LyondellBasell Houston refinery FCC to be shut through April

MOSCOW (MRC) -- The gasoline-producing fluidic catalytic cracker (FCC) at Lyondell Basell Industries’ 263,776 barrel-per-day (bpd) Houston refinery is expected to remain shut through April after more damage was found inside the unit, reported Reuters with reference to Gulf Coast market sources' statement.

The 90,000-bpd FCC was shut by a Feb. 16 fire, which led to the discovery of large cracks in the unit’s reactor. Until the discovery of more damage this week, the inspection of and repairs to the unit were expected to finish in the first week of April, the sources said.

As MRC wrote before, LyondellBasell (LBI), one of the largest plastics, chemicals and refining companies in the world, has just announced it has signed definitive agreements to expand in China through a 50:50 joint venture with the Liaoning Bora Enterprise Group (Bora). On September 5, 2019, LyondellBasell and Bora first signed a Memorandum of Understanding and announced their intention to form this joint venture during a ceremony in Panjin, China. Under the agreements, the partners will form a Sino-foreign joint venture, the Bora LyondellBasell Petrochemical Co. Ltd, that will operate a 1.1 million metric tons per annum ethylene cracker and associated polyolefin derivatives complex in Panjin, China, with a total expected cost of approximately USD2.6 billion.

LyondellBasell will market the polypropylene (PP) and high-density polyethylene (HDPE) which will be produced utilizing LyondellBasell licensed Spheripol, Spherizone PP technologies and Hostalen ACP polyethylene technology. Start-up is expected in the second half of 2020.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 215,390 tonnes in the first month of 2020, up by 23% year on year. Shipments of all grades of high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) increased due to higher capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market were 127,240 tonnes in January 2020, up by 33% year on year. ZapSibNeftekhim's homopolymer PP accounted for the main increase in shipments.

LyondellBasell is one of the largest plastics, chemicals and refining companies in the world. Driven by its 13,000 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, and improving the safety, comfort and fuel efficiency of many of the cars and trucks on the road. LyondellBasell sells products into approximately 100 countries and is the world's largest licensor of polyolefin technologies.
MRC

MOSCOW (MRC) -- Industrial plastics recycler Fibertech Inc. has named Brent Rasche as its new chief operating officer (COO), said Canplastics.

Prior to joining Elberfeld, Ind.-based Fibertech, Rasche worked for injection molder SRG Global in various roles, most recently as vice president, North America.

Fibertech provides plastic rotational molding and manufactures many different types of plastic products, spanning a range of industries.

Fibertech’s industrial plastic recycling services involve taking bulk industrial scrap plastic and turning it into durable material handling products, primarily through rotation molding.

As MRC informed earlier, Chester, N.S.-based GN Thermoforming Equipment has appointed Alberto Capodicasa as its new sales manager for Mexico and Central and South America. Based in Nova Scotia, Capodicasa is a native of Venezuela and fluent in English, Spanish, and Italian, has many years of experience in various sales positions, most recently as regional sales manager with LED Roadway Lighting Ltd.

As per MRC' DataScope, overall imports of PC granules to Russia (excluding shipments from Belarus) grew in the first month of 2020 more than by 3 times year on year to 2,590 tonnes. Imports of material into the country were 740 tonnes in January 2019. December 2019 imports of material to Belarus reached 2,850 tonnes. Extrusion grade PC accounted for the greatest increase in January imports. Their share rose significantly in the total imports of material into the Russian Federation to 82% (2,100 tonnes) from 44% (32,000 tonnes) in January 2019.

MRC

MOSCOW (MRC) -- Husky Energy is taking a series of actions to fortify its business in response to challenging global market conditions, said the company.

These initiatives reflect the Company’s commitment to capital discipline, which includes maintaining the strength of its balance sheet while protecting value in an extended low commodity price environment. Husky’s drive to improve process and occupational safety is unaffected and remains a top priority.

"Husky has three important advantages: a strong balance sheet, an Integrated Corridor which includes a sizeable downstream and midstream segment, and Offshore operations that include long-term gas contracts in the Asia Pacific region not linked to the price of oil," said CEO Rob Peabody.

Given current market conditions Husky will commence the safe and orderly reduction, or shut-in, of production where it is cash negative on a variable cost basis at current prices.

As MRC informed earlier, Husky Energy continues to make steady progress towards a return to full operations at the Superior Refinery. The Company has received the required permit approvals to begin reconstruction activities at the site and work is expected to begin immediately. Demolition of damaged equipment resulting from a fire in April of 2018 is now largely complete and the rebuild will take place over the next two years with an expected return to full operations in 2021.

