NNPC fired 850 workers, many from refineries

MOSCOW (MRC) -- The Nigerian National Petroleum Corporation (NNPC) has fired 850 workers, many of them from refineries, amidst the coronavirus pandemic, an oil union said, said Hydrocarbonprocessing.

The workers are both skilled and unskilled contractors, including technicians who helped maintain Nigeria’s oil refineries, said Lumumba Okugbawa, general secretary of the Petroleum and Natural Gas Senior Staff Association of Nigeria, speaking on the phone.

The NNPC did not immediately respond to requests for comment. Layoffs in Nigeria’s oil sector are a tense issue, with frequent stand-offs between the NNPC and unions. Nigeria is dependent on crude sales to prop up its struggling economy, now at risk of its worst recession in four decades due to the coronavirus and the pandemic tanking global oil prices.

Yet Nigeria’s refineries are barely operational. Almost all of the country’s fuel supply is processed overseas at great cost, despite Nigeria being Africa’s largest crude producer. In May, the NNPC said it had more than 6,600 staff.

As MRC informed earlier, NNPC has issued a crude-for-product swap tender, the company said. The Direct Sale Direct Purchase (DSDP) tender document did not specify the start date or the quantities involved but said the arrangement would be for one year. The tender is set to close on May 2 at noon (1100 GMT), NNPC said on its official Twitter account. Crude-for-product swap contracts are the country’s main avenue to meet the bulk of its gasoline and gasoil needs.

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

McDermott awarded next phase of Azikel Refinery project

MOSCOW (MRC) -- McDermott International Ltd. announced it has been awarded a large engineering and procurement contract from Azikel Petroleum Ltd. for the modular 12,000 bpd Hydro-Skimming Refinery project, said Hydrocarbonprocessing.

The facility will be located in Yenagoa, Bayelsa State within the Federal Republic of Nigeria. The scope of the award includes the detailed engineering and design of the inside battery limits (ISBL) modular refinery. It also includes supply of equipment and all tagged items within the ISBL.

McDermott has been working with Azikel Petroleum Ltd. since 2018, most recently on an extended Front-End Engineering Design (FEED). This next phase of the award will utilize McDermott's extensive modularization experience and expertise. The design capitalizes on McDermott's world-class refining process engineering abilities.

"McDermott has been an integral part of what is one of the few refineries to be built in Nigeria and we look forward to expanding our presence further by delivering the next phase of this important project," said Tareq Kawash, Senior Vice President, Europe, Middle East, Africa. "Our decades of modularization experience makes us uniquely positioned to deliver this scope and the team has done a great job of developing a simple process design that meets all of Azikel's product specification requirements."

The engineering and design are scheduled to be executed from McDermott's office in Tyler, Texas with support from its Mexico City office. Equipment will be sourced from both US domestic and international suppliers. Azikel is building this grassroots facility and has already done extensive work to prepare the site for construction. The early work includes site reclamation and backfilling, completion of roads, perimeter wall, drainage and security gates. Early work also includes construction of the administrative, maintenance and terminal operator buildings as well as the erection of the feedstock tanks. Construction is also underway for a 656-foot (200 meter) pier with shoreline protection. The pier will be used for the delivery of the refinery modules and other equipment.

The President of Azikel Group, Dr. Eruani Azibapu Godbless, stated that the award was based on the high level of confidence and professionalism exhibited by McDermott and he expects the project will be delivered on schedule and within budget. He further stated that the Azikel Refinery is a flagship for Nigeria as it is the first hydroskimming refinery to advance to this level of achievement in the modular refinery regime.

Azikel Petroleum Limited is a subsidiary of the Azikel Group and the progenitor of the Azikel Refinery Project. The contract award will be reflected in McDermott's second quarter 2020 backlog.

As MRC informed earlier, Haldia Petrochemicals (HPL), a flagship company of The Chatt­erjee Group (TCG), alo­ng with its international partner Rhone Capital has acquired US-based Lummus Technology at an enterprise value (EV) of USD2.725 billion (around Rs 20,590 crore) from McDermott International. In the joint acquisition, HPL’s share is at 57 per cent, the balance would be held by Rhone Capital. Under the new dispensation, Lummus Technology wou­ld function as a ‘standalone’ autonomous entity.

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

Air Liquide to invest more than USD100 million in new ASU in Texas

MOSCOW (MRC) -- Air Liquide says it plans to invest over USD100 million in a new air separation unit (ASU) on its Gulf Coast pipeline network at Ingleside, Texas, reported Chemweek.

The move follows the signing of a long-term agreement with Steel Dynamics (SDI), one of the largest steel producers and metals recyclers in the US, to supply gaseous oxygen, nitrogen, and argon to SDI’s steel mill at Sinton, Texas.

The ASU will have the capacity to produce over 770 metric tons/day of oxygen, as well as nitrogen and argon to supply SDI's planned 3 million metric tons/year steel mill starting up in 2021. Air Liquide will also add 45 kilometers of pipeline connecting SDI to its Gulf Coast pipeline system, strengthening the company’s position in the US Gulf Coast region and in the growing industrial basin of Corpus Christi where it has been present since the mid-1930s.

Air Liquide’s ability to provide large volumes of oxygen and nitrogen from Corpus Christi, Texas, to New Orleans, Louisiana, via its integrated production and supply pipeline network provides its customers with an enhanced competitiveness over the long-term, the company says.

The project will strengthen the US steel industry through the establishment of the largest steel mill in Texas, says Michael Graff, executive vice president and executive committee member at Air Liquide. “The investment in this ASU and pipeline infrastructure will further enhance Air Liquide’s network capabilities and leadership position in the Gulf Coast, allowing us to meet the growing industrial gas demands of our customers in the region,” he says.

