U.S. crude stocks rise less than expected last week

MOSCOW (MRC) -- U.S. crude stocks rose less than expected last week as refineries hiked output, while gasoline and distillate inventories fell, the Energy Information Administration said, as per Hydrocarbonprocessing.

Crude inventories rose by 414,000 barrels in the last week, compared with analysts’ expectations for an increase of 2.5 million barrels. Refinery crude runs rose by 190,000 barrels per day, EIA data showed. Refinery utilization rates rose by 1.4 percentage points. Net U.S. crude imports fell last week by 1.03 million barrels per day.

“A solid tick higher in refining activity and a firm drop in net imports has resulted in minor build to crude stocks,” said Matt Smith, director of commodity research at ClipperData. “This lesser build than expected, combined with draws to the products, is providing further encouragement for today’s rally."

Oil prices extended gains after the data, with Brent crude up about 1% and U.S. crude futures gaining about 1.6% by 11:29 a.m. ET (1629 GMT). Still, in the East Coast, refinery utilization rates dropped to the lowest level since November 2012, the data showed.

The gasoline-producing unit at Phillips 66’s Bayway Refinery in Linden, New Jersey, the largest on the East Coast, has been shut since early this month. Gasoline stocks fell by about 2 million barrels, compared with analysts’ expectations in a Reuters poll for a 435,000-barrel gain.

Distillate stockpiles, which include diesel and heating oil, fell by 636,000 barrels, versus expectations for a 1.5 million-barrel drop, the EIA data showed. “The refinery utilization rate is probably the most important number here. It looks like turnaround season is basically over, said Bob Yawger, director of energy futures at Mizuho in New York. “That’s the number that managed to lower the crude oil build.” Crude stocks at the Cushing, Oklahoma, delivery hub fell by 133,000 barrels, EIA said.

As MRC informed earlier, brent oil futures may be trading at USD27 per barrel but oil producers are selling their crude in the physical market at lower prices not seen since the aftermath of the Asian financial crisis of the late 1990s. Most are offloading their oil for below USD20 a barrel as the coronavirus pandemic savages demand and global supply rises amid a battle between Saudi Arabia and Russia for market share, according to traders, state oil firms, major refiners and prices quoted in physical markets.

As MRC informed earlier, US-based Phillips 66 is delaying three sizeable scheduled shutdowns at its refineries this year, the company said last week, because of concerns that coronavirus could spread among the refineries' workers if the maintenance goes ahead.

We also reminad that 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).
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Equinor to quit U.S. lobby group over climate policy

MOSCOW (MRC) - Equinor will leave industry lobby group the Independent Petroleum Association of America (IPAA) over a disagreement about climate policy, the energy producer said Reuters.

The Norwegian company is undertaking a review of its memberships of industry associations under an agreement with a group of institutional investors, the Climate Action 100+, signed last April. The Washington-headquartered IPAA represents thousands of independent oil and natural gas producers and service companies across the United States.

"We believe that IPAA's lack of position on climate leaves the association materially misaligned with Equinor's climate policy and advocacy position," the company said in its review of industry associations. Specifically, Equinor cited the IPAA's support for the U.S. Environmental Protection Agency's (EPA) roll-back of U.S. federal methane regulations, which the company opposes.

U.S. President Donald Trump's administration proposed in 2019 rescinding Obama-era limits on oil and gas industry emissions of methane, one of the main pollutants scientists link to climate change. The IPAA was not immediately available for comment.

Equinor also said it would remain a member of the American Petroleum Institute (API) and the Australian Petroleum Production & Exploration Asociation (APPEA) despite some "some misalignments" with the company's climate policies.

The group said it expected API to make further progress in strengthening its support for the Paris climate agreement, tightening methane emissions regulations and marking out a clearer stance on carbon pricing. "We will also encourage APPEA to take a clear stand on supporting carbon pricing in Australia and not supporting carryover of credits from the Kyoto protocol to the Paris Agreement," it added.

Under its agreement with the Climate Action 100+, Equinor has committed to make sure that all memberships in more than 100 industry associations, including oil, gas and renewable energy, align with its support for the goals of the Paris Agreement.

