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BP Midstream pipeline volumes fall in second quarter, but revenues up

August 10/2020

MOSCOW (MRC) -- BP Midstream Partners LP pipeline volumes fell roughly 10% in the second financial quarter as efforts to curb the spread of the coronavirus pandemic slashed fuel demand, reported Hydrocarbonprocessing with referemce to company executives.

Despite lower volumes, revenue of BPs US pipeline unit rose to USD31.50 in the three months ending June 30 from USD28.6 million in the same period last year as it clamped down on expenses.

Onshore pipelines, including the BP2 crude oil line and the River Rouge refined products line, which connect to BPs Whiting, Indiana refinery, saw 13% fewer barrels, the company said.

Volumes on offshore pipelines, including the 400,000 barrel-per-day Mars crude oil pipeline off the Louisiana coast, fell 8%. BP Midstream still plans to expand the Mars crude oil pipeline system starting next year.

Activity on those lines have picked up in the current quarter, company officials said.

"The impact of COVID-19 and broader market volatility on pipeline throughput was much more apparent across our portfolio in the second quarter compared to the first quarter, set against the backdrop of significant product demand destruction across the U.S., Craig Coburn, BP Midstreams chief financial officer, said on a company earnings call.

Industry-wide we saw reduced refinery utilization during the quarter, Coburn said.

US refinery utilization fell from record highs to 68% of the 19 million barrels-per-day total capacity in April as states and local governments attempted to combat COVID-19 by restricting travel and business activity.

As MRC wrote before, BP reports a 43% year-on-year (YOY) decline to USD47 million in second quarter earnings for its petrochemicals business, which remains on schedule to be sold to Ineos for USD5 billion before the end of the year. BP says it received proceeds from divestments and other disposals in the quarter of USD1.1 billion, including the first payment from the agreed sale of BPs petrochemicals business to Ineos.

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.


mrcplast.com
Author:Margaret Volkova
Tags:Europe, PP, PE, crude and gaz condensate, homopolymer PP, propylene, HDPE, ethylene, petrochemistry, BASF, Borealis, BP Plc, Ineos, LyondellBasell, Sabic, Total Petrochemicals, Russia, USA.
Category:General News
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