Marathon Galveston Bay refinery, Texas, FCC to run at reduced rates

MOSCOW (MRC) -- Marathon Petroleum Corp plans to operate the gasoline-producing fluidic catalytic cracker (FCC) at its 585,000 barrel-per-day (bpd) Galveston Bay Refinery in Texas City, Texas, at reduced production levels, reported Reuters with reference to sources familiar with plant operations.

The 140,000 bpd FCC restarted on Sunday after repairs following a March 23 brief power outage that shut the unit, the sources said.

As MRC wrote before, Marathon Petroleum Corp said it would temporarily idle its 26,000-barrel-per-day Gallup, New Mexico, refinery beginning on April 15, amid slumping demand from the coronavirus pandemic.

Earlier this year, a portion of Marathon Petroleum Corp’s 363,000 barrel-per-day Carson refinery in California was shut in late February 2020, following a fire.

We also remind that the gasoline-producing unit at Marathon Petroleum Corp’s 585,000-barrel-per-day (bpd) Galveston Bay Refinery in Texas City, Texas, remained shut for six weeks for repairs in late Juney-early August 2019. The 140,000-bpd gasoline-producing Fluidic Catalytic Cracking Unit 3 (FCCU 3) was shut on June 29 2019 to repair a leak. The refinery’s 65,000 bpd reformer, called Ultraformer 4, was also shut down.

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

According to MRC's ScanPlast report, PP shipments to the Russian market were 192,760 tonnes in January-February 2020, down by 6% year on year. Homopolymer PP accounted for the main decrease in imports.

New York largest biofuel plant supplies ethanol for sanitizer to US, Canadian corporations as Coronavirus persists

MOSCOW (MRC) -- Western New York Energy, New York's first and largest operational ethanol facility, has adapted operations to supply distillers, manufacturing, technology, and personal care corporations across the Northeast and Canada with ethanol to produce 80% antiseptic alcohol sanitizer amidst the COVID pandemic, as per Hydrocarbonprocessing.

The plant is producing over 100,000 gallons a day of tech-grade ethanol for businesses that halted operations to meet the urgent sanitizer needs of hospitals and at-risk communities. WNY Energy generates over 60-million gallons of biofuel annually, using 20-million bushels of corn. The USD90-million facility was the first biofuel company in the northeastern US.

Tim Winters, WNYE President & CEO, said, "Along with New York's corn growers, WNY Energy has been proud to supply ethanol to the distilleries and companies that first responded to the alarming lack of sanitizer due to COVID-19. And while many upstream chemicals used in sanitizer products are manufactured in China, WNYE has also established a manufacturing and distribution network that will exponentially increase the production of antiseptic sanitizers made from our farmers' corn. All the sanitizer and sanitizer products will be made in Western New York and the United States." Winters emphasized, "We could do none of this without support from farmers, our partners for the past 13 years. Corn ethanol is the key ingredient in making 80% antiseptic sanitizer. Farmers are as essential to WNYE's operation as they are to America's food supply - their contributions sustain this nation."

Colleen Klein, NY Corn and Soybean Growers Association Executive Director, said, "WNY Energy is a respected industry partner and a critically important, reliable market for our corn growers. In usual circumstances, our crop is used in the Medina facility to make clean, renewable fuel but these are not usual circumstances. We applaud WNYE's ability to pivot and provide needed sanitation resources while maintaining the market for our growers during uncertain times."

Jim Whipple, Orleans County IDA CEO, said, "WNY Energy has become one of the most important industries in Orleans County and NY State. The economics tied to the operation not only support local farmers but WNYE is the largest taxpayer in Orleans County. It's important that products made in farm communities be given purchasing priority in times like this."

Winters and 50 employees produce ethanol 24/7 using hydroelectric power from Niagara Falls. The renewable energy reduces the GHG footprint for every gallon, earning WNYE an EP3 designation from the EPA. Gil C. Quiniones, NYPA president and CEO, said, "With virtually all WNYE's 5-megawatt electric load being met with hydropower from the Niagara Power Project. We, at NYPA applaud WNYE's ingenuity in adapting its business to fit the needs of New Yorkers during this horrific pandemic."

Klein added, "New York farmers are going to show up to do their part -whatever it takes. We're happy to have a friend in WNYE who shares this mentality. Whether you're farm tough, New York City tough, or anywhere in between - we're all stronger together."

We remind that as MRC informed earlier, employees at Valero Energy Corp’s Port Arthur, Texas, refinery expressed worries about the company’s slow response to keep the coronavirus from spreading there after two workers tested positive. Valero, the nation’s second-largest refiner, started to cut non-essential work and related contractors only last week after starting temperature checks last week - much later than other major US refiners, according to the people. Valero spokeswoman Lillian Riojas said the company maintains the privacy of employee health information and as such would “not publicize individual cases of COVID-19.”

