Indian Oil partners with Greenstat on hydrogen development

MOSCOW (MRC) -- Indian Oil Corp will invest 329.46 billion rupees (USD4.46 billion) to raise the capacity of its Panipat refinery by two-thirds to 500,000 barrels per day (bpd) by September 2024, the country’s top refiner said, said Chemweek.

India, the world’s third biggest oil importer and consumer, aims to expand its 5 million bpd refining capacity by 60% to meet rising local demand as Prime Minister Narendra Modi seeks to boost the manufacturing sector. Along with expanding capacity, IOC will install catalytic dewaxing and polypropylene units at its Panipat refinery in northern Punjab state, it said in a statement.

In 2018 IOC announced capacity expansion of the 300,000 bpd Panipat refinery costing 231 billion rupees. At that time it did not announce plans to set up the two other units. IOC said expansion of the refinery would raise production of petrochemicals and value-added specialty products to improve its margins and help “de-risk the conventional fuel business of the company".

To meet India’s growing energy demand, oil minister Dharmendra Pradhan is seeking 175 acres of land in eastern West Bengal state for expansion of IOC’s 160,000-bpd Haldia refinery, IOC said. IOC along with its subsidiary Chennai Petroleum Corp Ltd, has a total installed refining capacity of 1.6 million bpd.

As MRC informed earlier, Indian Oil Corp. Ltd. (IOC) has approved the addition of a petrochemical and lube integration component to its previously announced and long-planned project that will expand crude oil processing capacity of its 13.7 million-tonne/year Koyali refinery at Vadodara in India’s western state of Gujarat.

As MRC informed earlier, IOC is expanding its petrochemical capacity by more than 70 per cent from its current 3.2 million tonnes a year. It is also on new technologies that reduces the cost of producing petrochemicals.

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.

Indian Oil Corporation Limited, or IndianOil, is an Indian state-owned oil and gas corporation with its headquarters in New Delhi, India.
MRC

MOSCOW (MRC) -- Malaysia's Petronas delayed the launch of its Pengerang Integrated Complex until the second half of the year from the first, but dismissed rumours partner Saudi Aramco was looking to exit the USD27 billion project, said Hydrocarbonprocessing.

The state oil firm Petronas said it faced another challenging year after booking a 1.1 billion ringgit (USD272 million) loss for the final quarter of 2020, its third quarterly loss in a row though higher prices and demand for liquefied natural gas (LNG) helped.

The world's fourth-biggest LNG exporter had earned a profit of 4.1 billion for the October-December quarter a year earlier. "The outlook remains challenging with modest recovery in demand and oil prices, as the COVID-19 impact still continues with the emergence of new surges in cases," Petronas CEO Tengku Muhammad Taufik Tengku Aziz said.

"Despite the prolonged volatile and challenging outlook, Petronas remains optimistic on our recovery pathway," he said. Revenue fell 31.3% to 44 billion ringgit. For 2020, it recorded a profit after tax of 10.5 billion ringgit, it said. Excluding impairment charges, its cash flow from operations was 40.7 billion ringgit.

The firm, formally known as Petroliam Nasional Berhad, said 2021 will remain difficult due to the pandemic. Petronas has allocated its annual capital expenditure at between 40 billion ringgit ($9.88 billion) to 45 billion ringgit for the next five years, with 55% of the allocation set for domestic operations, said Liza Mustapha, senior vice president and group CFO.

It boosted its capex allocation for new energy to 9% from 5% as it aims to expand its renewable energy portfolio. It said the restart of the Pengerang complex in the southern state of Johor previously expected in March would be delayed until the second half of the year due to the pandemic. It dismissed rumors' that partner Saudi Aramco was looking to exit the joint venture.

"Petronas and Saudi Aramco remain committed to the partnership.. It remains a commitment and I have engaged with the management of Saudi Aramco regularly," Tengku Muhammad said. Last March a deadly fire at Pengerang forced the closure of the facility which had been set to start full commercial operations last year. Its Myanmar operations were not affected by the military coup there, Tengku Muhammad added.

As per MRC, Petronas, said it aims to become a net zero emitter of greenhouse gases by 2050 and also plans to increase its investments in renewable energy. Burning of oil and gas accounts for the vast majority of the world’s carbon emissions, and many investors have pushed global oil majors to do more to combat climate change. Petronas, the world’s fourth-largest exporter of LNG, said it will intensify its efforts toward reducing the so-called Scope 1 and Scope 2 greenhouse gas emissions, referring to direct emissions from operations and the electricity used by the company.

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.

Petronas, short for Petroliam Nasional Berhad, is a Malaysian oil and gas company wholly owned by the Government of Malaysia. The Group is engaged in a wide spectrum of petroleum activities, including upstream exploration and production of oil and gas to downstream oil refining; marketing and distribution of petroleum products; trading; gas processing and liquefaction; gas transmission pipeline network operations; marketing of liquefied natural gas; petrochemical manufacturing and marketing; shipping; automotive engineering; and property investment.
MRC

MOSCOW (MRC) -- China's crude oil imports are set to slow in the second quarter after Brent prices hit a 13-month high, cooling demand and capping refiners' margins as they prepare to shut for planned maintenance, industry sources and analysts said, as per Hydrocarbonprocessing.

Expectations of a recovery in global fuel demand and tighter oil supplies from Saudi Arabia and the United States pushed front-month Brent futures to their highest since January 2020 this week, up around 30% from January. Chinese independent refiners, who account for a fifth of the country's import demand, have become reluctant to buy cargoes as they enter a low-demand season, while domestic margins have yet to catch up with strong gains in international prices, the sources said.

