INEOS collaborates with Plastic Energy on new plastics recycling facility

MOSCOW (MRC) -- INEOS and Plastic Energy have agreed to collaborate in constructing a new plant to convert waste plastic into raw material to make new plastic, reported Kemicalinfo.

The new facility would be operational by the end of 2023.

Plastic Energy’s proprietary Thermal Anaerobic Conversion (TAC) technology turns previously unrecyclable plastic waste into TACOIL. The resulting material is then used for replacement of conventional oil-derived raw materials in INEOS crackers to produce virgin plastic for use across medical products, food packaging, lightweight automotive parts and pipes for safe water transportation.

First product results from the new advanced recycling process at Plastic Energy have been completed. At the INEOS cracker at Koln, Germany, the new raw material was successfully converted into virgin polymer. Selected consumers and brands will now use the plastics made from this trial to highlight the benefits of the process.

Advanced recycling allows the finished product to be manufactured with an equivalent specification to virgin material. It eliminates all contamination so that the resulting polymers can be used in food and medical packaging where highest degree of product purity is required for safety standards.

Rob Ingram CEO INEOS Olefins & Polymers Europe said, “This represents the delivery of another important milestone in the INEOS sustainability strategy. To take plastic waste back to virgin plastic is the ultimate definition of recycling and will create a truly Circular Economy solution. This will enable us to offer another opportunity for our customers to help them meet their pledges and commitments in this area.’

Carlos Monreal Founder and CEO of Plastic Energy said, “We will work jointly to bring this new solution on to the market and respond to the growing demand for high quality recycled content and the growing imperative to increase recycling rates and move towards a circular future for plastics.”

As MRC informed previously, earlier this month, INEOS, one of the world’s largest manufacturing companies, announced that it is to build a fourth hand sanitiser plant. The plant to be built in Etian will be located to serve the hard hit hospitals in Paris and North Eastern France as well as meet the needs of Belgium. The company has also announced that it has met its ten-day target to build a hand sanitiser plant in Lavera France and has today started production of 1 million hand sanitisers a month.

We remind that in January 2019, INEOS announced Antwerp as the location for its new petrochemical investment. The EUR3 billion investment will be the biggest ever made by INEOS and is first cracker to be built in Europe in 20 years. The investment is a game changer for the chemical sectors and will bring huge benefits to the Belgium and wider European economies.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 215,390 tonnes in the first month of 2020, up by 23% year on year. Shipments of all grades of high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) increased due to higher capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market were 127,240 tonnes in January 2020, up by 33% year on year. ZapSibNeftekhim's homopolymer PP accounted for the main increase in shipments.

INEOS is a global manufacturer of petrochemicals, specialty chemicals and oil products employing 22,000 people. It has 34 businesses, with a production network spanning 183 manufacturing facilities in 26 countries.
MRC

US crude oil storage is filling rapidly

MOSCOW (MRC) -- U.S. crude storage facilities are filling rapidly, albeit from a low starting level, and tank space will become a problem if the global oil market remains heavily oversupplied in June and beyond, reported Reuters.

With global lockdowns already sharply reducing demand for oil, a lack of storage would weigh further on already depressed prices, leaving producers with few financial or physical alternatives but to turn off the taps.

The system still has the capacity to continue absorbing crude at the current rate for a few more weeks, and longer if the inflow is slowed by production cuts from OPEC and its allies as well as U.S. and Canadian producers.

But a more severe constraint is likely to come from the refined fuels system, where storage capacity is lower and logistics constraints are tougher.

U.S. Energy Information Administration data on working storage capacity covers crude rather than refined products – where storage is split between refiners, blenders, wholesalers, retailers and end users.

But once fuel storage is full, refineries will have no choice but to cut back crude processing, which will cause crude stocks to back up even more rapidly.

Working storage capacity for crude oil at refineries and tank farms amounted to 653 million barrels at the end of September 2019, the latest data available, according to the EIA.

Net stocks of crude held at refineries and tank farms amounted to 375 million barrels at the end of last week, implying storage facilities were about 57% full.

Storage utilization has climbed from 50% four weeks ago, before the economy started to go into lockdown, but it remains well below the recent peak of 68% set back in March 2017.

There is still around 280 million barrels of unused storage capacity available, down from 328 million barrels four weeks ago, but more than the 175 million barrels available at the tightest point in March 2015.

