KBR proprietary cracker technology selected for project in China

MOSCOW (MRC) -- KBR has been awarded two contracts by Ningxia Baofeng Energy Group Co. Ltd (Baofeng Energy) for its 500KTA coal to olefins project & 500KTA C2-C5 comprehensive utilization project to be built in Ningdong Town, Lingwu City, Ningxia, China, as per Hydrocarbonprocessing.

Under the terms of the contracts, KBR will provide process technology licensing and process design packages for this project, which will have an annual production capacity of one million tons of olefins. Once completed, the complex will be the largest single-train methanol to olefins (MTO) plant in the world.

KBR will use a combination of its best-in-class SCORE steam cracking and MTO recovery technologies to achieve Baofeng Energy's project objectives of highest yields and lowest capital investment. The SCORE steam cracking unit will convert the ethane and propane feedstock into ethylene and propylene, which are later separated and further purified in the MTO recovery section to ensure the quality needed to produce polymer grade ethylene and propylene. The MTO recovery process utilizes KBR's commercially-proven technology, which in addition to superior performance provides CAPEX and OPEX advantages over other technologies.

"We are proud that Baofeng Energy has selected KBR for this breakthrough world-scale MTO complex," said Doug Kelly, KBR President, Technology Solutions. "This award is a reaffirmation of our continued commitment to helping our clients maintain their competitive edge through technological advancements and delivering the best return on their investments."

For more than 50 years, KBR's Technology Solutions business unit has been delivering the technologies, flexible solutions and expertise that petrochemical manufacturers rely on to produce ethylene, propylene, acetyls, phenolics, vinyls and other specialty products from a variety of feedstocks in a safe, efficient, and sustainable manner.

As MRC reported earlier, Ningxia Baofeng Energy has brought on-stream its No.1 (methanol-to-olefins) MTO unit following a maintenance turnaround. Tje company resumed operations at this unit on August 2, 2020. The unit was shut for maintenance on 1 July, 2020. Located at Yinchuan, Ningxia, China, the MTO unit has an ethylene and propylene production capacity of 300,000 mt/year each.

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

1. Chinese July diesel exports hit five year low amid weak demand overseas

MOSCOW (MRC) -- China’s diesel exports fell for a fourth straight month in July,hitting their lowest level in five years, as tepid demand overseas due to the COVID-19 pandemic forced Chinese refiners to focus on domestic consumers, reported Reuters. China shipped out only 550,000 tons of diesel, about half of 1.04 million tons in June and a third of 1.58 million tons in July 2019, data from the General Administration of Customs showed on Sunday night. Gasoline exports were down 28% from a year earlier at 1.12 million tons last month, while jet kerosene exports were down 77% to 320,000 tons.

MRC

MOSCOW (MRC) -- Crude oil futures were stable in mid-morning trade in Asia on August 21 as planned compensation cuts by the OPEC+ coalition offset a bearish US jobs report amid worries of a slowing economic recovery, reported S&P Global.

At 10:37 am Singapore time (0237 GMT), the ICE Brent October crude futures were up 16 cents/b (0.36%) from the Aug. 20 settle at SUD45.07/b, while the new front-month NYMEX October light sweet crude contract was up by 9 cents/b (0.21%) at USD42.91/b.

The global crude complex was rangebound last week as a drawdown in US commercial crude and gasoline inventories was offset by a decline in total products supplied, US Energy Information Administration data released Aug. 19 showed.

Meanwhile, the headline OPEC+ Joint Ministerial Monitoring Committee meeting Aug. 19 proved to be supportive for prices as the coalition continued to put a strong focus on compliance and compensation cuts.

OPEC+ members that had exceeded their production quotas in May, June and July will have to cut a combined extra 2.31 million b/d as compensation by the end of September, S&P Global Platts reported earlier. Notably, Iraq and Nigeria were the two biggest laggards, overproducing by 851,000 b/d over the three months, while Nigeria was over its limit by 315,000 b/d.

"Industry reports estimate that approximately 1.2 million b/d of additional cuts through August and September are needed to offset oversupply to date, implying OPEC+ cuts fall to 8.9 million b/d in the current phase instead of the 7.7 million b/d target," Stephen Innes, chief global markets strategist at AxiCorp, said in a Aug. 21 note.

These factors combined allowed Brent crude futures to continue to trade in a tight range around the USD45/b level, while NYMEX WTI stayed slightly below USD43/b.

However, the continued spread of COVID-19 worldwide continues to weigh heavily on economic recovery, reviving concerns of energy demand.

US initial jobless claims for the week ended Aug. 15 was reported at 1.11 million, higher than analysts' expectations of a 925,000 gain and the 971,000 figure reported in the previous week, US Labor Department data released on Aug. 20 showed.

