COVID-19 - News digest as of 26.11.2021

1. Crude oil futures drop in Asia on reports of new COVID-19 variant from South Africa

MOSCOW (MRC) -- Crude oil futures plunged in mid-morning trade in Asia Nov. 26 as investors were spooked by reports of a new COVID-19 variant from South Africa that appeared to evade immune responses, sparking a sharp sell-off in the broader financial markets, reported S&P Global. At 10:05 am Singapore time (0205 GMT), the ICE January Brent futures contract was down USD1.13/b (1.37%) from the previous close at $81.09/b, while the NYMEX January light sweet crude contract was USD1.52/b (1.94%) lower at USD76.87/b. "South Africa made headlines yesterday with reports about a new coronavirus variant, resulting in UK authorities banning flights and instituting quarantine measures for travelers from selected African countries," OCBC Research analysts said in a note.

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Crude oil futures drop in Asia on reports of new COVID-19 variant from South Africa

Crude oil futures drop in Asia on reports of new COVID-19 variant from South Africa

MOSCOW (MRC) -- Crude oil futures plunged in mid-morning trade in Asia Nov. 26 as investors were spooked by reports of a new COVID-19 variant from South Africa that appeared to evade immune responses, sparking a sharp sell-off in the broader financial markets, reported S&P Global.

At 10:05 am Singapore time (0205 GMT), the ICE January Brent futures contract was down USD1.13/b (1.37%) from the previous close at $81.09/b, while the NYMEX January light sweet crude contract was USD1.52/b (1.94%) lower at USD76.87/b.

"South Africa made headlines yesterday with reports about a new coronavirus variant, resulting in UK authorities banning flights and instituting quarantine measures for travelers from selected African countries," OCBC Research analysts said in a note.

Oil prices were falling in line with the broader financial markets as investors exited riskier assets following reports of the new virus variant.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 1.11% as of 0205 GMT, while Japan's Nikkei was down 2.29%.

"At present, there is just a small number of known cases and nothing is known about its transmissibility, a key factor determining whether variants flourish or wither. But the new variant is considered notable enough that it is being urgently investigated in terms of both its transmissibility and vaccine efficacy against it," ANZ analysts Brian Martin and Daniel Hynes said in a note.

The latest development will further cloud hopes of a swift economic recovery as vaccinations around the world pick up pace. Europe is in the midst of battling its fourth, or for some fifth, wave of COVID-19 infections, with Portugal the latest to reimpose fresh restrictions Nov. 25.

We remind that, as MRC informed before, earlier this month, TotalEnergies and Daimler Truck AG signed an agreement on their joint commitment to the decarbonization of the road freight in the European Union. The partners will collaborate in the development of ecosystems for heavy-duty trucks running on hydrogen, with the intent to demonstrate the attractiveness and effectiveness of trucking powered by clean hydrogen and the ambition to play a lead role in kickstarting the rollout of hydrogen infrastructure for transportation.

We also remind that TotalEnergies has recently inaugurated the extension of Synova in Normandy, the French leader in recycled polypropylene (PP) production. TotalEnergies is therefore doubling its mechanical recycling production capacity for recycled polymers, to meet growing demand for sustainable polymers from customers, such as Automotive Manufacturer (Auto OEM) and the construction industry.

According to MRC's ScanPlast report, PP shipments to the Russian market were 1,138,510 tonnes in January-September 2021, up by 30% year on year. Supply of propylene homopolymer (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding statistical copolymers of propylene (PP random copolymers) decreased significantly.
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Kazanorgsintez plans to expand polycarbonate production

Kazanorgsintez plans to expand polycarbonate production

MOSCOW (MRC) - Kazanorgsintez (TAIF Group) in 2022 will complete the modernization of equipment for the production of polycarbonates, which will allow reaching the design capacity of 100 thousand tons per year, reports Tatar-Inform with reference to the words of the director of the plant Andrey Presnyakov.

"Initially, the project planned 65,000 tonnes per year, and now we are producing about 90,000 tonnes. There is one more stage of modernization, after which we will be able to reach full capacity - 100,000 tonnes," said A. Presnyakov.

He added that after the completion of the modernization at the plant, work will be carried out to reduce power consumption and emissions of harmful substances into the atmosphere. The production of polycarbonate at the enterprise is carried out using phosgene-free technology. This method is environmentally friendly due to the absence of by-products and waste water after production and very low emissions of harmful substances into the atmosphere.

Polycarbonate production at Kazanorgsintez was launched in 2008, in 2018 the company began modernizing production to increase production. Today the company employs 415 people.

Earlier it was reported that Kazanorgsintez resumed production of polycarbonate (PC) in Kazan on August 31 after scheduled repairs. This production was stopped in the first half of August. PJSC Kazanorgsintez is the only manufacturer of polycarbonates in the Russian Federation.

According to the ICIS-MRC Price Report, according to the results of three quarters, PC production at Kazanorgsintez increased by 3% to 71,400 tonnes against 69,000 tonnes in January-September 2020. Kazanorgsintez kept the October price of polycarbonate at the level of the previous month. At the end of September, the import of PC-granules and compositions to Russia, excluding supplies from Belarus, amounted to 1,400 tonnes against 1,800 tonnes a month earlier and 3,200 tonnes in September last year.

