US petrochemical production crippled by deep freeze

MOSCOW (MRC) -- Severe winter weather continues to decimate US base chemical production with just about every facility in Texas reporting shutdowns or curtailments on Wednesday. Production is expected to remain offline until this weekend at the earliest, reported Chemweek.

"While the US Gulf Coast is accustomed to severe hurricanes, the impact of the cold has been much more severe than the many Category 4-5 hurricanes that hit the coast over past decades," according to IHS Markit. "It is likely to be at least several days before refinery/petrochemical facilities and production operations can return to normal levels."

For polyethylene, IHS Markit is assuming outages affect all Texas and western Louisiana facilities. "We currently assume that 88% of all US PE capacity is offline and will be so until this weekend at the earliest," IHS Markit says. "We are assuming that upstream supply of key feedstocks for ethylene production, like ethane gas, are also experiencing issues as well as the actual ethylene crackers themselves."

The timing of successful startups upstream will be critical to support the restart of derivative units. Logistics are also widely affected and delays for moving polyethylene (PE) rail cars for both domestic and exports are expected. Multiple resin producers have announced either a sales allocation, force majeure, or some type of plant update.

IHS Markit estimates that 89% of all US polypropylene (PP) production is currently offline and will be so until this weekend at the earliest. Only four or 10 North American PP producers, only four (Braskem, Indelpro, Phillips 66, and Pinnacle Polymers) are not under a force majeure or sales allocation program.

Unusually cold temperatures are expected to persist in the Houston area through Friday morning. A hard freeze watch is in effect for Houston from late Thursday night through Friday morning. The National Weather Service expects temperatures in the Houston area to begin warming up later Friday, with a high of 60°F forecast for Sunday.

The Texas Commission on Environmental Quality (TCEQ) has been inundated with air emission reports from producers whose operations have been affected by the weather. “Extreme cold and instability of electrical supply, nitrogen, and fuel gas systems caused operating unit monitoring and control systems failures,” says a submission by Chevron Phillips Chemical (CPChem) relating to its Sweeny site in Old Ocean, Texas. CPChem shut down its Pasadena plastics complex because the cold has prevented delivery of nitrogen from a supplier. Many producers are also citing loss of steam because of the cold.

Specific South Texas operations shut down by the winter storm include Formosa Plastics’ three steam crackers at Point Comfort, and LyondellBasell’s cracker at Corpus Christi.

In the Greater Houston, Texas, area, steam crackers shut down include CPChem’s three at Sweeny and two at Cedar Bayou; ExxonMobil’s three at Channelview and Baytown; Ineos’s two at Alvin; and Shell’s one at Deer Park. Dow has shut down one of its Freeport crackers and is running two at reduced rates. LyondellBasell has shut down two of the three crackers it has at La Porte and Channelview, while one has been stabilized.

The Houston area is also home to five on-purpose propylene units. The Enterprise propane dehydrogenation (PDH) unit at Mont Belvieu is offline, as is the Flint Hills Resources PDH unit in Houston. Dow’s Freeport PDH unit is running at reduced rates, as are LyondellBasell’s metathesis units at Channelview.

The six steam crackers in the “golden triangle” northeast of Houston have all been shut down. These include BASF/Total, CPChem, and Motiva’s respective units at Port Arthur as well as Dow’s unit at Orange, ExxonMobil’s at Beaumont, and Indorama’s at Port Neches. BASF/Total’s metathesis unit is also offline.

Eastman’s three steam crackers in Longview, Texas, have also been shut down.

IHS Markit has confirmed the shutdown of three steam crackers in Louisiana: Westlake Chemical’s units at Sulphur and Indorama’s unit at Westlake. The status of Louisiana’s other steam crackers, which account for about 24% of US ethylene capacity, is uncertain. Located further east, they have been spared the worst of the cold, but with the winter storm moving in their direction over the next few days, that could change.

As MRC informed earlier, in late August 2020, Chevron Phillips Chemical shut down its Port Arthur, Texas cracker in preparation for Hurricane Laura. The unit's capacity of 855,000 mt/year. Chevron Phillips also shut its Cedar Bayou, Texas, crackers ahead of the storm. The company's Cedar Bayou crackers 1 and 2 have capacities of 837,000 mt/year and 1.7 million mt/year, respectively.

