Saudi Aramco CEO sees oil demand at 90 mil b/d in COVID-19 recovery

MOSCOW (MRC) -- Oil demand has rebounded close to 90 million b/d, partly reversing a slump in consumption caused by the COVID-19 pandemic, reported S&P Global with reference to Saudi Aramco's president and CEO Amin Nasser's statement in the transcript of an interview published on June 30.

"The worst is behind us," said Nasser, speaking at an online event for CERAWeek organized by IHS Markit. "We went from -$40 b/d to +$40 b/d with WTI. In April we were looking at demand of about 75-80 million b/d with significant supply at that time. Currently you are looking at almost close to 90 million b/d. I'm very optimistic about the second half of this year."

S&P Global Platts Analytics is forecasting oil demand will fall year-on-year by 8.3 million b/d in 2020 to 94.2 million b/d.

"There are different forecasts looking at between 95 million and 97 million b/d by year-end. So, it will all depend on whether there will be a second wave of coronavirus or not. But I am also not as concerned about a second wave because I think we are much better prepared now," said Nasser.

Downstream, Nasser said gasoline and diesel demand were picking up to pre-COVID-19 levels and he was optimistic about the prospects for a rebound in jet fuel as more countries open up.

Aramco, the world's largest oil company by production, was first impacted by the pandemic in February, with the reduction in demand from China. However, all of the oil giant's fields and plants have been running smoothly during the pandemic, said Nasser.

"More than 50% (of the office workers) were working from home, but when it comes to field presence, everybody was working, especially in remote areas and offshore sites," said Nasser. "We were able to manage the situation very well by putting all the precautions necessary to maintain their safety and health while maintaining our operational resilience during this time."

A major concern for Aramco through the pandemic is cybersecurity.

"We had a lot of hackers that target energy companies, so we had to be making sure that we are able to provide the connectivity while protecting our network from any hackers," said Nasser.

As MRC wrote previously, Saudi Aramco’s acquisition of petrochemical maker SABIC will accelerate the company’s downstream strategy and transform it into a global petrochemical player, said an official of the state oil giant's statement to al-Arabiya TV.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 595,170 tonnes in the first five month of 2020, up by 10% year on year. Deliveries of all ethylene polymers, except for linear low density polyethylene (LLDPE), rose partially because of an increase in capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market was 457,930 tonnes in January-May 2020 (calculated by the formula production minus export plus import). Deliveris of exclusively PP random copolymer increased.

Saudi Aramco, officially the Saudi Arabian Oil Company, is a Saudi Arabian national oil and natural gas company based in Dhahran, Saudi Arabia. Saudi Aramco"s value has been estimated at up to USD10 trillion in the Financial Times, making it the world"s most valuable company. Saudi Aramco has both the largest proven crude oil reserves, at more than 260 billion barrels, and largest daily oil production.
MRC

Brazilian refinery utilization rate stable at pre-pandemic levels

MOSCOW (MRC) -- Brazil's refineries returned close to pre-pandemic levels in June, despite several incidents at processing units across Latin America's biggest country that led to output volatility during the month, reported S&P Global with reference to the Mines and Energy Ministry's statement June 30.

State-led oil company Petrobras, which operates 98% of Brazil's refining capacity, was running refineries at 77% of installed capacity on June 27, the ministry said in its latest coronavirus impact report. That was down from an average of 79% in the first quarter, but off the social-distancing low of 52% set in mid-April, the ministry's data showed.

"After a period of oscillations in the first 15 days of the month because of incidents at processing units, the global oil-processing cargo at refineries returned to growth and consistency that maintained volumes equivalent to those practiced before the start of the pandemic and social-distancing measures," the ministry said.

Petrobras slashed oil and natural gas production as well as reduced refinery run rates in late March amid expectations for dramatically lower refined-product demand because of the implementation of social-distancing measures. Demand, especially for diesel driven by the sugarcane and oil seed harvest seasons, proved more resilient than initially expected, with Petrobras walking back the production cuts by mid-April.

The uptick in oil and gas output was accompanied by an increase in refining activity, although Petrobras did bring forward some maintenance work and temporary unit stoppages during the downturn. The return of domestic demand and quick turnarounds on maintenance projects combined with a fire at a distillation unit at the Refinaria Duque de Caxias, or Reduc, on June 15 undermined refinery performance, the ministry's data showed.

