Oiltanking commissions butane storage tank in Antwerp

MOSCOW (MRC) -- Tank storage company Oiltanking (Hamburg, Germany) says a wholly owned subsidiary has commissioned a new butane storage tank at the port of Antwerp, Belgium, that will store gas on behalf of Ineos for use at its nearby petrochemical manufacturing facilities, said Chemweek.

The subsidiary, Oiltanking Antwerp Gas Terminal (OAGT), says the fully refrigerated, double containment tank has a capacity of 135,000 cubic meters, doubling the company’s storage capacity at Antwerp. A second fully refrigerated tank with similar storage dimensions is also under construction on the same site, it says.

OAGT is one of Europe’s largest independent terminals for storage, throughput, and distribution of liquefied petroleum gas and petrochemical gases. Oiltanking is a subsidiary of Marquard & Bahls (Hamburg), an energy and chemicals trading and logistics company.

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

PDVSA customers schedule last oil cargoes amid US-imposed wind-down

MOSCOW (MRC) -- A handful of long-term customers of Venezuela’s PDVSA have begun winding down oil trade with the state-run company by scheduling the last cargoes to depart from the sanctioned country ahead of a US deadline, reported Reuters with reference to five sources close to the decisions.

The US government has given the firms - which include Spain's Repsol, Italy's Eni, India's Reliance Industries and Thailand's Tipco Asphalt - deadlines ranging between October and November for ending exemptions to the sanctions allowing some companies still to receive Venezuelan oil, the sources said.

With US elections looming in November, the Trump administration is seeking to raise the heat on Venezuelan President Nicolas Maduro, whose 2018 re-election was not recognized by most Western nations.

Repsol, which since late 2018 had been receiving crude under a swap deal with PDVSA authorized by the US Treasury Department allowing the Spanish company to cash pending debt, received its most recent cargo of Venezuelan oil this month on tanker Delta Ios, according to PDVSA’s exports schedules.

The company does not plan to charter a new vessel to pick up Venezuelan crude after October, a company source said. In response to Reuters’ questions, a Repsol spokesman said the firm “abides by the international norms in force and will keep on abiding.”

Eni, currently receiving crude under a similar swap deal, plans to take a Venezuelan oil cargo later this month on tanker Delta Captain and probably another in October before temporarily ending trade, according to PDVSA’s documents and a company source.

A spokesperson for Eni declined to comment on specific cargoes, but said the company “is operating and will operate in full compliance with applicable sanctions regulations and in continuous dialogue with the relevant authorities.”

Thailand’s Tipco Asphalt has three more cargoes of Venezuelan heavy crude scheduled to load through October, all of them bound for its Kemaman refinery in Malaysia, according to the documents and a company source.

Tipco Asphalt said in a letter to Thailand’s stock exchange this month that the US State Department had contacted the firm in August asking it to wind down procurement of Venezuelan oil by the end of November, warning the company that it could be subject to US sanctions in the event of non-compliance.

Tipco added this it was “taking steps to comply with such request,” including a temporary shutdown of its Kemaman refinery until finding alternative oil supplies.

The company did not immediately respond to an emailed request for further comment.

And Reliance Industries, which in July received a temporary US authorization to swap Venezuelan oil for diesel for the OPEC-member nation, has received some 4 million barrels of Venezuelan crude so far this month and plans to import almost 5 million barrels more in the coming weeks, the PDVSA documents showed.

A source close to Reliance’s plans said the firm will halt imports of Venezuelan oil in November and also shipments of diesel to the nation after a cargo currently on its way.

The pause would last for at least two months and a decision on whether to resume the trade would be taken after the US election.

Reliance and PDVSA did not reply to requests for comment.

As PDVSA’s pool of traditional customers has shrunk since last year due to sanctions, sales to mostly unknown or inexperienced firms accused by Washington of acting as shell companies have partially replaced them. A large portion of the crude taken by these firms ends up in China.

Venezuela has also received help from Iran this year as trade between the two sanctioned nations has deepened. A large tanker that delivered Iranian condensate to PDVSA earlier this month is now loading Venezuelan crude for Iran’s national oil company.

It is yet unknown if Washington will resume authorizing PDVSA’s customers to take Venezuelan oil under swap deals.

The US Treasury Department declined to comment.

US special envoy for Venezuela and Iran, Elliott Abrams, told Reuters that sanctions are “increasingly effective in denying revenue” to Maduro’s administration.

“Around the globe, leading companies are abiding by our sanctions, and acting responsibly and transparently. We appreciate their cooperation,” he added.

