ADNOC invests USD245 MM on Jebel Dhanna terminal upgrades

MOSCOW (MRC) -- ADNOC Onshore, a subsidiary of the Abu Dhabi National Oil Company (ADNOC), announced the award of two Engineering, Procurement, and Construction (EPC) contracts to upgrade two Main Oil Lines (MOLs) and crude receiving facilities at the Jebel Dhanna Terminal in the Emirate of Abu Dhabi, according to Hydrocarbonprocessing.

The EPC contracts have a combined value of around USD245 million (AED 899.9 million) and were awarded to China Petroleum Pipeline Engineering Company Limited - Abu Dhabi and Abu Dhabi-based Target Engineering Construction Co. L.L.C.

Over 50 percent of the total award value will flow back into the UAE’s economy under ADNOC’s In-Country Value (ICV) program, underscoring ADNOC’s drive to prioritize ICV as it invests responsibly and pursues smart growth to maximize value from its assets and deliver sustainable returns to the United Arab Emirates (UAE).

Yaser Saeed Almazrouei, Executive Director of ADNOC’s Upstream Directorate, said: “The EPC contracts awarded by ADNOC Onshore will increase the capacity of the two main oil lines and upgrade the Jebel Dhanna Terminal to enable it to receive Upper Zakum and Non-System crude for delivery to the Ruwais Refinery West project. The awards follow a very competitive tender process and highlight how ADNOC is making smart investments to optimize performance and unlock greater value from our assets. Crucially, a significant portion of the awards will flow back into the UAE’s economy under ADNOC’s ICV program, reinforcing our commitment to maximize value for the nation as we create a more profitable upstream business and deliver our 2030 strategy.”

The EPC contract awarded to China Petroleum Pipeline Engineering Company Limited – Abu Dhabi is valued at approximately USD135 million (AED 496.8 million) and the scope is to replace the two MOLs which transport ADNOC’s premium grade Murban crude oil from its oilfields at Bab (BAB), Bu Hasa (BUH), North East Bab (NEB), and South East (SE) to Jebel Dhanna terminal, increasing the capacity of the pipelines by over 30 percent.

The contract is expected to be completed in 30 months and will see over 45 percent of the award value flow back into the UAE’s economy under ADNOC’s ICV program.

The EPC contract awarded to Target Engineering Construction Co.L.L.C. is valued at approximately $110 million (AED 403.7 million) and will see the contractor upgrade the crude receiving facilities at the Jebel Dhanna Terminal, enabling ADNOC to utilize parts of the terminal’s existing facilities to import Upper Zakum (UZ) crude oil from offshore and Non-System (NS) crude, for delivery to the new Ruwais Refinery West (RRW) project, located approximately 12 kilometers to the east of Jebel Dhanna terminal.

This ability to import other grades of crude at Jebel Dhanna following the completion of the project will provide ADNOC greater flexibility, highlighting how the company is extracting value from every barrel of crude it produces. The terminal was originally conceived and operated as a Murban crude oil export facility since its inception in the 1960s.

The contract is expected to be completed in 20 months and will see over 60 percent of the award value to Target Engineering flow back into the UAE’s economy under ADNOC’s ICV program.

As part of the selection criteria for the awards, ADNOC carefully considered the extent to which bidders would maximize ICV in the delivery of the project. This is a mechanism integrated into ADNOC’s tender evaluation process, aimed at nurturing new local and international partnerships and business opportunities, fostering socio-economic growth, and creating job opportunities for UAE nationals. The successful bids by the two contractors prioritized UAE sources for materials, local suppliers and workforce.

As MRC informed earlier, in early May, 2020, Abu Dhabi National Oil Company (ADNOC) began a gradual restart of its Ruwais oil refinery complex after a scheduled maintenance shutdown. The Ruwais complex, which has capacity of 835,000 barrels per day, was shut down early this year, the ADNOC spokesman said.

And in late July 2019, ADNOC said its Ruwais refinery west cracker was offline for maintenance.

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

Axens to license alpha-olefins technology for Baltic chemical complex in Russia

MOSCOW (MRC) -- Axens says it will license its alpha-olefins production technology to Baltic Chemical Plant LLC (BCP LLC), a subsidiary of RusGazDobycha (Moscow, Russia), for its gas-based petrochemical project at Ust-Luga, near St. Petersburg, Russia, said Chemweek.

Axens will supply its AlphaButol technology for the production of high-purity butene-1 by ethylene dimerization, and its AlphaHexol process to produce high-purity 1-hexene through ethylene trimerization. Both products are used as comonomers in the production of various grades of polyethylene (PE), including linear low-density polyethylene (LLDPE) and high-density polyethylene (HDPE).

