Schneider Electric invests USD40 million to strengthen US supply chain

MOSCOW (MRC) -- Schneider Electric, a leader in the digital transformation of energy management and automation, announced an additional USD40 million investment towards modernizing its US manufacturing plants in Iowa, Kentucky, Nebraska, and Texas, according to Hydrocarbonprocessing.

The monies will go towards innovative technologies and new production lines that will help increase Schneider Electric’s capacity of operations in the US for its customers, as well as further develop its local workforce.

COVID-19 placed a spotlight on the critical vulnerabilities global manufacturing and supply chains can face during unprecedented disruption. This additional stake in the US is part of a larger, strategic approach to strengthen resilience, increase flexibility, and safeguard its supply chain. The initiative will provide Schneider Electric with greater control of its production processes that will help them deliver quality products and services to its customers, while introducing new learning opportunities to the workforce.

“This investment demonstrates our continued commitment to both our customers and our employees, while setting the foundation for the future,” said Annette Clayton, CEO and president, Schneider Electric North America. “We now have the technology and resources available to expand and efficiently produce more locally. By modernizing and localizing our operations, we can better serve our customers and minimize the risk of interruption when we face the challenges of global economic changes.”

For example, Schneider Electric’s smart factory in Lexington, KY recently earned the distinction of 4th Industrial Revolution (4IR) Advanced Lighthouse by the World Economic Forum, becoming the third of its factories to receive this honor. The factory was recognized for its success in adopting Industry 4.0 technologies at scale with demonstrated benefits around energy efficiency, sustainability and overall cost savings, while offering increasing agility and resiliency within the operation.

As US-based companies increasingly look to reshore more of their manufacturing operations, the industry is creating more jobs that will require a new wave of a skilled workforce to fill them. In Schneider Electric’s case, the company has hired and pledges to hire 130 new employees through early 2021. This new era of investing in smart manufacturing and automation tools is not only introducing the opportunity to upskill the industrial workforce, but it can help attract new talent and have a positive impact against the skills gap concerns the industry faces. As part of this investment, Schneider Electric employees will receive more digital training opportunities and tools that will enable them to adopt new skill sets and work more efficiently in a modern setting.

As MRC reported earlier, Royal Dutch Shell may begin the permanent shutdown of its 211,146 bpd Convent, Louisiana, refinery early this week. Shell announced on Nov. 5 the refinery, located 57 miles (92 km) west of New Orleans, was to close after the company failed to find a buyer amid the COVID-19 pandemic. The Convent refinery is the first U.S. Gulf Coast refinery to permanently close because of the pandemic-related decline in demand for refined products. Eight other North American plants have been idled or targeted for shutdowns.

We remind that Royal Dutch Shell plc. said earlier this month that its petrochemical complex of several billion dollars in Western Pennsylvania is about 70% complete and in the process to enter service in the early 2020s. The plant's costs are estimated to be USD6-USD10 billion, where ethane will be transformed into plastic feedstock. The facility is equipped to produce 1.5 million metric tons per year (mmty) of ethylene and 1.6 mmty of polyethylene (PE), two important constituents of plastics.

Ethylene and propylene are feedstocks for producing 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 density 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, excluding producers" inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.
MRC

MOSCOW (MRC) -- Oil futures settled lower Nov. 30 as OPEC delegates finished a first day of negotiations without a deal on whether to extend crude production quotas into the new year, reported S&P Global.

NYMEX January WTI settled 19 cents lower at USD45.34/b, and ICE January Brent finished the session down 59 cents at USD47.59/b.

The OPEC+ alliance at one point seemed close to a decision to maintain its collective 7.7 million b/d in output cuts through at least March to buttress oil prices against the impact of rising COVID-19 infections, but fissures have emerged as fatigue among many countries to rein in so much of their crude production has grown, and talks so far have failed to achieve a watertight consensus.

NYMEX December RBOB settled 3.31 cents lower Nov. 30 at USD1.2489/gal, and December ULSD was down 2.46 cents at USD1.3559/gal.

Year-ahead WTI futures settled in a 2 cents/b backwardation compared with the front-month contract, but Brent forward curve fell deeper into contango with the year-ahead contract settling at a 45 cent/b premium to front month.

OPEC held its formal meeting Nov. 30, intending to clinch a deal ministers would then hammer out the following day with its nine non-OPEC partners. Delegates said the framework of a cut extension for three months had been reached, but the UAE, which has been wavering in its commitment to OPEC, has yet to take a position, endangering the negotiations.

"It is becoming apparent that you are not having everyone fall in line here, and rightfully so; the Asian economic recovery is strong," OANDA senior market analyst Edward Moya said. "If the recovery continues like it is, (a quota extension) is basically giving US shale producers the greenlight to win back market share."

Chinese refinery runs hit a fresh all-time high of 14.15 million b/d in October, National Bureau of Statistics data showed Nov. 25.

Even an agreement among OPEC is not certain to be ratified by the non-OPEC members. Russia has expressed a desire to gradually increase quotas, while Kazakhstan wants to see the cuts rolled back as scheduled, sources told S&P Global Platts after preliminary consultations among some members were organized Nov. 29.

Without an extension agreement, the OPEC+ curbs are scheduled to ease to 5.8 million b/d from January, which many analysts have said could overwhelm the market given the recent surge in crude production from quota-exempt Libya.

"We calculate the market surplus could be as high as 1.5 million-3 million b/d in H1 2021 if it doesn't extend cuts," ANZ analysts said in a note Nov. 30.

As MRC reported 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% 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).

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.
MRC

MOSCOW (MRC) -- Petrochemical producer Braskem Idesa is investing in an additional ship-unloading pier to increase its ethane imports, reported S&P Global with reference to Braskem's CFO Pedro Freitas' statement in November.

