Indian refiner October oil processing highest since March

MOSCOW (MRC) -- Crude oil processed by Indian refiners rose to its highest in seven months in October as fuel demand picked up although throughput remained lower than a year earlier, hurt by the coronavirus pandemic’s impact on industrial and transport activity, said Hydrocarbonprocessing.

Crude oil throughput in October dropped 16.1% from a year earlier to 4.35 million bpd (18.39 million tons), but was the highest since March when the country went into a nationwide lockdown, provisional data issued by the government showed on Wednesday. Pointing to a recovery in economic activity, India’s fuel consumption registered its first year-on-year increase since February last month, data showed earlier.

Daily coronavirus cases in the country have declined steadily since having peaked in September, although it remains the second-highest number of cases in the world, after the United States. Crude oil throughput in October rose 0.5% from September’s 4.33 MMbpd (17.71 million tons). Indian refiners operated at an average rate of 86.7%, highest March, compared to 86.2% in September, data showed.

A major maintenance shutdown at Nayara Energy’s 400,000 bpd Vadinar refinery pulled down the nation’s average refinery run rates. Nayara’s plant operated at 33% capacity last month, the data showed. The country’s largest refiner, Indian Oil Corp (IOC) operated its directly owned plants at 95.64% capacity, the data showed. Reliance, owner of the world’s biggest refining complex, operated its plants at 94.33% capacity. Crude oil production fell by 6.2% to 2.57 million tons (608,000 bpd), the monthly report showed.

As MRC informed before, slumping fuel consumption during the pandemic is accelerating the long-term shift of refining capacity from North America and Europe to Asia, and from older, smaller refineries to modern, higher-capacity mega-refineries. The result is a wave of closures, often centering on refineries that only narrowly survived the previous closure wave in the years after the recession in 2008/09.

We remind that PetroChina has nearly doubled the amount of Russian crude being processed at its refinery in Dalian, the company's biggest, since January 2018, as a new supply agreement had come into effect. The Dalian Petrochemical Corp, located in the northeast port city of Dalian, was expected to process 13 million tonnes, or 260,000 bpd of Russian pipeline crude in 2018, up by about 85 to 90 percent from the previous year's level. Dalian has the capacity to process about 410,000 bpd of crude. The increase follows an agreement worked out between the Russian and Chinese governments under which Russia's top oil producer Rosneft was to supply 30 million tonnes of ESPO Blend crude to PetroChina in 2018, or about 600,000 bpd. That would have represented an increase of 50 percent over 2017 volumes.

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

MOSCOW (MRC) -- S&P Global, the owner of stock indexes like the Dow and the S&P 500, said on Monday that it plans to acquire IHS Markit for USD44 billion, including debt, reported The New York Times.

The transaction would create a financial information powerhouse at a time when data increasingly fuels automated trading.

The all-stock deal - the biggest announced so far this year - would give S&P Global control of IHS Markit, whose software is used by many of the world’s biggest financial institutions.

It is the latest show of strength by big companies amid the pandemic. Corporate boards have increasingly come to believe that getting bigger will help them ride out the turbulence caused by the coronavirus, while investors have encouraged companies to use stocks and cheap debt to buy growth.

Other big deals struck so far this year include Nvidia’s USD40 billion takeover of the computer chip designer Arm and Aon’s USD30 billion acquisition of its rival insurance broker Willis Towers Watson.

Financial data has long been one of the most coveted commodities on Wall Street, as demonstrated by the multibillion-dollar value of Bloomberg L.P., the empire of former New York City Mayor Michael R. Bloomberg.

Big deals in recent years have further illustrated its worth: Last year, the parent of the London Stock Exchange agreed to buy Refinitiv, the former data arm of Thomson Reuters, for USD14.5 billion.

IHS Markit itself was the product of a 2016 merger between IHS, which was founded in 1959 as a repository for aerospace data, and Markit, which was created in 2003 as a source of price information about the financial derivatives known as credit-default swaps.

Under the terms of the deal, S&P Global will own nearly 68% of the combined company, while investors in IHS Markit will own the remainder.

The companies expect the deal to close in the second half of next year, pending approval from shareholders and antitrust regulators.

As MRC informed earlier, the coronavirus pandemic has provided some opportunities hygiene products, but there are also risks in other petrochemical products, Borealis CEO Alfred Stern told S&P Global following their third quarter results Nov. 4. The company saw polyolefin sales volumes increase in the third quarter compared with the same quarter in 2019, as hygiene and healthcare segments experienced strong demand amid the coronavirus pandemic. Demand from the automotive and pipes sector was subdued in early summer but climbed higher in Q3, with automotive demand recovering to 90% of 2019 levels.

