First major shale gas project to add 40% to Saudi Aramco ethane production

MOSCOW (MRC) -- Saudi Aramco has received regulatory approval for the development of the Jafurah shale gas field in Saudi Arabia's Eastern Province, reported S&P Global.

The announcement was made on Friday at a meeting chaired by Crown Prince Mohammad bin Salman (MBS). Aramco will invest 412 billion Saudi riyals (USD110 billion) to develop the field, the largest unconventional nonassociated gas field in the country, with a length of 170 kilometers (km) and a width of 100 km. The volume of gas resources in the field is estimated at 200 trillion cubic feet of wet gas, which contains gas liquids that can be used in the petrochemical industry.

Staged development will gradually increase the field's production to reach approximately 2.2 billion standard cubic feet/day of gas by 2036, representing 25% of the country's current production, MBS pointed out. Production will begin in 2024, Aramco says. Because of the field's characteristics, it will be able to produce about 130,000 b/d of ethane, accounting for about 40% of current production. The company also expects the field to produce approximately 550,000 b/d of gas liquids and condensates required by the petrochemical industry, representing about 34% of current production. Petrochemical development in Saudi Arabia has been held back in recent years by a shortage of ethane, which has led producers to focus their attention on mixed-feed steam crackers and crude oil-to-chemicals projects. The Jafurah project could help rebalance this trend.

The news heralds a major expansion of hydraulic fracturing in Saudi Arabia. Aramco already uses the technique on a small scale to produce around 190 million cubic feet of gas per day from its remote North Arabia gas basin, where production began in 2018. The company has worked with international oil service companies Halliburton, Schlumberger, and Baker Hughes on the Jafurah field and the development of fracking technology to exploit it. Previously the lack of fresh water was a major inhibitor to shale development, but Amin Nasser, CEO of Aramco, said the company now has a process using seawater, which will be used in the Jafurah project. The company is also considering construction of a desalination plant.

Aramco chairman Yasir bin Othman al-Rumayyan says that the Jafurah development is expected to enhance the company’s leading position in the worldwide energy sector and help achieve its goal of being the world’s preeminent integrated energy and chemicals company. Baker Hughes in 2018 estimated that the country had recoverable shale gas reserves of 645 trillion cubic feet, which would give it the fifth-largest shale gas deposits in the world. If Aramco meets its targets for the Jafurah field, Saudi Arabia would become the world's third-largest producer, after the US and Russia, by 2030. MBS said that the development would earn, within 22 years, a net income for the government of about USD8.6 billion/year and provide an estimated gross domestic product of USD20 billion/year. It will make Saudi Arabia one of the most important gas producers in the world, in addition to being the most important oil producer. It is envisaged that, after satisfying domestic demand, Jafurah gas could be supplied to neighboring countries and could also help lead Saudi Arabia into the LNG export market.

We remind that, as MRC informed earlier, in October 2019, McDermott International announced that it had been awarded a contract by Saudi Aramco and Total Raffinage Chimie (Total) for their joint venture (JV) Amiral steam cracker project at Jubail, Saudi Arabia. Amiral is a JV in which Aramco holds 62.5% and Total the rest. The plant, designed to produce 1.5 million metric tons/year (MMt/y) of ethylene, will be one of the world's largest mixed-feed crackers.

Aramco and Total launched their USD5-billion Amiral JV project in October 2018. The steam cracker will be fed with a mixture of 50% ethane and refinery off-gases. It will supply ethylene to a downstream 1 MMt/y polyethylene manufacturing complex and other petrochemical products. The project aims to fully exploit operational synergies with the adjacent refinery, owned by Satorp, another JV between Aramco and Total. Third-party investors, including Daelim and Ineos, will locate plants at the value park adjacent to Amiral with a combined investment of USD4 billion. A final investment decision is expected in 2021.

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).

Saudi Aramco is an integrated oil and chemicals company, a global leader in hydrocarbon production, refining processes and distribution, as well as one of the largest global oil exporters. It manages proven reserves of crude oil and condensate estimated at 261.1bn barrels, and produces 9.54 million bbl daily. Headquartered in Dhahran, Saudi Arabia, the company employs over 61,000 staff in 77 countries.
MRC

MOSCOW (MRC) -- PTT Global Chemical (PTTGC), in its management discussion analysis for 2019, said a new olefins plant being built at its complex in Map Ta Phut, Rayong, Thailand, is expected to start commercial operation this year, reported Apic-online.

The USD985-million project includes a 500,000-t/y ethylene plant, based on CB&I's technology, and a 250,000-t/y propylene unit. It will increase the company's total nameplate olefins capacity to 3.7-million t/y from nearly 3-million t/y currently.

In 2018, Samsung Engineering awarded a contract to CB&I for the license and basic engineering of the ethylene facility and a pyrolysis gasoline hydrogenation unit. The contract also included detailed engineering and material supply of Short Resistance Time pyrolysis heaters.

