Ships carrying stored gasoline to discharge cargoes at Indonesia

MOSCOW (MRC) -- Two of six tankers used to store gasoline in Asia have arrived in Indonesia, with shipments into Asia’s largest petrol importer expected to rise this month versus May as Pertamina replenishes stocks, reported Reuters with reference to industry sources and Refinitiv shipping data.

Indonesia’s fuel demand slumped in the second quarter and inventories rose after the government imposed measures to curb the coronavirus, prompting companies to store gasoline onboard ships off Singapore and Malaysia.

The tankers - Aframax-sized Sloane Square, chartered by Equinor and carrying Norwegian gasoline - and Panamax-sized SCF Prudencia chartered by Pertamina, arrived at Indonesia’s Merak and Tuban ports, respectively, in the past week.

The ships can carry more than 120,000 tonnes (1 million barrels) of gasoline when fully loaded.

The shipments were planned “to maintain our stockpile levels”, Pertamina’s spokeswoman said, although Indonesia’s May petrol demand as of Wednesday, was still 27% below February’s level. Fuel stocks fell in May as its Balikpapan refinery was shut for maintenance.

Equinor has declined to comment.

Indonesia’s June imports are estimated at about 7 million barrels, said a trading source who tracks its purchases closely.

This is up from May which was estimated at between 5 million and 6 million barrels, half of monthly average in 2019 and down from February’s imports of 8 million barrels, according to Refinitiv Oil Research.

A third ship, the Panamax-sized Nordvenus, chartered by Pertamina in April to store gasoline, discharged its cargo in Singapore in May, Refinitiv data showed.

“As countries emerge from lockdowns and economic activities resume, we expect a gradual recovery in oil product demand over 2H. Among the key fuels, the demand recovery for gasoline should come fastest,” said Sri Paravaikkarasu, director for Asia oil at consulting firm FGE.

Asia’s gasoline refining margin has returned to a slight premium of 37 cents to Brent crude on June 3 for the first time in two weeks.

“Gasoline margins have been volatile despite demand recovery as it takes time for the excess cargoes to be absorbed,” said KY Lin, spokesman of Formosa Petrochemical Corp which operates a 540,000 barrels per day (bpd) refinery in Mailiao, Taiwan.

“But demand for naphtha, as a whole, would help to lift the entire light distillates fundamental.”

As MRC informed earlier, Formosa Petrochemical plans to shut down its No.3 cracker in Taiwan for maintenance in mid-August, 2020. The 1.2-MMt/y No. 3 cracker is due to be offline until end-September.

We also remind that Formosa took off-stream its No.2 cracker in Taiwan on 1 June, 2020. No reason for unplanned closure was given. The cracker came back on-line on 4 June. Located at Mailiao in Taiwan, the No.2 cracker has an ethylene production capacity of 1.03 million mt/year, propylene production capacity of 515,000 mt/year and butadiene production capacity of 162,000 mt/year.

Formosa, Asia's top naphtha importer, operates three naphtha crackers in Mailiao. These units have a total capacity of 2.93 million tpy of ethylene.

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) -- France's Feyzin refinery has resumed its maintenance and is likely to restart in July, according to trading sources, as per S&P Global.

Planned maintenance at Feyzin was suspended due to the coronavirus pandemic. The petrochemical part of the plant was operating normally. Work started on February 14 and was due to last around seven weeks.

As MRC informed before, France's Feyzin refinery was in the process of halting units and the steam cracker was running at reduced rates on 9 October, 2019. Local media had reported earlier that the refinery had been halting operations since Monday, 7 October, 2019 due to a strike. The company said it regrets the decision by labor unions to call a strike while discussions were ongoing with refinery staff about a planned indefinite closure of a unit due to lower product demand.

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) -- Dow and Shell say they have teamed up to accelerate the development of technology that can potentially electrify steam crackers, said Chemweek.

The two companies say project teams in Amsterdam and Terneuzen, Netherlands, and in Texas, are collaborating under a joint development agreement on the conceptual design and scaling of “e-cracker” technologies. Current steam crackers rely on fossil fuel combustion to heat their furnaces, making them CO2 intensive, the companies say. “As the energy grid becomes increasingly renewables-led, using renewable electricity to heat steam cracker furnaces could become one of the routes to decarbonize the chemicals industry. The challenge is to develop a technologically and economically feasible solution,” they say. Shell and Dow will first work on proving out process technology innovations in laboratory and pilot operations, and then scale up to commercial crackers.

