China November crude throughput hits daily record as private refiner starts new unit

MOSCOW (MRC) -- China's crude oil throughput in November rose 3.2% on year, setting a record high on a daily basis, as a huge private refiner started trials of a new refining unit and state-owned refineries raised processing rates to meet annual targets, reported Reuters.

The country processed 58.35 million tonnes of crude oil last month, equivalent to 14.2 MMbpd, according to data from the National Bureau of Statistics (NBS) on 15 December, 2020.

That exceeded the October record of 14.09 MMbpd.

January-November throughput was 614.41 MMt, or 13.39 MMbpd, up 3.1% from the same period in 2019.

Zhejiang Petrochemical Corp in early November started a 200,000 bpd crude unit, in addition to its existing 400,000 bpd refining capacity in eastern China.

State-backed oil refineries also stepped up operation rates to meet solid demand for diesel and low-sulphur marine fuel.

According to data compiled by S&P Platts, the average crude throughput rate at Chinese state-controlled firms rose by 1 percentage point from October to 79.8% in November.

Meanwhile, PetroChina Co's Yunnan refinery shut a 260,000 bpd crude processing facility on Dec. 5 for a 50-day overhaul. Sinopec's Qingdao and Qilu facilities are scheduled to resume operations later this month after maintenance.

The NBS data also showed China's crude oil output in November at 15.96 million tonnes, or 3.88 MMbpd, up 1.2% from a year earlier.

Output for the first 11 months rose 1.6% to 180 million tonnes.

Natural gas output last month increased 11.8% from a year earlier to 16.9 billion cubic metres (bcm), the data showed, with January-to-November production jumping 9.3% on year to 170.2 bcm.

As MRC wrote previously, in January 2020, Zhejiang Petroleum & Chemical Co Ltd, one of two new major refineries built in China in 2019, started up the remaining units in the first phase of its refinery and petrochemical complex. The complex is situated in east China’s Zhoushan city. The company, 51% owned by private chemical group Zhejiang Rongsheng Holdings, said it ha started test production at ethylene, aromatics and other downstream facilities, without giving further details.

Zhejiang Petrochemical started a first 200,000 barrels per day (bpd) crude processing unit in late May, 2019, following on from the start of a 400,000-bpd refinery owned by another private chemical major Hengli Petrochemical. The newly started units at Zhejiang Petrochemical should include a second 200,000-bpd crude unit, a 1.2 million tonnes per year (tpy) ethylene unit and a 2 million tpy paraxylene unit, according to several industry sources with knowledge of the plant’s operations.

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

According to MRC's DataScope report, PE imports to Russia decreased in January-November 2020 by 17% year on year and reached 569,900 tonnes. High density polyethylene (HDPE) accounted for the greatest reduction in imports. At the same time, PP imports into Russia increased by 21% year on year to about 202,000 tonnes in the first eleven months of 2020. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.
MRC

Clariant to conclude talks on pigments divestment within weeks, workforce reductions on track

MOSCOW (MRC) -- Clariant said in last week's presentation to analysts that talks for the previously announced sale of the company's pigments business will conclude in the coming weeks and an agreement is expected to be signed in the second quarter, according to Chemweek.

In addition, a reduction of the company's workforce by approximately 600, part of efficiency measures announced in February 2020, and a similar plan for its regional organizations and service units that will reduce Clariant’s workforce by a further 1,000, are on schedule, the company said.

Stephan Lynen, CFO at Clariant, said during the presentation that Clariant is in talks with potential buyers, including financial and industry companies, for the pigments business, and that the divestment is expected to close by the fourth quarter of 2021.

Conrad Keijzer, who assumed responsibility as Clariant’s new CEO on 1 January 2021, noted that restructuring the company is a priority and the workforce-reduction programs are on track and need to be completed.

Lynen said that the plan to reduce the company’s workforce by 600 is expected to be completed by the end of 2021. Meanwhile, the effects of the reorganization that will result in 1,000 job cuts, equivalent to about 6% of the company's total workforce - of which one third will be lost as a result of planned divestments - will be felt in 2021 and 2022, he said.

