Shell warns of negative impact from Texas winter storm on its Q1 2021 earnings

MOSCOW (MRC) -- Royal Dutch Shell PLC, the world's petrochemical major, has warned that the Texas winter storm is expected to have had a negative impact of USD200 million on its first-quarter adjusted earnings, according to MarketWatch.

In addition, the FTSE 100 oil and gas major said it expects to report natural gas production of between 920,000 and 960,000 oil-equivalent barrels a day for the first quarter, combined with liquefied natural gas volumes of 7.8 million-8.4 million metric tons. This compares with previous guidance of 900,000-950,000 barrels and 8.0 million-8.4 million tons.

For the upstream business, production is expected at 2.40 million-2.475 million oil-equivalent barrels a day, including a 10,000-20,000 barrels hit from the Texas storms. This compares with previous guidance of 2.40 million-2.60 million barrels.

Sales volumes for oil products have been downgraded to 3.7 million-4.7 million barrels a day from 4.0 million-5.0 million. Sales volumes for the chemicals division have been revised down to 3.5 million-3.7 million tons from 3.6 million-3.9 million.

However, the company's chemicals adjusted earnings are expected to be positively impacted by improved base margins and slightly higher intermediate margins compared with the fourth quarter of last year.

As MRC informed earlier, Royal Dutch Shell Plc restarted the small crude distillation unit (CDU) on 2 April at its 318,000-bpd joint-venture Deer Park, Texas, refinery. The 70,000-bpd DU-1 CDU was shut on Feb 14 by a pump seal failure. All other units were shut the following day by severe cold weather. DU-1 is the last unit shut in February to restart at the refinery.

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.

Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.
MRC

MOSCOW (MRC) -- Zhejiang Petrochemical Co Ltd (ZPC) has started up its No. 2 cracker in Zhoushan, China, which is part of the company's phase 2 petrochemical project in the cournty, reported S&P Global.

Thus, the cracker with an annual capacity of 1.4 million tons/year of ethylene and 700,000 tons/year of propylene began trial runs last week.

The commercial production at this facility is expected in the coming weeks.

As reported earlier, ZPC started operations at its No. 1 cracker in the first half of November 2019, whereas the commercial procution at this cracker was received in late December 2019.

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) -- Wanhua Chemical, a major petrochemical producer in China, plans to build a new propane dehydrogenation (PDH) plant in Fujian Province, southern China, adding to the PDH plant it operates at Yantai, eastern China, reported Indian CHEMICAL News.

The new plant will be built within the Fujian Jiangyin economic zone, near the city of Fuqing.

According to sources, the plant is expected to be completed in 2023.

The company's board has also approved plans to build associated downstream propylene derivative production chains in the Fujian Jiangyin zone.

Wanhua's PDH unit at Yantai has 750,000 metric tons/year of propylene capacity. It also operates a steam cracker with capacity for 1 million metric tons/year (MMt/y) of ethylene and 520,000 metric tons/year of propylene at Yantai that came online in November last year.

As MRC wrote previously, in January, 2020 Wanhua Chemical Group disclosed plans for a second ethylene cracker project at its Yantai, China, site with local government officials. The project will include a 1.2-million metric tons/year (MMt/y) ethylene unit; pyrolysis gasoline hydrogenation; aromatics extraction; and production facilities for butadiene, high density polyethylene (HDPE), low density polyethylene (LDPE), polyethylene (PE) plastomers and elastomers, polypropylene (PP), and other derivatives. Timing and other details were not disclosed. The second ethylene project will use naphtha and C4s as feedstock.

Propylene is the main feedstock for the production of PP.

According to MRC's ScanPlast report, 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) -- Russian oil producers reduced gas flaring only slightly last year and failed to reach a targeted level by a large margin, hampered by a lack of necessary infrastructure at new oilfields, a draft government document seen by Reuters showed.

Flaring, or the combustion of gas generated by various processes in the oil industry, generates carbon dioxide emissions.

Climate change poses a series challenge for Russia, with the economy heavily reliant on oil and gas production, as well as mining, and the government is under pressure to cut emissions.

The draft document, outlining oil industry developments until 2035, showed that the utilisation of the associated petroleum gas (APG) oil companies produce as a byproduct of crude extraction, rose to 82.6% in 2020 from 81.5% in the previous year - well below the 95% target which was expected to be achieved in the mid-2010s.

The document cites lack of infrastructure needed to transport and utilise APG, as well as a number of incidents at refining facilities as the main reasons for the high level of gas flaring.

The rate of APG utilisation in Russia rose to 88.2% in 2015 from 76.2% in 2013 but has declined since then, according to the document.

The World Bank found Russia, Iraq, the United States, and Iran accounted for 45% of all global gas flaring in 2017-2019. Gas flaring rates dipped across most of the top 30 gas flaring countries in early 2020 due to the pandemic.

The Russian document shows Surgutneftegaz had the most success in containing gas flaring, with its APG utilsation rate rising to 99.5% last year. At Russian gas giant Gazprom , it stood at 98.9%, but was just 73.1% at energy major Rosneft.

Russian APG utilisation rose to 94.7 billion cubic metres (bcm) overall in 2020 from 94.1 bcm in 2019. The rest was flared into the atmosphere.

As MRC informed earlier, 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, says GlobalData.

We 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 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) -- The Clermont-based company Carbios, a pioneer in the enzymatic recycling of plastic and textile polymers, has signed an agreement with Equipolymers which should host, at its site in Schkopau (Germany), a unit that will produce 40,000 tonnes of recycled PET each year, said Axelera.

In March, Carbios and Equipolymers, a subsidiary of Equate Petrochemical, signed a “ non-exclusive and non-binding agreement in the form of a Letter of Intent ”. If confirmed, Equipolymers, “ European leader in PET production ”, will host a unit at its Schkopau (Germany) site that will produce 40,000 tonnes of recycled PET each year using the enzymatic process developed by Carbios.

This agreement also provides for " assistance in securing the sources of supply of PET waste for this unit " which will enable Carbios to " transform the plastics industry market and take full advantage of its global leadership in this industry ". In addition, it will consolidate its model: the concession of operating licenses for its technologies and know-how and the sale of enzymes to its licensees who will build their own production units for recycled PET.

As MRC informed earlier, Equipolymers planned to carry out maintenance works at the polyethylene terephthalate (PET) plant in Schkopau (Sckhopau, Germany) in October. Neither the exact start and end dates of repair work at this enterprise, where two production lines with a capacity of 160,000 tonnes/year and 175,000 tonnes/year, were reported.

According to MRC's ScanPlast, the estimated PET consumption in Russia in January 2021 increased by 3% compared to the same indicator a year earlier. In total, according to the results of the first month of the year in Russia, the total estimated consumption of PET amounted to 57,420 tonnes.

Equipolymers is a company dedicated to the manufacture and marketing of PET resins. The company is a 50/50 global joint venture of The Dow Chemical Company (Dow) and Petrochemical Industries Company (PIC), a wholly owned subsidiary of Kuwait Petroleum Corporation. Since its formation in 2004, Equipolymers has leveraged the unique strengths of its parent companies, Dow and PIC of Kuwait. Equipolymers is the preferred partner for brand-owners and other key value chain players in the PET market, through innovation-driven leadership and high-quality product standards. Equipolymers' production facilities are located in Ottana (Italy) and Schkopau (Germany).
MRC