OPEC+ panel calls for more oil cuts on coronavirus impact

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

Ecopet restarted of PET production last weekend after a planned shutdown

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

Tomskneftekhim has introduced automation of PP and PE production

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

Eni oil production in Libya halved to around 160,000 bpd

MOSCOW (MRC) -- Eni’s oil production in Libya has halved to around 160,000 barrels per day, according to Hydrocarbonprocessing with reference to the Italian major’s chief executive's statement.

"The situation in Libya is very difficult since for more than three weeks there’s been a million barrels stuck," Claudio Descalzi said on the sidelines of a conference.

Descalzi said output was low, around 156,000-160,000 barrels per day compared to a previous 300,000 barrels.

"Our concern is for the people. We have more than 5,000 people and we need to understand if we can pay their salaries," Descalzi said.

Libya’s oil production had dropped sharply since groups loyal to eastern based commander Khalifa Haftar began a blockade on Jan. 18, closing ports and fields in the east and south.

Eni is the biggest foreign oil producer in Libya.

As MRC reported earllier, in H1 September 2019, Italy’s Versalis (part of Eni) took its cracker in Dunkirk, France offline due to a fire which broke out at the company’s petrochemical plant. Local media sources also reported that the fire was brought under control with no reported injuries and the company is currently assessing the required repairs.The cracker has a production capacity of 380,000 tons/year of ethylene and 95,000 tons/year 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 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).

Eni is an Italian multinational oil and gas company headquartered in Rome. It has operations in in 79 countries, and is currently Italy's largest industrial company with a market capitalization of 68 billion euros (USD 90 billion), as of August 14, 2013. The Italian government owns a 30.3% golden share in the company, 3.93% held through the state Treasury and 26.37% held through the Cassa depositi e prestiti. Another 39.40% of the shares are held by BNP Paribas.
MRC

Mitsubishi Chemical to announce MMA project on US Gulf Coast

MOSCOW (MRC) -- Mitsubishi Chemical plans to announce details in the first quarter of 2020 of a methyl methacrylate (MMA) project on the US Gulf Coast, reported Chemweek with reference to Christine Frederic, manager/direct procurement at Lucite International, a Mitsubishi Chemical group company.

Frederic said the MMA plant would have a capacity of 250,000–350,000 metric tons/year and be located between Houston, Texas, and Geismar, Louisiana. Start-up would most likely be in 2024, Frederic said. She disclosed no other details of the project, including the technology it will use.

Demand for MMA currently totals about 3.8 million metric tons/year and there is a worldwide surplus of MMA capacity of 500,000 metric tons/year, which is expected to shrink to 250,000 metric tons in 2023, according to IHS Markit. North America has a net deficit in MMA, which will increase through 2023. Northeast Asia and the Middle East have large surpluses of MMA, which are shipped to other regions, IHS Markit says.

The US is set to become a net exporter of methanol, a key raw material for MMA, in 2020, according to IHS Markit. Lucite developed the Alpha MMA technology, which consumes large volumes of methanol, as well as ethylene and carbon monoxide. A 350,000-metric tons/year Alpha plant consumes 273,000 metric tons/year of methanol, Frederic said.

Mitsubishi has been considering a new MMA plant on the US Gulf Coast for some time. The company signed a memorandum of understanding with Mitsui & Co. in 2014 for a joint venture to build a 250,000-metric tons/year MMA unit, under a deal that included a possible feedstock/product swap with Dow Chemical.

As MRC reported earlier, Dow plans to install a new furnace in its steam cracker at Fort Saskatchewan, Alberta, Canada, increasing its ethylene capacity, currently 1.42 million metric tons/year (MMt/y), by 130,000 metric tons/year.

The principal application, consuming approximately 75% of the MMA, is the manufacture of polymethyl methacrylate acrylic plastics (PMMA). Methyl methacrylate is also used for the production of the co-polymer methyl methacrylate-butadiene-styrene (MBS), used as a modifier for polyvinyl chloride (PVC).

According to MRC's DataScope report, exports of suspension polyvinyl chloride (SPVC) from Russia totalled 193,700 tonnes in 2019, up by 11% year on year. Imports increased more significantly - by 217% year on year - to 50,900 tonnes.

Mitsubishi Chemical with headquarters in Tokyo, Japan, is a diversified chemical company involved in petrochemicals, polymers, agrochemicals, speciality chemicals and pharmaceuticals. The company's main focus is on three business pillars: petrochemicals, performance and functional products, and health care.
MRC