Gazprom neftekhim Salavat seasonally increased production of bitumen

MOSCOW (MRC) -- The seasonal product is being actively produced and shipped at Gazprom neftekhim Salavat bitumen unit. In April the demand for bitumens usually increases, said the company.

Presently 600 to 800 tons of bitumens are shipped on a daily basis. It is almost twice as many as shipped from the beginning of the year.

In February-March bitumen unit of shop No. 18 at the Oil Refinery produced and shipped bitumen of BND 70/100 grade in the quantity of 16,700 tons and BND 100/130 grade in the quantity of 10,200 tons as well as 6,300 tons of low-sulfur fuel oil M 100.

"We started producing bitumen of BND 70/100 and BND 100/130 grades two years ago, — says Andrey Bryzgalov, Bitumen Unit Supervisor. — They are in demand at the market as they allow for formation of high-quality bitumen-concrete mixes used for construction and repair of public regional and municipal roads pavements. In other words, the use of our bitumens considerably extends the service life of road pavements.

Bitumen products are shipped by road and railway transport to the Republic of Bashkortostan, Orenburg region, Chelyabinsk region, Kurgan region and Sverdlovsk region. As for low-sulfur fuel oil, it is shipped to Vladivistok.

In February an overhaul of the bitumen unit was carried out. Scheduled works increased reliability of the equipment operation. In the end of March additional restrictive and preventive measures were implemented at the unit and other Gazprom neftekhim Salavat facilities due to COVID-19 outbreak. As for the rest, the work is being done as per normal.

As MRC informed earlier, based on the results of operations in the 1st quarter 2020, Gazprom neftekhim Salavat ramped up its stable gas condensate throughput and production output. The throughput performance of stable gas condensate during the 1st quarter 2020 (1 502 thousand tons) has grown by 15.7% at the Company’s Oil Refinery, as compared to the same period last year (1 298.5 thousand tons) due to increases in supplies.

It was previously reported that Gazprom Neftekhim Salavat (STS), one of the largest Russian petrochemical producers, plans to start scheduled repairs of acrylate production on April 20. This production will be closed until May 30.

Gazprom neftekhim Salavat is one of the largest oil refining and petrochemical complexes in Russia. The Complex was founded in 1948. The Company is integrated into the Gazprom system. It has the basic advantage, consolidating on a single site a full cycle of crude hydrocarbons processing, petrochemistry and mineral fertilizers production. The Company comprises the Oil Refinery, Gas & Chemical Plant and the Monomer Plant.Gazprom neftekhim Salavat produces more than 100 items, over 50% of which are bulk products including motor gasoline, diesel fuel, fuel oil, styrene, polystyrene, low density polyethylene, high density polyethylene, DOP plasticizer, butyl alcohols, sulphur, ammonia, urea, acrylic acid, butyl acrylate etc. The oil refining and petrochemical products are exported to all the federal subjects of the country. The export reach covers over 50 CIS and non-CIS countries including Finland, China, Brazil, the UK, Western Europe countries and the Baltic states.

MOSCOW (MRC) -- Brazil's state-owned oil firm Petroleo Brasileiro SA said on Wednesday it had begun suspending operations of 62 shallow water platforms in the Campos, Sergipe, Potiguar and Ceara basins, reported Reuters, adding that the cuts will amount to 23,000 bpd..

Petrobras said earlier that as part of a global effort to support oil prices, it would cut some 200,000 bpd from its daily production, an earlier Reuters report said.

OPEC+ agreed last week to reduce its combined production by 9.7 million bpd. This was less than most traders expected and a lot less than the slump in demand, which could be as much as 30 million bpd. However, with cuts from non-OPEC+ partners such as Brazil, Norway, Canada, and the United States, the total reduction in supply could reach 20 million bpd.

