Refineria di Korsou reached agreement with CORC B.V. to operate Isla refinery and neighbouring facilities

MOSCOW (MRC) -- Curacao’s state-run refining company Refineria di Korsou (RdK) said it reached a closing agreement with CORC B.V. to operate the 335,000 barrel-per-day (bpd) Isla refinery and neighbouring facilities, said Reuters.

The deal comes after RdK in January selected CORC as its preferred partner to operate Isla, the Bullenbay oil terminal and a linked utility company. Isla and Bullenbay had been run by Venezuelan state oil company Petroleos de Venezuela through the end of 2019, when its lease expired.

CORC, which is short for Curacao Oil Refinery Complex, will now negotiate fiscal terms and other aspects of the deal with the Dutch Caribbean island’s government and other state-owned entities before the definitive handover of the facilities, RdK said.

While the negotiations have been underway, Geneva-based firm Mercuria Energy Trading had received oil for storage at Bullenbay under a short-term deal. That came after a prior deal with oil firm SPS Drilling E&P to rent about 6 million barrels of Bullenbay’s 15-million barrel capacity fell apart due to a disagreement about fees.

An entry in the Curacao Commercial register shows CORC B.V. was established on Sept. 29, 2020 and that its directors are Spanish-born Dutch citizen Francisco Javier Modesto Santos Hernandez Rodriguez and Curacao-born Manoel Hussein De Silva De Freitas.

As MRC informed earlier, Curacao is pursuing a USD162 million arbitration claim against Venezuela’s state-run PDVSA oil firm over its management of the island’s oil refinery. The Dutch Caribbean islandseized a PDVSA-owned oil storage terminal in neighboring Bonaire to enforce claims for overdue payments, maintenance costs and environmental damage at RdK, Marcelino de Lannoy. Curacao separately expects a contract with commodities firm Klesch Group to operate the 335,000-barrel-per-day Isla refinery and its storage facilities will be delayed. Klesch is committed to the deal.

Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 576,270 tonnes in the first three month of 2021, up by 4% year on year. Low density polyethylene (LDPE) and high density polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market totalled 410,890 tonnes in January-March 2021, up by 56% year on year. Supply of homopolymer PP and PP block copolymers increased.
MRC

Shell to sell its controlling interest in Texas refinery to Pemex for USD596 mln

MOSCOW (MRC) -- Royal Dutch Shell agreed to sell its controlling interest in a Texas refinery to partner Petroleos Mexicanos (Pemex) for about USD596 million, the latest move by the European oil major to cut its global refining footprint, reporte Reuters.

The deal ends a 28-year partnership between Shell and Pemex, Mexico's state-run oil company that processed up to 340,000 barrels per day of oil into gasoline and diesel. The deal was significantly revamped three years ago in a move to halve its purchases of Mexican crude beginning in 2023.

Mexican President Andres Manuel Lopez Obrador had complained this month the Deer Park, Texas, joint venture had not been profitable for Mexico, and said he was committed to "addressing this issue" without providing details.

In a tweet on Monday, Obrador praised the buyout that makes Pemex the refinery's sole owner and gives it the first ownership of a plant outside of Mexico. The refinery, shipping docks and an adjacent chemical plant that Shell will retain ownership covers 2,300 acres outside of Houston. Neither Obrador, nor the announcement of the sale indicated whether Pemex or another company would operate the US plant.

Shell will retain control of the chemical plant that adjoins the 318,000-bpd Deer Park, Texas, refinery that sits along the Houston Ship Channel.

The sale comes as Shell is shrinking its refining and chemicals portfolio as part of a broader shift by oil majors to reduce their hydrocarbon footprint and shift to lower-carbon fuels.

As MRC wrote before, on May 4, Shell disclosed plans to sell its 149,000-bpd Puget Sound refinery in Anacortes, Washington, to US refiner HollyFrontier as part of the European company"s strategy to reduce its global refinery footprint.

We remind that in November 2020, Royal Dutch Shell plc. also said that its petrochemical complex of several billion dollars in Western Pennsylvania was about 70% complete and in the process to enter service in the early 2020s. The plant's costs are estimated to be USD6-USD10 billion, where ethane will be transformed into plastic feedstock. The facility is equipped to produce 1.5 million metric tons per year (mmty) of ethylene and 1.6 mmty of polyethylene (PE), two important constituents of plastics.

Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 576,270 tonnes in the first three month of 2021, up by 4% year on year. Low density polyethylene (LDPE) and high density polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market totalled 410,890 tonnes in January-March 2021, up by 56% year on year. 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

U.S. refiners trying to maximize gasoline production amid rising prices

MOSCOW (MRC) -- U.S. gasoline prices are rising strongly, encouraging refineries to maximise gasoline production, even as they struggle with lacklustre demand for jet fuel due to international quarantine restrictions, said Hydrocarbonprocessing.

Based on futures prices, gross margins for making gasoline from U.S. crude oil have surged to more than USD24 per barrel, up from just USD10 at the start of the year, and the highest level since 2015. Driving the rise in prices is a much faster recovery in demand for gasoline than for other oil products as economies reopen.

Margins are now in the 84th percentile for all weeks since the start of 2006, giving refiners a strong incentive to maximise production, even as they hold back output of other fuels. Rising margins have pushed the average retail cost of gasoline above $3 per gallon, its highest level since 2014, according to nationwide pump prices compiled by the U.S. Energy Information Administration (EIA).

Gasoline accounted for 63% of the total output of the big three fuels (including diesel and jet) last week, among the highest weekly shares since 2009/10. Gasoline inventories amounted to 234 million barrels, less than 1% above the pre-epidemic five-year average for 2015-2019.