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) -- India has imposed anti-dumping responsibility on imports of fluoroelastomers from China by 5 years beginning November 27, the Central Board of Oblique Taxes and Customs (CBIC) stated in a notification issued Friday, reported Kemicalinfo.

The Board stated that the choice has been taken after the Directorate Basic of Commerce Cures (DGTR) requested for additional extension of the anti-dumping responsibility on the products originating in or exported from China, as there was a chance of continuation of dumping and harm to home trade in case the anti-dumping responsibility is stopped presently.

“There’s enough proof to point that the cessation of anti-dumping responsibility at this stage will result in continuation of dumping and harm to the home trade,” the CBIC stated in its notification. The responsibility ranges between USD1.04 and USD8.6 per kg.

“The anti-dumping responsibility imposed beneath this notification shall be efficient for a interval of 5 years (except revoked, outdated or amended earlier) and shall be paid in Indian foreign money,” it added.

The DGTR had initiated an evaluation in January on whether or not the products being imported had been hurting home trade, and concluded it final month.

India had first imposed the responsibility in January 2019, which was prolonged in July these 12 months until October 27, after which additional to November 27.

Fluoroelastomers are synthetic rubbers with principal applications such as temperature-resistant O-rings, seals, and gaskets used in aerospace and industrial equipment.

As MRC informed previously, earlier this month, India terminated the anti-dumping investigation on monoethylene glycol (MEG) imports from Kuwait, Oman, the UAE and Singapore. The applicant, Reliance Industries Limited, withdrew the application on anti-dumping investigation via a letter on 18 November stating that “in view of the current situation, they have withdrawn the aforesaid application with a liberty to resubmit the same”, according to a notification from the Ministry of Commerce and Industry. The anti-dumping investigation was launched on 9 December 2019.

MEG is mainly used in the production of polyester fibres, resins and films (around 80% of global consumption), followed by use in polyethylene terephthalate (PET) resin. It is also used as automotive antifreeze.

As per MRC' ScanPlast, calculated consumption of polyethylene terephthalate (PET) reached 52,71o tonnes in September 2020, down 27% compared to the same time a year before. Total consumption of PET in Russia in the nine months of 2020 reached 530,750 tonnes, down 22% than the same indicator last year.
MRC

MOSCOW (MRC) -- The global oil and gas industry has witnessed a marginal increase in the number of oil and gas contracts from 1,104 in Q2 2020 to 1,136 in Q3 2020, said Hydrocarbonprocessing.

This is in spite of challenges such as crude oil process and the COVID-19 outbreak, says GlobalData, a leading data and analytics company. The industry recorded contract value of USD14.16B in Q3 2020, as compared to the previous quarter that reported USD32.51B in value. Primarily this difference was due to a high value USD19.21B contract agreement reported by Qatar Petroleum in Q2 2020.

The key contract in Q3 2020 was JGC’s Engineering, Procurement, Construction and Commissioning (EPCC) work for the 34,500 bpd FCC unit, 55,000 bpd VDU unit and 40,000 bpd Diesel Desulfurization unit for the upgrade of Basra refinery project in Al-Basrah, Iraq.

GlobalData’s latest report, ‘Global Oil and Gas Industry Contracts Review, Q3 2020’, states that the upstream sector reported 758 contracts in Q3 2020, followed by the midstream and downstream/petrochemical sector with 205 and 183 contracts, respectively, during the quarter.

Europe recorded majority of the contracts, with 495 contracts in Q3 2020, followed by Asia and North America with 240 and 215 contracts, respectively, during the quarter.

Operation and Maintenance (O&M) represented 50% of the total contracts in Q3 2020, followed by contracts with multiple scopes such as construction, design and engineering, installation, O&M and procurement, which accounted for 15%.

As MRC informed before, slumping fuel consumption during the pandemic is accelerating the long-term shift of refining capacity from North America and Europe to Asia, and from older, smaller refineries to modern, higher-capacity mega-refineries. The result is a wave of closures, often centering on refineries that only narrowly survived the previous closure wave in the years after the recession in 2008/09.

