Iranian gas exports to Turkey to resume by end-June

MOSCOW (MRC) -- Iranian gas exports to Turkey will resume by the end of this month, Iranian foreign minister Mohammad Javad Zarif said June 15, said S&P Global.

Register Now Speaking at a press conference in Istanbul with his Turkish counterpart Mevlut Cavusoglu, Zarif said he had received assurances that repairs to the pipeline, which has been closed since March 31, will be completed and that gas flows will be reinstated. Cavusoglu, who spoke at length on other bilateral issues, did not comment on the pipeline.

Flows through the Iran-Turkey gas pipeline were halted early March 31 following an explosion subsequently claimed as a sabotage attack by the Kurdistan Workers' Party (PKK).

The PKK has attacked the pipeline on at least 11 previous occasions when repairs were completed within a few days, prompting speculation that Turkey was stalling repairs in order to pressure Iran to improve their terms under which Turkey imports gas, and to allow state gas importer Botas to import cheap spot LNG cargoes in place of Iranian gas.

Turkey's deputy energy minister Alparslan Bayraktar told a conference in Istanbul in February that Turkey planned to use the availability of cheap spot LNG to persuade its long-term gas suppliers to lower their prices.

Ten days ago Iran's NIGC said Tehran had rejected Ankara's claim that the explosion was a force majeure event, and that the company expected flow to be restarted on June 21 at the earliest.

Turkey imports gas from Iran under an agreement signed in 1996 for up to 10 Bcm/year, which began operation in 2001 and was later reduced to 9.6 Bcm/year.

Disagreements over the terms of the contract and frequent cuts in supply to due to problems in Iran have seen the two countries resort to international arbitration on at least two occasions.

The contract ends in July 2026 with Ankara expected to be unlikely to renew unless the terms are competitive with spot market LNG prices and offer flexibility to allow for future market fluctuations.

Ethylene and propylene are feedstocks for producing PE and 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) -- Clariant is launching its next-generation phthalate-free olefin polymerization catalysts, expanding its portfolio to include a new offering to meet the most demanding customer toxicity requirements, as per Hydrocarbonprocessing.

Developed in partnership with McDermott’s Lummus Novolen Technology, the new PolyMax 600 Series catalysts answer the market’s increasing need for safer polypropylene solutions.

Stefan Heuser, Senior Vice President & General Manager at Clariant Catalysts, commented, "Performance is the key difference with our new PolyMax 600 Series catalysts. We have successfully developed a phthalate-free solution that adds significant value to our customers’ businesses. The innovative technology, which allows customers to achieve higher productivity rates and reduced process fluctuations, is delivering excellent results - with one major polypropylene producer now estimating economic benefits to exceed USD8 million annually."

The improved performance is due to a new proprietary technology that increases catalyst activity up to 25% compared to phthalate-based catalysts. This new technology results in not only higher plant productivity, but also superior polymer properties, such as increased impact strength for better durability.

PolyMax 600 Series catalysts are a drop-in replacement for phthalate-based polyolefin catalysts and are designed to suit a broad range of process requirements, in applications ranging from food packaging to engineered automotive parts. Considering the rapid growth of the polypropylene market, the catalysts come at an opportune time to help producers meet both increasing demand and stricter regulations.

As MRC reported earlier, in May 2020, Clariant’s CATOFIN catalysts was selected by Advanced Global Investment Co. (AGIC), a joint venture between Advanced Petrochemical Company (APC) and SK Group, to build a PDH facility in the Middle East.

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

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.

Clariant AG is a Swiss chemical company and a world leader in the production of specialty chemicals for the textile, printing, mining and metallurgical industries. It is engaged in processing crude oil products in pigments, plastics and paints.
MRC

MOSCOW (MRC) -- Daqing Petrochemical, part of PetroChina, has brought on-stream its No. 1 linear low density polyethylene (LLDPE) unit this week, as per Apic-online.

A Polymerupdate source in China informed that, the company has planned to resume operations at the unit on June 15, 2020. The unit was shut for unplanned maintenance on June 8, 2020.

Located in Daqing, China, the No. 1 LLDPE unit has a production capacity of 85,000 mt/year.

As MRC reported earlier, PetroChina has nearly doubled the amount of Russian crude being processed at its refinery in Dalian, the company’s biggest, since January 2018, as a new supply agreement had come into effect. The Dalian Petrochemical Corp, located in the northeast port city of Dalian, is expected to process 13 million tonnes, or 260,000 bpd of Russian pipeline crude this year, up by about 85 to 90 percent from last year’s level. Dalian has the capacity to process about 410,000 bpd of crude. The increase follows an agreement worked out between the Russian and Chinese governments under which Russia’s top oil producer Rosneft will supply 30 million tonnes of ESPO Blend crude to PetroChina in 2018, or about 600,000 bpd. That would represent an increase of 50 percent over 2017 volumes. The additional oil sent to Dalian is about 120,000 bpd and will make up the bulk of the Russian increases.

According to MRC's ScanPlast report, April LLDPE shipments to Russia rose to 42,830 tonnes from 36,790 tonnes a month earlier, production increased. Russia's overall LLDPE shipments totalled 152,840 tonnes in the first four months of 2020, up by 13% year on year. SabSibNeftekhim accounted for the main increase in shipments.

PetroChina Company Limited, is a Chinese oil and gas company and is the listed arm of state-owned China National Petroleum Corporation, headquartered in Dongcheng District, Beijing. It is China's biggest oil producer.
MRC

MOSCOW (MRC) -- French energy group Total is conducting an audit of a pipeline that supplies its Grandpuits refinery near Paris following leaks in recent years, reported Reuters with reference to a company's spokesman.

The audit will look at the cost of replacing the 260-km (161 miles) pipeline, the spokesman said in an email.

“The longer-term future of Grandpuits rests on the viability of the pipeline,” he said, adding that the pipeline was only operating at 70% of capacity.

The ageing PLIF pipeline brings crude oil from Le Havre port on France’s north coast to supply Grandpuits, which has a capacity of 102,000 barrels per day.

A leak last year, following a previous spillage in 2014, halted output at the refinery for several months. The facility went offline again in March for maintenance, with the outage extended to the beginning of June due to the coronavirus epidemic.

Faced with the potential cost of replacing the pipeline as France moves away from fossil fuels, Total is considering low-carbon activities for Grandpuits as an alternative to crude oil refining, Thierry Defresne, a CGT union representative at the group, said.

The group has cited as possibilities carbon capture and bio-plastics, Defresne told Reuters by phone.

Total has also referred to the potential for a second biofuel facility in France, after converting its La Mede refinery to biofuel, but without mentioning Grandpuits, Defresne added.

The CGT estimates the cost of replacing the pipeline at 350 million euros (USD394 million), with a basic cost of 1 million euros per kilometre expected to be increased by the need to re-route the pipeline away from protected areas, Defresne said.

The group is also facing the a bill of 80 million euros to conduct major maintenance done every seven years and due by early 2021, he said.

Total had told unions it would give an update on the pipeline audit in the autumn, he added.

As MRC informed before, Total has recently disclosed that it is evaluating construction of a new gas cracker at its Deasan, South Korea, joint venture (JV) with Hanwha Chemical.

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.

Total S.A. is a French multinational oil and gas company and one of the six "Supermajor" oil companies in the world with business in Europe, the United States, the Middle East and Asia. The company's petrochemical products cover two main groups: base chemicals and the consumer polymers (polyethylene, polypropylene and polystyrene) that are derived from them.
MRC

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