Shell Convent, Louisiana, refinery shuts crude unit for overhaul

MOSCOW (MRC) -- Royal Dutch Shell Plc shut the large crude distillation unit (CDU) at its 211,270 barrel-per-day (bpd) Convent, Louisiana, refinery for an overhaul, reported Reuters with reference to sources familiar with plant operations.

Shell shut the 130,000 bpd VPS-1 CDU for an overhaul expected to take 30 days to complete, the sources said.

As MRC wrote previously, a catalytic reformer was shut on Sunday night at Royal Dutch Shell Plc’s 211,270-barrel-per-day (bpd) refinery in Convent, Louisiana, after a brief fire.

We also remind that operations were stable on 13 September 2019 at Royal Dutch Shell Plc’s 340,000 barrel-per-day (bpd) joint-venture refinery in Deer Park, Texas, after the upper Houston Ship Channel was closed by protesters from Greenpeace USA. The Deer Park refinery is a 50-50 joint-venture between Shell and Mexico’s national oil company Petroleos Mexicanos (Pemex). Shell is the managing partner of the joint-venture. Shell has three crackers at Deer Park site with a combined ethylene capacity of 1,67 mln per year and petrochemical plants.

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).

Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.
MRC

MOSCOW (MRC) -- Shipments of three liquefied natural gas cargoes from Indonesia’s Tangguh LNG Plant to Fujian province in China have been delayed because of the coronavirus outbreak, Indonesia’s upstream oil and gas regulator SKK Migas, said Hydrocarbonprocessing.

The cargoes were due to depart in the third week of February but shipments have been rescheduled to an unspecified later time, Arief Setiawan Handoko, SKK Migas’ deputy for finance and monetisation told Reuters by text.

Indonesia’s Tangguh LNG plant is operated by a unit of BP Plc.

Shipments to other destinations, such as Japan and Singapore, are so far not affected by the coronavirus outbreak in China which has now spread to other countries.

Handoko said should the shipments be cancelled, Indonesia would prefer to sell the cargoes to a domestic buyer.

As MRC informed earlier, state-owned PetroChina shut its Guangxi Petrochemical in southern Guangxi province on February 9 for scheduled 50-day maintenance. The maintenance should help the refinery to offset stock pressure after product demand slumped due to the coronavirus outbreak.

We also remind that Sichuan Petrochemical (part of PetroChina) undertook an emergency shutdown at its naphtha cracker in Sichuan province of China on July 11, 2018 owing to a gas leak at its natural gas supply pipeline. Further details on duration of the outage could not be ascertained. Located at Sichuan province of China, the cracker has an ethylene capacity of 800,000 mt/year.

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).

PetroChina Company Limited, is a Chinese oil and gas company and is the listed arm of state-owned China National Petroleum Corporation, headquartered in Dongcheng District, Beijing. It is China's biggest oil producer.
MRC

MOSCOW (MRC) -- Oil prices fell for a fifth day on Thursday to their lowest since January 2019 as a growing number of new coronavirus cases outside of China fuelled fears of a pandemic which could slow the global economy and lower crude demand, reported Reuters.

Brent crude was down 60 cents, or 1.1%, at USD52.83 a barrel at 0741 GMT. The contract earlier fell to as low as $52.53, the lowest since Jan. 2, 2019.

West Texas Intermediate (WTI) futures fell by 55 cents, or 1.1%, to USD48.18 a barrel. It earlier fell to as low as $47.82, the lowest since Jan. 4, 2019.

In the five trading sessions through Thursday, Brent has dropped 10.6%, while WTI has declined 10.4%, their biggest five-day percentage losses since August 2019.

On Wednesday, for the first time ever, the number of new coronavirus infections outside China, the source of the outbreak, exceeded the number of new Chinese cases.

The spread to large economies including South Korea, Japan and Italy has caused concerns that fuel demand growth will be limited. On Wednesday, consultants Facts Global Energy forecast oil demand growth will only 60,000 barrels per day in 2020, or “practically zero”, because of the widening outbreak.

U.S. President Donald Trump assured Americans on Wednesday evening that the risk from coronavirus remained “very low”. However, Asian share markets fell on Thursday morning, as investors fear the coronavirus spread will disrupt the global economy as quarantines and other measures taken to halt its advance slow trade and industry.

“Speculations that coronavirus may spread in the United States prompted a series of fresh selling,” said Kazuhiko Saito, chief analyst at Fujitomi Co.

If an outbreak “continues to worsen in the United States, oil prices will likely decline further, especially with U.S. gasoline prices already plunging,” Saito said.

The United States is the world’s largest oil producer and consumer.

Gasoline stockpiles dropped by 2.7 million barrels in the week to Feb. 21 to 256.4 million, the Energy Information Administration (EIA) said on Wednesday, amid a decline in refinery throughput. Distillate inventories fell by 2.1 million barrels to 138.5 million.

U.S. crude oil stockpiles increased by 452,000 barrels to 443.3 million barrels, the Energy Information Administration said, which was less than the 2-million-barrel rise analysts had expected.

