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BP-Sinopec bunker venture to start fuel oil deliveries to Fujairah

July 10/2020

MOSCOW (MRC) -- The BP and Sinopec marine fuel bunkering joint venture will start deliveries of high sulfur and low sulfur fuel oils to Fujairah next month, a source close to the matter told S&P Global.

The 50:50 venture, BP Sinopec Marine Fuels Pte., was started five years ago and focused on Asia in the early years, and now has rented storage space for the fuels at the UAE port, the source said. BP and Sinopec declined to comment.

BP and Sinopec had said when the venture was announced in May 2015 that they plan to serve ports in Singapore, Fujairah, Antwerp, Rotterdam and Amsterdam, and China's Tianjin, Qingdao, Shanghai, Ningbo and Shenzhen.

Sinopec started producing LSFO for bonded bunkering in January with a target production capacity of 10 million mt in 2020.

Production of LSFO has gathered pace since the Chinese government introduced a rebate of Yuan 1,218/mt (USD174.24/mt) consumption tax and 13% VAT on domestically produced fuel oil, effective Feb. 1.

Over January-May, China's fuel oil exports totaled 5.2 million mt, up 29.8% year on year, latest data from the General Administration of Customs showed.

Sinopec is the world's largest refiner by capacity and accounts for nearly 40% of China's total crude throughput.

Fujairah produces its own fuel oils, with three refineries located at or near the port. VTTI's refinery has a capacity of 82,000 b/d, Uniper Energy has two 40,000 b/d distillation columns, and Ecomar Energy Solutions has a 15,000 b/d plant producing naphtha, kerosene, gasoil and residual fuel.

Fujairah fuel oil prices won't be under pressure from the additional supplies, the source said, noting that the market recently has been reacting to crude oil prices. Delivered bunker fuel for marine fuel maximum 0.5% sulfur in Fujairah was assessed by Platts at USD325/mt on July 8, up from USD322/mt a week earlier.

As MRC wrote previously, Sinopec Tianjin Co (Tianjin United Chemical) is in plans to bring on-stream its naphtha cracker following a turnaround. The company was 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.

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.

BP is one of the world's leading international oil and gas companies, providing its customers with fuel for transportation, energy for heat and light, retail services and petrochemicals products for everyday items.
Author:Margaret Volkova
Tags:PP, PE, LLDPE, crude and gaz condensate, PP random copolymer, propylene, ethylene, petrochemistry, BP Plc, Sinopec, China, Rossiya.
Category:General News
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