Equinor beats earnings forecasts as refinery and trading shines

MOSCOW (MRC) -- Equinor reported a drop in second-quarter operating profit but a strong performance from its refinery and trading business helped to counter a coronavirus-led slump in oil and gas prices allowing the group to beat forecasts, said Hydrocarbonprocessing.

The Norwegian oil and gas company reported an 89% slump in adjusted earnings before interest and tax (EBIT) to USD350 million (274.7 million pounds) in the April-June quarter, compared with USD3.15 billion in the year-ago period.

A poll of 25 analysts compiled by Equinor had forecast an adjusted operating loss of USD200 million. Equinor’s three oil exploration and production businesses, E&P Norway, E&P International and E&P USA, made losses, but profits increase at its refinery and trading division.

Chief Executive Officer Eldar Saetre said he saw pressure on oil prices increasing as OPEC+ is set to ease record cuts imposed after oil prices crashed due to the COVID-19 impact. He also told Reuters that there was still a lot of flexible production, such as U.S. shale, which could come back quickly to the market.

Saetre said he expected European gas demand to return to pre-pandemic levels in 2021 after the company deferred “significant volumes” of gas production in the quarter as prices fell by almost 60% from a year ago. The Norwegian government has imposed oil output limits from June to December this year, backing efforts by the OPEC+ and others to support prices.

Analysts at Sparebank 1 Markets said the performance was driven by exceptional results from crude and liquids trading, extracting value from the market “contango” and selling crude to Asia at higher prices in the forward market. Equinor shares were up 1.7% by 0923 GMT, outperforming a wider European oil and gas index .SXEP, which was down 0.5%.

Equinor’s total oil and gas output was flat at 2 million barrels of oil equivalent, despite production cuts at home and abroad, helped by ramp-up of its Johan Sverdrup oilfield. Adjusted for transactions and curtailments, output rose by 4%.

Equinor gave no production guidance for 2020, but reiterated its goal of increasing output by 3% per year from 2019 to 2026. The majority state-owned company maintained a quarterly dividend of USD0.09 per share, identical to the first quarter but down from USD0.27 in October-December. Capital spending guidance for this year was unchanged at USD8.5 million.

Equinor has also kept its long-term price assumptions, which include crude oil price of $USD0 a barrel in 2030, unchanged, unlike other European majors. It plans to update the price outlook, which could impact assets values, in the third-quarter.

As MRC informed earlier, in March 2018, Norway’s Statoil announced plans to change its name to Equinor, reflecting its commitment to become a broad energy company rather than one focused only on oil. Equinor holds an 82-percent stake in the methanol plant, while ConocoPhillips owns the rest.

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

MOSCOW (MRC) -- Honeywell announced that Malaysia-based Hengyuan Refining Company Bhd. (HRC) has started Honeywell UOP’s modular Chlorsorb technology as part of a revamp of its existing UOP CCR Platforming unit to help it comply with new clean air regulations, according to Hydrocarbonprocessing.

Located in HRC’s facility in Port Dickson, Malaysia, the modular ChlorsorbTM unit is the first retrofit in the world involving such a modular unit into an existing CCR Platforming unit.

The UOP Chlorsorb technology achieves up to 99% chloride removal efficiency, eliminates the need for caustic scrubbing, and reduces operating cost of a CCR Platforming unit. The technology was first commercialized in 1997 and today is operational in 95 units worldwide.

“The Chlorsorb technology simplifies operations, reduces maintenance and largely eliminates treatment of liquid and hazardous waste,” said Bryan Glover, vice president and general manager, UOP Process Technologies. “Customers such as HRC are interested in Chlorsorb because it’s a proven system that effectively removes chloride while helping them meet clean air regulations.”

In addition to technology licensing, UOP delivered the technology in pre-fabricated equipment modules and upgraded the control system. UOP has more than 30 years’ experience providing process units in modular form, and provides an economical solution for units that don’t have the space or equipment to fully incorporate it into an existing unit.

The UOP Chlorsorb technology is a cost-effective and efficient alternative to traditional caustic scrubbing of chloride which is used to maintain dispersion of the Platforming catalyst during regeneration. As a result, it enables a refinery to eliminate the use and disposal of caustic and to significantly reduce consumption of organic chloride in the operation of a continuous catalyst regeneration, or CCR, system.

As MRC reported earlier, Honeywell has recently announced that Pertamina (Persero) will use Honeywell Forge Process Advisor to maintain high operational reliability of crude oil upgrading processes at its Cilacap refinery in Central Java, Indonesia.

