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.

The company on Monday is forecast to swing to a second-quarter loss of USD1.75 per share, from a USD1.73 per share profit a year ago, according to Refinitiv data.

Marathon is negotiating a sale of its Speedway gasoline station network, a deal that could fetch between USD15 billion and USD17 billion, Reuters reported last month.

Marathon shares traded at USD38.20 on Friday, down 38% year to date.

Marathon spokesman Sid Barth declined further comment about the closures on Saturday.

About 860 employees work at the 161,000 barrel per day (bpd) Martinez and 27,000-bpd Gallup refineries. “Most jobs at these refineries will no longer be necessary, and we expect to begin a phased reduction of staffing levels” in October, the company said.

The closings are not anticipated to result in supply disruptions. “We will continue to utilize our integrated system to meet customer commitments,” the company said in a statement on its website.

As MRC reported earlier, US refiner Marathon Petroleum Corp is delaying all maintenance projects at its 102,000 barrel-per-day St. Paul Park, Minnesota, refinery for 2020 amid concerns related to the spread of the novel coronavirus. Several refiners have delayed planned maintenance at their plants this year due to concerns around the spread of the coronavirus among workers, or as part of capital and operational expense cuts.

Besides, Marathon Petroleum Corp idled its 166,000 barrel-per-day (bpd)refinery in Martinez, California beginning April 27 in response to the coronavirus pandemic’s hit to demand for refined products.

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

Shell Australia to buy land-use carbon offsets company

MOSCOW (MRC) -- Shell Australia will fully acquire specialist carbon emissions offsetting company Select Carbon, reported S&P Global with reference to the company's statement August 3.

The move is Shell's first acquisition for its nature-focused business division which invests in forests, grasslands, wetlands and other natural ecosystems around the world.

"The scale of Australia's rangelands, ecological diversity and integrity of intact primary forests make this market a natural choice for Shell's first acquisition globally for our Nature-Based Solutions business and to further scale Shell's investment in this area here in Australia," Shell Australia Chairman Tony Nunan said in a statement.

Select Carbon partners with farmers and other landowners to develop carbon farming projects throughout Australia which aim to reduce emissions and capture CO2 while benefiting biodiversity and local communities, Shell said.

The acquisition will contribute to Shell's ambition to be a net-zero emissions energy business by 2050 or sooner.

"This ambition also involves working with customers to reduce or offset the emissions generated when they use Shell products, such as through the use of carbon credits," the company said.

Select Carbon has developed and manages a portfolio of over 70 projects covering 9 million hectares across various ecosystems and agricultural uses in Australia.

Carbon farming uses agricultural and land management practices that capture carbon in vegetation and soils or reduce greenhouse gas emissions. By using the correct land management practices, farms can transition from being net carbon emitters to carbon sinks.

The carbon credits generated through Select Carbon's projects are offered through the Australian government's Emissions Reduction Fund and other markets, creating an additional revenue stream for farmers and landowners, Shell said.

Each Australian Carbon Credit Unit generated through Select Carbon's projects represents the avoidance or removal of 1 mt of carbon dioxide and is eligible to participate in the Australian Federal government's Emissions Reduction Fund.

Australia continues to be a priority market for Shell's investment in new energy generation, offering a combination of strong growth in renewables, access to natural gas and customer demand for low-carbon energy solutions, it said.

The new acquisition complements Shell's moves into diversified and emerging energy technologies, including the acquisition of Australian commercial and industrial energy retailer ERM Power; the acquisition of Sonnen – a German company with operations in Adelaide that provides battery storage systems and solar panels for homes in Germany, Italy, the US and Australia; investing a 49% stake in Australian solar developer, ESCO Pacific; and building Shell's first industrial-scale solar power farm in central Queensland.

The acquisition of Select Carbon is expected to be completed before the end of 2020 and is subject to Australian regulatory approval, Shell said.

As MRC wrote before, Shell will announce a major restructure by the end of the year as the company prepares to accelerate its shift toward its net-zero emissions goal by 2050, said CEO Ben van Beurden to employees. The restructuring will include workforce reductions as part of broader cost-cutting measures, although no figures have been decided yet, the CEO reportedly said during an internal webcast.

We remind that Royal Dutch Shell Plc plans to idle a sulfur recovery unit (SRU) at the joint-venture Deer Park, Texas, refinery in 2021, said Shell spokesman Curtis Smith in July 2020. Currently, the refinery is operating at about 75% of its 318,000 barrel-per-day capacity because of reduced demand due to the COVID-19 pandemic.

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.

Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.
MRC

Indorama assesses damage at offline Lake Charles cracker in Louisiana

MOSCOW (MRC) -- Indorama Ventures is still assessing the damage after lightning struck its Lake Charles cracker in Louisiana over the weekend, reported S&P Global with reference to spokeswoman Krystal Medlock's statement in an email Aug. 3.

"No restart date is available at this time," Krystal Medlock said.

At around 8:30 am CT (1330 GMT) Aug. 1, "lightning struck our Lake Charles ethylene cracker resulting in a plant trip of the facility and subsequent flaring. The plant is currently offline and being assessed by plant personnel," Indorama said in a statement.

The unit has a capacity of 440,000 mt/year, according to S&P Global Platts data.

As MRC informed earlier, in March 2020, Indorama Ventures Limited announced that the company decided to extend the pre-construction period of the purified terephthalic acid-polyethylene terephthalate (PTA-PET) plant in Corpus Christi, Texas through the end of 2020. Christi Polymers LLC (CCP), a joint venture among certain subsidiaries of Indorama Ventures Holding, Alpek and Far Eastern Investment (Holding) Limited was created to acquire and complete construction of an integrated PTA-PET plant in Corpus Christi. The completion of the project is expected to be in 2023.

