Phillips 66 posts smaller-than-feared loss on retail improvement

MOSOCW (MRC) - U.S. refiner Phillips 66 PSX.N reported a smaller-than-expected quarterly loss on Friday, as its marketing and specialties unit, which retails refined products, benefited from people returning to gas stations, said Reuters.

The unit buys refined products wholesale to resell at over 9,100 outlets the company operates through a joint venture, and has seen demand recover as coronavirus-related lockdowns ease and travel gradually picks up.

On a sequential basis, marketing fuel margins improved 27.4% in the third quarter to USD2.23 per barrel in the United States and up 24% to USD6.28 per barrel internationally.

However, realized refining margins slumped to USD1.78 per barrel, a 31.5% drop from the second quarter and 84% lower than last year, hit by weak fuel demand though oil prices have ticked up from spring lows.

Adjusted loss for the refining segment came at USD970 million, wider than USD867 million posted in the second-quarter.

Results in the third quarter were also hit by impairment charges of USD798 million related to the planned conversion of a San Francisco refinery into a renewable fuels plan.

The company had said in August it will reconfigure the refinery in Rodeo to produce renewable fuels, which are made from used cooking oil and fats, among others, and have seen an increased demand in recent months as they burn cleaner than traditional diesel.

The Houston, Texas-based company reported a net loss of USD799 million, or USD1.82 per share, for the quarter ended Sept. 30, from a year-ago profit of USD712 million, or USD1.58 per share.

As MRC informed earlier, Phillips 66 shut down its Belle Chasse refinery on 16 September in anticipation of Hurricane Sally. No estimate was provided for the duration of the shutdown. This site houses a plant with a capacity of 355,000/tonnes propylene per year.

According to MRC's ScanPlast report, PP shipments to the Russian market reached 880,130 tonnes in the first nine months of 2020 (calculated using the formula: production minus exports plus imports, excluding producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.

Phillips 66 was formed in May 2012 as a result of the division of ConocoPhillips, taking over the company's refining assets. The staff of the company consisted of about 14 thousand employees. The company is headquartered in Houston.
MRC

Global liquid fuels production outages have increased in 2020

MOSCOW (MRC) -- Disruptions to crude oil and condensate production from members of the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC countries have risen considerably since last year, said Hydrocarbonprocessing.

These outages have contributed to reduced liquid fuel supply and, along with crude oil production declines agreed to among OPEC and partner countries (OPEC+), have contributed to global liquid fuels inventory draws since June. So far in 2020, monthly oil supply disruptions have averaged 4.6 MM barrels per day (bpd) and reached 5.2 MM bpd in June, the highest monthly levels since at least 2011, when the U.S. Energy Information Administration (EIA) began tracking monthly liquids production outages. Global oil supply disruptions averaged 3.1 MM bpd in 2019, and rising outages in Iran have been the main drivers of the year-on-year increase. EIA does not include field closures for economic reasons or oil demand declines in its accounting of supply disruptions.

Libya, Venezuela, and Iran (the OPEC countries exempt from the latest OPEC+ agreement) were the main contributors to these outages. Domestic political instability in Libya has removed about 1.2 MM bpd from oil production since February 2020. The Libyan National Army, the warring faction in eastern Libya, blockaded five of the country’s oil export terminals and shut in oil production from major fields in the southwestern region in January 2020, causing Libya’s production to fall to less than 100,000 bpd by April.

U.S. sanctions have led to production outages in Venezuela and Iran. U.S. sanctions placed on oil-trading companies and shipping companies that facilitated exports of Venezuela’s crude oil in the first half of 2020 removed 500,000 bpd of crude oil production from global markets by August. Ongoing U.S. sanctions on Iran’s crude oil and condensate exports have kept Iran’s disruption levels elevated through 2020, and disruptions there have increased by another 100,000 bpd since January.

Non-OPEC oil supply disruptions, mostly from the United States and Canada, rose to nearly 800,000 bpd in August. Disruptions in Canada occurred when operators ordered nonessential staff to stop work because of coronavirus outbreaks at production sites. In the United States, hurricane-related disruptions and unplanned maintenance affected oil production this summer. Other non-OPEC countries experienced temporary field closures for various reasons such as coronavirus outbreaks among workers, logistical issues moving workers or equipment during the pandemic, fires at field operations in Canada, or other natural disasters.

