Sinopec Zhongke to start up its new PP plant in Zhanjiang by late August

MOSCOW (MRC) -- China’s Sinopec Zhongke, part of Sinopec Group, is readying to start up its new 550,000 tons/year polypropylene (PP) unit in Zhanjiang by the end of August, reported NCT with reference to sources close to the company.

The plant also houses a high density polyethylene (HDPE) unit with a capacity of 350,000 tons/year, of which start-up date was not revealed at the time of publication.

As MRC wrote previously, Sinopec Zhongke successfully conducted trial runs at its new 350,000 tons/year No. 1 PP unit on 9 June, 2020.

Based in Zhenjiang, China, the complex consists of two PP lines with combined production capacity of 550,000 tons/year, a 100,000 tons/year low density polyethylene (LDPE) plant and a 350,000 tons/year HDPE)/linear low density polyethylene (LLDPE) plant. All lines were initally expected to startup within July-August 2020 period.

We remind that top Chinese state refiner Sinopec Corp started up a USD6 billion new refinery and petrochemical plant in south China, making it the country’s third integrated complex to start operations in the past 18 months or so. The Sinopec venture, situated in coastal city of Zhanjiang, comprises a 200,000 barrel per day (bpd) crude oil refinery and an 800,000 tonne-per-year ethylene facility, built at a cost of 44 billion yuan (USD6.2 billion), Sinopec said in a statement. Two other complexes with combined refining capacity of 800,000 bpd have started up since early 2019, one built by privately-controlled Hengli Petrochemical Corp and the other by Zhejiang Petrochemical Corp.

According to MRC's DataScope report, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.

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

ExxonMobil commits to buying renewable diesel from Global Clean Energy

MOSCOW (MRC) -- ExxonMobil (Irvine, Texas) and Global Clean Energy Holdings (Long Beach, California) have signed an agreement for ExxonMobil to purchase 2.5 million barrels of renewable diesel annually for five years from Global Clean Energy Holding’s converted California refinery, beginning in 2022, reported Chemweek.

The renewable diesel will be sourced from a refinery acquired by Global Clean Energy in Bakersfield, California, which is being retooled to produce renewable diesel from Global Clean Energy’s patented varieties of camelina, a fallow land crop that does not displace food crops, and other non-petroleum feedstocks. Following scheduled production startup in 2022, ExxonMobil plans to distribute the renewable diesel within California and potentially to other domestic and international markets.

“Our agreement with Global Clean Energy builds on ExxonMobil’s longstanding efforts to develop and offer products that help meet society’s energy needs while reducing environmental impacts,” said Bryan Milton, president of ExxonMobil Fuels and Lubricants Company. “Chemically similar to petroleum-based diesel, renewable diesel can be readily blended for use in engines on the market today.”

In addition to camelina, various non-petroleum feedstocks, including used cooking oil, soybean oil, distillers’ corn oil, and other renewable sources will be refined to produce the renewable diesel.

Based on analysis of California Air Resources Board (CARB) data, renewable diesel from various non-petroleum feedstocks can provide life-cycle greenhouse gas emissions reductions of approximately 40–80% compared to petroleum-based diesel.

As MRC informed earlier, ExxonMobil aims to ease global oil and gas production shut-ins by about 40% to 200,000 b/d of oil equivalent as demand for transportation fuels slowly recovers from a second-quarter plunge. About 70% of the shut-ins expected to persist into Q3 are from government mandates, with the rest being market-based cuts, the company said.

We remind that the company plans to shut its cracker on Jurong Island with the capacity of 1 mln mt/year of ethylene and 450,000 mt/year of propylene for a 40-45 day turnaround in August, 2020. The exact dates of the shutdown were not announced.

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

According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.

ExxonMobil is the largest non-government owned company in the energy industry and produces about 3% of the world"s oil and about 2% of the world"s energy.
MRC

Saudi Aramco capacity increase on course, Reliance deal in question

MOSCOW (MRC) -- Saudi Aramco is continuing with plans to increase its maximum sustained capacity to 13 million b/d from 12 million b/d, despite the market downturn caused by the coronavirus pandemic, reported S&P Global with reference to the company President and CEO Amin Nasser's statement.

