Air Products signs long-term gas supply contract in China

MOSCOW (MRC) -- Air Products announced it has signed a long-term gas supply contract with Shandong Binhua New Material Co., Ltd. (Binhua), a subsidiary of Befar Group, which is a leading petroleum and chemical enterprise in China, to support Binhua’s flagship chemical project located in the Beihai Economic Development Zone of Binzhou City, Shandong Province, China, reported Hydrocarbonprocessing.

Under the contract, Air Products will build, own and operate several onsite gas production facilities in the Binzhou Port-centered Chemical Industry Park in phases, including an energy-efficient air separation unit (ASU), to meet Binhua’s gaseous oxygen and nitrogen demand. The ASU will also provide liquid products to other customers in the park and the growing merchant market in Shandong Province. All facilities will be fully operational in 2022.

“Befar Group is one of the most influential chemical companies in China. We are honored by the trust our customer has placed in Air Products to support their important project. We look forward to deepening the cooperation with them as they accelerate their expansion plans and business transformation,” said Saw Choon Seong, China president at Air Products. “We have already established a strong presence in the strategic industry clusters in Shandong Province. Our latest investment will further strengthen our integrated gases supply position to support the rapid development of this world-class park in Binzhou as well as the transformation and upgrading of the chemical industry under China’s 14th Five-Year Plan.”

"We are very pleased to work with such a world-leading industrial gases company. The successful signing of this contract gives us great confidence that our cooperation with Air Products will continue to expand in the long run," commented Jiang Sen, President of Befar Group.

Taking advantage of Beihai Economic Development Zone’s industrial development, geographical location and natural resources, the high-end Binzhou Port-centered Chemical Industry Park has already attracted several major chemical companies, including Binhua. Binhua’s RMB 51.5 billion yuan (USD 7.5 billion) two-phase propane and butane integrated utilization project involves world-leading technologies and green production and will comply with China’s latest environmental regulations. Air Products’ highly energy-efficient facilities will supply reliable gases to this project for producing a variety of chemical materials for use in high-growth new materials and new energy products.

As MRC informed earlier, China's Shandong Befar resumed production at its No. 1 an 3 propylene oxide lines in Binzhou City (Binzhou, Shandong Province, China) on June 28, 2020, following a scheduled maintenance. The turnaround at these lines with a total capacity of 200,000 mt/year of propylene oxide began on June 14, 2020.

Propylene is the main feedstock 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.

Air Products has been operating in China since 1987 and was one of the first multinational industrial gases corporations to invest in the country. With nearly 90 operating entities, over 200 production facilities and more than 4,000 employees, the company has already established a strong market position across China and serves a broad range of industries. In Shandong Province, Air Products has built a strong presence and supply network since its first investment in 1995, comprising several operating entities, production facilities, hydrogen fueling stations and engineering design capability.
MRC

Unplanned chemical unit closure at ExxonMobil refinery-petchems complex at Gravenchon, France

MOSCOW (MRC) -- A chemical unit has been shut down at ExxonMobil’s 233,000-barrels/day Gravenchon refinery and petrochemical complex in Port Jerome, France, with intermittent flaring expected as a result, reported Chemweek with reference to the company's statement.

The unplanned shutdown of the unspecified unit was expected to start around midday local time on Wednesday, with teams onsite to limit the duration of the works and flaring, ExxonMobil said in a public alert statement. No further information was disclosed.

ExxonMobil also operates a steam cracker at Gravenchon, which is scheduled for a maintenance turnaround between April and May this year. The maintenance program was set originally to take place last year, according to IHS Markit data. The cracker has the capacity to produce up to 400,000 metric tons/year of ethylene and other products including up to 80,000 metric tons/year of butadiene.

OPIS is an IHS Markit company.

As MRC informed earlier, last year, Exxon Mobil Corp announced it will lay off about 1,900 employees in the United States as the COVID-19 pandemic batters energy demand and prices.

