LyondellBasell to start turnaround at Texas BD unit in early March

MOSCOW (MRC) -- LyondellBasell, one of the largest plastics, chemicals and refining companies in the world, is likely to undertake a planned shutdown at its butadiene (BD) unit, according to Apic-online.

A Polymerupdate source in the U.S. informed that, the company has planned to halt operations at the unit for maintenance in early-March, 2020. The unit is expected to remain off-line for around two months.

Located at Channelview, Texas in the US, the BD unit has a production capacity of 390,000 mt/year.

LyondellBasell also operates several crackers at the site with the combined capacity of 1,900,000 tonnes of ethylene and 1,5000,000 tonnes of propylene per year.

We remind that, as MRC informed before, LyondellBasell shut down its cracker in La Porte (Texas, USA) on 19 September 2019 because of the flooding, caused by the tropical storm Imelda. According to the company's statement, this plant, which can produce 1,150,000 tonnes of ethylene per year, was shut on Wednesday when water entered a building containing electrical components and damaged critical process control equipment.

Butadiene is one of the feedstocks for the production of acrylonitrile-butadiene-styrene (ABS).

According to MRC's DataScopr report, overall ABS imports to the Russian market decreased in 2019 by 4% year on year to 33,700 tonnes.

LyondellBasell is one of the largest plastics, chemicals and refining companies in the world. Driven by its employees around the globe, LyondellBasell produces materials and products that are key to advancing solutions to modern challenges like enhancing food safety through lightweight and flexible packaging, protecting the purity of water supplies through stronger and more versatile pipes, improving the safety, comfort and fuel efficiency of many of the cars and trucks on the road, and ensuring the safe and effective functionality in electronics and appliances. LyondellBasell sells products into more than 100 countries and is the world's largest producer of polymer compounds and the largest licensor of polyolefin technologies.
MRC

Oil plunges to 14-month lows as coronavirus spread outside China sparks demand fears

MOSCOW (MRC) -- Dated Brent was assessed by S&P Global at USD50.49/b Friday, the lowest since December 31, 2018 and down nearly 22% from January 20, reported S&P Global.

Year-ahead Brent futures settled at a 19 cents/b contango to the front month Friday, flipping from a USD1.75/b backwardation February 21.

The one-year NYMEX WTI spread finished Friday in a USD1.41/b contango, compared to an 81 cent/b backwardation February 21.

The Singapore jet crack spread against Brent ended Friday at 5.68/b, down from USD11.34/b January 20.

The Rotterdam jet fuel crack against Brent ended Friday at USD8.58/b, down from USD14.17/b January 20.

The New York jet crack ended Friday at USD10.024/b, down from USD14.19/b January 20.

Oil prices moved sharply lower last week amid a renewed focus on demand destruction following a flurry of new coronavirus cases outside of China.

Now ICE front-month Brent futures settled at USD50.52/b Friday, down USD7.98 on the week, and down 22.5% since January 20, when commodities markets began to react to the virus.

S&P Global Platts Analytics has adjusted its 2020 global oil demand growth outlook down to 860,000 b/d, marking the weakest forecast since 2011. Asian refined products demand is expected to grow by 380,000 b/d in 2020, "posting its weakest growth since the global financial crisis in 2009," according to Platts Analytics.

Globally, 84,161 cases of Covid-19 coronavirus have been confirmed in 59 countries as of Friday, according to University of Virginia data.

While the overall number of new cases continues to fall, the growth rate outside of China accelerated last week, with major outbreak emerging in South Korea, Italy, and Iran.

"COVID-19 is arguably the biggest risk to global growth since the Great Recession," warned Platts Analytics in a recent update. "The rolling geographic nature of the virus's spread means its duration could be extended into the second quarter."

Major stock indicies fell into correction territory with the S&P 500 closing Friday down 11% from week-ago levels.

S&P Global Platts Analytics has adjusted its 2020 global oil demand growth outlook down to 860,000 b/d, marking the weakest since 2011. Asian refined products demand is expected to grow by 380,000 b/d in 2020, its weakest since 2009.

Key international airlines have suspended or reduced flights due to the virus, reducing jet fuel demand. United Airlines and Delta this week extended route modifications beyond China, while IAG, the parent company of British Airways, Iberia, Aer Lingus and Vueling, Friday said it would significantly cut capacity on its routes to and from Italy in March and would announce further capacity cuts soon.

