Shell cuts costs, slashes spending on virus turmoil

MOSCOW (MRC) -- Royal Dutch Shell said Monday it will slash costs and capital expenditure by billions of dollars due to the worsening coronavirus pandemic, which has sparked an oil price collapse, reported The Business Times.

The Anglo-Dutch energy major announced in a statement that it will axe operating costs by USD3.0-4.0 billion over the next 12 months, and will reduce its annual spending to USD20 billion from USD25 billion.

"As well as protecting our staff and customers in this difficult time, we are also taking immediate steps to ensure the financial strength and resilience of our business," said Chief Executive Ben van Beurden.

"The combination of steeply falling oil demand and rapidly increasing supply may be unique, but Shell has weathered market volatility many times in the past.

"In these very tough conditions, I am very proud of our staff and contractors across the world for maintaining their focus on safe and reliable operations while also ensuring their own health and welfare and that of their families, communities and our customers."

Shell added in the statement that it was taking "decisive action to reinforce the financial strength and resilience of our business so that we are well-positioned for the eventual economic recovery".

As MRC wrote before, the COVID-19 outbreak has led Shell Chemical to temporarily suspend construction on the massive plastics and petrochemicals site it's building in Monaca, Pa. Shell began construction in Monaca, near Pittsburgh, in late 2017. The 386-acre project will be the first US petrochemicals project built outside of the Gulf Coast of Texas and Louisiana in several decades. Production is expected to begin in the early 2020s. The complex will use ethane from shale gas produced in the Marcellus and Utica basins to make around 3.5 billion pounds of polyethylene resin per year. The complex will include four processing units, an ethane cracker and three PE units. Most of the resin made in Monaca is expected to be sold to Shell customers within North America.

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.

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

Sinopec Jingmen resumes production at PP unit in Hubei

MOSCOW (MRC) -- Sinopec Jingmen, part of the Chinese petrochemical giant - Sinopec, has restarted its polypropylene (PP) plant following a turnaround, as per Apic-online.

A Polymerupdate source in China informed that, the company has resumed operations at the plant on March 19, 2020. The plant remained under maintenance for around 10 days.

Located at Hubei, China, the plant has a production capacity of 120,000 mt/year.

As MRC reported earlier, Sinopec Qilu Petrochemical, another subsidiary of Sinopec, plans to shut the cracker unit in Tianjin in northeast China for scheduled repairs on 15 June, 2020. This cracking unit with a capacity of 900,000 tonnes of ethylene per year and 480,000 tonnes of propylene tons per year will be closed for scheduled repairs until 24 June, 2020.

According to MRC's ScanPlast report, 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.

Sinopec corp. is one of the world's largest integrated energy and chemical companies. Business Sinopec Corp. includes oil and gas exploration, production and transportation of oil and gas, oil refining, petrochemical production, production of mineral fertilizers and other chemical products. In terms of refining capacity, Sinopec Corp. ranks second in the world, in terms of ethylene capacity - fourth.
MRC

Polyolefin inventories rise to 1,28 mln tonnes in 3rd week of March

MOSCOW (MRC) -- The total inventories of polypropylene (PP) and polyethylene (PE) at China's Sinopec and PetroChina's (part of CNPC) warehouses were heard at 1.28 million mt last week, reported S&P Global.

This figure is higher than the typical level of 1 million mt.

As MRC informed before, in the 3rd week of February 2020, Asia's largest oil and gas firm PetroChina resumed construction of its oil refinery and petrochemical project in southern Chinese province of Guangdong, as the number of new coronavirus cases fell for a second straight day. With workers and machineries gradually in place, the USD10 billion refinery project in Jieyang city fully restarted construction by end-February. The project is scheduled to be fully completed by June 2022, with the launch of an oil refining section by end-2021 and chemical section in March 2022.

We also remind that Sinopec Qilu Petrochemical, subsidiary of Sinopec, plans to shut the cracker unit in Tianjin in northeast China for scheduled repairs on 15 June, 2020. This cracking unit with a capacity of 900,000 tonnes of ethylene per year and 480,000 tonnes of propylene tons per year will be closed for scheduled repairs until 24 June, 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.

Sinopec corp. is one of the world's largest integrated energy and chemical companies. Business Sinopec Corp. includes oil and gas exploration, production and transportation of oil and gas, oil refining, petrochemical production, production of mineral fertilizers and other chemical products. In terms of refining capacity, Sinopec Corp. ranks second in the world, in terms of ethylene capacity - fourth.

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

Sinopec Maoming refinery exports first low sulfur ship fuel

MOSCOW (MRC) -- Sinopec Corp’s Maoming refinery exported low sulfur fuel oil in February for the first time, totaling 21,400 tons, reported Reuters with reference to a report on the state refiner’s website and a source with direct knowledge of the matter.

The supplies, of heavy grade and with low sulfur content, went into a bonded storage in south China’s Guangdong province where the 400,000 barrels per day Maoming refinery is based.

This new production, similar to pilot cargoes moved into bonded tanks along China’s coast by China National Offshore Oil Company (CNOOC), Zhejiang Petrochemical Corp and PetroChina, will benefit from a tax waiver policy Beijing announced in late January, the source said.

Sinopec’s Zhenhai refinery, with annual crude oil refining capacity of 23 million tonnes, also exported 1,000 tonnes of cleaner shipping fuel for the first time to bonded tanks in the eastern port of Zhoushan, Sinopec said in a statement.

Zhenhai currently has low sulfur fuel oil production capacity of 200,000 tons per year, and will continue to expand capacity based on market demand, it said.

As MRC informed before, Sinopec Qilu Petrochemical, another subsidiary of Sinopec, plans to shut the cracker unit in Tianjin in northeast China for scheduled repairs on 15 June, 2020. This cracking unit with a capacity of 900,000 tonnes of ethylene per year and 480,000 tonnes of propylene tons per year will be closed for scheduled repairs until 24 June, 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.

Sinopec corp. is one of the world's largest integrated energy and chemical companies. Business Sinopec Corp. includes oil and gas exploration, production and transportation of oil and gas, oil refining, petrochemical production, production of mineral fertilizers and other chemical products. In terms of refining capacity, Sinopec Corp. ranks second in the world, in terms of ethylene capacity - fourth.
MRC

SK Advanced PDH plant in Ulsan operates at full capacity utilisation

MOSCOW (MRC) -- Major producer SK Advanced increased capacity utilisation at its propane dehydrogenation (PDH) plant to 100% on 19 March after a planned outage, according to S&P Global.

The company resumed operations at the plant on 9 March 2020. The plant was shut for maintenance on January 29, 2020 and was expected to resume production in end-February.

Located in Ulsan, South Korea, the plant has a propylene production capacity of 600,000 mt/year.

As MRC informed before, SK Advanced last undertook an emergency shutdown at its PDH plant at Ulsan on November 16, 2019 owing to a technical issue. The unit was brought on-stream on November 20, 2019. Located in Ulsan, South Korea, the plant has a propylene production capacity of 600,000 mt/year.

Propylene is the main feedstock for the production of polypropylene (PP).

According to MRC's ScanPlast report, 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.

SK Advanced, a joint venture of South Korea's largest LPG supplier SK Gas and Advanced Petrochemical Company (APC) of Saudi Arabia.
MRC