Total liquidity is USD4.9 billion, comprised of USD1.4 billion in cash and USD3.5 billion in unused credit facilities. In line with its committed credit facilities, Husky is required to maintain debt to capital of no more than 65%, and is well below this threshold with a ratio of 27% with no long-term debt maturities until 2022.
MRC

MOSCOW (MRC) -- US energy historian Daniel Yergin said it could be a long time before pressure is eased on sinking oil markets as the coronavirus causes public events and schools to close while global oil producers flood markets with crude, reported Reuters.

"It’s a problem of an oil price war in the middle of a constricting market when the walls are closing in," Yergin, who is also vice chairman of IHS Markit, told reporters at the US Department of Energy’s headquarters.

With global oil demand already sinking due to the spread of coronavirus, Saudi Arabia and Russia launched a war for market share, flooding global markets with crude. Oil traded in New York was trading at USD30.76 a barrel in aftermarket hours on Thursday, down more than 2%.

Trump administration officials have been mulling several ways to support energy producers including buying oil at current low prices to stash in the Strategic Petroleum Reserve, which is held in caverns along the Texas and Louisiana coasts.

But Yergin, who occasionally advises US officials on energy matters, was skeptical.

"I don’t see how you can use the SPR," he said. "With the amount of oil coming into market this is really going to lead to swollen inventories, it’s going to take a long time to bring down."

He also discounted efforts to lay out a case that Saudi Arabia and Russia were dumping oil on global markets. Harold Hamm, the executive chairman of Continental Resources Inc , has said that those countries are undertaking a "direct attack" on US drillers by increasing the oil supply, according to local media.

Hamm, a supporter of President Donald Trump, is the chairman of the Domestic Energy Producers Alliance, which is petitioning the Department of Commerce to pursue the anti-dumping case.

Yergin said it would be hard to prove that anyone was putting out oil below market value, and in any case it would not be an overnight fix.

Yergin, speaking minutes after the states of Ohio and Maryland announced public schools would shut, saw no quick relief.

"Normally demand would solve the problem in a way, because you would have lower prices that act like a tax cut and it would be a stimulus," he said. "But not in this case because of the freezing up of economic activity," he said.

"Low gasoline prices ... don’t do much when schools are closed, people are cancelling all their trips, and people are working from home," he said.

He expected energy company consolidation to accelerate. "Consolidation will be one way people will have to get their costs down."
MRC

MOSCOW (MRC) -- Asian refiners may curtail jet fuel output by partially reducing processing as the fuel's value versus diesel plunged after the United States said it would ban European travellers to prevent the spread of the coronavirus, reported Reuters.

The regrade, which is the price difference between jet fuel and diesel with a sulphur content of 10 parts-per-million (ppm), fell to a discount of USD3.86 a barrel on Thursday, the lowest since Aug. 13, 2015, according to data from S&P Global.

US President Donald Trump on Wednesday banned travel from 26 European countries for 30 days. On the same day, India said it will suspend the granting of visas to travel to the country.

As a result of the US ban, jet fuel demand may drop by between 200,000-250,000 barrels per day, split between the US and European markets over the 30-day ban, said Mark Williams, principal analyst, refining, at Wood Mackenzie.

"Refiners are also likely to lower jet yields and blend more jet fuel into the distillate pool to accommodate lower jet demand, adding further pressure to already weak distillate cracks," he said.

Refiners may deal with the lower jet fuel value by cutting their processing runs to make less of the fuel, which is typically produced during the initial distillation of crude into products.

Companies have already been cutting rates to deal with surplus aviation fuel because airline travel has declined as countries ban travel to halt the coronavirus spread.

"This (the US travel ban) is the end of jet (fuel) market and there will likely have to be run cuts from Europe," said a source from a South Korean refinery.

"This will have a spillover effect into Asian markets and refiners will likely have to consider run cuts," he added.

Jet fuel typically cannot be stored for long periods as its quality could degrade, increasing the incentive for refiners to produce less of the fuel.

As MRC informed previously, BP has recently 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.

We also remind that in September 2019, six world's major petrochemical companies in Flanders, Belgium, North Rhine-Westphalia, Germany, and the Netherlands (Trilateral Region) announced the creation of a consortium to jointly investigate how naphtha or gas steam crackers could be operated using renewable electricity instead of fossil fuels. The Cracker of the Future consortium, which includes BASF, Borealis, BP, LyondellBasell, SABIC and Total, aims to produce base chemicals while also significantly reducing carbon emissions. The companies agreed to invest in R&D and knowledge sharing as they assess the possibility of transitioning their base chemical production to renewable electricity.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 215,390 tonnes in the first month of 2020, up by 23% year on year. Shipments of all grades of high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) increased due to higher capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market were 127,240 tonnes in January 2020, up by 33% year on year. ZapSibNeftekhim's homopolymer PP accounted for the main increase in shipments.
MRC