Deepak Phenolics commissions IPA plant in Dahej, India

MOSCOW (MRC) -- Deepak Nitrite’s fully-owned subsidiary Deepak Phenolics to begin production of isopropyl alcohol (IPA) at its plant in Dahej, Gujarat, India, according to Kemicalinfo.

The company confirmed in its official disclosure to the Bombay Stock Exchange that the company commissioned a 30,000 metric ton per annum plant at Dahej to make Isopropyl Alcohol (IPA) from Acetone, thus significantly reducing the country’s dependence on imports.

IPA is an important input in the production of essential pharmaceuticals and manufacturing of sanitizers.

"The company has commissioned its plant to make IPA from acetone. This will significantly reduce the country’s import-dependence for IPA, which is an important input in the production of essential pharmaceuticals as well as hand-sanitizers," said a company spokesperson.

"Due care will be taken while ramping up the capacity utilization, taking manpower constraints and process safety into consideration," he added.

The demand for IPA based hand-sanitizers has gone up significantly due to the spread of the Covid-19 pandemic across the country.

The company has made an investment of Rs 200 crore (USD26.4 million) to set up the IPA manufacturing plant at its complex in Dahej.

As MRC reported before, the company started up its new phenol/acetone plant, located at Dahej in the state of Gujarat, on 16 August 2018. The plant, which is operated under Deepak Nitrite’s wholly-owned subsidiary Deepak Phenolics Limited, is able to produce 200,000 tonnes/year of phenol and 120,000 tonnes/year of acetone. There is also the potential for a capacity expansion in the future. Deepak Phenolics’ plant is the largest phenol/acetone plant in India.

Deepak Phenolics shut its phenol/acetone plant in Dahej on 25 March, 2020, because of the nationwide lockdown because of the spread of coronavirus. It is said to resume operations in late April, 2020.

Phenol is one of the main feedstocks for the production of bisphenol A (BPA), which, in its turn, is used for the production of polycarbonate (PC).

According to MRC's ScanPlast report, overall estimated consumption of PC granules totalled 22,700 tonnes in the Russian market in the first quarter of 2020 (excluding imports and exports to/from Belarus), compared to 17,000 tonnes a year earlier. Demand increased by 33%.
MRC

MOSCOW (MRC) -- Chinese integrated oil giant PetroChina will set its capital expenditure and production in line with oil price movements in 2020 to meet the challenges of poor demand caused by the coronavirus pandemic and low crude prices, reported S&P Global with reference to company executives' statement.

This is the first time since at least since 2015 that PetroChina has not disclosed precise capex and output targets for the ongoing year during its annual financial result briefing, suggesting the company prefers more operational flexibility amid an unexpectedly volatile market environment.

PetroChina is the listed arm of China National Petroleum Corporation, China's top oil and gas company by assets.

It produced 4.28 million boe/d of oil and gas in 2019.

"The crude oil price has slumped since February, dampening our Exploration and Production segment mostly, so that we will focus more on efficiency and will balance among profit, long-term versus short-term development and the effort to secure the nation's energy supply to plan our upstream production," vice president Li Luguang said during the 2019 results call.

PetroChina did not disclose its all-in cost for upstream production but said its lifting cost edged down 1.6% year on year to USD12.11/b in 2019.

Executive director and president Duan Liangwei predicted the crude oil price would remain low in 2020.

Duan said the coronavirus pandemic would not only have a big impact on oil prices, but also PetroChina's production and operations as both oil product prices and consumption have dropped in the domestic market, Duan said.

"As a result, PetroChina has slashed throughput since February while crude and product inventories went up," Duan said, adding that the company's refineries are gradually raising utilization rates as China gets the coronavirus under control.

S&P Global Platts survey on 60% of PetroChina's refining capacity showed a utilization rate of 64% in March and 66% in February.

PetroChina in 2019 lifted its crude throughput by 4.1% year on year to 1.228 billion barrels, accounting for 89% of its total crude oil primary distillation capacity of 3.78 million b/d.

"The external environment has undergone lots of significant changes. Because of these changes we have to prepare a capex plan in relation to the changes in oil prices," Chief Financial Officer Chai Shouping said.

"The general principles of the capex plan are to spend no more than our income, concentrate investment on key projects and try to achieve free cash flow."

PetroChina spent Yuan 296.8 billion (USD41.92 billion) in 2019, up 12.5% year on year, Chai said, adding that 77.54% of the budget went on the Exploration and Production segment.

As MRC wrote previously, PetroChina shut its Guangxi Petrochemical in southern Guangxi province on February 9, 2020, for scheduled 50-day maintenance. The maintenance should help the refinery to offset stock pressure after product demand slumped due to the coronavirus outbreak.

We also remind that Sichuan Petrochemical (part of PetroChina) undertook an emergency shutdown at its naphtha cracker in Sichuan province of China on July 11, 2018 owing to a gas leak at its natural gas supply pipeline. Further details on duration of the outage could not be ascertained. Located at Sichuan province of China, the cracker has an ethylene capacity of 800,000 mt/year.

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.

