COVID-19 - News digest as of 16.02.2021

1. Marathon Oil lays off 5% of workforce as part of cost-cut plans

MOSCOW (MRC) -- Marathon Oil Corp has laid off around 100 U.S. employees, or about 5% of its total workforce, a company spokeswoman told Reuters, days after the oil and gas producer cut salaries for top executives and board members, said Reuters. Although oil prices have raced back above the pre-pandemic level of $60 per barrel in recent months, producers are focusing on improving balance sheets instead of raising output, as demand forecasts hinge on vaccine rollouts. Marathon Oil's spokeswoman said the company's actions were part of its "commitment to continuously optimize our cost structure."


MRC

Hanwha Total to shut LPG-fed cracker in Daesan in March to expand ethylene capacity by 50%

MOSCOW (MRC) -- South Korea's petrochemical maker Hanwha Total plans to shut down its LPG-fed steam cracker in Daesan from March for 45 days to expand its ethylene production capacity by about half to 450,000 mt/year from 300,000 mt/year currently, reported S&P Global with reference to a company source's statement.

"In March, we will start the maintenance of our LPG cracker for 45 days. During that period, we also expand our cracker capacity by 50% from 300,000 mt/year of ethylene to 450,000 mt/year," said the company source, without giving the exact date in March for the shutdown to begin.

Once the expansion works are completed, the propylene capacity of LPG-fed steam cracker would be also raised to 130,000 tons/year from the current 80,000 tonnes of propylene.

Hanwha also owns another cracker at the same site, processing naphtha with the capacity of 1.1 million tons/year of ethylene and 860,000 tons of propylene.

Hanwha Total's naphtha-fed steam cracker is currently operating at 100% capacity, the company source said. This is similar to most naphtha-fed steam crackers in Asia.

As MRC informed earlier, Hanwha Total Petrochemical restarted its naphtha-fed Deasan cracker on 10 June, 2019, following a maintenance and debottlenecking exercise. The cracker was shut for maintenance and expansion in end-March, 2019. Following the expansion, the ethylene capacity has been increased by 310,000 MT and propylene capacity by 120,000 MT.

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

POLYPLASTIC spent 2,4 million Rb on coronavirus prevention in 2020

MOSCOW (MRC) -- The total amount of R&P POLYPLASTIC’s expenditures for activities on protecting its employees from COVID-19 and resisting further spread of coronavirus in 2020 equaled to over 2.4 million Rubles, said the company.

In total almost 1 400 pairs of gloves and 16 000 protection single use and reusable masks were purchased for the company’s production plants. R&P POLYPLASTIC compensated the cost of COVID-19 test to their employees and purchased express-tests. Industrial premises were cleaned with special means of disinfection, all public areas were equipped with antibacterial gels and sanitizers.

The cost of protective measures amounted to 1.8 million Rubles and in terms of equivalent amount for each worker – 3 292 Rubles/person. The amount is comparable to similar costs of petrochemical industry giants.

Moreover, R&P POLYPLASTIC allocated over half a million Rubles for combating coronavirus in its regions of presence handing over 10 thousand medical gloves and four oxygen concentrators to medical institutions of the Samara and Saratov regions.

As per MRC, POLYPLASTIC invests over 3.3 million Euros into expansion of production. Within the frame of a new investment project, R&P POLYPLASTIC – a Russian plastics producer – and KraussMaffei have recently concluded a contract for the delivery of two ZE 80 x 42D BluePower twin-screw extruders to extend the company's production capacity. Due to travel restrictions caused by the COVID-19 pandemic, both parties conducted the entire contract negotiations online remotely and signed the contract at the end of October. This contract further strengthens the long-standing, constructive and solution-oriented cooperation between R&P POLYPLASTIC and KraussMaffei.

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

Most units shut at Marathon Galveston Bay Refinery due to cold weather

MOSCOW (MRC) -- Most units were shut on Sunday night and Monday morning at Marathon Petroleum Corp's 585,000 barrel-per-day Galveston Bay Refinery in Texas City, Texas, as temperatures plunged due to a Arctic cold front reaching the Gulf Coast, said sources familiar with plant operations, said Reuters.

Marathon plans to begin restarting units shut by the severe cold weather in the next few days as temperatures rise, which is not expected before Tuesday afternoon, the sources said. Units shut last week for a planned overhaul underway at the refinery, will remain shut.

As MRC informed previously, Marathon Petroleum Corp plans to operate the gasoline-producing fluidic catalytic cracker (FCC) at its 585,000 barrel-per-day (bpd) Galveston Bay Refinery in Texas City, Texas. The 140,000 bpd FCC restarted on Sunday, 12 April, after repairs following a March 23 brief power outage that shut the unit.

Propylene is the main feedstock for the production of polypropylene (PP).

According to MRC's DataScope report, last month, Russian companies actually kept the November volume of external PP purchases, imports amounted to 21,300 tonnes. Thus, overall PP imports into Russia reached 224,000 tonnes in January-December 2020, compared to 182,800 tonnes a year earlier. Purchasing of all grades of propylene polymers in foreign markets increased, with homopolymer PP imports accounting for the most noticeable rise.
MRC

OQ Chemicals declares global sales control for carboxylic acids, aldehydes

MOSCOW (MRC) -- Global sales control has been announced by OQ Chemicals (Monheim am Rhein, Germany) on all grades of its carboxylic acids and aldehydes, said Chemweek.

N-heptanoic acid, n-pelargonic acid, n-heptanal, n-nonanal, and n-undecanal have all been placed under sales control, effective immediately.

OQ says it has implemented the measure due primarily to strong demand and recent short-term raw material disruptions, as well as in order to prepare for a planned maintenance turnaround at the company’s production site at Bay City, Texas.

"OQ Chemicals will be evaluating all orders for the future supply of the products listed above to ensure that the company can maintain the reliability of supply for its long-term customers per contractual and other ongoing commitments," it says. Sales control will remain in place until further notice, it adds.

The company announced sales control for its US oxo intermediate products in late January due to increased demand and supply shortages for oxo intermediate products produced at its Bay City facility.

As MRC wrote before, in September 2020, OQ Chemicals entered into an agreement to license its advanced proprietary technology for the production of ethylene and propylene derivatives to Duqm Refinery and Petrochemicals Industries Company (DRPIC) in Oman. DRPIC, a joint venture between Oman Oil Company and Kuwait International Oil Company, is a planned grassroots petrochemical complex at Duqm, Oman. In all, DRPIC awarded twelve license packages to international licensors.

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, exluding producers' inventories as of 1 January, 2020).

OQ Chemicals, formerly Oxea, is a global manufacturer of oxo intermediates and oxo derivatives, such as alcohols, polyols, carboxylic acids, specialty esters, and amines. These products are used for the production of high-quality coatings, lubricants, cosmetics and pharmaceutical products, flavours and fragrances, printing inks and plastics. OQ Chemicals is part of OQ, an integrated energy company that delivers sustainability and business excellence. OQ operates in 16 countries and covers the entire value chain from exploration and production to the marketing and distribution of its products.
MRC