Proposed US carbon capture credit hike may trigger big jump in use of climate-fighting technology to clean up industry

MOSCOW (MRC) -- A proposed tax credit hike for US carbon capture and sequestration projects being mulled by Congress could trigger a big jump in use of the climate-fighting technology to clean up industry, but environmentalists worry the scheme will backfire by prolonging the life of dirty coal-fired power plants, according to Hydrocarbonprocessing.

Carbon capture sequestration (CCS) is a technology that siphons planet-warming carbon dioxide from industrial facilities and stores it underground to keep it out of the atmosphere. The administration of President Joe Biden considers it an important part of its plan to decarbonize the US economy by 2050.

Under the proposal, embedded in the Biden administration’s USD1.75 trillion spending package, CCS projects would become eligible for an USD85 credit for each metric ton of carbon dioxide captured and stored, up from the current USD50-per-ton credit that the industry says is too low.

In the current tax credit regime, known as 45Q, CCS has languished. The United States currently has just a dozen operational commercial CCS facilities, along with a handful that have been suspended due to technological or economic problems, according to the Global CCS Institute.

The Clean Air Task Force, which advocates for carbon capture, cheered the proposal to boost the credit, saying it expects the change to lead to a spike in overall carbon capture capacity in the United States of 13-fold by the mid 2030s. It said the subsidy would also help the CCS industry lower costs and speed up deployment time, paving the way for growth in other countries keen to reduce emissions.

The currently existing facilities sequestered just 6.8 MM tons of industrial carbon dioxide underground in 2020, enough to offset the emissions from 1.5 MM passenger cars, according to the Environmental Protection Agency. Additional CO2 was injected underground for so-called enhanced oil recovery, a controversial process that uses the gas to increase oil field pressure to push more oil out of the ground.

Some environmental groups expect the credit will have the unintended consequence of extending the lives of big polluters like coal-fired power plants, among the world’s biggest greenhouse gas emitters, by giving them a new revenue stream.

Under the credit proposal, industrial facilities would be required to capture at least 50% of their carbon emissions to be eligible for the credit, with that threshold rising to 75% for power plants - thresholds green groups say are too low.

As MRC reported earlier, ExxonMobil has initiated the process for engineering, procurement and construction contracts as part of its plans to expand CCS at its LaBarge, Wyoming facility, which has already captured more CO2 than any other facility in the world. The expansion project will capture up to 1 MM metric tons of CO2, in addition to the 6-7 MM metric tons already captured at LaBarge each year.

We remind that ExxonMobil plans to build its first, large-scale plastic waste advanced recycling facility in Baytown, Texas, and is expected to start operations by year-end 2022. The new facility follows validation of ExxonMobil’s initial trial of its proprietary process for converting plastic waste into raw materials. To date, the trial has successfully recycled more than 1,000 metric tons of plastic waste, the equivalent of 200 million grocery bags, and has demonstrated the capability of processing 50 metric tons per day.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,638,370 tonnes in the first eight months of 2021, up by 10% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 989,570 tonnes in the first eight months of 2021, up by 30% year on year. Deliveries of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased, whereas shipments of injection moulding PP random copolymers decreased significantly.
MRC

Kuwait and Iraq support OPEC+ oil supply rise plan

Kuwait and Iraq support OPEC+ oil supply rise plan

MOSCOW (MRC) -- Kuwait and Iraq support sticking to plans to raise oil output by 400,000 barrels per day (bpd) at an OPEC+ meeting on Thursday, as the US called again for extra supply to cool rising prices, reported Reuters.

Kuwait's oil minister Mohammad Abdulatif al-Fares said on Monday that the OPEC member supports the plan to raise output, which would ensure adequate crude supply to balance the global market, state news agency KUNA reported.

Iraq's state oil marketing company, SOMO, said on Saturday that the OPEC member sees raising output as already planned was sufficient to meet demand and stabilize the market.

US President Joe Biden on Saturday urged major G20 energy producing countries with spare capacity to boost production to ensure a stronger global economic recovery. President Biden's statement is part of a broad effort by the White House to pressure OPEC and its allies to increase supply.

Brent crude prices were trading at near USD85 a barrel on Monday, despite China announcing a release of fuel reserves to increase market supply and support price stability in some regions.

OPEC heavyweight Saudi Arabia has already dismissed calls for more oil supplies from the group, saying the oil market was well-supplied.

