Irving cuts contract, refinery workforce at Saint John plant

MOSCOW (MRC) -- Irving Oil is reducing its contract and plant workforce at Canada’s largest oil refinery due to challenges caused by the coronavirus pandemic, the company said, as per Hydrcoarbonprocessing.

The Canadian oil giant is cutting its contract workforce at its 320,000 barrel per day refinery in St. John, New Brunswick to 225 from 1,000 in the first quarter of 2021. An additional 60 Saint John refinery employees were cut on Thursday, representing 7% of the refinery workforce, the company said.

“The COVID-19 pandemic has had extreme and serious impacts on our business and our industry,” Irving Oil President Ian Whitcomb and chief brand officer Sarah Irving said in a joint statement, citing the collapse in demand for refined products, market volatility, poor margins and the economic downturn.

Last year, Irving said it would lay off 250 people, or 6% of its global workforce, due to demand disruption caused by the coronavirus pandemic. A resurgence of coronavirus cases across the world has complicated an uneven recovery in consumption for liquid fuels that is estimated to have fallen by 9 million barrels per day in 2020, according to the U.S. Energy Information Administration.

U.S. refining margins were below USD10 - the threshold above which most refiners make money - for the majority of the fourth quarter of 2020. Margins have since risen to about USD12.70 on Thursday, though refinery utilization is off about 10% year on year.

Refiners across the globe have been scaling back contract workers as they defer maintenance projects as a result of the coronavirus pandemic. Companies, many of them lumbered with high debts, slashed all but the most essential work.

U.S. oil refiners such as CVR, Hollyfrontier and PBF Energy also cut salaried employees last year due to economic strain caused by the coronavirus pandemic.

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

Huafon Chemical to construct plans spandex plant in China

MOSCOW (MRC) -- Huafon Chemical plans to invest CNY4.36bn (USD674m) to construct a 300,000 tonne/year spandex project at Chongqing, said the company.

The project will be implemented in three phases, with a capacity of 50,000 tonnes/year, 150,000 tonnes/year and 100,000 tonnes/year, respectively. Each phase is expected to take two years to complete construction.

Currently in early stage without a detail timeline, the project will focus on high-end products to improve the company’s competitiveness, it said.

As MRC informed earlier, BASF and Huafon Group Co., Ltd. have signed a strategic cooperation agreement to extend their partnership with initiatives to develop the polyurethane, bio-fiber and spandex markets in China. The two companies will work together in the areas of technical exchange, market development, and quality raw material supply.

As MRC informed earlier, BASF says its 420,000-metric ton/year steam cracker in Ludwigshafen, Germany is continuously running and has not caused any interruption of supply to its customers. Earlier, several media outlets reported that unscheduled flaring started on 13 January at the northern part of the Ludwigshafen site and was expected to last until 17 January and that an unspecified unit was shut, which "was not the case", as per the company's letter received by MRC.

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

Brenntag acquires packaged chemicals distributor in UK

MOSCOW (MRC) -- Brenntag, the worldwide market leader in chemical and ingredients distribution, says it has acquired ICL Packed Ltd., the packaged chemicals division of Industrial Chemical Ltd (ICL; Grays, UK), a producer and trader of inorganic chemicals, reported Chemweek.

ICL Packed specializes in distributing packaged chemicals for water treatment.

The acquired business generated sales of about ?11 million (USD15 million) in 2020, Brenntag says. It operates hubs at Selby and West Thurrock, UK, which will transfer to Brenntag. Financial terms of the transaction have not been disclosed.

“We see a very positive outlook for the water treatment business in the UK over the years to come due to population growth and the increased pressure on environmental quality,” says Steven Terwindt, Brenntag board member and COO of the Brenntag Essentials unit.

ICL Packed has a “broadly diversified customer base and strong product portfolio,” and it “complements our current full-service approach to this important market in the UK,” says Anthony Gerace, managing director/mergers and acquisitions at Brenntag.

The transaction includes a supply agreement between Brenntag and ICL, a large manufacturer of caustic soda, hydrochloric acid, and iron and aluminum coagulants as well as sodium hypochlorite. ICL has production at Grays, Newcastle, Runcorn, Selby, Thurrock, and Widnes, UK, and will retain these facilities.

ICL says it has sales of GBP125 million/year, including ICL Packed, and will continue to distribute bulk chemicals in the UK by road tanker. “This transaction is an important strategic move and will make us stronger and enable us to make the investment required to meet market needs, whilst working closely with Brenntag to ensure that we have the production capacity to serve key elements of their distribution portfolio,” the company says. “We will be manufacturing some of the bulk chemicals to supply their packed business. They will be investing in dedicated storage and loading capabilities at West Thurrock to support this initiative.”

