Consortium outlines major CO2 capture, feedstocks project in Austria

MOSCOW (MRC) -- Borealis, OMV, Verbund, and LafargeHolcim subsidiary Lafarge Zementwerke have signed a memorandum of understanding (MOU) for the joint planning and construction of a full-scale carbon-capture plant in Austria by 2030 that would process carbon dioxide (CO2) into renewables-based feedstock for olefins, plastics, and synthetic fuels, said Chemweek.

The proposed three-phase project, dubbed ‘Carbon2ProductAustria’ (C2PAT), would significantly cut emissions from cement production, establishing CO2 as a valuable raw material, they say in a joint statement. No investment figure for the project has been given at this time.

The collaboration aims to create a cross-sectorial value chain and the operation of a full-scale plant by 2030, with the facility planned to capture almost 100% of the 700,000 metric tons/year of CO2 emitted at a cement plant owned and operated by Lafarge in Mannersdorf, Austria.

The CO2 would, in combination with green hydrogen produced using renewable sources by Verbund, be converted by OMV into renewable-based hydrocarbons. These would then be used by OMV to produce renewable-based synthetic fuel, or renewable-based olefins at its Schwechat refinery to be utilized by Borealis as feedstock at its polymerization plant at Schwechat to manufacture value-added plastics, according to the companies. The partners “aim to investigate a truly circular approach: with Borealis being a key partner, the captured CO2 can be used for the production of renewable-based, value-added plastics. These plastics are especially suited for recycling at the end of their lifetime, and with this, enable a nearly closed CO2 loop,” they say.

The first phase entails the evaluation and development of a joint strategy for project development, business modelling, and process engineering. A second phase could see a cluster of industrial pilot plants in Austria developed by 2023, while the third phase would see a full implementation of the project to the industrial-scale 700,000-metric tons/year target, according to the consortium. The success of the project will “largely depend on whether the right financial and regulatory framework conditions are created both at the EU and Austrian national level," it says.

The project also demonstrates that “economic viability and climate protection go hand-in-hand based on new technologies. CO2 is not just a greenhouse gas that we have to reduce. It is also a valuable raw material from which we can produce synthetic fuels and feedstock for the chemical industry,” says Rainer Seele, chairman of OMV’s executive board and CEO.

“The plastics industry can be a powerful contributor to climate action, through materials replacement that reduces weight, by minimizing food waste, and by shifting to well-designed circularity that reduces CO2 emissions,” says Borealis CEO Alfred Stern.

Verbund, Austria’s largest electricity company, would supply the green hydrogen—produced when water is electrolyzed using electricity from renewable sources—to recycle the CO2. “Green hydrogen offers huge potential for decarbonizing CO2-intensive industrial processes. In order to reach our national and global climate goals we have to collaborate across sectors and join our efforts for decarbonization and climate neutrality,” says Verbund CEO Michael Strugl.

“We have worked consistently and successfully on the reduction of the CO2 footprint of our cement plants, products and solutions. Ultimately, CO2-neutral cement production can only be possible with the implementation of breakthrough technologies, like carbon capture, which is why we have great expectations for the C2PAT project,” says Lafarge CEO Jose Antonio Primo.

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.

Borealis is a leading provider of innovative solutions in the fields of polyolefins, base chemicals and fertilizers. With headquarters in Vienna, Austria, Borealis currently employs around 6,500 and operates in over 120 countries.


MRC

Naphtha supply to tighten on lower refinery output

MOSCOW (MRC) -- Naphtha output is forecast to stay tight into 2021 as destruction of fuel demand caused by COVID-19 curbs refinery throughput and caps supply of the dominant feedstock for ethylene production, according to Premasish Das, executive director at IHS Markit, said Chemweek.

About 75% of naphtha, the feedstock for more than 40% of ethylene produced worldwide, comes from refineries. But “refineries do not run based on how much naphtha they want to produce. They run based on how much other key refined products they need to produce,” says Das, speaking today at IHS Markit’s Asia NGLs and Naphtha Conference Online.

The pandemic slashed worldwide demand for refined products including gasoline, jet fuel, and fuel oil by nearly 18 million b/d, prompting refiners to cut throughput by 15-16% in April alone. Some have continued to idle plants or extend scheduled maintenance works, Das says. Gasoline is the most impacted refined product in volume terms and with direct blending accounting for about 30% of global light naphtha demand, the lower blending demand outlook for the second and third quarters of this year has a direct impact on naphtha, he says.

