Sinopec Zhongyuan shut 180,000 T of ethylene capacity

MOSCOW (MRC) -- Sinopec Corp’s Zhongyuan Petrochemical Corp has shut down its ethylene production of 180,000 tonnes per year from Aug. 1 until Sept. 14 for maintenance, reported Reuters with reference to Sinopec's statement.

The plant, based in the central region of Henan, also plans to carry out maintenance on its 600,000-tonnes-per-year methanol to olefins (MTO) unit during the period of July 24 to Oct. 22.

The overhaul aims to eliminate safety risks at the production units and to ensure smooth operation in the next five years, the statement said.

Zhongyuan Petrochemical also has polyethylene (PE) production capacity of 260,000 tonnes per year and polypropylene (PP) capacity of 160,000 tonnes per year.

As MRC wrote previously, in mid-June 2020, top Chinese state refiner Sinopec Corp said it had 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.

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.

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

1. Marathon Petroleum to permanently close two oil refineries

MOSCOW (MRC) -- Marathon Petroleum plans to permanently close two small US oil refineries in Martinez, California, and Gallup, New Mexico, the company said, eliminating 800 jobs in response to lower fuels demand, reported Reuters. The largest US refiner by volume had earlier idled the two facilities following weak demand due to COVID-19 outbreaks in the United States. US refiners on average idled about 20% of total processing capacity on falling vehicle and air travel. Marathon said it plans to use the Martinez facility as an oil-storage facility and is evaluating its future use to produce renewable diesel, a fuel made from industry waste and used cooking oil. Martinez is California’s fourth largest refinery.



MRC

MOSCOW (MRC) -- Crude oil futures were steady to higher in mid-morning trade in Asia July 29 after an unexpected draw in US crude stocks provided some support to the global crude complex amid an uncertain demand outlook, as per S&P Global.

At 11:05 am Singapore time (0305 GMT), ICE Brent September crude futures were up 11 cents/b (0.25%) from the July 28 settle at USD43.33/b, while the NYMEX September light sweet crude contract was 1 cent/b (0.02%) higher at USD41.05/b.

"Broadly, we have been seeing crude oil prices paring gains from Tuesday with continued growth concerns capping further upsides at current levels," IG market strategist Pan Jingyi said July 29. "The surprise draw in crude oil inventories according to the API report had played a part in supporting prices overnight, though WTI can be seen staying relatively more cautious with a buildup in official EIA crude inventory expected on Wednesday," she added.

The American Petroleum Institute overnight reported a 6.83 million-barrels draw in crude oil inventories for the week ending July 24, against market expectations of a 450, 000-barrel rise, according to analyst reports. More definitive US stocks data is due for release by the Energy Information Administration later on July 29.

"The enormity of the inventory draw should be sufficient to hold the bears (at) bay (and) temporarily alleviate some concerns about ongoing demand distress," AxiCorp chief global markets analyst Stephen Innes said in a note July 29.

However, a resurgence in coronavirus infections in the Asia-Pacific, protracted US fiscal stimulus negotiations and an increase in supply from OPEC+ from August were weighing heavily on market sentiment, keeping crude prices rangebound, market sources said.

China reported 101 new coronavirus cases July 28 and Vietnam 30, while Tokyo, Hong Kong and Melbourne have reported jumps in infections rates in recent days, underlining the difficulty of containing the virus as restrictions ease in places that had earlier curbed infection rates, and indicating that demand was likely to remain subdued amid the uncertainty.

In the US, negotiations over a proposed trillion-dollar fiscal stimulus package that would provide a one-off USD1,200 payment while cutting weekly federal unemployment benefits from USD600 to USD200 are continuing; analysts said the protracted stimulus negotiations and USD400 reduction would weigh on consumer spending and market sentiment.

Global crude output is also set to increase in August as OPEC+ sticks with its schedule of tapering coordinated production cuts from 9.7 million b/d to 7.7 million b/d from August 1.

As MRC reported earlier, US crude oil inventories moved sharply lower during the week ended July 24 as exports and refinery demand climbed to multi-month highs, US Energy Information Administration data showed July 29, 2020. Commercial crude stocks fell 10.61 million barrels to 525.97 million barrels last week, EIA data showed. While the draw pushed stockpiles to 14-week lows, they remained more than 17% above the five-year average for this time of year.

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 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) - PetroChina Ningxia PC, part of PetroChina, is in plans to bring on-stream its polypropylene (PP) plant following a turnaround, according to Apic-online.

A Polymerupdate source in China informed that, the company is likely to resume operations at the plant on August 18, 2020. The plant was shut for maintenance on July 1, 2020.

Located at Yinchuan, China, the PP plant has a production capacity of 110,000 mt/year.

As MRC reported earlier, PetroChina has nearly doubled the amount of Russian crude being processed at its refinery in Dalian, the company’s biggest, since January 2018, as a new supply agreement had come into effect. The Dalian Petrochemical Corp, located in the northeast port city of Dalian, was expected to process 13 million tonnes, or 260,000 bpd of Russian pipeline crude in 2018, up by about 85 to 90 percent from the previous year’s level. Dalian has the capacity to process about 410,000 bpd of crude. The increase follows an agreement worked out between the Russian and Chinese governments under which Russia’s top oil producer Rosneft was to supply 30 million tonnes of ESPO Blend crude to PetroChina in 2018, or about 600,000 bpd. That would have represented an increase of 50 percent over 2017 volumes.

