Marathon Petroleum, top U.S. refiner, begins widespread job cuts

MOSCOW (MRC) -- Marathon Petroleum Corp., the largest U.S. oil refiner, began cutting jobs on Tuesday across the company, according to people familiar with the matter, as the COVID-19 pandemic sapped demand for motor fuels, said Hydrocarbonprocessing.

U.S. refiners have posted large losses this year as fuel consumption tumbled amid lockdowns and work-from-home policies to combat the spread of the coronavirus. Thin profit margins have been undercut by the need to operate plants at less than 80% capacity. Marathon officials are “communicating with our employees about measures we announced earlier this year to strengthen Marathon Petroleum for short-term and long-term success,” a spokeswoman said in a statement. She declined to comment on specific actions.

The Findlay, Ohio-based company has been shedding units to improve results. It had 60,000 employees as of Dec. 31, with two-thirds in retail operations that are being acquired by 7-Eleven Inc, an arm of Japan's Seven & i Holdings Co Ltd. About 60 salaried staff were let go by midday on Tuesday at Marathon’s large Galveston Bay plant in Texas and another 60 people were dismissed at the company’s Los Angeles refinery, the sources said.

The Galveston Bay operation may lose as many as 100 workers this week and up to 200 before the reductions end, one of the people said. As of Tuesday night, 45 salaried employees had been let go at the Garyville, Louisiana, refinery, sources said.

In August, Marathon began closing refineries in Martinez, California, and Gallup, New Mexico, eliminating 800 jobs. The latest cuts are across the company, one of the people said. It is expected to report a $623 million third-quarter loss on Nov. 2, according to IBES data from Refinitiv. It lost USD9.2 billion in the first half of the year, mostly on impairment charges.

Last week, LyondellBasell Industries also disclosed plans to cut 10% of staff at its Houston oil refinery because of heavy losses. Plant operations would be challenged for several years because of the drop in demand, a LyondellBasell executive said.

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) -- Sherwin-Williams (SW) has increased its full-year 2020 earnings and sales guidance due mainly to stronger-than-expected architectural coatings demand. The company now expects full-year earnings to total USD20.96-21.46/share, compared with prior guidance of USD19.21-20.71/share, said Chemweek.

Sales are now forecast to grow by 3-5% year-on-year (YOY), compared with a prior forecast calling for a low-single-digit percentage decrease. For the third-quarter, segment results have shown a stronger trajectory than expected. “The Americas group (TAG) third quarter net sales are expected to be up a low-single-digit percentage compared to our previous guidance of flat to up a low-single-digit percentage,” SW says. “The consumer grands group (CBG) third quarter net sales are expected to be up a low-twenties percentage compared to our previous guidance of up a low-double-digit percentage. The performance coatings group (PCG) third quarter net sales are expected to be flat to down a low-single-digit percentage compared to our previous guidance of down a low-to-mid-single-digit percentage."

The outlook for full-year segment sales has also improved. CBG sales are expected to increase by a double-digit percentage for the full-year, with TAG sales expected be flat to up by a single-digit percentage, and PCG forecast to fall by a low-to-mid single-digit percentage. The forecast for full-year earnings of USD20.96-21.46/share represents a 12.5% YOY increase at the midpoint.

"Demand for architectural coatings has been stronger than expected in the third quarter, led by our DIY, residential repaint and new residential segments,” says SW chairman and CEO John Morikis. “Demand on the industrial side of our business has also improved, led by continued strength in packaging and emerging momentum in other segments, most notably in automotive refinish and industrial wood. As a result, our sales expectations for the third quarter and full year 2020 have improved." SW will report third-quarter results on 27 October.

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) -- Indonesian petrochemical and gasoline producer TPPI will increase its aromatics capacity by 30pc by the end of 2021 through a planned USD180mn overhaul and maintenance programme, said Chemweek.

Paraxylene (PX) extraction capacity at TPPI's complex in Tuban, Java will increase from 600,000 t/yr to 780,000 t/yr, while benzene production capacity will rise from 360,000 t/yr to 490,000 t/yr. The company expects the expanded units to start production in early 2022.

The project will also expand an upstream platforming unit, raising reforming capacity by 5,000-10,000 b/d to 55,000 b/d. TPPI will need to buy heavy naphtha or additional condensate to operate the facility at full capacity following the expansion.

