Repsol bids for EU pandemic recovery funds to develop biofuels

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

MOSCOW (MRC) -- Celanese Corporation, a global chemical and specialty materials company, intends to initiate a three-year plan to expand engineered materials compounding capacities at the company’s Asia facilities, including the locations of Nanjing, China; Suzhou, China; and Silvassa, India, as per the company's press release.

To support the significant business growth expected, Celanese has begun planning for the following Asia expansion investments:

- Nanjing, China Compounding and LFT Expansion: the intended scope of this project adds approximately 52KT of compounding and long-fiber thermoplastics (LFT) capacity at the company’s Nanjing integrated chemical complex by the second half of 2023.
- Suzhou, China Nylon Expansion: the intended scope of this project adds approximately 7KT of nylon compounding capacity at the company’s Suzhou facility by the second quarter of 2022.
- India Compounding Expansion: the intended scope of this project adds approximately 7KT of annual compounding capacity at the company’s Silvassa, India facility by the first quarter of 2022.

“By continuing to increase our Asia presence in the engineered materials market, Celanese is adapting to local customer needs and gaining a competitive advantage in a complex and changing environment,” said Tom Kelly, Celanese Senior Vice President, Engineered Materials. “Celanese is committed to expanding its leadership position in the region by increasing both compounding and polymer manufacturing capacities and capabilities through greater investments and additions in its Asia network.”

Financial details of these engineered materials compounding expansions are not being disclosed at this time.

As MRC wrote before, Celanese Corporation has also announced its intent to expand its GUR ultra-high molecular weight polyethylene (UHMW-PE) production capacity in Europe. In addition to the recently announced Bishop, Texas, GUR expansion of approximately 15,000 tonnes per year coming online beginning in 2022, Celanese intends to invest in additional capacity for GUR in Europe.

We remind that in H2 February, 2021, Celanese declared force majeure on its products in the Americas and EMEA region due to the severe winter weather that has heavily curtailed US petrochemicals and refinery production and operations on the US Gulf Coast.

According to MRC"s DataScope report, January EVA imports to Russia rose only by 0,07% year on year to 3,084 tonnes from 3,087 tonnes a year earlier, and overall imports of this grade of ethylene copolymer into the Russian Federation dropped in January-December 2020 by 3,41% year on year to 38,170 tonnes (39,520 tonnes in 2019).

Celanese Corporation is a global technology leader in the production of differentiated chemistry solutions and specialty materials used in most major industries and consumer applications. Based in Dallas, Celanese employs approximately 7,700 employees worldwide and had 2020 net sales of USD5.7 billion.
MRC

1. Oil edges higher on bargain-hunting but oversupply fears cap gains

MOSCOW (MRC) -- Oil prices rises as investors looked for bargains following the previous day's plunge, but gains were capped as pandemic lockdowns in Europe and a build in US crude stocks curbed risk appetite and raised oversupply fears, reported Hydrocarbonprocessing. Brent crude futures rose 27 cents, or 0.4%, to USD61.06 a barrel by 0108 GMT, after tumbling 5.9% and hitting a low of USD60.50 the previous day. West Texas Intermediate (WTI) crude futures climbed 19 cents, or 0.3%, to USD57.95 a barrel, having lost 6.2% and touched a low of USD57.32 on Tuesday.


MRC

MOSCOW (MRC) -- The new coronavirus wave that has torn through Brazil in recent weeks has also affected its oil industry, according to unions and government data reviewed by Reuters, with infections among workers jumping and production taking a hit.

New COVID-19 cases among offshore oil workers rose to 46 on March 24 from 17 on March 3, based on a 15-day moving average, data from national oil regulator ANP showed.

Active cases are at their highest level since December at Brazil’s largest oil producer, state-run Petrobras, with 294 cases among employees as of Monday, according to Mines and Energy Ministry data.

Petroleo Brasileiro SA, as the firm is formally known, told Reuters it has adopted “rigorous measures” since the beginning of the pandemic to protect workers, carrying out some 650,000 COVID-19 tests among its workforce of roughly 46,000.

When employees are confined to enclosed spaces, as is common on offshore platforms, the company monitors them for 14 days prior to the beginning of their shift, Petrobras said. Still, those efforts have not insulated the company from a nationwide surge in COVID-19 cases in recent weeks.

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.
MRC