Algerian oil refinery restarts, kicking off fuel export plan

MOSCOW (MRC) -- Algeria has restarted the Sidi Rezine oil refinery in Algiers after modernization works that lift annual output to 3.645 million tons from 2.7 million tons a year ago, Hydrocarbonprocessing reported.

Fuel importer Algeria aims to start exporting gasoline next year and diesel in 2024 after upgrades to its refineries, state news agency APS said, quoting Sidi Rezine plant manager Hassen Boukhalfa.

Inaugurated by Prime Minister Abdelaziz Djerad, the Sidi Rezine refinery was shut down in 2018 for modernization work by China Petrolum Engineering and Construction (CPECC).

Algeria currently produces about 30 million tons of refined products a year and imports large quantities to meet growing domestic demand.

OPEC member Algeria’s gasoline output reached 2.7 million tons in 2019, against total domestic consumption of 4 million tons, Boukhalfa said.

It aims to stop imports this year and begin exporting in 2021 after completion of the upgrades at other refineries.

The modernization plan will also help to increase diesel production, paving the way for first exports in 2024, Boukhalfa said.

As MRC informed earlier, Turkey and Algeria will jointly establish a petrochemicals plant in Adana on the Mediterranean coast, Algerian Energy Minister Mohammed Arkab told state-run Anadolu Agency. Turkey’s Ronesans Holding and Algeria’s state-owned energy company Sonatrach will take part in the project, Arkab said on the margins of the Turkey-Algeria Business Forum. The facility is planned in Seyhan industrial zone for petrochemical development and will have production capacity of 450,000 tons per year of polypropylene (PP). The construction of the plant will be completed in two years and the facility is expected to become operational in July 2022, Arkab said.Sonatarch will supply the planned plant with 540,000 tons per year of propane that will be used to produce polypropylene, he added.

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) -- BP has decided to leave three US trade groups because of material differences over climate policies, said Reuters.

BP said its view on carbon pricing and that of the American Fuel & Petrochemical Manufacturers (AFPM) were “at odds and currently we have no areas of full alignment."

"BP will pursue opportunities to work with organisations who share our ambitious and progressive approach to the energy transition," Looney said in a statement.

It will also not renew its membership in the Western States Petroleum Association (WSPA) and Western Energy Alliance (WEA).

"AFPM is and has been committed to supporting policies that address climate change,” said AFPM Chief Executive Chet Thompson. “Because of that, it leads us to assume that this decision was made based on factors other than our actual positions on the issues."

BP, one of the largest U.S. refiners and petrochemical producers and fuel retailers, will remain a member of the American Petroleum Institute, the country’s largest energy association.

That decision prompted criticism from Greenpeace U.K. climate campaigner Mel Evans, who said API was the lobby group that helped overturn U.S. methane restrictions.

BP has called for placing a price on carbon emissions in order to push out the most polluting fossil fuel production including coal and encourage investment in renewable energy.

Royal Dutch Shell and Total last year both said they would not renew their memberships in the AFPM.

Oil and gas companies are under pressure from investors and climate activists to meet the 2015 Paris climate goal of limiting global warming to below 2 degrees Celsius from pre-industrial levels.

As MRC informed earlier, BP 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

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).

BP is one of the world's leading international oil and gas companies, providing its customers with fuel for transportation, energy for heat and light, retail services and petrochemicals products for everyday items.
MRC

MOSCOW (MRC) -- Kazakhstan’s energy ministry said that the country would resume exports of its oil to China in March 2020, reported Reuters.

The ministry did not disclose the amount of oil supplies.

As MRC informed before, in January 2020, Kazakhstan suspended its oil exports to China after organic chlorides contamination was found in crude supplied by a Kazakh producer less than a year after the "dirty oil" crisis in neighboring Russia.

We also remind that South Korea's LG Chem said in January 2016, it had decided to drop a plan to jointly build a USD4.2-billion petrochemical complex in Kazakhstan, citing a prolonged slump in oil prices and a sharp increase in facility investments. In 2011, the chemical company said it would construct the complex near the western Kazakh city of Atyrau as part of a 50-50 joint venture with two Kazakh companies. The plan involved building ethylene and polyethylene plants with annual capacities of 840,000 tonnes and 800,000 tonnes, respectively. The project was announced in 2013.

Ethylene and propylene are feedstocks for producing 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) -- McDonald’s and Starbucks are developing reusables; pilot programs in California that start this week will test systems to collect, clean and redistribute plastic coffee cups, said Bloomberg.

In the future, when you order a coffee at McDonald’s or Starbucks, it could be served in the same cup you used a few months earlier.

That’s the vision behind pilot programs this week that will introduce two types of “smart” reusable cups in independent coffee shops in San Francisco and Palo Alto, California. The models, made mostly from plastic and outfitted with RFID chips or QR codes for tracking, are the fruit of a two-year “moon shot” project known as the NextGen Cup Challenge, which was led by Starbucks Corp. and McDonald’s Corp.