Ethylene and propylene are feedstocks for producing PE and 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) -- AOC (Collierville, Tennessee) says it is raising prices with immediate effect for its entire unsaturated polyester resins (UPR) portfolio and epoxy vinyl ester (EVE) range sold in the EAME region, due to continued increases in raw materials, logistics, and packaging costs, reported Chemweek.

Prices for its EVE products will rise by EUR300/metric ton (USD364/metric ton), with its UPR portfolio prices to increase by EUR250/metric ton. The increase is with immediate effect for all new deliveries or as contracts allow, it says.

“The pricing of liquid epoxy resin (LER), styrene, and other key raw materials has seen continued increases over the past months following outages across the globe and force majeure declarations in Europe,” says Fons Harbers, AOC's vice president/EAME marketing and sales. “Logistics and packaging costs have been increasing steadily. This leaves us no choice but to raise the prices of our products as a result,” he says.

AOC announced price increases in January this year and December 2020 for the same product ranges, citing the same reasons.

As MRC informed earlier, in October 2020, AOC, Kaprain and Spolchemie announced they had reached agreement on AOC acquiring the Unsaturated Polyester Resin (UPR) manufacturing operations located at the Spolchemie site in Usti nad Labem (Czech Republic). This footprint extension will allow AOC to further improve service and logistics to its customers in Central/ Eastern Europe as well as in Germany, and will make new products (e.g. based on recycled PET) available for customers around Europe.

According to MRC's ScanPlast report, overall estimated PET consumption in Russia was 71,830 tonnes in December 2020, up by 8% year on year. Russia's PET consumption in all sectors (injection moulding, fibers/filaments, films) exceeded the level of 2019 by 17%, totalling 717,310 tonnes.
MRC

MOSCOW (MRC) -- Honeywell UOP selected GEA Refrigeration Technologies’ oil & gas team to supply engineered compression packages for a tail gas application at a refinery in Azerbaijan, said Hydrocarbonprocessing.

Utilizing GEA's most powerful screw compressor, the GEA model XH, the systems are designed for a modernization program at the refinery.

GEA's tail gas packages were selected for the project by Honeywell UOP as part of their Pressure Swing Adsorption (PSA) technology to supply high-quality hydrogen for the modernization of the Heydar Aliyev Oil Refinery (HAOR) in Baku, Azerbaijan. Pure hydrogen is essential to the refining process, where it is used to decontaminate oil and facilitate catalytic processes that produce clean-burning fuels, including those that meet Euro V standards for vehicle emissions.

The PSA technology will help Azerbaijan meet the growing domestic demand for transportation fuels that meet the Euro V standards. Hydrogen technology is an important element of modernization program that will help the refinery in Azerbaijan to remain among the most advanced refineries in the region, further improving environmental protection along with the quality of life in Azerbaijan.

The modernization enables the refinery to process 7.5 million metric tons per annum of crude oil blended from local sources. Hydrogen is key in the refining process, being produced as a byproduct of refining and intentionally from a steam methane reformer. Honeywell UOP's PSA technology purifies this hydrogen so it essentially can be recycled into the refinery to remove impurities and to perform catalytic processes that transform crude oil into clean fuels and other products.

The purpose of these tail gas compression units is to receive the tail gas – a gas mixture composition with up to ~70% hydrogen – from the PSA System and keep stable pressure at the PSA discharge. Received gas is compressed up to 6,7 bar(g) and then cooled down to 40°C in the after cooler before it is returned to the customer’s system.

These units are based on an oil-flooded screw compressor and the oil is separated from the tail gas into two oil separators (main and final) in order to deliver the gas with less than 1 ppm of oil content. As an oil-flooded screw compressor, the oil circuit is provided for lubricating the internal part of the screw compressor. The oil circuit comprises two oil pumps (one in standby), a pressure control valve to keep the oil

pressure constant and an electro-pneumatic three-way control valve to maintain the oil flow to the compressor at a fixed temperature. The oil circuit also comprises two oil coolers (one in standby) with a common inlet and outlet line for the cooling water system. The discharged oil at high temperature, recovered in the oil separator, is cooled down by using cooling water as a medium.

All vessels and all heat exchangers are designed and manufactured according to ASME (American Society of Mechanical Engineers) and TEMA R (Tubular Exchanger Manufacturers Association). GEA also provided the personnel protection with rock wool and aluminum and winterization of the entire oil circuit.

As per MRC, Honeywell announced a partnership with Princeps for petroleum refining supply chain solutions. Honeywell’s expertise in oil and gas planning will add Princeps’ petroleum solutions platform to its offerings to provide customers with industry-leading insights in determining the most profitable ways to operate their plants.

