BASF to invest up to USD4.7 bln to cut emissions 25% by 2030

MOSCOW (MRC) -- In pursue of more ambitious goals on its journey to climate neutrality and net zero emissions by 2050, BASF, the world's petrochemical major, is also significantly raising its medium-term 2030 target for reductions in greenhouse gas emissions: the company now wants to reduce its greenhouse gas emissions worldwide by 25% compared with 2018 – and to achieve this despite targeted growth and the construction of a large Verbund site in South China, according to Hydrocarbonprocessing.

Excluding the effects of the planned growth, this means cutting CO2 emissions in half in the current business by the end of this decade. Overall, BASF plans to invest up to EUR1 billion by 2025 to reach its new climate target and a further EUR2 billion to EUR3 billion by 2030. Thus, BASF will invest up to EUR4.0 billion (US4.7 billion) to cut its greenhouse gas (GHG) emissions 25% by 2030 compared with 2018.

In 2018, BASF Group’s worldwide emissions amounted to 21.9 million metric tons of CO2 equivalents. In 1990, this figure was roughly twice as high. The new 2030 emissions goal represents a reduction of approximately 60% compared to 1990 levels, which exceeds the European Union’s target of minus 55%.

“The new climate goals underscore our determination and BASF’s commitment to the Paris Climate Agreement. Climate change is the greatest challenge of the 21st century. In response, we must adapt our processes and our product portfolio. We need to accelerate this transformation now. We must first concentrate on the initial steps of this journey, not the final ones. That is why BASF will increase its use of renewable energies. And we will accelerate the development and deployment of new CO2-free processes for the production of chemicals. With transparency and offerings to systematically and incrementally reduce the carbon footprint of BASF products throughout the entire value chain, we help our customers in all industries to reduce the carbon footprint of their own products,” said Dr. Martin Brudermuller, Chairman of the Board of Executive Directors of BASF SE.

At the heart of the long-term transition toward net zero CO2 emissions by 2050 is the use of new technologies, which will replace fossil fuels such as natural gas with electricity from renewable sources. Most of these technologies are being pioneered by BASF in collaboration with partners and are currently in a pilot stage. Broad scaleup of these technologies will only be fully realizable after 2030. In order to accelerate the avoidance of CO2 emissions prior to that date, BASF also continues to systematically implement continuous improvement processes for existing production plants. In addition, BASF will progressively switch to renewable sources to meet its electricity needs and intends to invest in wind parks to facilitate this.

One of the most important new technologies that BASF is currently developing are electrically heated steam crackers for the production of basic chemicals such as ethylene, propylene and butadiene. These chemicals are building blocks for numerous value chains and are essential for chemical production. Hydrogen is another important feedstock for many chemical production processes. To achieve CO2-free production of hydrogen, BASF is pursuing two processes in parallel: the commercially available water electrolysis and methane pyrolysis, for which BASF has developed a new process technology. Another important lever to increase energy efficiency is the use of electrical heat pumps to produce CO2-free steam from waste heat. BASF’s goal is to work with Siemens Energy to gradually ramp up this technology to industrial scale and use it for waste heat recovery at entire sites.

BASF expects that this switch to climate-neutral production processes will lead to a sharp increase in electricity demand at the group’s major sites, including the largest production site in Ludwigshafen, in the coming decade. From around 2035, the group’s electricity demand is expected to be more than three times higher than it is today.

As MRC reported before, in mid-February, BASF said it was restarting one of its steam crackers at its Ludwigshafen complex in Germany after operations were halted last Wednesday due to a technical issue. The naphtha cracker produces ethylene and propylene, and is one of two crackers on the site. One has a production capacity of 420,000 metric tons/year, with the other's capacity at 240,000 metric tons/year, according to IHS Markit data.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC"s ScanPlast report, Russia's estimated PE consumption totalled 241,030 tonnes in January 2021 versus 217,890 tonnes a year earlier. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, PP shipments to the Russian market reached 141,870 tonnes in January 2021 versus 123,520 tonnes a year earlier. Supply of homopolymer PP and PP block copolymers increased.