"Other than the potential for the market returning to surplus next year, the other factor holding back the group is the uncertainty over if and when Iranian supply could return to the market," bank ING said on Monday.

Last week, Iran said talks with six world powers to try to revive a 2015 nuclear deal will resume by the end of November.

As MRC informed earlier, in September 2021, Iraq signed an initial deal with Swedish company SEAB to build a 70,000-barrels-per-day oil refinery near the northern city of Mosul. The refinery will use the heavy crude oil from the northern Qayyara oilfield to produce fuel, said oil ministry officials, without giving an estimated cost of the project.

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 1,638,370 tonnes in the first eight months of 2021, up by 10% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 989,570 tonnes in the first eight months of 2021, up by 30% year on year. Deliveries of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased, whereas shipments of injection moulding PP random copolymers decreased significantly.
MRC

Eni income indicator Q3 exceeded forecasts

Eni income indicator Q3 exceeded forecasts

MOSCOW (MRC) -- Eni's chemical business managed by Versalis swung to a third-quarter adjusted operating profit of €25m from a loss of EUR53m in the same period of last year on the back of higher margins, said the company.

Sales of petrochemical products were 1.03m tonnes in the third quarter, down by 7% year on year.
Petrochemical product margins improved significantly on the back of "macroeconomic recovery, which mitigated competitive pressure, and contingent factors due to temporary supply shortages during the first half of the year", the company said in a statement.

"The exceptionally strong products spread versus feedstocks recorded in the second quarter 2021 moderated in the third quarter as plants affected by contingent issues returned to normal activity", it said.

Adjusted operating profit for the group surged in the third quarter, with the upstream business supported by the rise in oil and gas prices.

Downstream pro-forma adjusted earnings before interest and taxes (EBIT) expected at about €200m in 2021, which is expected to be negatively affected by a deteriorated margin environment driven by higher feedstock and utilities costs. "This guidance could be revised downward under current market conditions," the company added.

As MRC wrote previously, Italian energy group Eni is evaluating conversion of its Livorno refinery in northwest Italy into a biorefinery, as part of the Italian company's wider strategy to make its activities more environmentally sustainable. Eni has already converted two of its Italian refineries and is looking to almost double its biorefining capacity to around 2 million mt/year by 2024, and expand this to at least five times by 2050, as part of its pledge to achieve complete carbon neutrality 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 1,638,370 tonnes in the first eight months of 2021, up by 10% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 989,570 tonnes in the first eight months of 2021, up by 30% year on year. Deliveries of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased, whereas shipments of injection moulding PP random copolymers decreased significantly.

Eni, abbreviation of Ente Nazionale Idrocarburi, in full Eni SpA, Italian energy company operating primarily in petroleum, natural gas, and petrochemicals. Established in 1953, it is one of Europe's largest oil companies in terms of sales.
MRC

Exxon will be focused on hydrocarbons

Exxon will be focused on hydrocarbons

MOSCOW (MRC) -- Exxon Mobil Corp remains focused on hydrocarbons and plans to press ahead with a USD30 B liquefied natural gas project in Mozambique, said Hydrocarbonprocessing.

"We've been in hydrocarbons for over 130 years... it's the core part of our business and it will be for a long time," Exxon Senior Vice President Neil Chapman said at a conference in the northern Italian city of Verona.

Chapman's comments come after a report that Exxon's board was questioning whether to pursue several major oil and gas projects as investors call on fossil fuel companies to be more cost-conscious and green-energy friendly. Activist investor Engine No. 1 shocked the industry earlier this year when three of its four nominees were elected to the board by Exxon shareholders. The appointment of activist Jeff Ubben in March put a third of the 12-member board in new hands.

"Yes we've had changes in the boardroom but it's the responsibility of management to lay out a clear strategy for stakeholders," Chapman said. He said Exxon's capabilities in oil and gas would support its pivot to the new technologies it was working on of carbon capture and storage, hydrogen and biofuels.

"It's the pace issue we have to manage and that requires a flexible strategy," he said. As oil and gas demand falls in the energy transition, Exxon believes the world is better served by companies supplying the lowest cost barrels with the lowest emissions, he said.

Chapman said the group had not changed its plans over multi-billion-dollar gas investments in Mozambique and Vietnam. "We don't know the date (for the Mozambique final investment decision) right now but there's no change and what was reported in the U.S. media was not correct," he added.