As MRC informed before, in October 2020, Clariant (Muttenz, Switzerland) announced the construction of a new state-of-the-art catalyst production site in China. This project represents a significant investment which further strengthens Clariant’s position in China and enhances its ability to support its customers in the country’s thriving petrochemicals industry.

The new facility will be primarily responsible for producing the Catofin catalyst for propane dehydrogenation, which is used in the production of olefins such as propylene. Thanks to its excellent reliability and productivity, Catofin delivers superior annual production output compared to alternative technologies, resulting in increased overall profitability for propylene producers, says the company. Construction at the Dushan Port Economic Development Zone in Jiaxing, Zhejiang Province was scheduled to commence in Q3 2020, and Clariant expects to be at full production capacity by 2022.

Propylene is the main feedstocks for the production of polypropylene (PP).

According to MRC's DataScope report, PP imports into Russia increased by 21% year on year to about 202,000 tonnes in the first eleven months of 2020. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.

Clariant AG is a Swiss chemical company and a world leader in the production of specialty chemicals for the textile, printing, mining and metallurgical industries. It is engaged in processing crude oil products in pigments, plastics and paints.
MRC

Pandemic hastens threat of closure for struggling oil refineries

MOSCOW (MRC) -- The collapse in oil demand from the COVID-19 pandemic is hastening the reckoning for those refiners already struggling as new capacity overtakes demand, posing an existential threat to many, particularly Europe’s ageing plants, said Chemweek.

Even before the pandemic struck, which at its height destroyed over 20% of global oil demand, analysts expected global refining capacity would have to rationalize, particularly in Europe. According to consultants WoodMac, 1.4 million barrels per day, or around 9%, of refining capacity is under threat of rationalization in Europe in 2022-2023.

WoodMac declined to name specific refineries, but in a list sent to its clients and seen by Reuters, BP’s 377,000 bpd Rotterdam refinery, Total’s 102,000 bpd Grandpuits refinery in France and Petroineos’ 200,000 bpd Grangemouth refinery in Scotland were among 11 plants mentioned. The three companies did not immediately reply to a Reuters request for comment. Last week, energy trader Gunvor said it was considering mothballing its loss-making Belgian refinery.

Goldman Sachs expects global refinery utilization rates in 2021-2024 to be 3% lower relative to 2019, heightening competition and eventually leading to permanent plant closures in developed markets.It adds a “risk weight” to capacities beyond 2021, forecasting a 6 million bpd net capacity increase over the next five years, around 2 million bpd below the International Energy Agency’s forecast.

European refining has seen several waves of rationalizations, most recently in the wake of the 2008-2009 financial crisis. “In 2023 it could well be that two-thirds of the refineries in Europe don’t make any money, or lose money on a cash basis,” Alan Gelder VP Refining, Chemicals and Oil Markets at WoodMac said.

Strong labor unions are making refinery closures in many European countries difficult. Two of Europe’s biggest refiners, Total and Eni, have managed to shutdown some capacity in the past decade, and to turn some sites into biofuel operations.

Total, having already converted its La Mede refinery into making biofuels, is considering a second biofuel facility in France. Capacity on the U.S. Coast, Japan and some older, less sophisticated sites in Asia is also under threat, WoodMac says. “On the U.S. east coast, refiners that process lighter sweeter grades, like Trainer and Bayway, might be in trouble,” Kevin Waguespack, refinery consultant at Baker O’Brien said.

He added that the lack of access to cheap crude in the northeast was the U.S. region’s “Achilles heel”. “Less competitive European refineries have been in trouble and the pandemic will put another nail in the coffin for them,” said John Auers, a refining analyst at consultancy Turner, Mason & Co. “Even before the pandemic, the IMO was going to disadvantage some refiners that made a lot of fuel oil that couldn’t afford to make upgrades,” Auers said.

