Unipetrol completes turnaround at Litvínov petrochemical complex

MOSCOW (MRC) -- The almost two-month-long planned operational turnaround at the chemical plant in Litvinov is coming to an end, said the company.

The regular maintenance of all facilities on-site, during which the operation was entirely suspended, started on 9 April. To mitigate the risk of the spread of coronavirus, it was accompanied by extensive and unparalleled safety, hygienic and anti-epidemic measures.

“We are part of the Czech Republic’s critical infrastructure and are one of the pillars of the Czech economy. At one moment, we were facing two simultaneous challenges: to implement the needed and urgent general overhaul of our production facilities and to minimise the risks related to the spread of COVID-19. I am glad that we managed both challenges together with the neighbouring municipalities, the region, ministries, and a host of experts,” said Tomasz Wiatrak, Unipetrol Group’s CEO and Board Chairman.

The turnaround, in other words, a planned shutdown of the entire production, took place in the Litvinov plant after four years. The primary reasons were regular maintenance of onsite production technologies according to legislative and review requirements and the preparation of the facilities for the next operational cycle. “The majority of planned work has been completed, and now we are beginning to gradually put the production technologies back into operation. The shutdown and the start-up of each production unit always take several days and is the most sensitive part of the turnaround. It includes the controlled combustion of excess gases using safety field burners. We apologise in advance to all the inhabitants of the neighbouring municipalities for the related transient light and sound effects,” said Tomas Herink, member of the Board of Directors of the Unipetrol Group.

For seven weeks, six thousand maintenance tasks and a range of investment projects were implemented within the maintenance and renovation of production facilities. “The key projects included a repair of the furnace of the atmospheric crude oil distillation unit, the replacement of the cooling-water underground pipeline at the partial oxidation production unit as well as servicing of large compressors at the steam cracker,” listed Tomas Herink.

About one month before the start of the turnaround, an unexpected situation occurred – the whole of Europe was affected by the pandemic of a coronavirus causing COVID-19. It resulted in the respective governments adopting unprecedented measures restricting the free movement of citizens, the performance of many occupations, the offer of services and contact with abroad. “Within a few days, we had to change the planned schedule of individual tasks and mainly create and implement a system of safety, hygienic and anti-epidemic measures which we submitted to the Central Crisis Staff of the Government of the Czech Republic,” explained Tomas Herink.

All these changes had to be coordinated with dozens of large and small domestic and foreign suppliers. And since the measures against the spread of the coronavirus were adopted in other countries of Europe as well, foreign suppliers could not guarantee that their employees would be sent to the Czech Republic in this situation. “We opened our crisis staff to representatives of municipalities, the region, the police and the public health protection authority. We collaborated with the Ministry of Industry and Trade, the Regional Public Health Protection Authority, the police and the municipalities of Litvinov and Most on the preparation of measures inside and outside of our site. Our goal was to ensure the safety of our employees, suppliers and inhabitants around the plant,” described Tomasz Wiatrak.

Foreign workers who arrived in the end had to undergo 14-day work quarantine and were subjected to a special regime when they were not allowed to move freely and use public transport. “We created communication manuals in eight languages, organised isolated accommodation capacities for quarantine and disease, and designated special entrances to the site, separate catering locations and stores to minimise foreign workers’ contact with our employees and the inhabitants of the neighbouring municipalities. Also, everyone was tested for COVID-19,” Tomasz Wiatrak enumerated the key measures.

Already the start of the turnaround work confirmed that the decision to perform the turnaround according to the planned schedule was right. It prevented any risk of employees and inhabitants that could be caused by operating technologies that would not be reviewed according to the mandatory deadlines. “We saw what we had expected while planning the turnaround. Some parts of the technologies were reaching the limit of their lifecycle and putting off their revision or replacement would have meant an increased operational risk,” said Tomas Herink.

In conclusion, Tomasz Wiatrak, CEO of the Unipetrol Group, added: “We would like to thank very much all the authorities, institutions and organisations that were involved in the preparation and implementation of the safety, hygienic and anti-epidemic measures. At the same time, we thank the inhabitants for their understanding and patience. Together, we have experienced a situation that has no parallel in the history of the Czech chemical industry."

