Shell to build large-scale carbon capture and storage facility in Alberta

MOSCOW (MRC) -- Shell announced a proposal to build a large-scale carbon capture and storage (CCS) project at its Scotford Complex near Edmonton, according to Hydrocarbonprocessing.

This would be a key step in transforming Scotford into one of five energy and chemicals parks for Shell around the world, providing customers with lower-carbon fuels and products into the future, such as hydrogen.

The proposed Polaris CCS project, the largest in a series of low-carbon opportunities Shell is exploring at Scotford, would capture carbon dioxide (CO2) from the Shell-owned Scotford refinery and chemicals plant. The initial phase is expected to start operations around the middle of the decade, subject to a final investment decision by Shell expected in 2023. Polaris would have storage capacity of about 300 million tonnes of CO2 over the life of the project.

“Shell is making bold moves to decarbonize our operations, and wider industry, and the Polaris CCS project is the latest example,” said Susannah Pierce, Shell Canada President and Country Chair. “Our plans for Scotford are in line with Shell’s target to become a net-zero emissions energy business by 2050, in step with society. We are creating a world-class site that will provide customers with lower-carbon fuels, products and CO2 storage. Polaris would also make a significant contribution to Shell’s aim to have access to an additional 25 million tonnes a year of CCS capacity by 2035.”

The Polaris CCS project follows the success of the Quest CCS facility at Scotford, which has captured and safely stored more than six million tonnes of CO2 in its six years of operation. Recently, Shell has also taken a final investment decision on the Northern Lights CCS project in Norway and is part of the Porthos CCS project in the Netherlands.

The initial phase of the Polaris CCS project would capture and store approximately 750,000 tonnes a year of CO2 from the Scotford refinery and chemicals plant. It would reduce Shell’s direct and indirect emissions (Scopes 1 and 2) by up to 40% from the refinery and by up to 30% from the chemicals plant. It would also create up to 2,000 jobs.

The second phase of the Polaris CCS project involves the creation of a CO2 storage hub in Alberta, further decarbonizing Shell’s facilities and storing emissions on behalf of third-party industry sources as a trusted and reliable CO2 storage operator. Fully built, and contingent on acquiring pore space leases from the Province of Alberta, Polaris could serve as a CO2 storage hub for more than10 million tonnes of CO2 each year.

Once fully built, Polaris would contribute to the Edmonton region becoming Canada’s first hydrogen hub. In the initial phase of Polaris, CO2 captured from the refinery’s hydrogen plants would produce blue hydrogen for use in the refining process, with the potential for large-scale blue hydrogen production in future phases. Shell is also exploring the development of additional volumes of blue and green hydrogen at Scotford that leverage Alberta’s abundance of natural gas and availability of renewable sources of power.

The transformation of Scotford into an energy and chemicals park for Shell builds on the site’s leading positions in energy efficiency and CCS, while including renewable sources of power and bio-feedstocks. CCS and renewable power will allow Scotford to process new feedstocks such as bio-oils or waste oils to significantly reduce the CO2 emitted in the production of the fuels of today. Scotford’s transition into a fully integrated energy and chemicals park is anticipated to happen this decade.

As MRC wrote before, in May 2021, Shell announced the sales of its Anacortes, Washington, US refinery as well as the controlling interest in the joint venture Deer Park, Texas, refinery. The company also sold its chemical refinery in Mobile, Alabama.

We remind that Royal Dutch Shell plans to reduce its refining and chemicals portfolio by more than half, it said in July 2020 without giving a precise timeframe. The move is part of the Anglo-Dutch company's plan to shrink its oil and gas business and expand its renewables and power division to reduce greenhouse gas emissions sharply by 2050.

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 744,130 tonnes in the first four month of 2021, up by 4% year on year. Shipments of all PE grades increased. At the same time, PP deliveries to the Russian market were 523,900 tonnes in January-April 2021, up by 55% year on year. Supply of homopolymer PP and PP block copolymers increased, whereas shipments of PP random copolymers decreased.

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) -- Crude oil futures were steady during mid-morning trade in Asia July 13, with market sentiment bogged down by a resurgence of COVID-19 cases across the globe that could slow economic recovery, while the OPEC+ alliance remained unable to reach a consensus on reducing production cuts for August and beyond, reported S&P Global.