As MRC informed earlier, crude oil futures fell during the mid-morning trade in Asia Nov. 13, extending overnight losses, after the US Energy Information Administration data showed a large build in US crude inventories, while concerns over the progression of the coronavirus pandemic continued to weigh on the market.

Iin September 2019, six world's major petrochemical companies in Flanders, Belgium, North Rhine-Westphalia, Germany, and the Netherlands (Trilateral Region) announced the creation of a consortium to jointly investigate how naphtha or gas steam crackers could be operated using renewable electricity instead of fossil fuels. The Cracker of the Future consortium, which includes BASF, Borealis, BP, LyondellBasell, SABIC and Total, aims to produce base chemicals while also significantly reducing carbon emissions. The companies agreed to invest in R&D and knowledge sharing as they assess the possibility of transitioning their base chemical production to renewable electricity.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,594,510 tonnes in the first nine months of 2020, up by 1% year on year. Only high denstiy polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market reached 880,130 tonnes in the nine months of 2020 (calculated using the formula: production minus exports plus imports, exluding producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.

EIA publishes historical unplanned production outage estimates in its Short-Term Energy Outlook (STEO). In its estimates of outages, EIA differentiates among declines in production resulting from unplanned production outages, permanent losses of production capacity, and voluntary production cutbacks. EIA’s estimates of unplanned production outages are calculated as the difference between estimated effective production capacity (the level of supply that could be available within one year) and estimated production.
MRC

Crude settles higher on COVID-19 vaccine progress, OPEC+ talks

MOSCOW (MRC) -- Oil futures settled higher Nov. 16 as supply and demand outlooks grew more bullish on COVID-19 vaccine progress and signs that OPEC+ was moving closer to extending output cuts into 2021, reported S&P Global.

NYMEX December WTI settled up USD1.21 at USD41.34/b and ICE January Brent was USD1.04 higher at USD43.82/b.

Oil futures stepped higher overnight following reports of a second COVID-19 vaccine developed by US company Moderna that is nearly 95% effective, according to data from the company Nov. 16. The news comes on the heels of a Nov. 9 announcement from pharmaceutical companies Pfizer and BioNTech that their coronavirus vaccine had shown itself to be more than 90% effective in a phase 3 trial.

NYMEX December RBOB settled 2.14 cents higher at USD1.1468/gal and December ULSD was up 2.47 cents at USD1.2289/gal.

While the vaccine progress was generally bullish for demand outlooks, near-term headwinds persisted amid fast-rising caseloads.

In the US, the seven-day moving average of new coronavirus cases reached a fresh all-time high 145,344 on Nov. 15, according to data from The Covid Tracking Project. Apple Mobility data accessed by S&P Global Platts showed that US driving activity during the week ended Nov. 13 was the lowest since late May.

The front-month ICE New York Harbor RBOB crack against Brent fell to around USD4.41/b in afternoon trading, the lowest since mid-August.

"The short-term headaches for the crude demand outlook however remain firmly in place," OANDA senior market analyst Edward Moya said in a note. "WTI crude looks ready to run higher but it may have to wait until the current coronavirus situation is under control in both Europe and the US."

Still, crude forward structure turned more bullish. Year-ahead WTI futures settled at a USD1.72/b premium to the front-month contract, the weakest contango since July 24.

Meanwhile, key oil ministers from OPEC and its allies will hold critical talks Nov. 17 on 2021 production quotas, steered towards an extension of current output cuts through March or June by an uncertain near-term market outlook.

OPEC+ ministers are weighing whether to relax their current 7.7 million b/d in collective production cuts to 5.8 million b/d as originally scheduled, maintain them at the same level for a few months, or even deepen them.

Saudi energy minister Prince Abdulaziz bin Salman has previously said the deal could be "tweaked" as market conditions warrant. An advisory delegate-level technical committee met Nov. 16, reviewing scenarios in which the current cuts were extended for three months or six months, sources told Platts.

