Stronger Hurricane Laura aims at heart of US oil refining industry

MOSCOW (MRC) -- Hurricane Laura strengthened on Wednesday as it churned over evacuated oil-production platforms in the US Gulf of Mexico and took aim at the energy industry’s refining hub along the Texas/Louisiana coast, reported Reuters.

The storm is forecast to become a Category 4 hurricane with catastrophic, 130 mile (209 km) per hour winds that will drive ocean waters up to 30 miles inland, forecasters said.

A half a million people in the two states fled the storm, clogging highways out of the area. Laura is forecast to dissipate quickly after landfall either late Wednesday or early Thursday, with the greatest danger more from wind and storm surges than rain.

Nine oil-processing plants that convert nearly 2.9 million barrels per day of oil into fuel, and account for about 15% of US processing were shutting down. Chevron Corp and Motiva Enterprises halted two oil refineries in the area on Wednesday.

The storm track will bring devastating winds and a storm surge to an area spanning Port Arthur, Texas, to Lake Charles, Louisiana, forecasters said, an area with a half-dozen large oil refineries and natural-gas processing plants.

The most powerful storm to hit the area since Hurricane Rita in 2005 could deliver an up to 15-foot (4.6-m) storm surge to the plants along the Texas/Louisiana border, the National Hurricane Center said.

Coastal area will see large and destructive waves accompanied by a storm surge that “could penetrate up to 30 miles inland from the immediate coastline,” according to NHC forecaster Daniel Brown.

Oil producers on Tuesday had evacuated 310 offshore oil facilities and shut 1.56 million barrels per day (bpd) of crude output, 84% of Gulf of Mexico’s offshore production.

As the storm prepared to strike the Texas/Louisiana border, refiners further west were expecting to ride it out. Marathon Petroleum Corp plans normal production at its large refinery in Texas City, according to people familiar with the matter. Marathon did not have an immediate response.

As MRC wrote before, Marathon Petroleum has recently sold its Speedway retail operations and is keeping offline two refineries shut earlier during the coronavirus pandemic, while increasing runs at its other refineries in the third quarter to meet rising demand following the easing of coronavirus-induced lockdowns.

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) -- Executives of 16 US refiners have asked President Donald Trump to side with small refineries on pending petitions for small refinery hardship relief under the Renewable Fuel Standard (RFS) in conversations with the Environmental Protection Agency, reported Reuters with reference to a letter signed on Monday.

“We ask that you resist efforts to harm the critical energy infrastructure you have fought so hard to protect during your Presidency under the false premise that doing so will help farmers,” wrote executives at refiners, including Par Hawaii Refining, Sinclair Casper Refining and Calumet Montana and Shreveport Refining.

The US Department of Energy recommended that some of the oil refiners that applied for retroactive exemptions from the nation’s biofuel blending law be granted partial relief, Reuters reported earlier this month.

As MRC wrote before, the US Department of Energy has finished reviewing retroactive requests from refiners for exemptions from the nation’s biofuel blending laws and has sent recommendations on how to address those requests to the Environmental Protection Agency, Senator Chuck Grassley said in mid-August. The EPA now has 90 days to review the recommendations, said Grassley, a senator from Iowa, the top ethanol-producing state. The agency will consider 58 pending requests for compliance years 2011 through 2018, EPA data showed.

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) -- Evonik Industries says it is acquiring catalyst rejuvenation firm Porocel Group (Houston, Texas) for USD210 million, as per the company's press release.

The purchase price is 9.1 times adjusted EBITDA in 2019, which Evonik says “is an attractive valuation for a high-quality asset in the catalyst sector.” The transaction will be financed by Evonik's "strong cash position" and is expected to close by the end of 2020 subject to approval by the relevant authorities, the company says.

The acquisition of Porocel expands significantly Evonik’s catalyst portfolio and especially its catalyst production capabilities, the company says. Sales of the combined catalyst business are expected to grow to more than EUR500 million (USD590 million) by the end of 2025 without the need for investment in new capacities, Evonik says.

“This acquisition is the next logical step in the strategic development of our portfolio. Our focus is on stable and high-margin specialty chemicals,” says Christian Kullmann, chairman of Evonik. “We are systematically expanding the share of our specialty businesses - and at an attractive valuation.”

Porocel generated sales of approximately USD100 million with an EBITDA of about USD23 million and EBITDA margin at about 23% in 2019, which is above Evonik's target range of 18-20%, the company says. Porocel has increased its EBITDA significantly in the last three years, driven by new product development through an expansion of R&D capabilities, Evonik says. It has more than 300 employees worldwide and production facilities in the US, Canada, Luxembourg, and Singapore.