We also remind that Valero Energy Corp restarted the small CDU at its Port Arthur refinery after repairing a valve on 25 September 2019. And in late October 2019, Valero Energy Corp shut the small crude distillation unit (CDU) at its Port Arthur refinery. The 75,000-bpd AVU 147 CDU was shut to repair a heat exchanger.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 383,760 tonnes in the first two month of 2020, up by 14% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments increased due to the increased capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market were 192,760 tonnes in January-February 2020, down by 6% year on year. Homopolymer PP accounted for the main decrease in imports.
MRC

UPM Raflatac and SABIC first to bring PP label material with recycled content to market

MOSCOW (MRC) -- UPM Raflatac is taking a major step toward creating a circular economy by collaborating with SABIC, a global leader in the chemical industry, for the first polypropylene (PP) label film manufactured from post-consumer recycled (PCR) plastic on the market (on a mass balance basis), said the company.

Now available globally, this label material uses SABIC’s groundbreaking TRUCIRCLE™ solutions for certified circular PP products.

The UPM Raflatac PP PCR Clear and White products are made with a chemical recycling technology that uses mass-balance approach to deliver virgin-like resin feedstock. With the same properties as standard PP films, these PP PCR films can be used in different label applications, including rigid food packaging. Customers and brand owners can achieve the same product performance and cut their footprint by decreasing the amount of virgin materials used at the same time.

“We are happy to be involved in our industry’s shift toward more circular solutions and this innovative product is the first of its kind available on the market. It is a concrete outcome of our efforts to label a smarter future beyond fossils by developing products that reduce the use of nonrenewable materials and treat waste as a valuable resource,” says Antti Jaaskelainen, Executive Vice President, UPM Raflatac.

The new PP PCR Clear and White products are a continuation of the company’s mission to use recycled or renewable raw materials. The first step was with UPM Raflatac Forest Film™ where fossil raw materials are replaced by renewable wood-based ones.

As per UPM Raflatac’s standard procedure, the whole value chain of PP PCR films has ISCC PLUS certification. The widely recognized sustainability certification scheme verifies that the mass balance accounting follows predefined and transparent rules. In addition, it provides traceability along the supply chain, from the feedstock to the final product.

The PP PCR films have been developed leveraging TRUCIRCLE, SABIC’s complete portfolio of solutions that span design for recyclability - mechanically recycled products, certified circular products from feedstock recycling of plastic waste streams and certified renewable products from bio-based feedstock.

The high quality of the post-consumer recycled plastic is secured through chemical recycling, turning plastic polymers back into their original molecules. These can be reformed into polypropylene which is equal to one made from virgin raw materials and fulfills strict food safety regulations. The chemical recycling process makes it possible to use recycled plastics in applications that could not utilize recycled materials before, such as food applications.

“SABIC is continuing to reinvent and lead in sustainability, and we are truly pioneering the way toward a circular economy for plastics. TRUCIRCLE is a significant milestone in our journey and with it, we’re more committed than ever to collaborating to close the loop on used plastics for the good of our planet,” says Mark Vester, Circular Economy Leader at SABIC.

As one of the signatories to the Ellen MacArthur New Plastic Economy initiative, UPM Raflatac is committed to developing label solutions that support brand owners in eliminating unnecessary plastic packaging and achieving their target of 100 percent reusable, recyclable or compostable plastic packaging by 2025. Finding the right partners, like SABIC, is essential in achieving this ambitious goal.

According to ICIS-MRC Price Report, April contract price of propylene was settled in Europe down by EUR175/tonne from the previous month. However, European producers are not going to cut export PP price proportionally for shipments to the CIS markets. Negotiations over April prices of European PP began at the mid of last week. All market participants said that European producers have made a significant reduction in the export prices of propylene polymers for shipments in the current month, but the price reduction does not exceed EUR100/tonne, while propylene fell by EUR175/tonne in the current month in Europe.

MRC

OPEC, Russia approve biggest-ever oil cut to support prices amid coronavirus pandemic

MOSCOW (MRC) -- OPEC and allies led by Russia agreed to a record cut in output to prop up oil prices amid the coronavirus pandemic in an unprecedented deal with fellow oil nations, including the United States, that could curb global oil supply by 20%, reported Reuters.

Measures to slow the spread of the coronavirus have destroyed demand for fuel and driven down oil prices, straining budgets of oil producers and hammering the U.S. shale industry, which is more vulnerable to low prices due to its higher costs.

The group, known as OPEC+, said it had agreed to reduce output by 9.7 million barrels per day (bpd) for May and June, after four days of talks and following pressure from U.S. President Donald Trump to arrest the price decline.

OPEC+ sources said they expected total global oil cuts to amount to more than 20 million bpd, or 20 percent of global supply, effective May 1. OPEC had the same figure in its draft statement but removed it from the final version.

The biggest oil cut ever is more than four times deeper than the previous record cut in 2008. Producers will slowly relax curbs after June, although reductions in production will stay in place until April 2022.