The bad news is this won’t be enough. The International Energy Agency (IEA) said in its latest monthly Oil Market Report that the coronavirus outbreak has so far caused a record drop in oil demand, at 9.3 million bpd from 2019 levels. In April alone, demand fell by 29 million bpd. Over the second quarter, the IEA said, demand would recover somewhat, to 23 million bpd below 2019 levels, and then further down the road, it could recoup most of the losses, ending the year 2.7 million bpd below 2019 levels.

It is clear to everyone that the cuts are necessary, but it also seems clear that they will not be enough to offset the demand decline fully. What’s worse is that global oil storage is filling up, and it will continue filling up despite the cuts. This seems to be the only thing that could force additional production cuts from most, if not all, oil producers.

Brazil, too, may have to cut deeper. The country was on course to a new oil boom in its presalt zone offshore when the crisis hit and persistently low prices could be the death of this oil boom. Currently, the country is producing around 3 million bpd but had plans to increase this substantially. According to OPEC’s February MOMR, Brazil’s production was expected to grow by 310,000 bpd in 2020.

As MRC wrote previously, the chief executive of Brazilian state-run oil firm Petroleo Brasileiro said in December 2019 he wants to sell the company's stake in petrochemical company Braskem within 12 months.

Besides, Braskem is no longer pursuing a petrochemical project, which would have included an ethane cracker, in West Virginia. And the company is seeking to sell the land that would have housed the cracker. The project, announced in 2013, had been on Braskem's back burner for several years.

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.

Headquartered in Rio de Janeiro, Petrobras is an integrated energy firm. Petrobras' activities include exploration, exploitation and production of oil from reservoir wells, shale and other rocks as well as refining, processing, trade and transport of oil and oil products, natural gas and other fluid hydrocarbons, in addition to other energy-related activities.
MRC

MOSCOW (MRC) -- Russia’s oil export duty CL-EXPDTY-RU, a key source of tax revenue for the government, is likely to plummet in May to its lowest level in nearly two decades if oil prices stay low, Reuters calculations showed.

The expected sharp decline in duty paid by Russian oil exporters will encourage oil producers to sell crude oil and make refining it less attractive, hitting the profit margins of Russian refineries.

The duty is currently set at USD52 per tonne for April. The Russian finance ministry will calculate the duty for May on the basis of prices of Russian Urals crude blend recorded between March 15 and April 14.

If Urals prices stay at around USD19 per barrel, the crude oil export duty for May would be set at USD7.5 per tonne. If the prices rise to USD30 or USD40 per barrel, the duty is expected to reach USD10.5-USD13.7 per tonne next month, according to Reuters calculations.

That would be the lowest level of oil export duty since at least 2002, due to the collapse of oil prices amid oversupply and restrictive measures taken to curb the global spread of the coronavirus.

Urals URL-E were trading at around USD18.55 per tonne on Tuesday.

As MRC informed earlier, based on the results of operations in the 1st quarter 2020, Gazprom neftekhim Salavat ramped up its stable gas condensate throughput and production output. The throughput performance of stable gas condensate during the 1st quarter 2020 (1 502 thousand tons) has grown by 15.7% at the Company’s Oil Refinery, as compared to the same period last year (1 298.5 thousand tons) due to increases in supplies.

It was previously reported that Gazprom Neftekhim Salavat (STS), one of the largest Russian petrochemical producers, plans to start scheduled repairs of acrylate production on April 20. This production will be closed until May 30.
MRC

MOSCOW (MRC) -- Clean-up crews were working to contain an oil spill at the Trans-Alaska Pipeline System’s (TAPS) Valdez Marine Terminal, officials said on Wednesday, but the volume spilled was not preventing tankers from loading at the site, as per Hydrocarbonprocessing.

A sump overflow spilled oil into the water at the terminal on Sunday night. By Wednesday, clean-up crews had recovered 574 barrels (24,108 gallons) of an oil-water mix, authorities said. A team composed of system operator Alyeska Pipeline Service Co, the U.S. Coast Guard and the Alaska Department of Environmental Conservation is managing the response and cleanup, now in its third day.