Porocel offers a technology for rejuvenation of desulfurization catalysts, which are in increasing demand for producing low-sulfur fuel, Evonik says. Rejuvenation reduces CO2 emissions by more than 50% compared with the production of new desulfurization catalysts, it says.

As MRC reported before, Dow and Evonik have recently entered into an exclusive technology partnership. Together, they plan to bring a unique method for directly synthesizing propylene glycol (PG) from propylene and hydrogen peroxide to market maturity.

Propylene is the main feedstock for the production of polypropylene (PP).

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.

Evonik is one of the world leaders in specialty chemicals. The focus on more specialty businesses, customer-oriented innovative prowess and a trustful and performance-oriented corporate culture form the heart of Evonik’s corporate strategy. They are the lever for profitable growth and a sustained increase in the value of the company. Evonik benefits specifically from its customer proximity and leading market positions. Evonik is active in over 100 countries around the world with more than 36,000 employees.
MRC

MOSCOW (MRC) -- Henkel says its subsidiary in North America, Henkel North America, has joined the US Plastics Pact, a collaborative initiative that aims to drive significant systems change by unifying diverse cross-sector approaches, setting a national strategy, and creating scalable solutions to create a path toward a circular economy for plastics in the US by 2025, reported Chemweek.

The US Plastics Pact is the first North American collaboration of its kind and is led by The Recycling Partnership, World Wildlife Fund, and Ellen MacArthur Foundation, the company says.

The US pact is complementary to, and follows the precedents set by the existing global network of plastics pacts, but it will be tailored to meet the unique needs and challenges of the US market, Henkel says. It will convene more than 70 brands, retailers, NGOs, and government agencies across the plastics value chain to bring one voice to US packaging through coordinated initiatives and innovative solutions for rethinking products, packaging, and business models, the company says.

The first task of the founding members of the US Plastics Pact will be to establish a “roadmap” in the first quarter of 2021 to identify key milestones and national solutions to achieving the US targets and realize a circular economy in which plastic never becomes waste, the company says.

As part of its broader sustainability strategy, Henkel has set global climate and energy commitments including being climate positive by 2040, with 2025 targets that include a 65% reduction in CO2 emissions from its production, and a reduction of 100 million metric tons of CO2 saved together with its consumers, customers, and suppliers, the company says.

As MRC informed earlier, Henkel AG & Co. KGaA (Dusseldorf, Germany) announced that Henkel Adhesives Technologies has officially inaugurated its new production facility in Kurkumbh, India.

Henkel is also partnering with Borealis and plastics solutions company Borouge to develop flexible packaging solutions for detergents containing both virgin polyethylene (PE) and high amounts of post-consumer recyclate (PCR) in efforts to increase sustainability.

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.
MRC

MOSCOW (MRC) -- China's Jiangsu Sailboat Petrochemical, also known as Jiangsu Shenghong, will maintain the run rate at its second 260,000 mt/year acrylonitrile (ACN) plants at Lianyungang at half the rate for the short run, reported S&P Global.

The company shut down its both 260,000 mt/yr ACN plants on July 16, 2020 due to the unexpected outage of its upstream methanol-to-olefins plant. The second ACN plant resumed operations on August 6, 2020.

Jiangsu Sailboat is not running the second ACN plant at full due to the lack of propylene feedstock.

As MRC informed before, in March 2018, Honeywell announced that Jiangsu Sailboat Petrochemical Company, Ltd. had accepted a new methanol-to-olefins (MTO) unit provided by Honeywell UOP, and that the plant was operating and had met all guarantees. With a production capacity of 833,000 metric tons per year, the unit is the largest single-train MTO unit in the world. Honeywell UOP, which pioneered MTO technology, started its first MTO unit for China's Wison Clean Energy in 2013.

ACN is a feedstock for the production of acrylonitrile-butadiene-styrene (ABS).

According to MRC's ScanPlast report, the estimated consumption decreased in January-June 2020 by 18% year on year in the Russian ABS sector, totalling 19,360 tonnes. 2,680 tonnes of ABS plastics were processed in Russia in June 2020.

Jiangsu Sailboat Petrochemical, part of the Shenghong Holding Group, is a major petrochemical manufacturer in China, including polyethylene (PE) and ethylene-vinyl-acetate (EVA). The company's production facilities are located in the new Xuwei Industrial Park in Lianyungang City, Jiangsu Province.
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