South African largest refinery to minimize maintenance over coronavirus shutdown

MOSCOW (MRC) -- South Africa’s largest refinery SAPREF will “minimize” maintenance to critical activities, a spokeswoman said, as a national lockdown looms to contain the spread of coronavirus, said Reuters.

“Arrangements are in place to sustain crude supply into the refinery. Our intention is to continue to operate to support the supply of petroleum products to the country,” the spokeswoman added.

SAPREF, situated near Durban along the east coast, is a 50/50 joint venture between BP and Shell with a refining capacity of around 8.5 million tons a year. It accounts for 35% of the refining capacity in Africa’s most advanced economy, which is a net importer of petroleum products.

As MRC informed earlier, BP Plc surprised investors with a slight increase in its dividend, bucking the trend in what has otherwise been a bleak earnings season for Big Oil. In the final set of results for retiring Chief Executive Officer Bob Dudley, the London-based company offered some respite for investors who received nothing but bad news from BP’s peers. Big payouts, whether as dividends or buybacks, are the only thing attracting many investors to the industry in a world increasingly aware of the impact of fossil fuels on climate change and falling energy prices.

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) -- From Canada and the Caribbean to the Baltic and Singapore, oil tanks around the world are filling fast, despite a 50%-100% jump in lease costs, as oil companies and traders scramble to park unwanted crude and refined products, said Hydrocarbonprocessing.

Millions of barrels are struggling to find buyers among industrial users and refiners, which have cut operations as the impact of the coronavirus has destroyed demand and a Saudi-Russia market share battle has led to a flood of supply.

Fuel storage rates doubled this month in some onshore European and U.S. hubs as traders rushed to secure tanks in the hope of selling their products at a higher price when the coronavirus outbreak eases and demand recovers. Europe’s Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub saw the cost of storing diesel and jet kerosene rise by between 50% and 100%, traders and industry watchers said.

"Storage prices for gasoil doubled in the last three weeks from 2 euros (USD2.16) per cubic metre per month to 4 euros,” said Patrick Kulsen from Insights Global, a firm that tracks oil product storage and exports in the ARA region.

As most airliners ground their fleet because of the virus, jet fuel storage rates have increased by 50% since before the coronavirus crisis to 3 euros per cubic metre per month, a source with a storage firm in the ARA region said on condition of anonymity.

The picture in the Mediterranean is similar. In the last three weeks, Barcelona storage prices rose to USD3.5 per cubic metre per month from USD2.85 for storage for as far out as the end of 2021, a Mediterranean jet fuel trading source said. In Cushing, Oklahoma, the delivery point for benchmark U.S. crude, traders said rates more than doubled to 50 cents per barrel per month from about 20 cents a month ago.

Highlighting the current premium for storage, shares in Dutch storage company Vopak were trading close to their 2015 highs despite a global market rout in recent weeks. Vopak declined to comment and unlisted German storage firm Oiltanking did not respond to a request for comment.

As MRC informed earlier, major energy companies in the United States imposed work-from-home rules for office staff and began health checks for remote or critical workers as coronavirus spread and threatened an industry reeling from falling demand and profits. BP, Exxon Mobil, Kinder Morgan, Motiva Enterprises and Royal Dutch Shell told most office staff to work from home starting Monday. Federal regulators on Friday were pressed by companies to ease work rules for pipeline operators and to limit visits to some sites. Shell and Chevron began health checks of workers and visitors at some key U.S. facilities, spokesmen said.

As MRC informed earlier, operations at Italian petrochemical producer Versalis (part of Eni) have not affected by emergency quarantine measures in the country. Italian Prime Minister Giuseppe Conte extended its emergency coronavirus measures Wednesday evening and announced the closure of "non-essential" commercial businesses. This follows the announcement of a nationwide lockdown on Monday, limiting movement for around 60 million people. Under these measures people will only be allowed to leave their homes for work or health reasons. Versalis has three steam crackers in Italy, capable of producing 1.675 million mt of ethylene, 750,000 of propylene and 285,000 mt of butadiene a year.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polyprolypele (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

MOSCOW (MRC) -- Curacao is pursuing a USD162 million arbitration claim against Venezuela’s state-run PDVSA oil firm over its management of the island’s oil refinery, reported Hydrocarbonprocessing with reference to an executive of Refineria di Korsou.

The Dutch Caribbean island last week seized a PDVSA-owned oil storage terminal in neighboring Bonaire to enforce claims for overdue payments, maintenance costs and environmental damage at RdK, Marcelino de Lannoy, RdK’s interim managing director, said in an interview.

Curacao separately expects a contract with commodities firm Klesch Group to operate the 335,000-barrel-per-day Isla refinery and its storage facilities will be delayed. Klesch is committed to the deal but any agreement may be delayed until May or June because of travel restrictions due to the coronavirus pandemic, de Lannoy said.

Globally, demand for oil and petroleum products have fallen due to the pandemic, slashing prices and profit margins for many refineries. But the sharp price has lifted demand for storage space, including at the island’s Bullenbay oil terminal, with its 17.75 million barrels of storage and blending capacity.

PDVSA ran RdK’s Isla refinery on Curacao for about 34 years through last year. US sanctions against Venezuela led to a halt of operations. PDVSA failed to make lease payments, did not meet take or pay agreements with RdK or fulfill maintenance requirements, de Lannoy said.

Neither PDVSA or the Venezuelan oil ministry immediately responded to requests for comment.

