Shell faces more North Sea COVID-19 disruption as industry urges rules easing

Shell faces more North Sea COVID-19 disruption as industry urges rules easing

MOSCOW (MRC) -- Shell continues to experience COVID-19 disruption at one of its main North Sea development projects, the revamp of the Shearwater gas and condensate hub, with evacuation plans underway for 20 people tested positive and a further 98 close contacts, reported S&P Global with reference to a source close to the situation.

Separately, industry group Oil & Gas UK said it was seeking a relaxation of rules on self-isolation for offshore workers deemed to have been in close contact with those tested positive for COVID-19, in order to ensure the efficiency of operations, while continuing to prioritize health and safety.

Shell's Shearwater project, intended to incorporate new fields and redirect gas flows to St Fergus on the Scottish coast and nearby petrochemical facilities, has been buffeted by a coronavirus upsurge since late June that threatens to delay completion of a current shutdown of the facility, due for completion mid- to late July.

The overall Shearwater project was already delayed by the pandemic, with startup originally scheduled for 2020.

The Shearwater area fields, along with TotalEnergies' nearby Elgin-Franklin complex, are predominantly gas, but send significant volumes of light oil or condensate through the UK's main crude artery, the Forties pipeline. A section of the Forties route that handles oil from Elgin-Franklin and Shearwater is currently shutdown for a protracted maintenance overhaul.

Regarding the latest infection situation at Shearwater, the source close to the situation said all those concerned "have been flown to shore, or are isolating while waiting to return to shore". Shell did not comment.

The UK's North Sea oil and gas industry typically produces around 1 million b/d of oil, or around 1% of the global market, while meeting about half the country's gas needs.

However, the problems for Shell come as UK oil and gas output has plunged due to operators catching up on maintenance and development work postponed from 2020 due to the pandemic.

Infection concerns have abated, partly, the industry says, due to strict COVID-19 testing and protocols, and offshore workforce numbers are now significantly higher than last year - at 10,678 for the week commencing June 28, according to Oil & Gas UK.

As MRC informed before, 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

Vladimirskiy chemical plant started deliveries of plastic compounds to the European market

MOSCOW (MRC) - PJSC Vladimir Chemical Plant has signed a contract for the supply of PVC compound IN-M 30 with one of the Czech consumers, which will allow organizing regular deliveries of this product to the European market, the company said.

The first test batch of products was sent to the Czech Republic in April, and in May 80 tons of raw materials were already shipped to ProCab. It is noted that, despite fierce competition, demanding European consumers preferred the Vladimir Chemical Plant.

"From the very beginning of its operation, the Vladimir Chemical Plant supplied products for export to partners in neighboring countries, and now we have entered the European market. Our export strategy is aimed at increasing the volume of supplied products and simultaneously expanding our geographical presence, and we are also aiming at increasing the percentage a component of export supplies in the client portfolio, which will allow VHZ.31 to expand production and its influence not only in Russia, but also abroad, "said Ilya Gorbatsky, managing partner of VHZ holding.

The high quality of VHZ products, corresponding to Russian and European standards, is achieved through proven technologies and formulations and testing for efficiency and safety in our own laboratory at different stages of production. In addition, in 2020, the plant underwent technical re-equipment of production lines, as well as a research laboratory and data technical control service.

"It is worth noting that the production facilities of the VHZ continued to function even under severe restrictions associated with the COVID-19 epidemic. At the moment, the plant's workload is about 80%, which allows us to produce up to 3 thousand tons of products per month. We plan to further increase volumes, because our strategy for the coming years includes goals for a significant increase in the company's financial performance, production volumes and the expansion of sales channels, including through the development of new directions and attracting projects to the site of the Vladimir Chemical Plant holding ", - commented Dmitry Moskovets, First Deputy General Director VHZ, chairman of the board of directors.

Earlier it was reported that PJSC Vladimirsky Chemical Plant plans to spend 300 million rubles for the modernization of the production complex until 2023. These funds will be invested in the purchase of a new PVC production line, as well as the modernization of current equipment and a scientific and technical laboratory on the territory of the VHZ. In addition, part of the funds is planned to be used to support and improve the quality of manufactured products in accordance with the requirements of the international standard.

Vladimir Chemical Plant was registered in Vladimir in 1992 and is part of the vertically integrated holding VHZ.31, which also includes a management company, an investment fund and a laboratory. According to the data on the site of the plant, the enterprise is one of the largest in Russia for the production of plastics for various industries. The main type of manufactured products is PVC compounds, non-plasticized materials in the form of sheets and granules. The owner of 79.71% of the company is Cheshor Enterprises Limited (Cyprus).
MRC

Chalmette refining announces potential USD550 MM renewable diesel project

Chalmette refining announces potential USD550 MM renewable diesel project

MOSCOW (MRC) -- Gov. John Bel Edwards and PBF Chalmette Refinery Manager Steven Krynski announced the company is studying the possible conversion of an idled refinery unit into a renewable diesel production complex, said Hydrocarbonprocessing.

