US renewable fuel credits double since court decision on refinery waivers

MOSCOW (MRC) -- US renewable fuel prices have doubled since a US appeals court in late January ruled that the Trump administration must reconsider three waivers it previously handed out to oil refineries that exempted them from biofuel blending laws, reported Reuters.

Renewable fuel (D6) credits RIN-D6-US for 2019 are trading at around 19 cents each, up from nine cents before the court’s Jan. 24 court decision, traders said. Refiners including Phillips 66 and Valero Energy Corp have actively bought in the market, two traders said.

Prices have steadily risen because the court decision raises the possibility of fewer small-refinery waivers going forward, creating higher demand for the credits, traders said.

Under the US Renewable Fuel Standard, the nation’s oil refineries are required to blend billions of gallons of biofuels such as ethanol into the nation’s fuel pool, or buy credits known as RINs from those that do. But the EPA can waive refiners’ obligations if they prove compliance would cause them financial distress.

The Environmental Protection Agency under President Donald Trump has roughly quadrupled the number of waivers handed out to small refiners, angering the biofuel industry, which claims the exemptions hurt demand for corn-based ethanol. The oil industry rebuts that and says the obligations are too pricey.

According to the court’s decision, the EPA overstepped its authority to grant waivers in the past for HollyFrontier’s (HFC.N) Woods Cross and Cheyenne refiners and CVR Energy’s Wynnewood refinery because the refineries had not received exemptions in the previous year.

Market participants are awaiting clarity on how the EPA will address the court’s ruling. The court vacated the EPA orders granting the exemptions to the three refineries and sent the issue back to the EPA for further action.

Biomass-based (D4) credits RIN-D4-US for 2019 have also risen since the ruling, to 55 cents each from 45 cents each, traders said.

As MRC wrote before, US-based Phillips 66 remains open to developing another ethane cracker for its Chevron Phillips Chemical (CP Chem) joint venture, the refiner's CEO said in March 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 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) -- Russia's Gazprombank plans to implement a number of projects in Azerbaijan, which it considers one of the key countries for cooperation, the bank's Vice President Denis Kamyshev has told Russian media, said Menafn.

Kaymyshev said that Gozprombank has business interests with other CIS countries. He noted that Gazprombank has outlined positive dynamics in the bank's relations with Azerbaijan's business, as well as with various local authorities.

Kamyshev added that as a significant share in both Russia's and Azerbaijan's economy is occupied by the petrochemical industry. He added that the infrastructure is an essential part of the Azerbaijani economy.

'Part of it required a radical modernization, and it was important not to miss the moment. The Azerbaijani leadership understood this. We knew that SOCAR is a very demanding partner with whom it is necessary to be as frank and involved in the process as possible, he said.

Kamyshev noted that Gazprombank is engaged in a large project in Azerbaijan to build factories for the production of polypropylene and high density polyethylene. The production site is located in the Sumgait Chemical Industrial Park, 30 km from Baku.

'The project is called SOCAR Polymer. The total cost is about USD800 million. The first plant was commissioned in July 2019. This is a major breakthrough for the country's economy, and a very interesting experience for us, Kamyshev emphasized.

He said that the bank has now launched the second large project in Azerbaijan - the construction of the SOCAR GPC gas processing and petrochemical complex, where Gazprombank acts as a financial consultant. He noted that the project's budget is about USD4 billion.

Kamyshev stressed that the bank intends to actively cooperate with local financial organizations during the implementation of projects in Azerbaijan.

'We have signed a cooperation agreement with two major Azerbaijani banks - PASHA Bank and the International Bank of Azerbaijan. We agreed on joint financing of investment projects in Azerbaijan in such priority areas as the petrochemical and oil and gas refining industries, agriculture, transport and logistics, communications and telecommunications, including with the use of factoring and leasing tools, he said.

In addition, the bank intends to offer a number of innovative hallmark products for sale in Azerbaijan.

As MRC informed earlier, SOCAR Polymer plans to reach the design load for low-pressure polyethylene (HDPE) no earlier than 2023. In 2019, SOCAR Polymer is expected to produce 48.2 thousand tons of low-pressure polyethylene and 110 thousand tons of polypropylene. In 2020, these indicators will amount to 97.4 and 140 thousand tons, respectively. In 2023, the company is expected to be able to reach its design targets and produce 120 thousand tons of polyethylene and 170 thousand tons of polypropylene. Thus, the production of HDPE relative to 2019 will grow by 2.5 times, polypropylene - by 54%.

