JV to build biorefinery in South Africa

MOSCOW (MRC) -- Maire Tecnimont S.p.A., through its subsidiary NextChem, and Essential Energy USA Corp. have executed a front-end engineering design contract, as well as a Memorandum of Understanding for the construction of a new biorefinery in South America for the production of renewable diesel, said Hydrocarbonprocessing.

Subject to the client’s Final Investment Decision, the biorefinery will produce 200,000 tpy of high-quality renewable diesel from advanced bio-feedstocks. NextChem will be the exclusive EPC contractor. The project is expected to be operational in 2023.

The biorefinery will transform natural oil, waste vegetables oils and tallow into hydrogenated vegetable oils (HVO), also known in the market as renewable diesel. Renewable diesel is a fuel which is chemically identical to petroleum-based diesel with the advantage of improved performance. It is used worldwide as a drop-in biofuel in diesel vehicles, with no engine modifications. Furthermore, the renewable diesel allows a carbon intensity reduction, for greenhouse gas emissions, above 80% vs. petroleum-based diesel.

Maire Tecnimont Group has exhaustive experience in EPC contracting in Energy Services including in South America. Additionally, NextChem has been active in energy transition projects with a focus on deploying solutions in carbon footprint reduction, through the development of new technologies for the production of biofuels and biochemicals from biobased feedstock and circular chemicals from waste.

As per MRC, Maire Tecnimont S.p.A. announced that its subsidiaries Tecnimont S.p.A. and KT - Kinetics Technology S.p.A. have signed with SOCAR’s subsidiary Heydar Aliyev Oil Refinery two Engineering, Procurement and Construction contracts, as part of the Modernization and Reconstruction of Heydar Aliyev Oil Refinery in Baku, Azerbaijan. SOCAR is the State Oil Company of Azerbaijan Republic. The overall contracts’ value equals to approximately USD 160 million.

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) -- Privatisation-bound Bharat Petroleum Corporation Ltd NSE 0.22 % (BPCL) on Wednesday said it will buyout Oman Oil Company's shares in the Bina refinery project for about Rs 2,400 crore, said Economictimes.

BPCL holds a 63.68 per cent stake in Bharat Oman Refineries Ltd (BORL), which built and operates a 7.8 million tonne oil refinery at Bina in Madhya Pradesh. In a stock exchange filing, BPCL said it has "finalised commercial terms in connection with the purchase of the 88.86 crore equity shares of Bharat Oman Refineries Limited (BORL), constituting 36.62 per cent of the equity share capital from OQ S.A.0.C. (formerly known as Oman Oil Company S.A.0.C.) for a consideration of approx Rs 2,399.26 crore".

The transaction, it said, is subject to the execution of the relevant transaction documentation and other conditions agreed upon among the parties. "Upon completion, BPCL will hold 100 per cent of the equity share capital in BORL," it said. On Tuesday, BPCL Director (Finance) N Vijayagopal had said that discussions with OQ S.A.O.C. had concluded.

BORL was incorporated in February 1994 to build a refinery at Bina in Madhya Pradesh. The unit initially could turn 6 million tonnes of crude oil annually into fuel, which was subsequently raised to 7.8 million tonnes. Before the company is privatised, BPCL will exit Numaligarh Refinery Ltd (NRL) by selling its 61.65 per cent stake to a consortium of Oil India Ltd NSE 0.35 % and Engineers India Ltd, Vijayagopal had said.

It is selling stake because the government had as per the Assam Peace Accord agreed to keep NRL in the public sector. "The consortium of OIL and Engineers India Ltd will acquire 49 per cent and the rest 13.65 per cent will be sold to the government of Assam," he had said. OIL currently holds 26 per cent equity in NRL, while the government of Assam has around 12.35 per cent.

The value for 61.65 per cent stake in NRL is reportedly around Rs 7,000 crore. Post NRL sale, BPCL would be left with three refineries at Mumbai, Kochi in Kerala and Bina. The government is selling its entire 52.98 per cent stake in BPCL in the nation's biggest privatisation till date.

Vedanta Group and private equity firms Apollo Global and I Squared Capital's Indian unit Think Gas have put in an expression of interest for buying the government stake. The sale of NRL is the first step towards the disinvestment of BPCL.