As MRC wrote before, in late December 2019, Air Liquide Philippines and Pilipinas Shell signed a long-term contract for a supply of Hydrogen to Shell’s Tabangao refinery in Batangas, Philippines. The new venture will secure for the Tabangao refinery a continuous supply of Hydrogen for its processing needs.

We remind that Shell Singapore restarted its naphtha cracker in Bukom Island in early December 2019, following a two months maintenance shutdown since the beginning of October 2019. Thus, this cracker was taken off-stream for the turnaround on 1 October 2019. The cracker is able to produce 960,000 tons/year of ethylene and 550,000 tons/year of propylene.

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.
MRC

SIBUR raises USD500 m in 5-year Eurobonds at 2.95%, the lowest coupon eve

MOSCOW (MRC) -- SIBUR Holding, Russia’s largest integrated petrochemicals company, announces it has raised USD 500 m following the offering of 5-year Eurobonds on the Irish Stock Exchange, said the company.

The coupon rate is 2.95%, which is a record low for Russian corporate issuers. The coupon will be paid twice a year. The Eurobond proceeds will be used to optimise the Company’s loan portfolio and for general corporate purposes.

Bank GPB International S.A., Citigroup Global Markets Limited, Goldman Sachs International, J.P. Morgan Securities plc and VTB Capital plc acted as the leading coordinators and bookrunners. The order book topped USD1 bn. The Eurobonds were sold to 94 investors. The issue was rated Baa3 by Moody’s and BBB- by Fitch.

Alexander Petrov, member of the Management Board and Managing Director for Economics and Finance at SIBUR, commented: "The resilience of SIBUR’s business and its growth potential are highly valued by investors, which is confirmed by the reaffirmation of the Company’s investment-grade credit ratings from the three leading agencies. The record low coupon rate at which the Eurobonds were offered testifies to investors’ confidence in SIBUR as a high quality borrower."

As MRC informed earlier, in February 2020, Linde PLC recieved a contract to provide technology for PJSC SIBUR Holding’s cracker at Amur gas chemical complex (GCC). GCC is an integrated 1.5 million tons per year polyethylene and polypropylene production complex to be built near Svobodny in Russia’s far-east Amur region. The contract was awarded to Linde under a consortium with SIBUR subsidiary and project contractor NIPIgazpererabota (Nipigaz).

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.

SIBUR is the largest integrated petrochemicals company in Russia. The Group sells its petrochemical products on the Russian and international markets in two business segments: Olefins & Polyolefins (polypropylene, polyethylene, BOPP films, etc.) Plastics, Elastomers & Intermediates (synthetic rubbers, EPS, PET, etc.). SIBUR’s petrochemicals business utilises mainly own feedstock, which is produced by the Midstream segment using by-products purchased from oil and gas companies. More than 26,000 employees working in SIBUR contribute to the success of customers engaged in the chemical, fast moving consumer goods (FMCG), automotive, construction, energy and other industries in 80 countries worldwide. In 2018, SIBUR reported revenue of USD 9.1 billion and adjusted EBITDA of USD 3.3 billion.
MRC

Total refining margin sinks to six-year low as sales slump, crude rebounds

MOSCOW (MRC) -- Total, Europe's biggest refiner, saw its average refining margin slump to the lowest level in six years during the second quarter when demand for fuels collapsed due to COVID-19 lockdowns while oil prices began to recover, reported S&P Global.

Total's "variable cost margin" for its European refineries in the second quarter fell to USD14.30/mt or about USD1.95/b, down from USD26.30/mt in the previous quarter and USD27.60/mt in the year-earlier period, it said July 15 in a trading statement.

The second-quarter average was the lowest since Q2 2014, when it was USD10.90/mt, although Total used a different methodology to calculate its margin at the time.

European refining margins had already begun to fall sharply in March as lockdowns tanked oil product demand globally, causing Q1 refining to shrink by around 20% from the previous quarter. Global oil demand shrank by 16.4 million b/d in the second quarter, according to the International Energy Agency.

Although European driving activity continues to rebound from lockdown lows in early April, Brent crude prices have surged by almost USD15/b over the same period to over USD40/b. Refining margins have also been hit by pressure from a global oil product surplus.

All of the IEA's margin indicators for Northwest Europe turned negative on a monthly average basis in May, with Brent cracking margins turning negative for the first time on a monthly basis since 2006.

Speaking at the end of May, CEO Patrick Pouyanne said he expects Total's refineries to operate at 70% of capacity this year, about 15 percentage points below the 2019 average, "which is going to impact the cash flow from refining."

Total's 93,000 b/d Grandpuits refinery in France restarted operations in early June after several months of outages and the company is contemplating the future of the site.

Last week, the IEA said the demand destruction caused by the coronavirus pandemic has set the refining sector back "by several years", with 2021 demand still forecast to be below that of 2017, while global refining capacity has increased.

It forecast global refinery runs in 2020 would fall by 6.4 million b/d to 75.3 million b/d, but increase by 4.7 million b/d in 2021.

BP's refining marker margins have continued to fall in the third quarter, and last week the major said its margins in Northwest Europe averaged USD4.40/b so far in the quarter, down from USD4.80/b in Q2.

Shell last month cut its long-term refining margin assumptions by around 30% to reflect a weaker, post-pandemic market outlook.

Over the second quarter, Total said its realized average liquids price was USD23.40/b, a USD10/b discount to the average Brent benchmark price of USD33.40/b for the period.

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 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.

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