Indian Oil seeks up to 24 million barrels of U.S. crude to diversify imports

MOSCOW (MRC) -- Indian Oil Corp, the country’s top refiner, is seeking to buy up to 24 million barrels of U.S. oil for delivery between October 2020 and March 2021, tender documents showed, as part of its efforts to diversify supply, said Hydrocarbonprocessing.

The move will help IOC to hedge against unpredictable pricing moves by Middle East producers, a source familiar with the matter said, speaking on condition of anonymity.

IOC is requesting 2 million barrels of U.S. crude per month with the option of an additional 2 million barrels per month for discharge at the Paradip port on the east coast, the documents showed.

Asian refiners had anticipated state oil giant Saudi Aramco would raise July crude prices, despite weak refining margins, to track a jump in Middle East benchmarks, but the increase to Asian buyers was more than expected.

The producer on Sunday hiked the selling prices for its crude grades to all destinations for July, a day after OPEC, led by Riyadh, and its allies agreed to extend record output cuts to the end of July.

For Asian buyers, Aramco raised the July official selling price (OSP) for its Arab light crude to Asia to plus USD0.20 a barrel, up USD6.10 from June.

Other Middle East producers will likely follow Aramco in increasing OSPs, trade and refinery sources told Reuters on Monday.

Higher OSPs would push companies to diversify oil supply from the Middle East to other regions, the source said, adding IOC wants to increase its annual intake of U.S. oil in this fiscal year.

The tenders will close on June 12 with validity on the same date.

As MRC informed before, Haldia Petrochemicals’ plant and Indian Oil’s refinery in East Midnapore district have been put on high alert in the wake of cyclone Amphan.

Several measures have been taken by the Haldia Petrochemicals Ltd (HPL) management in view of the cyclone, said its plant head Ashok Ghosh.

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) -- Russia's Gazprom said June 8 it was prepared to begin talks with Belarus over gas supply to its western neighbor Belarus in 2021 provided that Minsk fulfils the terms of the current year's agreement, said S&P Global.

Moscow and Minsk have had regular disagreements over the terms of Russian gas supply to Belarus over the past two decades, with disputes leading to interruptions to deliveries in 2004 and 2010.

Gazprom and Belarus signed an agreement on gas supply and transit for 2020 at the end of December, but only agreed on the pricing element of the contract in mid-February.

Now, Belarus has requested that discussions resume over the terms of 2020 pricing, citing disagreements over the calorific value of Russian gas.

However, Gazprom -- which claims Belarus also owes it some USD166 million in unpaid gas bills -- seems to be standing firm. "The price terms of gas supply to the end of this year were agreed on February 14, 2020," it said.

"Subject to full compliance by Belarus with the agreements reached in 2020, Gazprom confirms its readiness to start negotiations on the terms of gas supply from January 1, 2021," it said.

Belarus has denied it owes any money to Gazprom and has asked for new information regarding the cost of Russian gas.

As MRC informed earlier, in 2019, SIBUR and Gazprom Neft have consolidated 100% of the authorised capital in Poliom, a polypropylene plant in Omsk. Sibgazpolimer, a joint venture of the two companies, has signed an agreement to acquire a 50% stake in Poliom from the Titan Group.

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) -- Borealis said that it has reached an important milestone in the construction of its propane dehydrogenation (PDH) plant at Kallo, Belgium, said Chemweek.

The propylene splitter, one of the largest equipment items ever delivered to the port of Antwerp in one piece by ship, was successfully transported from the quay to the Borealis site at Kallo. The splitter is a distillation column, needed to split propane from propylene. It has a length of 105 meters, width of 10 meters and weight of 1,600 metric tons.

The PDH plant is Borealis’s most significant investment in Europe. The plant will have a targeted production capacity of 750,000 metric tons/year of propylene, making it one of the largest and most efficient facilities in the world. Production is expected to start by the end of 2022.

