Vietnamese Dung Quat refinery says to delay maintenance

MOSCOW (MRC) -- Vietnam’s Binh Son Refining and Petrochemical Co will delay maintenance at its Dung Quat refinery until July 27-September 16 due to the coronavirus pandemic, according to Hydrocarbonprocessing with reference to the company's statement.

It was scheduled to conduct maintenance at the 130,000-barrel-per-day refinery from June 12 to August 1.

The company said in a statement late on Monday that travel curbs due to the coronavirus pandemic had affected its preparation for the maintenance.

Binh Son reported a net loss of 2.33 trillion dong ($99.32 million) in the first quarter of this year, it said.

As MRC informed earlier, Binh Son Refining and Petrochemical took its polypropylene (PP) plant off-stream for a maintenance turnaround in June 2017 for a period of around 7 weeks. The exact date shutdown could not be ascertained. Located in Vietnam,the plant has a production capacity of 150,000 mt/year.

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.
MRC

Indonesian Pertamina cuts 2020 target, Balikpapan refinery shuts early May

MOSCOW (MRC) -- Indonesia’s oil and gas company PT Pertamina is reducing new drilling amid weak demand for oil and is cutting the output target this year by 3%, reported Reuters with reference to chief executive Nicke Widyawati's made to members of parliament.

Crude and gas output is now targeted at 894,000 barrels of oil equivalent per day (boepd), from the previous 923,000, she said.

Meanwhile, Pertamina expects to fully shutdown Balikpapan refinery in early May. Operations at the refinery have been gradually reduced this month.

As MRC informed before, PT Pertamina shut its cracker in Indonesia for maintenance works from 18 March, 2020 to 18 April, 2020. This cracker has a production capacity of 578,000 tons.

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).

Pertamina is an Indonesian state-owned oil and natural gas corporation based in Jakarta. It was created in August 1968 by the merger of Pertamin (established 1961) and Permina (established 1957). Pertamina is the world's largest producer and exporter of liquefied natural gas (LNG).
MRC

POLYPLASTIC was included into the list of strategic enterprises and continues its work

MOSCOW (MRC) -- Research and Production Enterprise “POLYPLASTIC” was included into the list of strategic enterprises for the Russian economy and continues its industrial activity, said the company.

Shipments of polymer compounds from warehouses in Engels, Togliatti and Moscow continue in their usual manner. The company carries out all of its obligations to consumers in full.

Personnel ensuring the continuity of production processes as well as employees working out of office will carry out their work in accordance with personnel health and safety objectives to prevent spread of the coronavirus infection. All employees not included in the continuous production process during the period from April 6 to April 30 will continue to stay at home in self-imposed isolation.

As MRC informed earlier, R&P POLYPLASTIC takes strong actions to prevent the coronavirus infection from spreading and closely follows all World Health Organization and competent government authorities’ guidelines. All company employees who have recently returned from countries with a large number of infected people are in self-imposed isolation and conduct their job functions from home as a preventive measure. Additionally, R&P POLYPLASTIC headquarters and production sites are equipped with state of the art non-contact thermal imaging cameras. Temperature of all employees and visitors is measured on a daily basis.

MRC

US crude futures turn negative for first time on scant storage, weak demand

MOSCOW (MRC) -- US crude oil futures turned negative on Monday for the first time in history as storage space was filling up, discouraging buyers as weak economic data from Germany and Japan cast doubt on when fuel consumption will recover, reported Reuters.

Physical demand for crude has dried up, creating a global supply glut as billions of people stay home to slow the spread of the novel coronavirus.

The May US WTI contract fell USD19.06, or 104.3%, to a discount of 79 cents a barrel at 2:09 p.m (1809 GMT) after touching an all-time low of - USD1.43 a barrel. Brent was down USD1.85, or 6.6%, at USD26.23 a barrel.

The June WTI contract is trading more actively at a much higher level of USD21.6 a barrel. The spread between May and June was more than USD23, the widest in history for the two nearest monthly contracts.

Investors bailed out of the May contract ahead of expiry later on Monday because of lack of demand for the actual oil. When a futures contract expires, traders must decide whether to take delivery of the oil or roll their positions into another futures contract for a later month.

As MRC wrote previously, global oil consumption cut by up to a third. What happens next in the oil market depends on how quickly and completely the global economy emerges from lockdown, and whether the recessionary hit lingers through the rest of this year and into 2021.

Earlier this year, BP said the deadly coronavirus outbreak could cut global oil demand growth by 40 per cent in 2020, putting pressure on Opec producers and Russia to curb supplies to keep prices in check.