The International Maritime Organization (IMO) changed the rules on shipping fuel at the start of the year so that all ships can only burn fuel with a maximum 0.5% sulfur, unless they have sulphur-cleaning kits. At least one of the Australia’s four remaining refineries could close unless the government steps in as the pandemic hits demand, sources told Reuters.

As MRC informed earlier, Enel Green Power (EGP), the renewable energy subsidiary of Italy’s Enel Group, and Maire Tecnimont (Rome, Italy) have agreed to work together on the development and construction of a green hydrogen production plant in the US.

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

According to MRC's ScanPlast report, Russia's estimated polyethylene (PE) consumption totalled 1,990,280 tonnes in the first eleven months of 2020, up by 1% year on year. Only high density polyethylene (HDPE) shipments increased. At the same time, polypropylene (PP) shipments to the Russian market reached 1 090,900 tonnes in the first eleven months of 2020 (calculated using the formula: production, minus exports, plus imports, excluding producers' inventories as of 1 January, 2020). Supply of exclusively PP random copolymer increased.
MRC

Indonesia spent more on biodiesel subsidies than funds collected in 2020

MOSCOW (MRC) -- Indonesia spent more on biodiesel subsidies than funds it collected through export levies last year, reported Reuters with reference to Eddy Abdurrachman, president director of the country's Estate Crop Fund (BPDP).

BPDP, the government body in charge of subsidising Indonesia's palm oil programmes, estimated 17-18 trillion rupiah had been raised from levies this year, while 25.7 trillion rupiah (USD1.82 billion) had been spent subsidising the price difference between crude oil and palm oil, he said.

"In 2020... crude oil price tended to go down, while crude palm oil trend is going up, so that there's this price gap that BPDP should bear," he told a virtual conference.

Indonesia makes it compulsory for its diesel to be blended with 30% biocontent made out of palm oil, as it tries to be less dependent on fuel imports and sop up palm supply.

But a slump in fuel prices this year has made the programme less economical and plans to increase the biocontent to 40% have been delayed due to funding issues.

To raise funds, Indonesia announced higher export levies on crude palm oil (CPO) exports earlier last month from a flat USD55 per tonne of CPO to a progressive levy system of USD55-USD255 depending on the price.

With the new levy system, BPDP expects to raise between 36-45 trillion rupiah next year to fund the biodidesel programme and a replanting programme for smallholder farmers, Eddy said.

As MRC wrote before, Indonesia's largest petrochemical producer Chandra Asri and Netherlands-based storage and terminal operator Vopak are planning to set up an infrastructure joint venture in Indonesia. The two companies signed a letter of intent on 5 October to set up the partnership, which aims to establish a new jetty and tank farm business that will serve third-party customers and to build secondary infrastructure at Chandra Asri's new petrochemical complex, the Indonesian firm said.

Chandra Asri's second petrochemical complex will include a 1.1mn t/yr naphtha-based cracker, 450,000 t/yr high-density polyethylene (HDPE) unit, 300,000 t/yr low-density polyethylene unit (LDPE) and a 450,000 t/yr polypropylene (PP) unit. The producer is aiming to commission the complex in 2024, barring any delays because of the Covid-19 pandemic.

Ethylene and propylene are feedstocks for producing PE and PP.

According to MRC's ScanPlast report, Russia's estimated polyethylene (PE) consumption totalled 1,990,280 tonnes in the first eleven months of 2020, up by 1% year on year. Only high density polyethylene (HDPE) shipments increased. At the same time, polypropylene (PP) shipments to the Russian market reached 1 090,900 tonnes in the first eleven months of 2020 (calculated using the formula: production, minus exports, plus imports, excluding producers' inventories as of 1 January, 2020). Supply of exclusively PP random copolymer increased.
MRC

Gron Fuels lets technology contract for billion-dollar clean fuels project

Gron Fuels lets technology contract for billion-dollar clean fuels project

MOSCOW (MRC) -- Gron Fuels, LLC has recently selecte Haldor Topsoe’s HydroFlex renewable fuels and H2bridge bio-hydrogen technologies with bio-carbon capture and sequestration option for a multi-billion low carbon intensity complex in Louisiana, according to Hydrocarbonprocessing.

