Marathon Galveston Bay, Texas, refinery shuts HCU, alky unit for work

MOSCOW (MRC) -- Marathon Petroleum Corp shut the hydrocracker (HCU) and alkylation unit at its 585,000 barrel-per-day (bpd) Galveston Bay Refinery in Texas City, Texas, as part of a multi-unit overhaul that began on Saturday, said sources familiar with plant operations, said Hydrocarbonprocessing.

Marathon spokesman Sid Barth declined to comment. The 60,000-bpd hydrocracker, called Ultracracker 4, and 31,500-bpd alkylation unit were shut along with a sulfur recovery unit and a 47,500-bpd aromatics recovery unit, the sources said.

The first units shut were the 65,000-bpd Ultraformer, as the reformer is called, a 60,000-bpd residual oil hydrotreater and an aromatics unit, the sources said. The first shutdowns began on Saturday.

The overhaul is expected to be completed as early as mid-July but may extend through Aug. 1. Because of the COVID-19 pandemic, the overhaul has twice been delayed from an initial start date scheduled in late March.

Hydrocrackers use a catalyst under high heat and pressure in the presence of hydrogen to produce diesel from gas oil along with other motor fuels. Alkylation units convert refining byproducts into octane-boosting components added to gasoline.

Reformers also convert refining byproducts into components used to boost octane in gasoline through a different process from that in reformers. Hydrotreaters use hydrogen to reduce sulfur in motor fuels in compliance with U.S. environmental rules.

As MRC informed before, a portion of Marathon Petroleum Corp’s 363,000 barrel-per-day Carson refinery in California was shut in late February 2020, following a fire.

We also remind that the gasoline-producing unit at Marathon Petroleum Corp’s 585,000-barrel-per-day (bpd) Galveston Bay Refinery in Texas City, Texas, remained shut for six weeks for repairs in late Juney-early August 2019. The 140,000-bpd gasoline-producing Fluidic Catalytic Cracking Unit 3 (FCCU 3) was shut on June 29 2019 to repair a leak. The refinery’s 65,000 bpd reformer, called Ultraformer 4, was also shut down.

Propylene is the main feedstock for the production of polypropylene (PP).

According to MRC's ScanPlast report, 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) -- Rosneft does not have enough crude to ship to buyers with which it has long-term supply deals, making it hard for the Russian company to continue with record oil cuts beyond June, four sources familiar with the matter told Reuters.

Rosneft has told the energy ministry it would be difficult to maintain cuts to the end of the year, as it has had to cut shipments to major buyers, such as Glencore (GLEN.L) and Trafigura, despite good demand, two sources close to the talks said on condition of anonymity.

"There is no doubt Rosneft will strictly fulfil all obligations under supply contracts with its foreign and Russian counterparties despite output cuts made by the company as a part of OPEC+ deal,” Rosneft CEO Igor Sechin said in a statement on Friday. Glencore and Trafigura declined to comment. Russia’s Energy Ministry did not respond to Reuters’ request for comment.

President Vladimir Putin, who decides on oil policy, spoke with Saudi Crown Prince Mohammed bin Salman on Wednesday about “close coordination” on output cuts, agreed in April to tackle oil market weakness because of the coronavirus pandemic.

Saudi Arabia, de facto leader of the Organization of the Petroleum Exporting Countries, proposes to extend the record cuts until December.

“Rosneft is in pain... They must supply refineries, term buyers. There are simply no resources,” a source familiar with Rosneft’s operations told Reuters. Rosneft, run by one of Putin’s closest allies, Igor Sechin, has long opposed output cuts in tandem with OPEC, but has been overruled by the president, who is keep to deepen political cooperation with the Middle East.

The company, which sells mostly to long-term buyers, has cut output by 17% so far in May versus April, a source familiar with daily output data said.

It will export 800,000 tonnes in 8 cargoes from Baltic ports in June compared to 27 cargoes in April and 13 in May even though buyers wanted more oil as demand recovers in Europe and the value of Russian crude Urals URL-E has strengthened.

Glencore, which has a 5-year supply deal with Rosneft, will get two Baltic cargoes in June compared to eight in April. Trafigura will get one compared to ten. The remaining five June cargoes of Urals were allocated to Total (TOTF.PA) and Gunvor - the winners of Rosneft’s 6-month tender for April-September loading. The volumes are the minimum under tender terms.

Rosneft also exports from the Black Sea and the Pacific and could compensate buyers on those routes or in the Baltic in the future, the sources said.

As MRC informed earlier, Rosneft produces at its facilities and sells ethyl alcohol and acetone in Russia, which are used in the manufacture of antiseptics. 15 thousand tons of these substances are produced per month. On the day the quarterly report was published, Rosneft told how its work has changed in the context of the coronavirus epidemic.

Acetone, along with phenol, is the main raw material component for the production of bisphenol A (BPA, by condensation), which, in turn, is used to produce polycarbonate (PC).

According to ScanPlast of Market Report, the total estimated consumption of PC granules in the Russian market (excluding imports and exports to Belarus) amounted to 22.7 thousand tons in the first quarter compared to 17 thousand tons for the same period last year. Demand increased by 33%.

