Output of chemical products in Russia grew by 6.3% in Jan-Oct 2020

MOSCOW (MRC) -- Russia's output of chemical products rose in October 2020 by 7.2% year on year. At the same time, production of basic chemicals grew in the first ten months of 2020 by 6.3% year on year, 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-October output.

Production of benzene went up to 106,000 tonnes in October 2020, compared to 92,300 tonnes a month earlier. In September, several producers shut down their production capacities for schedule turnarounds. Overall output of this product reached 1,116,600 tonnes over the stated period, down by 1.8% year on year.

October production of sodium hydroxide (caustic soda) were 109,000 tonnes (100% of the basic substance) versus 108,000 tonnes a month earlier. Overall output of caustic soda totalled 1,054,600 tonnes in the first ten months of 2020, down by 1.6% year on year.

1,985,000 tonnes of mineral fertilizers (in terms of 100% nutrients) were produced in October versus 2,014,000 tonnes a month earlier. Overall, Russian plants produced about 20,500,000 tonnes of fertilizers in January-October 2020, up by 3.5% year on year.

Last month's production of polymers in primary form grew to 857,000 tonnes from 852,000 tonnes in September. Overall output of polymers in primary form totalled 8,340,000 tonnes over the stated period, up by 17% year on year.
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Cepsa chemicals earnings rise on higher margins

MOSCOW (MRC) -- Cepsa (Madrid, Spain) has reported a 50% rise year on year (YOY) in third quarter clean EBITDA for its chemicals business to EUR92 million (USD109 million), also up 7% sequentially from the second quarter, due mainly to higher margins in its linear alkylbenzene (LAB) segment and a rebound in phenol/acetone margins, said Chemweek.

The improvement in the quarter was driven by the "strong performance" of LAB, currently in high demand as a raw material for detergents given the COVID-19 pandemic, and higher margins in all business lines, it says. Chemical product sales volumes were down 4% YOY at 693,000 metric tons, but up slightly on the second quarter.

LAB sales volumes at 178,600 metric tons were up slightly on the prior-year period and the second quarter, but registered higher margins, “especially the Spanish and Canadian plants,” Cepsa says. Product sales volumes in the phenol/acetone segment of 369,500 metric tons were 8% lower YOY and 3% down on the second quarter, impacted by a decrease in global demand due to the pandemic, although margins improved. Sales of solvents were flat YOY at 144,700 metric tons and up 8% sequentially, also with better margins, it adds.

Growth capital expenditure (capex) in the third quarter totaled €8 million, mainly on the revamping of the company’s LAB plant at Puente Mayorga, Spain.

The company’s chemical business performed “extremely well, proving to be resilient in the most adverse scenarios, and highlighting the importance and benefits of diversification in the current macroeconomic context,” Cepsa says. Despite its refining business remaining under pressure with European margins at recent record lows, the strategic locations of its refineries, their operational flexibility and strong integration with the chemicals and marketing businesses “provides greater optionality to optimize margins and mitigate exposure to the Iberian market,” it says.

Cepsa’s group clean EBITDA of EUR277 million for the third quarter was down 51% YOY but an improvement of 54% over the second quarter of this year. Clean net income on a current cost of supply basis was EUR39 million, plunging 77% compared to the prior-year period but swinging from a loss of EUR93 million in the second quarter.

As MRC informed earlier, Cepsa (Madrid, Spain) reports a 30% rise year on year (YOY) to EUR86 million (USD101 million) in clean EBITDA on a current cost of supply (CCS) basis for its chemicals business in the second quarter, due to a rebound in margins and volumes in the phenol/acetone segment and “high demand” in the detergents sector.

According to MRC's ScanPlast report, Russia's estimated consumption of PC granules (excluding imports and exports to/from Belarus) rose in the first three quarters of 2020 by 32% year on year to 75,600 tonnes (57,200 tonnes a year earlier).
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Lummus awarded double CATOFIN PDH contract in China

MOSCOW (MRC) -- Lummus Technology announced that it has been awarded a contract from Ningbo Kingfa Advanced Materials Co., Ltd. for two propane dehydrogenation units in Ningbo, Zhejiang Province, China. Lummus’ scope includes technology licensing, process design package and technical services, and catalyst supply through its partner Clariant, said Hydrocarbonprocessing.

"We have a strong history and presence in China, and licensing two world-scale CATOFIN units to a repeat customer is a testament to Lummus’ position and approach to the Chinese market,” said Leon de Bruyn, president and CEO of Lummus Technology. "Our best-in-class CATOFIN technology, along with Clariant’s catalysts, provide a highly reliable and low carbon route to propylene."