The integration of the fully proven H2bridge hydrogen technology with the HydroFlex technology enables Gron Fuels to produce renewable bio-hydrogen equivalent to the production of a 1,000 MW hydrolyser plant at a fraction of the cost. The design flexibility to include bio-carbon capture and sequestration (CCS) to the project is added to pursue negative carbon intensity renewable fuel production.

Bio-hydrogen not utilized for renewable diesel production will be made available by Gron Fuels for purchase by third parties for lowering the CO2 emissions of power production, industrial processes, or transportation and can be shipped by the ~600 miles/1,000 km of hydrogen pipelines operational and located near Gron Fuels’ site.

Gron Fuels worked collaboratively with Topsoe to design the facility to be able to manufacture renewable arctic diesel with an additive-free -40 degrees cloud point.

The facility will produce renewable diesel from non-fossil feedstocks such as soybean and canola oils, distillers corn oil, tallow, used cooking oil, and feedstocks of the future such as bio-crudes. The low-carbon fuels produced can directly substitute conventional fuels in cars, trucks and airplanes, while utilizing existing fuel storage tanks and infrastructure such as long-haul pipelines.

“We have integrated the world’s leading renewable fuels technology by Haldor Topsoe with a design and long-term vision for production of net negative CO2 renewable diesel that will also create significant new and long-term green industrial jobs in Louisiana,” said Dan Shapiro, Managing Partner and co-founder of Fidelis Infrastructure, LP.

“Haldor Topsoe’s people and proven technologies have been instrumental in the development of the Gron Fuels facility as an on-purpose, low-carbon intensity renewable fuel production facility utilizing biohydrogen rather than fossil-based hydrogen in the hydrotreating process. Additionally, Haldor Topsoe’s proven and operational capabilities to capture CO2 from the H2bridge hydrogen plant provides Gron Fuels the flexibility to pursue multiple follow-on projects to achieve net negative carbon intensity through bioenergy carbon capture and sequestration,” said Bengt Jarlsjo, Partner and co-founder of Fidelis Infrastructure, LP.

Gron Fuels, LLC is a portfolio company of Houston-based asset management firm Fidelis Infrastructure that specializes in renewable energy, low-carbon transportation fuels, sustainable and circular economy infrastructure and digital infrastructure.

“We are very proud to be part of this innovative project that has such great potential for the state of Louisiana and for reducing carbon emissions by leveraging Topsoe’s proven technologies into Gron Fuels’ pathway to ultra-low carbon intensity renewable fuels. Topsoe’s vision is to be recognized as the world leader in carbon emission reduction technologies by 2024, and this project is an important step on our journey as it incorporates several of our industry-leading technologies,” says Amy Hebert, Chief Commercial Officer, Haldor Topsoe.

As MRC reported earlier, Braskem, the largest petrochemical company in the Americas and a world leader in the production of biopolymers, and Denmark-based Haldor Topsoe, a global leader in supply of catalysts, technology, and services for the chemical and refining industries, announced in November 2020 that they had achieved their first-ever demo-scale production of bio-based monoethylene glycol (MEG).

MEG is used to produce polyethylene terephthalate (PET), which is used in the manufacturing of plastic bottles, films, packaging containers, in the textile and food industries.

As per MRC's ScanPlast, Russia's estimated PET consumption reached 61,110 tonnes in November 2020, up by 1% year on year. Overall PET consumption in Russia reached 648,110 tonnes in the first eleven months of 2020, down by 18% year of year.

Haldor Topsoe is a global leader in supply of catalysts, technology, and services to the chemical and refining industries. Topsoe aims to be the global leader within carbon emission reduction technologies by 2024. By perfecting chemistry for a better world, we enable our customers to succeed in the transition towards renewable energy. Topsoe is headquartered in Denmark and serves customers around the globe.
MRC