Even though scheduled cargoes of Venezuelan crude for Repsol, Eni, Tipco and Reliance are expected to finish soon once authorizations granted by Washington expire, the exchanged fuels most of these companies are delivering to PDVSA have continued arriving in Venezuelan ports, the documents also showed.

Venezuela expects the arrival this month of about 820,000 barrels of Iranian gasoline on tankers Forest, Faxon and Fortune, currently crossing the Atlantic Ocean.

As MRC informed before, Russian state oil company Rosneft's decision to cease operations in Venezuela and sell its assets there to a Russian government-owned company was a "maneuver" made in reaction to collapsing oil prices, a US State Department official said earlier this year.

We remind that Angarsk Polymers Plant, part of Russian oil giant Rosneft, has resumed its low density polyethylene (LDPE) production after an unscheduled shutdown because of a technical issues at the ethylene unit. The plant"s customers said Angarsk Polymers Plant had brought on-stream its LDPE production by 28 August after the forced shutdown due to technical problems at its ethylene production. And the first shipments of polyethylene (PE) to customers began on 31 August. The outage lasted slightly over two weeks and began on 10 August The plant"s annual production capacity is about 75,000 tonnes.

According to MRC's ScanPlast report, June estimated LDPE consumption in Russia grew to 55,260 tonnes from 45,490 tonnes a month earlier. Kazanorgsintez raised its PE output after a spring shutdown for a scheduled turnaround. Russia's estimated LDPE consumption rose to 291,270 tonnes in January-June 2020, up by 5% year on year. Russian producers raised their production, and LDPE imports also increased.

We also remind that 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

Shale bankruptcies pile on, Lonestar latest to succumb to weak demand

MOSCOW (MRC) -- Lonestar Resources US Inc filed for Chapter 11 bankruptcy protection on Thursday, joining a clutch of shale companies that have succumbed to weak crude prices as COVID-19 pandemic crimps fuel demand, said Hydrocarbonprocessing.

Lonestar, which operates in Texas’ Eagle Ford basin and produced roughly 14,000 barrels of oil equivalent per day, had a total debt of USD546.3 million as of June 30 and made the move after defaulting on two debt payments.

Shares of the company fell 13% to 20 cents, shrinking its market capitalization to just over USD5 million from nearly USD350 million at its peak in 2014. Weak crude demand due to the pandemic has proved to be a double-whammy for shale companies, which grew rapidly early in the decade but in the process amassed a large pile of debt.

Through the end of August, 36 oil and gas producers with USD51 billion debt have filed for bankruptcy this year, according to the law firm Haynes and Boone. It includes Chesapeake Energy, Chaparral Energy, Whiting Petroleum Corp., and Oasis Petroleum Inc filed for Chapter 11 on Tuesday.

Industry experts expect more companies to file for bankruptcy before the year is over. Gas producer Gulfport Energy Corp, which has hired a debt restructuring adviser, has interest payments on its debt due on Oct. 15, Nov. 1 and Nov. 15.

The upcoming biannual review of how much money energy companies can borrow against the value of their oil and gas reserves can also push some of the smaller companies, already struggling to find other methods of financing, into bankruptcy.

As mRC informed earlier, US propane and propylene stocks surged 4.1 million bbl during the week ended 25 September, according to the US Energy Information Administration (EIA). Nationwide stocks totaled 102 million bbl, up 4.2% on the week and 5.9% above year-ago levels. An OPIS survey of market participants on Tuesday called for an average build of 2.2 million bbl on the week, with estimates ranging from 500,000 bbl to 4 million bbl.

As per MRC's DataScope report, Russian companies significantly raised their purchasing of PP in foreign markets in August partially because of a major increase in demand, imports were 21,200 tonnes versus 17,200 tonnes a month earlier. Thus, overall PP imports into Russia reached 143,200 tonnes in January-August 2020, compared to 120,100 tonnes a year earlier. Purchasing of all grades of propylene polymers in foreign markets increased, with homopolymer PP imports accounting for the most noticeable rise.

MRC

LyondellBasell, Sasol agree on USD2-billion Lake Charles JV

MOSCOW (MRC) -- LyondellBasell and Sasol have agreed to form a joint venture (JV), under which LyondellBasell will pay USD2 billion to acquire 50% of Sasol’s new 1.5-million metric tons/year steam cracker, and low-density polyethylene (LDPE) and linear low-density polyethylene (LLDPE) plants with combined capacity for 900,000 metric tons/year, as well as associated infrastructure, at Lake Charles, Louisiana, said Chemweek.