"Significant technological breakthroughs are needed to reduce our industry’s energy use and greenhouse gas emissions, which will require companies to step out of their comfort zones and work together to achieve bold and ambitious new goals. Our partnership with Shell is an important step in making this vision a reality,” says Keith Cleason, Dow’s vice president/olefins, aromatics, and alternatives business.

The work "has the potential to contribute to the reduction of carbon emissions from the manufacture of chemicals and to Shell’s ambition of becoming a net-zero emissions energy business by 2050 or sooner," says Thomas Casparie, executive vice president/global chemicals at Shell.

As MRC informed earlier, in mid-May 2020, USA based Dow Chemical announced plans to shut three polyethylene (PE) plants in the USA and Argentina to avoid piling inventories amid sluggish global demand conditions due to the COVID-19 related lockdown.

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.

The Dow Chemical Company is an American multinational chemical corporation headquartered in Midland, Michigan, United States. Dow is a large producer of plastics, including polystyrene (PS), polyurethane, polyethylene, polypropylene, and synthetic rubber.
MRC

MOSCOW (MRC) -- Cepsa it is carrying out a routine maintenance at one of its two crude units at the San Roque refinery, without specifying which unit, said S&P Global.

The outage would last several days, the company said, without elaborating. The crude 1 unit can process 120,000 boe/d and crude 3 can process 135,000 boe/d, according to company data. The refinery's output has been adjusted to account for lower demand levels in the country due to COVID-19 industrial and travel restrictions.

As MRC informed earlier, Cepsa and Cosmo have signed a memorandum of understanding (MOU) to study new business opportunities in the lubricants market, both in Spain and Japan and internationally. The agreement covers potential synergies in the production of lubricants and coolants, the exchange of technology and formulations, and the search for possible partnerships in the marketing of these products, to increase their efficiency. The alliance also reflects both companies' interest in reaching an agreement to manufacture and supply lubricants and coolants on behalf of the other company, under the Cepsa or Cosmo trademark.

As MRC reported before, Cepsa Quimica plans to shut China phenol/acetone plant in 18 June.

Phenol is the main raw material component for the production of bisphenol A (BPA), which, in turn, is used to produce polycarbonate (PC).

According to MRC's ScanPlast report, overall estimated consumption of PC granules totalled 12,600 tonnes in the Russian market in January-February 2020 (excluding imports and exports to/from Belarus), compared to 9,600 tonnes a year earlier. Demand increased by 31%.

Cepsa is a Spanish petrochemical company. Full name Compania Espanola de Petroleos S.A. The headquarters of the company is located in Madrid. Refining is one of CEPSA's core business areas. The production of asphalt and other road surfaces is another of the company's core business areas; nine CEPSA plants are engaged in the production of these products.
MRC

MOSCOW (MRC) -- Belarus' Naftan refinery started unloading first ever barrels of US crude, operator Belneftekhim spokesman Alexander Tishchenko was quoted as saying June 11 by the Belta news agency, said S&P Global.

Register Now "US oil has already begun flowing at Naftan. At noon, we started unloading oil tanks that arrived earlier this morning," Tishchenko said. The 77,000-mt (around 565,000-barrel) cargo of Bakken crude, arrived at the Lithuanian port of Klaipeda on June 5 and is being delivered by rail together with the remaining barrels of Saudi oil purchased by Belarus in late April.

The first delivery contained 17 tank cars of US crude, with the rest arriving at Naftan over the next 10 days, Tishchenko said. This shipment marks the 12th tanker of oil Belarus has purchased in 2020 as the country continues to seek alternative suppliers after a disagreement with Russia on crude supply terms. Belarus has already received similar volumes from Saudi Arabia, Norway, and Azerbaijan.

In total, Belarus has purchased over 1 million mt, or 7.33 million barrels, of oil from alternative suppliers since the beginning of the year. In May, Belarusian refineries also received 1.13 million mt, or 267,190 b/d, of oil from Russia.

The volume necessary for the optimal running of Belarusian refineries is 2 million mt.

As MRC informed earlier, at the Polymir plant, which is part of Naftan, on June 16, two workshops stopped due to a decrease in the supply voltage. As a result of the reduction in ethylene production, the technological process was partially stopped in workshop No. 105 (production of propylene) and in workshop No. 402 (production of polyacrylonitrile fiber). There are no injuries.

According to the ICIS-MRC Price Report, Polymir last Monday cut the prices of the 109 and 158 LDPE for shipments to the domestic market to Brb1,772,000-1,876,000/tonnes, excluding VAT, FCA, respectively, for volumes of more than 200 tonnes. Brb1,816,000-1,923,000/tonnes for smaller volumes of prices. rub. per ton, excluding VAT, FCA.
MRC