As MRC informed earlier, in April 2020, Brenntag sai it had acquired the operating assets of Suffolk Solutions’ (Suffolk, Virginia) caustic soda distribution business. Financial terms of the deal have not been disclosed.

We remind that Russia's output of chemical products rose in November 2020 by 9.5% year on year. At the same time, production of basic chemicals increased in the first eleven months of 2020 by 6.6% year on year, 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-November 2020 output. November production of polymers in primary form rose to 896,000 tonnes from 852,000 tonnes in October. Overall output of polymers in primary form totalled 9,240,000 tonnes over the stated period, up by 17.1% year on year.
MRC

First propylene tank installed at Grupa Azoty PDH/PP plant at Police, Poland

MOSCOW (MRC) -- Grupa Azoty (Tarnow, Poland) says the first large propylene tank has been installed at its EUR1.5-billion (USD1.82 billion) propane dehydrogenation (PDH) and polypropylene (PP) project at Police, Poland, said Chemweek.

The tank, weighing 585 metric tons, was successfully transported to the construction site in a three-day operation, it says.

The tank will have a storage capacity for up to 1,400 metric tons of propylene and is the first of five that will be used to store product from the PDH unit, for onward supply to the adjacent PP plant. The first propylene tank was built at Gdynia shipyard in Poland, it says.

The scheduled start-up of the Polimery Police project was delayed by three months from the fourth quarter of 2022 into the first quarter of 2023 due to the impact of the COVID-19 pandemic, Grupa Azoty confirmed in November. Project construction was 32% complete in November, it said at the time. Hyundai Engineering is the general contractor. The complex at Police will include a 437,000-metric tons/year PDH plant, feeding a similar-capacity PP unit.

As per MRC, the scheduled startup of Grupa Azoty’s (Tarnow, Poland) flagship Polimery Police propane dehydrogenation (PDH) and polypropylene (PP) project at Police, Poland, has been delayed to the first quarter of 2023 due to the impact of the COVID-19 pandemic/

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.
MRC

Reliance Industries shares fall nearly 5% as COVID-19 hits oil business

MOSCOW (MRC) -- Shares of Reliance Industries Ltd fell as much as 4.7% in early trade on Monday after the Indian conglomerate posted a sharp drop in quarterly revenue from its dominant oil-to-chemicals business, reported Hydrocarbonprocessing.

Reliance, which operates the world’s largest refining complex, said on Friday revenue from its oil-to-chemicals division fell nearly 30% in the three months ended Dec. 31.

Total revenue slid 21% to 1.24 trillion rupees, and the company said its operations and revenue during the period were impacted by the COVID-19 pandemic.

Reliance, led by billionaire Mukesh Ambani, has built leading consumer-facing businesses in recent years to diversify away from its mainstay energy arm, but a coronavirus-driven slump in fuel demand has weighed on the Mumbai-headquartered group’s recent results.

RIL’s cyclicals business reporting has become opaque, with no disclosures on gross refining margin (GRM) data this time around, BOB Capital Markets said in a note over the weekend.

“We need to see earnings traction to justify the recent surge in stock price as the rally factors in positives from debt reduction. O2C (the oil to chemicals business) earnings growth remains elusive in the current pandemic-led uncertainty,” the brokerage added.

Reliance, which did not share the GRM, announced a reorganisation on Friday, according to which it now houses its oil refining, fuel retailing and petrochemicals operations together.

Reliance shares gained about 5.8% last week in the run-up to the results but were flat for this year after a more than 32% gain last year.

The company raised about USD26 billion last year from investors like Google and Facebook for its digital and retail arms.

As MRC informed earlier, in September 2020, RIL released a detailed plan to carve out its oil-to-chemicals business into a separate entity for a potential stake sale. As per the scheme, RIL's O2C assets, including its refining, petrochemicals, fuel retail (majority interest only) and bulk wholesale marketing businesses, along with its assets and liabilities, will be transferred to a new unit. The new unit will include the refining and petrochemical plants and manufacturing assets at RIL's Jamnagar, Dahej, Hazira, Nagothane, Vadodara, Patalganga, Silvassa, Barabanki and Hosiarpur locations.

It will also include all assets relating to RIL's ongoing refinery and petrochemical projects that are being commissioned or near completion, the company said. RIL had officially announced its proposal to transfer its oil-to-chemicals (O2C) business to a separate entity in April.

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.

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