Shell sharpens 2050 zero emissions goal

MOSCOW (MRC) -- Energy giant Royal Dutch Shell vowed to eliminate net carbon emissions by 2050, raising its ambition from previous targets, as its oil output declines from a 2019 peak, according to Hydrocarbonprocessing.

The Anglo-Dutch company is in the midst of its largest overhaul yet as it prepares to expand its renewables and low-carbon business in the face of growing investor pressure on the oil and gas sector to battle climate change.

Shell last year laid out a plan to reach net zero by 2050, in line with the Paris climate agreement and European Union ambitions, but it said the goal depended on its customers.

In a strategy update on Thursday, Shell outlined plans to curb its emissions through rapid growth of its low-carbon businesses, including biofuels and hydrogen, although spending will stay tilted towards oil and gas in the near future.

"We will use our established strengths to build on our competitive portfolio as we make the transition," CEO Ben van Beurden said in a statement.

Investors welcomed the upgraded targets.

"Shell's net zero target is industry-leading and comprehensive as it covers all their carbon emissions," Adam Matthews, Director of Ethics & Engagement for the Church of England Pensions Board, who led investor engagement with Shell, said in a statement.

Shareholders have an advisory vote on Shell's transition plan at this year's general meeting, an industry first, Matthews added.

Although such votes would be non-binding, investors see them as a mechanism to hold management publicly accountable for their progress on meeting targets to cut emissions.

Shell shares were down 1.9% at 1142 GMT at 1337 pence, dragging on the FTSE 100 index.

Historically, oil projects have delivered a return on investment of at least 15%, while renewables developers expect 6%-9%, but Shell and BP have said their complex marketing and trading units can increase renewable returns to around 10%.

Shell's strategy is to remain reliant on its retail business, the world's largest. It has a goal to increase the number of sites to 55,000 by 2025 from today's 46,000 and increase the number of electric vehicle charging points to 500,000 from 60,000 now.

It did not outline plans to grow its solar and wind power generation capacity, marking a difference from rivals, such as BP and Total, which aim to boost their ownership of physical wind and solar farms.

As MRC wrote previously, Shell says it will invest between USD4-5 billion annually to grow its chemicals and products business as part of a wider rebalancing of its group portfolio to reach its net-zero carbon emissions goal by 2050.

We remind that 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 polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,220,640 tonnes in 2020, up by 2% year on year. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, polypropylene (PP) shipments to the Russian market reached 1 240,000 tonnes in 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.

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

MOSCOW (MRC) -- Bulk liquid storage player Rubis Terminal says its fourth-quarter 2020 storage revenues have risen 30% year on year (YOY) to EUR56.5 million (USD68.4 million), and that it has “significantly increased” its exposure to chemical and biofuels storage following its acquisition last year of Terminales Portuarias (Tepsa; Madrid, Spain), reported Chemweek.

Rubis, a terminals business joint venture (JV) between fund manager I Squared Capital (ISC) and Rubis Group (Paris, France), says its pro-forma share of revenues from chemicals is now at 36% compared to 31% during the first half of 2020, while biofuels storage now makes up 5% of its pro-forma revenues. “The company has been steadily decreasing its exposure to fuel from 70% of sales in 2016 to currently around 50% of sales,” it says. Rubis completed its acquisition of Tepsa in October 2020 for an undisclosed amount.

The JV’s fourth-quarter rise in sales included 9% organic growth, it says. Full-year 2020 sales rose 10% over 2019 to EUR186 million, it adds.

The quarter “was solid in current circumstances and saw similar development as in the third quarter, with improving volumes and solid margins,” Rubis says.

Rubis Group owns 55% of Rubis Terminal, with ISC owning the remaining 45%.