Each unit will have a production capacity of 600,000 mtpy for a total additional propylene production capacity of 1,200,000 mtpy. This is the second CATOFIN PDH contract from Ningbo Kingfa. In 2011, Lummus licensed its CATOFIN technology for the first PDH unit at the same site.

"We are proud that our existing CATOFIN plant has demonstrated robust and reliable performance since its start up,” said Mark Yang, Ningbo Kingfa’s general manager. “We value our collaboration with Lummus for the CATOFIN technology and the proven performance and technical support that they provide. In turn, selecting Lummus’ technology for our Phase 2 and Phase 3 projects was a straight-forward decision."

CATOFIN technology is a unique process for the production of olefins, such as propylene (from propane) and iso-butylene (from iso-butane). Lummus has exclusive worldwide licensing rights to this technology. The catalyst is produced by Clariant, a leading company in the development of process catalysts. Due to its superior thermodynamic operating conditions of vacuum and lower temperature for reactors, CATOFIN provides the highest conversion and selectivity for conversion of paraffins to olefins. Even when co-producing propylene and isobutylene, high conversions can be maintained. The CATOFIN process employs multiple reactors operating in a cyclic manner with an automated program so that the flow of process streams is continuous.

As per MRC, Lummus Technology announced that it has been awarded a technology contract by Shandong Yulong Petrochemical Co., Ltd., a subsidiary of China’s Nanshan Group. Lummus will provide Master Licensor services for multiple licensed units, consisting of two mixed feed crackers, an EB/SM plant and two polypropylene (PP) lines. The scope includes technology licensing, process design package, training and advisory services, master licensor integration services and catalyst supply for the PP plant.

As MRC informed earlier. Haldia Petrochemicals (HPL), a flagship company of The Chatt­erjee Group (TCG), alo­ng with its international partner Rhone Capital has acquired US-based Lummus Technology at an enterprise value (EV) of USD2.725 billion (around Rs 20,590 crore) from McDermott International. In the joint acquisition, HPL’s share is at 57 per cent, the balance would be held by Rhone Capital. Under the new dispensation, Lummus Technology wou­ld function as a ‘standalone’ autonomous entity.

As MRC informed earlier, in late March 2020, India's private-sector Haldia Petrochemicals (HPL) shut its naphtha cracker after ports in the country declared force majeure to prevent the spread of the coronavirus.

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.
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Techno Oil builds LPG terminal in Nigeria Apapa region

MOSCOW (MRC) -- The Lagos State Government has lauded Techno Oil Limited for building a landmark 8,400-ton capacity LPG coastal terminal at Kirikiri in Apapa, Lagos, said Hydrocarbonprocessing.

The Governor of the state, Mr. Babajide Sanwo-Olu gave the commendation in Lagos in a message read on his behalf at the commissioning of the LPG terminal by the state’s commissioner for Energy and Mineral Resources, Mr. Olalere Odusote. The governor said that Techno Oil had demonstrated an uncommon resolve to contribute to the emancipation of Lagos State.

He recalled the building of an LPG cylinder manufacturing plant in the state last year, describing the gas sector as a key component of his administration’s quest to make Lagos a 21st Century economy. The governor said that he strongly believed that pivoting Lagos State to a gas-powered economy would offer an array of economic and environmental benefits to its residents.

"Developments such as this will help to promote and deepen domestic LPG utilization across the state, thereby reducing the state’s carbon footprint and ultimately benefiting the people of Lagos State and Nigeria as a whole. "As the major economic, commercial and financial nerve- center of the federation as well as the fifth largest economy in Africa, Lagos State is a major hub for the downstream sector of the oil & gas industry."

"We are hosts to strategically located petroleum product storage facilities and primed for the growth in gas usage. “Lagos is by far the largest consumer of petroleum and gas products in Nigeria.

"Indeed, in establishing this 8,400-ton capacity LPG Coastal Storage Terminal in Lagos, Techno Oil has made a strategic investment. "It is a significant step that will accelerate and deepen the growth of LPG to help diversify the economy, grow revenue and create jobs," he said.

The governor charged Techno Oil and other downstream players to work closely with Lagos State in ensuring safety and promoting best practices in the sector. "We must be jointly responsible for the protection of lives and property by ensuring a strict adherence to policy and regulatory measures that promote safety. Safety must be in the DNA of all practitioners in the gas industry.

"We have the paramount duty of institutionalizing a culture of safety and professionalism in the industry and my administration is committed to an all-inclusive and participatory effort that will accelerate growth in the sector,’’ he said.

