COVID-19 - News digest as of 12.05.2020

1. Transition to low-carbon energy may accelerate after crisis: Shell

MOSCOW (MRC) -- The ongoing transition to low-carbon energy sources may accelerate as economies recover from the impact of the coronavirus crisis, reported Reuters with reference to the head of oil and gas company Royal Dutch Shell's statement. Chief Executive Ben van Beurden said while Shell was not ringfencing its low-carbon Integrated Gas and New Energies division from spending cuts to weather the crisis, those businesses would be shielded from the worst of the reductions.


MRC

Qapco declares force majeure on LLDPE output

MOSCOW (MRC) -- In an official letter to its customers in Southeast Asia, Muntajat - the sole marketing and distribution arm for Qatar Petrochemical Company (QAPCO) declared a force majeure on linear low density polyethylene (LLDPE) shipment due to an unexpected shutdown at the production line on 3 May 2020, according to CommoPlast.

The LLDPE line is expected to remain off-line until 12 May 2020.

"We are unable to quantify the impact of the shutdown on the overall supply condition at the moment. However, the unplanned stoppage significantly impacted and prevented our ability to meet our delivery obligations," said the letter.

As MRC informed previously, in 2013, Qatar Chemical and Petrochemical Marketing and Distribution Company (Muntajat) took over the marketing and distribution responsibilities for Qatar’s globally recognised Lotrene brand of low density polyethylene (LDPE) and LLDPE. Muntajat has the mandate to export Qatar’s 10 million tonnes/year of chemicals and petrochemicals to markets worldwide.

In Qatar, LDPE and LLDPE are produced by Qatar Petrochemical Company (Qapco) and Qatofin, respectively, and these high-quality products are being sold to more than 4,500 customers worldwide under the brand name Lotrene.

Qatar’s chemical and petrochemical industry’s planned investments will further increase the country’s export portfolio to 23 million tonnes per year by 2020, from 10 million tonnes in 2013, according to Muntajat CEO Abdulrahman Ali Al-Abdulla's statement.

According to MRC's ScanPlast report, March LLDPE shipments to Russia grew to 36,790 tonnes from 25,690 tonnes a month earlier, production increased. Overall LLDPE shipments into the Russian market totalled 110,000 tonnes in the first three months of 2020, up by 11% year on year. SabSibNeftekhim accounted for the main increase in shipments.
MRC

Borealis investigates weekend fire incident at Stenungsund cracker in Sweden

MOSCOW (MRC) -- Austria-based petrochemicals producer Borealis said Monday that it was still investigating a fire that broke out late Saturday at its Stenungsund steam cracker in Sweden, reported S&P Global.

Borealis said in an initial public statement issued Sunday that "its emergency plan was immediately activated by the local crisis team." The fire broke out on 9 May, at 20:45 CEST, according to the company.

The company said no one was injured and that it was working closely with authorities to investigate the causes.

Market sources said the incident would have an impact on the market, referring back to when the Stenungsund cracker was under force majeure for around 10 days in April which helped noticeably to balance ethylene supply in Northwest Europe, which had been particularly long. Sources are predicting a similar impact as a result of this latest incident, with additional impact on propylene, a source said, as "they were cracking heavier."

As MRC informed earlier, the company declared FM on April 8 due to a technical incident, while before that Borealis had had lowered its steam cracker operating rates as a result of the recent slump in oil prices and the coronavirus lockdowns in Europe.

The Stenungsund cracker can produce 625,000 mt/year of ethylene and 150,000 mt/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 557,060 tonnes in the first three month of 2020, up by 7% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments rose because of the increased capacity utilisation at ZapSibNeftekhim. Demand for LDPE subsided. At the same time, PP shipments to the Russian market was 267,630 tonnes in January-March 2020, down 20% year on year. Homopolymer PP and PP block copolymers accounted for the main decrease in imports.

Borealis is a leading provider of innovative solutions in the fields of polyolefins, base chemicals and fertilizers. With headquarters in Vienna, Austria, Borealis currently employs around 6,500 and operates in over 120 countries.
MRC

LG Polymers PS plant remains shut after accident during its restart

MOSCOW (MRC) -- LG Polymers has decided not to resume operations at its polystyrene (PS) plant in India after the gas leak, according to Apic-online.

The pre-dawn tragedy at the LG Polymers plant in Visakhapatnam on 7 May, which left 11 dead and hundreds hospitalised, was on account of a styrene gas leak which occurred while starting up the facility.

A company source who wished not to be identified informed a Polymerupdate editorial team member, on account of the coronavirus pandemic, the plant had been shut. After 40 days of being closed, the company was preparing to restart operations when the accident occurred. The leakage was plugged within hours of the accident and the vapours neutralised.

When asked to elaborate on the reasons why the accident occurred, there is speculation in the press of it being a valve malfunction, however, the source said "I would request everyone to wait for an official statement from LG, as a thorough investigation is underway to determine the exact reason for the leak".

The PS plant was set up in 1961 as Hindustan Polymers and was taken over by South Korea?s LG Chem in 1997 following which it was named LG Polymers. The plant makes PS and expandable polystyrene (EPS).

According to MRC's ScanPlast report, March 2020 estimated consumption of PS and styrene plastics in Russia dropped by 2% year on year, totalling 42,130 tonnes. The estimated consumption totalled 121,880 tonnes in the first three months of 2020, down by 2% year on year. Overall, Russian plants produced 42,790 tonnes in March 2020.
MRC

Lotte expects to restart Daesan cracker by end of year

MOSCOW (MRC) -- South Korea’s Lotte Chemical might resume operations at its cracker in Daesan that was hit by an explosion in early March by late 2020, according to Chemweek.

The company shut its naphtha cracker on March 4,2020, after an explosion at the plant in the southwestern city of Seosan, which injured 31 people. The explosion, which was triggered by a fire at a compressor in Lotte Chemical’s naphtha cracker at around 3 a.m. local time (1800 GMT), was soon contained and under control, the company said then in a statement.

The petrochemical maker said it has suspended its naphtha cracker’s operations in Daesan county in Seosan due to the fire and will seek to minimize supply disruptions.

The company is looking into the exact cause of the accident, it said then, adding there was no leak of toxic chemicals.

Initially, Lotte Chemical planned to restart this cracker in a couple of weeks after the fire.

As MRC wrote before, Lotte Chemical has shut down its Deasan cracker for maintenance turnaround on October 14, 2019. The cracker resumed production on November 10, 2019. Located at Daesan in South Korea, currently the cracker has an ethylene capacity of 1.1 million mt/year and propylene capacity of 540,000 mt/year.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 557,060 tonnes in the first three month of 2020, up by 7% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments rose because of the increased capacity utilisation at ZapSibNeftekhim. Demand for LDPE subsided. At the same time, PP shipments to the Russian market was 267,630 tonnes in January-March 2020, down 20% year on year. Homopolymer PP and PP block copolymers accounted for the main decrease in imports.

Lotte Chemical runs two naphtha crackers in South Korea. One cracker is located in Daesan county in Seosan which can produce 1.1 million tonnes per year of ethylene with the other 1.2 million tonnes per year cracker in the southwestern city of Yeosu.
MRC