U.S. refineries see fewer breakdowns in pandemic-cut production

MOSCOW (MRC) -- U.S. refineries have sustained fewer mechanical outages as production has fallen because of the coronavirus pandemic in 2020, according to data from energy intelligence service Industrial Info Resources, said Hydrocarbonprocessinmg.

Average unplanned mechanical maintenance for crude units resulted in 95,000 barrels of capacity offline in April, May and June, compared with 254,000 barrels offline on average in the prior-year period. Because of reduced travel caused by the COVID-19 pandemic, U.S. refinery utilization fell from record highs to 68% of 19 million barrels per day in April. Utilization rose to 78.1% by the first week of July.

"Running units at higher capacity for many years requires more maintenance," said Sandy Fielden, energy analyst at financial services firm Morningstar. Prior to the pandemic, U.S. energy and chemical production was at an all-time high, and increasingly complex refineries had been running full-tilt, sometimes eschewing planned downtime to try to boost profits.

John Auers, executive vice president with Dallas-based Turner, Mason, said most U.S. refiners operate their plants reliably and safely and brought production down quickly when demand took a dive in March. "More than anything you can say it shows how good refiners were reacting to this crisis," Auers said.

Unexpected refining outages have soared in recent years, surpassing 2,000 incidents in 2019, quadruple 2015 levels. This year, some refiners took advantage of the unexpected downtime to perform routine maintenance. Others have delayed projects because of concerns the coronavirus could spread among refinery workers if the maintenance goes ahead.

But the reduced production rates may be affecting refiners’ financial ability to make repairs. "Refiners are piling overhead onto fewer barrels of oil refined, restricting cash flow that could be used for maintenance," Fielden said.

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

MOSCOW (MRC) -- Siemens and Bentley Systems will develop the first petrochemical digital twin in Indonesia for Chandra Asri, the country’s largest integrated petrochemical complex, said Hydrocarbonprocessing.

With over 27 year footprint, the latter is set to double its capacity in the next five years to tap into the robust domestic and regional economic growth. The development and implementation of this digital twin will take place in phases, from 2020 – 2025. FKA Global is the systems integration partner and will provide digitalization services, maintenance and further enhancement of the solution post-implementation.

The digital twin of Chandra Asri’s integrated petrochemical complex in Cilegon City will show and visualize digitalized data about the plant assets and the engineering data. Therefore analog plant data are transformed into an automated digital twin framework. This reduces risks of error. The information will henceforth be accessible through one integrated digital platform, ensuring data accuracy, consistency and integrity, as well as ease-of-maintenance.

AssetWise from Bentley Systems and COMOS from Siemens will form the foundation of the digital twin solution. AssetWise is an asset performance software that provides informed decision support and management of change from capital planning through proactive asset maintenance. COMOS is an integrated plant management and lifecycle software that integrates engineering, automation and operations data, with a customizable blueprint for brownfield plant data enablement. In addition, Bentley’s engineering design tools, OpenPlant and ProSteel, will be used to model and maintain piping and structural information for both brownfield and greenfield projects. Together, the joint solution will maintain data integrity and accuracy throughout the lifecycle.

As mRC informed earlier, Chandra Asri Petrochemical (CAP) has reached on-spec output at its 400,000 tons/year linear low density polyethylene (LLDPE) unit following several weeks of facing technical difficulties that severely affected the availability of the grade.

CAP began conducting a trial production at its newly expanded polyethylene (PE) plant in Cilegon in March 2020 to produce metallocene PE grade (MLLDPE). The company expanded PE capacity in 2019 by adding one more production line that pushed the total output to 736,000 tons/year. CommoPlast was informed that the newest 400,000 tons/year high density polyethylene (HDPE)/ linear low density polyethylene (LLDPE) swing line would be utilized for the MLLDPE trial production purpose.

According to MRC's ScanPlast report, May LLDPE shipments to the Russian market rose to 31,290 tonnes from 30,450 tonnes a month earlier, production increased. Overall LLDPE shipments to Russia totalled 153,080 tonnes in the first five months of 2020, down by 5% year on year. Production and exports increased by 2 times.

CAP is the largest integrated petrochemical company in Indonesia and operates the country’s only world-scale size Naphtha Cracker. The CAP plant is strategically located in Banten province, providing convenient access to key customers.

MRC

MOSCOW (MRC) -- Crackers in Asia are expected to switch to cheaper alternative feedstock LPG to meet shortfalls of naphtha whose supplies from the west is set to drop to a four-month low in August, four sources who track the shipments said, said Hydrocarbonprocessing.

Cumulative east-bound naphtha cargoes from Europe, the Mediterranean and the United States will fall at least 40% in August to 1.6 million-1.7 million tons from May’s record high due to run cuts in Europe, they said. That is about 7-9% lower versus July, they said. Buyers, most of whom are operating their crackers at full-tilt, are expected to turn to LPG, whose prices have recently started weakening. That could exert further pressure on naphtha spot prices and margins, which hit a one-month low of USD62.23 on Friday.

