US oil and natural gas companies gearing up for 2021 hurricane season

MOSCOW (MRC) -- US oil and natural gas companies are preparing for this year’s forecast of an above-average Atlantic hurricane season, reported Reuters with reference to a security and emergency expert with the American Petroleum Institute (API).

Last year’s record 30 named storms forced shutdowns of offshore oil production that reached, at one point, 90% of 1.9 million barrels per day in production and idled refineries for weeks. Two refineries in hard-hit Lake Charles, Louisiana, were shut for months.

“We’re trying to be as prepared as possible in 2021,” said Suzanne Lemieux, API’s operations security and emergency manager, said on a conference call with energy industry experts to discuss hurricane season preparations.

Oil and gas companies have increased the number of drills and exercises, she said.

US Gulf Coast refiners have revised plans after widespread storm-related outages, said Jeff Gunnulfsen, director of security and risk management for trade group American Fuel & Petrochemical Manufacturers.

Refiners have increased communication with government agencies and other industries as well as hardening refinery units and repositioning equipment to avoid floodwaters, Gunnulfsen said.

As MRC wrote previously, Dow said in late August, 2020, its sites along the US Gulf Coast reported no major damage from Hurricane Laura. Dow’s sites in Sabine, Beaumont, Deer Park, La Porte, Bayport and Texas City, Texas shut down operations prior to Laura making landfall. Dow's Freeport, Texas site continued operating as did facilities across Louisiana. Dow said it has not identified any significant structural damage or flooding at any of the facilities.

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

Nova, Dow, LyondellBasell establishing recycling PE and PP investment fund

MOSCOW (MRC) -- Three leading resin makers – Canada’s Nova Chemicals Corp. among them – are establishing a USD100-million investment fund to help finance recovery and recycling of polyethylene (PE) and polypropylene (PP) in Canada and the U.S., said Canplastics.

Nova, Dow Inc. and LyondellBasell Industries are contributing a total of USD25 million to start the Closed Loop Circular Plastics Fund, which they said they hope to grow to US$100 million with money from other corporate and financial investors. The fund is being managed by New York-based investment firm Closed Loop Partners.

"The goal of the catalytic fund is to grow to deploy USD100 million, through a combination of the fund’s founding investors, additional corporate investors and financial institutions, in order to attract additional capital beyond the fund’s own commitments,” the companies said in a May 26 news release. “At scale, the fund’s investments aim to recycle over 500 million pounds of plastic over the fund’s lifespan."

The fund will focus on three areas: increasing access to collection; optimizing recycling systems to capture “high-quality” plastic like food-grade and medical-grade materials; and investing in manufacturing that uses recycled-content plastic.

One of the problems the fund hopes to solve, the companies said, is that the current supply of recycled plastics meets only six per cent of demand for the most commonly used plastics in the U.S. and Canada. “Systemic bottlenecks, misaligned incentives and policies, technological inefficiencies and outdated equipment across the plastics recovery system contribute to millions of tons of plastic going to waste in landfills and oceans,” the companies said. “Increasing the recovery and recirculation of plastics could help meet an addressable market for plastics with potential revenue opportunities of USD120 billion in the U.S. and Canada alone."

The companies claim that “significant opportunity exists” to bolster the recovery of PE and PP, based on these materials’ market desirability and expected production amounts, as well as their wide variety of applications across industries, including healthcare and food and beverage.

According to the news release, the fund will deploy a flexible mix of debt and equity financing, and will also aim to stimulate mainstream co-investments, including those from financial institutions, into circular solutions for plastics to further accelerate impact at scale. “With established facilities, extensive supply chain networks and markets, Dow, LyondellBasell and Nova are collectively well-positioned to help advance the transition to a new, more circular system,” it said. “Together, they create a precedent for a sustainable future for the plastics industry, building a runway for further investments and synergies with other stakeholders in the plastics recovery and reuse value chain."

As per MRC, RT-Invest (Moscow, part of Rostec) will invest 6 billion rubles. in the construction of a new plant in the Moscow region for the production of recycled polyethylene terephthalate (r-PET) from packaging waste, which will be in demand from Mars, PepsiCo and Danone operating in Russia.

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

COVID-19 - News digest as of 27.05.2021

1.Asia Distillates-Jet fuel cash differentials flip back to discounts on the back of fresh waves of coronavirus infections

MOSCOW (MRC) -- Asia's cash differentials for jet fuel flipped back into discounts on Wednesday, 19 May, after staying in positive territory for two weeks, as fresh waves of coronavirus infections in several regional markets weighed on aviation demand, reported Reuters. Cash differentials for jet fuel JET-SIN-DIF plunged to a discount of 3 cents per barrel to Singapore quotes, compared with a premium of 5 cents a barrel on Tuesday. A resurgence in coronavirus cases and a slow rate of vaccinations are forcing people to avoid travel and governments to keep border restrictions intact.