At 10:24 am Singapore time (0224 GMT), the ICE September Brent futures contract was up 16 cents/b (0.21%) from the previous close to USD75.32/b, while the NYMEX August light sweet crude contract was up 17 cents/b (0.23%) at USD74.27/b.

"Oil looks like it is stuck between opposing forces -- on one hand, there is the slowing down of recovery, particularly in Asia, and on the other hand, there are expectations that OPEC+ will come up with a (production) deal to maintain prices," Jeffery Halley, senior market analyst at OANDA, told S&P Global Platts July 13.

Concerns of softening demand weighed on market sentiment after data from the US showed a spike in COVID-19 cases in the week ended July 11, reflecting that the path to demand recovery may not be smooth sailing.

"The robust crude demand outlook is starting to take a hit as many countries continue to struggle with the more infectious Delta variant. Even the US is seeing a surge as low vaccinated states are behind the 47% increase in cases over the previous week," said Edward Moya, senior market analyst at OANDA in a July 13 note.

Furthermore in Asia, countries continue to implement lockdown measures to combat the resurgence of the virus, further dampening the global demand outlook for the near term.

In the UK, rising counts of COVID-19 cases are casting a shadow over the optimism surrounding the re-opening of the country, which is expected to continue as planned on July 19.

Meanwhile, the OPEC+ alliance remains unable reach an agreement on the reduction on production cuts for August and the months ahead, resulting in the bloc defaulting to sticking to current production quotas that could result in oil supply tightness, providing some support to prices.

Meanwhile, as MRC informed 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 744,130 tonnes in the first four month of 2021, up by 4% year on year. Shipments of all PE grades increased. At the same time, PP deliveries to the Russian market were 523,900 tonnes in January-April 2021, up by 55% year on year. Supply of homopolymer PP and PP block copolymers increased, whereas shipments of PP random copolymers decreased.
MRC

1. US petroleum inventories fallen below the pre-pandemic five-year average

MOSCOW (MRC) -- US petroleum inventories have fallen below the pre-pandemic five-year average with consumption accelerating but crude producers slow to respond to rising prices, signalling more supply is needed, reported Reuters. Total stocks of crude and refined products outside the strategic petroleum reserve fell by 10 million barrels last week and are now down by 188 million barrels compared with the same point a year ago. Total stocks have fallen in 38 out of the last 52 weeks as OPEC+ and US shale firms limit crude production even as product consumption recovers.

MRC

MOSCOW (MRC) -- Neste launched Neste MY Renewable Diesel, in the Belgian market. The fuel, produced from 100% renewable raw materials, is brought to the Belgian market in collaboration with the channel partner EG Group, said Hydrocarbonprocessing.

Neste MY Renewable Diesel enables customers to reduce greenhouse gas emissions by up to 90% over the fuel’s life cycle compared to fossil diesel. “This expansion is another important step in the execution of our growth strategy globally. We are very excited to expand our renewable diesel offering in Europe and especially in Belgium, a country which is at the heart of Europe. We firmly believe that all solutions are needed to reduce transportation-related emissions and support the sector’s contribution to the EU-level target of reaching carbon-neutrality by 2050,” says Peter Vanacker, President and CEO at Neste.

“With the use of Neste MY Renewable Diesel, our customers can reduce their greenhouse gas emissions in an instant. Neste MY Renewable Diesel is a sustainable alternative to fossil diesel, and its use does not require any modifications to existing engines, vehicles or fuel distribution infrastructure. We are committed to supporting our customers to reduce greenhouse gas emissions by at least 20 million tons annually by 2030,” adds Carl Nyberg, Executive Vice President for Neste’s Renewable Road Transportation business unit.

“We are excited to expand our cooperation with Neste. Since the joint launch of Neste MY Renewable Diesel in the Netherlands, we offer Neste MY Renewable Diesel B2B home base deliveries and to B2B and private customers via our fuel stations. Following the success in the Netherlands, we are looking forward to entering the Belgian market and supporting the customers to reduce their greenhouse gas emissions immediately,” says Jurgen Artz, EG Fuel Director - Europe from EG Group.