Petrochemical makers who operate naphtha crackers typically can replace 5% to 15% of their key feedstock with LPG. While most have term supplies of LPG, they would buy some spot cargoes but only when the prices are trading at a discount of at least USD50 a tonne to naphtha.

Strong demand for LPG, a mixture of propane and butane, had kept its spot prices high until June. But based on data from Argus Media, the Argus Far East Index (AFEI) for prompt butane on a CFR basis for the week ended June 7 flipped to a discount for the first time since March against Reuters naphtha price assessment NAF-1H-TYO, with the discount widening to at least $80 a tonne from second-half of June.

"We expect LPG demand for cracking to increase in July/August as light olefins prices continue to strengthen while LPG’s price discount continues to steepen against naphtha," said Aaron Cheong of Energy Aspects. Light olefins, the building blocks for plastics, are obtained through cracking of naphtha or LPG.

As cracking LPG feedstock produces around 10% more light olefins per tonne of feedstock compared to naphtha, there is a strong incentive for cracker operators to produce more light olefins via lighter feedstocks to maximise profits,” Cheong added.

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

MOSCOW (MRC) -- Total S.A. has changed its name to TOTAL SE because of its registration with the Trade and Companies Register of Nanterre, said the company.

The company stated: “Total S.A. announces that it has become Total SE following its registration with the Trade and Companies Register of Nanterre as a European Company, which occurred on July 16, 2020.

“This registration was approved at the Shareholders’ Meeting, held on of May 29, 2020, and follows negotiations with employees’ representatives in 25 countries of the European Economic Area.

"On April 15, 2020, the members of the Special Negotiating Body approved and signed an agreement relating to the procedures for the involvement of employees in the European Company."

It added: "The Company will now be listed as Total SE on stock markets trading its shares and American Depositary Shares. Its ISIN codes and mnemonics remain unchanged."

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

MOSCOW (MRC) -- Gazprom Neft and Shell have signed an agreement to establish a joint venture to study and develop the Leskinsky and Pukhutsyayakhsky license blocks on the Gydan Peninsula, said the company.

Following completion, the partners will each have a 50% interest in the capital of the joint venture. The joint venture will be managed by Gazprom Neft and Shell on a parity basis. Closing of the transaction is scheduled for 2020 after the receipt of necessary corporate and regulatory approvals.

The intent of the joint venture is to combine the capabilities and competences of its partners in the exploration of a large promising cluster in the north-eastern part of the Gydan Peninsula. Its assets are characterized by a low degree of geological knowledge and significant remoteness from the transport and oil-and-gas infrastructure.

The Leskinsky license block is located in the Taymyr district of the Krasnoyarsk Krai. It covers an area of over 3,000 square kilometers. Its hydrocarbon resources may exceed 100 million tons of oil equivalent. Adjoining the Leskinsky block, the Pukhutsyayakhsky block, which covers an area over 800 square kilometers, is located in the Tazovsky district of the Yamal-Nenets Autonomous Okrug. Its resources are estimated at around 35 million tons of oil equivalent.

At present, 2D seismic surveys have been completed on both blocks. By the end of 2020, drilling of the first prospecting well will begin in the Leskinsky area. Data obtained from this well will make it possible to refine the geological concept and prepare a future project development plan. At the first stage, Gazprom Neft-GEO will be the operator of exploration works in the Leskinsky and, the Pukhutsyayakhsky blocks.

“Exploration of the Gydan blocks is among Gazprom Neft’s strategic objectives, so changes in the market conditions have not affected our plans. In case of geological success, a new large hydrocarbon province will appear on the peninsula. It is also important for us that we continue the project together with our longstanding partner Shell, with whom we will combine experience and technological expertise to study Gydan and prepare for the development of these new territories."

“Despite the economic uncertainties and pressure on our industry, Russia remains a country of strategic focus for Shell. We welcome the expansion of our cooperation with Gazprom Neft, our reliable and highly professional long-term partner. I look forward to using the winning combination of our two companies’ strengths to make the Gydan exploration project a success."

As MRC informed earlier, Royal Dutch Shell Plc shut the gasoline-producing fluidic catalytic cracker (FCC) at its 318,000 bpd joint-venture Deer Park, Texas, refinery after a fire. How long the 70,000-bpd FCC will be shut was unknown on Sunday, the sources said. Shell spokesman Curtis Smith said on Sunday that all individuals were safe and accounted for at the Shell Deer Park Complex, which includes the refinery and adjoining chemical plant.

Propylene is the main raw material for the production of polypropylene (PP).

According to MRC's ScanPlast, PP suppliy to the Russian market in January - May 2020 rechaed 457,930 tonnes (calculated using the formula production minus exports plus imports). The supply of only stat-copolymers of propylene (PP-random) increased.

The Deer Park refinery is a 50-50 joint venture between Shell and Pemex, Mexico’s national oil company. Shell is the managing partner.
MRC