Ethylene and propylene are feedstocks for producing 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.

he Unipetrol Group is the largest refinery and petrochemical company in the Czech Republic. It focuses on crude-oil processing and on the production, distribution and sale of vehicle fuels and petrochemical products – particularly plastics and fertilisers. In all these areas, it belongs among the important players on the Czech and Central European market. The Unipetrol Group encompasses refineries and production plants in Litvinov and Kralupy nad Vltavou, Paramo with its Mogul brand in Pardubice and Kolin, Spolana Neratovice, and two research centres in Litvinov and Brno. Unipetrol also includes a network of Benzina filling stations in the Czech Republic and Slovakia. With 416 filling stations, Benzina is the largest chain in the Czech Republic. Unipetrol is one of the largest companies in terms of turnover in the Czech Republic. It earned over CZK 129 billion last year and employs more than 4,800 persons. In addition to its business development, Unipetrol is proud to be a socially responsible corporation. Therefore, it pays an equal amount of attention to initiatives which focus on the cultivation and support of sustainable development, education, local communities, and the environment. In 2005, Unipetrol became a member of the ORLEN Group, the largest crude-oil processor in Central Europe.
MRC

Oil falls below USD41 as U.S. inventory rise revives glut worries

MOSCOW (MRC) -- Oil fell more than 1% to below USD41 a barrel after a report showed a rise in crude inventories in the United States, reviving concerns about oversupply and weak demand because of the coronavirus crisis, said Hydrocarbonprocessing.

The report from the American Petroleum Institute, an industry group, said crude stocks rose by 8.4 million barrels, rather than falling as analysts forecast. The U.S. government’s official stocks figures are due out later on Wednesday.

"Indications from the American Petroleum Institute show that stocks built quite a lot,” said Bjornar Tonhaugen of Rystad Energy. “What else can you do as a trader but rush to sell?" Brent crude LCOc1 was down 50 cents, or 1.2%, to USD40.68 a barrel at 1325 GMT. U.S. West Texas Intermediate (WTI) CLc1 also dropped 50 cents, or 1.3%, to USD38.44.

Both benchmarks had hit three-month highs on Monday. Brent has more than doubled since falling to a 21-year low below USD16 in April. But some analysts think the market has risen too far as the coronavirus pandemic continues.

“With equity markets edging lower, and a vast amount of good news baked into oil prices at these levels, it was no surprise that the oil market’s confidence wavered slightly,” said Jeffrey Halley, senior market analyst at OANDA. Official government figures on U.S. stockpiles from the Energy Information Administration are due later on Wednesday.

Prices have been supported by a record oil supply cut of 9.7 million barrels per day (bpd), about 10% of pre-coronavirus daily demand, by the Organization of the Petroleum Exporting Countries (OPEC), Russia and others, a group known as OPEC+.

An easing of government lockdowns that sought to limit the spread of the virus has revived demand by boosting travel and economic activity, also supporting the market. OPEC+ agreed on Saturday to extend the record cut for another month until the end of July.

While this helped prices, the market came under pressure after Saudi Arabia, Kuwait and the United Arab Emirates decided not to extend their extra voluntary supply reductions.

On June 6, the 23 members of the OPEC+ alliance renewed their April agreement to reduce production by 9.6 million b/d through July. Under the plan, Saudi Arabia is cutting its monthly output by at least 8.5 million b/d, which is down almost 30% from the 12 million b/d it said it was producing in April. The kingdom had previously agreed to institute an additional 1 million b/d in cuts for June but has indicated it would not be willing to continue those curbs in July.

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

BASF to cease production at Pennsylvania petrochemical catalysts facility

MOSCOW (MRC) -- BASF announced that it will close its manufacturing facility in Erie in 2021, said Yourerie.

BASF produces process catalysts used primarily in the petrochemical industry. According to BASF, most production operations will cease by the end of 2020. The facility will continue to fulfill confirmed customer requests through the first quarter of 2021 and final decommissioning and demolition work are anticipated through mid-2022.

"This is a difficult situation and we are grateful for the BASF Erie site team’s dedication over the years and during the transition,” said Travis Rollins, Site Manager for BASF’s Erie facility. “Our priorities continue to be the well-being of our employees and maintaining safe operations during the closure process."