BP said in February it would leave the main U.S. refining lobby group, the American Fuel & Petrochemical Manufacturers (AFPM), a leading U.S. refining lobby, and two other trade groups due to disagreements over climate policies.

As MRC informed earlier, BP Zhuhai, part of BP PLC, has taken off-stream its No. 3 purified terephthalic acid (PTA) plant for a maintenance turnaround. The company halted operations at the plant on March 14, 2020. The plant is slated to remain off-line for around two weeks. Located at Zhuhai in China, the No.3 PTA plant has a production capacity of 1.25 million mt/year.

PTA is used to produce polyethylene terephthalate (PET), which is used in the manufacturing of plastic bottles, films, packaging containers, in the textile and food industries.

As per MRC's ScanPlast report, the estimated consumption of polyethylene terephthalate (PET) in Russia increased in January 2020 by 9% year on year. Totally, Russia recycled 55,390 tonnes of PET chips in January (excluding shipments of Russian material to the countries of the Customs Union). PET chips production in Russian in January 2020 totalled 43,200 tonnes.
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Eastman begins producing materials needed to help make 10,000 face shields

MOSCOW (MRC) -- Eastman announced on Tuesday that the company has partnered with the Tennessee Higher Education Commission and Austin Peay State University to support the production of 10,000 face shields for medical personnel in Nashville, according to WJHL.

According to a release from Eastman, materials like rolls of PETG film and a copolyester used for medical packaging to help produce the face shields.

“The Eastman team that made this happen has my thanks, and I find this work and numerous other efforts like it happening around the world to be inspiring,” said Steve Crawford, Eastman’s chief technology and sustainability officer. “The need here is very real and life-changing. Health care workers are in dire need of help as they are on the front lines of battling COVID-19, and I’m proud to be part of an Eastman team that always steps up when help is needed.”

Eastman and THEC hope to produce the 10,000 face shields using 3D printers at different colleges and universities across Tennessee.

As MRC reported earlier, in 2016, Eastman Chemical's chief executive Mark Costa announced that the company wanted to reduce its surplus ethylene and commodity intermediates, but did not intend to sell its cracker in Longview, Texas.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 215,390 tonnes in the first month of 2020, up by 23% year on year. Shipments of all grades of high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) increased due to higher capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market were 127,240 tonnes in January 2020, up by 33% year on year. ZapSibNeftekhim's homopolymer PP accounted for the main increase in shipments.

Eastman is a global specialty chemical company that produces a broad range of products found in items people use every day. With a portfolio of specialty businesses, Eastman works with customers to deliver innovative products and solutions while maintaining a commitment to safety and sustainability. Its market-driven approaches take advantage of world-class technology platforms and leading positions in attractive end-markets such as transportation, building and construction and consumables. Eastman focuses on creating consistent, superior value for all stakeholders. As a globally diverse company, Eastman serves customers in more than 100 countries. The company is headquartered in Kingsport, Tennessee, USA and employs approximately 14,500 people around the world.
MRC

China to grant fuel export quotas to non-state refineries in Zhejiang free trade zone

MOSCOW (MRC) -- China will grant export quotas for refined oil products to non-state refineries in the Zhejiang pilot free trade zone, the country’s state council said in a statement, as per Reuters.

Fuel export quotas have only been granted to state-backed oil firms in the past. However, the statement did not specify any volume or timeframe in the new policy.

The state council statement also said it will study raising export rebates for low-sulphur bunker fuel and allow companies to carry out bonded oil blending within the free trade zone for the supply of clean marine fuel.

It also said it would bring in foreign exchanges, including New York, London, Singapore and Dubai, as strategic investors into the free trade zone, but did not give details.

As MRC informed earlier, Zhejiang Petrochemical Co Ltd (ZPC) has successfully started up its high density polyethylene (HDPE) plant since last week. Based in Zhejiang, China, the petrochemical complex consists of 450,000 tosn/year of HDPE, 400,000 tons/year of linear low density polyethylene (LLDPE) and two polypropylene (PP) plants with combined production capacity of 900,000 tons/year.