We remind that Pengerang Refining and Petrochemical (PRefChem), a joint venture of Petronas and Saudi Aramco, took its naphtha cracker in Johor off-stream after an explostion and fireat the site in late March, 2020, with no notice on how long the unit would remain shut. The cracker has an annual capacity of 1.2 million tons/year of ethylene and 600,000 tons/year of propylene.

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

MOSCOW (MRC) -- A sale of the Philadelphia Energy Solutions oil refinery site to real estate developer Hilco is expected to close next week for USD27.5 million less than planned, the bankrupt refiner said in a court filing, said Hydrocarbonprocessing.

Hilco Redevelopment Partners won an auction in January to buy the 1,300-acre (526-hectare) south Philadelphia refinery with plans to transform it into a mixed-use industrial park. It agreed to pay USD252 million for the site. The Chicago-based developers, citing economic uncertainty caused by the coronavirus pandemic and higher-than-expected environmental costs tied to cleaning up PES land, asked to amend the agreement and delay the sale earlier this month, the filing said.

PES agreed to lower the price contingent partly on Hilco finalizing the deal by June 26. The United States Bankruptcy Court for the District of Delaware must sign off on the amended sale agreement. The refiner shut its 335,000 barrel-per-day refinery, the largest and oldest on the East Coast, and filed for Chapter 11 bankruptcy last summer after a fire at one of its fuel processing units badly damaged the plant and leaked toxic chemicals into the air.

More than 1,000 workers were laid off, including 640 United Steelworkers members. Executives of the company, which had just emerged from a separate bankruptcy at the time of the June 21 blaze, have received millions of dollars in bonuses since the shutdown.

Union workers, who were let go without access to extended health benefits typically given to laid-off employees, will receive several thousand dollars apiece in transition pay after the sale is finalized, according to the original agreement. It’s not clear whether that amount will be affected by the amended sale agreement.

As MRC informed before, global oil consumption cut by up to a third in Q1 2020. What happens next in the oil market depends on how quickly and completely the global economy emerges from lockdown, and whether the recessionary hit lingers through the rest of this year and into 2021.

Earlier this year, BP said the deadly coronavirus outbreak could cut global oil demand growth by 40 per cent in 2020, putting pressure on Opec producers and Russia to curb supplies to keep prices in check.

We remind that in September 2019, six world's major petrochemical companies in Flanders, Belgium, North Rhine-Westphalia, Germany, and the Netherlands (Trilateral Region) announced the creation of a consortium to jointly investigate how naphtha or gas steam crackers could be operated using renewable electricity instead of fossil fuels. The Cracker of the Future consortium, which includes BASF, Borealis, BP, LyondellBasell, SABIC and Total, aims to produce base chemicals while also significantly reducing carbon emissions. The companies agreed to invest in R&D and knowledge sharing as they assess the possibility of transitioning their base chemical production to renewable electricity.

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

MOSCOW (MRC) -- An estimated 11 million metric tons (MMt) of plastic waste enter the ocean every year and this will almost triple by 2040, to 29 MMt, if immediate and sustained action is not taken, according to a newly published in-depth report, said Chemweek.

This is equivalent to dumping 110 lbs (50 kilograms) of plastic on every meter of coastline around the world, it says. However, it is possible to reduce annual flows of plastic into the ocean by about 80% in the next 20 years by applying existing solutions and technologies, according to the report, Breaking the Plastic Wave. The report notes there is no single solution that can achieve this goal, but that it is rather through breaking “the plastic wave” by taking immediate, ambitious, and concerted actions. The research was carried out and published by The Pew Charitable Trusts (London, UK), and SYSTEMIQ (London, UK), a certified B Corp, in collaboration with the University of Oxford, University of Leeds, Ellen MacArthur Foundation (Cowes, UK), and Common Seas (Bristol, UK).

The current commitments made by governments and industry can only cut the annual volume of plastic flowing into the ocean by about 7% by 2040, and most new regulations “focus on specific items rather than systemic change,” the report says. Reducing plastic use is key to preventing it entering the ocean, but this requires “finding substitutes for plastics, improving recycling practices, expanding waste collection, and ensuring that disposal facilities prevent plastic leakage as a transitional measure,” it says.

The implementation of all these measures, as well as substantial shifts in all economic sectors, significant new investments, and major policy changes from governments would be required, but they could achieve the 80% reduction in the annual flow of plastic waste into the ocean by 2040, the report says.

