COVID-19 - News digest as of 19.05.2020

1. 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.


MRC

Shell, Eni lead oil majors climate ambitions but still fall short

MOSCOW (MRC) -- None of the big oil companies currently meet U.N. targets to limit global warming despite the most ambitious targets set by Royal Dutch Shell and Eni , reported Reuters with reference to the statement of investors managing USD19 trillion.

The Transition Pathway Initiative (TPI), which represents the investors and is co-chaired by the Church of England Pensions Board, called on all oil and gas producers to set both intensity-based and absolute emissions reductions targets so that the industry adheres to a common standard on ‘net zero’ emissions.

Burning of oil and gas accounts for the vast majority of the world’s carbon emissions. TPI, in a study of Europe’s biggest oil producers, singled out Shell and Italy’s Eni for making the broadest commitments to reduce greenhouse gases from all fuel products they sell, also known as Scope 3 emissions.

All European majors have committed to varying degrees of carbon reductions by 2050 to make their companies fit for a transition to a lower carbon economy. In marked contrast, U.S. oil giants lag far behind in terms of climate aims.

Shell has pledged to bring down its overall carbon intensity by 65%, Eni by 55% and BP by 50% by 2050. Intensity targets mean that absolute emissions can rise with increasing production.

Eni has also set itself a target to bring down its absolute emissions by 2050 by 80%.

Scope 3 emissions dwarf, typically by a factor of about six, direct emissions from operations and from the electricity a company uses, known as Scope 1 and 2 emissions.

BP and Spain’s Repsol have pledged to bring down their overall emissions to net zero by 2050, but this target does not cover fuel initially acquired from other producers and sold through their marketing businesses.

Most companies use the phrase ‘net zero’ carbon in some way to describe their ambitions, despite the varying pathways.

"We now need a net zero standard for the oil and gas sector," said Adam Matthews of the Church of England Pensions Board.

None of the companies had done enough to align with plans to keep global warming to below 2 degrees Celsius.

"Claims of ‘net zero’ or 1.5 C alignment are not substantiated by TPI’s analysis. Even the most ambitious new goals (Shell and Eni) are not aligned with a 2 C scenario using TPI’s intensity metric," TPI said in a report.

"Alignment with a Below 2 C scenario requires a 90% cut in emissions intensity (by 2050) while alignment with 1.5 C scenario requires a 100% reduction in net emissions (a genuine ‘net zero’ strategy)."

It added that only Eni had provided substantial detail on its use of nature-based offsets - an integral part of every group’s climate targets - to balance out emissions it cannot eliminate.

Austria’s OMV is the laggard with the least ambitious climate targets among big integrated European oil companies, TPI said, adding that it expected OMV to issue an update on its transition plans this year.

TPI also urged all groups to provide more detail on their carbon capture and storage renewables investment plans.

A spokesman for BP said: "What the world needs to meet the Paris goals are absolute reductions in emissions to net zero... We do not believe that carbon intensity alone is a reliable single measure of progress towards the Paris goals."

A Shell spokeswoman said "we need to look at the detail of this report, but we are pleased our ambition is recognised and we are confident our approach is aligned with the 1.5 degrees Celsius goal of the Paris Agreement."

An OMV spokesman said OMV had already achieved its 2025 targets and that it would set itself more ambitious climate protection goals.

Eni and Repsol did not immediately respond to requests for comment.

As MRC reported before, the ongoing transition to low-carbon energy sources may accelerate as economies recover from the impact of the coronavirus crisis, said the head of oil and gas company Royal Dutch Shell in its last week's statement.

We remind that 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.
MRC

Chevron Phillips announces management changes

MOSCOW (MRC) -- Chevron Phillips Chemical Company LLC has announced that Mitch Eichelberger has become senior vice president, Polymers and Specialties, effective May 16, 2020, reported BusinessWire.

Eichelberger replaces Dave Morgan, who will retire after more than 40 years with Chevron Phillips Chemical and Phillips Petroleum (now Phillips 66).

"Since our inception, Dave has exemplified the spirit of what it is to be a Chevron Phillips Chemical employee and lived by our tagline - Performance by Design, Caring by Choice," said Mark Lashier president and CEO. "His respect for employees, commitment to diversity and inclusion, and long-term vision have been invaluable to our success. He will be missed by us all, but his legacy remains. Dave has been a driving force in shaping our culture to make it a great place to work and meet the needs of our customers globally."

Eichelberger, currently senior vice president, Corporate Planning and Technology, will continue serving on the company’s Leadership Team as a direct report to Lashier. Eichelberger has nearly 40 years of industry experience and previously held leadership roles that will serve him well in his new position, including vice president, Qatar and vice president, Specialties. He also led the research and technology licensing group and served as polyethylene global business manager.

