ADNOC awards Eni, PTTEP concession amid plans to hit 5 mil b/d capacity by 2030

MOSCOW (MRC) -- Abu Dhabi National Oil Co, the UAE's biggest energy producer, has awarded Italy's Eni and Thailand's PTTEP an exploration concession amid plans to boost oil production capacity by 25% to 5 million b/d by 2030, reported S&P Global.

The Eni-PTTEP consortium won rights to look for oil and gas in Offshore Block 3, the second award in ADNOC's second bidding round, the company said in a statement Dec. 21. Occidental Petroleum won the first concession in the second bidding round, which was launched in 2019.

PTTEP and Eni will hold 100% in the exploration phase with investments up to Dirham 1.51 billion (US412 million), which include exploration and appraisal drilling, and a participation fee to explore for and appraise oil and gas opportunities. Eni will be the operator in the exploration phase for the block that spans an 11,660 sq km area.

"Following successful commercial discovery during the exploration phase, Eni and PTTEP will, together, have the right to a production concession to develop and produce such commercial discoveries," ADNOC said.

"New 3D seismic data has been acquired for a part of the block, which, combined with its proximity to the existing onshore oil and gas fields, suggests the concession area has promising potential."

Together, Eni and PTTEP will have the right to a production concession to develop and produce commercial discoveries following the exploration phase. ADNOC has the option to hold a 60% stake in the production phase of the 35-year concession, which starts with commencement of the exploration phase.

In January 2019, a consortium led by Eni and PTTEP won two offshore blocks in Abu Dhabi's first competitive bid round. They continue to explore for oil and gas in the area located northwest of Abu Dhabi city.

Eni and PTTEP will also participate technically and financially in ADNOC's "mega" 3-D seismic survey that will "capture high-resolution 3D images of the complex geology at ultra-deep locations below the surface and will be used to identify potential hydrocarbon reservoirs," the company added.

ADNOC is ramping up exploration for oil and gas as it seeks to boost its gas output and increase oil production capacity by 25% to 5 million b/d by 2030.

Abu Dhabi, the oil-rich emirate in the seven-member UAE federation, is forging ahead with expanding its hydrocarbons sector in the face of the coronavirus pandemic, by also announcing a plan for ADNOC to spend Dirham 448 billion (USD122 billion) over the next five years.

The new award follows the announcement from Abu Dhabi's Supreme Petroleum Council - its highest energy decision making body - about the discovery of recoverable unconventional oil resources estimated at 22 billion stock tank barrels, or STB, and an increase in conventional oil reserves of 2 billion stock tank barrels, boosting the UAE's conventional reserves to 107 billion STB.

In the second round, Abu Dhabi's five blocks that were opened for bidding - three of which are offshore and two onshore - are known as Offshore Block 3, Offshore Block 4, Offshore Block 5, Onshore Block 5 and Onshore Block 2, with the latter offering two separate licensing opportunities for conventional and unconventional oil and gas, respectively.

In total, the five blocks comprise an area of about 34,000 sq km.

ADNOC's first bid round, which concluded in March 2019, awarded Onshore Block 1 to Bharat Petroleum Corp. and Indian Oil Corp. Onshore Block 3 was awarded in a concession to Occidental Petroleum, and Onshore Block 4 was awarded to INPEX Corp.

As MRC reported previously, in early May, 2020, Abu Dhabi National Oil Company (ADNOC) began a gradual restart of its Ruwais oil refinery complex after a scheduled maintenance shutdown. The Ruwais complex, which has capacity of 835,000 barrels per day, was shut down early this year, the ADNOC spokesman said.

And in late July 2019, ADNOC said its Ruwais refinery west cracker was offline for maintenance.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,760,950 tonnes in the first ten months of 2020, up by 3% year on year. Only high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments increased. At the same time, PP shipments to the Russian market reached 978,870 tonnes in January-October 2020 (calculated using the formula: production minus exports plus imports minus producers' inventories as of 1 January, 2020). Supply of exclusively of PP random copolymer increased.
MRC

MOSCOW (MRC) -- BASF has reached an agreement to sell its manufacturing site in Kankakee, Illinois and the associated businesses of vegetable-oil-based raw material sterols and natural vitamin E, anionic surfactants and esters produced there to an affiliate of One Rock Capital Partners, LLC, a US-based private equity firm, as per the company's press release.

The businesses have around 160 employees including business management and commercial personnel across the US. The transaction is expected to close in the first half of 2021, subject to the approval of the relevant competition authorities. Terms of the transaction were not disclosed.

BASF acquired the site and its businesses from Cognis in 2010. It is operated by the Nutrition & Health and the Care Chemicals divisions of BASF. Based on a recent careful market review it was determined that the site is no longer a strategic fit for BASF.

