Asia distillates-gasoil cracks drop as coronavirus hits demand

MOSCOW (MRC) -- Asian refining margins for 10 ppm gasoil dropped, as demand for the industrial and transportation fuel remained under pressure due to lockdowns across the region to contain the coronavirus pandemic, reported Reuters.

Refining profit margins, also known as cracks, for gasoil with 10 ppm sulphur content plunged to USD6.59 a barrel over Dubai crude during Asian trading hours on Monday, down from USD8.48 per barrel on Thursday.

The gasoil cracks had held their ground even a couple of weeks ago when jet fuel and gasoline margins turned negative, taking a hit from the virus outbreak, but traders said the overall industrial demand for gasoil or diesel has been fast waning.

Cracks for the benchmark gasoil grade in Singapore have shed over 48% since March 30, Refinitiv Eikon data showed.

"The recent weakness that has come into the diesel market is showing us that run cuts thus far have potentially not been severe enough, and the situation is made worse by India joining the lockdowns in the region," Kostantsa Rangelova, lead Asia analyst at JBC Energy said.

"India's personal travel has much more diesel demand than other countries in the region, meaning demand there is likely to fall relatively more than elsewhere, with refiners looking to push a higher share of their diesel output into the regional market where possible."

Indian refiners are likely to continue prompt export of refined fuels to avoid a complete shutdown after the coronavirus lockdown hit local demand, company officials said.

Cash discounts for 10 ppm gasoil GO10-SIN-DIF widened to USD1.99 per barrel to Singapore quotes on Thursday, a fresh low since Singapore's benchmark was shifted to 10ppm gasoil in January 2018, from 500ppm earlier. They were at a discount of USD1.67 a barrel on Thursday.

Meanwhile, cash discounts for jet fuel JET-SIN-DIF narrowed to USD2.97 per barrel to Singapore quotes on Monday. The jet cash differentials were at a discount of USD3.22 per barrel on Thursday, a level not seen since August 2008.

Refining margins for jet fuel in Singapore weakened on Monday to USD2.46 a barrel below Dubai crude on Monday, compared with minus USD1.02 per barrel in the last trading session on Thursday.

India's fuel demand slid 17.8% in March compared with the same month last year, data from the Petroleum Planning and Analysis Cell (PPAC) of the oil ministry showed on Monday.

Consumption of fuel, a proxy for oil demand, totalled 16.08 million tons, the data showed.

Consumption of diesel, which is widely used for transportation as well as for irrigation needs in India, was down about 24% in March year-over-year at 5.65 million tons.

India's domestic consumption pattern typically impacts the volume of the country's exports, which in turn affects the overall supply in the wider Asian markets.

Domestic jet fuel sales in March were at about 480,000 tons, compared with 690,000 tons in February, and 720,000 tons in March 2019.

Asia Pacific oil refineries are finding that processing cuts are not keeping pace with sharp drops in fuel margins, which hit record lows this month, caused by the demand decline from the economic dislocations of the coronavirus outbreak.

Analysts at Wood Mackenzie, JBC Energy, Energy Aspects, Rystad Energy, IHS Markit and FGE estimate that Asian refineries will cut their processing by between 2 million to 4 million barrels per day (bpd) in April. For the whole of the second quarter, the cuts will average between 2 million to 2.7 million bpd, the analysts said.

As MRC informed before, India’s state oil refiners have reduced crude processing as local fuel demand has tumbled due to lockdowns in much of the country that are aimed at halting the spread of coronavirus.

We also remind that state-owned Bharat Petroleum Corporation Ltd (BPCL) will invest about Rs25,000 crore to set up an ethylene cracker plant at Rasayani, 50 kilometres from its Mumbai refinery, as the firm pushes further into the petrochemicals business to fuel growth.

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

MOSCOW (MRC) -- Global oil producers and refiners are struggling with a series of unprecedented dislocations as the simultaneous epidemic and volume war between Saudi Arabia and Russia rip through every element of the supply chain, said Reuters.

Some idea of the extraordinary speed and scale of the disruptions was evident in the “Weekly Petroleum Status Report” published by the U.S. Energy Information Administration on Wednesday.

The United States is the world’s largest oil consumer and producer, though it is not entirely representative of the whole global market.

But its weekly oil data have an outsized influence because they provide the fastest and most readily available statistics on the changing production-consumption balance.

The latest weekly report reveals an industry in crisis – unable to cope with the simultaneous collapse in fuel consumption and rise in crude production.

Inventories are increasing an unsustainable rate that will soon fill up all available storage space in onshore tank farms as well as tankers moored off the coast.

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

MOSCOW (MRC) -- Honeywell announced that Nakilat, a publicly listed global shipping and maritime company, chose Honeywell’s Assurance 360 Performa service management program to drive long-term performance of 14 of its Q-Max liquefied natural gas (LNG) vessels. Nakilat is the largest owner of LNG carriers in the world, with 74 ships in its fleet, said Hydrocarbonprocessing.

Under the Assurance 360 contract, Honeywell will upgrade each vessel’s legacy C200-based control system to contemporary C300 controllers, allowing engineers to address the most demanding process control requirements. The upgrade will take place in several phases over the next six years, as Honeywell can manage a hybrid system of multiple generations of controllers. The migrations to the new Honeywell control platforms will help extend the life of the ships by 20 years while retaining Nakilat’s intellectual property contained in earlier systems.

To avoid any additional downtime, the complex migrations will be accomplished during the vessels’ 20 days-long drydock times. These migrations are scheduled for 2020, 2023, 2024 and 2025.

“Nakilat is known for operating the largest LNG fleet in the world and embracing cutting-edge technology that ensures the safe, environmentally sound and cost-effective transportation of gas across the globe,” said Nick Parker, vice president and general manager, Lifecycle Solutions and Services, Honeywell Process Solutions. “Honeywell maintaining, supporting and optimizing the system performance of 14 of these ships enables Nakilat to strengthen its reputation for innovation and focus on its core business."

Honeywell’s Assurance 360 Performa services address today’s skills shortage, helping industrial firms maintain automation assets that are crucial to meeting production goals. With Assurance 360 Performa, Honeywell collaborates with companies’ employees to develop valuable know-how and augment their workforce to mitigate resource challenges. The program helps users build competencies and sustain expertise within their organization through best practices in automation support that are tracked by defined outcome metrics.

Today, Honeywell supports over 140 LNG vessels around the world with service programs. Assurance 360 services are multi-year cooperative service arrangements to maintain, support and optimize the performance of Honeywell control systems, regardless of the industry or size of operations.

As MRC wrote before, Fujian Meide Petrochemical Co. Ltd, a wholly-owned subsidiary of China Packing Group Company Ltd, will utilize the Honeywell Process Reliability Advisor for prescriptive monitoring of on-purpose propylene at its new UOP C3 Oleflex unit in Fuzhou, Fujian Province. The plant is designed to convert propane into 660,000 t/y 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 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.

Honeywell is a global diversified technology and manufacturing company with a wide range of aerospace products and services, control, sensing and security technologies for buildings, homes and industry, turbochargers, automotive products, specialty chemicals, electronic and advanced materials, process technology for refining and petrochemicals and energy efficient products and solutions for homes, business and transportation.
MRC

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.

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