Saudi Aramco, Chevron chiefs see global oil demand recovery

MOSCOW (MRC) -- Global oil demand is recovering and could return to around pre-pandemic levels next year, the chief executive of Saudi Aramco told an oil and gas conference, said Hydrocarbonprocessing.

Global demand for oil is likely to recover from the second half of the year and could reach 99 MMbpd in 2022, Amin Nasser said at IHS Markit's online CERAWeek conference.

Diesel demand has recovered globally due to door-to-door deliveries, though jet fuel lags as people avoid long flights, said Chevron CEO Michael Wirth, who spoke on a panel with Nasser.

Oil demand improving in China, India and East Asia, with vaccine deployment as "cause for optimism" in the West, Nasser said.

As per MRC, Saudi Aramco and Saudi Basic Industries Corporation (SABIC) have decided to reevaluate their crude-oil-to-chemicals project in Yanbu on the kingdom's west coast. The USD20 billion project may be downsized to use Aramco's existing facilities in the port city, instead of building a new plant.

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) -- Chemieanlagenbau Chemnitz (CAC) has been assigned by OMV with overall responsibility for the construction of a biofuel plant, said Hydrocarbonprocessing.

With this project CAC is realizing one of the first large-scale plants in Europe to use innovative co-processing to produce carbon-neutral fuels. For this purpose biogenic input materials are processed together in combination with fossil, oil-based raw material in a hydrogenation facility at the refinery. The Vienna-based international oil, gas and chemicals company is investing about 200 million euros in the conversion at the site in Schwechat (Austria). This is in line with the EU requirement for biofuels to adhere to strict ecological and social criteria throughout the value chain.

With this process, the hydrogenated vegetable oil should lead to an annual reduction in OMV’s carbon footprint of up to 360,000 metric tons of fossil CO2. This is equivalent to the annual emissions of around 200,000 cars driving an average of 12,000 km per year. The product meets the highest quality standards and can be freely used in any type of vehicle. The technology applied is not limited to vegetable oil – waste products (such as used cooking oil) and advanced feedstocks are also possible and will be used based on availability. OMV expects demand for its hydrogenated biofuels to increase ten-fold by 2030.

"With this project we are joining OMV in taking a further step towards sustainable mobility,” declared Jorg Engelmann, managing director of CAC, which is currently launching its technology for manufacturing synthetic gasoline on an industrial scale onto the market. “Only with technological openness we can provide rapid and sustainable protection for our environment."

With overall responsibility for all phases of the project, CAC is undertaking detail engineering, including project management and project controlling, procurement services and construction site management. This includes the supply of equipment and bulk materials (piping, instrumentation, electrotechnical material) as well as responsibility for construction and assembly work.

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.

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). Supply of exclusively PP random copolymer increased.
MRC

MOSCOW (MRC) -- The Prax Group announced that it has completed an exclusive crude oil and feedstocks supply arrangement with Trafigura, a market leader in the global commodities industry, said Hydrocarbonprocessing.

Under the terms of the transaction, Prax will purchase crude oil and refinery feedstocks from Trafigura for all of its requirements for Prax Lindsey Oil Refinery, located near Immingham in the Humber estuary, in the North East region of the United Kingdom.

Under the new agreement, Trafigura will use its extensive global reach in international oil markets to source the optimal range of crude oils and feedstocks for the refinery.

Sanjeev Kumar, CEO of the Prax Group, said: “This arrangement is an important step in the Group’s plans for the long-term growth of the refinery and it will pave the way to further strengthen our long-term relationship with Trafigura. It will provide operational and planning flexibility, helping us to continue to deliver an excellent level of service to our customers.

Jose Maria Larocca, Executive Director and Co-Head of Oil Trading for Trafigura, said: “Trafigura is delighted to be working with the Prax Group following their new refinery acquisition. We’re committed to supporting our customers by providing access to the best opportunities available in the global commodity markets."

The Prax Group took over ownership of Lindsey Oil Refinery from Total on 1st March 2021. With an annual production capacity of 5.4 million tonnes, the acquisition underpins the Group’s long-term strategy to be fully integrated across the oil value chain from upstream to downstream, and secures local supply for the trade and sale of oil products for its substantial downstream presence in the United Kingdom.

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.

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). Supply of exclusively PP random copolymer increased.
MRC

MOSCOW (MRC) -- The European Commission has conditionally approved Japanese company Mitsui & Co’s planned acquisition of a controlling interest in Belgian company Belchim Crop Protection, said Chemweek.

Mitsui agreed to the acquisition in December 2019. The approval is conditional on full compliance with a commitments package offered by Mitsui. The Commission commented that Belchim as well as Mitsui & Co through its subsidiary Certis Europe cater to high-value crops such as potatoes, vegetables and grapevines. Its investigation found that the proposed transaction would have reduced competition in two specific products: plant growth regulators (PGRs) used to prevent or control sprouting in stored potatoes; and paraffinic oils used to prevent or limit the spread of viruses in seed potatoes and flower bulbs.

In PGRs, the Commission says that since the 2020 EU ban of chlorpropham, both Mitsui and Belchim have been among very few suppliers that sell, or are about to sell, alternative products to chlorpropham in post-harvest potato PGRs markets in Denmark, Germany, Poland, Sweden, and potentially in Finland and Norway. The transaction would have led to high combined market shares in countries where Mitsui and Belchim compete. Also, it would have eliminated competition from Mitsui as a potential entrant in Finland and Norway. The Commission was therefore concerned that this would give rise to higher prices for potato PGRs in those countries.