Rosneft became Russia's largest publicly traded oil company in March 2013 after the USD55 billion takeover of TNK-BP, which was Russia’s third-largest oil producer at the time.
MRC

MOSCOW (MRC) -- PT Pertamina will develop its Cilacap refinery in Central Java “independently”, the state energy company said, dropping a plan to boost capacity through a joint venture with Saudi Aramco, said Reuters.

The two companies have been in talks to upgrade the Cilacap refinery since 2016 and last year said that they would finalise a joint venture plan in the first quarter of 2020.

"Pertamina will continue to independently develop the Cilacap Refinery Development Master Plan, while we look for another strategic partner,” Pertamina spokesman, Fajriyah Usman, said in a statement. Usman confirmed that the planned joint venture with the Saudi oil giant had now been axed.

Saudi Arabian Oil Co. did not immediately respond to a request for comment. The Cilacap Refinery Development Master Plan aims to increase Cilacap’s refining capacity to 400,000 barrels per day from 348,000 bpd.

Pertamina had said last year that it will start the development of the Cilacap project with or without a partner to meet an operational target of 2025.

As MRC informed earlier, Pertamina carried out planned maintenances at the liquid catalytic cracking unit in Balongan (Balongan, West Java, Indonesia). Repair work on this installation with a capacity of 180,000 tonnes/year of propylene started on 19 March of this year and ended on 19 April.

Propylene is a feedstock for producing of PP.

According to MRC's ScanPlast report, 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.

Pertamina is an Indonesian state-owned oil and natural gas corporation based in Jakarta. It was created in August 1968 by the merger of Pertamin (established 1961) and Permina (established 1957). Pertamina is the world's largest producer and exporter of liquefied natural gas (LNG).
MRC

MOSCOW (MRC) -- LyondellBasell, one of the largest plastics, chemicals and refining companies in the world, has announced that it has declared a dividend of USD1.05 per share, as per the company's press release.

The dividend is to be paid June 15, 2020 to shareholders of record June 8, 2020, with an ex-dividend date of June 5, 2020.

As MRC reported earlier, global petrochemical producer LyondellBasell has reduced rates across its system to accommodate lower demand wrought by shutdowns around the globe to stem the spread of the coronavirus pandemic, said the company's CEO Bob Patel. LyondellBasell's overall global petrochemical and refining assets were expected to operate at 60% to 80% of nameplate capacity through the second quarter, Patel said during the company's first-quarter earnings call. European crackers were seen running at 80% to 85%, while US crackers were expected to run at about 75%, he said.

We also remind that to further aid in the fight against the COVID-19 pandemic, LyondellBasell (LBI) donated a key ingredient to Huntsman Corporation to produce hand sanitizer for US first responders.

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.

LyondellBasell is one of the largest plastics, chemicals and refining companies in the world. Driven by its 13,000 employees around the globe, LyondellBasell produces materials and products that are key to advancing solutions to modern challenges like enhancing food safety through lightweight and flexible packaging, protecting the purity of water supplies through stronger and more versatile pipes, and improving the safety, comfort and fuel efficiency of many of the cars and trucks on the road. LyondellBasell sells products into approximately 100 countries and is the world's largest licensor of polyolefin technologies.
MRC

MOSCOW (MRC) -- China’s Sinopec Corp is expected to start commercial operations at its oil refining and petrochemical complex in Zhanjiang at the end of July, reproted Hydrocarbonprocessing with reference to a company spokesperson's statement.

The refinery is capable of processing 200,000 barrels per day (bpd) of crude oil and the petrochemical plant will produce 800,000 tonnes per year of ethylene. The project, with first phase investment of 40 billion yuan ($5.59 billion), is located in southern China’s Guangdong province.

The refinery received its first crude oil cargo of 128,900 tonnes from a very large crude carrier (VLCC) that arrived at the plant’s 300,000-tonne capacity berth in early May, Sinopec said on May 9.

The Zhanjiang refinery is Sinopec’s first capacity addition since the start up of the similar-sized Qingdao refinery on China’s east coast in 2009.

The Zhanjiang plant is located about 60 km (37 miles) from Sinopec’s 400,000-bpd Maoming refinery.

Sinopec also owns commercial crude oil storage tanks in Zhanjiang that serve as a delivery point for crude oil futures contracts traded on China’s International Energy Exchange (INE).

The Guangdong provincial government aims to set up an oil refining and petrochemical industry base to shore up its economy. German chemical giant BASF is also building a USD10-billion integrated petrochemical project in Zhanjiang.

An Sinopec executive at the Zhanjiang refinery proposed during China’s annual parliament conference, the National People’s Congress (NPC), to include the Maoming-Zhanjiang base into the list of national-level petrochemical bases, according to a report on the proceedings released by the NPC on Monday.

Companies involved in the national petrochemical bases would be expected to receive preferential policies from the government on taxes and land purchases.

China has seven national-level petrochemical bases at Dalian in Liaoning province, Caofeidian in Hebei province, Lianyungang in Jiangsu province, Shanghai, Ningbo in Zhejiang province, Gulei in Fujian province and Huizhou in Guangdong.

As MRC informed earlier, in October 2019, Sinopec SABIC Tianjin Petrochemical Co. (SSTPC), a 50-50 joint venture of Sinopec and SABIC, began construction on an ethylene expansion project in Tianjin Province, China. The project will boost the company's ethylene capacity to 1.3-million t/y from 1-million t/y currently. Cost and a schedule for the project were not given.

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.

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.
MRC