As MRC informed earlier, Borealis would not proceed with the development of a multi-billion-dollar integrated steam cracker and polyethylene (PE) project in Kazakhstan.

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

1. Bank of England gave loan 53 companies USD20.6 billion to cope with COVID-19

MOSCOW (MRC) -- The Bank of England (BoE) says that as of 3 June, 53 companies had used the CCFF and a total of GBP16.2 billion (USD20.6 billion) had been loaned to cope with the impacts of COVID-19, said Chemweek. BASF is the biggest beneficiary of a UK government emergency loan scheme to help the biggest companies operating in the country cope with the impacts of COVID-19, Bayer is also one of the biggest recipients of the emergency funding, which takes the form of cheap government loans, under the Covid Corporate Financing Facility (CCFF). The Bank of England (BoE) says that as of 3 June, 53 companies had used the CCFF and a total of GBP16.2 billion (USD20.6 billion) had been loaned. BASF was the biggest beneficiary, receiving GBP1 billion, the maximum amount allowed by the BoE to one company under the CCFF, and Bayer had received GBP600 million. The other chemical industry participant is AkzoNobel, which had received GBP30 million of loans under the scheme.


MRC

MOSCOW (MRC) -- Shell and other top producers in the US Gulf of Mexico are planning to resume drilling operations and bring production volumes back online now that Tropical Depression Cristobal is onshore and most deepwater oil and gas facilities were left unscathed, said S&P Global.

While Shell never took any oil and gas volumes offline during the storm, BP, Occidental Petroleum and others shut in some production volumes as the Gulf temporarily lost nearly 35% of its crude volumes and almost one-third of its natural gas output, according to the US Bureau of Safety and Environmental Enforcement.

More than 635,000 b/d of crude and 878 MMcf/d of gas were shut in ahead of Cristobal's move onshore, BSEE said June 7, as operators evacuated 188 platforms and rigs in the Gulf -- roughly 30% of the US Gulf's total platforms with working personnel.

BP, for instance, had reduced outputs at its Thunder Horse, Atlantis and Na Kika platforms in the Gulf. Those three BP-operated platforms churn out more than 200,000 boe/d.

Shell said June 8 that it will begin redeploying nonessential workers who were evacuated from offshore platforms as Shell resumes operations. "There were no impacts to our production as a result of TS Cristobal, and we expect to resume our drilling operations as conditions continue to improve today and tomorrow," Shell said in a prepared statement.

A Murphy Oil spokesman said the oil producer was working to return crews to their offshore locations. And ExxonMobil said its offshore facilities and USGC refineries are all operating normally.

Cristobal battered southern Mexico and shut down ports over the past week, before moving through the Gulf and spreading heavy rainfall from Louisiana to Florida. The storm hit just as oil prices were moving up with the OPEC+ group agreeing to extend deeper production cuts at least through July and front-month NYMEX WTI flirting with hitting $40/b for the first time since early March.

Total Gulf oil production was nearly 2 million b/d before the coronavirus pandemic cratered global demand and oil prices. BSEE was estimating Gulf oil production at closer to 1.85 million b/d before Cristobal.

However, S&P Global Platts Analytics data estimates that Gulf crude oil production will fall to an estimated 1.62 million b/d average for June as some producers reduced their volumes because of lower prices.

As MRC wrote previously, Tropical Storm Cristobal forced ports to close in three states in Mexico's Bay of Campeche area June 3, although there has been no major impact on oil, gas or power generation infrastructure.

We remind that Royal Dutch Shell Plc restarted the crude distillation unit, coker and gasoline-producing cat cracker at its 225,300 barrel-per-day (bpd) Norco, Louisiana, refinery. Shell is restarting the hydrocracker, while the reformer and naphtha hydrotreater will remain shut for previously planned work, the sources said. The coker is scheduled to undergo planned work beginning next week, but is expected to remain in operation.

We also remind that Shell Singapore restarted its naphtha cracker in Bukom Island in early December 2019, 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 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