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) -- An OPEC, non-OPEC technical panel has recommended extending a current oil supply cut pact until the end of 2020 and more output reductions due to the impact of the coronavirus on oil demand, reported Reuters with reference to Algeria’s oil minister's statement.

Mohamed Arkab, who currently holds the presidency of the Organization of the Petroleum Exporting Countries (OPEC), also said that the OPEC+ Joint Technical Committee, known as the JTC, has recommended that "an additional reduction in production be made until the end of the second quarter of 2020".

The JTC which advises OPEC and its allies, a group known as OPEC+, concluded its meeting on Thursday.

"The coronavirus epidemic has a negative impact on economic activities, especially on the transport, tourism and industry, in China particularly, and also increasingly in the Asian region and gradually in the world," Arkab said.

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

We also 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 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) - Ecopet, the largest producer of polyethylene terephthalate (PET) in Russia and Eastern Europe, began to restart polyethylene terephthalate (PET) production after scheduled maintenances last weekend, according to ICIS-MRC Price Report.

The producer shut its facilities at a scheduled maintenance works on 20 January. The plant still does not ship PET chips for export, the current level of export prices was €840/tonne FCA Kaliningrad, excluding VAT.

Last October, the chemical laboratory of Ecopet JSC passed the accreditation procedure of a new technology for the production of its products. The approved accreditation area of the Ecopet chemical laboratory includes studies of high viscosity polyethylene terephthalate of the Ekopet trademark, terephthalic acid, isophthalic acid, ethylene glycol, diethylene glycol, sewage, natural water.

It was previously reported that in May 2017, Alco-Nafta CJSC was reorganized into a joint-stock company, and from June 26, 2017 it was renamed Ecopet AO.

The company is based on the territory of the free economic zone of the Kaliningrad region. The plant's total PET production capacities are 220,000 tonnes per year. PET chips are produced under the EcoPet trademark and is used for the production of food packaging and PET bottles.
MRC

MOSCOW (MRC) - Tomskneftekhim (TNKhZ), a subsidiary of SIBUR and one of the largest Russian producers of polymers - polypropylene (PP) and high-pressure polyethylene (LDPE), has introduced an advanced process control system APC (Advanced Process Control) at key installations of polypropylene and polyethylene production, the press service of the Tomsk site of SIBUR reported.

This is a hardware-software complex for process control, based on modeling methods and predictive control. The system is superstructured over the already existing automated process control system (APCS) and allows, based on given mathematical models, to maintain a stable technological mode.

The introduction of the control system for polymer production at Tomskneftekhim leads to a decrease in energy consumption and raw material consumption, an increase in environmental performance of plants, an increase in plant productivity, and stabilization of product quality.

The control system is associated with minimizing the information load on operators controlling the process.
In 2020, a new system was commissioned at Tomskneftekhim to control processes such as polymerization of propylene, regeneration of the solvent in the production of polypropylene, compression and polymerization of ethylene, and granulation of polyethylene.

"Implementing APC is a successful global practice for managing complex processes. Unlike other systems that regulate each parameter separately without controlling their influence on each other, the control system defines a working algorithm, calculating and considering the dependence of the parameters in advance. An improved system allows us to optimize the process and significantly improve the technical and economic performance indicators of production, ”explained Konstantin Koryakin, deputy chief production engineer at Tomskneftekhim.

It is predicted that the economic effect of the introduction of process control systems at the polymer production of Tomskneftekhim during the year will be 69 million rubles. due to the additional release of polyethylene and polypropylene and reduction of energy resources.

The SUUTP, which was introduced in 2019 at the gas separation unit for the production of monomers of Tomskneftekhim, already allows increasing the efficiency of the enterprise by increasing the yield of target products and reducing the volume of recycle streams leaving the gas separation columns. The annual effect will be 21 million rubles.

The project for the implementation of advanced process control systems is being deployed at most SIBUR enterprises.

Tomskneftekhim is the first enterprise where the implementation of the control system is completed at the main production facilities.

According to the ICIS-MRC Price Report, in September 2019 Tomskneftekhim stopped production for scheduled preventive repairs.

Tomskneftekhim, LLC, was established in July 2003 on the basis of Tomsk enterprises - CJSC "Metanol", OJSC "Plant Benzol", OJSC "Tomsk Petrochemical Plant", OJSC "Tomsk Petrochemical Enterprise". Tomskneftekhim is a subsidiary of SIBUR and one of the largest Russian producers of polymers - PP and LDPE. The capacity for Tomskneftekhim's production of LDPE is 240,000 tonnes/year and production of PP - 140,000 tonnes/year.
MRC