75 positions will be phased out starting with the ceasing of operations in December and continuing through the decommissioning process. BASF says they will provide severance and outplacement services to employees, including support for employment at other BASF facilities.

We remind that BASF has restarted its No. 1 steam cracker following a maintenance turnaorund. Thus, the company resumed operations at the plant on September 30, 2019. The plant was shut for maintenance in mid-August, 2019. Located at Ludwigshafen in Germany, the No. 1 cracker has an ethylene production capacity of 235,000 mt/year and a propylene production capacity of 125,000 mt/year.

Ethylene and propylene are feedstocks for producing 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.

BASF is the leading chemical company. It produces a wide range of chemicals, for example solvents, amines, resins, glues, electronic-grade chemicals, industrial gases, basic petrochemicals and inorganic chemicals. The most important customers for this segment are the pharmaceutical, construction, textile and automotive industries. BASF generated sales of EUR59 billion in 2019.
MRC

Braskem signs five-year naphtha supply deal with Petrobras

MOSCOW (MRC) -- Braskem announced today that it has signed agreements with Petrobras for the supply of naphtha feedstock to Braskem's units in Bahia and Rio Grande do Sul, said Chemweek.

The deal, which covers five years after the expiry date of the current agreement at the end of this year, provides for the supply of a minimum volume of 650,000 metric tons/year, at an option for Petrobras to supply an additional volume of up to 2.8 million metric tons/year, at a price equivalent to international ARA reference price.

In addition, to guarantee access to the naphtha logistics system in Rio Grande do Sul, Braskem has renewed the storage agreement with Petrobras and the transport and storage agreement with Petrobras Transporte S.A.

At a results conference call with analysts earlier this month, Braskem’s CFO Pedro Freitas, said that Braskem is facing some uncertainty as Petrobras is in the process of divesting refineries as part of a major restructuring program. “We anticipate that there will be different owners in the two refineries that are closer to our plants in the south and in the north of Brazil.” The new naphtha contract will be split “so that we have a contract in the south and another in the north, so that whenever Petrobras sells the refineries, we already have that contract structure arranged for the new configuration in the future,” Freitas said.

As MRC informed earlier, Braskem's 450,000 mt/year polypropylene (PP) plant under construction along the Houston Ship Channel is nearly complete. The company said construction was 98.4% complete by the end of the first quarter of 2020, with USD634 million spent. Braskem's US arm, Braskem America, imported 8,000 mt of PP from the parent company's Brazilian operations in Q1 to continue the new facility's pre-marketing activities.

According to MRC's ScanPlast report, 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.

Headquartered in Rio de Janeiro, Petrobras is an integrated energy firm. Petrobras' activities include exploration, exploitation and production of oil from reservoir wells, shale and other rocks as well as refining, processing, trade and transport of oil and oil products, natural gas and other fluid hydrocarbons, in addition to other energy-related activities.
MRC

COVID-19 - News digest as of 10.06.2020

1. BP to slash operating costs by USD2.5 billion, cut almost 10,000 jobs

MOSCOW (MRC) -- BP says it will reduce its operating costs by USD2.5 billion in 2021 and cut close to 10,000 jobs, mostly before the end of this year, due to the collapse in oil demand because of COVID-19 and as part of its strategy to become a lower-carbon company, said Chemweek. The UK major in early April announced a cut of around 25%, approximately USD2.5 billion, in its planned capital expenditure (capex) to USD12.0 billion for 2020. BP’s CEO Bernard Looney now says those capex cuts will total around USD3.0 billion. It will also now reduce its operating costs, currently USD22 billion, by USD2.5 billion. The company has not specified any specific business divisions that will be affected. “It was always part of the plan to make BP a leaner, faster-moving and lower-carbon company. That is how we will deliver on our net zero ambition. And that is how we will seize opportunities throughout the energy transition. Then the COVID-19 pandemic took hold,” he says. Flagging the widespread economic fallout of the pandemic, Looney says the oil price has plunged “well below the level we need to turn a profit. We are spending much, much more than we make – I am talking millions of dollars, every day.” The company’s net debt rose by USD6 billion in the first quarter of this year as a result, he says, adding, “We have to spend less money.”

MRC