USGC ethylene exports pick up amid stronger Asia pricing

MOSCOW (MRC) -- Ethylene exports from the US Gulf Coast (USGC) are recovering from their recent trough as ethylene prices in Asia and Europe show signs of strength, said Chemweek.

Enterprise Products Partners' new joint-venture ethylene export facility with Navigator Gas has sent out its first cargo since the start of April, headed for Europe. PetroChem Wire data show total ethylene exports from the two facilities in Houston dipped to 23,000 metric tons (mt) during April, compared with 44,000 mt in March.

Volumes are poised to recover respectively to 27,000 mt and 42,500 mt during May and June, based on preliminary PetroChem Wire vessel tracking. The Enterprise facility accounts for almost all of the increased volumes, these data show. Shipbroker fixture reports corroborate an uptick in cargo activity as well.

The US Gulf Coast is awash with ethylene supply despite reduced operating rates at many steam crackers. While some companies have disclosed operating rates as low as 70–80%, overall Gulf Coast cracker utilization is estimated around 85% at present.

US ethylene has had the lowest price in the world for many months. Ethylene prices in those two markets are also in recovery mode.

The cavern in Mont Belvieu, 20 miles northeast of Morgan's Point, has a capacity of 600 million lbs. Enterprise has designed the system "to serve as an open market storage and trading hub for the ethylene industry through storage, connections to multiple ethylene pipelines and high-capacity export capabilities," according to a previous announcement.

A Europe-headquartered chemical producer is believed to have a term agreement at the new terminal, lifting one cargo per month.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 721,290 tonnes in the first four month of 2020, up by 4% year on year. Low density polyethylene (LDPE) and linear low density polyethylene (LLDPE) shipments grew partially because of the increased capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market totalled 347,440 tonnes in January-April 2020 (calculated by the formula production minus export plus import). Supply exclusively of PP random copolymer increased.
MRC

MOSCOW (MRC) -- BP has agreed to sell its global petrochemicals business to INEOS for USD5 billion as part of plans to "reinvent" BP into a more focused, integrated energy company, reported S&P Global.

The sale agreement comprise all of BP's aromatics and acetyls businesses, including assets, technology and licences, as well as related assets that are concentrated mostly in Asia, the US and Europe, BP said.

Last year, BP's petrochemicals division produced 9.7 million mt of products and employed over 1,700 staff worldwide.

The sale will also include related interests, such as the chemical recycling technology BP Infinia, and BP's interest in acetylated wood developer Tricoya, BP said.

"This is another significant step as we steadily work to reinvent BP," CEO Bernard Looney said in a statement. "Strategically, the overlap with the rest of BP is limited and it would take considerable capital for us to grow these businesses. As we work to build a more focused, more integrated BP, we have other opportunities that are more aligned with our future direction. Today's agreement is another deliberate step in building a BP that can compete and succeed through the energy transition."

Petrochemicals company INEOS has bought a number of businesses from BP over the past two decades, notably the USD9 billion purchase of Innovene in 2005, a BP subsidiary that comprised the majority of BP's's then chemicals assets, and two refineries.

Following the agreed deal, BP said it has now meet its current USD15 billion divestment target through 2019 and 2020, a year earlier than expected.

The move comes two weeks after BP said it plans to write off up to USD17.5 billion worth of assets after cutting its long-term price assumptions for oil and gas to reflect expectations that the coronavirus pandemic will accelerate a shift away from fossil fuels.

The write-offs would likely push BP's debt gearing to 47.8%, by far the highest in the sector, according to Royal Bank of Canada analyst Biraj Borkhataria.

Proceeds from the sale of its petrochemicals business will be used for "general corporate purposes," BP said.

Under the terms of the agreement, INEOS will pay BP a deposit of USD400 million and will pay a further USD3.6 billion on deal completion. An additional USD1 billion will be deferred and paid in three separate installments of USD100 million each in March, April and May 2021, with the remaining $700 million payable by the end of June 2021.

ubject to regulatory and other approvals, the transaction is expected to complete by the end of 2020.

