BP and Equinor seal deal to supply US with offshore wind

MOSCOW (MRC) -- BP completed the formation of its strategic US offshore wind partnership with Norway's Equinor, said the company.

Under the award, Equinor and incoming strategic partner BP will develop the 1,260 MW Empire Wind 2 and the 1,230 MW Beacon Wind 1 offshore wind projects. The execution of the procurement award is subject to the successful negotiation of a purchase and sale agreement.

Equinor and BP will also partner with the State of New York to transform the South Brooklyn Marine Terminal (SBMT) and the Port of Albany into large-scale offshore wind working industrial facilities.

“The U.S. East Coast is one of the most attractive growth markets for offshore wind in the world. The successful bids for Empire Wind 2 and Beacon Wind 1 represent a game-changer for our offshore wind business in the U.S. and underline Equinor’s commitment to be a leading company in the energy transition,” said Anders Opedal, CEO of Equinor.

The State of New York launched its second offshore wind solicitation in July 2020, seeking up to 2,500 MW of projects. Equinor is already developing the 816 MW Empire Wind Phase 1 wind farm which was selected in New York’s first-ever offshore wind solicitation in 2019 alongside Orsted and Eversource Energy’s Sunrise Wind project.

Empire Wind is located 15-30 miles southeast of Long Island and spans 80,000 ha, with water depths of between 65 and 131 feet. The lease was acquired in 2017 and is being developed in two phases. Beacon Wind is located 60 miles east of Montauk Point and 20 miles south of Nantucket and covers 128,000 ha. The lease was acquired in 2019 and has the potential to be developed with a total capacity of more than 2.4 GW.

The project, which was initially announced in September will be staffed equally from both companies once in in operation. This builds on BP’s strategy to become an integrated energy company, growing net renewable capacity from 2.5GW in 2019 to 20GW by 2025 and around 50GW by 2030.

The investment also contributes towards BP’s aim of increasing annual low-carbon investment ten-fold to around USD5bn a year by 2030.

We also remind that BP and Equinor confirmed they are shutting in production on their platforms, while Chevron, BHP and others said they are evacuating some personnel and considering decisions on production reductions.

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

MOSCOW (MRC) -- Royal Dutch Shell Plc shut the gasoline-producing residual catalytic cracking unit (RCCU) at its 227,400 barrel-per-day (bpd) Norco, Louisiana refinery, according to Hydrocarbonprocessing with reference to sources familiar with plant operations.

The 112,000 bpd RCCU, which converts residual crude oil into unfinished gasoline, was shut to repair a leak, the sources said.

A Shell spokesman did not have information immediately available about operations at the Norco refinery on Monday morning.

The RCCU repairs led Shell to issue a notice to nearby residents on Thursday that the Norco refinery and chemical plant complex would using the safety flare system because of maintenance on a unidentified unit.

Safety flares are used to burn off hydrocarbons that cannot be processed normally because of unit shutdowns or startups.

The RCCU, unlike the more common fluidic catalytic cracker (FCC), uses residual crude oil from distillation units to make unfinished gasoline. FCCUs use gas oil as their feedstock.

As MRC wrote before, Royal Dutch Shell has reported an outage at its olefins plant in Deer Park, Texas, USA, on 5 January, 2021. The plant flared for 16 hours following unspecified process upset. Maximum steam cracker operating rate in Texas falls to 89%.

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.

Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.
MRC

1. Phillips 66 posts wider-than-expected loss on pandemic hit

MOSCOW (MRC) -- Phillips 66 reported a wider-than-expected loss on Friday, as rising oil prices and lower fuel demand hit the US refiner's marketing and specialties business, reported Reuters. While crude prices rallied more than 20% in the last quarter, driven by optimism over the development of COVID-19 vaccines, refiners struggled with uneven demand for fuel and related products as fresh lockdowns due to a resurgence in COVID-19 infections threatened that recovery. Consumption of liquid fuels globally is estimated to have fallen by 9 million barrels per day in 2020, according to U.S. Energy Information Administration. Data also shows that travel on U.S. roads also fell 11% in November from the year-ago period, after a 9% drop in October. Like rival Valero, Phillips 66 also expects COVID-19 vaccination efforts to boost economic recovery.



MRC

MOSCOW (MRC) -- Weekly US crude exports jumped 1.1 million b/d to 3.36 million b/d over the week ended on Jan. 22, reported S&P Global with reference to data from the US Energy Information Administration Jan. 27, despite difficult arbitrage economics.