PetroChina Company Limited, is a Chinese oil and gas company and is the listed arm of state-owned China National Petroleum Corporation, headquartered in Dongcheng District, Beijing. It is China's biggest oil producer.
MRC

MOSCOW (MRC) -- Russia's output of chemical products rose in March 2020 by 8.1% year on year. Thus, production of basic chemicals increased by 6.7% in the first three months of 2020, according to Rosstat's data.

According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the January-March output. Last month, ethylene production increased to 383,400 tonnes against 344,700 tonnes in February, several producers increased their monomer production at once. Overall ethylene production exceeded 1 mln tonnes in January-March 2020, compared to 793,600 tonnes a year earlier.

Production of benzene was 133,000 tonnes in March 2020, compared to 129,000 tonnes a month earlier. Overall output of this product reached 395,000 tonnes over the stated period, up by 5% year on year.

March production of sodium hydroxide (caustic soda) was 110,000 tonnes (100% of the basic substance) versus 107,000 tonnes a month earlier. Overall output of caustic soda totalled 330,000 tonnes in the first three months of 2020, up by 1.7% year on year.

2,195,000 tonnes of mineral fertilizers (in terms of 100% nutrients) were produced in March 2020 versus 1,905,000 tonnes a month earlier. Overall, Russian plants produced a little bit more than 6,000,000 tonnes of fertilizers in January-March 2020, down by 0.2% year on year.

Last month's production of polymers in primary form grew to 883,000 tonnes from 819,000 tonnes in February.
Overall output of polymers in primary form totalled 2,520,000 tonnes over the stated period, up by 20.7% year on year.
MRC

MOSCOW (MRC) -- Sahara International Petrochemical Co. (Sipchem) said that negotiations with the German chemical firm Linde Plc to set up and operate a production facility in Saudi Arabia to supply industrial gases are still going, reported Agraam with reference to a bourse statement on Sunday.

Both parties agreed to extend the initial agreement signed in December 2019 till the end of the third quarter of 2020.

The statement further explained that the companies faced some challenges in conducting visits to the manufacturing sites as part of confirmatory due diligence under current circumstances.

According to data compiled by Argaam, Sipchem signed in December 2019 a memorandum of understanding (MoU) with Linde Plc to meet growing demand from the refining and chemical industries, as well as to develop the new production facilities to supply industrial gases in Saudi Arabia.

As MRC wrote before, on 29 December, 2014, Sipchem started a new ethyl vinyl acetate (EVA) film plant. Located at Hail in Saudi Arabia, the plant has a production capacity of 4,000 mt/year.

According to MRC's DataScope report, February EVA imports to Russia rose by 9,83% year on year to 3,107 tonnes from 2,829 tonnes a year earlier, and overall imports of this grade of ethylene copolymer into the Russian Federation increased in January-February 2020 by 8,36% year on year to 6,194 tonnes (5,716 tonnes a year earlier).

Established in 1999, Saudi International Petrochemical Company (Sipchem) manufactures and markets methanol, butanediol, tetrahydrofuran, acetic acid, acetic anhydride, vinyl acetate monomer. Besides, it has launched several down-stream projects to manufacture ethylene vinyl acetate, low density polyethylene, ethyl acetate, butyl acetate, cross linkable polyethylene, and semi conductive compound that are scheduled to start in 2013.
MRC

MOSCOW (MRC) -- The magnitude of how damaged the energy industry is came into full view on April 20 when the benchmark price of U.S. oil futures, which had never dropped below USD10 a barrel in its nearly 40-year history, plunged to a previously unthinkable minus USD38 a barrel, as per Hydrocarbonprocessing.

In just a few months, the coronavirus pandemic has destroyed so much fuel demand as billions of people curtail travel that it has done what financial crashes, recessions and wars had failed to ever do - leave the United States with so much oil there was nowhere to put it.

While the unusual circumstance of negative oil prices may not be repeated, many in the industry say it is a harbinger for more bleak days ahead, and that years of overinvestment will not correct in a period of weeks or even months.

“What happened in the futures contract the other day indicated things are starting to get bad earlier than expected,” said Frederick Lawrence, vice president of economics and international affairs at the Independent Petroleum Association of America.

“People are getting notices from pipeline companies that say they can’t take their crude anymore. That means you’re shutting down the well yesterday."

Evidence of the erosion of value for a product that has been a mainstay of global society since the late 19th century abounded across the world last week.

In Russia, one of the world’s top producers, the industry is considering resorting to burning its oil to take it off the market, sources told Reuters.

Norwegian oil giant Equinor slashed its quarterly dividend by two-thirds. Next week will bring earnings reports from the world’s largest oil companies including Exxon Mobil Corp, BP PLC and Royal Dutch Shell PLC. They are all expected to detail additional spending cuts, and investors will be watching closely for how those companies plan to manage dividends.

U.S. billionaire Harold Hamm’s Continental Resources Inc sent servicers out into fields in Oklahoma and North Dakota in the middle of the week to abruptly shut wells, and the company declared it could not make crude deliveries to customers due to poor economics.

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