As MRC informed before, BP says it expects to take an estimated USD13.0-17.5 billion hit in non-cash impairments and write-offs in the second quarter of 2020 after lowering its long-term assumptions for oil and gas price.

We remind that BP has entered into an agreement to license its latest generation technology for the production of purified terephthalic acid (PTA) to China’s Dongying Weilian Chemical Co., Ltd. Weilian Chemical is a subsidiary of Dongying United Petrochemical Co., Ltd, one of the leading manufacturers and distributors of petroleum and petrochemical products in China. Weilian Chemical intends to build a 2.5 million tonnes per annum PTA production unit at the Dongying Port Economic Development Zone in eastern Shandong province, adding to Dongying United Petrochemical’s existing refineries and paraxylene (PX) facilities portfolio.

PTA is used to produce polyethylene terephthalate (PET), which, in its turn, is used in the manufacturing of plastic bottles, films, packaging containers, in the textile and food industries.

According to MRC's ScanPlast report, April total estimated PET consumption virtually did not change year on year, totalling 60,840 tonnes (in April 2019 - 60,980 tonnes). 235,160 tonnes of PET chips were processed in Russia in January-April 2020.

BP is one of the world's leading international oil and gas companies, providing its customers with fuel for transportation, energy for heat and light, retail services and petrochemicals products for everyday items.
MRC

MOSCOW (MRC) -- Honeywell is to build a new production line capable of producing up to 4.5 million FFP2 and FFP3 disposable face masks per month at its Newhouse site in Scotland, United Kingdom, said Britishplastics.

These masks will assist the UK Government’s response to the coronavirus (COVID-19) outbreak and the new production line is expected to create approximately 450 jobs at the site. The UK Government has ordered 70 million of the locally produced Honeywell SuperOne face masks, with production expected to start as early as July 2020.

"As a global leader of high quality personal protective equipment, Honeywell is committed to getting safety gear to those who need it most, including workers on the front line of the fight against COVID-19,” said Will Lange, president of Honeywell’s personal protective equipment business.

"Our Newhouse facility has both the physical capacity and technical capabilities to launch a large-scale respirator production line in such a short timeframe. We are proud of our teams who are bringing new manufacturing capabilities to the United Kingdom as quickly as possible to support the country’s response to the pandemic."

This is the third new face mask production line Honeywell has announced in the last two months. The company started two new manufacturing lines in the United States for the North American market. Honeywell’s Newhouse plant specialises in electronic systems assembly and testing and other advanced manufacturing capabilities for several of Honeywell’s business groups and will continue to do so alongside the new face mask line.

"These 70 million masks are the result of our challenge to UK industry to scale-up domestic PPE manufacturing," said Matt Hancock, Health Secretary, UK Government.

"This deal is brilliant news for the whole United Kingdom, which will not only deliver the masks we need but create around 450 jobs in Newhouse, Scotland. I’m delighted to team up with Honeywell to open up another avenue to get millions of masks to the frontline and strengthen our ongoing response to the outbreak."

Honeywell will supply the 70 million face masks from Newhouse to the UK Government over an 18-month timeframe.

As MRC informed before, in September 2019, Honeywell announced that PKN orlen had licensed the UOP MaxEne process, which can increase production of ethylene and aromatics and improve the flexibility of gasoline production. The project, for the PKN Orlen facility in Plock, Poland, was in the basic engineering stage then.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 721,290 tonnes in the first four month of 2020, up by 4% year on year. Low density polyethylene (LDPE) and linear low density polyethylene (LLDPE) shipments grew partially because of the increased capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market totalled 347,440 tonnes in January-April 2020 (calculated by the formula production minus export plus import). Supply exclusively of PP random copolymer increased.

MRC

MOSCOW (MRC) -- The U.S. Environmental Protection Agency has proposed lifting the amount of biofuels that refiners must blend into their fuel next year to 20.17 billion gallons, from 20.09 billion this year, according to two sources familiar with the details of an agency draft proposal, said Hydrocarbonprocessing.

The 2021 volumes would include 15 billion gallons of conventional biofuels like ethanol and 5.17 billion gallons of advanced biofuels, according to the sources. The advanced biofuels mandate would include 670 million gallons of cellulosic biofuel, up from 590 million gallons in 2020, they said.

