Shell Norco, Louisiana, refinery operating at 80% capacity

MOSCOW (MRC) -- Royal Dutch Shell Plc’s Norco, Louisiana, refinery is operating at about 80% of its 225,300 barrel-per-day (bpd) capacity, reported Reuters with reference to sources familiar with plant operations.

A Shell spokesman declined to comment.

The Norco refinery cut production in April, the sources said. Shell’s 211,270 bpd-capacity Convent, Louisiana, refinery, has as well reduced production by 100,000 bpd with the shutdown of a small crude distillation unit (CDU).

As MRC informed earlier, Pilipinas Shell Petroleum Corp said it will shut down its 110,000-barrel-per-day Tabangao refinery in the Philippines for one month from mid-May as the coronavirus pandemic has hammered oil demand.

We also remind that Shell Singapore restarted its naphtha cracker in Bukom Island this week 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 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.

Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.
MRC

Oil falls on fears of second coronavirus wave

MOSCOW (MRC) -- Oil prices fell as investors worried about a second wave of coronavirus infections, but new output cuts from Saudi Arabia tempered worries about oversupply and limited price losses, reported Reuters.

Brent crude futures fell USD1.04, or 3.4%, to USD29.93 a barrel by 12:58 p.m. EDT (1658 GMT). US West Texas Intermediate (WTI) crude fell 30 cents, or 1.2%, to USD24.44 a barrel on 11 May.

Global oil demand has slumped by about 30% as the coronavirus pandemic has curtailed movement across the world, leading to growing inventories globally. While crude futures have fallen more than 55% this year because of the virus, prices have gained the past two weeks, supported by a modest rebound in demand as some travel restrictions are eased.

However, fears about a second wave of the virus weighed on futures.

Germany reported on Monday that new coronavirus infections were accelerating exponentially after early steps to ease its lockdown. Elsewhere, Wuhan, the epicentre of the outbreak in China, reported its first cluster of infections since the city's lockdown was lifted a month ago.

South Korea also warned of a second wave of the virus on Sunday.

"Traders stepped back from last week's enthusiasm, contemplating the possibility of a second wave of the epidemic, which, if realised, could drive demand lower than the market hopes and expects for the second half of 2020," said Rystad Energy's head of oil markets, Bjornar Tonhaugen.

Prices received a boost, however, after a Saudi energy ministry official said the ministry has directed national oil company Saudi Aramco to reduce its crude oil production for June by an extra 1 million barrels per day.

The reduction is on top of a pact by the Organization of the Petroleum Exporting Countries (OPEC) and allied producers - a group known as OPEC+ - to cut production from May 1 by about 10 million bpd in an effort to support prices.

"It's a balance between OPEC production cuts versus concerns about the possibility of a second wave of coronavirus," said Phil Flynn, senior analyst at Price Futures Group. "It's those two emotions that have been bouncing the market back and forth today."

In the United States, fears that the country is running out of oil storage space sent WTI prices into negative territory last month, prompting some U.S. producers to rein in output.

The number of operating oil and gas rigs in the world's largest oil producer last week fell to 374, a record low according to data going back to 1940 from energy services company Baker Hughes Co.

As MRC wrote before, 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.

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 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 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.
MRC

MEGlobal announces ACP for June 2020

MOSCOW (MRC) -- MEGlobal announced that its Asian Contract Price (ACP) for monoethylene glycol (MEG) will be USD570/MT CFR Asian main ports for arrival June 2020, said the company.

The June 2020 ACP reflects the short term supply/demand situation in the Asian market.

As MRC informed earlier, MEGlobal announced that its Asian Contract Price (ACP) for monoethylene glycol (MEG) will be USD560/MT CFR Asian main ports for arrival May 2020. The May 2020 ACP reflects the short term supply/demand situation in the Asian market.

MEG is one of the main feedstocks for the production of polyethylene terephthalate (PET).

As per MRC's ScanPlast report, Russia's estimated PET consumption decreased to about 53,890 tonnes in February 2020, down by 3% year on year. 100,830 tonnes of PET chips were processed in Russia in the first two months of 2020. February PET production in Russia dropped to 45,800 tonnes, down by 5% year on year. Russia's overall PET production fell in January-February 2020 by 13% year on year.