The capacity hike, which was first announced in March, will not have a significant impact on the oil giant's capex commitments for 2021, as it will be gradually expanded over a period of years, said Nasser, on a call to analysts and investors following the company's Q2 results announcement Aug. 9.

The expansion follows Aramco hitting a new maximum production rate of 12.1 million b/d in April.

"We demonstrated that the maximum sustained capacity is solid for when it needs to be utilized. Not only from the upstream side but from the export side and terminals," Nasser said. "The MSC is available for one year without any increase in capital."

On the call, the company also threw its announced acquisition of a 20% stake of Reliance Industries' oil-to-chemical business somewhat into doubt.

"The Reliance deal is going through the due diligence and we will make our decision after the due diligence," Nasser said. "We need to take our time and then decide."

The deal, which was first announced in August 2019, was originally set to be concluded before the end of March. Upon completion, it will enable to Saudi Arabia to expand its burgeoning footprint in India's fast-growing refining sector. Progress of the deal has been impacted by the pandemic.

Aramco's company's capex plans for next year will also be curtailed.

"We had previously given a guidance of USD40 billion to USD45 billion for next year and we are expecting to be significantly lower than that," Nasser said. "We will be looking at our flexible capital and our plan going forward."

Aramco, which revealed a year-on-year drop in profits of 73% for Q2, is still grappling with demand levels that were diminished by the pandemic.

Saudi domestic demand is now between 4.3 million and 4.5 million barrels of oil equivalent, down from 4.7 million barrels pre-pandemic. During the peak of the crisis, domestic demand for gasoline fell by about 75% and jet fuel plummeted by 50%, Nasser said

"Our expectation is that global demand is around 90 million b/d, compared to 100 million b/d pre-Covid and our expectation is by year-end it will be in the mid-90s," he said.

For its crude exports, Aramco ships 75% to Asia, about 15% to Europe and 10% to North America. The company is currently exporting 1.6 million b/d to China, which is lower than pre-pandemic levels, Nasser said.

The current breakdown of the company's investments is 40% for crude, 30% for natural gas and 30% for downstream.

"Gas is a growth area for us, especially considering increasing gas demand in the kingdom," Nasser said. "The Northern area is declining, but there is pick-up in the Eastern province, the Jafurah Basin and South Ghawar in conventional gas."

Work on developing the Jafurah Basin, the biggest unconventional gas field in the country has been ongoing throughout the pandemic, confirmed Nasser.

Saudi Aramco said in February it plans to invest USD110 billion to develop Jafurah, estimated to hold 200 Tcf of unconventional and un associated gas. It expects production from the field to start in 2024 and reach about 2.2 Bcf/d of sales gas by 2036, it said at the time.

For its official selling prices for crude, the company's continued aim to the price crude competitively in each market so it can meet its sales targets.

"Based on our assessment on the market, driven by demand and supply fundamentals. We get some feedback from buyers that we take into consideration," Nasser said. "Aramco determines the price it charges for its crude based on multiple market factors, with differ in each region."

Between 60% to 70% of its sales are based on Aramco's Far East formula. Therefore, the realization was impacted by Oman and Dubai prices declining at a steep rate, as it represents 70% of Aramco's sales, according to CFO Khalid H al-Dabbagh.

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

According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.

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

EQUATE receives award for Oyster Creek Project

MOSCOW (MRC) -- The EQUATE Group has added a new global award to its list of accomplishments, as the MEGlobal BOOKRAMEG Oyster Creek Project has been named an Award of Merit winner in the Power/Industrial category of the ENR Best Project Awards of 2020, said the company.

The world-scale 750,000 metric-ton-per-annum monoethylene (MEG) glycol and di-ethylene glycol facility (DEG) was constructed in Oyster Creek, Texas ahead of schedule, below budget and with an excellent safety record. It was the first time the EQUATE Group constructed a new EG facility in the United States.

EQUATE CEO-elect and Sr. Vice President Naser Al-Dousari credited the project team and ownership for working together to build a world class facility in a region that provides access to plentiful feedstocks and global markets.