In a message, the Minister of State for Petroleum Resources, Mr. Timipre Sylva said that Nigeria had earmarked the year 2020 to be the beginning of the decade of gas. According to him, this is a period in which the national economy is programmed for expansion using the abundant natural gas resources of the country.

Sylva whose message was read by a deputy director at the Department of Petroleum Resources (DPR), Dr. Musa Zaki, said that central to the aspiration was the deepening of LPG penetration in the country. He noted that the deepening of cooking gas would reach a point when both domestic and commercial food cooking would be fueled by LPG.

The minister said that having built an LPG cylinder manufacturing plant, producing five million cylinders per annum and inaugurating the 8,400MT automated terminal, Techno Oil was on course to providing end-to-end solutions in the domestic LPG industry.

"The commissioning of this facility is definitely a good contribution to the two aspirations cited above in addition to environmental protection, job and wealth creation by reducing deforestation and greenhouse emissions and promoting domestic gas value-chain development.

"With the inauguration of this facility, there are now 12 LPG depots in the country and we are gradually marching to our expected destination in LPG adoption. "It should be noted, however, that the Nigerian LPG market is still not saturated. There are huge opportunities for further investments in the entire domestic gas value-chain.

"These include gas processing, transportation and distribution, storage, retailing, manufacturing of equipment and provision of services,” he said. In a speech, the Group Managing Director/Chief Executive Officer of Techno Oil, Mrs Nkechi Obi, said that the terminal would generate up to 2,000 jobs in the months ahead. Obi pleaded with the federal government to come to the rescue of Nigerian industrialists in their bid to contribute to the economic growth of the nation.

"We plead with government to provide funding to industrialists in building key facilities such as the one being commissioned. "Government should consider reactivating its butanization plants and also building new ones across the country to guarantee LPG availability nationwide.

"Similarly, it is also time for government to embark on media campaign to sensitize the populace on the benefits of LPG over other cooking fuels. "More so, government agencies and regulatory bodies should enforce the rules to sanitize the space for a safe and profitable business environment.

"We remain thankful to the Lagos State government for being a worthy host by providing the much appreciated conducive environment for our business to thrive. "This is yet another of our numerous projects being hosted in Lagos. We thank you from the bottom of our hearts.

The chairman of the board of Techno Oil, prof. Anya O. Anya, lauded the staff and management of Techno Oil for embarking on the project. He said that young people in the country were increasingly demonstrating their abilities to make thing happen in every field of human endeavor.

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

Crude oil futures rangebound as economic impact of pandemic weighs on vaccine optimism

MOSCOW (MRC) -- Crude oil futures remained rangebound during mid-morning trade in Asia Nov. 23 as market optimism over the pace of development of COVID-19 vaccines was countered by the more immediate impact of the pandemic on economic activity and global demand, reported S&P Global.

At 10:30 am Singapore time (0230 GMT), ICE Brent January crude futures were up 5 cents/b (0.11%) from the Nov. 20 settle at USD45.01/b, while the NYMEX January light sweet crude contract was 5 cents/b (0.12%) lower at USD42.37/b.

The contracts contract rose 5.1% and 5% respectively in the week ended Nov. 20 in a rally driven primarily by vaccine optimism, with speculation the incoming Biden administration was reluctant to impose a nationwide lockdown in the US and the signing of the Regional Comprehensive Economic Partnership among Asia-Pacific nations also boosting sentiment earlier in the week.

However, the focus shifted back to the progression of the coronavirus Nov. 23, with the trajectory of crude prices likely tethered to the market's assessment of the pandemic's impact on the global economy and on energy demand.

"The market will be looking at the upcoming Markit PMI data releases across the European Union, the UK and the US for clues as to how badly the pandemic has hit business activity in major economies," DailyFX strategist Margaret Yang told S&P Global Platts Nov. 23. "This Wednesday's US initial jobless claim figures and EIA crude oil inventories will be closely watched, too," she added.

Other market analysts emphasized the upcoming OPEC and non-OPEC Ministerial Meeting on Dec. 1, which is expected to provide clarity over the OPEC+ alliance's production plan going into 2021. Most market analysts expect the meeting to confirm a three- to six-month extension of the current 7.7 million b/d production cut, but some analysts, encouraged by hints from key figures within the OPEC+ alliance, believe that deeper production cuts could also be announced.

"The broader market is very aware that even the most promising vaccine news will not have a discernible effect on oil demand until at least the second half of 2021. But what will have an immediate impact on the oil market - or rather bring into better equilibrium the balance of supply and demand by drawing down inventory more definitively - is an OPEC quota extension," Axi global chief market strategist Stephen Innes said in a Nov. 23 note.

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