The refinery’s parent company, PBF Energy, would make a USD550 million capital investment to retrofit a hydrocracker unit – out of operation since 2010 – with new technology to accommodate renewable diesel production. The project also would include construction of a pretreatment unit that will allow Chalmette Refining to create non-fossil feedstocks from soybean oil, corn oil and other biogenically derived fats and oils.

With the project, Chalmette Refining would create 20 new direct jobs at an average annual salary of USD70,000, plus benefits. Louisiana Economic Development estimates the project would result in 90 new indirect jobs, for a total of 110 new jobs for St. Bernard Parish and the Southeast Region. The project is expected to support 200 construction jobs, and it would enable Chalmette Refining – the largest private employer in St. Bernard Parish – to retain 516 existing jobs at the refinery.

"Louisiana continues to position itself as a leading state for environmentally friendly energy production,” Gov. Edwards said. “This innovative project at Chalmette Refining is right in line with the goals set out by the Climate Initiatives Task Force I created last year. With this major capital investment in a next-generation energy source and the creation of quality manufacturing jobs along the way, Louisiana would benefit from this project on many levels."

PBF Energy and its potential partners are considering Chalmette Refining along with other facilities for the renewable diesel project, and it expects to make a final investment decision after local taxing bodies in St. Bernard Parish consider the project. PBF is one of the largest independent refining companies in the U.S. In addition to its Louisiana facility, PBF operates two refineries in California and one each in Ohio, Delaware and New Jersey.

"The devastating economic impact of the COVID-19 pandemic on the energy industry is undeniable – we’ve seen eight U.S. refineries shut down since the beginning of 2020, including one down the road in St. James Parish,” Krynski said. “PBF Energy is looking for projects that will create stability for our workforce, prepare the refinery for a green energy transition and help us recover from the losses of the last year and a half. Louisiana financial incentives like the Industrial Tax Exemption and Quality Jobs programs help make the numbers work, especially as our company and entire industry recover from the pandemic. With the support of our state and local leaders, I am hopeful we will be able to bring this project and its economic benefits to St. Bernard Parish."

To secure the project, the State of Louisiana offered PBF Energy an incentive package featuring the comprehensive workforce solutions of LED FastStart, the nation’s No. 1 state workforce training and talent attraction program. The company also is expected to utilize the state’s Quality Jobs and Industrial Tax Exemption programs. The granting of ITEP incentives is subject to final approval by local officials in St. Bernard Parish, with votes expected later this summer.

"The Chalmette Refining facility has been a mainstay of our local economy for more than a century,” St. Bernard Parish President Guy McInnis said. “This important project would position the refinery for success in the years to come as it adapts to the new demands of our energy future. Chalmette Refining is the parish’s top taxpayer and largest private employer, and support for this project will help to secure its future in St. Bernard Parish."

"Chalmette Refining is an important asset to St. Bernard Parish and a pillar of our community,” said Executive Director Meaghan McCormack of the St. Bernard Economic Development Foundation. “As we work to attract new businesses and industries, it is also of incredible importance to recognize the businesses who have a history in the parish – businesses that stabilize our tax base, employ our people and contribute to our economy. We are grateful our parish’s largest private business employer is eager to continue investing here. This is our chance to show that St. Bernard Parish is not only welcoming to new businesses, but also supports the innovation and growth of existing companies. St. Bernard Parish is one of many locations being considered for this potential project, and our decision can make all the difference."

"Renewable diesel comes with a number of benefits: it’s made of renewable resources, it burns clean and it works just like traditional diesel,” said President and CEO Michael Hecht of Greater New Orleans Inc. “We are proud that our team has worked with Chalmette Refining, Louisiana Economic Development and elected officials over the past year to help bring this project to fruition, to bring investment, jobs and clean energy to St. Bernard and the region."

As per MRC, Louisiana parish council has approved a property tax exemption for a project that a company official said could be the saviour of independent refiner PBF Energy and its Chalmette, Louisiana refinery. The exemption, approved late on Tuesday, will save PBF ГЫВ91 million over 10 years in property taxes for a new renewable diesel unit, according to documents filed by PBF with the council of St. Bernard Parish on the east side of New Orleans. PBF wants to use the tax break to attract a partner for the conversion of an idled hydrocracker, which made diesel from gas oil, into a renewable diesel unit that will make the truck fuel from animal fats.

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

Chart Industries acquires L.A. Turbine

Chart Industries acquires L.A. Turbine

MOSCOW (MRC) -- Chart Industries, Inc. has acquired L.A. Turbine for USD80 million. L.A. Turbine is a global leader in turboexpander design, engineering, manufacturing, assembly and testing process for new and aftermarket equipment, with significant in-house engineering expertise, said Hydrocarbonprocessing.