BASF is the leading chemical company. It produces a wide range of chemicals, for example solvents, amines, resins, glues, electronic-grade chemicals, industrial gases, basic petrochemicals and inorganic chemicals. The most important customers for this segment are the pharmaceutical, construction, textile and automotive industries.
MRC

MOSCOW (MRC) -- Petroleo Brasileiro SA has signed the contract to sell its RLAM refinery to Abu Dhabi’s Mubadala Capital for USD1.65 billion, in a victory for outgoing Chief Executive Roberto Castello Branco, reported Reuters.

Earlier on Wednesday, Petrobras said its board had authorized the sale to Mubadala Capital, under the aegies of its MC Brazil Downstream Participacoes unit.

Petrobras is currently selling off eight refineries in a bid to reduce debt. It is also attempting to break its own virtual refining monopoly in Brazil, which has proved a major issue as the company has come under frequent political pressure to lower domestic fuel prices.

Brazilian President Jair Bolsonaro fired Castello Branco after the company hiked fuel prices several times. It is not clear if the incoming administration at Petrobras, set to take office in April, will be as committed to selling downstream assets.

The sale of the refinery must still be approved by Brazil’s Administrative Council for Economic Defense (CADE), a regulator, Petrobras said. The company announced the sale in principal in February, but its approval by the board - which itself will experience major changes in April - was a key step.

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 241,030 tonnes in January 2021 versus 217,890 tonnes a year earlier. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, PP shipments to the Russian market reached 141,870 tonnes in January 2021 versus 123,520 tonnes a year earlier. Supply of homopolymer PP and PP block copolymers 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.
MRC

MOSCOW (MRC) - The Ministry of Industry and Trade opposes the regulation of polymer prices in Russia, Interfax reports.

"You know, if we regulate all prices, then we need to revive the state plan. For this, first of all, there is the Federal Antimonopoly Service, which monitors the level of excess of those parameters that change in the market depending on the market situation. an unpopular decision, but we believe it is inappropriate to replicate it. At the same time, if any serious situations arise, of course, we gather industry specialists - both raw material producers and consumers, "the head of the ministry Denis Manturov told reporters on Friday.

As reported, the Union of Plastics Processors has prepared an appeal to the government of the Russian Federation with a request to take measures to curb the rise in prices for basic raw materials. The union notes "an unprecedented rise in prices" and claims that the cost of polymer raw materials on the Russian market breaks records every month. For some items, compared to the beginning of 2021, the growth milestone of 30% has been passed.

In the current situation, processors of polypropylene and polyamide-6 are forced to raise prices for products for consumers - manufacturers of plastic products, the union stressed. The organization cited information from the trading house "Polyplastic", according to which the company increased the cost of its products based on polypropylene by 11%, and on the basis of polyamide-6 - by 9%. The company did not rule out that they will have to raise prices again.

The organization warns that an increase in prices for basic raw materials will inevitably lead to an increase in the cost of the final product: for example, in February, food industry enterprises announced that, due to an increase in the cost of packaging by 10-15%, products in stores may still increase in price.

Earlier it was reported that in early February, plastic packaging companies contacted the Ministry of Trade regarding the increase in the cost of raw materials - basic polymers for the production of packaging materials. These appeals were forwarded to the FAS Russia.

According to the ICIS-MRC Price Report, in Russia on the spot market this week the growth of polyethylene prices continued. The supply is still limited for almost all types, and some manufacturers do not promise an improvement in the situation in April. Negotiations have started on the April contract prices for Russian polyethylene, processors are reporting an increase in prices by more than Rb11,000/tonne for all types of polyethylene.
MRC

MOSCOW (MRC) -- Spain's Repsol is seeking European pandemic recovery funds to support projects including new biofuel plants and 'green' hydrogen production made from renewable sources in a pivot away from oil and gas to supplying low-carbon energy, according to Hydrocarbonprocessing.