The required technologies exist, but government incentives and a new approach from industry and investors are needed to enable a “substantial shift of investment away from the production of new plastic to the development of reuse and refill systems and sustainable substitute materials,” according to the study. This also means that every nation will have to do its part in accordance with its capabilities, the report says.

“Adopting systemwide changes to curb ocean plastic pollution offers social, economic, and environmental benefits, from reducing projected greenhouse gas emissions to creating 700,000 jobs around the globe,” the report says.

A five-year delay in taking the actions outlined in the report “would add 80 million metric tons of plastic waste to the 248 million metric tons projected to enter the ocean from 2016 to 2040, compounding risks for marine species and ecosystems, our climate, and our communities,” according to the report.

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

MOSCOW (MRC) -- DuPont Clean Technologies (DuPont) announced the successful startup and performance test of a 300 KMTA STRATCO alkylation unit licensed by DuPont at the Hengli Petrochemical Company (Hengli) new refinery complex, Changxing Island Harbor Industrial Zone, China, reported Hydrocarbonprocessing.

The new alkylation unit enables Hengli to produce high-quality alkylate, a key component for cleaner, high octane gasoline, from a 100% isobutylene feed stream. This first-of-a-kind unit was developed through DuPont research into the best ways to maximize product octane and minimize end point with this feedstock. Hengli had awarded DuPont the contract for the new alkylation unit as well as a MECS Sulfuric Acid Regeneration unit in 2015.

The alkylation unit uses the latest innovative patented XP2 technology by DuPont in the STRATCO Contactor reactor. The reactor enhancement is designed to improve the acid/hydrocarbon emulsion flow path near the tube bundle heat transfer area of the reactor in order to realize significant process benefits and achieve optimal alkylate product quality.

“DuPont Clean Technologies could not be happier with its ability to enable Hengli Petrochemical Company to meet performance guarantees while processing a feed never before processed in an alkylation unit,” said Eli Ben-Shoshan, Global Business Leader, DuPont Clean Technologies. “It’s a groundbreaking achievement and we’re very pleased to provide innovative technology and services that support the operational and business goals of Hengli.”

“We’re delighted that the new alkylation unit is performing to design specifications,” said a unit manager at the Hengli Petrochemical Company. “The fact that we’re able to produce high-quality alkylate with high-octane values from isobutylene by using the STRATCO alkylation technology benefits our refinery’s overall gasoline pool.”

The STRATCO Alkylation Technology is a sulfuric acid, catalyzed process that converts low-value, straight-chain olefins into high-value, branched components called alkylate. Alkylate, with its superior blending properties, is a key component for clean gasoline and the STRATCO Alkylation Technology helps refiners safely produce cleaner-burning gasoline with high octane, low RVP, low sulfur, zero aromatics and zero olefins. STRATCO alkylation technology is licensed and marketed by DuPont as part of its Clean Technologies portfolio in Overland Park, Kansas. DuPont is the world leader in alkylation technology with more than 100 licensed units worldwide and more than 915,000 BPSD (35,800 KMTA) of installed capacity. DuPont is committed to alkylation research and has extensive experience in assisting refiners with alkylation research, design, start-ups, test runs, troubleshooting, optimization, revamps, expansions, analytical testing, operator training, turnarounds and HAZOP studies.

Hengli Petrochemical Co., Ltd. manufactures chemical fibers. The Company researches, produces, and sells polyester filament and chips for consumer and industry products. Hengli Petrochemical markets it products worldwide.

As MRC wrote oreviously, Hengli Petrochemical Co Ltd ramped up the operation rate of its new No. 5 purified terephthalic acid (PTA) line at Dalian to around 85% on 11-12 July, 2020. The company managed to produce prime grade PTA cargoes at its new PTA line in China on 30 June. This line was successfully launched on 28 June, 2020. Based in Dalian, China, the company has 5 PTA plants with combined production capacity of 11.6 million tons/year, making Hengli Group the world's largest PTA producer, as each PTA plant has production capacity of 2.5 million tons/year.

As per MRC's ScanPlast report, May estimated PET consumption in Russia amounted to 70,170 tonnes, which corresponds to the level of consumption last year (70,450 tonnes). In total for the period January - May of this year, the estimated PET consumption in the Russian Federation amounted to 304,310 tonnes of material. This is 3% lower than the same indicator in 2019.

Hengli Petrochemical Co., Ltd. manufactures chemical fibers. The Company researches, produces, and sells polyester filament and chips for consumer and industry products. Hengli Petrochemical markets it products worldwide.
MRC