Total says Saudi Amiral project spared planned spending cuts

MOSCOW (MRC) -- French energy major Total said its joint USD5 billion petrochemical project with Saudi Aramco in the Saudi city of Jubail will not be hit by planned cuts in investment, although the partners were focused on controlling costs, according to Hydrocarbonprocessing.

Total, like other oil companies, has announced deep cuts in spending, and is expected to shelve some projects after restrictions on movement to contain the coronavirus destroyed fuel demand and led to a collapse in the price of oil.

“The recently announced objective by Total to reduce its capital expenditure for 2020, including USD500 million in the downstream sector, does not include this project,” Total said in a statement to Reuters earlier this year.

It said the partners were focused on controlling the cost and engineering studies for the petrochemical complex located next to the Satorp refinery were underway.

The complex, which would comprise a mixed-feed cracker with the capacity to produce 1.5 million tonnes a year of ethylene, is expected to start in 2024, Total said, adding the partners were pursuing efforts to keep to the announced schedule.

As MRC wrote before, in November 2019, Total disclosed that itis 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 DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.

Total S.A. is a French multinational oil and gas company and one of the six "Supermajor" oil companies in the world with business in Europe, the United States, the Middle East and Asia. The company's petrochemical products cover two main groups: base chemicals and the consumer polymers (polyethylene, polypropylene and polystyrene) that are derived from them.
MRC

COVID-19 - News digest as of 28.08.2020

1. Sinopec Shanghai Petchem to raise second-half crude throughput

MOSCOW (MRC) -- Sinopec Shanghai Petrochemical, a refining subsidiary of Asia's top refiner Sinopec, plans to raise daily crude oil throughput by 7.8% in the second half of 2020, as per Hydrocarbonprocessing. The Chinese company aims to process 7.68 million tonnes of crude oil in July-December, equivalent to 304,700 barrels per day, a company official said at a briefing on Thursday. That compares to 7.02 million tonnes of crude oil in the first half of 2020, which was down 6.1% from the same period last year due to the coronavirus outbreak and refinery overhaul. The firm has annual crude refining capacity of 16 million tonnes.

MRC

August LDPE prices rose in the Russian market by more than a quarter

MOSCOW (MRC) -- The Russian market saw a constant rise in low density polyethylene (LDPE) prices throughout August due to good demand and shutdowns for maintenance at some plants. The increase in prices of some grades exceeded 25% for the month, according to ICIS-MRC Price report.

The rise in LDPE prices in Russia began back in late June because of shutdowns for turnarounds at Angarsk Polymers Plant and Gazprom neftekhim Salavat. But in August, the dynamics of price growth increased significantly due to strong demand and the upcoming shutdowns for maintenance simultaneously at three plants in September. Polyethylene (PE) prices of some sellers grew by Rb20,000/tonne and more in the last summer month.

Angarsk Polymers Plant shut down its production capacities for a 30-day turnaround on 22 June, however, the plant had managed to resume its PE production after maintenance only by 3 August, and PE production was again taken-off stream on 10 August due to problems at the ethylene unit. The producer has not resumed its LDPE production so far.

A similar situation occurred with Gazprom neftekhim Salavat, the shutdown started on 1 July and was also planned to be conducted during the month, but the resumption of LDPE production started only 10 days after the scheduled date. At the same time, Salavat PE was virtually completely absent in the spot market in the second half of August.

It is also worth noting that Kazanorgsintez reduced its LDPE output in August due to a shortage of ethylene.

Many sellers limited their sales in the spot market throughout August, and prices were also adjusted on a weekly basis. In the contract market, consumers reported restrictions from producers. As a result, many converters were unable to build up additional LDPE inventories.

But September will be the most difficult month for consumers because of a series of shutdowns for maintenance at three more plants. Ufaorgsintez will be the first to start gradually shutting down its production for a turnaround from 29 August, the maintenance works are scheduled to be fully completed by 6 October.

Tomskneftekhim intends to shut down its production capacities for a two-week turnaround in early September. Kazanorgsintez will shut down its production capacities in several phases from 17 September, the outage will last until 10 October.