Spain and Italy, due the biggest chunks of Europe's EUR750 billion (USD884 billion) lifeline in recognition of the damage the pandemic caused their economies, have invited companies to propose projects that could help wean their economies off carbon.

The company said on Friday that Repsol responded by putting forward 30 projects which it calculates will need total investment of EUR5.96 billion. They include a plant Repsol has agreed in partnership with oil giant Saudi Aramco to build in northern Spain, which will produce synthetic fuel for cars, trucks and aircraft using carbon dioxide captured from a nearby refinery, and hydrogen produced from electricity generated from renewables.

Another potential candidate is a refinery in southern Spain where Repsol aims to start producing advanced biofuels in 2023. Chief Executive Josu Jon Imaz told a livestreamed shareholder meeting that refineries in central and eastern Spain "are already getting prepared and producing these sustainable biofuels".

A planned extension to a hydroelectric plant in the northern region of Cantabria has also been included in the proposals. Repsol estimates adding a gigawatt of capacity to the Aguayo hydroelectric facility will cost around EUR700 million.

Oil and gas firms across Europe, including major groups BP, Total and Shell, have pledged to adapt their businesses in response to government and investor pressure to help reduce planet-warming carbon emissions.

As MRC reported earlier, Repsol's refinery at Puertollano in central Spain has carried out an upgrade of its olefins unit. The modernization was a part of planned maintenance of the cracker and chemical derivative plants at the end of 2020.

We remind that Spain’s Repsol shut down its cracker in Tarragona (Spain) for maintenance in the fourth quarter of 2019. The turnaround at this steam cracker, which produces 702,000 mt/year of ethylene and 372,000 mt/year of propylene, was pushed back from Q3 2019. The exact dates of maintenance works were not disclosed.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 241,030 tonnes in January 2021 versus 217,890 tonnes a year earlier. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, PP shipments to the Russian market reached 141,870 tonnes in January 2021 versus 123,520 tonnes a year earlier. Supply of homopolymer PP and PP block copolymers increased.

Repsol S.A is an integrated Spanish oil and gas company with operations in 28 countries. The bulk of its assets are located in Spain.
MRC

MOSCOW (MRC) -- Nigeria’s cabinet has approved USD1.5 billion of spending on the modernisation of the Port Harcourt oil refinery and awarded a contract to Italy’s Tecnimont, said Hydrocarbonprocessing.

Petroleum Minister Timipre Sylva said.The project will be completed in three phases, the first within 18 months taking the refinery to 90% production capacity, with the second and final phases carried out within 24 months and 44 months respectively, Sylva told reporters in Abuja. Africa’s top oil exporter has made producing its own fuels a priority for years but efforts to revamp its refineries have failed, leaving it almost entirely reliant on imports.

It is now struggling to balance a promise to end costly fuel subsidies with public anger over more expensive fuel. Reuters reported in January that NNPC was in talks to raise around $1 billion to refurbish its largest refining complex at Port Harcourt and that Afreximbank is looking into a facility for the refurbishment.

The country opened bids in December for investors to carry out engineering work for the revamp. Nigeria has four refineries with a combined capacity of 445,000 barrels per day (bpd): one in the north at Kaduna and three in the oil-rich Niger delta region at Warri and Port Harcourt. The Port Harcourt complex consists of two plants with a combined capacity of 210,000 bpd.

In April 2020, they were all shut pending rehabilitation while the refineries lost some 167 billion naira a year early and only Warri processed any oil.

As per MRC, Nigeria is losing 200,000 barrels of crude oil a day because of theft and vandalism, the head of the state oil company said, underscoring how insecurity is causing vast financial losses for the West African country. With Brent Crude oil prices hovering around USD66.70, the losses would amount to more than USD13 million a day and more than USD4.8 billion a year, at a time when Nigeria needs funds to tackle poverty, improve security and boost the economy, which shrank 1.92% in 2020 in part due to the pandemic.

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