The agreement includes customary rights for each partner regarding the potential future sale of its ownership interest, the companies say in a joint statement. The JV will operate under the name Louisiana Integrated PolyEthylene JV LLC. LyondellBasell and Sasol will each provide pro-rata shares of ethane feedstock to the cracker and offtake pro-rata shares of cracker and polyethylene (PE) products at cost, they say. LyondellBasell will operate the assets on behalf of the JV.

Sasol says it carried out a process to determine “the optimal partnership construct” for its US base chemicals business. The proposal by LyondellBasell “offered the best combination of upfront and long-term value, consistent with Sasol’s long-term strategic priorities,” it says. The transaction, subject to customary regulatory approvals and approval by Sasol shareholders, is expected to close by the end of the year. A number of Sasol’s US employees will transfer to LyondellBasell when the transaction closes.

Other companies that reportedly made offers to Sasol in discussions earlier this year for the assets include CPChem and Ineos. Sasol will retain full ownership and operational control of its existing 454,000-metric tons/year Lake Charles East Plant ethane cracker, an R&D complex, and its performance chemicals assets at Lake Charles producing Ziegler alcohols and alumina, ethoxylates, Guerbet alcohols, paraffins, comonomers, linear alkylbenzene, ethylene oxide, and ethylene glycol, it says.

LyondellBasell CEO Bob Patel describes the investment as a “unique opportunity” to create deep, long-term value that will also immediately realize the benefits of new, strategically located assets. The transaction is expected to be accretive to cash flow and earnings per share within a year, with “significant upside as market conditions continue to improve,” he says. The investment allows LyondellBasell to expand in a core area of its business and leverage its operational and commercial strengths, according to the company. It will also realize immediate returns while eliminating “customary construction risks associated with new project execution,” it says.

Sasol president and CEO Fleetwood Grobler says LyondellBasell is the “ideal partner to ensure the success of these world-class assets with its deep expertise in commodity chemicals.” The transaction represents a significant step forward for Sasol in creating a more sustainable and resilient company for the long term, he says. The deal also reduces the company’s net debt and helps to shift its portfolio focus increasingly toward specialty chemicals, according to Sasol. The US performance chemicals business is “consistent with the strategy to increase focus on specialty chemicals where Sasol enjoys differentiated capabilities and strong market positions,” it says. The company says it will also retain access to “competitively priced onsite ethylene to ensure value-chain integration."

Kirkland & Ellis is serving as legal counsel to LyondellBasell and Gordon Dyal & Co. and J.P. Morgan are serving as financial advisors. Latham & Watkins is serving as Sasol’s legal counsel and Bank of America is serving as financial advisor.

Sasol said in August that it had received “strong global interest” for its Lake Charles Chemicals Project (LCCP) base chemicals assets and that a deal was expected to close by the end of the year. The overall current forecast cost of the LCCP is USD12.8 billion, a cost that has soared from its original estimate of USD8.9 billion. Sasol also reported a net loss of USD5.3 billion for its full financial year ended 30 June.

The last remaining unit to come online at the LCCP complex is the 420,000-metric tons/year LDPE facility, damaged in a fire earlier this year. It is still expected to achieve beneficial operations by the end of this month, according to Grobler.

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 contribution towards cleaner fuels in India

MOSCOW (MRC) -- In order to reduce the sulfur dioxide (SO2) emissions released from vehicles and so to comply with more stringent specifications for transportation fuel standards, the government of India undertook an unprecedented decision by leapfrogging from Bharat Stage (BS)-IV to BS-VI national motor vehicle emission standards, said Hydrocarbonprocessing.

The BS-VI fuel specifications, equivalent to Euro-VI specifications, aim at mainly reducing the sulfur content in gasoline to 10 ppmwt (weight part per million) from 50 ppmwt (BS-IV) nationwide by 2020. As part of the objective to produce higher-quality BS-VI gasoline, Axens, with its leadership in cracked gasoline selective hydro-desulfurization technology, Prime-G+®, offered tailor-made and cost effective solutions for existing or grassroots units for 14 different sites.

These Prime-G+® projects, for a 250,000 BPSD cumulated capacity, carried out in fast-track mode represent 100% awards in FCC gasoline hydro-treatment of the Indian public-sector refineries. Axens is delighted to contribute to the successful accomplishment of this major step producing BS-VI-compliant fuels and thus improving air quality in India.

As MRC informed earlier, 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.

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.
MRC