We remind that PetroChina has nearly doubled the amount of Russian crude being processed at its refinery in Dalian, the company's biggest, since January 2018, as a new supply agreement had come into effect. The Dalian Petrochemical Corp, located in the northeast port city of Dalian, was expected to process 13 million tonnes, or 260,000 bpd of Russian pipeline crude in 2018, up by about 85 to 90 percent from the previous year's level. Dalian has the capacity to process about 410,000 bpd of crude. The increase follows an agreement worked out between the Russian and Chinese governments under which Russia's top oil producer Rosneft was to supply 30 million tonnes of ESPO Blend crude to PetroChina in 2018, or about 600,000 bpd. That would have represented an increase of 50 percent over 2017 volumes.

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

MOSCOW (MRC) -- The closure of Petron Corp.’s refinery in Bataan is imminent if all industry players will not be accorded a level playing field, reported The Manila Times with reference to the company's top executive statement.

“Kailangan maging level playing field. Kung hindi maging level playing field ang Petron refinery with the importers, magsasara na rin kami sigurado. Kailan iyon? Very soon (We should be on a level playing field. If Petron will not have a level playing field with the importers, we will close our refinery for sure. When? Very soon),” Petron President and Chief Executive Officer Ramon Ang said in a virtual briefing.

Ang told reporters the listed oil company “will go to that direction” if the same situation persists.

Energy Secretary Alfonso Cusi said the Department of Energy (DoE) is yet to receive a notification from Petron on its supposed plan to permanently close its refinery in Limay town.

In a statement, Cusi said, “whatever business measures Petron will arrive at in the course of its discussion with the concerned parties, we at the DoE will respect the management’s decision.”

The point of contention, according to Petron’s top executive, is the double imposition of taxes: one on the imported crude oil upon its arrival and another on the finished product. On the other hand, importers are taxed once for selling petroleum products.

Sought for comment, Finance Secretary Carlos Dominguez 3rd said the refinery business is “a supply chain issue rather than a tax issue.”

But for Laban Konsyumer Inc. President Victorio Mario Dimagiba, the imposition of fuel excise taxes under the Tax Reform for Acceleration and Inclusion law makes refinery operations in the country no longer viable.

“We note that in the refinery, there might be market and timing issues including the importation of crude at a high price, then after refining the world crude prices might be lower, thus, refining margins could be lower,” Dominguez said in a message to reporters.

“On the other hand, an importer, who imports finished products can sell these products right away, making him less vulnerable to oil price movements,” he added.

Dominguez explained the excise tax (and duties) on importation of finished products is imposed upon importation and on locally refined products, it is imposed upon removal from place of manufacture.

So, at the time of marketing or sale, the excise tax in both instances should have already been paid, he added.

“Petron and Shell should have read this in 2018 that Train was not equitable tax policy at their end of the business,” said Dimagiba, a former Department of Trade and Industry undersecretary, referring to the Tax Reform for Acceleration and Inclusion law.

The 180,000 barrel-per-day oil refinery in Bataan, inaugurated in 1961, is now the lone refinery in the Philippines.

In August this year, Pilipinas Shell permanently shut its refinery in Tabangao, Batangas that would be transformed into a full import and storage terminal for finished products.

Chevron was the first to close its refinery in Batangas in 2003 and was subsequently converted into a finished-import terminal.

Should Petron decide to halt operations of the Bataan refinery for good, the country “will be at the mercy of foreign suppliers,” according to Petron.

Dimagiba shares the same sentiment, saying this “will make the country make us dependent to foreign supply and prices.”

Ang said the only way to achieve a level playing field is to go to Congress and have the existing tax laws amended even though this is a long and tedious process.

“The only way to save this is if we can go to Congress at ma-level playing field,” Ang said, adding all questions to be raised by legislators have to be addressed.

But Dominguez thinks otherwise.

“We don’t need to change our tax on this. It’s happening worldwide, refinery margins are getting squeezed. Big oil companies have been shutting down their refineries in various parts of the world,” he said.

Ang said, “iyong refinery business today nakapahirap talaga. Makita mo sa buong mundo marami na ang nagsasara (it is difficult to manage a refinery business today. Around the world, a lot of refineries have already shut down).”

Cusi said the Energy department is looking into the taxation concerns raised in coordination with the Department of Finance. “At the same time, we are also evaluating how a closure scenario would impact pricing, as well as the country’s energy security.”

Dimagiba is proposing that the government should mull buying back Petron, which he said was once a state-owned entity through Philippine National Oil Co.

“The environment where Covid-19 (coronavirus disease 2019) will linger should be a driving criteria. We should offer to buy back Petron from Ramon Ang,” Dimagiba said.

As MRC informed before, 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 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