While Sentinel Midstream's Texas GulfLink deepwater crude export terminal project remains on schedule, the spread of the virus comes just as the company is trying to nail down contracted shippers and buyers, especially in Asian markets, putting talks on hold.

The Port of Corpus Christi expects February crude exports to slip from January's record-high 1.38 million b/d due to ripple effects from coronavirus.

European refiners are starting to cut runs and alter their refining yields as middle distillate margins sink.

Demand for Chinese mainstays such as Russian ESPO Blend crude and medium sour Oman is expected to take a hit in February, with trade and economic activity declining.

Refinery run rates at China's state-owned oil giants - Sinopec, PetroChina, CNOOC and Sinochem - fell to a record low 67% of nameplate capacity in February, from 85% in January. Run rates for independent refineries in Shandong plunged to 35-36% from 63.5% in January, with 15 refineries idle in February.

With Asia's crude buying curtailed while the region tackles the outbreak, more oil from West Africa is being offered in Europe.

OPEC still planning to meet in Vienna March 5-6, but is monitoring situation after coronavirus case was reported there. A technical committee February 7 recommended deepening the OPEC+ 1.7 million b/d production cut accord by 600,000 b/d through the end of Q2. Russia has yet to endorse the plan.

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.

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).
MRC

Repsol certifies petrochemical complexes for the production of circular polyolefins

MOSCOW (MRC) -- After the certification of its industrial complex in Puertollano at the end of 2019, Repsol accomplished another critical milestone in its commitment to boost the circular economy of its materials, by obtaining the ISCC PLUS certification for the rest of its polyolefin production centers, said Hydrocarbonprocessing.

By certifying its Tarragona and Sines complexes, Repsol reaffirms its leadership, being the first petrochemical company to certify all its complexes for the production of circular polyolefins.

The certificates were handed out on February 14, 2020, to Jose Luis Bernal, Executive Director at Repsol Quimica, by Fabian Campillay, Executive Director of Control Union Espana.

“Our commitment to the circularity of our materials began long ago when in 2015 we began to experimentally feed oil from chemical recycling of plastic waste, becoming the first company to do it on an industrial scale. This new milestone reaffirms our leadership and commitment to circular polyolefins. A commitment that we already made public last October when we obtained the ISCC PLUS certification in our Puertollano complex and that allowed us to offer our customers in Europe the first tons of circular polyethylene and polypropylene," Jose Luis Bernal said.

To produce circular polyolefins, Repsol feeds, as an alternative raw material, oil obtained from the use of plastic waste not suitable for mechanical recycling. A waste that, otherwise, would end up in the landfill. This new raw material is fed alongside conventional raw material, reducing the consumption of non-renewable resources.

This certification guarantees the traceability of the plastic waste used at the source and, at the same time, offers the same quality and functionality of virgin polyolefins. This way, Repsol provides its customers with a portfolio of products with recycled material for applications that demand high standards of hygiene and safety, ideal for food packaging.

Once again, Repsol is committed to innovation, the excellence of its processes, and the collaboration with third parties to anticipate offering pioneering products that help its customers meet the demand of consumers for more sustainable products and that contribute to the transition towards a circular economy.

As MRC infotmed earlier, Repsol plans in the first half of March to bring capacity utilization at the plant for the production of styrene and propylene oxide in Tarragona (Tarragona, Spain) to the standard level. Repsol S.A is an integrated Spanish oil and gas company with operations in 28 countries. The bulk of its assets are located in Spain.

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).

Repsol S.A is an integrated Spanish oil and gas company with operations in 28 countries. The bulk of its assets are located in Spain.Repsol
MRC

Sekisui Chemical & Sumitomo cooperate to produce polyolefin using waste

MOSCOW (MRC) -- Sekisui Chemical and Sumitomo Chemical have agreed to form a strategic alliance to deploy technology for manufacturing polyolefin using waste as a raw material, according to Apic-online.

The alliance combines Sekisui's production technology for converting waste into ethanol with Sumitomo's technological know-how in manufacturing polyolefin.

Pilot production is scheduled to begin in fiscal 2022, with full-scale market launch of the production method expected in fiscal 2025.

Sekisui's process, developed in cooperation with LanzaTech, was launched in December 2017. It enables gasification of combustible waste accumulated at waste disposal facilities into carbon monoxide and hydrogen, without the need for waste separation, and converts these gases into ethanol using a microbial catalyst, which prevents the need for heat or pressure, the companies explained.