The initiative is part of the "fast track" project, which is responsible to provide imported ethane to the Veracruz complex in Mexico.

"We expect that in the beginning of 2021 we will be able to import more than 25% of our ethane requirements," Freitas said.

According to the executive, if working perfectly today, the "fast track" can deliver up to 20% of the complex needs, but this is "very hard to do".

Mexican state-owned Pemex is Braskem Idesa's main ethane provider, but the company is struggling to fulfill the agreed amount.

The supply contract signed between the two companies has come under scrutiny after former Braskem Idesa president Emilio Lozoya Austin's statement was delivered to the Mexican Attorney General's Office as part of an investigation.

The investigation is looking into claims of corruption in the deal as Mexican President Andres Manuel Lopez Obrador accuses Braskem Idesa of damaging Pemex in millions of dollars by making the oil company supply Braskem Idesa with artificially low-priced ethane.

"We remain in touch with Pemex to find a constructive solution regarding ethane," Freitas said.

As MRC informed before, in early February, 2020, Braskem said its Braskem Idesa joint venture with the Mexican group Idesa had reached an important milestone with the import of its first ethane from the US, which will be used as feedstock to at the Coatzacoalcos, Mexico, petrochemical complex. Braskem Idesa has spent USD4 million on logistics infrastructure and will be able to import up to 12,800 b/d of ethane to the feed the complex. This quantity represents 19% of the company’s 1.05-million metric tons/year steam cracker’s ethane needs.

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, excluding producers" inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.

Braskem S.A. produces petrochemicals and generates electricity. The Company produces ethylene, propylene, benzene, toluene, xylenes, butadiene, butene, isoprene, dicyclopentediene, MTBE, caprolactam, ammonium sulfate, cyclohexene, polyethylene theraphtalat, polyethylene, and polyvinyl chloride (PVC).
MRC

MOSCOW (MRC) -- The 380,000-metric tons/year steam cracker at Porvoo, Finland, operated by Borealis is expected to restart operations in early December after the company declared force majeure following a technical failure on 11 November, reported Chemweek with reference to a company spokesperson's statement to OPIS on Friday.

"Start-up is currently foreseen for early December 2020," the spokesperson said.

The cracker was shut down to allow necessary repair works, according to Borealis. Cumene and phenol operations at Porvoo have not been disrupted by the cracker outage, as Borealis has been able to source feedstocks to maintain production, according to IHS Markit analysts. Borealis produces

150,000 metric tons/year of benzene, 245,000 metric tons/year of cumene, and 190,000 metric tons/year of phenol at Porvoo, IHS Markit data show.

OPIS is an IHS Markit company.

As MRC informed earlier, Borealis announces that its new naphtha cavern in Porvoo, Finland has now been safely commissioned as of October 2020. Having invested around EUR25 million in the construction of this 80,000 m3 facility, Borealis can now source and store naphtha for its Porvoo operations from the global market in a more flexible, cost-efficient, and secure way. The cavern can also accommodate renewable naphtha, making it possible for Borealis customers in future to draw on certified renewable polypropylene (PP) and polyethylene (PE), as well as renewable base chemicals, ethylene, propylene and phenol.

We remind that the light-feed 625,000-metric tons/year Borealis steam cracker at Stenungsund, Sweden, is expected to restart operations in the fourth quarter this year after a fire broke out at the plant in May, 2020. The cracker has been under force majeure ever since after the blaze at the plant on 10 May, which was subsequently brought under control the following day.

Ethylene and propylene are feedstocks for producing PE and 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, excluding producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.

Borealis is a leading provider of innovative solutions in the fields of polyolefins, base chemicals and fertilizers. With headquarters in Vienna, Austria, Borealis currently employs around 6,500 and operates in over 120 countries.
MRC

MOSCOW (MRC) -- TechnipFMC has successfully completed the remaining conditions required to enable work to commence on the EPC contract with Assiut National Oil Processing Company (ANOPC) for the construction of a new hydrocracking complex for the Assiut refinery in Egypt, according to Hydrocarbonprocessing.

As previously announced, this major EPC contract covers new process units such as a vacuum distillation unit, a diesel hydrocracking unit, a delayed coker unit, a distillate hydrotreating unit as well as a hydrogen production facility unit using TechnipFMC’s steam reforming proprietary technology. The project also includes other process units, interconnecting, offsites and utilities.

The project supports the Egyptian government’s Energy Transition strategy and will reinforce the economic growth of rural areas while minimizing environmental emissions as well as reducing the government export bill. The complex will transform lower-value petroleum products from Assiut Oil Refining Company’s (ASORC) nearby refinery into approximately 2.8 million tons per year of cleaner products, such as Euro V diesel.

The contract award will be included in the Company’s fourth quarter 2020 inbound orders.

As MRC reported earlier, Saad Helal, the Chairman of Egyptian Petrochemicals Holding Company (ECHEM), stated in September 2020 that his company is rapidly working on implementing a number of seven new projects to the national plan for the period of 2020-2035. He said that these projects include one by Wood Technology Company for producing medium-density fibreboard (MDF) wood which is being installed and implemented by Petrojet, a methanol derivative production project which produce a capacity of 140 tons per year and is worth USD117 million, and a project by the Egyptian Ethylene and Derivatives Company (Ethydco) for producing rubber polybutadiene at a capacity of 36,000 tons per year with costs USD183 million.

Butadiene is the main feedstock for the production of acrylonitrile-butadiene-styrene (ABS).

According to MRC's ScanPlast report, Russia's estimated consumption of polystyrene (PS) and styrene plastics totalled 362,820 tonnes in the first nine months of 2020, down by 1% year on year. Consumption of material in the Russian ABS segment decreased in January-September 2020 by 8% year on year, totalling 32,240 tonnes.
MRC