ConocoPhillips cuts production, buybacks, spending again

MOSCOW (MRC) -- ConocoPhillips said it would cut gross production by 225,000 barrels of oil per day while also suspending its share repurchase program and cutting back further on capital spending to weather the collapse in oil prices, said Hydrocarbonprocessing.

Oil and gas producers have sunk deep into crisis mode over the past month as the slump in demand caused by coronavirus lockdowns left the world’s big producers producing far more than current needs and crude prices falling below USD30.

ConocoPhillips said it was currently cutting back production at its Surmont oil sands facility in Canada by about 100,000 barrels of oil per day (bpd) due to low prices for Canadian crude. The independent producer also plans to begin reducing production across the lower 48 U.S. states from May, with an initial cutback of 125,000 bpd.

North American oil producers have so far announced cuts of more than 550,000 oil equivalent barrels per day (boepd) for the year, data compiled by Reuters showed, with more expected to come in quarterly earnings reports over the next few weeks.

The U.S. Energy Information Administration expects U.S. crude oil production to fall about 500,000 bpd this year to an average 11.8 million bpd in 2020. ConocoPhillips also said it would cut its operating capital expenditures by an additional USD1.6 billion to USD4.3 billion. This comes on top of a USD700 million reduction announced last month and brings the total cut to about 35% from its original guidance of USD6.6 billion.

U.S. and Canadian producers, generally burdened with higher costs than some of their global competitors, have already slashed spending by more than USD37 billion, or around 30%.

ConocoPhillips said the roll back in spending would be primarily focused on North America. The company, which last month halved USDts USD3 billion a year share buyback program, said it would suspend repurchases and cut operating costs to save USD5 billion in cash.

As MRC informed earlier, ConocoPhillips has seized products belonging to Venezuelan state oil company PDVSA from the Isla refinery it runs on Curacao. Conoco has won court orders allowing it to seize PDVSA assets on Caribbean islands, including Curacao, in efforts to collect on a USD2 billion arbitral award linked to the 2007 nationalization of Conoco assets under late leader Hugo Chavez.

According to MRC's ScanPlast report, 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

1. SIBUR and Netkanika agree to boost supplies of polypropylene for protective medical devices

MOSCOW (MRC) -- SIBUR, Russia’s largest integrated petrochemicals company, and Netkanika, a major manufacturer of high-quality nonwoven materials, agreed to expand cooperation to provide the healthcare industry with high quality single-use personal protective equipment, said the company. SIBUR undertakes to deliver the polypropylene grade for medicinal and hygienic use in the quantities required to fully utilise Netkanika’s capacities. This grade is perfectly suited for the production of nonwoven fabric, which is light-weight and low density (g/cm2), and at the same time durable, soft and air permeable. End products made of polypropylene-based multilayer nonwowen fabrics are characterised by a high bacterial filtration rate, air permeability and fluid resistance. Polypropylene for medicinal and hygienic use is produced at several SIBUR’s sites, including ZapSibNeftekhim.


MRC

MOSCOW (MRC) -- NOVA Chemicals is resuming construction activities in a phased approach at its Corunna site, according to Blackburnnews.

The company said beginning Thursday, April 16 it will gradually increase the number of workers involved in construction of the new polyethylene plant and the cracker expansion project.

NOVA announced late last month that it was sending home the majority of the construction workers at the Corunna site to reduce the risk of exposure to COVID-19. In an updated statement Wednesday, the company said it intends to safely and steadily resume some construction activities on both projects.

"In keeping with Ontario government directives for significant industrial petrochemical projects and our company’s foundational principles and core values, NOVA Chemicals has taken significant steps to maintain the health and safety of our employees, contractors and community," the statement said.

NOVA Chemicals President and CEO Todd Karran said many of them are working from home until future notice but they have site-critical employees and contractors working at their manufacturing locations and construction projects.

"I continue to be impressed by the resiliency and dedication of our workforce and I’m confident that together we are taking the necessary precautions to keep our people safe," said Karran. "With a strong commitment to social distancing and working responsibly, we can do our part to flatten the curve."

NOVA Chemicals is building a new polyethylene plant at its new Rokeby Line site adjacent to the existing Corunna plant. The Corunna cracker is being expanded to provide additional ethylene feedstock.

The start-up of the expanded facilities, costing approximately USD2.2 billion, was initially targeted for late 2021.

As MRC reported before, NOVA Chemicals expanded ethylene production capacity by 20% at its cracker in Corunna, Ontario from the previous capacity of about 839,000 tpy. The expansion occurred between 2014 and 2018 and was part of a wave of expansions and upgrades to NOVA's existing facilities near Sarnia, Ontario. Other upgrades in the plan included a debottlenecking of the Moore low-density polyethylene (LDPE) line and a retrofit of the Moore high-density polyethylene (HDPE) line.

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.

