Spain to channel USD1.8B in EU rescue funds to 'green' hydrogen

MOSCOW (MRC) -- Spain will spend 1.5 billion euros (USD1.8 billion) from a European economic recovery fund over the next three years in developing "green" hydrogen production, which will use renewable power, prime minister Pedro Sanchez said, said Hydrocarbonprocessing.

With its sunny plains, windy hillsides and gas infrastructure, Spain is keen to lead production of hydrogen using renewable resources, a process seen as key to meeting carbon emissions targets provided costs can be brought down.

Hydrogen, which is now mostly produced from fossil fuels, can be made from water using electrolysis but the process is expensive and only avoids emissions if renewable power is used.

Madrid has set a target to encourage 8.9 billion euros (USD10.5 billion) of investment, mainly from the private sector, to build electrolysers with a total 4 gigawatt capacity by 2030. This would give Spain 10% of the EU's hydrogen production target.

Spanish energy firm Iberdrola has applied for EU funds to expand a project spanning two sites in Spain it says will need investment worth 1.8 billion euros and could create 4,000 jobs.

Energy minister Teresa Ribera called for people working in green hydrogen supply chain, from researchers to potential end users, to submit details of their projects.

As MRC informed earlier, crude prices rose in mid-morning trade in Asia Nov. 16, as the market was comforted by the strong possibility that any new lockdowns in the US will be less severe than the nationwide lockdowns seen in spring, with the signing of the Regional Comprehensive Economic Partnership (RCEP) also providing a boost to sentiment.

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).

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

Mitsui Chemicals completes production increase for TEKNOROTE

MOSCOW (MRC) -- Mitsui Chemicals' wholly owned subsidiary Sunrex Industry Co has completed the construction on expanded production facilities for share-holding plastic wire mainly used for mask nose clamps, said Japanese producer.

Work on the expanded facilities got under way this June in response to surging mask demand amid the COVID-19 pandemic. Completed on October 15, the expanded facilities began commercial operations earlier this month.

The expanded facilities allow the Mitsui Chemicals Group to now produce enough nose clamps to cover 3 billion masks per year. In view of dealing with continued rising mask demand while also pursuing other applications for the material, however, consideration will be given to further expansion of TEKNOROTE™ production facilities in due course.

Work on the expanded facilities in Yokkaichi, Mie prefecture started in June in response to surging mask demand amid the coronavirus pandemic, it said in a statement. Financial details of the expansion project were not disclosed.

The expanded facilities will allow the Mitsui Chemicals group to produce enough nose clamps to cover 3bn masks per year.

As MRC informed earlier, Mitsui Chemicals operated its naphtha cracker normally following a maintenance turnaround. Company resumed operations at the cracker on July 19, 2020. The cracker was shut for maintenance on June 11, 2020. Located in Osaka, Japan, the cracker has an ethylene capacity of 500,000 mt/year and a propylene capacity of 280,000 mt/year.

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.

Mitsui Chemicals is a leading manufacturer and supplier of value added specialty chemicals, plastics and materials for the automotive, healthcare, packaging, agricultural, building, and semiconductor and electronics markets. Mitsui Chemicals is a Japanese Chemicals company, a part of the Mitsui conglomerate. The company has a turnover of around 15 billion USD and has business interests in Japan, Europe, China, Southeast Asia and the USA. The company mainly deals in performance materials, petro and basic chemicals and functional polymeric materials.



MRC

COVID-19 period an inflection point for energy transition

MOSCOW (MRC) -- The COVID-19 period will be viewed “as an inflection point for the global energy transition,” according to Mark Eramo, global vice president/oil markets, midstream, downstream, chemicals at IHS Markit.

The impact of the pandemic going forward on the decarbonization of energy consumption “causes a faster pace of change, versus what we’ve seen in the past,” said Eramo, speaking at the Chemical Industry Financial Outlook & Sustainability Forum 2020, being held in a virtual format and hosted by IHS Markit.

Peak oil demand may also now have taken place, Eramo says. “We believe COVID-19 has reset oil demand at a lower level. With the move to work from home—even after we get a vaccine and get back to normal—we’re looking at scenarios where 2019 could be that peak in world oil demand, depending on whether we return to our commutes, by car, train, or plane, and the degree that all that comes back.” Oil demand in 2020 is forecast by IHS Markit to be about 94 million b/d, well down on the 2019 total of just more than 100 million b/d.