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.

Indorama Ventures Public Company Limited, listed in Thailand, is one of the world's leading petrochemicals producers, a global manufacturing footprint with 59 sites in 20 countries across Africa, Asia, Europe and North America. The company's portfolio is comprises necessities and high value-added (HVA) categories of polymers, fibers, and packaging. Indorama Ventures has approx. 24,000 employees worldwide and consolidated revenue of USD 11.4 billion in 2019.
MRC

AFPM Safety awards Industries Outstanding Workplace Operations

MOSCOW (MRC) -- The American Fuel & Petrochemical Manufacturers (AFPM) has announced the winners of the 2019 Annual Safety Awards, part of an ongoing mission to enhance and recognize outstanding workplace safety, said Hydrocarbonprocessing.

The awards are part of a comprehensive program developed by the AFPM Safety and Health Committee to promote safe operations in the refining and petrochemical industries and to recognize facilities with outstanding occupational and process safety records.

"There is nothing more important to the fuel and petrochemical industries than safety. Our member companies go above and beyond requirements to keep our people, communities and facilities safe, and the AFPM Safety Awards recognize their strong commitment to safety and their persistence to improve on their already outstanding records,” said AFPM President and CEO Chet Thompson.

"The recipients represent leaders within our industries, and we are pleased to acknowledge these facilities for their excellent safety records, proactive programs, and impressive safety cultures," Thompson continued.

The highest honor, the Distinguished Safety Award, is awarded to the top sites with outstanding safety performance, program innovation and safety leadership. We proudly bestow this honor on a record nine facilities this year for achieving a sustained, exemplary level of safety performance: Chevron Phillips Chemical Company LP – Borger Plant, ExxonMobil Chemical Company – Baton Rouge Polyolefins Plant, LyondellBasell Industries – Clinton Complex, Marathon Petroleum Corporation – Martinez Refinery, Phillips 66 – Bayway Refinery, Phillips 66 – Ferndale Refinery, Phillips 66 – Lake Charles Manufacturing Complex, Phillips 66 – Santa Maria Refinery and Phillips 66 – WRB Refining, LP - Borger Refinery.

The Elite Gold Award, which historically on average recognizes facilities with safety performances in the top one percentile and that have demonstrated superior and consistent safety performance, program innovation and leadership, has been given to eight facilities this year: Chevron U.S.A. Inc – Richmond Refinery, CITGO Petroleum Corporation – Lemont Refinery, ExxonMobil Chemical Company – Baton Rouge Chemical Plant, ExxonMobil Chemical Company – Beaumont Polyethylene Plant, Flint Hills Resources, LLC – Peru Plant, LyondellBasell Industries – Chocolate Bayou Polymers Facility, LyondellBasell Industries – LaPorte Complex and LyondellBasell Industries – Matagorda Complex.

The Elite Silver Award, which recognizes those sites that have attained top industry safety performance for the application year and demonstrated excellent program innovation and leadership over time. The Elite Silver Award has historically on average recognized the top five percentile of industry safety and was awarded to eight facilities this year: Chevron Phillips Chemical Company LP – Drilling Specialties Conroe Plant, Chevron Phillips Chemical Company LP – Orange Plant, ExxonMobil Chemical Company – Pensacola Specialty Elastomers Plant, ExxonMobil Chemical Company – Baton Rouge Plastics Plant, LyondellBasell Industries – Corpus Christi Operations, LyondellBasell Industries – Edison Catalyst Manufacturing, LyondellBasell Industries – Victoria Site and Valero Energy Corporation – Wilmington Asphalt Plant.

As MRC informed previously, 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.

And 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

Petrobras forges ahead with downstream, midstream divestments

MOSCOW (MRC) - Brazilian state-run oil firm Petroleo Brasileiro SA expects to conclude negotiations on the sale of its RLAM refinery in northeastern Brazil in the near future and is pushing ahead with the IPO of a gas pipeline unit, executives said Reuters.

Speaking to analysts following the company's second quarter results release, Chief Executive Roberto Castello Branco said the firm expects to seal a sale agreement for the refining unit within the next "one to two months."

Abu Dhabi's investment fund Mubadala Investment Co is in exclusive negotiations with Petrobras, as the Brazilian company is commonly known, after presenting the highest bid for the asset during a competitive bidding process in June.

During the same call, Petrobras downstream chief Anelise Lara said Petrobras is pushing ahead with plans announced in 2019 to sell of a clutch of offshore natural gas pipelines via an initial public offering. She said the IPO would not occur until 2021, though the company expects to seal an agreement with partners such as Repsol SA and Galp Energia SGPS SA that would be needed to go forward with the deal by the end of the third quarter.

As MRC reported previously, Petrobras may need more than a year to divest its stake in Braskem, said Andrea Almeida, Petrobras CFO, in early July. She said during the company’s recent webinar that Petrobras plans to give more time for potential investors to make offers for the company's assets, including for its refineries and stakes at its petrochemical and fuel distribution affiliates. The divestment of Petrobras's stake in Braskem in 2020 would be desirable but "might not be possible" as the COVID-19 pandemic has changed market conditions, she said. The company plans to close part of its refinery sales in 2021. In December, Roberto Castello Branco, CEO of Petrobras, said that he wants to sell the company’s stake in Braskem within a year. Petrobras owns 32.15% of Braskem.

We remind that Braskem is no longer pursuing a petrochemical project, which would have included an ethane cracker, in West Virginia. And the company is seeking to sell the land that would have housed the cracker. The project, announced in 2013, had been on Braskem's back burner for several years.

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