The expansion is the result of TPPI's need to replace existing equipment, which is coming to the end of its lifespan, with newer and more efficient facilities that will raise overall capacity.

TPPI will resume aromatics production at the end of this month at the expense of gasoline under its third-party processing agreement with state-owned refiner Pertamina.

TPPI has been focused on gasoline production since August 2019 because of expectations that aromatics margins would narrow. But Indonesian gasoline demand has fallen since the government imposed travel restrictions in April to curb the Covid-19 outbreak.

As MRC informed earlier, Russia's output of products from polymers grew in August 2020 by 4.1% year on year. However, this figure increased by 1.9% year on year in the first eight months of 2020. According to the Russian Federal State Statistics Service, August production of unreinforced and non-combined films rose to 126,300 tonnes from 118,200 tonnes a month earlier. Output of films products grew in January-August 2020 by 8.3% year on year to 863,200 tonnes.
MRC

MOSCOW (MRC) -- TechnipFMC says it has been awarded a contract by Shell to supply eight new ethylene furnaces at the Moerdijk petrochemicals complex in the Netherlands. The contract is described as “significant” by TechnipFMC, a term it uses to cover value between USD75 million and USD250 million, said Chemweek.

The work scope covers engineering, procurement, and module fabrication for proprietary equipment and related services for the furnaces, which will replace 16 existing furnaces at Shell’s complex. The new units will utilize TechnipFMC’s multilane radiant coil design and replace the older units without reducing the facility’s capacity, while also increasing energy efficiency and reducing greenhouse gas emissions, according to TechnipFMC. The Moerdijk cracker is one of Europe’s largest, with an ethylene production capacity of 940,000 metric tons/year.

The upgrade is expected to reduce Shell Moerdijk’s annual carbon dioxide emissions by about 10%, the contractor says. The new equipment will be shipped to the site in modules, enabling the steam cracker at Moerdijk to continue to operate throughout the upgrade, which was announced by Shell earlier this month. The modernization work is expected to be completed in 2025, Shell said when announcing the upgrade.

"We continue to invest in innovation, even in difficult economic times. This investment at Moerdijk contributes to the reduction of carbon emissions from our manufacture of chemicals and to Shell’s ambition of becoming a net-zero-emissions energy business by 2050 or sooner," says Richard Zwinkels, Shell’s general manager at Moerdijk.

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) -- BP will undertake maintenance work at its Gelsenkirchen-Scholven refinery complex in Germany starting in mid-October, said Chemweek.

The maintenance will take place at the northern site at Scholven and is expected to last about eight weeks, focusing on meeting unit inspection requirements, according to BP. The company did not specify the number of units affected or say whether output would be impacted.

BP was planning to carry out maintenance at Scholven in April but had to postpone it, citing the COVID-19 pandemic as the reason for the delay. Flaring might occur during the maintenance period, when parts of the system are taken out of service or put back into service and the excess gas that arises needs burning in a controlled manner, according to BP.

"The aromatics units had already been suspected to be offline over the summer, but it is unclear as to whether this was a commercial decision or due to technical issues at the plant," said Eleanor Dann, principal analyst at IHS Markit. BP has relied on para-xylene (p-xylene) production from its associated unit at Geel, Belgium, instead, she added.

The northern site at Scholven has a capacity to produce 150,000 metric tons/year of p-xylene and 75,000 metric tons/year of ortho-xylene (o-xylene) from mixed xylenes extracted at the refinery. Western European p-xylene demand has declined by 143,000 metric tons and o-xylene demand has fallen by 36,000 metric tons this year to date compared with 2019 levels, Dann estimated. She adds that the lost capacity has failed to make any significant impact on the market.

According to MRC's ScanPlast report, Russia's estimated PET consumption totalled 367,720 tonnes in the first six months of 2020, up by 19% year on year. Russian companies processed 62,910 tonnes in June. Russian plants reduced their PET output in January-June 2020 by 25% year on year. Overall PET chips production at four Russian plants reached 281,100 tonnes in January-June 2020.

BP operates two plants in the Horst and Scholven districts as an integrated refinery location at Gelsenkirchen. The BP complex produces a variety of refined oil and petrochemical products. Its main output by volume includes 1.05 million metric tons/year (MMt/y) of ethylene, 1.90 MMt/y of gasoline, and 4.20 MMt/y of diesel, according to BP data.
MRC