Such an extension would help bolster the market as it awaits the mass availability of a COVID-19 vaccine, but many members are weary of having sacrificed so much production for so long already.

Demand outlooks also gleaned support from an unexpected increase in Chinese crude demand in October. China's domestic refineries processed 14.15 million b/d of crude oil in October, rising 0.9% on the month, to end the downtrend and hit a fresh record high, the National Bureau of Statistics' data released Nov. 16 showed.

The high throughput in October was unexpected, analysts said.

"We previously projected October crude throughput to remain in the low levels with notable cuts from state-owned refineries, due to high oil product inventory and weaker than expected demand," a Beijing-based analyst said.

The country's previous record high throughput was 14.14 million b/d in June, NBS data showed.

As MRC informed previously, global oil demand may have already peaked, according to BP's latest long-term energy outlook, as the COVID-19 pandemic kicks the world economy onto a weaker growth trajectory and accelerates the shift to cleaner fuels.

Earlier this year, BP said the deadly coronavirus outbreak could cut global oil demand growth by 40 per cent in 2020, putting pressure on Opec producers and Russia to curb supplies to keep prices in check.

And in September 2019, six world's major petrochemical companies in Flanders, Belgium, North Rhine-Westphalia, Germany, and the Netherlands (Trilateral Region) announced the creation of a consortium to jointly investigate how naphtha or gas steam crackers could be operated using renewable electricity instead of fossil fuels. The Cracker of the Future consortium, which includes BASF, Borealis, BP, LyondellBasell, SABIC and Total, aims to produce base chemicals while also significantly reducing carbon emissions. The companies agreed to invest in R&D and knowledge sharing as they assess the possibility of transitioning their base chemical production to renewable electricity.

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

ccording to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,594,510 tonnes in the first nine months of 2020, up by 1% year on year. Only high denstiy polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market reached 880,130 tonnes in the nine months of 2020 (calculated using the formula: production minus exports plus imports, exluding producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.
MRC

Maire Tecnimont and Hera Group collaborate on upcycling

MOSCOW (MRC) -- Maire Tecnimont S.P.A. and Hera Group signed of a strategic agreement between Aliplast, Hera Group’s subsidiary, for the collection, recycling and conversion of plastics, and NextChem, Maire Tecnimont Group’s company, for the development of projects and technologies for the energy transition, said the company.

NextChem will provide technology and engineering, procurement and construction services to build a plant which will use proprietary innovative technology MyReplastTM for upcycling of plastic waste into high value-added polymers.

These partners are each leader in their respective sectors. Hera Group’s Herambiente unit – Italy’s pioneer in the treatment of all types of waste – has 90 plants with an important know-how in the management of the entire environmental chain, in which Aliplast contributes with a circular and integrated stronghold in plastic sector. Maire Tecnimont Group is a global leader in process engineering and strongly committed – through its subsidiary NextChem – to developing projects and technologies for the energy transition and circular economy. Maire Tecnimont adopts an innovative industrial approach focused on engineering of transformation processes able to produce polymeric high value-added materials which can replace virgin materials derived from fossil sources.

The synergy between skills and resources of these two big players will result in the only plant of its kind in Europe. One of Hera Group’s sites will use the innovative MyReplastTM technology licensed by NextChem and will produce recycled polymers of high quality and purity, with high-level chemical-physical and mechanical performance.

The aim of the plant is to treat post-consumer plastic waste to obtain customized recycled products capable of meeting customer requirements and quality market standards, with features and properties on par with virgin polymers from fossil sources. This is a cutting-edge plant engineering experience.

Once fully operational, the plant – powered by green sources thanks to Herambiente – will be able to produce up to 30,000 tons of polymers per year. The plant will ensure high security standards and be equipped with innovative features such as processes automation and high digitalization for data analytics, thereby allowing it to maximize energy efficiency, delivering further environmental benefits.

With this agreement, Aliplast takes another step forward in its mission to attain excellence, also at international level, in plastic recycling and regeneration. It is the first Italian company to have reached full integration in the plastic life cycle, using technology completely developed in house. Aliplast operates plants in France, Spain and Poland and is leader in the production of flexible film of PE and PET sheets, with 90,000 tons per year of finished products and regenerated polymers, and over 90% recovery/recycling in terms of volumes.