Steam cracking demand for light naphtha, however, is expected to hold up with demand for petrochemicals proving more resilient than transportation fuels. Further support for naphtha is coming from unfavorable liquefied petroleum gas (LPG) cracking economics because of tight gas supply, he notes. “The pull for naphtha will continue to be strong from the petrochemical industry," Das says.

Based on IHS Markit modelling, the shortfall in light naphtha supply will continue to grow in the second half of 2020 and peak in the fourth quarter owing to reduced refinery runs and lower production of natural gasoline, he says. While the shortfall is forecast to contract as refiners ramp up runs to meet post-pandemic demand recovery, the deficit in 2021 is still expected to be higher than in 2019, he adds.

One way for refiners to help alleviate the tightness in light naphtha supply is to back blend excess heavy naphtha, used for aromatics production and gasoline blending, into light naphtha, according to Das. Additional heavy naphtha can come from jet fuel optimization, the demand for which will take the longest to recover. “Refiners would try to minimize jet production by putting the front, or lighter end, of jet fuel into the heavy naphtha stream,” Das says, adding that each refinery runs a different optimization mode.

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

DSM takes over part of Clariant 3D printing business portfolio to expand rapid market-driven product development solutions

MOSCOW (MRC) -- Royal DSM, a global purpose-led, science-based company in Nutrition, Health and Sustainable Living, and Clariant, a focused, sustainable and innovative specialty chemical company, announced an agreement for DSM to take over certain parts of Clariant’s 3D printing business portfolio, said Chemweek.

The agreement allows DSM to offer customers rapid product development iterations for filaments and pellets based on application needs. As additive manufacturing technology is increasingly adopted for industrial production, customers are looking for materials to match their existing product portfolio and production processes. The combination of DSM’s filament and pellet capabilities and former Clariant 3D printing activities will be able to better serve those needs, bringing customers quick tweaking of high performance filaments and pellets based on market needs.

The upcoming integration of these assets enables DSM to strengthen its engineering grade filament, pellet and powder portfolio. Customers will also benefit from faster product tweaks based on application needs thanks to the Clariant team’s experience in fast and market-driven product development using a dedicated, highly flexible and high-speed compounding setup. The transaction includes part of Clariant 3D printing team, selection of their portfolio and pipeline of engineering-grade filament and pellet materials and customer relations, expertise in powder development, and a small production line for fast ramp-up of small batches.

Hugo da Silva, Vice President Additive Manufacturing at DSM, commented: “We are very excited about welcoming the new team members and the expertise they bring to expand our service offering. We share the same focus on customer needs and have complementary expertise and portfolio. Together we can fulfil market needs faster and with a broader materials toolbox, and realize further the potential of additive manufacturing to the manufacturing world."

"After thorough strategic review, Clariant concluded that its 3D printing materials business was no longer aligned with its strategic focus. While we will continue to serve the 3D printing market with our high quality additives and flame retardants, we are confident that DSM is the ideal new home for parts of Clariant’s tailored 3D printing materials business to continue its successful development. I look forward to seeing them thrive,“ said Richard Haldimann, Head of Sustainability Transformation at Clariant.

As MRC reported earlier, in June 2020, TechnipFMC and Clariant Catalysts entered into a joint development agreement for the demonstration and commercialisation of Clariant’s new state-of-the-art AcryloMax propylene ammoxidation catalyst for the production of acrylonitrile (ACN).

Besides, 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

ACC sees near 10% drop in US chemical volumes in 2020

MOSCOW (MRC) -- US chemical volumes are expected to drop nearly 10% this year as global economic activity contracts due to the impacts of COVID-19, reported Chemweek with reference to the American Chemistry Council's (ACC) Mid-Year 2020 Chemical Industry Situation and Outlook.

Volumes should recover in 2021 with a return to pre-COVID-19 output levels in the US by the second half of 2021.

“As key end-use and export markets struggle, US chemical volumes will contract as well,” says Martha Moore, senior director of policy analysis and economics at ACC. “Chemical volumes will fall 9.3% this year, while shipments will decline by 13.5%," Moore says. "In 2021, volumes will rebound 12.3% and shipments will increase by 14.5%."

ACC forecasts a decline in basic chemicals volumes of 8.9% in 2020 with a 14.2% rebound in 2021.Of the major basic chemical segments, plastic resins fare the best with an expected decline of only 5.6% in 2020. In specialties, the 2020 decline is expected to be 13.6% in 2020, followed by a 10.6% gain in 2021.