As MRC informed in January 2020, Berry Global Group, Evansville, Indiana, announced that Madrid-based Repsol, its longtime supplier, will supply it with circular resins. The Spanish multienergy global company will supply Berry with International Sustainability and Carbon Certification (ISCC) Plus-certified circular polyolefins from its Repsol Reciclex range. According to a news release from Berry Global, these polyolefins are obtained by advanced recycling, enabled by the adoption of new chemical recycling technologies, of postconsumer plastic scrap not suitable for traditional recycling.

We remind that Repsol shut down its cracker in Tarragona (Spain) for maintenance in the fourth quarter of 2019. The turnaround at this steam cracker, which produces 702,000 mt/year of ethylene and 372,000 mt/year of propylene, was pushed back from Q3 2019. The exact dates of maintenance works were not disclosed.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,220,640 tonnes in 2020, up by 2% year on year. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, polypropylene (PP) shipments to the Russian market reached 1 240,000 tonnes in 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) -- Asian refining margins for 10 ppm gasoil rose on Monday, hovering close to multi-month highs touched last week, buoyed by expectations for firmer demand and tighter supplies in coming months, reported Reuters.

Refining margins, also known as cracks, for 10 ppm gasoil climbed to USD7.34 per barrel over Dubai crude during Asian trading hours, compared with USD7.01 a barrel in the last trading session on Thursday. Cracks for the benchmark gasoil grade in Singapore have surged 22.7% so far this month, Refinitiv Eikon data showed.

The regional gasoil market is expected to strengthen further as countries roll out wider vaccinations in coming days that would boost economic recovery and fuel demand, market watchers said. Cash differentials for gasoil with 10 ppm sulfur content were at a narrow premium of USD0.01/bbl to Singapore quotes, compared with a discount of $0.04/bbl on Thursday.

Global oil and fuel prices are picking up as demand returns to pre-pandemic levels amid easing coronavirus lockdowns in key countries like China and India and signs of increasing road travel in several countries. However, there are questions over how quickly refiners with idled capacity can respond to increased demand. Analysts say the recovery pace will vary by region and fuel type, and that jet fuel demand will remain the weakest performer until more international air travel resumes.

As MRC informed before, slumping fuel consumption during the pandemic is accelerating the long-term shift of refining capacity from North America and Europe to Asia, and from older, smaller refineries to modern, higher-capacity mega-refineries. The result is a wave of closures, often centering on refineries that only narrowly survived the previous closure wave in the years after the recession in 2008/09.

We remind that PetroChina has nearly doubled the amount of Russian crude being processed at its refinery in Dalian, the company's biggest, since January 2018, as a new supply agreement had come into effect. The Dalian Petrochemical Corp, located in the northeast port city of Dalian, was expected to process 13 million tonnes, or 260,000 bpd of Russian pipeline crude in 2018, up by about 85 to 90 percent from the previous year's level. Dalian has the capacity to process about 410,000 bpd of crude. The increase follows an agreement worked out between the Russian and Chinese governments under which Russia's top oil producer Rosneft was to supply 30 million tonnes of ESPO Blend crude to PetroChina in 2018, or about 600,000 bpd. That would have represented an increase of 50 percent over 2017 volumes.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,220,640 tonnes in 2020, up by 2% year on year. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, polypropylene (PP) shipments to the Russian market reached 1 240,000 tonnes in 2020 (calculated using the formula: production, minus exports, plus imports, excluding producers' inventories as of 1 January, 2020).
MRC

MOSCOW (MRC) -- The UK Supreme Court on Friday allowed a group of 42,500 Nigerian farmers and fishermen to sue Royal Dutch Shell (RDS) in English courts after years of oil spills in the Niger Delta contaminated land and groundwater, said Hydrocarbonprocessing.

Senior judges said UK-domiciled Shell, one of the world's biggest energy companies, did have a common law duty of care, in the latest case to test whether multinationals can be held to account for the acts of overseas subsidiaries. The ruling comes almost two years after a seminal ruling by the Supreme Court in a case involving mining company Vedanta. The judgment allowed nearly 2,000 Zambian villagers to sue Vedanta in England for alleged pollution in Africa.

