Russia extends Sakhalin Energy oil and gas licenses for 5 years

MOSCOW (MRC) -- Sakhalin Energy, the international operator of a pioneering LNG plant in eastern Russia, said authorities have extended its oil and gas production licenses, which were due to expire in 2021, for five years, reported Reuters.

Sakhalin Energy operates Sakhalin-2, Russia’s first LNG plant, which came onstream in 2009 with production capacity of around 10 million tons per year.

It said on Thursday it had secured rights to further develop Piltun-Astokhskoye and Lunskoye oil and gas fields in the Sea of Okhotsk, off the eastern island of Sakhalin, until May 19, 2026.

The initial licenses were awarded in 1996 for 25 years.

Equity holders in Sakhalin Energy include Gazprom, Royal Dutch Shell, and Japan’s Mitsui and Mitsubishi Corp.

As MRC informed earlier, in 2019, SIBUR and Gazprom Neft, part of Gazprom, consolidated 100% of the authorised capital in Poliom, a polypropylene (PP) 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.

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.
MRC

MOSCOW (MRC) -- KBR signed a memorandum of understanding with L&T Hydrocarbon Engineering Ltd (LTHE) for refinery and petrochemical projects, said the company.

Under the terms of the agreement, KBR and LTHE will collaborate to develop business opportunities for which KBR will license proprietary technology and engineering services and LTHE will be the EPC provider. LTHE will exclusively bid for projects globally, with specific focus in India, South East Asia, the Middle East and Africa involving KBR’s solid acid alkylation technology (K-SAATTM), solvent de-asphalting technology (ROSE®) and catalytic olefins technology (K-COTTM).

K-SAAT is KBR's next generation solid acid alkylation technology that provides high alkylate yield and high feed flexibility. KBR’s solvent de-asphalting technology, ROSE, has more than 90% market share among solvent de-asphalting technologies. KBR’s K-COT is a catalytic olefins technology that convert low-value olefinic, paraffinic or mixed streams into high-value propylene, ethylene and aromatics.

"This MoU brings together KBR’s century-long technology expertise and LTHE’s strong capability as a major EPC player and modular solution provider,” said Doug Kelly, KBR President, Technology Solutions. “KBR's innovative and reliable process technologies have been helping refinery and petrochemical plants globally to optimize production and reduce operating costs."

As MRC informed erlier, KBR announced that it has been awarded a contract by Hainan Huasheng New Material Technology Co., Ltd. (Hainan Huasheng) to license Mitsubishi Chemical Corporation's (MCC) proprietary Bisphenol A (BPA) technology for a new plant in Dongfang City, Hainan Province, China. Under the terms of the contract, KBR will provide a Licensing and Basic Engineering Design (LBED) package to Hainan Huasheng for building a grassroots 240,000 tons per annum BPA plant. KBR will also provide commissioning, startup support, and training services for the project.

BPA is the main feedstock for the production of epoxy resins and polycarbonate (PC).

According to MRC's ScanPlast report, Russia's estimated consumption of PC granules (excluding imports and exports to/from Belarus) totalled 78,500 tonnes in 2019, up by 15% year on year (68,100 tonnes a year earlier).

KBR is a global provider of differentiated professional services and technologies across the asset and program lifecycle within the Government Solutions and Energy sectors. KBR employs approximately 37,000 people worldwide (including our joint ventures), with customers in more than 80 countries, and operations in 40 countries, across three synergistic global businesses.
MRC

MOSCOW (MRC) -- Zhongke Refinery and Petrochemical Complex, part of Sinopec Group, has successfully conducted trial runs at its new 350,000 tons/year polypropylene PP unit on 9 June, 2020, reported CommoPlast with reference to market sources.

Based in Zhenjiang, China, the complex consists of two PP lines with combined production capacity of 550,000 tons/year, a 100,000 tons/year low density polyethylene (LDPE) plant and a 350,000 tons/year high density polyethylene (HDPE)/linear low density polyethylene (LLDPE) plant.

All lines are expected to startup within July-August 2020 period.

As MRC informed earlier, the Sinopec venture, situated in coastal city of Zhanjiang, comprises a 200,000 barrel per day (bpd) crude oil refinery and an 800,000 tonne-per-year ethylene facility, built at a cost of 44 billion yuan (USD6.2 billion).

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.

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

1. Russian oil refineries cut gasoline output to 15-year low in May

MOSCOW (MRC) -- Russian oil refineries cut gasoline output to a 15-year low of 2.477 million tons in May amid a global deal to curb crude supplies and coronavirus-related lockdowns, energy ministry data and Reuters calculations showed. They also showed that volumes of primary oil processing REF-RU-TPUT declined to a seven-year low of 21 million tons last month. Demand for fuel has been dented by the economic fallout from the COVID-19 pandemic and lockdowns to combat it.





MRC

MOSCOW (MRC) -- Crude oil futures were trading lower in mid-morning trade in Asia June 17, after settling higher overnight, as reports of fresh COVID-19 outbreaks continued to weigh on hopes of economic recovery, reported S&P Global.

At 10 am Singapore time (0200 GMT), ICE Brent August crude futures were down 64 cents/b (1.56%) from the June 16 settle at USD40.32/b, while the NYMEX July light sweet crude contract was 78 cents/b (2.03%) lower at USD37.60/b.

Both benchmarks had settled more than USD1.20/b higher June 16 after the release of bullish demand projections by the International Energy Agency and stronger-than-expected US retail sales data for May.

"However, the rally was capped by concerns about a second wave of COVID-19 cases. Beijing shut its schools and lifted its emergency response to level two to contain a new outbreak," ANZ analysts said in a June 17 note.

China reported 44 new coronavirus cases nationwide on June 16, comprising 11 imported and 33 local acquired cases, increasing concerns over a resurgence of infections, according to media reports.

"This comes amid rising cases in the US. The market was reminded of the damage the pandemic has caused the oil market, with the IEA calling it the biggest shock to world energy markets since WWII (World War Two)," ANZ analysts added.

While US markets remained buoyed by recent Federal Reserve announcements of efforts to stimulate the economy, the number of new COVID-19 cases continued to trend higher in the US, hitting record highs in six US states on June 16 and posing further concerns over oil demand recovery.

The outlook is expected to remain volatile as investors weighed new COVID-19 headlines versus the optimistic US market data seen earlier in the week.

US retail sales jumped by a record 17.7% month on month in May, even as May sales remained 6.1% lower from the same month a year earlier, latest data showed.

As MRC informed before, global oil consumption cut by up to a third in Q1 2020. What happens next in the oil market depends on how quickly and completely the global economy emerges from lockdown, and whether the recessionary hit lingers through the rest of this year and into 2021.

Earlier this year, BP said the deadly coronavirus outbreak could cut global oil demand growth by 40 per cent in 2020, putting pressure on Opec producers and Russia to curb supplies to keep prices in check.

We remind that, in September 2019, six world's major petrochemical companies in Flanders, Belgium, North Rhine-Westphalia, Germany, and the Netherlands (Trilateral Region) announced the creation of a consortium to jointly investigate how naphtha or gas steam crackers could be operated using renewable electricity instead of fossil fuels. The Cracker of the Future consortium, which includes BASF, Borealis, BP, LyondellBasell, SABIC and Total, aims to produce base chemicals while also significantly reducing carbon emissions. The companies agreed to invest in R&D and knowledge sharing as they assess the possibility of transitioning their base chemical production to renewable electricity.

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