Moodys cuts Deer Park rating after Pemex acquires Houston refinery from Shell

MOSCOW (MRC) -- Moody's Investors Service has downgraded Deer Park Refining Limited Partnership to "Baa3" from "Baa2", the rating agency said, while placing the stock on review for a further downgrade, reported Reuters.

The decision comes after Shell Oil Co, a subsidiary of Royal Dutch Shell Plc, agreed to sell its controlling interest in Deer Park Refining to partner Mexican state oil company Petroleos Mexicanos, or Pemex.

This makes Deer Park Refining, a Texas-based facility, the first foreign refinery that Pemex will own solely in its history. The Mexican company said it plans to control and run the refinery after the deal is settled by late this year.

"The review for downgrade of the Baa3 ratings further reflects Moody's expectation that following the sale, Deer Park ratings will be driven predominantly by its standalone credit dynamics and the much-weaker credit profile of Pemex," the agency said in a statement.

"The Baa3 rating still benefits from a multi-notch rating uplift, which is primarily linked to Shell and also factors in several credit-enhancing arrangements, including shareholder loans and liquidity support arrangements, committed by both Shell and Pemex."

As MRC informed before, Shell is shrinking its refining and chemicals portfolio as part of a broader shift by oil majors to reduce hydrocarbon emissions and shift to lower-carbon fuels.

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

MOSCOW (MRC) -- Chevron Phillips Chemical broke ground on a new world-scale unit for on-purpose 1-hexene in Old Ocean, Texas, near its Sweeny facility, said the company.

With a capacity of 266 KTA, the new asset grows the company’s total U.S. 1-hexene capacity to 650 KTA at a time of rising customer demand. 1-hexene is central to manufacturing high-performance plastic products.

The project will harness Chevron Phillips Chemical’s proprietary, on-purpose 1-hexene technology, which produces exceptional purity comonomer grade 1-hexene from ethylene. Construction is expected to commence during the third quarter of 2021, with project startup in 2023, and is expected to involve 600 construction jobs at its peak. Once operational, the project will support more than 50 full-time positions.

"The new unit will provide additional flexibility and production to meet anticipated demand from our growing customer base, while establishing a strong foundation for future growth,” said Mitch Eichelberger, executive vice president of polymers and specialities. “This new asset will also serve as a catalyst to advance the local economy as a source of job creation. We are very proud to be part of this community and look forward to bringing this project to life."

The new 1-hexene unit in Old Ocean will enjoy significant advantages in infrastructure, feedstock availability and operational expertise. It will also benefit from the latest technology advances to achieve energy and emissions efficiency improvements. Once operational, it will further the company’s position as a leading 1-hexene supplier. Chevron Phillips Chemical already operates the world’s largest on-purpose 1-hexene unit and two full-range alpha-olefin units at its Cedar Bayou plant in Baytown, Texas.

Earlier it was reported that the American Chevron Phillips Chemical (CP Chem), one of the world's largest petrochemical companies, on April 26 stopped production at cracking unit No. 1592 in Cedar Bayou (Texas, USA) in order to carry out scheduled maintenance work. It is expected that repair activities at this enterprise with a capacity of 850 thousand tons of ethylene per year will continue until May 3 of this year. Chemical emissions to the atmosphere are expected within about seven days.

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

MOSCOW (MRC) -- At the Ordinary and Extraordinary Shareholders’ Meeting, shareholders approved, almost unanimously, the resolution to change the company’s name from Total to TotalEnergies, thereby anchoring its strategic transformation into a broad energy company in its identity, according to Hydrocarbonprocessing.

In tandem with this name change, TotalEnergies is adopting a new visual identity.

This new name and new visual identity embody the course TotalEnergies has resolutely charted for itself: that of a broad energy company committed to producing and providing energies that are ever more affordable, reliable and clean.

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

1. EIA revises down its forecast of India oil demand due to rising COVID-19 cases

MOSCOW (MRC) -- The rapid increase in COVID-19 cases in India has led to various travel restrictions, which reduced the consumption of transportation fuels such as gasoline and diesel. As a result, EIA revised down its forecast for petroleum consumption in India in the May Short-Term Energy Outlook (STEO), according to Hydrocarbonprocessing. EIA estimates that petroleum consumption in India declined by 0.4 million barrels per day (b/d) (8%) to 4.7 million b/d between March and April. India’s petroleum consumption data, released after the May STEO’s publication, revealed a similar decline of 0.3 million b/d (6%) over the same period. Reduced travel in India will likely continue, so it also revised down petroleum consumption in May and June from the April STEO. EIA expects India’s consumption of petroleum and other liquids will return to previously forecast levels by July.


MRC

MOSCOW (MRC) -- Crude oil futures ticked higher the mid-morning trade in Asia May 28 as positive economic data from the US augured well for oil demand, even as concerns persisted over the pandemic's progression in Asia, reported S&P Global.

At 10:26 am Singapore time (0226 GMT), the ICE Brent July contract was up 18 cents/b (0.26%) from the previous settle at USD69.64/b, while the July NYMEX light sweet crude contract was 29 cents/b (0.43%) higher at USD66.85/b.

US initial unemployment claims fell 9% on the week to a 14-month low of 406,000 in the week ended May 22, Department of Labor data released May 27 showed. The decline in claims exceeded market expectations and reinforced the US economic recovery narrative, according to analysts.

Oil and the broader commodities complex also received support from reports that US President Joe Biden will propose a USD6 trillion budget for the 2022 fiscal year.

The US' ongoing economic recovery has already been having a positive impact on oil demand, with ANZ analysts saying in a May 28 note: "American drivers (are hitting) the road in increasing numbers... they are now travelling as many miles on interstate highways as they did in 2019."

US driving activity rose 3% to 146.5% of the baseline level in the week ended May 21, the highest level since the index was launched in January 2020, Apple mobility data showed.

ING analysts echoed the positive sentiment, but cautioned that headwinds for the oil complex remain as countries in Asia continue to grapple with mobility restrictions amid a resurgence of coronavirus infections.

Another downside risk for oil is the ongoing negotiations over the Joint Comprehensive Plan of Action in Vienna, a deal that could see sanctions on Iran's oil sector being lifted, leading to the return of an additional 1 million-2 million b/d to the market. The prospect of additional Iranian barrels raises questions over the OPEC+ coalition's production plans, which includes scheduled 700,000 b/d and 840,000 b/d production increases in June and July.

Russia's deputy prime minister Alexander Novak said May 26 that the coalition should consider a possible increase in Iranian output when assessing further steps, leading to speculation that the coalition could adjust the production increase planned for July at its June 1 meeting.

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