Sumitomo Chemical is a Japanese based manufacturer of a diverse range of products, including basic chemicals, petrochemicals and plastics, fine chemicals, agricultural chemicals, IT-related chemicals and pharmaceuticals.

As MRC reported before, in September 2015, Japan-based Sumitomo Chemical permanently terminated the operations of an ethylene plant at its Chiba Works in Ichihara, Chiba, following a decline in domestic demand for ethylene derivatives.

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).

Sumitomo Chemical is a Japanese based manufacturer of a diverse range of products, including basic chemicals, petrochemicals and plastics, fine chemicals, agricultural chemicals, IT-related chemicals and pharmaceuticals.
MRC

Pemex posts steep 2019 loss in blow to president revival plan

MOSCOW (MRC) - Petroleos Mexicanos posted a USD18.3 billion net loss for 2019 on Thursday, nearly doubling the previous year’s loss and dealing a major blow to the Mexican president’s quest to revive the heavily-indebted state oil company, reported Reuters.

The company known as Pemex said it had racked up a USD9 billion loss in the fourth quarter, or about half the year’s total losses, as it struggled to reverse a 15-year streak of declining crude output.

When last year’s actuarial losses from employee benefits are added, the total 2019 loss rises to some USD35 billion, according to a statement filed with the Mexican stock exchange.

The dismal results mark one of Pemex’s worst annual financial performances not primarily attributable to an outside factor, such as a sudden plunge in international oil prices.

"It’s not even possible to put into words how bad these results are for the company," independent oil analyst Gonzalo Monroy said, later describing them as "really terrible."

Pemex’s search for the “easiest barrels” and its large refining losses were especially problematic, he said.

Mexican President Andres Manuel Lopez Obrador took office in December 2018 pledging to boost Pemex’s oil output by about half by the end of his six-year term and ease its punishing debt load.

Instead, oil production declined last year compared to 2018 and the government struggled to make headway in reducing its debt, despite some hefty capital injections.

Pemex’s total financial debt stood at USD105.2 billion last year, down just 0.6% compared to USD105.8 billion in red ink posted at the end of 2018.

Credit ratings agencies have warned of Pemex’s extremely high debt load, Lopez Obrador’s decision to spend more on the money-losing refining business while eschewing new investment opportunities for foreign and private oil companies.

Last year, Fitch Ratings downgraded Pemex debt to junk status, and if another major ratings agency does the same this year, some funds would likely be forced to sell billions of dollars in Pemex bonds.

The company’s debts to its service providers in 2019, meanwhile, rose on the year by almost a quarter to USD9.8 billion.

But in a conference call with analysts, Chief Financial Officer Alberto Velazquez argued things were going well.

"We have registered significant improvements in many of our indicators, confirming that the company is on the right track," he said, touting more spending on exploration and production and dramatically less fuel theft last year.

In a break with years of practice, Pemex executives did not take any questions on the call.

Under Lopez Obrador, Pemex’s engineers have pledged to discover and develop 20 new oil and gas fields each year, targets viewed as extremely optimistic by industry analysts.

Only three of the 20 priority projects selected last year reported crude production as of December, according to data from Mexican oil regulator CNH.

Lopez Obrador, a leftist who has pursued a state-centric energy model, has pushed back against overtures from business groups to boost production via oil auctions open to private producers that were championed by his centrist predecessor.

Pemex’s 2019 crude production averaged 1.68 million barrels per day (bpd), less than half the 3.4 million bpd the company pumped in 2004 and down by about 7% compared to 2018 levels.

The company pointed to a 9% drop in the average price of its crude exports in 2019 as a factor in its falling revenue, which slid about 16% during the year to USD74.3 billion. The volume of Pemex’s crude exports also fell by about 80,000 bpd.

As MRC wrote previously, in 2016, Pemex shut its steam cracker at its Cangrejera complex for maintenance on February 15. The cracker was idle for about 14 days. The conducted repairs at the cracker were a part of planned maintenance.

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).

Pemex, Mexican Petroleum, is a Mexican state-owned petroleum company. Pemex has a total asset worth of USD415.75 billion, and is the world's second largest non-publicly listed company by total market value, and Latin America's second largest enterprise by annual revenue as of 2009. Company produces such polymers, as polyethylene (PE), polypropylene (PP), polystyrene (PS).
MRC