Those two chains alone blow through billions of paper cups a year, and most are coated with a plastic lining that makes them almost impossible to recycle. Eliminating that waste would go a long way toward meeting environmental goals set by each company. The NextGen group also intends to try some new compostable and recyclable single-use cups in Oakland.

The key to leaving a lighter footprint on the planet may not be choosing the perfect material, because there are downsides to any disposable cup, whether paper, aluminum or plastic. Instead, NextGen’s big idea is to make cups durable and create a system in which they would be reused. That means collecting, cleaning, redistributing and digitally tracking them — a process that could keep tabs on rates of reuse and attrition. It could theoretically identify areas where people are buying drinks but not returning cups, perhaps indicating a need for more collection sites nearby.

“This technology for tech-enabled reusable cups didn’t exist five years ago,” said Bridget Croke, managing director at Closed Loop Partners, a recycling-focused private equity firm that coordinated the challenge.

The pilot programs starting at independent coffee shops in California this week are a test for the public as well as for the new cups: Will consumers choose to drop cups at certain collection sites instead of in trash cans?

Two small startups will use this trial to scale up their logistics and get a sense of what it would be like to run a reusable cup system globally.

The model on trial in San Francisco, from the startup Muuse, is printed with a distinct QR code on each cup, which consumers can scan when they pick up and drop off cups. Muuse has been used on college campuses.

The model from a startup called CupClub, which will debut in Palo Alto, was designed by London-based architect Safia Qureshi in 2015. The cups are meant to be easily stacked at bright-yellow drop-off points, scattered throughout the city. Then they will be piled into vans and sent for cleaning. Embedded with RFID tags, the cups can be scanned as they pass near certain points, like the coffee shop counter or a collection site. The startup has been selling the system to corporate offices and says reusing its cups can reduce landfill waste by as much as 40%.

Qureshi said people didn’t like the experience of drinking out of reusable metal cups, so the company settled on recyclable white plastic. “Consumers need a product that isn’t going to be so much of a step change,” she said.

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) -- Research and rating agency Moody’s has recently downgraded Nayara Energy Limited’s corporate family rating to negative from stable, driven largely by weak refining margin environment in Asia, according to Energyworld.

"The downgrade to Ba3 reflects the significant deterioration in Nayara's credit metrics, driven largely by the weak refining margin environment in Asia," Sweta Patodia, Moody's lead analyst for Nayara, said in a statement.

Nayara's operating performance was further affected by a planned maintenance shutdown in December 2018, which resulted in lower throughput and capacity utilization during the period. In addition, the implementation of new accounting standards with respect to operating leases resulted in higher leverage and further weakened the company's credit metrics.

“Nayara's leverage - as measured by debt/EBITDA - increased to approximately 6.3x for last twelve months ended 30 June 2019 from 3.9x for fiscal year ended March 2018, and interest cover - as measured by EBIT/interest - declined to 1.5x from 2.1x over the same period,” Moody’s said in a statement.

Tightening regulations on the use of heavy fuel oil in the shipping industry from January 2020 will result in an increase in demand for middle distillates and lead to some recovery in refining margins for the refinery, the agency projected.

The rating agency expects Nayara to benefit from the new regulations given its high proportion of light and middle distillate output. However, the impact of recent outbreak of coronavirus on regional demand growth of petroleum product remains uncertain.

"While we expect Nayara's credit metrics to improve over the next 12-18 months, they will continue to remain weakly positioned," Patodia said. The negative outlook reflects that the regional refining margin environment continues to remain uncertain and could delay improvement in Nayara's credit metrics from current levels, Moody’s said.

“Given the negative outlook, an upgrade is unlikely over the next 12-18 months. The outlook could return to stable if there is an improvement in the operating environment which leads to an improvement in the company's profitability,” the agency said.

Nayara Energy Ltd is a refiner and supplier of petroleum products in India and overseas. It operates the country's second largest single-site refinery in Gujarat, with a nameplate capacity of 405 thousand barrels per day and a high complexity index of 11.8.

As MRC reported previously, Thyssenkrupp Industrial Solutions (India) has recently signed a contract with Nayara Energy, under which it will provide project management consultancy (PMC) services for Nayara's new petrochemical project to be built at the site of Nayara's 20-million-t/y Vadinar refinery in India. The USD850-million project, which will mark Nayara's entry into the petrochemical sector, includes a 450,000-t/y propylene recovery unit, a 450,000-t/y Unipol polypropylene (PP) plant, a 200,000-t/y methyl tertiary butyl ether unit and associated off-sites and utility facilities. PCN earlier said the project was expected to be completed in 2022.

According to MRC's ScanPlast report, Russia's 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