NOVA Chemicals Corporation is a plastics and chemical company headquartered in Calgary, Alberta, Canada, and is wholly-owned ultimately by Mubadala Investment Company of the Emirate of Abu Dhabi, United Arab Emirates.
MRC

MOSCOW (MRC) -- Borealis AG has announced that it has completed the acquisition of NOVA Chemicals’ 50% ownership interest in Novealis Holdings LLC, according to Kemicalinfo.

Formed in 2018, Novealis is the joint venture between affiliates of Borealis and NOVA Chemicals, which subsequently formed a 50/50 joint venture with an affiliate of Total S.A. to launch Bayport Polymers LLC in Houston, Texas, US.

"This acquisition supports our global growth ambitions," commented Alfred Stern, Borealis CEO.

"Acquiring NOVA Chemicals’ share in Novealis will allow us to further increase our footprint in North America, enabling us to better serve our customers in this region with our value-add Borstar technology and its related products," he added.

As MRC informed earlier, on 9 September 2019, Borealis held the groundbreaking ceremony for its new, world-scale propane dehydrogenation (PDH) plant. Located at the existing Borealis production site in Kallo, Belgium, the new facility has a targeted production capacity of 750,000 metric tonnes per year of propylene, making it one of the largest and most efficient plants of its kind in the world. With a total of around EUR 1 billion invested in the course of the project, the investment is the largest ever made by Borealis in Europe. It underscores the company’s commitment to its operations on the continent, and to being the supplier of choice to its European customers.

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.

Borealis is a leading provider of innovative solutions in the fields of polyolefins, base chemicals and fertilizers. With headquarters in Vienna, Austria, Borealis currently employs around 6,500 and operates in over 120 countries.

NOVA Chemicals Corporation is a plastics and chemical company headquartered in Calgary, Alberta, Canada, and is a wholly owned subsidiary of the International Petroleum Investment Company (IPIC) of the Emirate of Abu Dhabi, United Arab Emirates.
MRC

MOSCOW (MRC) -- PTTGC America expects fallout from the coronavirus pandemic to further delay its final investment decision to launch major construction on a petrochemical complex in southeast Ohio, reported S&P Global with reference to the company's statement in an email Wednesday.

"We do believe FID will be impacted by the health crisis, but at this point it is difficult to predict how," the company said on Wednesday. "The companies are doing all they can to reach FID as quickly as possible, but as you know, there are things out of their control."

PTTGC America and its partner, Daelim Chemical USA, "would begin construction pretty much immediately after FID," the company said.

PTTGC, the US arm of Thailand's PTT Global Chemical, has repeatedly delayed FID for the project, with the latest timeline targeting the first half of 2020. The companies received a necessary permit in December 2018 from Ohio's Environmental Protection Agency, and the FID delays allowed more time to evaluate engineering designs, and site preparation work began in mid-2019.

The companies said in February that preparation work was completed, and activity would be "significantly reduced" for the next two to three months as financing and supply agreements were finalized.

The project includes a 1.5 million mt/year ethane cracker and four derivative polyethylene plants with a combined capacity of 1.6 million mt/year in Shadyside, Ohio.

The new complex would be part of a second wave of new petrochemical projects fueled by cheap feedstocks and the second in the US Northeast, home to the Marcellus and Utica natural gas shale plays. The first wave involved eight crackers and 13 PE plants, most of which have come online.

However, the pandemic has prompted some projects, including Shell's USD6 billion complex in southwest Pennsylvania, to suspend construction work. Such projects bring hundreds of contractors to sites, and social distancing measures deemed necessary to combat the spread of the pandemic would be difficult to maintain during such work.

Shell in March said the company temporarily suspended work at the complex, and would consider a phased construction ramp-up after imposing additional mitigation measures aligned with US Centers for Disease Control and Prevention guidelines.

Other projects that have stopped or slowed work include FG LA's "Sunshine Project" involving two new 1.2 million mt/year crackers and four new PE plants with a combined 1.6 million mt/year capacity; LyondellBasell's new USD2.4 billion propylene oxide/tertiary butyl alcohol plant east of Houston; and NOVA Chemicals' new 454,000 mt/year PE facility and cracker expansion in Ontario.

As MRC informed earlier, PTT Global Chemical (PTTGC) fully restarted its No. 2 cracker in Map Ta Phut in early March,2020, after a planned turnaround. The company started resuming operations at the cracker by end-February, 2020. The cracker was shut for maintenance on January 20, 2020. Located at Map Ta Phut, Thailand, the No. 2 cracker has an ethylene production capacity of 400,000 mt/year. The company also operates No. 1 cracker at the same site with a capacity of 515,000 tonnes of ethylene and 310,000 tonnes of propylene per year, which was also shut on 23 January, 2020, for a 40-day turnaround.

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

According to MRC's ScanPlast report, 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.

PTT Global Chemical is a leading player in the petrochemical industry and owns several petrochemical facilities with a combined capacity of 8.45 million tonnes a year.
MRC