“With this divestment, we are sharpening the profile of our human nutrition business, to which we remain firmly committed, with focus on creating superior food ingredients and formulations that meet challenges and needs of continuously evolving lifestyles,” said Dr. Melanie Maas-Brunner, President of BASF’s Nutrition & Health division. “This is a further step to optimize the global manufacturing footprint of our division,” said Ralph Schweens, President of BASF’s Care Chemicals division. “I am glad that, with One Rock Capital Partners, we have found a promising new home for our Kankakee site and the team.”

“During recent years, the Kankakee site has established a strong reputation for delivering natural, high-quality, mission critical products to its global customer base. We look forward to building on its success and providing customers with exceptional service and new innovations,” said Tony W. Lee, Managing Partner of One Rock Capital Partners. “Our intention is to transform the business into a strong standalone enterprise poised for significant growth,” added R. Scott Spielvogel, Managing Partner of One Rock Capital Partners.

BASF continues to produce anionic surfactants for the home care, personal care and industrial formulators industries at its other sites worldwide.

As MRC reported before, German chemicals maker BASF said in early November it had put a project to build a petrochemicals complex in India worth up to USD4 billion on hold due to the economic uncertainty caused by the COVID-19 pandemic. BASF signed a memorandum of understanding with Abu Dhabi National Oil Company (ADNOC), Adani Group and Borealis AG in October 2019 to evaluate a collaboration to build the chemical site in Mundra, in India’s Gujarat state.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,760,950 tonnes in the first ten months of 2020, up by 3% year on year. Only high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments increased. At the same time, PP shipments to the Russian market reached 978,870 tonnes in January-October 2020 (calculated using the formula: production minus exports plus imports minus producers' inventories as of 1 January, 2020). Supply of exclusively of PP random copolymer increased.

BASF is the leading chemical company. It produces a wide range of chemicals, for example solvents, amines, resins, glues, electronic-grade chemicals, industrial gases, basic petrochemicals and inorganic chemicals. The most important customers for this segment are the pharmaceutical, construction, textile and automotive industries.
MRC

MOSCOW (MRC) -- Neste has a target to process annually over 1 MM tons of waste plastic from 2030 onwards. The company plans to use liquefied plastic waste as a raw material at its fossil oil refinery to upgrade it into high-quality drop-in feedstock for the production of new plastics, according to Hydrocarbonprocessing.

Neste successfully processed 400 tons of liquefied plastic waste at its refinery in Finland this fall, an amount corresponding to the annual amount of plastic waste generated by 20,000 average European citizens. This was the first time Neste processed liquefied waste plastic at an industrial scale. During the run, packaging and mixed waste plastics were upgraded into high-quality recycled feedstock for petrochemical industry uses, e.g. for the production of new plastics.

The processing run marks a very important milestone with regards to Neste’s strategic aims of driving circular economy and replacing crude oil use at its own refineries. Neste’s target is to process more than 1 MM tons of waste plastic annually from 2030 onwards.

Neste aims to increase the volumes of liquefied waste plastic processing gradually to continue learning and developing the value chains and processing technologies. Next processing runs at Neste’s fossil oil refinery in Porvoo are already being prepared for 2021.

“We are very excited to have successfully completed our very first industrial-scale processing run with liquefied waste plastic. While there is still a lot of work to be done, this is a huge step for our industry towards turning hard-to-recycle plastics from waste to a valuable resource, making circularity a reality,” says Mercedes Alonso, Executive Vice President, Renewable Polymers and Chemicals at Neste. “Together with the renewable feedstock that we have already been providing for the production of high-quality, high-performance polymers and chemicals with reduced carbon footprint, these new volumes produced through chemical recycling of plastic waste will significantly contribute to accelerating the necessary shift towards the circular bioeconomy for plastics.”

Prior to the trial, Neste carried out extensive research and laboratory tests in addition to conducting comprehensive analyses with regards to production assets and processes to ensure the feasibility and safety of processing this new recycled raw material.

"The trial run is a result of great cooperation throughout the Neste organization. We have technically advanced refineries and the required expertise in refining low-quality waste and residue raw materials into high-quality end products. These factors will enable us to reach our goal to develop Porvoo refinery towards co-processing renewable and circular raw materials", says Marko Pekkola, Executive Vice President, Oil Products, Neste.