The government has already indicated that it expects to complete BPCL privatisation by the first half of the fiscal beginning April (2021-22). The sale is key to achieving the Rs 1.75 lakh crore disinvestment target set for 2021-22. BPCL will give the buyer ownership of around 15.33 per cent of India's oil refining capacity and 22 per cent of the fuel marketing share.

As per MRC, the Government of India expects to complete the sale of its 52.98% stake in Bharat Petroleum Corp Ltd (BPCL) in the current fiscal year as it is currently in talks with interested international buyers.

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

1. U.S. expected to return to being a net petroleum importer in 2021 and 2022

MOSCOW (MRC) -- More petroleum (including crude oil and refined products) was exported from the United States in 2020 than was imported. U.S. net imports (gross imports minus gross exports) of petroleum declined from 670,000 barrels per day (bpd) in 2019 to an estimated -700,000 bpd in 2020, said Hydrocarbonprocessing. The U.S. Energy Information Administration’s (EIA) February 2021 Short-Term Energy Outlook (STEO) estimates that 2020 marked the first year that the United States was a net petroleum exporter on an annual basis. Declining net imports of crude oil primarily drove this change from being a net importer to a net exporter. In 2021 and 2022, EIA expects the United States to return to being a net petroleum importer, averaging 230,000 bpd in 2021 and 550,000 bpd in 2022. The STEO model forecasts petroleum trade in terms of net imports rather than gross imports and gross exports. In 2020, 81% of the decline in net imports of petroleum was crude oil. EIA expects that increasing crude oil imports will drive the growth in net petroleum imports in 2021 and 2022 and more than offset declines in refined product net imports.




MRC

MOSCOW (MRC) -- Crude futures climbed to fresh 13-month highs Feb. 12 as oil demand outlooks improved amid signs of progress on US COVID-19 vaccination distribution and a coronavirus stimulus package, reported S&P Global.

NYMEX March WTI settled up USD1.23 at USD59.47/b and ICE April Brent climbed USD1.30 to USD62.44/b.

President Joe Biden announced late Feb. 11 that the US has secured deals to buy 200 million more COVID-19 vaccines from producers Moderna and Pfizer, boosting optimism that a rapid rollout of doses will lead to a robust oil demand recovery in the second half of the year.

"The crude demand outlook looks like it could get its best-case scenario as Americans who want a COVID[-19] vaccine will be able to get it by April," OANDA senior market analyst Edward Moya said in a note. "WTI crude is having an amazing February and given the strength heading into a long weekend, it seems energy traders are hesitant on scaling back."

Meanwhile, the president's USD1.9 trillion coronavirus relief bill continued to advance through Congress, with the House of Representatives Ways and Means Committee passing a USD940 billion portion of the package that included a third round of direct relief payments totaling USD1,400.

NYMEX March RBOB settled up 4.23 cents to USD1.6925/gal and March ULSD climbed 2.68 cents to USD1.7714/gal.

Over the next three years, global oil consumption is set to see the fastest rise in absolute volumes since the 1970s, according to Bank of America's Global Energy Weekly report, released late Feb. 11. Total demand is expected to grow nearly 9 million b/d by 2024, the report said, with 5.3 million b/d of that total being realized in 2021, 2.8 million b/d in 2022, and 1.4 million b/d in 2023.

Notably, the recovery in demand has not been even across sectors and has not improved steadily, either, on a sequential basis, BofA analysts said.

"For instance, mobility dropped across a broad range of regions in December and January, dragging down fuel demand. Meanwhile, segments like petrochemical demand have flourished due to increased use of single-use plastics, while others, like jet fuel, have floundered," the Global Commodity research team wrote in the report.

"This lack of consistency in the oil demand recovery is visible also across different regions and points in time. For example, workplace mobility in Europe has taken a major hit, particularly in the UK ... . Also, after a steady improvement since (first-quarter) 2020, China has seen a sharp drop in the number of flights heading into the Chinese New Year," they added.

In the US, crude inventories have declined more than 17 million barrels since mid-January and are rapidly approaching their five-year average following three weeks of counter-seasonal draws, but European demand outlooks remain under pressure as Germany recently extended its nationwide lockdown to March amid concern regarding the spread of new variants of the virus.

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 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