Refined-product sales remained mostly lower on the year in the June 1-24 period, measured by the Mines and Energy Ministry, as social-distancing measures curbed mobility, but there are signs of a nascent recovery in demand, the ministry said.

Diesel sales were a highlight in the period, advancing 3.5% on the year, the ministry said. Diesel demand has been driven by the agriculture sector, which started to bring in the winter harvest in late March.

Sales of 13-kilogram LPG tanks also advanced on the year in the June 1-24 period, climbing 19.6%, the ministry said. LPG sales have been boosted by consumer fears of shortages, with Brazilians building stocks of the tanks used to power cooking stoves in regions not covered by traditional natural gas distribution networks.

Jet fuel sales were most affected by the outbreak, which caused air travel to plummet. Jet fuel sales plunged 75.9% on the year in the June 1-24 period, the ministry said. Gasoline and ethanol sales were also down on the year as fewer Brazilians drove during the shutdowns, with gasoline sales falling 8% on the year and ethanol sales down 22.5%.

Hydrous ethanol can be used directly in tanks of flex-fuel vehicles and is a biofuel competitor to gasoline, while gasoline sold at the pump is blended with 27% anhydrous ethanol.

As MRC informed before, in mid-June, 2020, Petrobras said that a fire at its Duque de Caixas refinery left the facility operating with only half of its installed capacity.

We remind that the chief executive of Brazilian state-run oil firm Petroleo Brasileiro said in December 2019 he wants to sell the company's stake in petrochemical company Braskem within 12 months.

Besides, Braskem is no longer pursuing a petrochemical project, which would have included an ethane cracker, in West Virginia. And the company is seeking to sell the land that would have housed the cracker. The project, announced in 2013, had been on Braskem's back burner for several years.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 595,170 tonnes in the first five month of 2020, up by 10% year on year. Deliveries of all ethylene polymers, except for linear low density polyethylene (LLDPE), rose partially because of an increase in capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market was 457,930 tonnes in January-May 2020 (calculated by the formula production minus export plus import). Deliveris of exclusively 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

PVC prices rose by Rb6,000/tonne and more in July in Russia

MOSCOW (MRC) -- Negotiations on July shipments of suspension polyvinyl chloride (SPVC) to the domestic market began in the Russian market in the end of last week. Because of scheduled shutdowns and a significant increase in prices in foreign markets, producers announced a price increase in July of Rb6,000/tonne or more, according to the ICIS-MRC Price Report.

Due to quarantine restrictions on coronavirus pandemic, demand for PVC reduced significantly in April - May, some converters even had to suspend their work. But the situation has changed dramatically since June due to both the seasonal factor and the relaxation of quarantine.

Demand began to recover dynamically, while the supply from domestic manufacturers was limited due to two turnarounds. PVC prices also increased significantly in foreign markets, which was one of the reasons for the serious increase in PVC prices in the Russian market in July.

SayanskKhimPlast (from 8 July for 30 days) and RusVinyl (from 13 July for 14 days), with a total capacity of about 680,000/tonnes plan to stop their capacities in July. The shutdowns were were announced back in the spring; for the most part, converters were not able to build additional stocks.

Due to quarantine limited demand for finished PVC products reduced significantly in April-May, and no one understood what would happen next with demand. Also, the converters did not have sufficient financial funds to build up stocks.

Demand for PVC began to grow dynamically in various regions of the world, the largest increase in demand was seen in Asia. Because of the recovery in demand and rising oil prices, PVC began to rise in price in world markets.
And if in April the prices of North American PVC for deliveries to Russia reached USD600/tonne, CFR St. Petersburg, and lower, and Chinese acetylene PVC was offered at USD685/tonne DAP Moscow, then by June these prices rose to USD780/tonne CFR St. Petersburg, and USD800/tonne DAP Moscow, respectively.

Demand for PVC from Russian consumers grew quite seriously in June, some converters increased purchases by a third. Buyers were faced with limited quotas from a number of domestic manufacturers in the first month of summer.
The situation with the availability of PVC from Russian suppliers worsened in July, some consumers said that they were not able to fully cover all their needs for PVC.

Some converters intend to cover their current PVC needs with supplies from China and Europe. The prices of the import alternative start from the mark of Rb76,000/tonne, including VAT, and delivery, for Chinese acetylene PVC, European PVC was Rb2,000-4,000/tonne more expensive.

