COVID-19 - News digest as of 29.03.2021

1. 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.

MRC

MOSCOW (MRC) -- Crude oil prices rose about 6% last Wednesday after a ship ran aground in the Suez Canal, and worries that the incident could tie up crude shipments gave prices a boost after a slide over the previous week, reported Reuters.

The crude benchmarks, US crude and London-based Brent, added to gains after US inventory figures showed a further rebound in refining activity, suggesting US refiners are mostly recovered from the cold snap that slammed Texas in February.

Brent crude settled at USD64.41 a barrel, gaining USD3.62, or 6%, after tumbling 5.9% the previous day. West Texas Intermediate (WTI) settled at USD61.18 a barrel, rising USD3.42, or 5.9%, having lost 6.2% on Tuesday.

The gains appeared to stabilize the market that had slumped from early this month, when prices hit their highest levels this year on expectations for demand recovery. Those hopes have since been dashed as European nations re-entered lockdowns to halt another wave of the pandemic.

Oil has recovered from historic lows reached last year as OPEC and its allies made record output cuts. On Tuesday, both benchmarks touched their lowest since February.

Ten tug boats struggled on Wednesday afternoon to free one of the world’s largest container ships after it ran aground and blocked the Suez Canal for more than a day, port agent GAC said.

The GAC said the information it had received earlier claiming the vessel was partially refloated, allowing traffic to resume along the fastest shipping route from Europe to Asia, was inaccurate.

Oil prices were also supported by US Energy Information Administration data that showed refinery runs recovering after a winter storm shut Texas refineries last month.

“The refiners are coming out of maintenance and recovering from the power outages. The expectation is now that they’re getting back to work, we will see crude inventories trending lower in the coming weeks,” said Phil Flynn, senior analyst at Price Futures Group in Chicago.

Italy, France and other European countries have re-imposed movement restrictions. But German Chancellor Angela Merkel said she was reversing a decision for a stricter Easter shutdown.

As MRC informed before, the largest US refinery, Motiva Enterprises’ 607,000 barrel-per-day Port Arthur, Texas, plant, returned to normal operations. The refinery was shut on Feb. 15 when freezing temperatures, rarely seen on the US Gulf Coast, knocked out steam supply. Motiva began restarting the refinery on Feb. 24.

Motiva Chemicals has also resumed operations at its mixed-feed cracker in Port Arthur, USA. The process of restart of this cracker with the capacity of 635,000 mt/year of ethylene and 340,000 mt/year of propylene began on 27 February, 2021, and finished late last week. The cracker wa shut along with the refinery at the same site on 14 February, 2021, because of the deep freeze.

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

MOSCOW (MRC) -- Firefighters in Indonesia are working to put out a massive fire that has broken out at one of the country's largest oil refineries, reported BBC.

The fire broke out at the Balongan refinery, run by state oil firm Pertamina, at 00:45 local time on Monday (17:45 GMT Sunday).

At least five people are injured and around 950 residents have been evacuated to safety. A handful of people have been reported missing.

According to the regional disaster management agency, five people were being treated in hospital for serious burns with another 15 with minor burns.

The Balongan Refinery is one of Indonesia's largest refineries and also one of its most crucial, as it feeds fuel and petrochemicals to the greater Jakarta area.

Questions have now been raised on how this incident will affect plastics and chemicals businesses and factories, though Pertamina has told the public that "fuel delivery to the public is undisturbed and currently still ongoing".

Pertamina said the cause of the fire was unknown, but that it started during heavy rain and lightning.

In a press conference later on Monday, the firm said the fire had not damaged the refinery's processing capabilities and that operations could hopefully return to normal in the next five days.

The fire was focused on the refinery tanks, with no damage to the processing plant, said Reuters, citing Pertamina Chief Executive Officer Nicke Widyawati.

The oil firm also said it was shutting down the refinery and conducting "oil flow control" to prevent any further spread.

The Balongan refinery, which is located approximately 200km (125 miles) east of the capital Jakarta and measures at least 340 hectares, can process 125,000 barrels per day.

As MRC informed before, PT Pertamina shut its cracker in Indonesia for maintenance works from 18 March, 2020. This cracker with a production capacity of 578,000 tons remained off-stream until 18 April 2020.

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.