That move was seen as a victory for rural communities seeking to hold parent companies accountable for environmental disasters. Vedanta ultimately settled out of court in January. Nigeria's Ogale and Bille communities allege their lives and health have suffered because repeated oil spills have contaminated the land, swamps, groundwater and waterways and that there has been no adequate cleaning or remediation.

Represented by law firm Leigh Day, they argued that Shell owed them a duty of care because it either had significant control of, and was responsible for, its subsidiary SPDC. Shell countered that the court had no jurisdiction to try the claims.

SPDC is the operator of oil pipelines in a joint venture between the Nigerian National Petroleum Corporation which holds a 55% stake, Shell which holds 30%, France's Total with 10%, Italy's Eni with 5%. A Shell spokesman said the decision was disappointing.

Shell has blamed sabotage for oil spills. It said in its annual report published last March that SPDC, which produces around 1 million barrels of oil per day, saw crude oil spills caused by theft or pipeline sabotage surge by 41% in 2019. Shell CEO Ben van Beurden said last week that the firm would take "another hard look at its onshore oil operations" in the west African country.

The ruling is the second judgement against Shell this year regarding claims against its Nigerian operations. In a landmark Dutch ruling two weeks ago, an appeals court held Shell responsible for multiple oil pipeline leaks in the Niger Delta and ordered it to pay unspecified damages to farmers, in a victory for environmentalists.

Leigh Day said that the amount of compensation sought would be quantified as the case enters the trial stage. In 2015, Shell agreed to pay out 55 million pounds ($83.4 million) to the Bodo community in Nigeria in compensation for two oil spills, which was the largest ever out-of-court settlement relating to Nigerian oil spills.

As MRC wrote previously, Shell expects its oil production to decrease by 1%-2% annually as it prioritizes spending on transition projects in an acceleration of its strategy to achieve net zero emissions by 2050.

We remind that 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 polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,220,640 tonnes in 2020, up by 2% year on year. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, polypropylene (PP) shipments to the Russian market reached 1 240,000 tonnes in 2020 (calculated using the formula: production, minus exports, plus imports, excluding producers' inventories as of 1 January, 2020).

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

MOSCOW (MRC) -- Ingevity says that its chairman Richard Kelson passed away on 13 February at the age of 74, according to Chemweek.

The cause of death has not been disclosed. The company says its “board will select a new chairman over the next several days who will preside over the regularly scheduled board meetings later this week.”

Kelson had been Ingevity’s chairman since its spin-off from WestRock in 2016. He was named interim president and CEO in February 2020 following the resignation of Michael Wilson, and held the role until the appointment of John Fortson, Ingevity’s current president and CEO, on 1 September 2020.

Ingevity’s board, management, and employees have expressed their deepest condolences to Kelson’s family, and the company says it will make a donation in his memory to the Penn Center for Research on Coronavirus.

As MRC reported earlier, in November 2020, Ingevity said it intends to challenge a decision of the US District Court for the District of Delaware regarding a patent-infringement complaint brought by Ingevity against BASF.

And in December 2020, BASF said it would pursue antitrust claims in a US court in Delaware related to Ingevity’s business practices in the evaporative emissions control market. The case concerns BASF’s EvapTrap-branded scrubbers for evaporative emissions control.

We remind that BASF said late last week it was restarting one of its steam crackers at its Ludwigshafen complex in Germany after operations were halted last Wednesday due to a technical issue. The naphtha cracker produces ethylene and propylene, and is one of two crackers on the site. One has a production capacity of 420,000 metric tons/year, with the other’s capacity at 240,000 metric tons/year, according to IHS Markit data.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,220,640 tonnes in 2020, up by 2% year on year. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, polypropylene (PP) shipments to the Russian market reached 1 240,000 tonnes in 2020 (calculated using the formula: production, minus exports, plus imports, excluding producers' inventories as of 1 January, 2020).
MRC