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

Petrobras says 2020 oil output averaged record 2.28 MMbpd

MOSCOW (MRC) -- Brazil's Petrobras produced a record 2.28 million barrels of oil per day in 2020, a figure that is directly in line with the most recent guidance given by the state-run oil company, said Hydrocarbonprocessing.

The combined oil and natural gas output of Petrobras averaged 2.84 million barrels of oil equivalent per day last year, the company said in a securities filing, a figure that also matched the company's guidance.

The firm attributed the record output to better-than-expected processing capacity at its Buzios field, a smaller-than-expected production decline in the Tupi and Sapinhoa fields and better efficiency at its platforms.

Petroleo Brasileiro SA PETR4.SA, as the firm is formally known, had said for most of the year that it expected production of 2.2 million barrels of crude and 2.7 million boepd in 2020. However, the company upped its guidance to 2.28 million barrels of crude and 2.84 million boepd in mid-October, a move that did not come as a surprise to the market, as the company had been outperforming production targets all year.

The company did not break down production by field or product, nor offer any details on the destination of its oil and gas. The firm will likely offer more details during its fourth quarter results release in late February.

We remind that Braskem is no longer pursuing a petrochemical project, which would have included an ethane cracker, in West Virginia. And the company is seeking to sell the land that would have housed the cracker. The project, announced in 2013, had been on Braskem"s back burner for several years.

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.

Headquartered in Rio de Janeiro, Petrobras is an integrated energy firm. Petrobras" activities include exploration, exploitation and production of oil from reservoir wells, shale and other rocks as well as refining, processing, trade and transport of oil and oil products, natural gas and other fluid hydrocarbons, in addition to other energy-related activities.
MRC

COVID-19 - News digest as of 11.01.2021

1. Feedstocks, energy in transition

MOSCOW (MRC) -- The global transition toward a lower-carbon future is rapidly changing the energy and feedstocks landscape for chemical and energy companies as they head into 2021. The pandemic caused worldwide crude oil demand to slump 10% in 2020, dramatically accelerating preparations by the refining sector to shift away from fuels toward a petrochemicals-centric future, reported Chemweek. The world will still consume large amounts of oil for decades, but COVID-19 “reset world oil demand at a lower level,” says Jim Burkhard, vice president/crude oil markets at IHS Markit. Forecast global crude oil demand is now 3.5-4.0 million b/d less in the late 2020s compared with the pre-COVID outlook. “In our base case, world oil demand reaches a plateau in the mid-2030s. However, we do not rule out the possibility that 2019 was the peak in world oil demand, particularly if COVID-19 is not contained,” Burkhard said, speaking at the World Methanol Conference, held recently by IHS Markit in a virtual format. Last year may be remembered “as a pivot point when the energy transition moves from decades of slow motion to a faster pace of change,” he said.



MRC

Asia distillates-gasoil cracks dip amid concerns over ample supplies

MOSCOW (MRC) -- Asian refining margins for 10-ppm gasoil slipped in late December, weighed down by concerns that near-term supplies on the back of high regional refinery runs would weaken market fundamentals, reported Reuters.

Although gasoil demand has improved in recent weeks, renewed lockdown measures in several markets to contain a new variant of the coronavirus are expected to dampen the pace of recovery in coming weeks, market watchers said.

Refining margins, also known as cracks, for 10-ppm gasoil were at USD6.21 a barrel over Dubai crude during Asian trading hours on 30 December, down from USD6.53 per barrel a day earlier.

Cracks for the benchmark gasoil grade in Singapore have gained 17.6% in the past month, but they were still about 57% lower than their seasonal average for this time of the year, Refinitiv Eikon data showed.

The front-month time spread for 10-ppm gasoil in Singapore, which has narrowed its contango by nearly 70% this month, traded at a discount of 15 cents per barrel on 30 December.

The flattening contango structure would encourage traders to liquidate gasoil stocks from storages, putting pressure on the market and capping any major upside for the refining profits in the first half of 2021, industry analysts said.

Middle-distillate inventories in the Fujairah Oil Industry Zone dropped 8.2% to 5.03 million barrels in the week ended Dec. 28, data via S&P Global Platts showed.

The weekly stocks in Fujairah have averaged 4.2 million barrels in late December, 2020, compared with the weekly average of 2.4 million barrels in 2019, Reuters calculations showed.

US distillate stockpiles fell by 1.9 million barrels in the week to Dec. 25, counter to expectations for a build of 529,000 barrels, data from industry group the American Petroleum Institute (API) showed on 29 December.

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 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