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.

PetroChina Company Limited, is a Chinese oil and gas company and is the listed arm of state-owned China National Petroleum Corporation, headquartered in Dongcheng District, Beijing. It is China's biggest oil producer.
MRC

MOSCOW (MRC) -- The Abu Dhabi National Oil Company (ADNOC) and ADQ signed a joint venture (JV) agreement to create a new investment platform to fund and oversee the development of industrial projects within the planned Ruwais Derivatives Park, a key enabler of ADNOC Downstream’s 2030 smart growth strategy and the UAE’s chemicals and industrial growth strategy, reported Reuters.

The agreement was signed by H.E. Dr. Sultan Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology and ADNOC Group CEO, and H.E. Mohamed Hassan Alsuwaidi, CEO of ADQ.

Under the terms of the agreement, ADNOC and ADQ will jointly evaluate and invest in anchor chemicals projects. ADNOC will hold a 60% majority equity stake in the JV with ADQ holding the remaining 40%. ADQ’s extensive portfolio, including local and international logistics and transport, power and water, industrial construction, and other essential infrastructure and enabling services, will complement ADNOC’s strong hydrocarbon feedstock position in Ruwais as well as its longstanding relationships with trusted international partners and investors. These combined strengths will enhance the overall value proposition of the planned Ruwais Derivatives Park and, in turn, support the long-term growth of the broader Ruwais industrial complex and increased investment in the Emirate of Abu Dhabi.

The JV partners will conduct a comprehensive feasability study to further develop identified projects in Ruwais and take forward those that show maximum potential for value creation. The JV plans to announce the results of this study before the end of 2020, including specific details on its selected target projects and the range of potential opportunities available for prospective investors and partners.

H.E. Dr. Sultan Ahmed Al Jaber said: “The range, scale and caliber of resources ADNOC and ADQ each bring to this new chemicals investment platform underscore Abu Dhabi’s position as a leading global destination for international investors and industrial partners. In line with ADNOC’s commitment to smart, responsible investment in the current market environment, as well as our unwavering focus on stretching the margin of every barrel of oil produced, our partnership with ADQ will expand on existing efforts to maximize the value of our assets in Ruwais, to kickstart the development of the UAE’s downstream deriviatives sector, support the transformation of Ruwais into a global hub for industry and attract additional foreign direct investment.”

H.E. Mohamed Hassan Alsuwaidi, CEO of ADQ, said: “By partnering with ADNOC to faciliate the development of the investment platform in Ruwais Derivatives Park, we will play a key role, together with the public and private sectors, in providing essential infrastructure development services. At ADQ, we are driving value creation and helping to build a prosperous economy for the benefit of Abu Dhabi through our diverse portfolio of the emirate’s leading entities such as Abu Dhabi Ports, Abu Dhabi National Energy Company (TAQA), Etihad Rail, Emirates Steel, DUCAB and Arkan.”

ADNOC and ADQ both have strong track records of driving private sector growth in Abu Dhabi. At the core of its current plans, ADNOC’s in-country-value (ICV) program, to date, has driven more than AED 44 billion (USD12 billion) back into the UAE economy and created over 1,500 private-sector jobs for UAE nationals since it was launched in 2018. ADQ brings together a range of vital local expertise across power and logistics, industrial fabrication and manufacturing which will support the development of the planned Derivatives Park in Ruwais.

With the required approvals, the JV will be incorporated in Abu Dhabi Global Markets with both companies jointly determining the JV’s management team and board, in line with global corporate governance best practice.

The development of a robust downstream derivatives industry in Ruwais is the cornerstone of ADNOC downstream’s growth strategy, launched at ADNOC’s Downstream Investment Forum in 2018. Since the Forum, ADNOC has attracted signinficant foreign investment and expanded its downstream partnership base across its refining, fertilizer and pipeline assets. Concurrently, ADNOC has successfully progressed large-scale capital projects in Ruwais to further stretch the margin of each barrel of oil produced, including the Crude Flexibility Project, ADNOC’s flagship refinery upgrade program, which will enable processing of crudes other than Murban, and, in turn, unlock more robust crude export optionality. ADNOC’s joint venture with Borealis, Borouge, has also advanced the development of production units at the Borouge 4 complex, a core enabler of the Ruwais Derivatives Park which will support feedstock production capacity for the Park’s anchor projects.

ADNOC continues to deliver on the expansion of its downstream business as part of its 2030 smart growth strategy, which will see the Ruwais industrial complex transformed into a globally competitive chemicals cluster, leveraging the UAE’s close geographic proximity to global growth markets, access to competitive feedstocks, streamlined utilities and services offer, as well as Abu Dhabi’s attractive fiscal and regulatory environment.

As MRC informed earlier, in late July 2019, ADNOC said its Ruwais refinery west cracker was offline for maintenance.

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