However, crude inventories have been rising at an average of 16 million barrels per week over the last three weeks. If tank farms continue to fill at this rate, spare capacity will fall back to its recent lows by the end of May.

U.S. petroleum markets, refining and storage are organised regionally rather than nationally, with limited transfer capacity and flexibility between regions.

Most crude storage capacity is concentrated on the Gulf Coast and in the Midwest, which together account for 83% of the total, with more limited volumes on the East and West Coasts and in the Rocky Mountain region.

Crude storage utilisation in the Gulf Coast refining region is at 55%, up from 50% four weeks ago, though still well below its recent peak of 72%.

In the Midwest refining region storage utilisation is at 60%, up from 48% four weeks earlier, but still well below the recent peak of 80%.

There is still 166 million barrels of spare capacity in the Gulf Coast, compared with a recent low of just 90 million, and 69 million barrels in the Midwest, compared with a recent low of just 27 million.

Working storage capacity is defined as that part of the tank from which crude can readily be withdrawn; it excludes tank bottoms, where pumping cannot effectively remove the oil.

Even so, working storage capacity cannot be filled 100%; some must remain available for receiving new deliveries, tank-to-tank transfers, blending, and other routine operations.

Operational requirements suggest the tank system could become effectively full well before working capacity reached 100%.

But experience has shown the system can operate with relatively high storage utilisation rates. The system managed to cope with a nationwide average of 69% (in March 2017) and with regional averages as high as 80% in the Midwest (March 2015) and 72% on the Gulf Coast (Feb 2017).

If the global oil market remains oversupplied into June and July, crude and products storage could start to become a more significant problem.

Cash prices for crude and fuels, as well as near-dated futures contracts, are trading at big discounts to compel those without firm buyers or access to storage in June and beyond to slow down their wells and refining capacity.

John Kemp is a Reuters market analyst. The views expressed are his own.

As MRC informed earlier, 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.

We remind that 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

PBF Toledo refinery to delay full restart after completing turnaround

MOSCOW (MRC) -- BF Energy Inc is indefinitely delaying the restart of several units including a cat cracker and a crude unit at its 170,000 barrel-per-day refinery in Toledo, Ohio, due to poor refinery economics, reported Reuters with reference to sources familiar with the matter.

The units were taken offline earlier this year as part of a plant turnaround, but since that time the spread of the novel coronavirus has sapped demand for key products including gasoline and jet fuel.

The restart of the refinery’s gas plant and alkylation unit will also be delayed from their initial targeted early April restart, the sources said. Some units will be brought back online in the coming days, they said, and the refinery will continue to focus on chemical and diesel production.

PBF Energy did not respond to a request for comment.

The refinery has also drastically reduced contract maintenance workers in the plant in response concerns over the spread of coronavirus, the sources said.

Analysts have said that refineries in the US Midwest and Rocky Mountains that mostly produce gasoline and have limited storage space for crude and refined products are vulnerable to shutdowns as stocks build.

As MRC wrote before, US refiner PBF Energy has completed its acquisition of Shell’s 157,000 bbl/day Martinez refinery near San Francisco, California. The USD1bn deal, agreed in June 2019, was completed effective 1 February 2020.

Besides, in late March 2020, PBF Energy Inc said it was operating its refineries at minimum rates, with throughput about 30% lower than the refiner’s expectations, as coronavirus-driven travel curbs hit fuel demand.

We also remind that Shell Singapore restarted its naphtha cracker in Bukom Island in early December 2019, following a two months maintenance shutdown since the beginning of October 2019. Thus, this cracker was taken off-stream for the turnaround on 1 October 2019. The cracker is able to produce 960,000 tons/year of ethylene and 550,000 tons/year 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 215,390 tonnes in the first month of 2020, up by 23% year on year. Shipments of all grades of high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) increased due to higher capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market were 127,240 tonnes in January 2020, up by 33% year on year. ZapSibNeftekhim's homopolymer PP accounted for the main increase in shipments.
MRC

BASF and INOV agree to expand partnership

MOSCOW (MRC) -- BASF and Shandong INOV Polyurethane Co. (INOV) have strengthened their existing relationship with the signing of a framework agreement to serve increasing demand from various industries in China and overseas, according to Apic-online.