Pertamina is an Indonesian state-owned oil and natural gas corporation based in Jakarta. It was created in August 1968 by the merger of Pertamin (established 1961) and Permina (established 1957). Pertamina is the world's largest producer and exporter of liquefied natural gas (LNG).
MRC

MOSCOW (MRC) -- Hyundai Engineering Co. Ltd. will construct of a petrochemical complex in the Kambarsky district of Udmurtia, which is planned to be launched by Udmurt Petrochemical Company LLC in 2023, said the Minister of Construction and Trade of the Republic Viktor Lashkarev to reporters.

"Petrochemical complex -" Udmurt Petrochemical Company "will be its investor, with the involvement of a syndicate of banks. Production volume - up to 2 mln tonnes of processing raw materials, investment volume - up to EUR3 bn euros," V. Lashkarev said.

"We plan to carry out design work on the construction of the complex during 2021-2022 and, accordingly, start its construction in 2023," the minister added. He specified that the complex will be engaged in the processing of oil raw materials, the production of polyethylene, polypropylene, aromatic hydrocarbons and products of their deep processing.

V. Lashkarev said that it will be a new site. In October 2019, the head of Udmurtia, Alexander Brechalov, signed an order on the allocation of 335 hectares and 85 hectares of land plots to Udmurt Petrochemical Company LLC in the Kambara region of the republic. The document said that it was planned to build a complex for the processing of oil raw materials and the production of polyethylene, polypropylene, aromatic hydrocarbons and products of their deep processing with a volume of 2 mln tonnes per year at these sites.

Earlier it was reported that on 29 May 2020, representatives of Hyundai Engineering, the state-owned Korea Overseas Infrastructure & Urban Development Corporationt (KIND), Poland's largest chemical enterprise Grupa Azoty and the Lotos refinery signed an agreement on joint investment of $733.3 mln in the construction of the plant for the production of polypropylene. It is noted that South Korean companies are investing USD130 mln in this project.

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.

Founded in 1988 and headquartered in Dangjin, South Korea, Hyundai Engineering Plastics Co., Ltd. develops, manufactures and supplies various engineering plastics both to the South Korean market and to other global markets. Among the manufactured products are such polymers as PP, PE, PS and PET compounds, elastotemoplastics, binders based on ethylene vinyl acetate (EVA), etc.
MRC

MOSCOW (MRC) -- Sinopec posted a 42.4% decline in net profit last year as the coronavirus pandemic hit demand and caused sharp falls in petrochemical prices, said Reuters.

China Petroleum & Chemical Corp, better known as Sinopec, plans a 23.8% increase in capital spending to 167.2 billion yuan in 2021 following recovery of oil prices and energy demand as the COVID-19 epidemic subsided.

Sinopec expects to spend 66.8 billion yuan on upstream exploration focusing on shale gas development in southwest China and construction of liquefied natural gas (LNG) terminals in coastal areas, up from 56.4 billion yuan last year.

The company on Sunday also reported a 42.9% drop in net profit to 32.92 billion yuan last year, the lowest since 2015, as the pandemic dented fuel consumption amid months-long lockdowns.

In That just beat analysts’ forecast for net profit of 32.3 billion yuan, according to IBES data from Refinitiv.

In 2020, Sinopec’s crude oil throughput fell 4.7% from a year earlier to 236.91 million tonnes, with gasoline and diesel output down 7.7% and 4.3%, respectively, while kerosene production plunged 34.6%.

Its crude oil production was 280.22 million barrels in 2020, down 1.4% year-on-year, and natural gas output at 1,072.3 billion cubic feet, was up 2.3% from 2019.

As per MRC, Sinopec Maoming Petrochemical Company, part of Sinopec, has delayed the turnaround at its No. 2 low density polyethylene (LDPE) unit in Guangdong, China until 24 March. Initially the company intended to take off-stream its 250,000 tons/year No. 2 LDPE unit on 15 March, 2021. However, Sinopec Maoming Petrochemical decided to delay the shutdown slighlty. The outage is expected to last for 63 days.

According to MRC's ScanPlast report, January estimated LDPE consumption in Russia grew to 61,210 tonnes from 43,090 tonnes a year earlier. Russian producers increased their capacity utilisation, and export LDPE shipments decreased. Russia's estimated LDPE consumption was about 563,730 tonnes in 2020, up by 1% year on year.

Sinopec corp. is one of the world's largest integrated energy and chemical companies. Business Sinopec Corp. includes oil and gas exploration, production and transportation of oil and gas, oil refining, petrochemical production, production of mineral fertilizers and other chemical products. In terms of refining capacity, Sinopec Corp. ranks second in the world, in terms of ethylene capacity - fourth.
MRC