The rise took exports to their highest average weekly export level since the week ended on Jan. 1, and kept the four-week moving-average above 3 million b/d.

The arbitrage for WTI MEH crude into Rotterdam against local Forties crude fell to a minus 34 cents/b incentive on Jan. 26 and has averaged just a 4 cents/b incentive through the first 26 days on January, according to the S&P Global Platts Crude Arbflow calculator. Through December, by comparison, the arbitrage incentive averaged 57 cents/b, according to Platts Arbflow.

Refinery runs and margins are expected to remain weak through 1Q21 in Europe as demand recovery remains slow and product stocks are generally high, according to S&P Global Platts Analytics.

Furthermore, Europe could already be facing a "double-dip" recession following the tightening of COVID-19 restrictions. The early release of the euro area composite Purchasing Managers Index was reported at 47.5 for January, implying a more negative outlook from the previous month. Indeed, the euro area composite PMI averaged just 48.1 in 4Q20, showing the depressed outlook held at the end of 2020 was continuing into January 2021.

Platts Analytics expects European oil demand to fall 5-6 million b/d lower during January and February of 2021 compared to the same time in 2019. Some recovery, however, is expected after mid-year.

The arbitrage for WTI MEH crude into Northeast Asia against local ESPO crude has also come under pressure in recent days, however, values for ESPO crude have fallen significantly amid a larger monthly supply of ESPO in the market and limited demand amid recent lockdowns in China.

WTI MEH against ESPO in Japan fell to minus 74 cents/b on Jan. 26, down from a minus 26 cents/b incentive just the day prior. Through the first 26 days of January, the arbitrage incentive averaged 60 cents/b, and in December, the incentive averaged USD1.02/b. ESPO has weakened significantly in recent weeks to a 75 cents/b premium to Dubai on Jan. 27, down from plus USD2.70/b on Jan. 7.

US crude exports in 2021 face further pressure from falling US crude production and recovering refinery runs, which would leave fewer barrels available for export. Despite these headwinds, Platts Analytics expects US crude exports to average more than 2 million b/d in 2021.

As MRC informed before, global oil demand is expected to rise by nearly 7% this year, boosted by quicker vaccine distribution and a better economic outlook, according to consultancy Wood Mackenzie's statement. Total liquids demand is expected to average 96.7 million barrels per day (bpd) in 2021, 6.3 million bpd higher than last year when the Covid-19 pandemic caused an unprecedented oil demand shock. Refineries under the threat of closure could repurpose the facilities to produce liquid renewables instead of converting into a terminal, which could help oil companies’ aim of achieving carbon neutrality.

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

MOSCOW (MRC) -- Poland's state-run oil refiner PKN Orlen has partnered with Canada's Northland Power to jointly develop a 1.2 gigawatt offshore wind farm in the Baltic Sea, according to Hydrocarbonprocessing.

Poland is pushing development of offshore wind in its future energy mix, complemented by solar and nuclear energy, with the European Union pressing it to cut carbon emissions.

The Polish Baltic Sea region has been attracting foreign investors as local companies seek international expertise and experience. Private energy firm Polenergia is working with Equinor, while state-run PGE is in talks with Orsted on a joint project.

PKN Orlen said the joint venture agreement was signed between its Baltic Power company and Northland Power's unit registered in Amsterdam. Northland Power will ultimately reach a 49% stake in Baltic Power.

Construction will start in 2023 and it is expected to come into operation in 2026. Based on the agreement, in 2021 Northland Power will invest around 290 million zlotys (USD77.94 million) in Baltic Power.

"The combination of our local experience... and Northland Power's global know-how, will allow us to quickly and efficiently implement the next stages of the investment," PKN Orlen Chief Executive Daniel Obajtek said in a statement.

Poland expects to have its first offshore wind farm in 2025 and sees total wind capacity in the Baltic Sea at around 10 gigawatts (GW) by 2040.

As MRC reported earlier, in December 2020, PKN Orlen (Plock, Poland) announce that the company will invest an average of 4.4 billion zloty (USD1.2 billion) per year between 2021 and 2030 on a major expansion of its integrated petrochemicals business and the creation of a plastics recycling division as part of an enhanced strategic focus on petchems and renewables over the next 10 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.
MRC