As MRC informed before, on 30 December 2019, Zhejiang Petrochemical Co Ltd started up its ethylene cracker. Based in Zhejiang, China, the cracker is able to produce 1.4 million tons/year of ethylene.
MRC

Nacero selects Topsoes TIGAS technology for natural gas-to-gasoline plant

MOSCOW (MRC) -- Nacero has signed agreements with Haldor Topsoe for basic engineering and license for a planned natural-gas-to-gasoline facility in Casa Grande, Arizona, with a capacity of 35,000 barrels-per-day of finished gasoline. Pending final investment decision, Topsoe will also supply proprietary hardware, catalysts, and services, said Hydrocarbonprocessing.

The plant will use Topsoe’s proven TIGAS™ gas-to-gasoline technology to produce clean, high-value gasoline from low-cost natural gas. The gasoline meets local quality specifications. In May 2019, the world’s first TIGAS™ natural gas-to-gasoline plant started production of 15,500 barrels-per-day of gasoline in Turkmenistan. This is the only large-scale natural gas-to-gasoline plant in the world. The owner and operator is Turkmengas, and Kawasaki Heavy Industries and Ronesans were EPC contractors.

Gasoline from TIGAS™ is free of sulfur, cost-competitive, and seamlessly replaces traditional gasoline in car engines. The TIGAS™ process utilizes large amounts of natural gas, which today is often vented or flared, and converts the gas into a useful product.

"By making an environmentally superior gasoline from natural gas rather than crude oil, Nacero will enable drivers to keep their cars and help the planet. Using existing vehicles, markets, infrastructure, and proven technology affords Nacero the opportunity to quickly and predictably create meaningful benefits at worldclass scale," says Jay McKenna, CEO, Nacero.

Nacero selected Haldor Topsoe and TIGAS™ after careful consideration of competing technologies. A highly influential factor was that the TIGAS™ technology is industry-proven and backed by a strong commitment from Topsoe. Topsoe initially developed the TIGAS™ technology and catalysts in the late 1970’s and has continuously improved the solution through an extensive R&D program for over 40 years.

“We are proud that Nacero has made TIGAS™ their technology of choice in their ambitious plan to bring gasoline security and jobs to Arizona. This cutting-edge technology will help communities and producers monetize natural gas resources, and reduce imports by producing high-quality gasoline locally,” says Kim Knudsen, Executive Vice President, Haldor Topsoe.

As MRC informed earlier, Gaz Sintez has nominated Haldor Topsoe as licensor of its methanol plant in the Leningrad Region, Russia. The plant will produce 1.6 million tons per year of АА grade methanol based on Topsoe’s SynCOR Methanol™ technology. Gaz Sintez is developing the methanol plant project at the port of Vysotsk in the Leningrad Region of Russia. As announced earlier, Hyundai Engineering has started the development of the FEED-package, and NIIK has been awarded the Russian general designer contract. The plant is expected to be completed in 2023.

In January 2020, Topsoe announced the official opening of the world’s only natural gas-to-gasoline complex in Turkmenistan. The complex includes the world’s largest methanol plant based on autothermal reforming (ATR), using Topsoe’s SynCOR Methanol solution, with methanol production capacity of 5225 MTPD.

We remind that, as MRC wrote previously, the sale of polypropylene (PP) and high-density polyethylene (HDPE) from a new gas chemical complex began in the export trades of the State Commodity and Raw Materials Exchange of Turkmenistan on 3 September, 2018. The new gas chemical complex for production of HDPE and PP with the capacity of 386,000 tonnes/year and 81,000 tonnes/year, respectively, was built by the consortium TOYO Engineering (Japan) and LG and Hyundai (South Korea). The total cost of the project was about USD3.4 billions.

TIGAS™ comprises Topsoe’s proprietary and widely used SynCOR Methanol™ technology that secures exceptional economy of scale. The Nacero plant will produce more than 10,000 metric tons per day (MTPD) of methanol, which is further processed to gasoline. The only byproduct from the process is purified water which is a valuable resource in the dry area. The TIGAS™ process has a very high carbon efficiency, and the Nacero facility will have the flexibility to meet various specifications and grades of gasoline.
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