Italian refiner VLSFO sales top 120,000 tons

MOSCOW (MRC) -- Since Saras launched its very low-sulfur fuel oil (VLSFO) blend in early September its sales have topped 120,000 tons, reported Reuters with reference to an executive at the Italian refiner.

VLSFO is the name given to a range of new fuel blends that refiners have created to comply with International Maritime Organization (IMO) rules which kicked off at the start of the year limiting sulfur content in shipping fuel to 0.5%.

"Saras’ flexible and complex refinery configuration allows cost effective VLSFO production," Massimo Vacca, planning, benchmarking and sustainability manager for Saras told reporters.

"We are very pleased with this new product," he added.

Saras is targeting 550,000 tonnes of VLSFO and 180,000 tonnes of marine gasoil (MGO) in annual sales, according to company figures.

Profit margins for VLSFO have surprised market participants on the upside, and prices have even traded at parity with the usually more expensive MGO at some ports.

Saras is able to produce a 380-cst specification and has so far received "very positive feedback from its clients and no complaints concerning the stability of its VLSFO," Vacca said.

Saras operates the 300,000 barrel per day Sarroch refinery in Sardinia.

As MRC informed before, in early 2017, Rosneft JV Projects S.A. (Luxembourg), an indirect subsidiary of Rosneft Oil Company, announced the agreement to sell to institutional investors 114,120,000 ordinary shares in Saras S.p.A., representing 12% of the total share capital in Saras S.p.A., at a price of EUR 1.53 per share through an accelerated bookbuilding.

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

ExxonMobil reports worst core profit in 3 years

MOSCOW (MRC) -- ExxonMobil has reported its poorest quarterly operating earnings in three years in results dragged down by slim oil refining margins and a rare loss in its chemicals business, said the Financial Times.

The largest US oil group on Friday reported net income of USD5.7bn in the fourth quarter, or 1.33 per share, down from $6bn or USD1.41 per share a year earlier.

The results were buoyed by one-off items worth about USD3.9bn, or USD0.92 per share, largely from gains involving the USD4.5bn sale of Exxon properties in Norway to Var Energi late last year.

Without those items, net profit was about USD1.8bn or USD0.41 per share — below analysts’ expectations of USD0.45.

The USD355m loss in Exxon’s chemicals business was its first in at least two decades. according to data from S&P Global Market Intelligence. Exxon’s oil refining business earned USD898m in the quarter, down by two-thirds from a year before.

“Our operations performed well, while short-term supply length in the downstream and chemicals businesses impacted margins and financial results,” said Darren Woods, chief executive.

The global chemicals business has been difficult, with a “particularly bearish” outlook for polyethylene, a building block for plastics, analysts at Barclays said before the earnings release. Industry profit margins are likely to be strained for some time as supply growth of 5-6 per cent per year outpaces demand growth of 2-3 per cent per year.

Exxon is among the companies adding to capacity as it builds a 1.8m tonne-per-year chemical and polyethylene plant in Texas with Sabic of Saudi Arabia.

China, the world’s largest polyethylene importer, this month announced restrictions on the use of single-use plastics, which will eventually affect its consumption, Wood Mackenzie said.

Exxon has been investing heavily to expand output in the Permian Basin of Texas and New Mexico, home to the most prolific oilfields in the US. Production there increased by 54 per cent on the previous year, a slower annual growth rate than the 72 per cent the company reported in the third quarter.

The company’s overall liquids production increased by 2 per cent on year driven by growth in the Permian, while natural gas volumes decreased 4 per cent. Exxon’s results came a day after Royal Dutch Shell reported an almost 50 per cent drop in fourth-quarter profits caused by lower oil and gas prices and weaker refining and chemicals margins.

Chevron, the second-largest US oil group, was set to report fourth-quarter results later on Friday.

As MRC informed earlier, ExxonMobil resumed PE production at its site in Notre Dame de Gravenchon, France after a temporary shutdown due to commercial reasons. Thus, this plant wa taken off-stream at the end of the 2nd week of December 2019.

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.

ExxonMobil is the largest non-government owned company in the energy industry and produces about 3% of the world's oil and about 2% of the world's energy.
MRC

CPC eyes turnaround at No. 3 Cracker in 2020

MOSCOW (MRC) -- CPC Corporation is in plans to shut its No. 3 cracker for a maintenance turnaround, according to Apic-online.

A Polymerupdate source in Taiwan, informed that, the company has schedule to commence a turnaround at the cracker, in mid-February 2020. The cracker is likely to remain off-stream for around two months.

Located at Kaohsiung, Taiwan, the No. 3 cracker has an ethylene capacity of 720,000 mt/year and propylene capacity of 370,000 mt/year.

