Exxon Baton Rouge, Louisiana, refinery aims to restart CDU this week

MOSCOW (MRC) -- Exxon Mobil Corp plans to restart the large crude distillation unit (CDU) and a coker this week at its 502,500 barrel-per-day (bpd) Baton Rouge, Louisiana, refinery this week, sources familiar with plant operations said, said Reuters.

The 240,000 bpd PSLA 10 CDU and the 50,000 bpd coker were shut on Feb. 12 following a natural gas pipeline fire that idled most of the production units at the refinery, the sources said.

Exxon spokesman Jeremy Eikenberry said on Monday operations were continuing at the Baton Rouge refinery and adjoining chemical plant. He declined to discuss the status of individual units.

PSLA 10 and the coker could restart as early as the middle of this week, if all goes as planned, the sources said. Three of the four CDUs at the refinery were shut by the fire. The pipeline that caught on fire supplies natural gas that fuels boilers on the units, the sources said.

The CDUs do the primary breakdown of crude oil into the hydrocarbon feedstocks, from which motor fuels like gasoline and diesel and plastics are made in other production units at the refinery. Restarting PSLA 10 has been a top goal with for Exxon since the fire, the sources said. Restart efforts depend on restoring the natural gas feed to the unit.

Returning the refinery to production is expected to take at least a month from the date of the fire, sources have said.

The coker converts residual crude oil from distillation units into feedstock for motor fuels or petroleum coke, a coal substitute.

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) -- Rosneft has allocated ESPO Blend crude supplies in April to European trader Trafigura, leaving none for China’s CEFC which has a long-term deal to buy oil from the Russian oil giant, four people with knowledge of the matter said, as per Reuters.

It was not immediately clear why Rosneft changed its allocation of ESPO crude, a popular grade among Chinese “teapots”, or independent refineries that collectively make up a fifth of the country’s crude imports.

But the changes may suggest that Rosneft’s deal with CEFC, which was supposed to end in 2022, might have been adjusted or even terminated earlier than expected, the sources told Reuters.

Rosneft did not respond to a request for comment. Calls to CEFC in Singapore went unanswered. Trafigura declined to comment.

“There was a discussion going on for a while to cut supplies to CEFC ... it looks like Trafigura could get it,” said one of the sources familiar with the talks.

A change to Rosneft’s crude supply deal would be another blow to CEFC, which has been under pressure since its founder and chairman Ye Jianming was detained by Chinese authorities in 2018.

Trafigura received six cargoes for April loading and the Swiss commodities trading house could become the major lifter of Rosneft’s ESPO crude this year, replacing CEFC, two of the sources said.

Trafigura, which was the term lifter of Rosneft’s ESPO before CEFC took over in 2018, has since sold one of the April cargoes to oil major Royal Dutch Shell, traders said.

Rosneft had pledged to supply CEFC with 61 million tonnes of oil over five years starting from Jan. 1, 2018. In 2019 the Russian firm switched its crude supply deal to CEFC’s trading unit in Singapore from the China-based unit.

Rosneft also supplies Urals crude to CEFC under the contract and it is unclear if this supply will be affected from April, traders said, adding that Rosneft has allocated at least one 80,000-tonne Urals cargo to CEFC to load from Novorossiisk in March.

As MRC informed earlier, Russia’s largest oil producer Rosneft posted a 45% growth in fourth quarter net profit and a 20% growth in 2019 crude oil sales despite the impact of a pipeline contamination and global efforts to cap output.

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) -- Indian refining companies are snapping up rare crude grades as the coronavirus outbreak curtails China’s demand for processing, executives and traders said, with prices for some grades falling by as much as 15%, said Hydrocarbonprtocessing.

Chinese refiners have slashed output by at least 1.5 million barrels a day in February, or over 10 percent, after the virus outbreak hit domestic fuel demand, leading to swelling stocks.

"Opportunity for Indian markets is more in the context of what is happening in China and in recent times we received crudes which are appearing to be attractive as compared to their value earlier,” said R. Ramachandran, head of refineries at Bharat Petroleum Corp.

Refiners in India, the world’s third-biggest oil importer, rarely get the opportunity to buy suitable grades from areas like the Mediterranean and Latin America due to higher freight rates.

However, shipping rates have plunged by nearly half since the virus outbreak, and after the U.S. partially lifted sanctions on part of Chinese shipping firm COSCO. BPCL will receive a million barrels each of Brazil’s Sapinhoa and Mediterranean CPC blend in April, Ramachandran told Reuters.

It is also scouting for a million barrels each of Angola’s Palanca, a grade BPCL processed years ago, and Nigerian Okoro “as pricing appears attractive” for April, he said. “This is an opportunity for Indian refiners to buy new and rarely purchased grades that are available at cheaper rates,” said Sri Paravaikkarasu, director for Asia oil at consultancy FGE.

Asia’s spot premiums for Middle East, Russian, West African and Brazilian crude have all dropped this month with grades favoured by Chinese buyers, such as ESPO, Lula and Angolan, hurt the most. “For the Brazilian and CPC blend we have seen crude cost lower by 10-15% compared to what we used to see,” Ramachandran said.