Overall, July deals for Russian PVC with K64/67 were negotiated in the range of Rb78 000 - 81 000/tonne CPT Moscow, including VAT, up by Rb6,000-7,000/tonne from June, for quantities of up to 500 tonnes.
MRC

Air Products starts up Geismar steam methane reformer

MOSCOW (MRC) -- Air Products (Lehigh Valley, Pa.) announced that its new steam methane reformer (SMR) and cold box in Geismar, Louisiana are onstream and supplying Huntsman’s neighboring industrial operations, said Chemengonline.

Air Products built, owns and operates the facility under a long-term agreement, supplying carbon monoxide (CO), hydrogen and steam produced from the facility to Huntsman. Air Products’ SMR is also connected to its Gulf Coast hydrogen pipeline and network system (GCP), which is the world’s largest hydrogen plant and pipeline network system.

"Air Products’ new Geismar facility was successfully placed onstream and met the customer’s desired schedule and product needs. The facility is state-of-the-art and offers high reliability and sustainability, with enhanced energy efficiency and reduced emissions. We have a long-standing relationship with Huntsman, and we are pleased this new world-scale facility and long-term supply agreement expands our support for Huntsman’s operations,” said Dr. Samir J. Serhan, chief operating officer at Air Products.

Tony Hankins, president of Huntsman’s Polyurethanes division said, “We are appreciative of the professionalism and dedication of the Air Products and Huntsman project teams, which enabled the on-time completion of this world scale HyCo facility. The Huntsman Geismar team delivered a significant and complex element of the project, constructing interconnecting facilities and process controls to flow the products and utilities between the sites. The new plant substantially improves HyCo reliability and strengthens the reliability and environmental performance of our upstream MDI-polyurethanes assets at Geismar, which in turn underpins our drive into downstream markets."

The new facility is located on land leased from Huntsman and produces approximately 6.5 million standard cubic feet per day (MMSCFD) of CO, 50 MMSCFD of hydrogen, and up to 50,000 pounds per hour of steam. The facility is also capable of being expanded to increase CO supply in the future to support additional demand.

With the additional hydrogen production facility, Air Products continues to expand the capacity and capabilities of its GCP. Air Products’ GCP, dedicated in 2012, is an over 600-mile pipeline span that currently stretches from the Houston Ship Channel in Texas to New Orleans, Louisiana.

"Additions to our GCP like this one in Louisiana continue to enhance the reliable hydrogen supply to all the customers along the pipeline network. Air Products is always seeking to add product supply capacity from more sources of hydrogen for our customers to build on our well-established pipeline system in the Gulf Coast,” said Bill Hammarstrom, president – HyCO Americas at Air Products.

In January 2020, Air Products announced another addition to the pipeline is coming with an SMR to be built in Texas City, Texas. When the Texas City facility is added to the GCP system, customers will be reliably served by over 1.7 billion feet of hydrogen per day from 24 connected production facilities.

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

Sinopec Tianjin to resume production at its cracker in Tianjin in early July

MOSCOW (MRC) -- Sinopec Tianjin Co (Tianjin United Chemical) is in plans to bring on-stream its naphtha cracker following a turnaround, as per Apic-online.

A Polymerupdate source in China informed that, the company is likely to resume operations at the cracker by early-July, 2020. The cracker was shut for maintenance on May 9, 2020.

Located at Tianjin, China, the cracker has an ethylene production capacity of 240,000 mt/year and propylene capacity of 100,000 mt/year.

As MRC reported earlier, Sinopec SABIC Tianjin Petrochemical Co. (SSTPC), a 50-50 joint venture of Sinopec and SABIC, shut its naphtha cracker in Tianjin on 1 May 2020 for routine maintenance work. The cracker is expected to remain off-line until early July 2020. The naphtha cracker is designed to produce 1 million tons/year of ethylene, which supplies several local buyers in the Tianjin area. Besides, the company is also planning to expand its cracker capacity to 1.3 million tons/year in 2021.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 595,170 tonnes in the first five month of 2020, up by 10% year on year. Deliveries of all ethylene polymers, except for linear low density polyethylene (LLDPE), rose partially because of an increase in capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market was 457,930 tonnes in January-May 2020 (calculated by the formula production minus export plus import). Deliveris of exclusively 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