Baofeng Energy awards contracts to KBR for Chinese MTO project

MOSCOW (MRC) -- Ningxia Baofeng Energy Group Co. (Baofeng Energy) has selected KBR's proprietary cracker technology for its new methanol-to-olefins (MTO) project to be built in Ningxia, China, according to Apic-online.

Under the contracts, KBR will provide process technology licensing and process design packages for Baofeng Energy's 500,000-t/y coal-to-olefins facility and its 500,000-t/y C2-C5 comprehensive utilization project.

Once complete, the complex will be the "largest" single-train MTO plant in the world, KBR noted. Value of the contracts and a project schedule were not given.

"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," said KBR.

"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."

Johnson Matthey was recently chosen to be the licensor and supplier of associated engineering, technical review, commissioning assistance, catalyst and equipment supply for a new methanol synthesis unit for the project.

As MRC reported earlier, Ningxia Baofeng Energy has brought on-stream its No.1 MTO unit following a maintenance turnaround. The 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

Shell restarting FCC at Deer Park, Texas refinery

MOSCOW (MRC) -- Royal Dutch Shell Plc has restarted the gasoline-producing fluid catalytic cracker (FCC) at its 318,000 barrel-per-day (bpd) Deer Park, Texas refinery, reported Reuters with reference to sources familiar with plant operations.

The 70,000-bpd FCC was shut on Aug. 23, the sources said.

As MRC wrote before, in late August 2020, US producers took steps to either evacuate crews from Gulf of Mexico platforms as Tropical Storms Marco and Laura continued their northward push toward the Gulf Coast and expected landfalls at the end of last week of August. Shell said Aug. 22 that it was shutting in production at the "majority" of its Gulf of Mexico assets and evacuating crews from platforms.

We remind that 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 also 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

Saudi Aramco slows diversification plans amid industry downturn

MOSCOW (MRC) -- Oil company Saudi Aramco is reviewing plans to expand at home and abroad in the face of sharply lower oil prices and a heavy dividend burden, reported Reuters with reference to the Wall Street Journal, citing people familiar with the matter.

Aramco will review a USD6.6 billion plan to add petrochemical output at its Motiva refinery in Texas, as well as a big natural-gas project with Sempra Energy in the same state, according to the report.

The state-run company is also pausing investments in refineries in China, India and Pakistan, the WSJ said.

Oil companies globally have been cutting spending across the board to shore up cash as the industry contends with a realization that lower crude prices could be the norm for a long period of time after the COVID-19 pandemic sapped fuel demand.

In Saudi Arabia, Aramco is delaying plans by a year to boost crude production capacity to 13 million barrels a day, from currently about 12 million, the report added.

The company plans to cut its capital spending to between USD20 billion and USD25 billion this year to pay a USD75 billion dividend it pledged to investors during its initial public offering last year, the Financial Times reported last month.

Aramco did not immediately respond to a Reuters request for comment.

As MRC informed earlier, Saudi Aramco has recently suspended plans to participate in a joint venture (JV) to build a USD10-billion refining and petrochemicals complex at Liaoning, China, as the company cuts spending in response to continued low oil prices.

Besides, Saudi Aramco exited plans to participate in a refinery and aromatics JV with Pertamina in Indonesia earlier this year.

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.

Saudi Aramco is an integrated oil and chemicals company, a global leader in hydrocarbon production, refining processes and distribution, as well as one of the largest global oil exporters. It manages proven reserves of crude oil and condensate estimated at 261.1bn barrels, and produces 9.54 million bbl daily. Headquartered in Dhahran, Saudi Arabia, the company employs over 61,000 staff in 77 countries.
MRC

ExxonMobil weighs global job cuts after unveiling Australian lay-off plan

MOSCOW (MRC) -- ExxonMobil Corp is assessing possible worldwide job cuts, a spokesman said, after the company announced a voluntary lay-off program in Australia, according to Hydrocarbonprocessing.

Exxon is the latest oil major to embark on axing jobs spurred by a historic collapse in fuel demand because of the coronavirus pandemic.

The company has slashed capital spending this year by 30% to around USD23 billion and said in August it planned both capital and operating expense cuts to defend its dividend after reporting losses in the first and second quarters.

“We have evaluations underway on a country-by-country basis to assess possible additional efficiencies to right-size our business and make it stronger for the future,” spokesman Casey Norton, based at the company headquarters in Irving, Texas, said in emailed comments to Reuters.

The comments mark a shift, after Exxon told Reuters in July it had no plans for layoffs due to the pandemic and no percentage targets to reduce its workforce through this year’s employee reviews.

In Australia, Exxon said on Wednesday it had completed a review of its current and future project work in the country and was seeking volunteers to quit the company.

“This program will ensure the company manages through these unprecedented market conditions,” it said in a statement.

“Until other study work is complete, it would be premature to draw conclusions for other countries,” Norton said.

Exxon is looking to sell its 50% stake in the Bass Strait oil and gas joint venture in southeastern Australia, which analysts have estimated could fetch up to USD3 billion.

Analysts have speculated it could also sell or close its Altona plant in Melbourne, Australia’s oldest refinery.

As MRC informed earlier, ExxonMobil has put off for a year work on its refinery expansion in Beaumont, Texas. The expansion project is now slated to be online sometime in 2023, versus the original 2022 proposal. Bloomberg first reported the delay. ExxonMobil declined to confirm the story, noting that it does not comment on the status of individual projects. The company "is evaluating all appropriate steps to significantly reduce capital and operating expenses in the near term as a result of market conditions caused by the COVID-19 pandemic and commodity price decreases," the company 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.

ExxonMobil is the largest non-government owned company in the energy industry and produces about 3% of the world's oil and about 2% of the world's energy.
MRC

COVID-19 - News digest as of 03.09.2020

1. High petrochemical inventories in China dampen trade activity in August

MOSCOW (MRC) -- High levels of petrochemicals stored in China's tanks and warehouses, much of which was purchased during the price trough in March-April, are slowing import demand into China in August, reported S&P Global with reference to market sources. Despite inventory drawdowns in recent weeks, styrene monomer stockpiles remain above 300,000 mt in East China, keeping shore tanks filled to the brim, due in part to concentrated arrivals and a slowdown in consumption. Tank shortage and port congestion have led to an average 8-10 day waiting time for vessels offloading, one market source said, while traders were heard to be bearing higher demurrage costs, especially for import cargoes. "Given ample supplies and tight storage space, nobody in China is in a hurry to buy styrene cargoes at present," a downstream producer source said. Benzene commercial storage swelled to more than 283,000 mt in the last week of July, with further increases expected in the first week of August.

MRC