As MRC informed earlier, this month, PTT Global Chemical (PTTGC) and ALPLA established a new joint venture, named Envicco, to build and operate a recycled plastics resin plant at the Asia Industrial Estate in Rayong Province, Thailand.

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).

PTT Global Chemical is a leading player in the petrochemical industry and owns several petrochemical facilities with a combined capacity of 8.45 million tonnes a year.
MRC

MOSCOW (MRC) -- Sika announced on 25th, Feb that the company has joined the ‘Together for Sustainability’ (TfS) initiative as a new member, reported Kemicalinfo.

The organization, founded in 2011, aims to improve sustainability practice within the supply chain of the chemicals industry.

According to Sika, sustainability is a key feature and a central element of its growth strategy.

"With this membership, Sika sets clear targets for compliance with sustainability and quality standards in procurement and within the supply chain," the company stated.

Sika is the 25th member and will apply global standards for environmental, social and governance performance of supply chains. The TfS program is based on the UN Global Compact and Responsible Care principles, and allows Sika to assess and evaluate the performance of its suppliers in various aspects. This includes environmental, labor & human rights, ethical and sustainable procurement performance in order to achieve measurable improvements and its own sustainability performance.

Marcos Vazquez, Head of Sika Group Procurement said, "Joining TfS will allow Sika to learn and exchange with its members best practices in sustainability, and to actively participate in the improvement of sustainability practices within the supply chains of the chemical industry."

Bertrand Conqueret, TfS President said, "By joining TfS, Sika will benefit from the TfS framework, collaborative mindset and robust tools to assess and improve the sustainability performance of its supplying companies while at the same time increase its own responsible sourcing program. Sika together with the other 24 TfS member companies, will contribute to shaping the future of the chemical industry and its customers. "

Sika’s overriding goal is to reduce CO2 emissions per ton manufactured by 12% until 2023. Climate Performance is one of the target areas of Sika’s Growth Strategy 2023. Due to the importance of the topic, Sika is processing CO2 reduction programs covering all regions and countries.

As MRC reported earlier, in August 2015, Swiss specialty chemicals company Sika opened its forth production site in Russia. A new mortar factory and a plant to produce concrete admixtures were opened in Volgograd, in southern Russia. Thus, at the existing site in Lobnya, 30 km north of Moscow, a new production facility, which manufactures polymers for concrete admixtures, came on stream.

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).

Sika is a specialty chemicals company with a leading position in the development and production of systems and products for bonding, sealing, damping, reinforcing, and protecting in the building sector and motor vehicle industry. Sika has subsidiaries in 101 countries around the world and manufactures in over 200 factories. Its more than 20,000 employees generated annual sales of CHF 7.09 billion in 2018.
MRC

MOSCOW (MRC) - ChemChina plans to invest CNY50 billion in the construction of a cracking unit in Dongying, Shandong Province, Polymerupdate reports citing a market source.

The project is in a preliminary stage and no details were available at the moment. The company is also awaiting project approval from the government of Shandong.

If approved by the government, ChemChina will build its first cracker.

As previously reported, ChemChina is in talks with another major chemical company, Sinochem, on mergers and acquisitions.

It was previously noted that Beijing sees the deal between Sinochem and ChemChina as a plan to rationalize and consolidate its disparate state-owned enterprises, with the result that major market leaders will be created.

It was previously reported that for the first time ChemChina plans to acquire the Sinochem Group became known in October 2016.

Ethylene and propylene are the main raw materials for the production of polyethylene (PE) and polypropylene (PP), respectively.

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).

China National Chemical Corporation, commonly known as ChemChina, is a Chinese state-owned chemical company in the product segments of agrochemicals, rubber products, chemical materials and specialty chemicals, industrial equipment, and petrochemical processing.
MRC

MOSCOW (MRC) -- Belarusian state energy company Belneftekhim said that the country’s refineries were currently working at half their capacity and had refined 1.8 million tonnes of oil in January and February, said Reuters.

Belarus is locked in a row over oil supply with Russia, and flows to Belarus slowed dramatically from Jan. 1 after Minsk and Moscow failed to agree terms for supplies.

As per MRC's DataScope, overall imports of unmixed polyvinyl chloride (PVC) into Belarus increased by 19% in 2019 year on year, totalling 38,800 tonnes. Local converters slightly reduced their purchasing of PVC in December 2019, overall imports totalled 3,400 tonnes, compared to 3,300 tonnes a month earlier. Russian producers with the share of about 82% of the Belarusian market were the key suppliers of resin to Belarus over the stated period. Producers from Ukraine and Germany with the share of 8% and 6%, respectively, were the second and third largest suppliers.

Also, December 2019 PP imports to the Belarusian Republic were 9,600 tonnes, compared to 9,800 tonnes a month earlier, local companies reduced their purchasing of PP in Russia. Overall imports of propylene polymers reached 109,400 tonnes in January-December 2019, compared to 99,500 tonnes a year earlier, demand increased for all PP grades, with propylene copolymers accounting for the greatest growth.
mrcplast.com