The crude market was also watching for possible deeper output cuts by the Organization of the Petroleum Exporting Countries (OPEC) and its allies including Russia, a group known as OPEC+.

“The falls this week, primarily through $55.00 on Brent crude, are likely to awaken the OPEC+ grouping from their slumber finally,” said Jeffrey Halley, senior analyst at OANDA.

OPEC+ plans to meet in Vienna over March 5-6.

As MRC informed before, state-owned PetroChina shut its Guangxi Petrochemical in southern Guangxi province on February 9 for scheduled 50-day maintenance. The maintenance should help the refinery to offset stock pressure after product demand slumped due to the coronavirus outbreak.

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) -- Arkema reports a 13% decline year on year (YOY) to EUR102 million (USD111.6 million) in adjusted net income for the fourth quarter of 2019, on sales down 7% YOY to EUR2.05 billion, with market uncertainty “continuing to weigh heavily on demand,” it says.

Group EBITDA rose 3% to EUR295 million compared with the prior-year quarter, reflecting growth for its specialty businesses and more favorable raw materials prices, it says. The EBITDA margin increased to 14.4% from 13% a year earlier, it adds.

Arkema says the coronavirus disease 2019 (Covid-19) outbreak "has led to a number of disruptions” for the company. “Quarantined personnel and transportation restrictions in China have impacted the supply chain. Furthermore, lower activity levels have affected the level of demand of our customers in China and in Europe. Uncertainty persists concerning the evolution of the epidemic and its impact on the group’s results beyond the month of February,” it says. The company estimates the outbreak’s impact on EBITDA at the end of February at around EUR20 million.

Volumes in the fourth quarter declined 5.3% YOY, reflecting the ongoing slowdown in the transportation, oil and gas, and consumer electronics markets, as well as a high basis of comparison with the equivalent quarter in 2018 for the company’s coating solutions division, according to Arkema.

A negative 5.4% price effect is mainly due to lower propylene prices for acrylic monomers and ongoing very tough market conditions for fluorogases, which overshadowed a continuing positive price dynamic in high-performance materials, it says. The company says it was also impacted to a limited extent by the nationwide strikes protesting against pension reforms in France.

In Arkema’s high-performance materials business, sales rose 1.3% YOY to €991 million, fueled by a 5.4% positive scope effect arising from the consolidation of the ArrMaz, Prochimir, and Lambson acquisitions. Solid momentum for batteries and 3D printing was countered by ongoing weaker demand in the transportation, oil and gas, and consumer electronics sectors, as well as inventory adjustments of some customers, leading to a 7.6% decline YOY in volumes. The division’s EBITDA rose to EUR140 million from EUR125 million a year earlier, driven in particular by ArrMaz’s contribution and Bostik’s continued growth.

The company’s industrial specialties division achieved sales of EUR593 million, down 13.2% YOY, mostly due to a 10.3% negative price effect, largely attributable to market conditions in fluorogases, it says. EBITDA was EUR133 million, down 5% YOY.

In the coating solutions division, sales fell 13.9% YOY to €464 million, with the decrease in propylene prices having “a strong impact” on the overall price effect, which was a negative 12.6%. Volumes were 2.8% lower, while EBITDA declined to EUR36 million from EUR44 million a year earlier, with the company saying improved unit margins in downstream businesses failed to fully offset more challenging market conditions for upstream businesses.

For the full fiscal year 2019, Arkema reports adjusted net income of EUR625 million, down from EUR725 million in 2018, on sales of EUR8.7 billion, slightly lower than the previous year.

The company “experienced a more difficult economic climate in 2019, marked by downturns in some markets, such as the automotive and electronics sectors, as well as a general lack of visibility. In this context, the group’s performance remained at a high level and its resilience compared favorably with the sector average,” says CEO Thierry Le Henaff.

As it was written earlier, in October 2019, Arkema (Colombes, France) announced the proposed divestment of its Functional Polyolefins business to SK Global Chemical (Seoul, South Korea), a subsidiary of SK, the major South Korean corporation. With this project, Arkema continues its shift towards specialty chemicals and advanced materials.

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) -- Benchmark northwest European diesel refining margins LGOc1-LCOc1 fell by 22% to usd7.80 a barrel, their lowest since late September 2016, on the growing spread of the coronavirus in Europe, reported Reuters.

“People are trading down the virus risk,” one European trader said, in reference on the impact the virus will have on demand in Europe.

As MRC informed before, economic disruption surrounding the Wuhan coronavirus outbreak will significantly complicate petrochemical markets, not only cutting into demand globally, but also tightening access in China to feedstock and slowing capital projects, in H1 February 2020, said Dewey Johnson, vice president/base chemicals at IHS Markit. He estimates that each 1% decline in China"s GDP growth this year will translate into about 2.5 million metric tons/year (MMt/y) of lost base chemicals demand.

The coronavirus could also affect the pace of capital investment in China. "There"s significant amount of capacity being added today in China," Johnson notes. "Labor may be a key bottleneck in this period, and the question is, how does that affect the (engineering, procurement, and construction) schedules and plant start-ups?"

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