While recent data suggest that the global recession may have already bottomed out in the second quarter, the 2020 outlook is one of the poorest in decades, says Kevin Swift, ACC's chief economist. ACC expects global GDP to contract by 4.6% in 2020 before rebounding by 5.3% in 2021. “After suffering the sharpest pullback on record in April, many industrial sectors are showing signs of recovery," Swift says. "(US) Industrial production is set to fall 10.5% in 2020 before increasing by 3.1% in 2021.” World trade, still reeling from the impact of US trade policies, will contract 15.7% in 2020 before improving by 14.4% in 2021, Swift adds.

Industrial activity started the year on a weak note even before supply disruptions from COVID-19 emerged in February. Vehicle sales will decline from 16.9 million last year to 13.1 million in 2020, then improve to 14.9 million in 2021, according to ACC. Housing starts will tumble to 1.19 million in 2020, from 1.3 million last year, and increase to 1.24 million in 2021.

US chemical capital spending is set to decline 17.6%, to USD29.0 billion, in 2020, but grows 15.7% in 2021 to USD33.5 billion. "It'll be 2022 or even beyond when you get back to prior peak levels of capital spending as companies are trying to preserve cash,” Swift says. “They're doing that by delaying or extending some of these projects."

US chemicals trade will fall by 16.4% in 2020, to USD199 billion. US chemical exports will decline sharply, falling by 14.5% in 2020 before rising 10.9% in 2021. Full recovery to pre-COVID-19 levels is not expected until 2022. US chemical imports will fall an even sharper 19.1% in 2020, then grow by 11.9% in 2021. Full recovery is expected in late 2022 or 2023. By 2025, net exports of chemicals will reach USD37 billion as industry maintains its net trade surplus.

As MRC informed before, chemical production in the US fell by 2.0% in May on a three-month moving average (3MMA) basis, the third consecutive month of declines as the COVID-19 pandemic continues to put a dent into demand.

We remnd that Russia's output of chemical products rose in May 2020 by 4.4% year on year. Thus, production of basic chemicals increased year on year by 5.4% in the first five months of 2020, according to Rosstat's data. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the output in January-May.
MRC

South Korea data: US crude imports suffer biggest ever on-year drop in May

MOSCOW (MRC) -- South Korea's crude oil imports from the US in May dropped 35.7% from a year earlier, which marks the biggest decline since the country began US crude imports, data released by Korea National Oil Corp. showed June 24, said S&P Global.

South Korean refiners imported 7.407 million barrels of US crude in May, compared with 11.516 million barrels a year earlier, according to the KNOC data. The 35.7% decline was the sharpest since South Korea began US crude imports on a regular basis in 2015.

The May shipments were down 50% from 14.827 million barrels in April that marked the biggest since South Korea began US crude imports, breaking the previous record high of 14.78 million in July 2019. South Korea's US crude imports marked the first decline in December last year when shipments fell 2.1% from a year earlier, and second time in February this year when US shipments fell 0.9% year on year.

The decline in May was largely attributable to less competitive prices of North American grades, as well as tepid domestic and regional fuel demand as economic activities slowed down due to restrictions to contain the spread of COVID-19, according to a refinery official in Seoul.

Major refiners across South Korea, China and Southeast Asia said Asia's overall US crude imports could recede from Q3 as they no longer find WTI, Bakken and Eagle Ford grades attractive, S&P Global Platts reported previously.

Despite the latest hike in Saudi OSP differentials for July-loading cargoes bound for Asia, many refiners would continue to favor Persian Gulf cargoes over US export grades, including WTI Midland and Eagle Ford, due to the prevailing high long-haul freight rates, Platts reported previously.

The KNOC data showed South Korea's crude imports from its top supplier Saudi Arabia climbed 14.7% year on year to 28.857 million barrels in May, from 25.154 million barrels a year earlier, driven by Aramco's lowering of export prices earlier this year.

Imports of Iraqi crude dropped 44.2% on year to 5.34 million barrels in May, South Korea's import of Iraqi crude has declined since November 2019 when the country received 13.54 million barrels.

South Korea received 2.057 million barrels of Forties from the UK, marking the first North Sea crude shipment since August last year when it took 2.024 million barrels. South Korea's total crude imports in May fell 6.3% from a year ago to 78.83 million barrels.

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