Butene-1 will be produced at two 60,000-metric tons/year units at the petchems complex, while 1-hexene will be produced at a single 50,000-metric tons/year plant on the same site. The agreement includes the transfer of the license, the process book, a number of chemicals such as catalysts and adsorbents, and proprietary equipment, says Axens. It will also provide training to the customer’s employees, plus technical support, it says.

"Work on the construction of a gas chemical complex, as part of an ethane-containing gas processing complex, is proceeding according to the schedule," says Konstantin Makhov, project operator BCP LLC’s general director. “Conclusion of an agreement for the supply of technology for the production of alpha-olefins is the completion of the next significant stage in the project," he says.

The gas chemical project being built on the shore of the Gulf of Finland is planned to produce 3 million metric tons/year of PE, alongside an integrated complex for processing and liquefying natural gas, as well as marine terminals for the shipment of commercial products. The overall USD13.2-billion ethane gas processing complex is a joint project between RusGazDobycha and Gazprom (Moscow). Long-term contracts were signed by both companies in June guaranteeing the supply of 45 billion cubic meters/year of ethane feedstock for a period of at least 20 years.

According to MRC's ScanPlast report, Russia's overall PE production totalled 1,712,400 tonnes in the first seven months of 2020, up by 58% year on year. Linear low density polyethylene (LLDPE) accounted for the greatest increase in the output.

BCP LLC chose Univation Technologies’ Unipol PE process for six 500,000-metric tons/year PE lines at the complex last year. China National Chemical Engineering Co. (CNCEC) will build the complex, centered on two steam crackers, each with capacity to produce 1.4 million metric tons/year of ethylene. The complex will also have capacity for 274,000 metric tons/year of linear alpha-olefins (LAO). The units are slated for start-up during 2023–24. Lummus Technology will provide the process design package, engineering, and the license for the olefin production and recovery units.
MRC

Petrochemical demand on the rise but will only provide limited support to oil, gas

MOSCOW (MRC) -- Global petrochemical demand will continue to grow but as more recycled material is used as a feedstock in production, support from the sector to the upstream oil and gas industries seems to be limited, industry experts said during a panel discussion at the Asia Pacific Petroleum Virtual Conference, or APPEC 2020, on Sept. 15, said S&P Global.

We are not going to see any peak in the near future," Maria Victoria Zingoni, executive managing director of commercial businesses and chemicals, chairwoman of Repsol Electricity and Gas, said during the discussion.
Nevertheless, industry experts believe that the way of producing petrochemicals in the future will be changed dramatically, providing limited support to the upstream oil sector.

"Today, we have a virgin feedstock ratio of about 98%, so nearly all of the feedstock to petrochemical is coming from new sources....There will be definitely more recycled feedstock getting into the value chain. There are studies by consultants saying that this ratio will increase to 60% in the long term. So the trend is definitely, and it has to be, towards circular economy," said Michael Spitzbart, vice president for crude and risk management at OMV Downstream GmbH.

Plastics recycling is undoubtedly a trend that will continue as many global majors have committed to using recycled plastics in their various packaging applications, Mathew George, head of petrochemical exports at Indian Oil Corporation, said during the panel discussions. Meanwhile, there is a lot of new petrochemical capacity coming online in Asia and the Middle East.

"It could lead to a problem of temporary oversupply of virgin materials, however...I don't think that's going to impact the pricing of virgin products substantially," George said, adding that there is unlikely to be price-driven competition between virgin and recycled products producers in the long term.

"The fossil fuel feedstock for petrochemical stands for less than 10% [of total oil production. I guess it is in the range of 5-8%. So petrochemical will not eat up the full amount of demand loss of oil," Spitzbart added.

"Based on Analytics view, it is probably that oil demand, excluding petrochemicals, will peak by the end of this decade. But petrochemicals will add to the demand, so meeting the peak oil is perhaps more towards the back end of the 30s or early 40s," said Chris Midgley, global director of Platts Analytics.

Ethylene and propylene are feedstocks for producing PE and polypropylene (PP).

According to MRC's ScanPlast report, Russia's overall PE production totalled 1,712,400 tonnes in the first seven months of 2020, up by 58% year on year. Linear low density polyethylene (LLDPE) accounted for the greatest increase in the output. At the same time, overall PP production in Russia increased in January-July 2020 by 24% year on year to 1,063,700 tonne. ZapSibNeftekhim accounted for the main increase in the output.
MRC

Chinese national oil companies outline early green energy plans

MOSCOW (MRC) -- China’s top state oil and gas producers - PetroChina, Sinopec Corp and CNOOC Ltd - are working on the following green initiatives, reported Reuters with reference to company executives' statements at earnings briefings and email replies.

