Indiian Oil buys its first cargo of Iraqi Basra Medium oil

MOSCOW (MRC) -- Indian Oil Corp (IOC) , the country's top refiner, has loaded its first cargo of Iraq's newly introduced Basra Medium crude grade, according to Reuters with reference to ship tracking data from Refinitiv Eikon and a source with knowledge of the matter.

IOC loaded the cargo onto Minerva Kalypso, a suezmax-sized vessel, which left Iraq's southern port of Basra on Jan. 4, the data showed.

The ship is expected to arrive at Chennai port in southeastern India for IOC's subsidiary Chennai Petroleum Corp (CPCL) around Jan. 14.

Iraq's state oil marketing company (SOMO) launched the new sour crude grade in January by splitting existing Basra Light production into two grades to provide better quality stability.

"From this year IOC will get all three grades - Basra Light, Basra Medium and Basra Heavy - depending on the availability with the supplier," the source said, adding that the 1 million barrels of Basra Medium crude would go to CPCL.

Along with Chennai Petroleum, IOC controls about a third of the 5 million bpd of refining capacity in India.

"CPCL has been procuring Basra Light and Basra Heavy crude oil from Iraq and Basra Medium was procured recently for the first time, this is after the introduction of this grade by SOMO supplier to the market for the first time," the company said in a statement to Reuters.

Iraq has increased crude exports by introducing Basra Medium after the Organization of the Petroleum Exporting Countries and its allies agreed to raise output by 500,000 barrels per day (bpd) in January.

"Basra Medium helps fill the gap of a shortage of heavy oil globally due to sanctions on Iran and Venezuela, declining production in Colombia and Mexico and OPEC+ quotas," analytics firm Kpler said.

As MRC reported earlier, India’s top refiner Indian Oil Corp has been operating at 100% capacity since early November, 2020, as local fuel demand has recovered, its chairman S.M. Vaidya said late last year. IOC has been gradually raising crude runs at its plants, which plunged to about 39% at the beginning of April when a nationwide coronavirus lockdown hit fuel demand.

We remind that IOC is expanding its petrochemical capacity by more than 70% from its current 3.2 million tonnes a year. It is also on new technologies that reduces the cost of producing petrochemicals.

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.

Indian Oil Corporation Limited, or IndianOil, is an Indian state-owned oil and gas corporation with its headquarters in New Delhi, India.
MRC

MOSCOW (MRC) -- Sasol has completed the USD$404-million sale to Ineos of its 50% equity stake in the companies’ Gemini high-density polyethylene (HDPE) manufacturing joint venture (JV) at La Porte, Texas, said Chemweek.

The planned divestment, first announced by Sasol in November 2020, was successfully closed on 31 December.

The sale total was satisfied through a combination of cash and release from debt obligations, Sasol says in an announcement to the Johannesburg stock exchange. “The relevant debt facilities and security package have now been successfully restructured, releasing Sasol and its subsidiaries from any obligation to provide further security,” it says. The cash proceeds from the transaction were received on 31 December and will be used by Sasol to repay near-term debt obligations, it says. No value for the final cash amount received was given.

Ineos Olefins and Polymers (O&P) USA, a wholly-owned subsidiary of Ineos, is now the sole owner of the 470,000-metric tons/year Gemini HDPE unit. Ineos has operated the plant, located within the company’s Battleground manufacturing complex, since its start-up in 2017. Ineos said at the time of the announcement in November that the purchase would allow it to “further expand its reach” in the rapidly growing specialty PE markets for pressure-pipe and high-molecular-weight film.

Ineos has four other HDPE production plants with 767,000 metric tons/year of total capacity at Deer Park, Texas, according to IHS Markit data.

Sasol closed a USD2-billion transaction with LyondellBasell in December that saw the two companies formally set up an integrated polyethylene (PE) joint venture (JV) at Lake Charles, Louisiana, with LyondellBasell acquiring 50% ownership of Sasol’s new 1.5-million metric tons/year steam cracker, and low-density polyethylene (LDPE) and linear low-density polyethylene (LLDPE) plants.

As MRC informed earlier, in September 2020, Air Liquide finalised an agreement with Sasol to acquire the biggest oxygen production site in the world with a plan to reduce its carbon dioxide (CO2) emissions by 30%. After the announcement on July 29, the international major industry gas company has now entered into a business purchase agreement with Sasol to acquire the oxygen production site in Secunda, South Africa.

We remind that Sasol's world-scale US ethane cracker with the capacity of 1.5 mln tonnes per year reached beneficial operation on 27 August 2019. Sasol's new cracker, the heart of LCCP, is the third and most significant of the seven LCCP facilities that came online and will provide feedstock to the company's six new derivative units at Sasol's Lake Charles multi-asset site.

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

MOSCOW (MRC) -- India's fuel consumption rose for a third straight month in November, helped by reviving transportation and business activity, although a year-on-year fall pointed to a sluggish economic recovery, reported Reuters.

Consumption of refined fuels, a proxy for oil demand, in November rose 0.4% from the previous month to 17.83 million tonnes, data from the Petroleum Planning and Analysis Cell (PPAC) of the Ministry of Petroleum & Natural Gas released on Saturday showed.

Diesel consumption, a key parameter linked to economic growth and which accounts for about 40% of overall refined fuel sales in India, edged up 0.6% month-on-month, but fell 7% to 7.04 MMt on an annual basis.