RdK’s claim was filed earlier this month at the International Centre for Dispute Resolution, an arbitration group in New York, de Lannoy said. An ICDR spokesman said the group does not comment on its work.

A Dutch court in Curacao authorized a legal attachment of the Bonaire Petroleum Corp site. De Lannoy said Curacao would seek to auction the site if it wins the arbitration case.

PDVSA and the Venezuelan government have missed billions of dollars in payments to creditors in recent years as the once prosperous OPEC nation’s economy unraveled, putting many of its overseas assets at risk of seizure.

As MRC informed before, in May 2019, Curacao’s state-owned Isla oil refinery received an exemption from US sanctions on PDVSA, the Caribbean island’s government said in a statement. The US Treasury Department slapped sanctions on PDVSA in late January in a bid to force out socialist President Nicolas Maduro, who has overseen a collapse in the OPEC member nation’s economy. The license for the refinery, along with two other related companies, will allow the facility to continue to do business with US companies through Jan. 15, 2020.
MRC

MOSCOW (MRC) -- US monoethylene glycol exports to China and South Korea rose dramatically in January compared to the year-ago month, reported S&P Global with reference to the latest federal data.

US International Trade Commission data showed that China shot up to be the top export market for US MEG having received 86,846 mt, up from 18 mt in January 2018. South Korea received no US MEG in the year-ago month, but was the third-largest US MEG export market in January this year with 20,015 mt received.

However, the coronavirus outbreak hit China and Southeast Asian countries in January and began reaching other regions as well including the US and Europe. MEG prices started falling as demand plunged and widespread petrochemical plants either shut down or cut rates.

Activity in China was seen crawling back from widespread factory and manufacturing shutdowns and slowdowns as workers inched back to their jobs. US workers, by contrast, are increasingly telecommuting when possible as companies order them to work from home amid closed schools and businesses, such as restaurants. Major sports events and conferences have been cancelled throughout March in an effort to prevent crowds from spreading the disease.

US petrochemical plants had yet to show rate cuts, but market sources said such cuts may come if entire shifts are shut down because a worker showed up sick.

US MEG and many other petrochemicals and raw materials still face 25% tariffs imposed by China in August 2018 in response to 25% tariffs imposed on Chinese goods by the US the same month. Some tariffs imposed by both countries in 2019 were reduced as part of a Phase One trade pact reached in January, but 2018 tariffs remain in place.

This week, US President Donald Trump said he saw "no reason" to further lift or reduce tariffs.

China is the largest global consumer of MEG for its vast polyester industry as well as a feedstock for polyethylene terephthalate, a resin used to make plastic beverage bottles and fibers. MEG also is used as a solvent and antifreeze.

Last year China was the fifth-largest export market for US MEG, having received 142,706 mt, up from 79,063 mt in 2018. While flows to China increased year on year in 2019, they rose more to Belgium, South Korea and Turkey. Mexico remained the top export market for US MEG last year, but fell behind China in January this year with 31,320 mt.

As per MRC's ScanPlast report, the estimated consumption of polyethylene terephthalate (PET) in Russia increased in January 2020 by 9% year on year. Totally, Russia recycled 55,390 tonnes of PET chips in January (excluding shipments of Russian material to the countries of the Customs Union). PET chips production in Russian in January 2020 totalled 43,200 tonnes.
MRC

MOSCOW (MRC) -- Indorama Ventures Limited has announced that the company decided to extend the pre-construction period of the PTA-PET plant in Corpus Christi, Texas through the end of 2020, reported Kemicalinfo.

Christi Polymers LLC (CCP), a joint venture among certain subsidiaries of Indorama Ventures Holding, Alpek and Far Eastern Investment (Holding) Limited was created to acquire and complete construction of an integrated PTA-PET plant in Corpus Christi.

Indorama indicated that the current construction estimate is considerably higher than the estimate at the time of completion of the acquisition, primarily due to higher labor costs prevailing in the Gulf Coast region.

The Board of Directors of the CCP, consisting of members of all three JV partners, have agreed to extend the approval of the project through 2020 to optimize project construction efficiency in order to build a competitive PTA-PET asset at the site.

Indorama mentioned that it did not plan to make any additional cash contribution during the year 2020. During this period, the site will be properly maintained for the smooth restart of the construction.

The completion of the project is expected to be in 2023.

As MRC reported previously, in February 2019, IVL commenced production of purified terephthalic acid (PTA) and polyethylene terephthalate (PET) at plants it acquired from Artlant PTA in Portugal and EIPET in Egypt. IVL completed the acquisition of the 700,000-t/y PTA facility, located at the Sines industrial complex, in Late 2017. Value of the transaction, which included all equipment, surface rights and employment contracts, was not disclosed.

As per MRC's ScanPlast report, the estimated consumption of polyethylene terephthalate (PET) in Russia increased in January 2020 by 9% year on year. Totally, Russia recycled 55,390 tonnes of PET chips in January (excluding shipments of Russian material to the countries of the Customs Union). PET chips production in Russian in January 2020 totalled 43,200 tonnes.

Indorama Ventures Public Company Limited, listed in Thailand, is one of the world's leading petrochemicals producers, a global manufacturing footprint with 59 sites in 20 countries across Africa, Asia, Europe and North America. The company's portfolio is comprises necessities and high value-added (HVA) categories of polymers, fibers, and packaging. Indorama Ventures has approx. 15,000 employees worldwide and consolidated revenue of USD 8.4 billion in 2017. The company is listed in the Dow Jones Sustainability Index (DJSI).
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