In late July, prices for 108 grade PE started from Rb74,500/tonne CPT Moscow, including VAT, and offer prices for 158 grade LDPE were at an average of Rb76,500/tonne CPT Moscow, including VAT. In late August, prices rose to Rb95,000/tonne CPT Moscow, including VAT, and Rb100,000/tonne CPT Moscow, including VAT, respectively.
MRC

HDPE production in Russia up by 84% in Jan-Jul 2020

MOSCOW (MRC) -- Russia's production of high density polyethylene (HDPE) totalled 1,040,000 tonnes in the first seven months of 2020, up by 84% year on year. ZapSibNeftekhim accounted for the main increase in the output, according to MRC's ScanPlast report.

July total HDPE production in Russia was 147,500 tonnes, whereas this figure was 114,400 tonnes a month earlier, the largest producer - ZapSibNeftekhim - raised its capacity utilisation after the shutdown for a scheduled maintenance in July. Thus, overall HDPE output reached 1,040,000 tonnes in January-July 2020, compared to 564,500 tonnes a year earlier. All producers raised their output, but ZapSibNeftekhim accounted for the greatest increase.

The structure of HDPE production by plants looked the following way over the stated period.


Kazanorgsintez reduced its HDPE production in July in favour of linear low density polyethylene (LLDPE), the total production was 41,500 tonnes, compared to 42,600 tonnes a month earlier. The plant's overall HDPE output reached 312,600 tonnes in the first seven months of 2020, down by 2% year on year.

Stavrolen shut down some of its HDPE production capacities last month due to technical issues, the total production was 22,800 tonnes versus 27,500 tonnes in June. The plant's overall output totalled 186,700 tonnes in January-July 2020, up by 2% year on year.

Gazprom neftekhim Salavat reduced its capacity utilisation in July, the plant's HDPE production dropped to 8,700 tonnes from 11,300 tonnes a month earlier. The Salavat plant's overall output of polyethylene (PE) reached 73,100 tonnes, up by 19% year on year, such an increase in production was caused by the absence of shutdown for maintenance this year.

ZapSibNeftekhim produced 74,600 tonnes last month versus 33,000 tonnes in June, the low figure of the first summer month was due to a two-week shutdown for a turnaround. The plant's overall production totalled about 468,000 tonnes over the stated period.

MRC

LyondellBasell shuts multiple plants ahead of Hurricane Laura's landfall

MOSCOW (MRC) -- LyondellBasell has shut multiple plants in Louisiana and Texas ahead of Hurricane Laura's landfall, reported S&P Global with reference to a spokeswoman's confirmation in an email Aug. 26.

Spokeswoman Chevalier Gray said the company had shut two polypropylene (PP) plants in Lake Charles, Louisiana; three PP plants in Alvin, Texas; and a high density polyethylene plant (HDPE) in Bayport, Texas, along the Houston Ship Channel.

The company operates 1 million mt/year and 400,000 mt/year PP plants in Lake Charles, which is among the cities in the storm's direct path.

Hurricane Laura strengthened to a Category 4 storm, packing winds up to a maximum of 140 mph, on Aug. 26 and was expected to make landfall near the Texas-Louisiana state line at midnight or shortly thereafter on Aug. 27.

The National Hurricane Center said Hurricane Laura's storm surge along the coastline could reach 15-20 feet at Calasieu Lake in Lake Charles.

Chevalier said a "ride-out crew," or a small team of Lake Charles workers, remain on site "to ensure the safety of the plant and our assets during the storm." Such ride-out crews are common at refineries and chemical plants when storms hit.

LyondellBasell's other shut assets include three PP plants at Bayport near the mouth of the Houston Ship Channel with capacities of 1.16 million mt/year, 455,000 mt/year and 235,000 mt/year. The shut HDPE plant in Alvin, Texas, can produce up to 180,000 mt/year.

As MRC reported previously, in early August, 2020, China’s Bora LyondellBasell Petrochemical, a JV between the privately owned Bora Enterprise Group and the world's petrochemical major - LyondellBasell, has started up its new steam cracker at the Panjin complex in northeast China. The steam cracker, when fully operational, is able to produce up to 1 mln mt/year of ethylene.

According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.

LyondellBasell is one of the largest plastics, chemicals and refining companies in the world. Driven by its 13,000 employees around the globe, LyondellBasell produces materials and products that are key to advancing solutions to modern challenges like enhancing food safety through lightweight and flexible packaging, protecting the purity of water supplies through stronger and more versatile pipes, and improving the safety, comfort and fuel efficiency of many of the cars and trucks on the road. LyondellBasell sells products into approximately 100 countries and is the world's largest licensor of polyolefin technologies.
MRC