Mexican Pemex restores oil production after recent fire at offshore platform

MOSCOW (MRC) -- Mexican state oil firm Petroleos Mexicanos (Pemex) resumed 421,000 barrels per day in oil production and brought back online 125 wells following a deadly fire at an offshore platform on Aug. 22, reported Reuters.

The accident in the southern Gulf of Mexico at the offshore platform that is part of Pemex's most productive oil field Ku-Maloob-Zaap, knocked out about 25% of Mexico's total production.

As MRC informed before, Pemex Petroquimica, a subsidiary of the Mexican state oil company Pemex, has resumed production of high density polyethylene (LDPE) on No. 2 line in Cangrejera, Mexico after an unscheduled repairs. Pemex postponed the restart of this line with a capacity of 200,000 mt/year of LDPE until August 10, 2021. It was originally planned that the launch of this production will begin at the end of July. The line was shut on July 10, 2021.

According to MRC's ScanPlast report, June estimated LDPE consumption in Russia dropped to 45,190 tonnes from 47,780 tonnes a month earlier. Russian producers increased their export PE sales. Russia's estimated LDPE consumption totalled about 280,850 tonnes in the first six months of 2021, down by 2% year on year. PE production decreased, whereas exports increased.

Petroleos Mexicanos (Pemex) is a Mexican state-owned oil and gas and petrochemical company. Since the nationalization of the Mexican oil industry in 1938, Pemex has remained a state-owned company and, by law, has exclusive rights to explore and produce oil in the country. Almost 60% of the company's revenues go to the state budget. Petrochemical products include, but are not limited to, polyethylene, polyvinyl chloride.
MRC

MOSCOW (MRC) -- Indorama Ventures (IVL’s) joint venture with Coca-Cola Beverages Philippines (CCBPI) to start a recycled polyethylene terephthalate (R-PET) plant in the Philippines has been delayed primarily due to the pandemic, said the company.

IVL and CCBPI entered into a joint venture agreement in March 2020 to launch an R-PET facility in Cavite, Philippines with target opening date by end 2021. The plant will have the capacity to process 30,000 tonnes/year of PET bottles and produce around 16,000 tonnes/year of R-PET pellet.

However, due to the logistical challenges posted by COVID-19, the plant’s launch has been delayed to March 2022.

IVL entered into the agreement with CCBPI through its indirect subsidiary Indorama Ventures Packaging (Philippines) Corp (IVPPC) which will give the company a 70% ownership, with the remaining 30% owned by CCBPI.

According to MRC's ScanPlast report, Russia's estimated PET consumption totalled 411,200 tonnes in the first six month of 2021, up by 12% year on year. Russian companies processed 62,910 tonnes in June, compared to 85,890 tonnes a month earlier.

Indorama Ventures Public Company Limited, listed in Thailand (Bloomberg ticker IVL.TB), is one of the world’s leading petrochemicals producers, with a global manufacturing footprint across Africa, Asia Pacific, Europe and Americas. The company’s portfolio comprises Integrated PET, Olefins, Fibers, Packaging and Specialty Chemicals.
MRC

MOSCOW (MRC) -- The idled Limetree Bay oil refinery could resume operations with “minimal capital” and could “easily” be transformed to produce biofuels, the investment banker hired to attract investors said in a marketing document, reported Reuters.

The St. Croix, US Virgin Islands, refinery filed for bankruptcy in July after investors poured USD4.1 billion into an unsuccessful revival of the aging facility. US regulators halted processing after residents complained of foul odors, oil that was sprayed on nearby homes and contaminated drinking water supplies.

Jefferies Financial Group Inc, which was hired to find a buyer, said in its marketing pitch that “zero facility investment” is required for a restart. It also said the refinery had been fully operational since January 2021 and has “strong government support” at territorial and municipal levels.

It made no mention of the US Environmental Protection Agency order shutting down the plant or requirements to install air monitoring systems before a restart. US prosecutors also are investigating potential criminal violations of the Clean Air Act, a Limetree attorney said during a bankruptcy hearing in early August.

Jefferies did not respond to a request for comment.

In a radio interview on the local national public radio affiliate in mid-August, Limetree Chief Executive Officer Jeff Rinker said that apart from one unit - the coker - that caused the rotten egg odors and spray, the facility was fully operational prior to the shutdown.

Rinker said Limetree implemented all recommendations made by the company that designed the coker, which converts a type of crude oil from other units into motor fuel feedstocks. A buyer would have to invest further to satisfy recommendations made by a independent auditor, Rinker said.

“I’m hopeful that an investor will come in and want to restart the refinery,” said Rinker, chief executive of Limetree since November 2020.

The 210,000 barrel per day refinery is due to receive up to USD25 million in interim financing while its private-equity and other owners seek to restructure nearly USD2 billion in debt.

The plant’s “hydrotreater units (are) easily converted for renewable diesel production,” Jefferies said. US refiners can take advantage of state and federal incentives to produce renewable fuels.

Rinker said that the USVI governor and Department of Planning and Natural Resources would support any restart, but investors were spooked by uncertainty over required EPA approvals.

As MRC informed before, Judge Jones, who is a veteran of refinery restructurings in the Southern District of Texas court, said in July he was concerned about Limetree’s ability to through Chapter 11 with the existing DIP loan. The process of decommissioning the refinery will take several months, the company’s owner, a consortium led by EIG Global Energy Partners, told the Texas court this month.