Global COVID-19 case counts stood at 22,539,975, while total daily infections worldwide shot back up to 273,374 cases, slightly lower than the record of 304,449 cases set on Aug. 14, latest data from John Hopkins University showed.

"On the health front, there is no question that traders are still peering into a cloudy view-finder as even with new COVID-19 cases declining across the US, we know that can change on a dime as evidenced by recent second wave breakouts around the world. And it is going to take some time for people to feel safe to move freely and possibly only when a vaccine is in hand," Innes added.

As MRC wrote before, US crude oil stockpiles fell in the second week of August even as net imports jumped sharply, while fuel demand dipped as well, according to the US Energy Information Administration's statement. Crude inventories fell by 1.6 million barrels in the week to Aug. 14 to 512.5 million barrels, less than analysts’ expectations in a Reuters poll for a 2.7 million-barrel drop. Net US crude imports rose by 1.1 million barrels per day to 3.6 MMbpd, the EIA said.

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

MOSCOW (MRC) -- The US energy industry was preparing for a major hurricane strike, cutting crude production at a rate approaching the level of 2005’s Hurricane Katrina and halting oil refining at plants along the Texas/Louisiana coast, reported Reuters.

Officials in the two states called for hundreds of thousands of people to evacuate as Hurricane Laura intensified and forecasters predicted it would become a major hurricane with sustained, 115 mile per hour (185 kph) winds.

The intensification will bring at least a 10-foot (3-meter) storm surge to the upper Texas coast later this week and could produce a devastating category 4 hurricane, said Chris Kerr, a meteorologist at agriculture, energy and weather data provider DTN.

Oil producers on Tuesday had evacuated 310 offshore facilities and shut 1.56 million barrels per day (bpd) of crude output, 84% of Gulf of Mexico’s offshore production, near the 90% outage that Katrina brought 15 years ago.

The storm will make landfall by early Thursday in an area that accounts for more than 45% of total US petroleum refining capacity and 17% of oil production, according to the Energy Information Administration.

Refiners that produce gasoline and diesel fuel were taking steps to halt eight coastal facilities with nearly 2.78 million bpd of processing, 14.6% of the U.S. total capacity, according to Reuters tallies.

The impact on refineries so far is less than Hurricane Harvey, whose drenching rains took down nearly one quarter of US refining capacity three years ago.

US gasoline futures have jumped as much as 10% since Friday, while crude benchmarks settled at a five-month high on Tuesday due to the shutdowns.

“There will be a significant storm surge from Galveston (Texas) to the Sabine River,” an area encompassing some of the region’s largest refineries, said DTN’s Kerr. “There are ideal conditions in central and west Gulf for rapid intensification.”

Officials in several Texas and Louisiana communities called for mandatory evacuations affecting half a million people. Residents from areas of Houston to Orange, Texas, should flee the area and seek shelter inland, Texas officials said.

Cheniere Energy Inc, the largest US exporter of liquefied natural gas, evacuated staff and suspended operations at its Sabine Pass LNG export terminal on the Texas/Louisiana border.

Motiva Enterprises, Total SA and Valero Energy began cutting operations at their Port Arthur, Texas, refineries, according to people familiar with the matter.

Total, Motiva and Valero confirmed the shutdowns, and a Valero spokeswoman said it also was reviewing the risks to its Texas City, plant southeast of Houston.

Citgo Petroleum said it has begun to halt processing at its 418,000 bpd refinery in Lake Charles, Louisiana.

Exxon Mobil Corp also began shutting production at its large Beaumont, Texas, refinery and reduced output at its Baytown, Texas, plant ahead of a possible shutdown.

Exxon confirmed it was initiating a shutdown at Beaumont and was preparing for possible severe weather at its Baytown refinery and chemical complex, a spokesman said. If the Baytown plant fully halts processing, total shutdowns along the coast would hit 2.78 million bpd.

Ethylene and propylene are feedstocks for producing 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) -- Preparing for hurricane Laura, Phillips 66 began the shutdown of its Lake Charles manufacturing complex in Louisiana, which includes its 260,000 barrels per day refinery, reported Reuters.

The storm is forecast to be near major hurricane strength when it approaches the coast.

“Non-essential personnel have been released from work ahead of the storm,” the company said on its website.

As storms took aim at the US Gulf Coast, energy companies have moved to cut production at oil refineries after shutting 82% of the area’s offshore crude oil output.

As MRC informed before, earlier this month, US refiner Phillips 66 said it plans to reconfigure its refinery in Rodeo, California to produce renewable fuels from used cooking oil, fats, greases and soybean oils.

We remind that US-based Phillips 66 remains open to developing another ethane cracker for its Chevron Phillips Chemical (CP Chem) joint venture, the refiner's CEO said in March 2018.

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