LyondellBasell to slow down construction on PO/TBA project in USA

MOSCOW (MRC) -- LyondellBasell, one of the largest plastics, chemicals and refining companies in the world, has informed the engineering and construction contractors it will slow construction of its world-scale propylene oxide (PO) and tertiary butyl alcohol (TBA) plant, said the producer in its press release.

The company is limiting non-essential activities at this time due to ongoing concerns related to the COVID-19 pandemic, including government orders designed to limit human contact.

"The COVID-19 pandemic is unprecedented and evolving. Because the PO/TBA site is currently under construction and not producing needed products yet, in the interest of health and safety we believe it is prudent to limit construction activities at this time," said Torkel Rhenman, executive vice president, Intermediates & Derivatives (I&D). "We remain committed to the completion of this strategic investment incorporating our low-cost, next generation PO/TBA technology. Over the next several weeks, we will be working with our contractors and suppliers to develop a revised project timeline."

LyondellBasell's PO/TBA project broke ground in August 2018. Currently, the project is more than 30 percent complete with ongoing installation of key equipment and towers. The PO/TBA project has a split-facility design to optimize synergies between two existing LyondellBasell sites. A 140-acre PO/TBA plant is being built at the company's Channelview, Texas facility, and an associated 34-acre ethers unit is being built at the company's Bayport Complex in Pasadena, Texas. When complete, the PO/TBA plant will produce approximately 1 billion pounds (470,000 metric tons) of PO and 2.2 billion pounds (1 million metric tons) of TBA annually, which will serve the growing need for better insulation material, home comfort, cleaner fuels and other consumer applications.

This announcement does not impact LyondellBasell's ongoing operations at Channelview or Bayport, which are designated as part of the United States' critical infrastructure by the Department of Homeland Security.

As MRC reported earlier, Lyondell Basell Industries said maintenance operations were staffed at its Houston refinery to assure safety and reliability. Gulf Coast market sources told Reuters hundreds of contractors were home last week to reduce the risk of coronavirus spreading in the 263,776 barrel-per-day refinery. Those contractors work for companies hired by Lyondell to perform maintenance on units in the refinery. Lyondell employee operations and maintenance staff continue to work in the refinery, the sources said.

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) -- Air Products has reached an agreement with PBF Energy Inc. that include the acquisition of USD530 million of five hydrogen steam methane reformers (SMR) hydrogen production plants and the long-term supply of hydrogen to PBF refiners from those already operating plants, according to Kemicalinfo.

Located in Torrance and Martinez, California and Delaware City, the SMRs have a combined production capacity of nearly 300 million standard cubic feet per day.

The deal is expected to close during the third quarter of 2020 fiscal year.

"This puts us in an outstanding financial position to execute our strategy of investing in long-term onsite deals, which includes asset acquisitions like the one we are announcing today. With this acquisition, not only do we gain five SMR plants, but we also secure a long-term hydrogen sale of gas agreement with an existing customer who is one of the largest independent refiners in North America," said Seifi Ghasemi, Chairman, President and Chief Executive Officer at Air Products.

Air Products is known as a leader in the supply of hydrogen to refineries in order to make cleaner burning transportation fuels.

The company also operates one of the most successful carbon capture projects in the world in Port Arthur, Texas, where the captured carbon dioxide (CO2) is injected into the ground and used for enhanced oil recovery in the state. Since 2013, Air Products has captured nearly 10 million tons of CO2 at Port Arthur that has been put to beneficial use.

Air Products currently operates 12 industrial gas facilities in California, which includes five hydrogen production plants.

The SMR being purchased in Delaware City would be Air Products’ first major asset operating in Delaware.

As MRC wrote before, US refiner PBF Energy has completed its acquisition of Shell’s 157,000 bbl/day Martinez refinery near San Francisco, California. The USD1bn deal, agreed in June 2019, was completed effective 1 February 2020.

Besides, in late March 2020, PBF Energy Inc said it was operating its refineries at minimum rates, with throughput about 30% lower than the refiner’s expectations, as coronavirus-driven travel curbs hit fuel demand.

We also remind that Shell Singapore restarted its naphtha cracker in Bukom Island in early December 2019, following a two months maintenance shutdown since the beginning of October 2019. Thus, this cracker was taken off-stream for the turnaround on 1 October 2019. The cracker is able to produce 960,000 tons/year of ethylene and 550,000 tons/year of propylene.

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

MOSCOW (MRC) -- Gujarat Narmada Valley Fertilizers & Chemicals Ltd (GNFC), has shut its toluene diisocyanate (TDI) units at Bharuch & Dahej, according to Apic-online.

A Polymerupdate source in India informed that, the company has halted operations at the units last week owing to a nation-wide lockdown caused by the COVID-19 outbreak. Further details on duration of the shutdown could not be ascertained.

Located in Gujarat, India, the Bharuch unit has a production capacity of 50,000 mt/year and the Dahej unit has a production capacity of 17,000 mt/year.

TDI is a chemical used in the production of polyurethanes, primarily for flexible foam applications including furniture, bedding and carpet underlay, as well as packaging applications. TDI is also used in the manufacture of coatings, sealants, adhesives and elastomers.

As MRC wrote previously, India lockdown adds uncertainty for polyvinyl chloride (PVC) exports. Last week India's Prime Minister Narendra Modi announced a nationwide lockdown from Wednesday for 21 days in an effort to slow the spread of the coronavirus in the world's second-most populous country, which has 1.3 billion people. The lockdown applies to ports, which will slow imports of all kinds of goods, including PVC, to a country that was dependent on PVC imports to meet demand before the pandemic gripped the globe.