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 1,176,860 tonnes in the first half of 2021, up by 5% year on year. Shipments of exclusively low density polyethylene (LDPE) decreased. At the same time, PP shipments to the Russian market were 727,160 tonnes in the first six months of 2021, up by 31% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased. Supply of statistical copolymers of propylene (PP random copolymers) subsided.
MRC

MOSCOW (MRC) -- Major Japanese large firms are to invest about USD6.4 billion to implement six infrastructure projects in Bangladesh under the public-private partnership model, said Thedailystar.

The six companies - which include Toshiba Energy Systems & Solutions Corp, Toyo Engineering Corp, Toshiba Corporation, Japan CCS Co and All Nippon Airways Co - plan to complete the project in end-March 2025, under their proposed “Regional CO2 Resource Utilization Study Business Through Electrolysis Utilizing Artificial Photosynthesis Technology”. Financial details of the project were not disclosed.

Under the plan, Toshiba Energy Systems and Solutions will build a prototype of a full-scale carbon dioxide (CO2) electrolysis unit and conduct demonstration operation of the unit its Hamakawasaki Operations in Kawasaki in Kanagawa Prefecture.

“Through this demonstration project the six companies will contribute to the commercialization of a SAF (sustainable aviation fue) supply chain based on carbon recycling as well as regional revitalization,” they said. The six companies have previously cooperated to combine the CO2 electrolysis technology developed by Toshiba to convert CO2 into carbon monoxide (CO) via the FT process to produce sustainable aviation fuel (SAF) and to study carbon recycling business models using P2C.

“This initiative was adopted as a commission project by the Ministry of the Environment and the six companies will study promoting both decarbonization and regional development by utilizing the infrastructure and characteristics of regional areas to achieve carbon recycling within those regions,” the companies said.

As per MRC, Idemitsu Kosan took off-stream its naphtha cracker for a turnaround. The company halted operations at the cracker on September 7, 2020. The cracker is likely to remain under maintenance by end-October, 2020. Located at Tokuyama, Japan, the cracker has an ethylene production capacity of 690,000 mt/year and propylene production capacity of 110,000 mt/year.

Idemitsu Kosan also operates another cracker in Chiba, Japan, with an ethylene production capacity of 410,000 mt/year.

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 1,176,860 tonnes in the first half of 2021, up by 5% year on year. Shipments of exclusively low density polyethylene (LDPE) decreased. At the same time, PP shipments to the Russian market were 727,160 tonnes in the first six months of 2021, up by 31% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased. Supply of statistical copolymers of propylene (PP random copolymers) subsided.
MRC

MOSCOW (MRC) -- Crude oil futures were higher in mid-morning trade in Asia Aug. 30 after Hurricane Ida forced the shutdown of more than 95% of the Gulf of Mexico's oil production and the US dollar softened on latest indications from the US Federal Reserve, reported S&P Global.

At 10:25 am Singapore time (0225 GMT), the ICE October Brent futures contract was up 35 cents/b (0.48%) from the previous close at USD73.05/b, while the NYMEX October light sweet crude contract was 3 cents/b (0.06%) higher at USD68.77/b.

"Oil prices were trading higher with Hurricane Ida driving evacuation from offshore rigs and putting a cap on oil supplies in the near term," IG market strategist Yeap Jun Rong said Aug. 30.

Ida was upgraded to a Category 4 hurricane by the US National Hurricane Center Aug. 29 with maximum sustained winds of 150 mph before making landfall south of New Orleans just before noon CT as one of the most powerful storms to ever hit the US Gulf Coast. By 4 pm CT, Ida remained at Category 4 strength, with sustained winds at 130 mph.

The US Bureau of Safety and Environmental Enforcement Aug. 29 reported that 95.65% or 1.741 million b/d of the US Gulf's crude oil was shut in, as well as 93.75% or 2.091 Bcf/d of the region's 2.2 Bcf/d of natural gas production,. An estimated 288 offshore platforms were evacuated -- 51.4% of the US Gulf's total.

The US dollar has also weakened since Federal Reserve Chairman Jerome Powell at the recent Jackson Hole Symposium said the central bank may begin tapering its bond buying program before year end. The market had largely expected Powell to announce the start of the tapering program in September, and the unexpectedly dovish stance weighed heavily on the dollar.

Amid the upswing in oil prices, market watchers remained cautious ahead of the OPEC+ alliance meeting scheduled for Sept. 1.

However ING analysts said in a note: "We do not foresee any fireworks from the group following the more recent recovery in prices and we expect that they will continue the easing of their supply cuts as planned."

As MRC informed previously, crude oil stockpiles fell modestly in early August, while gasoline inventories dipped to their lowest level since November, according to the US Energy Information Administration. Crude inventories fell by 447,000 barrels in the week to Aug. 6 to 438.8 million barrels, compared with analysts' expectations in a Reuters poll for a 1.3 million-barrel drop. Overall crude inventories have been on the decline for several weeks due to increased demand.

We remind that US crude oil production is expected to fall by 160,000 barrels per day (bpd) in 2021 to 11.12 million bpd, the US Energy Information Administration (EIA) said in a monthly report, a smaller decline than its previous forecast for a drop of 210,000 bpd.
MRC