Asia’s largest oil and gas producer, Petrochina said in late August it aims for near-zero greenhouse gas emissions by 2050, the first Asian national oil company to set that target.

It plans to spend up to USD1.5 billion annually by 2025 - a more than five-fold increase from current levels, and roughly 4% of its 2020 total spend - on a mix of gas power generation, geothermal, wind, solar and hydrogen projects. It did not provide a breakdown.

The company carried out pilot projects on geothermal and biofuels in northern China, and aims to continue investing in those sectors.

In July, PetroChina’s parent group CNPC revealed its target to slash methane emission intensity by 50% by 2025.

Last month, PetroChina set up a hydrogen joint venture with Shanghai’s Shenergy Group in which it holds a 40% stake.

The world’s largest oil refiner is the most ambitious on hydrogen among domestic rivals, owning annual output capacity of 3 million tonnes, or 14% of the national total, at its refineries. It wants to become the industry leader.

Sinopec plans to build several “hydrogen highway corridors” along China’s east coast by adding hydrogen refueling stations alongside its 30,000-strong petrol stations.

It has created a 6-person new energy office under the group’s planning department and established a R&D center of 48 staff.

Last month, Sinopec announced its first capital investment in solar, by investing in photovoltaic glass maker Fengyang Sillicon Valley Intelligence Co.

China’s leading shale gas developer, Sinopec also aims to nearly double its output of the unconventional fuel to 13 billion cubic metres by 2025.

The offshore oil and gas specialist CNOOC revived activities in offshore wind power in 2019 after closing its renewable unit in 2014, planning to spend 3% to 5% of its annual budget on the sector.

Its first 300-megawatt wind power plant off Jiangsu province is due online at the end of 2020 and it has planned other projects off Guangdong and Shandong provinces.

The company also plans to more than double its natural gas production by 2025 to make up 30% of its total oil and gas output from the current 19%.

As MRC informed earlier, Sinopec Shanghai Petrochemical, a refining subsidiary of Asia's top refiner Sinopec, plans to raise daily crude oil throughput by 7.8% in the second half of 2020. The Chinese company aims to process 7.68 million tonnes of crude oil in July-December, equivalent to 304,700 barrels per day.

We remind that Sinopec Zhongyuan Petrochemical, also part of Sinopec Group, is in plans to bring on-stream its cracker following a maintenance turnaround. The company is likely to resume operations at the cracker by mid-September, 2020. The cracker was shut for maintenance on August 1, 2020. Located at Henan in China, the cracker has a ethylene capacity of 220,000 mt/year and propylene capacity of 95,000 mt/year.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's overall PE production totalled 1,712,400 tonnes in the first seven months of 2020, up by 58% year on year. Linear low density polyethylene (LLDPE) accounted for the greatest increase in the output. At the same time, overall PP production in Russia increased in January-July 2020 by 24% year on year to 1,063,700 tonne. ZapSibNeftekhim accounted for the main increase in the output.
MRC

Kemira extends polymer supply agreement with UK oil extraction firm

MOSCOW (MRC) -- Kemira has signed a multiyear extension of its polymer supply agreement with Ithaca Energy, the Finnish chemicals company said on Wednesday.

Kemira says it has signed a multiyear extension to its polymer supply agreement with Ithaca Energy (Aberdeen, UK). The agreement extends the contract between the two companies, signed in 2018, covering the supply of polymers to enhance oil extraction performance at one of the assets operated by Ithaca Energy in the UK North Sea.

The extended supply agreement is expected to utilize product from an expansion of polymer production capacity for chemical enhanced oil recovery at Kemira's Botlek, Netherlands, site that took place in 2017, the company says.

The financial or volumes details of the supply deal with Ithaca were not disclosed.

Ethylene and propylene are feedstocks for producing PE and polypropylene (PP).

According to MRC's ScanPlast report, Russia's overall PE production totalled 1,712,400 tonnes in the first seven months of 2020, up by 58% year on year. Linear low density polyethylene (LLDPE) accounted for the greatest increase in the output. At the same time, overall PP production in Russia increased in January-July 2020 by 24% year on year to 1,063,700 tonne. ZapSibNeftekhim accounted for the main increase in the output.
MRC