In a statement from the White House, Trump welcomed the commitment by Saudi Arabia and Russia “to return oil production to levels consistent with global energy and financial market stability.”

Earlier on Twitter, Trump wrote: “The big Oil Deal with OPEC+ is done. This will save hundreds of thousands of energy jobs in the United States.”

Thanking Russian President Vladimir Putin and Saudi King Salman for pushing the deal through, Trump added: “I just spoke to them... Great deal for all,”

Oil demand has dropped by around a third because of the coronavirus pandemic. Oil prices jumped more than $1 a barrel in Monday trading after the agreement, but gains were capped amid concern that it would not be enough to head off oversupply with the coronavirus pandemic hammering demand.

Total global cuts will include contributions from non-members, steeper voluntary cuts by some OPEC+ members and strategic stocks purchases by the world’s largest consumers.

Saudi Energy Minister Prince Abdulaziz bin Salman told Reuters that real effective cuts by OPEC+ would total 12.5 million bpd because Saudi Arabia, the United Arab Emirates and Kuwait would cut supplies steeper given higher output in April.

Three OPEC+ sources said non-members Brazil, Canada, Indonesia, Norway and the United States would contribute 4 million to 5 million bpd.

Three OPEC+ sources said the International Energy Agency (IEA), the energy watchdog for the world’s most industrialised nations, would announce purchases into stocks by its members to the tune of 3 million bpd in the next couple of months.

The IEA said it would provide an update on Wednesday when it releases its monthly report. The United States, India, Japan and South Korea have said they could buy oil to replenish reserves.

Trump had threatened OPEC leader Saudi Arabia with oil tariffs and other measures if it did not fix the market’s oversupply problem as low prices have put the U.S. oil industry, the world’s largest, in severe distress.

Canada and Norway had signalled a willingness to cut and the United States, where legislation makes it hard to act in tandem with cartels such as OPEC, said its output would fall steeply by itself this year because of low prices.

The Canadian government said in a statement it welcomed the OPEC+ deal, saying it was committed to achieving price certainty and economic stability.

The deal had been delayed since Thursday, however, after Mexico, worried about derailing its plans to revive heavily indebted state oil company Pemex, balked at the production cuts it was asked to make.

Mexican President Andres Manuel Lopez Obrador said on Friday that Trump had offered to make extra U.S. cuts on his behalf, an unusual offer by the U.S. leader, who has long railed against OPEC.

Trump said Washington would help Mexico by picking up “some of the slack” and being reimbursed later. He did not say how that would work.

A previous agreement by OPEC+ to cut production this year fell apart because of a dispute between Russia and Saudi Arabia, triggering a price war that brought a flood of supply just as demand for fuel was crushed by the coronavirus pandemic.

Banks Goldman Sachs and UBS predicted last week that Brent prices would fall back to $20 per barrel as cuts would not be enough to help offset severe demand destruction because of the restrictions to curb the coronavirus outbreak.
MRC

French CIM oil storage tanks brimming as coronavirus quashes demand

MOSCOW (MRC) -- Oil tanks at France’s storage and dispatch services company CIM are completely full due to the glut in global oil supply and the sharp drop in products demand, the director general of the company said, as per Reuters.

CIM, which handles around 40% of France’s crude imports, has 3 million cubic metres of crude storage capacity and 1.7 million cubic metres of refined products storage capacity, mostly at the Le Havre oil port hub. The firm also operates the 4,700 km Trapil pipeline network. “There is no demand, our tanks are full to the brim,” CIM’s Olivier Peyrin told Reuters.

Measures put in place by governments to stop the spread of the novel coronavirus outbreak have led to a sharp drop in fuel demand globally.

“Petrol demand has fallen by around 80% (in France), while jet fuel demand has tumbled by around 95%,” Peyrin said, with air traffic at France’s two major airports Orly and Charles De Gaulle, close to a standstill.

“I’ve never witnessed a crisis like this,” said Peyrin, who worked for oil major Shell before joining CIM in 2010.

“Before the crisis, we generally used to receive around 2 million tonnes of crude per month. Today we are at about 1 million tonnes,” he said. “For refined products, we use to handle 500,000 tonnes per month, now we are falling towards zero."

Peyrin said only one of three oil refineries supplied by CIM from Le Havre, Exxon Mobil Port-Jerome Gravenchon, was still operational. Total’s Gonfreville Normandy refinery has been halted following a fire, while the restart of its Grandpuits has delayed.

"We have reduced the team at Le Havre to a minimum just to receive the few deliveries we get, and expedite some refined products,” Peyrin said, adding that other storages facilities in France were in a similar situation.

As MRC reported earlier, 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. 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.

We also remind that 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, USA.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 383,760 tonnes in the first two month of 2020, up by 14% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments increased due to the increased capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market were 192,760 tonnes in January-February 2020, down by 6% year on year. Homopolymer PP accounted for the main decrease in imports.
MRC