Headquartered in Dubai (UAE), MEGlobal is the world leader in the production of monoethylene glycol (MEG) and diethylene glycol (DG). Established in July 2004, MEGlobal currently sells more than 2.5 million tons of DG per year worldwide. MEGlobal is a 100% subsidiary of Equate Petrochemical Company. In December 2015, Dow Chemical closed a deal to sell its stake in MEGlobal to Equate Petrochemical Company as part of a strategy to optimize its equity stake in Kuwaiti joint ventures.

MRC

China issues second batch fuel export quotas for 2020, all to state firms

MOSCOW (MRC) -- China has issued 28 million tons of refined fuel export quotas in the second allotment for this year, little changed from the first batch of 27.99 million tons issued last December, according to four sources with knowledge of the matter, as per Hydrocarbonprocessing.

The quotas were released last week to five state oil companies, PetroChina, Sinopec, China National Offshore Oil Corp, Sinochem Group and China National Aviation Fuel Corp, the sources said. The new quotas, of mostly gasoline, diesel and aviation fuel, come as domestic fuel consumption is recovering from a plunge in demand caused by the novel coronavirus, while the Asian market is awash with unwanted transportation fuels.

Still, no private refiner was granted quotas, despite Beijing’s pledge last December to give wider market access to the private sector. Beijing normally issues three or more batches of quotas during a year. A total of 56 million tons were issued for 2019.

The new issue consists of 24.6 million tons under the general trade category and 3.4 million tons under the tolling system. Companies receive a tax refund for general trade transactions once exports are completed, while taxes are waived under tolling arrangements.

China’s exports of gasoline jumped 21% in the first quarter from a year earlier, while that of aviation fuel rose 6%, as refineries scrambled to increase sales to overseas markets amid tepid domestic demand due to coronavirus-led disruptions to transport and industry.

Separately, China has issued its first-ever export quotas for very low sulfur fuel oil totalling 10 million tons, including an allotment to a private refiner for the first time ever, to capture a transforming shipping fuel market under a new global emission rule.

Ethylene and propylene are feedstocks for producing PE and 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

MEGlobal donates personal protective equipment to local fire departments

MOSCOW (MRC) -- MEGlobal Oyster Creek donated more than 1,500 Tyvek suits to local fire departments to assist them in meeting their personal protective equipment (PPE) needs, said the company.

Brazoria County Fire Marshall Martin Vela said the suits will be “extremely beneficial to fire and emergency services operations." “With the events unfolding, fire departments have been depleting their inventory of PPE and are unable to restock their supplies. This is very concerning when normal purchasing options have been extended or normal options are not available. Having proper PPE for unknown or known medical emergencies provides the fire service with a valuable level of protection for our first responders,” he said.

Vela added that more than half the county’s 26 departments are in immediate needs of the suits, and nine of those departments are 100 per cent volunteer. “Volunteer departments rely heavily on private donations throughout the year,” said Vela. “This tremendous donation has taken a small burden off their shoulders and filled a gap."

MEGlobal Site Leader Scott Daigle said his company was happy to be able to help. “In times like these we all need to step up and find ways to help each other,” he said. “We were hearing about PPE shortages among our emergency responders and we had extra Tyvek suits left from the site construction that was completed last year. It made perfect sense to give them to the people who are on the front lines right now."

MEGlobal has also donated USD5,000 to ACTIONS Inc. to support their efforts to provide meals and groceries to local senior citizens, as well as USD2,500 to the United Way of Brazoria County to assist with their COVID-19 response.

MEG is one of the main feedstocks for the production of polyethylene terephthalate (PET).

As per MRC's ScanPlast report, Russia's estimated PET consumption decreased to about 53,890 tonnes in February 2020, down by 3% year on year. 100,830 tonnes of PET chips were processed in Russia in the first two months of 2020. February PET production in Russia dropped to 45,800 tonnes, down by 5% year on year. Russia's overall PET production fell in January-February 2020 by 13% year on year.

MEGlobal is a global leader in the manufacture and marketing of ethylene glycol (EG). With a worldwide network, MEGlobal markets its products throughout Asia, the Americas, Europe and the Middle East. MEGlobal embraces the principles of Responsible Care®, focusing on the safety of employees, neighbors, communities and the environment in every aspect of its operations. As a subsidiary of EQUATE Petrochemical Company (EQUATE), MEGlobal is part of the EQUATE Group which is the world’s second largest producer of EG.
MRC