Easing purchases from China, the world's largest crude importer, led to a drop in spot prices for Middle East and Russian grades this week, while prices of crude from other regions such as Africa and South America have also weakened. "Demand is very slow now and there are many available cargoes to choose from," said a source at a Chinese refinery, adding that high oil prices have cooled buying interest. "The lack of substantial demand, plus strong backwardation, put a lot of pressure on traders," said a source with an Asian refiner, noting an increasing number of unsold cargoes due to arrive in Asia in March and April.

The sources declined to be named due to company policies. Iraq's Basra Light crude and Upper Zakum from the United Arab Emirates have dropped to discounts against their official selling prices (OSPs) in spot purchases by Chinese refiner Hengli Petrochemical, traders said. Companies typically do not comment on their trades. More than 10 Chinese independent refiners, including one operated by Zhenghe Petrochemical, a subsidiary of ChemChina, and Shandong Qicheng Petroleum Chemical's plant, will shut for maintenance between March and June, according to Chinese consultancy JLC. Capacity at both plants are at 5 million tonnes per year (tpy).

The run rate at independent refineries is expected to fall below 70% in April, from around 74% presently, JLC analyst Zhou Guoxia said.

As MRC informed before, earlier this week, ExxonMobil Corp said it will close its 72-year-old Altona refinery in Australia, the country’s smallest, and convert it to a fuel import terminal as refiners struggle with low demand.

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.
MRC

MOSCOW (MRC) -- Oil prices were mixed with U.S. crude edging up to its highest close since 2019 as Texas refineries restarted production after last week's freeze, while Brent eased on worries that four months of gains will prompt producers to boost output, said Hydrocarbonprocessing.

Earlier in the day, an assurance that U.S. interest rates will stay low and a sharp drop in U.S. crude output last week due to the winter storm in Texas, helped boost both U.S. crude and Brent to their highest intraday prices since January 2020. Brent futures for April delivery fell 16 cents, or 0.2%, to settle at USD66.88 a barrel. The April Brent contract expires on Friday.

U.S. West Texas Intermediate (WTI) crude, meanwhile, ended 31 cents, or 0.5%, higher at USD63.53, its highest close since May 2019. Analysts said WTI increased late in the day as more Texas refineries started to return to service, including Valero Energy Corp's Port Arthur plant and Citgo Petroleum Corp's Corpus Christi plant.

The freeze caused U.S. crude production to drop by more than 10%, or a record 1 million barrels per day (bpd) last week, while refining runs tumbled to levels not seen since 2008, the Energy Information Administration said. "The more refineries return to service, the more crude oil they will burn through, and the less crude oil will go to storage," said Bob Yawger, director of energy futures at Mizuho in New York. Overall, however, analysts noted price gains slowed on Thursday.

"With momentum appearing to slow a week before the next OPEC+ meeting, crude may be positioning for a small correction," said Craig Erlam, senior analyst at OANDA, noting "There's still plenty of downside risks in the market and one of them is OPEC+ unity coming under strain in the coming months." The Organization of the Petroleum Exporting Countries and its allies including Russia, a group known as OPEC+, are due to meet on March 4.

Analysts noted recent higher oil prices - both Brent and WTI have gained more than 75% over the past four months - could encourage U.S. producers to return to the wellpad and OPEC+ to loosen its production reductions.

The group will discuss a modest easing of oil supply curbs from April given a recovery in prices, OPEC+ sources said, although some suggest holding steady for now given the risk of new setbacks in the battle against the pandemic. Extra voluntary cuts by Saudi Arabia in February and March have tightened global supplies and supported prices.

Meanwhile, an assurance from the U.S. Federal Reserve that interest rates would stay low for a while helped support oil prices earlier in the day and should boost investors' risk appetite and global equity markets.

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.
MRC

MOSCOW (MRC) -- Global demand for oil-based marine fuels is set to fall in the next three decades as stricter carbon emissions rules for the shipping industry kick in and alternative fuel use climbs, consultancy Wood Mackenzie said, said Hydrocarbonprocessing.

The U.N.'s International Maritime Organization (IMO) is set to formally adopt energy efficiency regulations in June that aim to reduce the carbon footprint of new and existing ships by 40% by 2030 compared with 2008 levels. By 2050 the IMO aims to reduce the overall greenhouse gas emissions from ships by 50% from 2008 levels.

Adoption of the upcoming efficiency rules would achieve the IMO's 2030 target and cause a decline in global bunker fuel demand of around 370,000 barrels per day (bpd) by 2030 compared to the current outlook, Iain Mowat, a principal analyst at Wood Mackenzie.

Even with these reductions, global consumption of marine fuels, currently estimated at just under 5 million bpd, is expected to grow to 5.9 million bpd by 2030, said Mowat. The use of liquefied natural gas (LNG) in marine fuels could limit the growth in carbon emissions from the shipping sector and is expected to further displace nearly 700,000 bpd of oil bunkers by 2030, Wood Mackenzie said in a report on Friday.

"In our current outlook we have the overall size of the marine bunker market dropping to less than 5.6 million bpd by 2050, of which oil bunkers accounts for less than 3.6 million bpd," said Mowat. But with LNG's carbon content still high relative to low-carbon alternatives, demand growth for the super-chilled fuel as a shipping fuel will also slow after 2040 as zero-carbon fuels, such as methanol and ammonia produced from green hydrogen, become more prevalent, said Mowat.

"A major shift towards low- and zero-carbon fuels by 2050 is absolutely required to reach IMO's target to halve overall greenhouse gas emissions," he said, resulting in a further 900,000 bpd decline in oil bunker demand by 2050.

As MRC informed before, earlier this week, ExxonMobil Corp said it will close its 72-year-old Altona refinery in Australia, the country’s smallest, and convert it to a fuel import terminal as refiners struggle with low demand.

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.
MRC