Consumption was just 3% below the pre-epidemic five-year average, with stay-at-home orders lifted, travel to work restarting and most businesses open. Consumption has recovered much faster than for products as a whole, still down almost 6% last week, or refineries’ crude processing, down almost 9%. High margins will ensure refiners squeeze as much gasoline out of the process as possible – even as they continue to limit crude runs to avoid producing unwanted jet fuel.

As per MRC, U.S. traffic volumes have almost returned to pre-pandemic levels, helping normalise gasoline consumption as more businesses re-open, domestic leisure travel resumes and workers return to offices. The volume of traffic on all roads was down by less than 4% in March compared with the same month two years ago, according to the Federal Highway Administration (“Traffic volume trends” FHWA, March 2021). Traffic levels had been down 41% in April 2020 at the height of the first wave of the pandemic and were still down 11% as recently as December 2020 during the second wave.

As per MRC, Countries around the world have reported steep falls in fuel demand as lockdowns to contain the spread of the novel coronavirus limit the movement of more than 4 billion people. U.S. fuel demand has dropped 28% in the last four weeks, the Energy Information Administration said on April 29. Overall finished motor gasoline demand is still down 44% over the past four weeks from the year-ago period, but a drawdown in stocks in the previous week suggests the consumption declines may be leveling off. Jet fuel demand was down 62%.

Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 576,270 tonnes in the first three month of 2021, up by 4% year on year. Low density polyethylene (LDPE) and high density polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market totalled 410,890 tonnes in January-March 2021, up by 56% year on year. Supply of homopolymer PP and PP block copolymers increased.
MRC

PPG announces executives changes, appoints sustainability VP

MOSCOW (MRC) -- PPG Industries says it has named Diane Kappas, current vice president/automotive OEM coatings, Americas, to the post of vice president/global sustainability, as per the company's press release.

Andrew Carroll, currently vice president/industrial coatings, has been named vice president/automotive OEM coatings, Americas and mobility. Both appointments will be effective 1 July.

Carroll will report to PPG executive vice president Rebecca Liebert, and Kappas will report to Amy Ericsson, senior vice president/packaging coatings.

“In this newly created global role focused on sustainability, Diane’s diverse experience at PPG and her ability to work collaboratively with customers to solve their problems will further drive this core business imperative,” says Michael McGarry, PPG chairman and CEO. “Andrew’s new leadership role is important in continuing to partner with our automotive OEM customers and meet their evolving needs.”

As MRC reported earlier, PPG Industries received approval from the Federal Antimonopoly Service (FAS) of Russia on May 21, 2021, and it has now received all necessary regulatory approvals to complete the tender offer to acquire Tikkurila. The company has announced that the tender offer will expire on June 4, 2021. PPG expects to complete the tender offer and close the transaction on or about June 10, 2021.

We remind that Russia's output of chemical products rose in February 2021 by 5.3% year on year. Thus, production of basic chemicals increased year on year by 7.5% in the first two months of 2021, according to Rosstat's data. Last month's production of polymers in primary form in Russia was 861,000 tonnes versus 196,000 tonnes in January. Overall output of polymers in primary form totalled 1,770,000 tonnes over the stated period, up by 8.4% year on year.
MRC

Crude oil futures climb in Asia on hurricane season concerns, pares losses after selloff

MOSCOW (MRC) -- Crude oil futures jumped during mid-morning trade in Asia May 24, as the market grew anxious of another above-normal hurricane season, while paring losses from a selloff during the week ended May 21 due to concerns over an influx of Iranian barrels into the market, reported S&P Global.

At 11:39 am Singapore time (0339 GMT), the ICE Brent July contract was up 50 cents/b (0.75%) from the May 21 settle at USD66.94/b, while the July NYMEX light sweet crude contract was up 60 cents/b (0.94%) at USD64.18/b.

This morning's climb came as the specter of supply disruptions during the 2020 Atlantic hurricane season returned to haunt markets, after Subtropical Storm Ana became the first named storm of this year's hurricane season on May 22. While Ana has since been downgraded to a tropical depression by the National Hurricane Center, concerns over upcoming storms may have led markets to price in a small hurricane premium.

These concerns have been exacerbated by a May 20 report from the National Oceanic and Atmospheric Administration's Climate Prediction Center, in which forecasters predicted a "60% chance of an above-normal season, a 30% chance of a near-normal season, and a 10% chance of a below-normal season."

Vandana Hari, CEO of Vanda Insights, told S&P Global Platts May 24 that amid unchanged fundamentals, the volatility in the market could have been due to anxiousness over the upcoming hurricane season, with an overdone selloff in the market last week also providing some bounce.

Iranian President Hassan Rouhani sent oil prices into a tailspin May 20 when he said the "main agreement" to reinstate the Joint Comprehensive Plan of Action has been made, and that only ancillary details need to be worked out before a final deal is struck. In contrast, a US Department of State representative insisted later May 20 that "many challenges" remain.

"The selloff on the JCPOA deal was overdone. With negotiators aiming for talks to conclude this week, it may be overly optimistic to expect a full-fledged deal," Hari said. "Instead, we may see only a framework agreement, which may not have a material impact on supply, capping the upside in prices rather than pushing them lower."

As MRC wrote earlier, Indian refiners, anticipating a lifting of US sanctions, plan to make space for the resumption of Iranian imports by reducing spot crude oil purchases in the second half of the year. The world's third-largest oil consumer and importer halted imports from Tehran in 2019 after former US President Donald Trump withdrew from a 2015 accord and re-imposed sanctions on the OPEC producer over its disputed nuclear programme.

Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 576,270 tonnes in the first three month of 2021, up by 4% year on year. Low density polyethylene (LDPE) and high density polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market totalled 410,890 tonnes in January-March 2021, up by 56% year on year. Supply of homopolymer PP and PP block copolymers increased.
MRC