The company named Steve Prusak, currently general manager, Corporate Planning and Development, to assume the role of senior vice president, Corporate Planning and Technology and become a member of the Leadership Team, reporting directly to Lashier. Prusak has 30 years of industry experience and has held commercial, project and strategy roles during his tenure with the company. Notably, he served as a project director for the company’s U.S. Gulf Coast Petrochemicals Project, which was completed in 2018.

Darren Ercolani, currently general auditor, will also join the Leadership Team and report to Lashier in a newly created role, vice president, Business Transformation. In this position, Ercolani will lead the company’s efforts to innovate business operations and be responsible for championing the company vision for a digital future. As part of this effort, the company’s Information Technology department will also report to him. Ercolani has nearly 30 years of industry experience.

"The changes we are announcing today position Chevron Phillips Chemical to thrive in the global marketplace for years to come. We are embracing digitization and innovation, ensuring that our businesses continue to have seasoned and thoughtful leadership, and delivering on our mission to be the premier chemical company, known as the employer, supplier, neighbor and investment of choice," concluded Lashier.

As MRC informed earlier, US-based Phillips 66 remains open to developing another ethane cracker for its Chevron Phillips Chemical (CP Chem) joint venture, the refiner's CEO said in March 2018.

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.

Chevron Phillips Chemical Company LLC is one of the world’s top producers of olefins and polyolefins and a leading supplier of aromatics, alpha olefins, styrenics, specialty chemicals, plastic piping and polymer resins. With approximately 5,000 employees, the LLC and its affiliates own nearly USD17 billion in assets, including 31 manufacturing and research facilities in seven countries. Chevron Phillips Chemical Company LLC is equally owned indirectly by Chevron Corporation and Phillips 66, and is headquartered in The Woodlands, Texas.
MRC

Nan Ya Plastics pushes back start-up of Texas MEG plant to late 2020 or early 2021

MOSCOW (MRC) -- Nan Ya's 800,000 mt/year monoethylene glycol (MEG) plant in Texas is expected to come online by late 2020 or early 2021 rather than the third quarter of 2020, reported S&P Global with reference to a source familiar with company operations.

The company did not respond to a request for comment Friday.

According to Formosa Plastics USA, Nan Ya suspended construction on the project at Formosa's Point Comfort, Texas, complex in March on coronavirus pandemic-related concerns to ensure worker safety and social distancing. The company has not publicly disclosed a new startup timeline.

The facility's startup was originally expected to come in the first half of this year, and later pushed back to Q3.

The latest delay on pandemic concerns came as US supply was seen ample after 1.7 million mt/year of additional MEG capacity came online in 2019.

MEG is used to manufacture downstream polyethylene terephthalate (PET), a resin that makes plastic bottles, as well as polyester fibers and antifreeze.

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

As per MRC's ScanPlast report, March estimated PET consumption in Russia was 65,3700 tonnes, up by 1% year on year. Russia's estimated PET consumption decreased in January-March 2020 by 3% year on year to 175,170 tonnes.

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

Sinopec SABIC Tianjin Petrochemical shuts SM plant for maintenance

MOSCOW (MRC) -- Sinopec SABIC Tianjin Petrochemical Co. (SSTPC), a 50-50 joint venture of Sinopec and SABIC, has taken off-stream its styrene monomer (SM) plant, according to Apic-online.

A Polymerupdate source in China informed that, the company has undertaken a planned shutdown at the plant on May 7, 2020. The plant is slated to remain under maintenance for about 7-8 weeks.

Located at Tianjin, China, the SM plant has a production capacity of 35,000 tonnes/year.

As MRC reported earlier, SSTPC also shut its naphtha cracker in Tianjin on 1 May 2020 for routine maintenance work. The cracker is expected to remain off-line until early July 2020. The naphtha cracker is designed to produce 1 million tons/year of ethylene, which supplies several local buyers in the Tianjin area. Besides, the company is also planning to expand its cracker capacity to 1.3 million tons/year in 2021.

SM is the main feedstock for the production of polystyrene (PS).

According to MRC's ScanPlast report, March 2020 estimated consumption of PS and styrene plastics 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. Overall output of high impact polystyrene (HIPS) and general purpose polystyrene (GPPS) totalled 32,100 tonnes in March 2020. 98,390 tonnes of HIPS and GPPS were produced in January-March 2020. The decrease in Russian plants' output was 3%.

China Petrochemical Corporation (Sinopec Group) is a super-large petroleum and petrochemical enterprise group established in July 1998 on the basis of the former China Petrochemical Corporation. Sinopec Group"s key business activities include the exploration and production of oil and natural gas, petrochemicals and other chemical products, oil refining.

Saudi Basic Industries Corporation (Sabic) ranks among the world"s top petrochemical companies. The company is among the world"s market leaders in the production of polyethylene, polypropylene and other advanced thermoplastics, glycols, methanol and fertilizers.
MRC