Oil and gas industry delays repairs amid virus lockdown

MOSCOW (MRC) -- The coronavirus pandemic has disrupted maintenance at oil and gas projects and refineries from Russia’s Far East to the coast of Canada, storing up problems for an industry already reeling from slumping prices, analysts say, said Hydrocarbonprocessing.

Below is a list of projects that have been affected in recent months. Total’s Grandpuits refinery near Paris, Feyzin refinery near Lyon and Gonfreville Normandy refinery in northern France all delayed maintenance due to the outbreak.

Phillips 66 (PSX.N) is delaying three sizeable scheduled shutdowns at its refineries this year, the company said last week, because of concerns that coronavirus could spread among the refineries’ workers if the maintenance goes ahead.

BP Plc (BP.L) delayed a planned turnaround at its Australian refinery to late 2021 from early next year to observe coronavirus social distancing restrictions. It has also delayed the start date of its Cherry Point refinery in Washington.

Energy trader Gunvor Group told Reuters that a major turnaround at its 88,000-bpd refinery in Rotterdam remained on hold.

Marathon Petroleum Corp (MPC.N) pushed back the start date of a multi-unit overhaul at its 585,000 barrel-per-day Galveston Bay Refinery in Texas City, Texas, to late April, said sources familiar with plant operations.

INEOS INEOSG.UL postponed a planned shutdown of its Forties Pipeline System (FPS) planned for June until spring next year “as a consequence of the ongoing COVID-19 pandemic.

Citgo’s refinery in Lemont, Illinois, had pushed a multi-unit turnaround project due to start in late March to May 1, but further delayed the turnaround to another 2-3 weeks, according to a source familiar with plant operations.

In Vietnam, Binh Son Refining and Petrochemical Co delayed maintenance at its Dung Quat refinery once to July and then to August, after travel curbs affected its preparation for the maintenance, according to a company statement. The firm faced difficulties shipping needed equipment to Vietnam, a source told Reuters, and travel bans made it difficult for foreign contractors to send workers to the refinery.

A major maintenance programme in Russia’s Far East Sakhalin-2 project faced delay as the firm could not received pre-ordered pieces of machinery, two sources told Reuters.

Its neighbour, Sakhalin-1 project, operated by ExxonMobil (XOM.N), has said that it was adjusting the schedule and scope of its activities.

Qatar Petroleum has delayed some routine and unnecessary maintenance, its chief executive Saad al-Kaabi told Reuters in April, due to the spread of the coronavirus and constraints on movement.

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

MOSCOW (MRC) -- Energy powerhouse OQ (formerly Oman Oil and Orpic Group) has announced the launch of the commissioning phase of Liwa Plastics Industries Complex (LPIC), a giant petrochemicals project being set up at an investment of USD6.7 billion, according to ZAWYA.

This transformational project will firmly put the Sultanate on the global petrochemicals map and enhance OQ, stated the Oman Observer, citing the wholly government-owned energy conglomerate in a tweet.

Located within Sohar Port, with an upstream Natural Gas Extraction (NGL) around 300 km away in Fahud, Liwa Plastics is OQ’s signature investment.

At full capacity, Liwa Plastics will boost OQ’s production of polyethylene and polypropylene to 1.4 million tonnes.

The product portfolio will include linear Low-Density Polyethylene (LLDPE), High-Density Polyethylene (HDPE) and Polypropylene (PP). The improvement of the product mix helps OQ’s partners to address the growing global demand for innovative polymers.

In addition to maximizing value addition to the nation’s hydrocarbon wealth, the mega venture will also spawn investments in a wide array of downstream activities.

The LPIC steam cracker project will allow polyethylene (PE) to be produced in Oman for the first time, as well as strengthen the company’s polypropylene (PP) capabilities.

As MRC wrote before, in February 2020, Oman, the biggest Middle East oil producer outside OPEC, awarded France's Total and Thailand's PTTEP rights to explore and develop non-associated gas deposits in the sultanate, which is ramping up exploration and development of gas resources.

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

MOSCOW (MRC) -- Borealis says it will not proceed with the development of a multi-billion-dollar integrated steam cracker and polyethylene (PE) project in Kazakhstan, said the company.

“The decision to discontinue this project is based on a thorough assessment of all aspects of the prospective venture and impacted by the effects of the COVID-19 [coronavirus disease 2019] pandemic as well as the increased uncertainty of future market assumptions,” Borealis states.

The company signed a joint development agreement in March 2018 with United Chemical Co. (UCC; Astana, Kazakhstan) to develop the world-scale petrochemical project at Atyrau, Kazakhstan. UCC has previously put the estimated total investment figure for the integrated petchem project at $6.8 billion. A memorandum of understanding (MOU) was also signed simultaneously with the development agreement to cooperate on a 500,000-metric tons/year polypropylene (PP) project being implemented by the Samruk-Kazyna Sovereign Wealth Fund, which is the sole owner of UCC. The PP project was not included in the statement by Borealis.

Borealis said in late March it had concluded a feasibility study for the petchem project at Atyrau, with the development at that point in the basic engineering phase. An onstream date was scheduled for late 2025, with commissioning in 2026, according to Philippe Roodhooft, executive vice president/Middle East and growth projects, speaking at an exclusive briefing with CW. The project plan entailed the construction of a 1.2-million metric tons/year (MMt/y) steam cracker fed by ethane from the giant onshore Tengiz oil and gas field in Kazakhstan. The cracker was to have fed a 1.25 MMt/y PE complex based on two third-generation Borstar-process PE units. Borealis was expected to have about 50% of the joint venture (JV) with UCC, with the project initially planned to target growing markets in the CIS, with some exports outside the region.