On paraffinic oils, the Commission found that Mitsui is the main supplier of paraffinic oils for virus control in seed potato and flower bulb crops in the Netherlands. It also found that there were no suppliers other than Belchim who were likely to make a significant entry on those markets in the near future. As a result of the merger, Dutch farmers could have seen higher prices in paraffinic oils used to control viruses in seed potatoes and flower bulbs.
To address the Commission's competition concerns, Mitsui offered to transfer its distribution agreement and customer relationships for its potato PGRs in one or two packages (one for Germany and Poland and the other for the Nordic countries) to one or two remedy takers. If Mitsui cannot transfer both packages within a certain timeframe, it has offered to transfer instead the Belchim distribution agreement and customer relationships for its PGR product under the same terms.

Mitsui also offered to transfer to a remedy taker, the Belchim distribution agreement and other relevant data and agreements for its paraffinic oils for virus control in seed potatoes and flower bulbs in the Netherlands.
Both the potato PGRs and the paraffinic oil divestment businesses include access to brands and IP, application machinery and education and training. Mitsui cannot implement the acquisition of Belchim before the Commission has formally assessed and approved the transfer of each of the packages to remedy takers.

As MRC informed earlier, Mitsui Chemicals operated its naphtha cracker normally following a maintenance turnaround. Company resumed operations at the cracker on July 19, 2020. The cracker was shut for maintenance on June 11, 2020. Located in Osaka, Japan, the cracker has an ethylene capacity of 500,000 mt/year and a propylene capacity of 280,000 mt/year.

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.

Mitsui Chemicals is a leading manufacturer and supplier of value added specialty chemicals, plastics and materials for the automotive, healthcare, packaging, agricultural, building, and semiconductor and electronics markets. Mitsui Chemicals is a Japanese Chemicals company, a part of the Mitsui conglomerate. The company has a turnover of around 15 billion USD and has business interests in Japan, Europe, China, Southeast Asia and the USA. The company mainly deals in performance materials, petro and basic chemicals and functional polymeric materials.
MRC

MOSCOW (MRC) -- The chief executive of Brazil's state-run oil company Petrobras, Roberto Castello Branco, said biofuels, especially those for the aviation industry, will be key for "de-carbonizing" transportation in coming years, a goal for energy transition, reported Reuters.

Brazil, a major corn and sugarcane producer and a country with a more diversified energy matrix than its neighbors, is also a large consumer of domestic ethanol, with pure gasoline supplies a rarity.

"For the future, we are evolving to bio jet fuel, which will be very important for de-carbonizing transportation, so we are focusing on ships and aircraft," he said at the CERAWeek energy conference on Tuesday.

Aviation biofuels are biomass-derived fuels from plants or waste used to power aircrafts. They produce lower CO2 emissions than conventional jet fuel.

Petrobras is among the region's largest exporters of low-sulfur marine fuel. Competitors including Venezuela's PDVSA and Mexico's Pemex have not showed much progress in recent years in producing low-sulfur fuels that exports markets demand.

Brazil increased 4.4% its imports of refined products, mainly diesel, to 34.2 million cubic meters in 2019 but also boosted fuel exports 2.6% that year, including fuels for the maritime and aviation industries, to 13.7 million cubic meters, according to figures by the nation's oil regulator.

Asked about how a giant company such as Petrobras, which has focused on keeping production costs low, can move faster to achieve energy transition, Castello Branco said that "elephants can dance and fly as well."

"Petrobras was known as an elephant, a state oil company very big and too bureaucratic, very slow-moving. We are looking for fast solutions and diagnosis for solving problems as we are living in a technology-driven world."

The company aims to capture 25 million tonnes of carbon dioxide (CO2) through 2025 while reducing emissions from its fossil fuel operations.

As MRC informed before, Brazil's state-run oil company Petrobras is seeking 800 million reais (USD152 million) in compensation from engineering group Odebrecht in arbitration proceedings over its alleged violation of the shareholders agreement in petrochemical company Braskem.

We remind that Petrobras may need more than a year to divest its stake in Braskem, said Andrea Almeida, Petrobras CFO, in early July, 2020. She said during the company"s recent webinar that Petrobras plans to give more time for potential investors to make offers for the company"s assets, including for its refineries and stakes at its petrochemical and fuel distribution affiliates. The divestment of Petrobras"s stake in Braskem in 2020 would be desirable but "might not be possible" as the COVID-19 pandemic has changed market conditions, she said. The company plans to close part of its refinery sales in 2021. In December, Roberto Castello Branco, CEO of Petrobras, said that he wants to sell the company"s stake in Braskem within a year. Petrobras owns 32.15% of Braskem.

We also remind that Braskem is no longer pursuing a petrochemical project, which would have included an ethane cracker, in West Virginia. And the company is seeking to sell the land that would have housed the cracker. The project, announced in 2013, had been on Braskem"s back burner for several years.

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.

Headquartered in Rio de Janeiro, Petrobras is an integrated energy firm. Petrobras" activities include exploration, exploitation and production of oil from reservoir wells, shale and other rocks as well as refining, processing, trade and transport of oil and oil products, natural gas and other fluid hydrocarbons, in addition to other energy-related activities.