This acquisition aligns with our inorganic investment principles and contributes to our financial growth and strength through expanded revenue and profit. LAT’s capabilities are a natural fit and deliver a competitive point of differentiation for Chart. There is a very unique expander required for hydrogen and helium liquefaction which is difficult to obtain in the market due to a limited number of companies like LAT that are capable of designing and producing it. Further, within the last three years, the other qualified suppliers have been acquired by companies that only use their hydrogen and helium turboexpanders for in-house dedicated purposes (i.e. discontinuing sales to third parties). These very specialized expanders are difficult to design and produce as they require very high efficiency, in some cases oil free machines, foil bearings for plants producing 10 tons per day and smaller, and magnetic bearings for larger helium and hydrogen liquefaction plants. Plus, this part of the liquefier is one of the longest lead-time items at one to two years depending on the configuration. L.A. Turbine has these capabilities in-house and our ownership of these capabilities will further position us to win liquefaction projects and deliver them in significantly shorter timeframes, a further differentiator in the expanding liquefaction market.

"It is an exciting time for Chart and L.A. Turbine as we now work together to bring our customers expanded solutions across multiple molecules, including nearly all types of energy sources and multiple industrial gas applications,” stated Jill Evanko, Chart’s CEO and President. “L.A. Turbine is one of the only turboexpander engineering and manufacturing companies that can design and produce very specialized expanders; one of the longest lead time items in the hydrogen and helium liquefaction supply chain. With this capability in house, we are further differentiated in liquefaction – not just from decades of experience but also from world class efficiency and now, significantly shorter and guaranteed delivery times."

Couple the above complementary nature of the business with the fact that our companies have worked together for numerous years and we expect to have immediate and significant synergies including expanded field service and repair capabilities (LAT is the global leader in servicing all brands of turboexpanders).

"Since our company’s inception, L.A. Turbine’s focus is to be the go-to turboexpander solution provider, as an OEM of highly-engineered rotating equipment designs and process solutions for engineering, procurement and construction clients and end-user operators as well as aftermarket, service and repair. With Chart we can both capitalize on emerging market opportunities while also enhancing and extending the reach of the value chain to our collective customers through our people, technology, infrastructure and financial assets,” stated Danny Mascari, President, L.A. Turbine. “In addition, we remain committed to providing the top-of-the-line FX-TURBO aftermarket service our turboexpander customers have come to know and expect."

Additionally, this acquisition builds on other recent additions to our portfolio, including Cryo Technologies’ helium and hydrogen liquefaction capabilities which will also utilize L.A. Turbine’s equipment. Both of our businesses have very active commercial order pipelines and there are multiple requests for hydrogen liquefaction and processing as well as a variety of energy projects.

LAT is expected to be immediately accretive to Chart, with 2021 positive impact to full year guidance to be shared on Chart’s second quarter 2021 earnings call which is scheduled for July 22, 2021. Looking ahead to 2022, when we will have ramped up our combined benefits, L.A. Turbine is expected to contribute between USD40 and USD50 million of revenue and USD0.20 to USD0.30 of non-diluted earnings per share on approximately 35.5 million weighted shares outstanding (assuming tax rate of 18%). Additionally, our total addressable market (“TAM”) for our specialty products is expanded by USD350 million resulting from this acquisition – the result of the expanded TAM for hydrogen liquefaction, helium liquefaction and carbon capture with energy storage. This addition brings our total near-term specialty products addressable market size to USD6.6 billion. Winston & Strawn LLP served as legal advisor to Chart on the transaction. No investment bankers were engaged in this transaction.

As per MRC, Reliance Industries (RIL) and US-based Chart Industries are leading a new coalition focussed on commercialising hydrogen technologies and systems to build net-zero carbon pathways in India. The alliance will work together to build the hydrogen economy and supply-chain here and also help develop blue and green hydrogen production and storage apart from building hydrogen-use industrial clusters and transport use-cases with hydrogen-powered fuel cells.

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

Union, company meet over Exxon Mobil refinery lockout in Beaumont

Union, company meet over  Exxon Mobil refinery lockout in Beaumont

MOSCOW (MRC) -- Union and company negotiators met to discuss the lockout of workers at Exxon Mobil Corp’s (XOM.N) Beaumont, Texas refinery, spokespeople for both sides said, as per Reuters.

Exxon and United Steelworkers union (USW) representatives agreed to meet again next week, said Hoot Landry, international staff representative for the union, as the lockout of 650 workers reached nine weeks. "We continue to meet and bargain in good faith,” said Exxon spokeswoman Julie King. “Our current offer remains available for a vote by the membership."

Exxon locked out the workers represented by USW 12-243 on May 1, citing the risk of a strike. Exxon has said the proposal would give it flexibility to be profitable in even low-margin environments.

As MRC informed previously, Gov. John Bel Edwards and ExxonMobil Baton Rouge Refinery Manager David Oldreive have announced the company’s final investment decision for more than USD240 million in capital improvements at the ExxonMobil Baton Rouge Refinery.

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.

ExxonMobil is the largest non-government owned company in the energy industry and produces about 3% of the world's oil and about 2% of the world's energy.
MRC