The Valdez terminal is located in Prince William Sound, on the south coast of Alaska, at the terminus of the Trans-Alaska Pipeline System. Workers have put booms on the water to try to stop the spread of an oil sheen, collecting oily snow and digging into the area where the spill originated, the unified command said in a statement.

Despite the spill, regular TAPS operations continue, the statement said. One tanker loaded with crude departed the Valdez terminal Wednesday morning and another had likely arrived by midday to start loading, said Alyeska spokeswoman Michelle Egan.

“We are working with the USCG and ADEC to make sure the loading area is sheen-free so that tankers can arrive and depart,” Egan said in an email.

Alyeska needs to continue loading oil tankers to manage inventories, said Donna Schantz, executive director of the Prince William Sound Regional Citizens Advisory Council, an oversight group. “It’s going to be going on for quite some time. It’s not something that’s going to be over tomorrow,” she said.

As MRC informed earlier, British oil major BP Plc agreed to sell all its Alaskan properties for USD5.6 billion to privately held Hilcorp Energy Co, exiting a region where it operated for 60 years. The deal, which includes interests in the most prolific oil field in US history at Prudhoe Bay, and the 800-mile (1,300-km) Trans Alaska Pipeline, is part of BP's plan to raise USD10 billion over the next two years through asset sales to further strengthen its balance sheet, it said.

Also, BP Plc’s three largest US refineries are operating between 80 and 85% of their individual crude oil processing capacities because of limited storage. Previously, the sources had told Reuters that BP’s 430,000-barrel-per-day (bpd) Whiting, Indiana, refinery, 242,000-bpd Cherry Point, Washington, refinery, and the 155,000-bpd joint-venture refinery in Toledo, Ohio, were operating at 85% of their capacities.

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) -- Saipem (Milan), leading a consortium that also includes Petrojet (Cairo), has been awarded a contract by Egyptian Ethylene & Derivatives Co. (Ethydco) for Egypt’s first polybutadiene rubber (PBR) production facility, according to Chemweek.

The plant, to be built at Alexandria, will be designed to produce 36,000 metric tons/year and use the Versalis process.

Saipem and Petrojet will be jointly responsible for detailed engineering design, procurement and supply of equipment and materials, construction, precommissioning, commissioning up to start-up, and performance testing. The overall value of the contract is for approximately USD150 million.

Ethydco operates a Lummus-process steam cracker designed to produce 460,000 metric tons/year of ethylene; two Univation Technologies–process polyethylene units, each designed for 200,000 metric tons/year; and a 20,000-metric tons/year Lummus-process butadiene unit.

We remind that as MRC reported earlier, in May 2019, Italian oil services company Saipem signed a Preliminary Agreement with JSC GazpromNeft Moscow Refinery and an EPC Contract with Infrastructure Development and Construction (IDC) for an aggregate value of around 500 million Euro. The Preliminary Agreement in Russia covers the execution on an EPC basis of a new "Sulphur Recovery Unit" (SRU) inside the existing Moscow refinery. The signature of the final EPC Contract is expected to take place by the end of the Second Quarter 2019 on the basis of the main terms and conditions agreed between the parties as an integral part of the same agreement. The EPC contract in Serbia encompasses the design and construction of about 150 kilometers of gas pipeline and the engineering of the relevant compressor station.

Butadiene is the main feedstock for the production of acrylonitrile-butadiene-styrene (ABS).

According to MRC's DataScope report, overall ABS imports to the Russian market increased in the first two months of 2020 by 8% year on year to 4,800 tonnes. This figure was at 4,500 tonnes in January-February 2019. February imports of material into the Russian Federation rose by 48% year on year to 2,500 tonnes from 2,700 tonnes a year earlier. Imports were 2,300 tonnes in January 2020.
MRC