Gazprom Neft sends more than RUB1 million worth of medical personal protective equipment to the Omsk Oblast

MOSCOW (MRC) -- Gazprom Neft continues to support the Omsk Region in combatting the spread of COVID-19, having sent almost 400,000 medical face masks to local government agencies — and having previously despatched more than 700,000 pieces of equipment (including visors, goggles, masks, hamzat suits and antiseptic solutions, as well as respirators) to hospitals and polyclinics in the region, said the company.

Fuel is being supplied free of charge to medical and social-services transport in the city, while G-Energy service centres are undertaking oil changes for emergency vehicles, free of charge. Volunteers helping the elderly and vulnerable have been given cards allowing them to fill up for free at Gazprom Neft stations.

“I am grateful to Gazprom Neft for the extensive and wide-ranging support offered to the Omsk Region in combatting COVID-19. The company has sent more than one million pieces of cutting-edge, medical PPE to the region, in total. This has helped us build up the necessary stocks for specialists working with coronavirus infection cases. In addition to which, fuel has been provided for the entire medical fleet, as well as for Omsk volunteers on the #МыВместе (AllinItTogether) initiative. Gazprom Neft has, yet again, proved itself to be a key partner to the Omsk Oblast, including in our battle against the spread of infection."

As MRC informed earlier, in 2019, SIBUR and Gazprom Neft have consolidated 100% of the authorised capital in Poliom, a polypropylene plant in Omsk. Sibgazpolimer, a joint venture of the two companies, has signed an agreement to acquire a 50% stake in Poliom from the Titan Group.

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.

Gazprom Neft in Russia owns the Omsk Refinery and the Moscow Refinery, with refining capacities of 20.89 and 12.2 million tons of oil per year, respectively. In Serbia, the company owns the NIS processing complex, which consists of two plants (in Panchaevo and Novi Sad). The maximum capacity of the two enterprises exceeds 7 million tons of oil per year. Gazprom Neft also owns shares in YANOS (15 million tons) and the Mozyr Oil Refinery (Belarus, 14 million tons).
MRC

India gas demand gradually picking up as virus restrictions ease

MOSCOW (MRC) -- India’s natural gas consumption is recovering slowly as the world’s biggest lockdown starts to ease with the gradual resumption of economic and industrial activity, reported Reuters with reference to several industry sources.

Prime Minister Narendra Modi’s government is starting to pull back from one of the world’s tightest lockdowns of 1.3 billion people, which has left millions out of work and stranded in cities far from home while infections keep rising.

The government has already allowed some economic activity to resume in areas where there are few cases of COVID-19, the disease caused by the coronavirus.

"Gas demand is rising as some industries are back, like chemicals and pharmaceuticals. Every industry wants to start operations," a liquefied natural gas (LNG) industry official based in India said.

"Some textile, ceramic, and steel (businesses) have started operations, (and) demand from refineries is back to normal."

As MRC informed before, Gulf Cooperation Council (GCC) mono ethylene glycol (MEG) imports into India may be severely hurt as a result of an ongoing anti-dumping investigation targeting imports from Oman, Saudi Arabia, Kuwait & UAE, as per Gulf Petrochemicals and Chemicals Association (GPCA). According to GPCA analysis, the inconsistent investigative practices by Indian authorities on anti-dumping regulations raise serious concerns under World Trade Organization (WTO) rules and threaten to severely hurt GCC economies, jeopardising USD543 million worth of MEG imports, which is equivalent to 20% of total chemical imports from the region into India.

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.
MRC

Total Texas refinery production dips to 70% of capacity

MOSCOW (MRC) -- Total SA cut production at its Port Arthur, Texas, refinery to 70% of its 225,500 barrel-per-day (bpd) capacity with a reduction in the operating level of the large crude distillation unit (CDU), said Gulf Coast market sources, said Hydrocarbonprocessing.

The large CDU’s production was reduced to improve the efficiency of the unit’s heater, the sources said.

As MRC informed earlier, Total has recently 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.

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

Formosa Plastics encountered cracked PP storage tank in Linyuan plant

MOSCOW (MRC) -- On 15 May 2020, a fire broke out at Formosa Plastics plant in Linyuan, Taiwan that was brought under control within twenty minutes, reported CommoPlast.

The initial investigation found that the fire was a result of a faulty safety valve at the granule storage tank at the polypropylene (PP) unit.

According to the company, the (T-913B) storage tank stowed PP pallets produced from 7 PM on 14 May 2020 to 6 AM on 15 May 2020.

There is no further information on the operation status of the plant at the time of the report, however, the company does not expect any major impact of the incident on the market as it has sufficient inventories to meet the market requirement.

As MRC informed earlier, Formosa Plastics, part of Formosa Petrochemical, conducted a scheduled turnaround at its PP plant in Linyan from mid-June to mid-July 2019.

According to MRC's ScanPlast report, Russia's 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.

Formosa Petrochemical is involved primarily in the business of refining crude oil, selling refined petroleum products and producing and selling olefins (including ethylene, propylene, butadiene and BTX) from its naphtha cracking operations. Formosa Petrochemical is also the largest olefins producer in Taiwan and its olefins products are mostly sold to companies within the Formosa Group. Among the company's chemical products are paraxylene (PX), phenyl ethylene, acetone and pure terephthalic acid (PTA). The company"s plastic products include acrylonitrile butadiene styrene (ABS) resins, polystyrene (PS), polypropylene (PP) and panlite (PC).
MRC

Brent oil market structure, physical rally could draw oil from storage

MOSCOW (MRC) -- The oil futures market is pricing in tighter supplies due to OPEC-led production cuts and recovering demand as lockdowns to contain the coronavirus outbreak are eased, suggesting a huge inventory buildup could slow and start to be drawn down, reported Reuters.

Brent crude futures for July are trading at the smallest discount to the contract six months in the future since March. A price structure where oil for immediate delivery is cheaper is called contango. A narrowing contango usually points to supplies becoming more constrained.

At the same time, the price of North Sea physical oil compared with dated Brent - the benchmark used to price most of the world’s cargoes - has recovered from historic discounts and is moving toward parity.

The changes arise against the backdrop of supply cuts led by the OPEC+ group of oil producers and reductions by other producers, such as the United States. Government lockdowns to limit the spread of the coronavirus have also begun to be eased, pointing to a recovery in fuel use.

"The supply and demand balance is tightening," said Olivier Jakob, analyst at Petromatrix. "The physical market is moving towards some rebalancing and away from the heavily over-supplied condition."

The record contango that arose due to the collapse in demand caused by the lockdowns had encouraged a vast buildup of oil in storage that had strained available storage capacity and led to a record amount held in ships at sea.

Now the incentive to keep adding to storage has weakened. Crude traders said demand for oil for immediate delivery had increased, as supply cuts had surprised on the upside.

"There is an improvement. People are getting back to work," a North Sea trade source said. "Hopefully we’ll see some crude that’s in storage being drawn on."

Another trade source said the narrowing contango was creating a temptation to offload some stored crude, or at least to swap the oil being held in tanks for another grade if it was in higher demand.

Still, the physical rally could have run too fast. Eugene Lindell, analyst at JBC Energy, said a drop in refinery profit margins could put a brake on the gains.

"The physical differentials are currently doing very well," said. The big fly in the ointment is that crude buying interest is ebbing given weak refinery margins on the back of elevated product stocks. Hence, we are cautious on the sustainability of this mini rally - at least in the short term."

As MRC informed previously, 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