The launch follows the successful introduction of Neste MY Renewable Diesel on the Dutch market in October 2019. The fuel is currently available at more than 100 stations throughout the Netherlands and more than 500 locations worldwide. Besides Belgium, Neste MY Renewable Diesel is available for customers in the Netherlands, Finland, Sweden, Estonia, Latvia, Lithuania and the United States in California and Oregon.

Growing availability of renewable diesel and sustainable aviation fuel Neste’s Rotterdam refinery together with the company’s Singapore refinery, are the world’s biggest and most advanced renewable diesel and renewable products refineries. The total annual production capacity of Neste’s renewable diesel and other renewable products is currently 3.2 million tons, and by the first quarter of 2023 it will increase to close to 4.5 million tons.

As per MRC, Neste is committed to reaching carbon neutrality in its production by 2035. As part of this effort, Neste aims for 100% renewable electricity use globally by 2023. In order to proceed with this target, Neste will increase the use of renewable electricity at its Porvoo refinery and has signed a new wind power agreement with a wind power company Ilmata. Renewable electricity produced by wind power is one of the key ways to reduce greenhouse gas emissions* related to the electricity purchases of production facilities.

As MRC reported earlier, in May 2021, Neste, Mitsui Chemicals, Inc. and Toyota Tsusho Corp. announced they are joining forces to enable Japan’s first industrial-scale production of renewable plastics and chemicals from 100% bio-based hydrocarbons. In this collaboration, Mitsui Chemicals will use Neste RE, 100% bio-based hydrocarbons produced by Neste, to replace a part of the fossil feedstock in the production of a variety of plastics and chemicals at its crackers within Osaka Works during 2021.

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 744,130 tonnes in the first four month of 2021, up by 4% year on year. Shipments of all PE grades increased. At the same time, PP deliveries to the Russian market were 523,900 tonnes in January-April 2021, up by 55% year on year. Supply of homopolymer PP and PP block copolymers increased, whereas shipments of PP random copolymers decreased.
MRC

MOSCOW (MRC) -- A USD440 million loan tied to the now-idled Limetree Bay refinery in St. Croix has lost nearly 30 percent of its value amid a serious cash crunch that could leave a number of U.S. mutual funds holding the debt with losses, said Hydrocarbonprocessing.

The loan is backed by revenue from oil storage operations on the 1,500-acre (600-hectare) complex on the Virgin Islands. But those operations lost their biggest customer this past month when the refinery said it would shut indefinitely because of financial problems and pollution woes that drew enforcement action from the U.S. Environmental Protection Agency.

Bid prices on the loan backed by Limetree Bay Terminals LLC have dropped below 70 cents on the dollar this week, down from a three-month high of 97 cents, according to Refinitiv data. The loan matures in 2024 and several mutual funds hold slices of it, according to filings with the U.S. Securities and Exchange Commission.

As a result of the closure, the storage and terminal operations will lose USD52 million of expected operating revenue in fiscal 2021, according to analysts at Moody's Investors Service. The rating agency downgraded the loan to "Caa1" with a negative outlook.

The terminal stopped making payments to the refinery in mid-May after the EPA ordered all operations at the adjacent refinery to pause for a period of up to 60 days. "Without the refinery as a customer, the expected turnaround in credit metrics and material excess cash flow generation in 2021 becomes unlikely," Moody's said in a June 28 research note.

As per MRC, imports of petroleum products-gasoline, distillate, and other products into the East Coast region of the United States increased in March 2021. Rising imports resulted from lower domestic supply, higher demand, and higher domestic petroleum product prices compared with prices in Europe. In March, East Coast petroleum product imports averaged 1.4 million barrels per day (b/d). In addition, East Coast gasoline imports averaged 737,000 b/d, the highest March level since 2009, and East Coast distillate imports averaged 421,000 b/d, the highest March level since 2003.

We remind that most units were shut on Sunday night and Monday morning (15-16 February) at Marathon Petroleum Corp's 585,000 barrel-per-day Galveston Bay Refinery in Texas City, Texas, as temperatures plunged due to a Arctic cold front reaching the Gulf Coast. They resumed operations in the first half of March.

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 744,130 tonnes in the first four month of 2021, up by 4% year on year. Shipments of all PE grades increased. At the same time, PP deliveries to the Russian market were 523,900 tonnes in January-April 2021, up by 55% year on year. Supply of homopolymer PP and PP block copolymers increased, whereas shipments of PP random copolymers decreased.
MRC