As MRC informed previously, CPC Corporation took one of its naphtha crackers off-stream on 8 November 2019 for major maintenance work. The cracker number 4 was expected to remain offline for about 65 days. The No. 4 unit has an annual capacity of 380,000 tons/year of ethylene and 193,000 tons/year of propylene. The shutdown would result in a production loss of 67,671 tons of ethylene and 34,370 tons 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 1,904,410 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.

CPC Corporation, Taiwan, is engaged in the exploration, production, refining, procurement, transportation, storage, and marketing of oil and gas. The company provides fuel oil, including automotive unleaded gasoline and diesel fuel, low-sulfur fuel oil, marine distillate fuels, marine residual fuels, and aviation fuel; petrochemicals, such as ethylene, propylene, butadiene, benzene, para-xylene, and ortho-xylene; liquefied petroleum gas products comprising liquefied petroleum gas, propane, butane, and a propane/butane mixture; lubricants, motor oil, industrial oil, grease, and marilube oil; SNC products, including petroleum ether, naphtha, toluene, xylene, crude octene, methyl alcohol, normal paraffin, viscosity-graded asphalt cement, and sulfur; and natural gas.
MRC

Lake Charles fire impacts earnings for Sasol

MOSCOW (MRC) -- South African petrochemicals group Sasol said on Friday it expects lower first-half headline earnings per share (HEPS) and also cut earnings outlook from its Lake Charles Chemicals Project following a fire mishap at one of its unit this month, said Hydrocarbonprocessing.

HEPS is the main profit measure in South Africa and strips out certain one-off items.

The company said it expects core earnings from the Lake Charles project to come in between USD50 million and USD100 million for the financial year 2020 following an explosion and a fire at the low-density polyethylene unit in Louisiana, United States on January 24.

In August, Sasol had lowered its core earnings outlook for the U.S.-based ethane cracker project to between USD150 million and USD300 million from USD300 million-USD350 million.

Problems with the Lake Charles project, which is costing billions of dollars more than initial estimates, have led to the resignation of both of the company's joint chief executives.

Sasol expects its first-half HEPS to be between 4.79 rand and 7.11 rand, for the six months ended Dec. 31, compared with HEPS of 23.25 rand (USD1.62) last year.

Half-year earnings will also be hit by about 1.7 billion rand in depreciation charges and nearly 2 billion rand in finance charges as the Lake Charles units reach beneficial operation, the South African company said, adding that results were also dented by a weak macroeconomic environment that resulted in lower margins and operating profit.

As MRC wrote before, Sasol announced that its world-scale US ethane cracker with the capacity of 1.5 mln tonnes per year reached beneficial operation on 27 August 2019. Sasol’s new cracker, the heart of its Lake Charles Chemicals Project (LCCP), is the third and most significant of the seven LCCP facilities to come online and will provide feedstock to our six new derivative units at the company's Lake Charles multi-asset site.

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.

Sasol is an international integrated chemicals and energy company that leverages technologies and the expertise of our 31 270 people working in 32 countries. The company develops and commercialises technologies, and builds and operates world-scale facilities to produce a range of high-value product stream, including liquid fuels, petrochemicals and low-carbon electricity.
MRC

Ecopetrol commits to stop routine gas flaring at operations

MOSCOW (MRC) -- Colombia’s state-owned oil company Ecopetrol said it has signed up to a World Bank-led global initiative to stop routine gas flaring at its operations, said Hydrocarbomprocessing.

Flares at oil fields pump hundreds of millions of tonnes of carbon dioxide into the atmosphere each year, according to the World Bank. The multilateral lender’s initiative aims to stop routine flaring by 2030 as part of a push to fight climate change.

Globally, Ecopetrol follows 38 other oil and gas companies and 32 governments in joining the initiative, which was launched by the World Bank in 2015, according to the lender’s website.

Within Latin America, the plan is supported by the governments of Ecuador, Mexico and Peru. Petrobras and Petroamazonas EP, the state-owned oil companies of Brazil and Ecuador, respectively, also support the strategy.

“We are committed to being leaders in the reduction of greenhouse gases in Colombia and increasing the energy we generate with renewable sources,” Ecopetrol Chief Executive Officer Felipe Bayon said.

Signing up to the initiative is part of Ecopetrol’s commitment to cut its emissions by 20% by 2030, a plan it announced in 2019. The company will commit to not burning gas flares at new oil fields and will stop routine flaring in existing fields as soon as possible.

It will also report the annual volume of gas it burns to the Global Gas Flaring Reduction Partnership, which supports efforts to reduce gas flaring.

Ecopetrol on December 25 to resumed production of high-pressure polyethylene (LDPE) in the city of Barrancabermeja (Barrancabermeja, Colombia), previously closed due to a shortage of raw materials - ethylene. This production with a capacity of 23 thousand tons of LDPE per year was closed for repair on November 18.

It was previously reported that Ecopetrol intends to double sales by 2023. Ecopetrol sees opportunities to expand sales of aromatics, LDPE, solvents, base oils and asphalt in Colombia and other countries.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polyprolypele (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