EPA’s proposal would also place the 2022 mandate for biodiesel at 2.76 billion gallons, from 2.43 billion in 2021, sources said. The agency sets biodiesel mandates two years ahead.

An EPA spokesperson declined to comment. The draft proposal is currently being reviewed by the White House.

The EPA is charged with setting biofuel and biodiesel blending requirements for the refining industry as part of the Renewable Fuel Standard, a regulation aimed to help farmers and reduce U.S. dependence on oil.

Under the RFS, refiners must blend billions of gallons of biofuels into the nation’s fuel pool or buy credits from those that do. Refiners say the obligations are too costly, while farmers benefit from an expanded market for their crops.

Small refineries can be exempted from biofuel blending if they prove that complying would cause them financial strain. The waivers have been a lightning rod for controversy, as the Trump administration has made wide use of the exemptions, angering biofuel advocates, who say they hurt ethanol demand.

As MRC informed earlier, US lawmakers introduced a relief bill that would include aid to biofuel producers after demand for the fuel plummeted because of the coronavirus pandemic, causing mass shutdowns in the industry. The bill, introduced by House Democrats, would reimburse producers that suffered unexpected market losses because of the pandemic from January 1 through May 1. It is not clear whether the bill as proposed will be passed into law.

As MRC informed before, global oil consumption cut by up to a third in Q1 2020. 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 721,290 tonnes in the first four month of 2020, up by 4% year on year. Low density polyethylene (LDPE) and linear low density polyethylene (LLDPE) shipments grew partially because of the increased capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market totalled 347,440 tonnes in January-April 2020 (calculated by the formula production minus export plus import). Supply exclusively of PP random copolymer increased.
MRC

MOSCOW (MRC) -- Pakistan's oil marketing companies are likely to import more spot barrels of motor fuels soon as the recovery in domestic demand amid low refinery run rates threatens to draw down the country's already limited supplies, traders said, said S&P Global.

This expectation was sparked by concerns of a supply crunch after the country's Oil and Gas Regulatory Authority in mid-June imposed a cumulative fine of around Pakistan rupees 40 million (USD240,000) on six major oil marketing companies for holding insufficient motor fuel inventories, OGRA's official reports revealed.

Shell Pakistan, Total Parco Pakistan Limited, Puma Energy, Gas and Oil Pakistan, Attock Petroleum and Hascol Petroleum were the six slapped with fines, according to the reports. However, they could not be immediately reached for comment on the matter.

Signs of an increased import appetite also emerged from a string of amendments Pakistan State Oil Corporation made to its recent buy tenders, seeking even prompter delivery of gasoline cargoes. In Its 92 RON gasoline buy tender for H1 July, the company revised the original delivery dates of July 1-15 to June 25-July 15, while the dates for its H2 July and H1 August tenders were changed to July 10-31 and August 1-12, from July 16-31 and August 1-15, respectively.

"By pushing the dates earlier, we can see that PSO has a more urgent need for [gasoline] cargoes," one Singapore-based trader said. In addition, the company also issued a fresh spot tender seeking an additional 4,000 mt of 97 RON gasoline for delivery over July 23-28 to Keamari terminal.

PSO typically buys 97 RON gasoline in a combined cargo with 92 RON gasoline, but this time round, has imported it separately due to a sudden spike in driving activity, market sources said.

In addition to raising the cargo sizes of imports to 55,000 mt, from 45,000 mt previously, a source with close knowledge of PSO's import plans said that the company's import requirements will likely be around eight MR-sized cargoes per month, two more than the usual requirement of around six MRs per month.

As MRC informed before, global oil consumption cut by up to a third in Q1 2020. 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 721,290 tonnes in the first four month of 2020, up by 4% year on year. Low density polyethylene (LDPE) and linear low density polyethylene (LLDPE) shipments grew partially because of the increased capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market totalled 347,440 tonnes in January-April 2020 (calculated by the formula production minus export plus import). Supply exclusively of PP random copolymer increased.
MRC