As MRC reported earlier, in May, 2020, Honeywell announced that Enterprise Products Partners L.P. will use Honeywell UOP’s C3 Oleflex technology in its second propane dehydrogenation plant, called "PDH 2". Located near Mont Belvieu, Texas, PDH 2 will produce 750,000 metric tons per year of polymer-grade propylene as part of Enterprise’s expansion of propylene manufacturing capacity.

Propylene is the main feedstock for the production of 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) - Woodside Petroleum expects strong buyer interest in the sale of a share of a new production unit at its Pluto LNG plant, top executives said on Thursday, a precondition for a planned USD11 B expansion at its Scarborough gas and Pluto project, said Reuters.

The renewed push by Australia's biggest independent gas producer on the 8-MMtpy expansion project comes after last year's COVID-19 induced collapse in oil and gas prices drove its underlying annual profit down 58% to USD447 MM. The result was well short of analysts' forecasts, which sent its shares down as much as 3.7% after the result was released on Thursday.

Woodside is looking to sell a 50% stake in the new production unit, or train, at the Pluto LNG plant in Western Australia, which will be fed with gas from the Scarborough project. Selling a stake would be key to avoiding a capital raising or a credit downgrade.

The company suspended the sale process last year when oil prices slumped but is now optimistic about luring buyers. "We're now sitting in a much more attractive pricing environment," Chief Financial Officer Sherry Duhe told analysts.

"The buyer appetite for infrastructure assets just continues to grow. And so we do believe that there'll be strong interest in that asset," she said. Woodside's other growth project underway is the Sangomar oil development off Senegal, where its partner FAR Ltd has just received a tentative takeover offer from Russia's Lukoil.

Woodside last year pre-empted Lukoil from buying Cairn Energy's stake in Sangomar, as it was concerned the project could then fall foul of U.S. sanctions on Russia. However Chief Executive Peter Coleman said on Thursday there was no concern with Lukoil becoming a partner through a takeover of FAR, as FAR's stake in the Senegal project was below the 33% equity threshold for U.S. sanctions.

Woodside stuck to its forecast for fiscal 2021 output of 90-95 MMb of oil equivalent, lower than its production in 2020. On a statutory basis, Woodside posted an annual loss of USD4.03 B, its first loss in eighteen years, hit by USD4.37 B in asset write-downs it took at the half-year.

As per MRC, Wood has secured a contract valued at over USD120 million with Sinopec Hainan Refining and Chemical Limited Company (Sinopec) to provide engineering, procurement and construction (EPC) services to expand its refinery development in the Hainan Free Trade Zone (FTZ) in South China. Once completed, the ethylene renovation and expansion project will produce up to one million tonnes of ethylene derivatives and refined oil on an annual basis and is expected to boost economic growth in China’s downstream sector by more than 100 billion yuan (USD14.1 billion). Output from the Hainan FTZ will serve ethylene demand across China and globally.

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) -- Encina Development Group (Encina; The Woodlands, Texas) and Flint Hills Resources say they are exploring a collaboration to produce renewable chemicals and fuels from plastic waste, reported Chemweek.

The two have signed a non-binding term sheet that proposes construction of a facility in Corpus Christi, Texas. Flint Hills would market the aromatic products produced at the Encina Corpus Christi facility and work with its affiliates to market renewable aromatic products from other Encina plants in the US.

“Our work with Encina is an exciting addition to our growing portfolio of renewable product and technology investments,” says Francis Murphy, senior vice president/chemicals at Flint Hills. “Renewable aromatics and bioplastics are playing an increasingly import role in the product value chain and reducing environmental impacts while still delivering on all the various products that make modern life possible.”

“Flint Hills Resources is an excellent partner for Encina,” says David Schwedel, executive director at Encina. “They have deep domain industry expertise and an aligned focus on delivering highly-valued and sustainable products to the marketplace.”

In December 2020, Encina and Braskem announced a collaboration for the production of circular propylene from plastic waste.

As MRC informed previously, in November 2019, Motiva Enterprises, the US refining arm of Saudi Aramco, acquired 100% of Flint Hills Resources chemical plant, adjacent to its Port Arthur, Texas, oil refinery. The Flint Hills plant operates a 1.57 billion-pound-per-year ethylene cracker, a unit producing nylon component cyclohexane, and a network of pipelines and storage caverns.

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