Gasoil consumption in India, which has been one of the primary drivers for Asian demand for the fuel in recent weeks, alongside steady growth in overall fuel sales, has prompted the country's refiners to ramp up capacity.

"For Asia Pacific gasoil/diesel demand, recovery is accelerating in Q4 2020, driven mainly by India as the country now enters high seasonal gasoil/diesel demand period," said WoodMac research associate Qiaoling Chen.

Sales of gasoline, or petrol, rose by 0.4% from October and 5.1% from a year earlier to 2.66 million tonnes.

India's daily coronavirus cases have declined steadily, although the country has the world's second-highest number of infections with more than 9.8 million cases.

Total fuel demand fell 3.7% on year after registering its first year-on-year increase since February in October, as manufacturing and services slowed with consumers staying indoors to avoid getting infected by the novel coronavirus.

Cooking gas, or liquefied petroleum gas (LPG), sales increased by about 4% to 2.35 million tonnes from a year earlier, but fell 2.9% from the previous month, while naphtha sales rose by 7.2% to 1.34 million tonnes year-on-year.

Sales of bitumen, used for making roads, were up about 19% on year, while those of fuel oil increased by about 8.7%.

As MRC informed before, India’s Chemicals and Fertilisers Minister D V Sadananda Gowda said in mid-December, 2020, the demand for chemicals and petrochemicals is expected to rise 9% annually, and the size of the industry is likely to grow to USD300 billion by 2025.

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

MOSCOW (MRC) -- Members of parliament in the UK voted Wednesday to approve legislation that will pass the post-Brexit trade deal into law, after European Commission president Ursula von der Leyen and European Council president Charles Michel signed the agreement earlier in Brussels, Belgium, as per Chemweek.

The House of Commons approved the EU (Future Relationship) Bill by a vote of 521-73 at its first stage after Parliament was recalled. The bill will now pass to the House of Lords for approval. When this is done, the Queen will be asked to sign the legislation, known as Royal Assent.

The Brexit agreement was finally reached on 24 December after months of negotiation between the UK and the EU, and is based on international law. As part of the bill, it was agreed that there will be no tariffs or quotas on the movement of goods between the UK and the EU.

Without a deal in place, the UK would have faced a 4.7% tariff on gasoline exports to the EU. The UK exports any surplus of gasoline it produces to US and west African consumers, and imports diesel, gasoil, and jet fuel from Russia, the Middle East, and the west coast of India.

The post-Brexit deal also includes provisions to support trade in services, including financial and legal services, as well as arrangements for airlines and haulers to facilitate travel to and from the EU easily, notwithstanding population movement restrictions to curb rising COVID-19 infections.

As MRC informed earlier, the UK chemical industry has given a mixed reaction to the post-Brexit trade and cooperation agreement announced on 24 December by the EU and UK. The Chemical Industries Association (CIA; London, UK) says there is “some relief” that the deal confirms zero tariffs on EU-UK trade. However, a lack of clarity persists around the deal’s regulatory impact.

We remind that Russia's output of chemical products rose in September 2020 by 6.7% year on year. At the same time, production of basic chemicals increased by 6.1% year on year in the first nine months of 2020, 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-September output. Last month's production of primary polymers decreased to 852,000 tonnes from 888,000 tonnes in August due to shutdowns in Tomsk, Ufa and Kazan. Overall output of polymers in primary form totalled 7,480,000 tonnes over the stated period, up by 16.4% year on year.
MRC

MOSCOW (MRC) -- Germany’s chemical industry association VCI (Frankfurt) has welcomed the Comprehensive Agreement on Investment between the EU and China, said Chemweek.

It is a significant deal since “China is and will remain an important partner of the German chemical-pharmaceutical industry,” VCI says. The European Commission says that the deal will create a better balance in the EU-China trade relationship. The EU has traditionally been much more open than China to foreign investment, and with this agreement China now commits to “open up” to the EU in several key sectors, it says.

According to the Commission, China has committed to a greater level of market access for EU investors than ever before, and has made commitments to ensure fair treatment for EU companies so they can compete on a better level playing field in China, including in terms of disciplines for state-owned enterprises, transparency of subsidies, and rules against the forced transfer of technologies.

China has also agreed, for the first time, to provisions on sustainable development, including commitments on forced labor and the ratification of the relevant International Labor Organization fundamental conventions, the Commission says.

"Today‘s agreement...will provide unprecedented access to the Chinese market for European investors, enabling our businesses to grow and create jobs. It will also commit China to ambitious principles on sustainability, transparency, and non-discrimination," says Ursula von der Leyen, president of the European Commission.

As per MRC, China's monoethylene glycol (MEG) stocks fell in mid-December below the 1 million mt mark for the first time since February. Thus, MEG stocks were at 976,000 mt, down by around 20,000-30,000 mt from a week ago.

We remind that Russia's output of chemical products rose in September 2020 by 6.7% year on year. At the same time, production of basic chemicals increased by 6.1% year on year in the first nine months of 2020, 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-September output. Last month's production of primary polymers decreased to 852,000 tonnes from 888,000 tonnes in August due to shutdowns in Tomsk, Ufa and Kazan. Overall output of polymers in primary form totalled 7,480,000 tonnes over the stated period, up by 16.4% year on year.
MRC