In the sourcing of liquefied waste plastic for the first processing run, Neste was supported by its partner Ravago. Together with Ravago and several other plastics value chain partners, Neste is developing chemical recycling technologies and capacity to enable recycling of plastic waste streams that are considered unsuitable for mechanical recycling and are currently destined for incineration or landfills. Developing ecosystems to chemically recycle plastic waste supports the global efforts to reduce plastic waste, which can help prevent littering of the environment. By providing plastic waste a high-value outlet, a new life cycle, Neste and its partners help keep plastics in circulation, while also providing new means to reduce crude oil dependency in the production of new plastics.

As MRC reported earlier, in March 2020, Borealis started to produce polypropylene (PP) based on Neste-produced renewable feedstock in its production facilities in Kallo and Beringen, Belgium. This marked the first time that Borealis has replaced fossil fuel-based feedstock in its large-scale commercial production of PP. The Belgian plants were recently awarded by the International Sustainability and Carbon Certification (ISCC) organization with ISCC Plus certification for its renewable PP.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,760,950 tonnes in the first ten months of 2020, up by 3% year on year. Only high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments increased. At the same time, PP shipments to the Russian market reached 978,870 tonnes in January-October 2020 (calculated using the formula: production minus exports plus imports minus producers' inventories as of 1 January, 2020). Supply of exclusively of PP random copolymer increased.
MRC

MOSCOW (MRC) -- Global jet fuel markets are coming back to life, resuscitated by a rebound in air cargo demand, gradually recovering passenger traffic and hopes that COVID-19 vaccines will spur more international flights in 2021, said Hydrocarbonprocessing.

The pandemic brought air travel to a virtual halt this year, and analysts say it may take years before global appetite for jet fuel returns to pre-pandemic levels. But refining profits for the fuel surged to multi-month highs in all key trading hubs in December on hopes of higher demand in 2021, with U.S. and European margins underpinned by a recovery in air cargo volumes and Asian margins also by a rebound in domestic travel and heating consumption.

Jet refining margins in Asia - the world’s top fuel market - have soared 580% and export prices by 45% since mid-September to their highest since March. Domestic air travel picked up as some countries eased coronavirus curbs.

"We expect vaccines will become available by (the) end of Q1 2021 and some travel restrictions will remain in place," said Qiaoling Chen, research associate at consultancy Wood Mackenzie in Singapore, forecasting Asian jet fuel demand at 1.4 million barrels per day (bpd) in the first quarter of next year. The consultancy expects appetite for jet fuel in the region to hit 1.3 million bpd in the fourth quarter of 2020, up by 460,000 bpd from Q2, but still 41% below the same period in 2019.

In the United States, margins to refine crude into distillates, which includes jet fuel, have about doubled since mid-September to more than USD13 a barrel, but are still about $10 per barrel below year-ago levels, according to Refinitiv data. Artyom Tchen, senior analyst at Rystad Energy in Norway, said U.S. jet fuel demand is currently around 1.34 million bpd, 30% off pre-coronavirus levels in January. International flights account for over 60% of global appetite for jet fuel.

"We will see the demand recovery going forward, but it will take some time and is especially dependent on how quickly international traffic volumes from the U.S. recover,” he said. While passenger air travel globally has recovered from its plunge to near total stoppage in May, the number of scheduled flights remained around 45% below year-ago levels in November.

Cargo traffic, however, has recovered far more briskly, and in October was only 6% below year-ago levels thanks to booming e-commerce. Global air cargo demand is expected to receive a further boost as airlines prepare to play a key role in mass vaccine roll-outs.

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% 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 1,760,950 tonnes in the first ten months of 2020, up by 3% year on year. Only high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments increased. At the same time, PP shipments to the Russian market reached 978,870 tonnes in January-October 2020 (calculated using the formula: production minus exports plus imports minus producers' inventories as of 1 January, 2020). Supply of exclusively of PP random copolymer increased.
MRC

MOSCOW (MRC) -- China's monoethylene glycol (MEG) stocks fell in mid-December below the 1 million mt mark for the first time since February, according to S&P Global with reference to market sources.

Thus, MEG stocks were at 976,000 mt, down by around 20,000-30,000 mt from a week ago.

As MRC reported earlier, MEGlobal has announced its Asian Contract Price (ACP) for monoethylene glycol (MEG) to be shipped in January 2021. Thus, on 11 December, the company said ACP for MEG would be at USD670/MT CFR Asian main ports for arrival in January 2021, up by USD10/MT from December. The November 2020 ACP reflects the short term supply/demand situation in the Asian market.

MEG is one of the main feedstocks for the production of polyethylene terephthalate (PET).

According to ICIS-MRC Price report, in Russia, December contract PET prices were in the range of Rb68,100-71,000/tonne CPT Moscow, including VAT. Most producers raised their prices of material in the second week of December and expect further price increases by the end of this month.
MRC