release. US crude gained 23 cents to USD39.51 a barrel by 11:17 a.m. ET (1517 GMT) while Brent rose 43 cents to USD41.70 a barrel.

“The main reason oil is pulling back is disappointing gasoline demand,” said Phil Flynn, senior analyst at Price Futures in Chicago.

Distillate stockpiles, which include diesel and heating oil, fell by 593,000 barrels in the week to 174.1 million barrels.

US gasoline stocks rose by 1.2 million barrels, the EIA said, compared with expectations for a 1.6 million-barrel drop.

As MRC informed before, global oil consumption cut by up to a third in Q1 2020. What happens next in the oil market depends on how quickly and completely the global economy emerges from lockdown, and whether the recessionary hit lingers through the rest of this year and into 2021.

Earlier this year, BP said the deadly coronavirus outbreak could cut global oil demand growth by 40 per cent in 2020, putting pressure on Opec producers and Russia to curb supplies to keep prices in check.

We remind that, in September 2019, six world's major petrochemical companies in Flanders, Belgium, North Rhine-Westphalia, Germany, and the Netherlands (Trilateral Region) announced the creation of a consortium to jointly investigate how naphtha or gas steam crackers could be operated using renewable electricity instead of fossil fuels. The Cracker of the Future consortium, which includes BASF, Borealis, BP, LyondellBasell, SABIC and Total, aims to produce base chemicals while also significantly reducing carbon emissions. The companies agreed to invest in R&D and knowledge sharing as they assess the possibility of transitioning their base chemical production to renewable electricity.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 595,170 tonnes in the first five month of 2020, up by 10% year on year. Deliveries of all ethylene polymers, except for linear low density polyethylene (LLDPE), rose partially because of an increase in capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market was 457,930 tonnes in January-May 2020 (calculated by the formula production minus export plus import). Deliveris of exclusively PP random copolymer increased.
MRC