PJSC Kazanorgsintez is one of the largest enterprises in the Russian Federation (PJSC TAIF Group of Companies). It produces 40% of all Russian polyethylene and is its largest exporter. Currently, PE, polycarbonate (PC), polyethylene pipes, phenol, acetone, bisphenol A are produced. KOS is the only Russian PC manufacturer. There are 170 types of products in total. The annual production volume is 1.6 million tons. The enterprise is the largest producer of low-pressure polyethylene (HDPE) pipes in Russia. The annual production capacity of HDPE is 540 thousand tons, and LDPE - 225 thousand tons.
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ExxonMobil and Chevron lag Permian independent production despite claims of leadership

ExxonMobil and Chevron lag Permian independent production despite claims of leadership

MOSCOW (MRC) -- Although the Permian Basin is an important upstream growth target for Chevron and ExxonMobil, independent operators are the dominant producers in the area, according to an analysis by the Institute for Energy Economics and Financial Analysis (IEEFA).

While ExxonMobil and Chevron have portrayed themselves as leaders in the Permian, the IEEFA analysis finds it unlikely that future operations from their current assets will propel either to top-producer status in the vast region that sprawls across Texas and New Mexico.

“Both Chevron and ExxonMobil see the Permian as the future of their domestic upstream growth,” said Trey Cowan, an IEEFA oil and gas analyst who authored the briefing note. “But the reality is that they are not likely to overtake independent producers at their current pace.”

IEEFA’s analysis of data from 2018 through 2020 found independent producers hold the highest-performing wells, and that metrics used by the two supermajors to portray leadership actually favor independent producers. For example, Pioneer Natural Resources, which acquired Parsley Energy and DoublePoint Energy earlier this year, overtook OXY to become the largest Permian Basin producer.

“Big Oil would have to significantly increase their drilling and completion campaigns to rise to the activity pace that the leading independents have set,” said Cowan. “Their average productivity per well also lags far behind EOG’s in the Delaware Basin.”

With thousands of turned-in-line wells, the Permian has become the focus of US oil production. Output has increased from 890,000 barrels per day (bpd) to 4.3 million bpd over the last decade, or more than twice the pace of total US crude oil production growth over the same period, according to the Energy Information Administration.

“While Big Oil has held substantial acreage positions across the Delaware, Midland and Central Basin Platform in the Permian, we find little by way of well production quality to distinguish the supermajors,” said Cowan.

As MRC reported before, ExxonMobil said earlier this month it is on track to meet its 2025 emissions reduction targets by the end of this year - four years earlier than planned - and has vowed to ramp up investments to further cut emissions.

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. 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 1,868,160 tonnes in the first nine months of 2021, up by 18% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,138,510 tonnes in January-September 2021, up by 30% year on year. Supply of propylene homopolymer (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding statistical copolymers of propylene (PP random copolymers) decreased significantly.

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.

Headquartered in San Ramon, California, Chevron Corporation is the the second-largest integrated energy company in the United States and among the largest corporations in the world. Chevron is involved in upstream activities including exploration and production, downstream activities including refining, marketing and transportation, and advanced energy technology. Chevron is also invested in power generation and gasification processes.
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PTT invests in Thailand port expansion with construction starting in 2023

MOSCOW (MRC) -- National oil and gas conglomerate PTT Group (PTT) said on Thursday its joint venture GPC International Terminal has signed a 35-year contract to build the third phase of Laem Chabang port project with a budget of 30.9 billion baht, according to Thai Enquirer.

The joint venture GPC is formed by PTT’s subsidiary PTT Tank, Chec Oversea Infrastructure Holding, and Gulf Energy Development.

PTT, Chec Oversea, and GULF will hold 30%, 30%, and 40% stake in GPC, respectively.

The agreement was completed in the form of a public-private partnership to develop the Laem Chabang port phase III project at the Terminal F, which was approved by the cabinet earlier this month, PTT president Auttapol Rerkpiboon said in a statement.

He said the goals are “to operate a seaport and to provide services” such as transporting goods and running warehouses with the capacity up to 4 million twenty-foot equivalent units (TEU) per year.

GPC plans to start constructing the first part, Terminal F1, in 2023 and begin commercial operation in 2025.

The second part, Terminal F2, will be built in 2027 and will launch its operation in 2029.

“This is in line with PTT’s strategy in pursuing Logistics & Infrastructure business and supporting infrastructure growth in Thailand,” Auttapol said.

As MRC informed earlier, in October 2021, Thai chemical firm, PTT Global Chemical Pcl (PTTGC) said it plans to invest over USD22 bln in the next three decades to achieve net zero carbon emissions 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 1,868,160 tonnes in the first nine months of 2021, up by 18% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,138,510 tonnes in January-September 2021, up by 30% year on year. Supply of propylene homopolymer (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding statistical copolymers of propylene (PP random copolymers) decreased significantly.
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