MRC

Total operating profit in upstream oil and gas business almost triple in Q1

MOSCOW (MRC) -- Total has reported a strong first-quarter recovery in its upstream oil and gas business, with higher prices leading to almost triple the level of adjusted operating profit in the segment compared to a year ago, but also noted continued market volatility and "very poor" refining margins, reported S&P Global.

Total also reported record-high adjusted operating profit from its 'integrated gas renewables & power' division, which includes its LNG business. The company's LNG sales were stable compared with a year ago at 9.9 million mt, but the company said it had more than doubled its installed renewable power generation capacity in the last year from 3 GW to 7.8 GW, and the division as a whole generated 8% more in adjusted operating profit.

The French major forecast its oil and gas production would remain stable in 2021 compared with 2020 levels, even though first-quarter hydrocarbon production was down 7% on the year at 2.86 million b/d of oil equivalent, within which liquids output fell 11% to 1.51 million b/d.

The fall in upstream output was due to reductions under the OPEC+ agreement, which crimped volumes from Kazakhstan, Nigeria and the UAE, as well as unplanned Norwegian maintenance, Total said. But the company also benefited from a recovery in Libya and growth from new projects, notably Culzean and Johan Sverdrup in the North Sea, North Russkoye in northern Russia, and Brazil's Iara sub-salt field.

CEO Patrick Pouyanne highlighted that adjusted profit for the quarter was higher than the same quarter two years earlier, in 2019, reinforcing hopes for recovery. However, "the oil environment remains volatile and dependent on the global demand recovery, still affected by the COVID-19 pandemic," the company added.

Underlining the precarious state of European refining, Total said European refining margins were 80% lower than a year earlier, at USD5.3/mt, reflecting a 2 million b/d drop in European demand for refined products, to 13 million b/d. Total reduced its refinery throughput by 38% globally and 81% in France, to 1.15 million b/d and 114,000 b/d respectively, as it works to reduce capacity or convert facilities to renewable fuel production. Poor refining results were, however, offset by strong petrochemical performance and "resilient" marketing and services, Total said.

Overall, Total reported a 69% year-on-year increase in adjusted net profit, to USD3 billion for the quarter.

As MRC reported earlier, within the framework of its net zero strategy, Total will convert its Grandpuits refinery (Seine-et-Marne) into a zero-crude platform and will invest more then EUR500 mln into this project. By 2024 the platform will focus on four new industrial activities: production of renewable diesel primarily intended for the aviation industry, production of bioplastics, plastics recycling and operation of two photovoltaic solar power plants.

We remind that in November 2019, Total disclosed that itis evaluating construction of a new gas cracker at its Deasan, South Korea, joint venture (JV) with Hanwha Chemical.

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.

Total S.A. is a French multinational oil and gas company and one of the six "Supermajor" oil companies in the world with business in Europe, the United States, the Middle East and Asia. The company's petrochemical products cover two main groups: base chemicals and the consumer polymers (polyethylene, polypropylene and polystyrene) that are derived from them.
MRC

Oil production may possible increase by Iran - Novak

MOSCOW (MRC) -- Global oil deficit is currently seen at around 1 million barrels per day, Russia's deputy prime minister Alexander Novak told reporters, said Hydrocarbonprocessing.

He added that the Organization of Petroleum Exporting Countries and its allies, a group known as OPEC+, should take into account possible increase in oil production by Iran when considering its further steps.

As MRC informed earlier, an explosion on an oxygen pipeline in a petrochemical plant in Assaluyeh on Iran's Gulf coast killed one worker, Iranian state media reported, adding that the ensuing fire had been extinguished. "One worker was killed and two others were injured in the explosion on the oxygen transmission pipeline," Iran's state news agency IRNA quoted Abdolnabi Yusefi, governor of Assaluyeh in Iran's Busher province, as saying. "The reason for the blast is under investigation and the fire has been extinguished."

As per MRC, A fire broke out at the site of Bashneft-Ufaneftekhim branch in Ufa. The fire was quickly extinguished by the operational services of the branch. No one was injured. Bashneft-Ufaneftekhim explained that a small volume of oil caught fire at the industrial site, the area of the fire did not exceed 15 sq. m. The company does not see environmental threats: constant environmental monitoring is carried out on site. The main production of the plant is operating normally.

According to MRC's ScanPlast report, Ufaorgsintez was operating with higher capacity utilisation in March, the plant's PP production totalled about 11,400 tonnes versus 9,500 tonnes a month earlier. The Ufa plant's overall PP output reached 32,800 tonnes in the first quarter of 2021, down by 3% year on year.
MRC