HollyFrontier closes acquisition of Puget Sound refinery from Shell

HollyFrontier closes acquisition of Puget Sound refinery from Shell

MOSCOW (MRC) -- HollyFrontier Corporation has announced the completion of the previously announced acquisition of the Puget Sound Refinery, the on-site cogeneration facility and related logistics assets, from Equilon Enterprises LLC d/b/a Shell Oil Products US for aggregate cash consideration ofUSD$613.6 million, which consists of a base cash purchase price of USD350.0 million, hydrocarbon inventory with an estimated closing value of approximately USD266.2 million and other closing adjustments and accrued liabilities of USD2.6 million, as per the company's press release.

HollyFrontier expects the transaction to be immediately accretive to HollyFrontier’s earnings per share and free cash flow.

Mike Jennings, President and CEO of HollyFrontier commented, “The Puget Sound Refinery has a strong record of financial and operational performance that we believe will complement our existing refining business. The refinery supplies transportation fuels into the premium Pacific Northwest region and sources advantaged Canadian crude, further enhancing our refining asset base. We are committed to the continued safe and environmentally responsible operations of the facility and welcome Puget Sound’s highly skilled workforce to the HollyFrontier family.”

The Puget Sound Refinery is strategically located on approximately 850 acres in Anacortes, Washington, approximately 80 miles north of Seattle and 90 miles south of Vancouver. The 149,000 barrel per day facility is a large, high quality and complex refinery with catalytic cracking and delayed coking units and is well positioned geographically and logistically to source advantaged Canadian and Alaskan North Slope crudes.

In addition to refining assets and an on-site cogeneration facility, the transaction includes a deep-water marine dock, a light product loading rack, a rail terminal, and storage tanks with approximately 5.8 million barrels of crude, product and other hydrocarbon storage capacity.

As MRC reported earlier, Shell has been planning to shrink its refining and chemicals portfolio from 14 to six sites with chemical business synergies including its Deer Park, Norco, Pernis, Pulau Bukom, Rheinland and Scotford sites. In 2020, it began shutting its 211,146-bpd Convent, Louisiana refinery after failing to find a buyer for the plant.

Earlier that year, Shell sold its 156,400-bpd Martinez, California, refinery and logistics assets to PBF Energy for USD960 million plus the price for oil and refined products on hand.

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.

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.

HollyFrontier Corporation, headquartered in Dallas, Texas, is an independent petroleum refiner and marketer that produces high value light products such as gasoline, diesel fuel, jet fuel and other specialty products. HollyFrontier owns and operates refineries located in Kansas, Oklahoma, New Mexico, Washington and Utah and markets its refined products principally in the Southwest US, the Rocky Mountains extending into the Pacific Northwest and in other neighboring Plains states. In addition, HollyFrontier produces base oils and other specialized lubricants in the US, Canada and the Netherlands, and exports products to more than 80 countries. HollyFrontier also owns a 57% limited partner interest and a non-economic general partner interest in Holly Energy Partners, L.P., a master limited partnership that provides petroleum product and crude oil transportation, terminalling, storage and throughput services to the petroleum industry, including HollyFrontier Corporation subsidiaries.
MRC

Chinese state-owned companies face difficulties to align climate rhetoric with reality

Chinese state-owned companies face difficulties to align climate rhetoric with reality

MOSCOW (MRC) -- Ambitious pledges from China's leaders to cut emissions have put its giant, carbon-intensive state corporations under pressure to respond, but they are at risk of falling short amid confused policy signals and other constraints, reported Reuters.

When Chinese President Xi Jinping said last September that the world's biggest source of greenhouse gases would slash emissions to "net zero" by 2060, attention turned to China's state-owned enterprises (SOEs).

China has already submitted updated climate targets to the United Nations as a new round of climate change talks gets under way in Glasgow. The next challenge is working out how to implement them.

However, the struggles facing China's giant firms will make it harder for Beijing to offer stronger pledges and smooth the way for a more ambitious program of global emissions cuts - especially as it negotiates its way through crippling power shortages.

"State firms are busy drafting their plans and trying to set their targets, and some of them are already creating more detailed planning for the transition," said Ma Jun, director of the Institute of Public and Environmental Affairs (IPE), which tracks the environmental and climate records of big corporations in China.

"How to ensure that they can fulfil other demanding targets while in the meantime achieving climate targets needs a real solid transitioning strategy, and so far there are still major gaps," Ma added.

IPE has assessed 58 listed units of Chinese state-owned enterprises from sectors such as steel, petrochemicals, electric power and aviation, covering more than 1 B tons of annual emissions. The study found that although they are generally ahead of their private sector counterparts, some are lagging, and on indices such as energy efficiency, sectors like steel are still behind global rivals, Ma said. Of the 58, 91% have disclosed climate and emissions data in their official reports. More than half have taken action to reduce emissions, but only 16% so far have announced targets.

Meanwhile, just six have issued formal "climate declarations", including giant power generators like Huaneng , Huadian and Datang, all of which have vowed to bring emissions to a peak by 2025, earlier than the national 2030 goal.

Three others - Baowu Iron and Steel, China's biggest steelmaker - as well as the two biggest oil and gas suppliers PetroChina and Sinopec - have all promised to hit "net zero" around 2050, a decade earlier than the national target.

As MRC wrote previously, 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.
MRC

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