Oil prices of below $50/bbl are likely to remain through mid-2021, with a “slow steady increase” to the end of this year and into 2021 expected, before demand starts slowly to correct the oversupply situation, Eramo says. The energy transition is also at the heart of a strategic restructuring of the refining sector, which has been accelerated by the pandemic, he says. The restructuring process will impact the petrochemical industry, because of the feedstocks that the refining sector supplies, while “petrochemical integration with refining is also back in focus,” he notes.

Companies examining opportunities for integration are faced with issues such as high capital and the cost of entry, according to Eramo. “If I’m running a refining asset and want to view petrochemicals as a means for growth in the future, what’s my cost of entry to do that,” he says. This is a process already taking place in China, he says. Chemical yields per barrel of oil have risen over time from less than 15% to a point where assets under construction or operating today can yield 40-80% per barrel, he notes.

The integration trend also is being driven by “this narrative of peak oil, driven by the refining industry and those in the upstream and midstream markets looking at petrochemicals as a potential vehicle for growth. Because, in a peak oil world, you can look at petrochemicals that we believe will continue to grow at a very reasonable multiple of GDP,” Eramo says.

For global chemicals demand, IHS Markit sees a “snapback” in 2021, followed by a settling period similar to that seen in 2009-11 following the global economic crisis. Strong growth in 2021 is expected as supply chains are refilled, before there is a period of steady growth of 15-20 million metric tons annually, Eramo says. He highlighted ethylene as a product forecast to “actually see some growth this year, a lot of it stimulated by the growth in PPE [personal protective equipment], as well as the health and sanitization for protective gear, that is creating strong demand.” The shift to work from home and increased packaging required for goods being delivered to homes shows there are “a lot of different stimulus at work here,” Eramo says.

The global economy is facing a “bounce, fade, and slog scenario,” said Nariman Behravesh, senior vice president and chief economist at IHS Markit, also speaking at the virtual event. “By that we mean that, in any event, the moment of growth that we saw in the third quarter was unsustainable, with growth rates of 30%.” The level is expected to come down to 4-5% in the fourth quarter, he says. “There was pent up demand, but that has been released and is now pretty much done. There’s very little prospect of big stimulus, and then there’s the virus itself. All this suggests that the next few quarters are not going to be good."

Global GDP is forecast to shrink by 4.5% in 2020, before recovering to possible growth of 4.0% in 2021, according to Behravesh. While US GDP is expected to decline by up to 3.5% this year, GDP in the eurozone is forecast to plunge by 7.5%. “Europe has been much less aggressive [than the US] in terms of fiscal and monetary policy, and I think that has made a huge difference in the subsequent upturn, or lack thereof,” he says.

US GDP is expected to grow by 3.0-3.5% in 2021 and cross over to pre-pandemic levels during the first half of 2022, and the eurozone is looking at a crossover at the beginning of 2023, he says. The recovery in Europe will not be uniform, he notes. Germany is expected to return to pre-pandemic GDP levels in 2022 and Italy is forecast not to reach that point until 2026.

As MRC informed earlier, crude prices rose in mid-morning trade in Asia Nov. 16, as the market was comforted by the strong possibility that any new lockdowns in the US will be less severe than the nationwide lockdowns seen in spring, with the signing of the Regional Comprehensive Economic Partnership (RCEP) also providing a boost to sentiment.

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).

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

Iraq to invite bids for new oil refinery in south

MOSCOW (MRC) -- Iraq plans to invite international energy companies and investors to compete to build an oil refinery in its southern port of Fao, reported Reuters with reference to the country's oil ministry.

The refinery in Fao will have a 300,000 bpd capacity and include a petrochemical plant, a statement said citing Oil Minister Ihsan Abdul Jabbar.

As MRC wrote previously, in July 2020, Iraq’s government agreed to sign a contract with JGC Corp to build a 55,000 barrels per day refinery in the southern region of Basra. The refinery will produce fuels including liquified petroleum gas, gasoline and gasoil, it said, estimating the cost of the facility at USD4 billion.

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

Kemira adjusts 2020 financial targets

MOSCOW (MRC) -- Kemira says its board has approved updated financial targets for 2020. The company is now targeting an operative EBITDA margin of 15-18% instead of 15-17%, according to Chemweek.

The other financial targets remain unchanged. Kemira is aiming for growth above market rates and a debt/equity ratio below 75%.

The company confirmed in October its revised 2020 outlook as part of the announcement of its third-quarter results.

As MRC informed earlier, Kemira has signed a multi year extension of its polymer supply agreement with Ithaca Energy. 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.

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