As per MRC, ExxonMobil plans to build its first, large-scale plastic waste advanced recycling facility in Baytown, Texas, and is expected to start operations by year-end 2022. By recycling plastic waste back into raw materials that can be used to make plastic and other valuable products, the technology could help address the challenge of plastic waste in the environment. A smaller, temporary facility, is already operational and producing commercial volumes of certified circular polymers that will be marketed by the end of this year to meet growing demand.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,396,960 tonnes in January-July 2021, up by 7% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 841,990 tonnes in the first seven months of 2021, up by 29% year on year. Supply of propylene homopolymers (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of statistical copolymers of propylene (PP random copolymers) subsided.

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

China 2030 carbon emissions peak action plan provides more opportunities than threats to Sinopec business

China 2030 carbon emissions peak action plan provides more opportunities than threats to Sinopec business

MOSCOW (MRC) -- China's 2030 carbon emissions peak action plan provides more opportunities than threats to Sinopec's business, Secretary to the Board of Directors Huang Wensheng said during the company's third quarter results briefing conference call Oct. 29, reported S&P Glboal.

China's State Council on Oct. 26 released the nation's action plan to peak carbon emissions, including targets to have around 40% of incremental vehicles in the country fueled by new energy sources and reach peak petroleum consumption for land transportation by 2030.

Huang said the company expected China's gasoline demand to peak in 2025 or 2026, with more and more electric vehicles to replace gasoline and gasoil cars.

Output of transportation fuels gasoline, gasoil and jet fuel accounted for more than 50% of Sinopec's production and more than 30,000 oil product retail pump stations in China, which is a threat to the company when consumption peaks, Huang said.

However, the company has started to leverage the retail network to provide integrated energy supplies, with hydrogen refueling and battery service on top of petroleum fuels, to meet demand for energy transition, Huang said, adding that this was an opportunity.

Meanwhile, Sinopec has significantly lifted its capex in the chemical sector, aiming to increase petrochemical product yield while capping oil products output as consumption approaches peaking, Huang added. Sinopec spent Yuan 29.7 billion in its chemical segment over January-September, surging 184% from Yuan 10.46 billion over the same period a year earlier, the company results showed.

The company's yield of the key oil products gasoline, gasoil and jet fuel fell to 57% in the first nine months of the year from 60% a year earlier.

China also targets keeping domestic capacity for the primary refining of crude oil below 1 billion mt/year (20 million b/d) and raising the utilization rate of production capacity for main products to above 80% by 2025, according to the action plan. Huang said there was still room for China's refining capacity to grow, given that the current capacity is about 900 million mt/year and some small and independent capacities were set to be shut.

Sinopec is the world's biggest refiner, with 296.90 million mt/year refining capacity at end 2020.

The refiner and PetroChina slashed their gasoil yields over January-September, which led to a supply shortage in the domestic market when imports of gasoil blending material light cycle oil were impacted by a hefty consumption tax.

Sinopec's gasoil yield fell to 23% over January-September from 27% in a year earlier, resulting in gasoil output dropping 10.3% to 42.92 million mt despite crude throughput rising 9.3% over the same period. The company said it will increase gasoil supplies in Q4 to meet strong domestic demand by lifting throughput and production yields. It has already raised its gasoil supply by about 20% in October from the monthly average level in the first three quarters of the year, and aims to further boost supply in November by 29% month on month. Gasoil production averaged 7.15 million mt/month over January-September, according to the company's results.

As MRC informed before, in August, 2021, Sinopec, the world's petrochemical major, launched the first phase of the Gulei refining complex in Zhangzhou city in China’s southeastern Fujian province. The refining complex, a 50:50 joint venture between Sinopec’s Fujian Petrochemical Company Ltd and Taiwan Xuteng Investment Company Ltd, invested 27.8 billion yuan (USD4.28 billion) in the first phase. That will result in an 800,000 tonnes per annum ethylene plant, a 600,000 tonnes per annum styrene unit and seven other downstream petrochemical units, Sinopec said.

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 1,638,370 tonnes in the first eight months of 2021, up by 10% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 989,570 tonnes in the first eight months of 2021, up by 30% year on year. Deliveries of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased, whereas shipments of injection moulding PP random copolymers decreased significantly.

China Petrochemical Corporation (Sinopec Group) is a super-large petroleum and petrochemical enterprise group established in July 1998 on the basis of the former China Petrochemical Corporation. Sinopec Group's key business activities include the exploration and production of oil and natural gas, petrochemicals and other chemical products, oil refining.
MRC