Earlier this month Alfred Stern, CEO of Borealis, and Mark Tonkens, CFO, outlined cost-cutting plans to mitigate the effect of the COVID-19 pandemic on the company’s balance sheet, including reducing its capital expenditure in 2020 by 25% to €750 million ($821 million) from its original plan, but did not highlight specific longer-term projects that could be affected. Borealis is progressing with three major growth projects—the Kallo, Belgium, propane dehydrogenation (PDH) plant; its Baystar 50/50 JV with Total in the US; and the PP5 Borouge PP project at Ruwais, Abu Dhabi, but Stern said it was “unrealistic” to expect them to be completed on time due to current circumstances.

OMV (Vienna, Austria) is currently in the process of raising its stake in Borealis from 36% to 75% by acquiring part of Mubadala Group’s (Abu Dhabi) shareholding. The deal is expected to close in the fourth quarter of this 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.
MRC

MOSCOW (MRC) -- Total has signed an agreement with PureCycle Technologies to develop a strategic partnership in plastic recycling, said the company.

As part of the agreement, Total undertakes to purchase part of the output of PureCycle Technologies’ future facility in the United States and to assess the interest of developing a new plant together in Europe. PureCycle Technologies uses an innovative, patented technology to separate color, odor and any other contaminants from plastic waste feedstock to transform it into virgin-like recycled polypropylene. The company, which will begin construction on its first plant in Ohio (U.S.A.) this year, will produce 48,000 tons of recycled polypropylene.

“This partnership is an important new milestone for Total as it strengthens the Group’s position in chemical recycling. This first partnership in the United States opens new perspectives for addressing the challenge of the circular economy and achieving our ambition of producing 30% recycled polymers by 2030,” said Valerie Goff, Senior Vice President, Polymers at Total.

“Total possesses world-class expertise in the research, development and production of polypropylene. We believe Total represents the best possible strategic partner for PureCycle as we strive to scale this very promising and transformational technology globally. The introduction of recycled polypropylene that can be used interchangeably with virgin resin will have an enormously beneficial impact on the global plastics circular economy. Total shares our passion to make this happen and we are very pleased to have them as a strategic partner,” commented Mike Otworth, CEO of PureCycle Technologies.

Total is deeply committed to recycling plastics and intends to produce 30% recycled polymers by 2030. To achieve that goal, it is working on all types of recycling to improve the properties and uses of recycled plastics: Total is a leader in innovative polymers, pioneering with the production of some fifteen grades of polypropylene and polyethylene containing at least 50% recycled materials.

Total has also become involved in mechanical recycling by acquiring Synova, French leader in the production of high-performance recycled polypropylene for the automotive industry. The affiliate's output will be doubled to reach 40,000 tons by 2021.

In the area of chemical recycling, Total has joined forces with Citeo, Recycling Technologies, Nestle and Mars in December 2019 to develop chemical recycling of plastics in France. Total is a broad-energy company that produces and markets fuels, natural gas and low-carbon electricity. Our 100,000 employees are committed to better energy that is safer, more affordable, cleaner and accessible to as many people as possible. Active in more than 130 countries, our ambition is to become the responsible energy major.

PureCycle Technologies offers the only recycled polypropylene with properties equal to virgin polymer. Our proprietary process, invented by Procter & Gamble, removes color, odor, and other contaminants from recycled feedstock resulting in virgin-like polypropylene suitable for any PP market. PureCycle Technologies licenses technology from Procter & Gamble.

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

MOSCOW (MRC) -- Boiler work at the ExxonMobil-operated 830,000-metric tons/year ethylene plant at Mossmorran, UK, is scheduled for completion in June, reported Chemweek with reference to OPIS.

Two of the three boilers at the plant exploded in August 2019, resulting in the plant being taken offline until the end of February. OPIS sources say that the plant is currently able to operate at full capacity with two boilers in operation but that the third boiler will be working by June.

A source tells OPIS that the work planned at Mossmorran in the coming months will be more limited than previously scheduled. "It's mostly safety-critical work apart from the boiler work," says the source. "That's continuing because it's infrastructure- and safety-critical. You need three boilers because if one of the two boilers running goes down, you can turn the third one on. The plant has two (boilers) fully functioning and the third one is being finished for June."

The six-month spell that saw the ethylene unit out of action also meant that the neighboring 12,500-metric tons/day Shell natural gas liquids (NGL) plant supplying it with ethane was forced to flare the surplus product. OPIS revealed earlier this week that turnarounds at the two plants scheduled for July 2020 have been postponed to April 2021.

The Shell NGL plant is supplied by gas via a 220-kilometer pipeline from the Shell-operated St. Fergus gas plant and that will also see maintenance work in April next year, sources have told OPIS. St. Fergus has a gas intake capacity of 1,600 million standard cubic feet/day.

ExxonMobil declined to comment on the boiler work, and Shell and ExxonMobil did not wish to comment earlier this week when asked about plant turnaround postponements.

As MRC informed before, in September 2019, ExxonMobil announced plans to spend GBP140 million over the next two years in an additional investment program at its Fife ethylene plant, which has a capacity of more than 800,000 t/y.

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.

ExxonMobil is the largest non-government owned company in the energy industry and produces about 3% of the world's oil and about 2% of the world's energy.
MRC