We remind that ExxonMobil has undertaken a planned shutdown at its cracker in Singapore. The company halted operations at the cracker for maintenance on September 14, 2020. The cracker was expected to remain off-line till end-October, 2020. Located at Jurong Island, Singapore, the cracker has an ethylene production capacity of 1 million mt/year and a propylene production capacity of 450,000 mt/year.

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.

ExxonMobil is the largest non-government owned company in the energy industry and produces about 3% of the world"s oil and about 2% of the world"s energy.
MRC

U.S. crude stockpiles jump, refiners boost output last week

MOSCOW (MRC) -- U.S. crude oil stockpiles rose unexpectedly last week, while refineries hiked output to their capacity usage since March, the Energy Information Administration said, said Hydrocarbonprocessing.

Crude inventories rose by 4.4 million barrels in the week to Jan. 15, compared with analysts' expectations for a decrease of 1.2 million barrels. Refinery utilization rates rose by 0.5 percentage points to 82.5% of total capacity, their highest since March, EIA data showed, a potential signal of optimism that demand will rebound in coming months. Refinery crude runs rose by 110,000 barrels per day.

"The refinery runs came in better, so basically the market is getting a little support on the fact that we are seeing continued improvement in demand," said Phil Flynn, senior analyst at Price Futures Group in Chicago. Crude stocks at the Cushing, Oklahoma, delivery hub for futures fell by 4.7 million barrels to 52.5 million barrels, their lowest since August, the EIA said.

Oil prices pared their losses after the data. U.S. crude was off by 60 cents, or 1.1%, to USD52.53 a barrel as of 11:18 a.m. EST (1618 GMT), while Brent fell 60 cents to USD55.49 a barrel. Gasoline stocks fell by 260,000 barrels, compared with analysts' expectations in a Reuters poll for a 2.8 million-barrel gain.

Distillate stockpiles, which include diesel and heating oil, rose by 458,000 barrels, versus expectations for a 1.2 million-barrel increase, the EIA data showed. Net U.S. crude imports rose last week by 566,000 bpd.

As MRC informed previously, oil producers face an unprecedented challenge to balance supply and demand as factors including the pace and response to COVID-19 vaccines cloud the outlook, according to an official with International Energy Agency's (IEA) statement.

We remind that the COVID-19 outbreak has led to an unprecedented decline in demand affecting all sections of the Russian economy, which has impacted the demand for petrochemicals in the short-term. However, the pandemic triggered an increase in the demand for polymers in food packaging, and cleaning and hygiene products, according to GlobalData, a leading data and analytics company. With Russian petrochemical companies having the advantage of access to low-cost feedstock, and proximity to demand-rich Asian (primarily China) and European markets for the supply of petrochemical products, these companies appear to be well-positioned to derive full benefits from an improving market environment and global economy post-COVID-19, says GlobalData.

We also remind that in December 2020, Sibur, Gazprom Neft, and Uzbekneftegaz agreed to cooperate on potential investments in Uzbekistan including a major expansion of Uzbekneftegaz’s existing Shurtan Gas Chemical Complex (SGCC) and the proposed construction of a new gas chemicals facility. The signed cooperation agreement for the projects includes “the creation of a gas chemical complex using methanol-to-olefins (MTO) technology, and the expansion of the production capacity of the Shurtan Gas Chemical Complex”.

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

Reliance reports YOY fall in oil-to-chemicals profit, revenue; sequential improvement

MOSCOW (MRC) -- Reliance Industries says that EBDITA dropped 28% year-on-year (YOY) at its oil-to-chemicals (O2C) business, to 97.56 billion Indian rupees (USD1.34 billion) in the fiscal third quarter ended 31 December, said Chemweek.

Quarterly sales for the sector were Rs838.3 billion, down 29.6% YOY. The O2C business includes refining, petrochemicals, fuel retailing through the Reliance BP Mobility business, aviation fuel, and bulk wholesale marketing.

However, Reliance's O2C business achieved sequential improvement with fiscal-third-quarter revenue up 10% quarter-on-quarter (QOQ) primarily on higher volumes of transportation fuels, purified terephthalic acid (PTA), and polyester supported by improved product realization across polymers, intermediates, and polyester. “We have delivered strong operational results during the quarter with a robust revival in the O2C segment,” says Mukesh Ambani, chairman and managing director at Reliance.