Ample crude supplies allow other buyers to shop around and buy crude cargoes at cheap prices, although some Chinese refiners are also still chasing cheap supplies. “For March-loading, April-arrival West African crude cargoes, premiums have dropped across-the-board,” said a West African crude trader.

“Different crude grades are reacting differently... In general, most grades were down more than USD1. Rare grades are very cheap,” the trade source said. National oil companies in China buy a lot of Middle Eastern heavy crudes and medium grades, while independents process medium-to-heavy sweet grades from Latin America and Africa.

“In spot tenders we are seeing a reduction in premiums. We are seeing offers for sale of new grades. Opportunities have increased,” said M. K. Surana, chairman of Hindustan Petroleum Corp (HPCL).

“We are seeing offers for rare grades from Africa like Angolan Nemba and U.S. crude like WTI Midland at very competitive rates.”

As MRC informed earlier, Henkel AG & Co. KGaA (Dusseldorf, Germany) announced that Henkel Adhesives Technologies has officially inaugurated its new production facility in Kurkumbh, India, near Pune. With a total investment of about EUR50 million, the business unit aims to serve the growing demand of Indian industries for high-performance solutions in adhesives, sealants and surface treatment products. Designed as a smart factory the new plant enables a wide range of Industry 4.0 operations and meets the highest standards for sustainability.

Also, State-run oil supplier CPC Corp., Taiwan has recently opened a representative office in New Delhi as part of its plans to set up a plant in India and forge ties in the petrochemical industry here.

As MRC informed earlier, CPC Corporation took one of its naphtha crackers off-stream on 8 November 2019 for major maintenance work. The cracker number 4 remained offline for about 65 days and resumed operation by mid of January 2020. The No. 4 unit has an annual capacity of 380,000 tons/year of ethylene and 193,000 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).
MRC

MOSCOW (MRC) -- Bahrain said it is committed to supporting an additional oil production cut of 600,000 bpd as recommended by Opec+’s joint technical committee at a meeting in early February, reported Hydrocarbonprocessing.

“The proposed voluntary adjustment in production is recommended to counter the expected drop in oil demand, mainly in China, due to corona virus outbreak,” Sheikh Mohammed bin Khalifa Alkhalifa, Bahrain’s oil minister, said in a statement.

As MRC wrote before, in May 2019, ыtate-run Bahrain Petroleum Co (Bapco) completed multi-billion-dollar financing aimed at expanding its refining capacity to 380,000 barrels per day (bpd) from 267,000 bpd.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polyprolypele (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) -- Oil prices fell around 1%, pressured by growing worries about fuel demand as a coronavirus epidemic spread further beyond China, and as major crude producers appeared to be in no rush to cut output to buttress the market, said Hydrocarbonprocessing.

Brent crude was down 64 cents, or 1.1%, at USD58.67 a barrel by 0703 GMT, while U.S. crude dropped 54 cents, or 1%, at USD53.34 a barrel.

South Korea’s fourth-largest city has become the latest virus hotspot, with streets abandoned and residents staying indoors after dozens of people were infected in what authorities described as a “super-spreading event” at a church. Singapore and Japan are on the cusp of recession and the epidemic will be a major focus of talks at a meeting of G20 finance leaders on the weekend.

In China itself, the world’s biggest importer of crude oil, new cases also rose on Friday from the day before even as Beijing presses on with efforts to contain the spread that has largely paralyzed the world’s second-biggest economy. “I think there is a lot of reason for caution right now, as the impact of coronavirus on demand is still unclear,” Stratfor oil analyst Greg Priddy said by email.

"If it begins to look like the impact will be modest, that could affect Russia’s decision at the March 5-6 OPEC+ meeting on whether they are willing to endorse a further cut," he added. Russian Energy Minister Alexander Novak said on Thursday that global oil producers understood that it would no longer make sense for the Organization of the Petroleum Exporting Countries (OPEC) and its allies to meet before their gathering.

The grouping, known as OPEC+, has been withholding supply from the market to support prices for several years now and many analysts expect an extension or deepening of the restrictions on production. Moscow has said it will disclose its stance in the coming days.

"We still believe that the market is likely to trade lower from current levels, given the scale of the surplus over the first half of this year," ING Economics said in a note. Adding to pressure on oil prices was the strength of the U.S. dollar as investors looked for safe havens. A stronger greenback typically makes oil more expensive as the commodity is usually priced in dollars.

Prices were fazed by tensions in the Middle East after Saudi Arabia said on early Friday it had intercepted and destroyed several ballistic missiles launched by Houthi militia towards Saudi cities.

In the United States, crude stockpiles rose for a fourth week last week, although less than analysts had forecast. Gasoline and distillate inventories continued recent declines.

As MRC infomed earlier, the price of Brent crude oil, the international benchmark, averaged USD64 per barrel (b) in 2019, USD7/b lower than its 2018 average. The price of West Texas Intermediate (WTI) crude oil, the U.S. benchmark, averaged USD57/b in 2019, USD7/b lower than in 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