PetroChina makes first VLSFO exports after tax waiver

MOSCOW (MRC) - PetroChina exported first batch of very low sulphur fuel oil (VLSFO) after China waived consumption taxes and granted rebates on value-added taxes on the clean marine fuels, as per Reuters.

The 5,300 tonnes of VLSFO was produced by PetroChina's Liaohe refinery and was put into a bonded storage, managed by China Marine Bunker Co, via Dalian customs.

The tax waiver helps PetroChina to save around 2 million yuan (USD286,426.26).

As MRC informed earlier, PetroChina, China’s second state refiner, is reducing refinery crude throughput by about 320,000 barrels per day this month versus its original plan as a spreading coronavirus hits fuel demand. PetroChina started the production cuts at the beginning of the month, but deepened the cuts from Monday, said the official with direct knowledge of the matter. The February cut is equivalent to about 10% of the refiner’s average production rate at around 3.32 million bpd.

As MRC informed earlier, polypropylene (PP) futures in China fell 5.99% on Monday due to concerns about a high level of material stocks in the market amid weak demand and limited supplies. So, PP futures for May 2020, most actively traded on the Dalian Commodity Exchange (DCE), on February 3 were at the level of CNY6 903 (USD983) per ton. Since the price reached the bottom, the auction closed that day. The Chinese market was closed from January 24 to February 2 due to the extension of the celebration of the Lunar New Year by the Chinese government.

According to MRC's ScanPlast report, 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) -- Karpatneftekhim (Kalush, Ivano-Frankivsk region), Ukraine's largest petrochemical plant, intends to resume its high density polyethylene (HDPE) production in the third decade of March after a forced outage, according to ICIS-MRC Price report.

The plant's representative and customers said the Ukrainian producer plans to launch its HDPE production on 20 March. The shutdown of polyethylene (PE) production took place in early January and was caused by high prices of material, which did not match the world prices of polymer.

The situation in the feedstocks markets has changed dramatically for the past several week, thus, oil prices fell significantly, which suggests a proportional reduction in net cost of PE production.

As reported earlier, Karpatneftekhim's overall HDPE output exceeded 93,000 tonnes in 2019, up by 4% year on year.

Karpatneftekhim is one of the largest enterprises of Ukraine's petrochemical complex. Currently, the plant can produce annually 300,000 tonnes of PVC, 200,000 tonnes of caustic soda, about 180,000 tonnes of chlorine, as well as 250,000 tonnes of ethylene and 100,000 tonnes of polyethylene.
MRC

MOSCOW (MRC) -- Hyosung Vietnam started trial operation at its newly constructed polypropylene (PP) plant in Ba Ria Vung Tau province on 12 February 2020, reported CommoPlast with reference to market sources.

This is the No. 1 PP unit that has an annual capacity of 300,000 tons/year.

The company might be able to commence commercial production on 18 February 2020 would the trial run produces on-spec cargoes, sources added.

As part of the Phase – I project, the company also builds an underground a liquefied petroleum gas (LPG) storage.

In the meantime, the Phase – II project is still under construction, which houses a propane dehydrogenation (PDH) plant and No. 2 PP unit that could produce another 300,000 tons/year.

As a result, the No. 1 PP plant is currently operating using propylene (C3) cargoes from external sources.

As MRC informed earlier, Hyosung Corp. plans to invest USD1.2-billion in a two-phase project, which involves construction of PP plants and LPG warehouse at the Cai Mep Industrial Zone in Vietnam.

According to MRC's ScanPlast report, 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).

Hyosung Corporation is a Korean industrial conglomerate, founded in 1957. It operates in various fields, including the chemical industry, industrial machinery, IT, trade, and construction.
MRC

MOSCOW (MRC) -- ExxonMobil Corp does not have a timeline for restarting fuel-producing units at its second-largest US refinery following a fire Wednesday that cut production, reported Reuters with reference to sources, as the shutdown boosted gasoline prices on Thursday.

Some units remain in operation at the refinery including a crude distillation unit (CDU), gasoline-producing fluidic catalytic cracking unit (FCCU) and a coker, the sources said.

A blaze on Wednesday cut output at Exxon’s 502,500 barrel-per-day (bpd) Baton Rouge, Louisiana, refinery. It was the third Exxon petrochemical plant along the US Gulf Coast to suffer damage in less than a year. 2

No injuries were reported because of the fire that broke out from a natural gas pipeline shortly before midnight on Tuesday and burned for about seven hours on Wednesday, the sources said.

The blaze affected pipes laid on racks 50 feet in the air, and forced the shutdown of multiple units at the oil refinery and adjoining chemical plant, the sources said.

The fire forced the shutdown of three CDUs and an FCCU, but was confined to the pipe bundle where it broke out.

Operations at the refinery and chemical plant continue, Exxon spokesman Jeremy Eikenberry said on Thursday. He declined to discuss the status of individual processing units.

Exxon was meeting contractual commitments and expected to meet all customer commitments, he said.

The company and other refiners are suffering from weak margins due to excess supplies and falling demand for some fuels. Exxon US refining profits fell 42% last year over 2018 due to weak margins and higher maintenance costs.

CDUs are the heart of the refining process, providing the primary breakdown of crude oil into hydrocarbon feedstocks that other production units convert into motor fuels and feedstocks for plastics.

As MRC informed before, in September 2019, ExxonMobil announced plans to spend GBP140 million over the next two years in an additional investment program at its Fife ethylene plant, which has a capacity of more than 800,000 t/y.

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).

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

MOSCOW (MRC) -- The Philadelphia Energy Solutions oil refinery site will be sold for USD252 million and redeveloped under a plan approved in bankruptcy court on Thursday, ending months of uncertainty over whether the idled plant would be restarted, reported Reuters.

Hilco Redevelopment Partners, which will become the new owner of the roughly 1,300-acre (526-hectare) PES refinery site as part of the plan, is expected to begin demolition work before building warehousing and other commercial projects on the land.

PES shut its 335,000-barrel-per-day refinery in South Philadelphia, the largest and oldest on the East Coast, and filed for Chapter 11 bankruptcy after a fire destroyed a section of the plant over the summer.

As MRC wrote previously, in November 2019, US and local officials were opposing the sale procedure for the bankrupt Philadelphia Energy Solutions oil refinery, arguing the plan discourages bidders and keeps the city locked out of the process.

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