Segment EBITDA in the third quarter improved by 10.3% sequentially due to higher product sales and shifting of product placement from exports to the domestic market. Throughput grew from 16.8 million metric tons (MMt) to 18.2 MMt on a QOQ basis owing to improved demand.

In the polymers business, prices of polypropylene (PP), polyethylene (PE), and polyvinyl chloride (PVC) strengthened during the quarter by 18%, 8%, and 29% QOQ, respectively, amid a strong demand recovery in Asian markets. The company says that margins of PP and PE over naphtha increased by 31% (USD698/metric ton) and 13% ($541/metric ton), respectively, and PVC margins over naphtha and ethylene dichloride rose 15% (USD628/metric ton) on a QOQ basis led by strong demand recovery across sectors. PVC prices were at a decade-high level during the quarter, Reliance says.

In the intermediates and polyesters business, prices of para-xylene (p-xylene), PTA, and ethylene glycol (EG) strengthened during the quarter by 3%, 15%, and 8% QOQ, respectively, amid a hike in energy values and improved downstream demand. P-xylene, PTA, and EG margins increased by 4% (USD141/metric ton), 57% (USD168/metric ton), and 17% (USD218/metric ton), respectively, amid lower inventory across the polyester chain in China. Reliance says it achieved higher capacity utilization rates on the back of festive demand and the availability of labor in the downstream sector. Polyester margins improved QOQ through differentiated and specialty products.

Reliance's average steam cracker operating rate was 96%, despite a scheduled shutdown at the company's refinery off-gas cracker at Jamnagar, India. “The O2C platform will increasingly move further downstream and become closer to customers. It will create planet-friendly and affordable energy, and materials solutions to meet the growing needs of every sector of the Indian economy,” adds Ambani. The company’s other business units include oil and gas, retail, digital services, and financial services.

As MRC informed earlier, Reliance Industries Ltd (RIL), an Indian energy and petrochemical giant, has resumed production of refined terephthalic acid (PTA) in Kuantan, Malaysia following an unscheduled refurbishment. This production with a capacity of 610,000 tonnes of PTA was closed for repairs in mid-January for a technical reason.

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

According to MRC's ScanPlast report, Russia's estimate 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 on year.

Reliance Industries is one of the world's largest producers of polymers. Thus, the company produces among others polypropylene, polyethylene and polyvinyl chloride.
MRC

Borealis plans April–May maintenance at phenol plant in Finland

MOSCOW (MRC) -- Borealis is planning to carry out maintenance work at its phenol plant at Porvoo, Finland, between April and May, said Chemweek.

The Porvoo site includes a 190,000-metric tons/year phenol plant and a 118,000-metric tons/year acetone facility, according to IHS Markit data. "The exact dates are not known but we know that Borealis is expected to have maintenance at both units between April and May, possibly mid-April until the end of May, which they postponed from last year," a source said.

Borealis did not wish to comment on the dates for the work. "We do not proactively communicate our maintenance schedule," a spokesperson for the company said Friday. Borealis declared force majeure on phenol and acetone production from the Porvoo site following a power outage on 15 December 2020. The force majeure on phenol production from Porvoo was lifted on 28 December, Borealis says.

Borealis also produces 150,000 metric tons/year of benzene and 245,000 metric tons/year of cumene at Porvoo, IHS Markit data show.

Along with phenol, acetone is largely used to produce bisphenol A (BPA), which, in its turn, is used in the production of plastics such as polycarbonate (PC) and epoxy resins.

According to MRC's ScanPlast report, Russia's estimated consumption of PC granules (excluding imports and exports to\\from Belarus) rose in January-November 2020 by 18% year on year to 83,600 tonnes (70,600 tonnes a year earlier).

OMV (Vienna, Austria) owns 75% of Borealis and the remaining 25% is owned by Mubadala (Abu Dhabi).
MRC