According to MRC's ScanPlast report, contrary to seasonal factors, Russian producers of unmixed PVC have maintained a high level of capacity utilisation. Russia's overal PVC output totalled 91,700 tonnes in January 2020, up by 4% year on year. January production of unmixed PVC was 91,700 tonnes versus 87,760 tonnes in January 2019 and 81,400 tonnes in December 2019. Thus, despite relatively weak demand for resin from the domestic market, the average capacity utilisation exceeded 95% last month. Russia's overall PVC production reached 975,000 tonnes in 2019, compared to 958,600 tonnes a year earlier.
MRC

MOSCOW (MRC) -- In India, downstream operations have been affected by the 21-day nationwide lockdown, which orders 1.3 billion people to stay at their homes, reported NCT.

Accordingly, sources close to the company reported that India’s DCW shut its 150,000 polyvinyl chloride (PVC) plant in Tamil Nadu, India. The restart date was not disclosed at the time of publication.

Furthermore, Chemplast Sanmar has declared force majeure on its PVC supplies from Tamil Nadu unit, sources familiar with the matter said. The plant has an emulsion PVC capacity of 44,000 tons/year, while it produces 22,000 tons/year of suspension PVC.

On the other hand, Indian major Reliance Industries is reportedly operating smoothly despite the lockdown. A source reported that only non-essential factories have been affected by the situation.

As a side note, India has no plans to extend the lockdown, the government said on Monday, as the country struggles to keep essential supplies flowing and prevent out-of-work citizens fleeing to the countryside, said media sources.

As MRC informed earlier, India lockdown adds uncertainty for PVC exports. Last week India's Prime Minister Narendra Modi announced a nationwide lockdown from Wednesday for 21 days in an effort to slow the spread of the coronavirus in the world's second-most populous country, which has 1.3 billion people. The lockdown applies to ports, which will slow imports of all kinds of goods, including PVC, to a country that was dependent on PVC imports to meet demand before the pandemic gripped the globe

According to MRC's ScanPlast report, contrary to seasonal factors, Russian producers of unmixed PVC have maintained a high level of capacity utilisation. Russia's overal PVC output totalled 91,700 tonnes in January 2020, up by 4% year on year. January production of unmixed PVC was 91,700 tonnes versus 87,760 tonnes in January 2019 and 81,400 tonnes in December 2019. Thus, despite relatively weak demand for resin from the domestic market, the average capacity utilisation exceeded 95% last month. Russia's overall PVC production reached 975,000 tonnes in 2019, compared to 958,600 tonnes a year earlier.
MRC

MOSCOW (MRC) -- Brent oil futures may be trading at $27 per barrel but oil producers are selling their crude in the physical market at lower prices not seen since the aftermath of the Asian financial crisis of the late 1990s, said Hydrocarbonprocesing.

Most are offloading their oil for below $20 a barrel as the coronavirus pandemic savages demand and global supply rises amid a battle between Saudi Arabia and Russia for market share, according to traders, state oil firms, major refiners and prices quoted in physical markets.

While some crude grades typically sell at a discount to Brent, the market environment is making that gap even wider and other grades that usually cost more than the European benchmark are now cheaper for the most time ever.

The discounting is leaving revenue per barrel at a fraction of the prices factored into many 2020 budgets, which is likely to put even more pressure on government finances in some oil producing countries.

In extreme cases, once discounts and other costs have been applied, the value of some producers’ oil is close to $10 a barrel while Venezuela’s Merey crude sold for as little as $8 last week, according to Refinitiv data and traders.

While all types of crude have been hit, so-called light and medium sweet grades are the least in demand, meaning the outlook is bleaker for countries such as Azerbaijan, Kazakhstan and Nigeria, according to traders in oil from those countries.

Light grades with low density and sulphur are mostly used to make naphtha, gasoline and jet fuel, refined products that are both out of favour because of the economic fallout from the pandemic and also hard to store for long.

While Moscow and Riyadh remain locked in their battle, physical oil traders say a glut might push prices even lower as more countries lock down and trade slows.

This week, Russia got as little as $18 per barrel for its benchmark export grade medium sour Urals while Saudi Arabia was selling its Arab Light in Europe for $16, according to Reuters calculations based on official Saudi prices and Urals deals.

Canada’s key Western Canada Select grade was worth $15 a barrel on March 16, the last day of its monthly trading cycle, and will now probably sell closer to USD10 if its last discount of USD13.6 to the U.S. WTI benchmark is applied.

Traders said the pressure on prices and the desire on the part of sellers to offload crude quickly was evident in the way deals were being struck at the moment.

“Normally, we used to discuss cargoes at bid versus offer spreads of around 10 to 20 cents for several weeks before we closed a deal,” one trader at a major refining firm said.

As MRC informed earlier, North Atlantic Refining Ltd’s Come-by-Chance refinery in Canada will be the first to close in North America due to the coronavirus pandemic as refineries worldwide cut back operations. The company confirmed on Monday that it told stakeholders it was pausing production because of concerns about worker safety as the virus spreads.

As MRC informed earlier, US-based Phillips 66 is delaying three sizeable scheduled shutdowns at its refineries this year, the company said last week, because of concerns that coronavirus could spread among the refineries' workers if the maintenance goes ahead.

We also reminad that Phillips 66 remains open to developing another ethane cracker for its Chevron Phillips Chemical (CP Chem) joint venture, the refiner's CEO said in March 2018.

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