COVID-19 - News digest as of 22.04.2020

1. 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.


MRC

MOSCOW (MRC) -- DuPont lifted its first-quarter earnings outlook as the coronavirus disease 2019 (COVID-19) pandemic bolsters demand for products such as Tyvek protective fabric, but withdrew its full-year guidance and announced steps to improve its balance sheet because the virus’s longer-term impacts on markets such as automotive and oil and gas remains unclear, reported Chemweek.

DuPont expects first-quarter 2020 adjusted earnings of USD0.82-0.84/share, well above the analysts’ consensus estimate of USD0.68/share, as reported by Refinitiv (New York), and the company’s initial first-quarter guidance of USD0.70-0.74/share, issued on 11 March.

First-quarter net earnings are expected to be USD0.70-USD1.00/share, on net sales of approximately USD5.2 billion. The company expects a first-quarter loss from continuing operations in the range of USD510-725 million operating EBITDA of approximately USD1.3 billion.

The company acknowledged significant uncertainty for the rest of the year and weakness in automotive, oil and gas, and industrial markets due to COVID-19, and withdrew its full-year guidance. "As this pandemic expands globally, the uncertainty around demand in select end-markets continues,” said Ed Breen, Executive Chairman and CEO. “In response, we continue to advance initiatives to improve our working capital and have taken steps to delay certain capital investments and idle production at several manufacturing sites."

The company entered into a 364-day, USD1.0-billion revolving credit facility, replacing the USD750 million revolving credit facility that was set to expire in June 2020, and secured a USD2.0-billion, 364-day delayed-draw facility ensuring its ability to meet the November 2020 maturities. "Securing these two new facilities further strengthens our near-term liquidity position," Breen says. "Additionally, we now have committed financing in place to bridge our debt maturing in November 2020 to the receipt of the special cash payment in connection with the Nutrition & Biosciences and IFF transaction. Combined with our existing cash balances and available borrowings through our commercial paper program, these facilities provide the liquidity needed to navigate these uncertain times."

DuPont has also idled production at several manufacturing sites, predominantly production plants within the transportation and industrial segment, due to significant downturn in automotive production.

The company will report first-quarter results on 5 May.

As MRC informed earlier, DuPont, which operates one of the Richmond region’s largest manufacturing plants, confirmed last Monday that five local employees have tested positive for the coronavirus, but the company’s local manufacturing operations are still functioning.

We also remind that an employee at the Port Arthur Total refinery has tested positive for the coronavirus. The company confirmed Tuesday that the employee who tested positive is in self-quarantine and hasn't been at the site since March 26. Total says it has 'implemented its pandemic response in the case of a positive COVID-19 test, which includes disinfecting and sanitation of the potentially-affected areas.'

In November 2019, Total disclosed that it is evaluating construction of a new gas cracker at its Deasan, South Korea, joint venture (JV) with Hanwha Chemical.

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) -- Portugal’s Galp Energia will suspend output as its largest oil refinery at Sines for a month from May 4 as the drastic drop in demand due to the coronavirus outbreak has left the company out of storage space, a Galp spokesman said, as per Hydrocarbonprocessing.

The move follows the suspension on April 10 of the group’s smaller refinery in Matosinhos, bringing all its domestic oil and gas operations - making up 20% of refining capacity on the Iberian peninsula - to a halt.

As MRC informed earlier, Galp Energia said on Tuesday it will kick off its green business by installing renewable energy capacity of 10 gigawatts in the decade ahead. Galp, which last month bought solar power projects from Spain's ACS for 2.2 billion euros (USD2.38 billion), hopes to install 3.3 gigawatts of solar energy in Portugal and Spain alone by 2023, generating more than 10% in equity returns. Fossil fuel companies are racing to adapt to investor-demands for more sustainable business models as public awareness of climate change grows.

As MRC reported before, 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, 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) -- GAIL (India) Ltd has shut its petrochemical complex in Pata, Uttar Pradesh as the nationwide lockdown severely hit demand and creates logistics bottleneck that leads to bloated warehousing issue, reported CommoPlast.

In fact, market sources informed that following the lockdown, which started on 24 March 2020, about two-thirds of trucks that used to transport the materials to buyers stopped operations.

The plant houses two ethylene crackers with a combined capacity of 950,000 tons/year. Downstream plants include 210,000 tons/year HDPE/LLDPE swing unit, 200,000 tons/year standalone HDPE units, and a 400,000 tons/year metallocene PE unit.

It is unclear when the company would restart the operation as the Indian government extended the lockdown until 3 May 2020 to combat the COVID-19 outbreak.

As MRC reported before, in May 2019, GAIL approved the revival of an existing liquefied petroleum gas (LPG) plant for conversion into a new polypropylene (PP) complex in Usar, Raigad district of Maharashtra, India. The "first of its kind project in India" will have 500,000 t/y of PP capacity, as well as an integrated propane dehydrogenation unit, at an estimated cost of Rs 8,800 crore, GAIL noted. The project is scheduled to be commissioned by fiscal year 2023-2024.

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.

Gas Authority of India Limited (GAIL) is the largest state-owned natural gas processing and distribution company in India. It is headquartered in New Delhi. It has the following business segments: natural gas, liquid hydrocarbon, liquefied petroleum gas transmission, petrochemicals, city gas distribution, exploration and production, GAILTEL and electricity generation.
MRC

MOSCOW (MRC) -- China is set to issue more crude oil import quotas to non-state refiners in its second batch of allowances for 2020, several sources at five independent refineries told Reuters.

China’s Ministry of Commerce will issue quotas totaling 53.88 million tonnes (393.32 million barrels), said the sources, who said they have seen documents outlining the allocations.

The new quotas are the top-up volumes for the first batch of 2020 quotas that were granted at the end of last year of 103.83 million tonnes.

A total of 36 companies, including 31 independent refiners and five trading entities that are affiliated to state-run companies, are expected to receive the second batch of crude import quotas, the sources said.

Private refinery Hengli Petrochemical Co Ltd is set to receive a quota of 8 million tonnes and Zhejiang Petrochemical Corp may receive 9.6 million tonnes, according to company officials.

The refiners have yet to receive the official quota release from the Commerce Ministry, but the release could come within a few days, the sources said.

The ministry did not respond to a faxed request seeking comment.

Non-state crude oil import quotas for the whole year of 2020 were set at 202 million tonnes, the ministry said in November.

As MRC informed earlier, rather than cutting back on imports, China pushed crude oil into storage tanks at almost double the rate in the first quarter of this year than it did in the same period in 2019 as the new coronavirus hit domestic consumption. China doesn’t release official data on flows into strategic and commercial stockpiles, but an estimate can be made by subtracting the amount of crude processed by refineries from the total volume of oil available from both imports and domestic output.

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.
MRC