The partnership with NextChem will allow Aliplast to exploit recycling and compounding opportunities in order to expand into the sector of rigid plastics, like PP, HDPE and ABS, which are difficult to recycle effectively with mechanical processes.

The aim is to continue to serve customers offering them a larger choice of high-quality recycled plastics, moving towards more advanced circular economy models in line not only with EU and UN targets but also with the New Plastics Economy Global Commitment developed by the Ellen MacArthur Foundation, an important international network for the circular economy, of which Hera Group is a member.

As MRC informed earlier, Maire Tecnimont S.p.A. signed a EUR1.2 billion contract for engineering, procurement and on-site services (EPSS) for the planned Amur Gas Chemical Complex (Amur Gas Chemical Complex) of SIBUR, the largest petrochemical holding in Russia and Eastern Europe. The agreement was signed with the Amurskiy GCC, a subsidiary of SIBUR.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,594,510 tonnes in the first nine months of 2020, up by 1% year on year. Only high denstiy polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market reached 880,130 tonnes in the nine months of 2020 (calculated using the formula: production minus exports plus imports, exluding producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.

Maire Tecnimont S.p.A., a company listed on the Milan Stock Exchange, leading an international industrial group which is a leader in the transformation of natural resources (plant engineering in downstream oil & gas, with technological and execution competences). Through its subsidiary NextChem it operates in the field of green chemistry and the technologies to support the energy transition. Maire Tecnimont Group operates in about 45 countries, through 50 operative companies and a workforce of approximately 6,300 employees, along with approximately 3,000 professionals in the electro-instrumental division.
MRC

DSM completes acquisition of Erber Group

MOSCOW (MRC) -- Royal DSM, a global science-based company in Nutrition, Health and Sustainable Living, today announces the completion of its acquisition of Erber Group for an enterprise value of EUR980 million, said the company.

The transaction - which excludes two smaller units in the Erber Group - is expected to be earnings enhancing in the first year upon completion. The acquisition of Erber Group was first announced on 12 June 2020.

DSM acquired Erber Group’s Biomin and Romer Labs. Erber Group’s specialty animal nutrition and health business Biomin specializes primarily in mycotoxin risk management and gut health performance management, whereas the Romer Labs business focuses on food and feed safety diagnostic solutions. Both expand DSM’s range of higher value-add specialty solutions.

The acquisition of Erber Group’s Biomin further strengthens DSM’s expertise and reputation as a leading provider of animal health and nutrition solutions for farm productivity and sustainability, with an emphasis on emissions reduction, feed consumption efficiency, and better use of water and land. It is therefore very much aligned with DSM’s focus to make animal farming more sustainable from both an ecological and economical perspective. Romer Labs also complements DSM’s human nutrition and health offering to customers in the food & beverages market segments.

As MRC informed earlier, Royal DSM (Netherlands) announced an agreement to sell its resin and functional materials business units and related businesses DSM Resins & Functional Materials (RFM) to Covestro AG (Germany) for EUR1.6 billion.

As MRC informed earlier, DSM formed a 50/50 joint venture (JV) with VDL Groep (Eindhoven, Netherlands), called Dutch PPE Solutions, to produce medical facemasks and establish the first permanent production of critical facemask components in the Netherlands. The companies are investing several million euros to purchase manufacturing equipment and build manufacturing facilities to produce meltblown polypropylene (PP), the critical material layer in medical facemasks that filters viruses, and make medical masks.

We remind that Russia's output of chemical products rose in September 2020 by 6.7% year on year. At the same time, production of basic chemicals increased by 6.1% year on year in the first nine months of 2020, according to Rosstat's data. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the January-September output. Last month's production of primary polymers decreased to 852,000 tonnes from 888,000 tonnes in August due to shutdowns in Tomsk, Ufa and Kazan. Overall output of polymers in primary form totalled 7,480,000 tonnes over the stated period, up by 16.4% year on year.
MRC