Specifically, the parties will work together in the areas of raw material supply, market expansion, research and development for sustainable products, improved quality of operation and environmental protection, health and safety, BASF noted.

Under the agreement, both partners will increase production capacities of raw materials, including diphenylmethane diisocyanate (MDI), toluene diisocyanate (TDI), and polytetrahydrofuran (PolyTHF). The deal will also strengthen cooperation to develop performance materials and construction materials.

"This is a win-win strategy, which combines BASF's proven research capabilities with our expertise in production," said Xu Jun, chairman and general manager of INOV. "We are looking forward to working with BASF to produce high-quality chemical products for local and overseas customers along the value chain."

Based in Zibo, Shandong Province, China, INOV is China's "leading" producer of propylene oxide, downstream derivatives of ethylene oxide, and polyurethane, BASF added.

As MRC reported earlier, BASF has restarted its No. 1 steam cracker following a maintenance turnaorund. Thus, the company resumed operations at the plant on September 30, 2019. The plant was shut for maintenance in mid-August, 2019. Located at Ludwigshafen in Germany, the No. 1 cracker has an ethylene production capacity of 235,000 mt/year and a propylene production capacity of 125,000 mt/year.

Ethylene and propylene are feedstocks for producing 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.

BASF is the leading chemical company. It produces a wide range of chemicals, for example solvents, amines, resins, glues, electronic-grade chemicals, industrial gases, basic petrochemicals and inorganic chemicals. The most important customers for this segment are the pharmaceutical, construction, textile and automotive industries. BASF generated sales of around EUR63 billion in 2018.
MRC

SIBUR sustainability committee outlines further steps in coronavirus response

MOSCOW (MRC) -- SIBUR’s Sustainability Committee held a regular meeting online to review measures implemented by the Company in dealing with the COVID-19 outbreak and approve further steps in key focus areas, said the company.

The safety of our employees and clients is at the centre of the Company’s pandemic response. SIBUR works consistently and proactively to tackle COVID-19 and its consequences. The Company is placing major emphasis on protecting its employees and partners as it seeks to maintain the highest level of customer service and meet the increased demand for materials used in medical products and safe packaging.

We have cancelled all employee business trips, urging staff to refrain from personal travel outside the region of their residence. The Company has asked office employees to work remotely while retaining their salary levels. For employees engaged in the continuous production of supplies for strategically important industries, including the healthcare sector, SIBUR has introduced a shift-camp work model. With their full agreement, employees are transitioned to live and work at on-site shift camps, with shifts rotating every two weeks. Before joining a shift, all staff members are tested for coronavirus. All of them, including heads of production units who have tested negative are isolated from the outside world with their consent to live and work in a special safety environment created on site. The facilities available to them include dormitories, canteens offering three-time meals at the Company’s expense, convenience stores, recreational areas and first aid posts. Those joining shift camps will see their monthly remuneration increase by 20%.

The Sustainability Committee highlighted the importance of continued partnership with external counterparties. As of now, SIBUR delivers on all of its contractual obligations and takes active steps to mitigate the risk of non-performance due to imposed restrictions, including by altering its supply routes to overcome logistic limitations in certain regions.

The Company increases its production of polymers, including polypropylene, to ensure supply of high-quality disposable PPE to healthcare facilities. The prices for medical grade polymers are kept at their minimum levels. We also expand cooperation with producers of medical supplies to support high utilisation of their capacities and help drive their production growth. In addition, SIBUR invests in developing a feedstock base for import substitution of medical products in order to meet the nation-wide demand for disposable PPE.

As part of social and economic support in its regions of operation, the Company will provide over 40,000 epidemiological kits required by healthcare facilities. On top of anti-crisis aid, the committee decided to continue the Formula for Good Deeds charitable programme, keeping its scope intact. The Company works together with its partners and grantees to transform the 2020 projects and ensure their successful implementation while abiding by the strict safety requirements for organisers and attendees.

Alexey Kozlov, Managing Director and Member of SIBUR’s Management Board, commented: “SIBUR remains focused on ensuring the safety of our employees and clients. We take comprehensive measures to mitigate the negative impact of the coronavirus outbreak, regularly monitor their effectiveness and maintain a flexible approach to planning further steps. We will continue to work closely with our partners, clients and government authorities to respond to this challenge and its developments promptly and effectively."

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