"We are truly humbled by this honor,” he said. “This project demonstrated what can be accomplished when you bring together global petrochemical leadership with a dedicated expert project team. We thank everyone who played a part in delivering the BOOKRAMEG project to EQUATE’s portfolio and strengthening our ability to reach customers around the world."

The project was co-submitted for award by MEGlobal, Worley (general contractor) and Fluor (construction contractor) and was one of 30 selected from a record number of entries. The submissions were judged by an international panel of industry experts.

"The panel looked at projects in many markets and examined safety performance, innovations, challenges, and design and construction quality – with a special emphasis on the diversity of global project teams and their collaboration,” said Engineering News-Record editor Scott Blair in a news release. “They also considered how the project benefits the local community and/or the construction industry."

The winners of ENR’s Global Best Project Awards will be celebrated at a virtual ceremony in September.

As MRC informed earlier, MEGlobal announced that its Asian Contract Price (ACP) for monoethylene glycol (MEG) will be USD620/MT CFR Asian main ports for arrival September 2020. The September 2020 ACP reflects the short term supply/demand situation in the Asian market. The price is on a CFR (cost and freight) Asia basis.

MEG is mainly used in the production of polyester fibres, resins and films (around 80% of global consumption), followed by use in polyethylene terephthalate (PET) resin. It is also used as automotive antifreeze.

According to MRC's ScanPlast report, Russia's estimated PET consumption totalled 367,720 tonnes in the first six months of 2020, up by 19% year on year. Russian companies processed 62,910 tonnes of material in June.

The EQUATE Group is a global producer of petrochemicals and the world’s second-largest producer of ethylene glycol (EG). The Group owns and operates industrial complexes in Kuwait, North America and Europe that annually produce over 6 million tons of ethylene, ethylene glycol (EG), polyethylene (PE), polyethylene terephthalate (PET), styrene monomer (SM), paraxylene (PX), heavy aromatics (HA) and benzene (BZ). The EQUATE Group includes EQUATE Petrochemical Company (EQUATE), The Kuwait Olefins Company (TKOC), as well as a number of subsidiaries such as MEGlobal and Equipolymers. Their products are marketed throughout Asia, the Americas, Europe, the Middle East and Africa. The EQUATE Group’s shareholders are Petrochemical Industries Company (PIC), The Dow Chemical Company (Dow), Boubyan Petrochemical Company (BPC) and Qurain Petrochemical Industries Company (QPIC). Employing more than 1,500 people worldwide, the EQUATE Group is a leading enterprise that pursues sustainability wherever it operates through partnerships in fields that include the environment, economy and society.
MRC

Canaddian Co-op refinery extinguishes fire

MOSCOW (MRC) -- Canada’s Co-op refinery complex in Regina, Saskatchewan, said it has contained and extinguished a fire in ‘Section 1’ of the 135,000 barrel-per-day refinery, with all personnel safe, according to Hydrocarbonprocessing.

The fire was “extinguished quickly”, the refinery said in statement on its website. The Co-op Refinery Complex (CRC) is a wholly-owned subsidiary and a strategic business unit of Federated Co-operatives Limited (FCL).

As MRC wrote before, in 2018, China's Sinopec Corp joined a group planning to build an oil refinery in Alberta, an enterprise that would strengthen demand for the Canadian province's heavily discounted crude. Thus, state-owned Sinopec, formally known as China Petroleum & Chemical Corp, along with an Alberta indigenous group, China State Construction Engineering Corp and Alberta management company Teedrum, plan to build a refinery to process 167,000 barrels per day of crude into gasoline and other products. The SinoCan Global refinery would cost CD8.5 billion, with a financing plan still to be worked out.

We remind that Sinopec SABIC Tianjin Petrochemical Co. (SSTPC), a 50-50 joint venture of Sinopec and SABIC, completed the debottlenecking of its ethylene cracker on 11 July 2020, adding another 30,000 tons/year output to its current capacity. Followed the expansion, the Tianjin based plant become the country's largest compressor unit, producing 1.3 million tons of ethylene annually. The cracker was shut for maintenance and debottlenecking on May 9, 2020.

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

According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.
MRC