We also remind that, in September 2019, six world's major petrochemical companies in Flanders, Belgium, North Rhine-Westphalia, Germany, and the Netherlands (Trilateral Region) announced the creation of a consortium to jointly investigate how naphtha or gas steam crackers could be operated using renewable electricity instead of fossil fuels. The Cracker of the Future consortium, which includes BASF, Borealis, BP, LyondellBasell, SABIC and Total, aims to produce base chemicals while also significantly reducing carbon emissions. The companies agreed to invest in R&D and knowledge sharing as they assess the possibility of transitioning their base chemical production to renewable electricity.

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

SIBUR to ramp up trial production of thermoplastic elastomers at its Voronezh site

MOSCOW (MRC) -- SIBUR is ramping up trial production of thermoplastic elastomers (SBS polymers) at its Voronezh site in accordance with the project schedule, said the company.

Thermoplastic elastomers (TPE) are a unique material, which can significantly improve the quality of output in road construction, roof coating and footwear production, and other industries. The new capacities are set to meet demand in special segments, such as compounds and glues. Thus, in 2020 the Company’s product portfolio will include five new SBS grades, sought after in the footwear, automotive, and packaging industries, as well as in the production of household goods (e.g., hygiene products and items in close contact with food).

The company launched the investment project to increase the production of TPE for road construction, roof coating production and other industries by 50 ktpa in the second half of 2018. The project relied on available government support provided on several levels: municipal and regional support under the Special Investment Contract (SPIC) with the Government of the Voronezh Region and the Administration of the City of Voronezh, and federal support under the agreement on the implementation of the Corporate Competitiveness Improvement Programme (CCIP) with the Russian Ministry for Industry and Trade.

The use of cutting-edge technologies in line with the best global practices for project construction will ensure that TPE production will meet environmental standards. A German air purification plant makes TPE production environmentally friendly. The plant’s pollutant removal efficiency is 99%. The project's general designer was NIPIgaspererabotka, a leading Russian research centre for facility design, procurement, logistics, and construction in the petrochemical industry. Promstroi played the role of the projects’s general contractor.

In January 2020, SIBUR’s Voronezh site (Voronezhsintezkauchuk) completed the construction phase and produced the first tonne of TPE. Since then, the plant has produced 3,000 tonnes of TPE and is proceeding with the homologation of new product grades. With the current TPE output, the total design capacity of Voronezhsintezkauchuk is set to increase to 135 ktpa.

“Thermoplastic elastomers are a unique polymer product with an excellent market potential in the modern world. They are in high demand, and with our additional production capacity we will be able to meet the demand in both the Russian and foreign markets. Other advantages of our TPE investment project include excellent environmental properties of the production process and the product itself, additional tax revenue for the regional budget and an increase in exports from Voronezh Region,” said Pavel Lyakhovich, member of the Management Board and Managing Director at SIBUR.

One of TPE’s key application areas is the production of polymer-bitumen binders (PBBs), which are part of the road pavement’s top layer. PBBs help extend time between repairs and the life of pavement from 3–4 years to 7–10 years, while also improving its crack, heat, shear, water and cold resistance. Other benefits include cutting maintenance expenses almost by half, increasing the road’s surface life some 2.5 times, improving traffic safety and, ultimately, expanding road capacity – all due to fewer repairs.

Despite the unfavourable situation with the spread of COVID-19, SIBUR did not postpone the start of trial production. To minimise the risk of virus spreading and support continuous plant operation, Voronezhsintezkauchuk took all necessary preventive measures as early as in March. Preventive activities include the mandatory thermometry of plant and contractor employees, ongoing monitoring of personnel health, provision of necessary means of personal protection, and a thorough sanitisation of all office and production premises.

As MRC informed earlier, SIBUR will develop a feasibility study for the construction of a gas processing plant near Kazan by July 2020. Based on the feasibility study, the company"s shareholders will decide on the construction of the enterprise.

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.

SIBUR Holding PJSC is the largest petrochemical company in Russia and Eastern Europe with full coverage of the industry cycle from gas processing, production of monomers, plastics and synthetic rubbers to plastics processing. The main shareholder of SIBUR Leonid Mikhelson controls 48.48% of the company, Gennady Timchenko - 17%, Kirill Shamalov - 3.88%, the current and former management of the company (including SIBUR chairman of the board Dmitry Konov and head of Gazprom Neft Alexander Dyukov) - 10.6%, Chinese Sinopec and the Silk Road Fund - 10% each.
MRC