Phillips 66 announces 2022 capital program of USD1.9 B

Phillips 66 announces 2022 capital program of USD1.9 B

MOSCOW (MRC) -- Phillips 66 has announced its 2022 capital program of USD1.9 B. The plan includes USD992 MM for sustaining capital and USD916 MM for growth capital, according to Hydrocarbonprocessing.

Approximately 45% of growth capital supports lower-carbon opportunities.

“The 2022 capital program demonstrates our commitment to disciplined capital allocation,” said Greg Garland, Chairman and CEO of Phillips 66. “Our plan for sustaining capital reflects our ongoing focus on operating excellence to ensure the safety and reliability of our operations. We are also investing in returns-focused growth opportunities, including projects that will help us advance a lower-carbon future. In addition to a disciplined capital program, we will continue to prioritize debt reduction and returns to shareholders.”

The Midstream capital plan of USD703 MM, which includes Phillips 66 Partners, comprises USD426 MM for growth projects and USD277 MM for sustaining projects. Growth capital will be directed toward completing construction of Sweeny Frac 4 and repayment of our 25% share of the Bakken Pipeline joint venture’s debt due in 2022. Midstream growth capital also includes Emerging Energy opportunities to advance the company’s lower-carbon efforts.

In refining, Phillips 66 plans to invest USD896 MM, with USD488 MM for reliability, safety and environmental projects. Refining growth capital of $408 MM is primarily for the reconfiguration of the San Francisco refinery in Rodeo, California, as part of the Rodeo Renewed project. Upon expected completion in early 2024, the facility will initially have over 50,000 bpd, or 800 MM gallons per year, of renewable fuel production capacity, making it one of the world’s largest facilities of its kind. The conversion will reduce emissions from the facility and produce lower-carbon transportation fuels. Refining growth capital will also support opportunities for high-return, low-capital projects.

The marketing and specialties capital plan reflects the continued development and enhancement of the company’s retail network, including energy transition opportunities. Corporate and other capital will primarily fund digital transformation projects.

Phillips 66’s proportionate share of capital spending by joint ventures Chevron Phillips Chemical Company LLC (CPChem), WRB Refining LP (WRB) and DCP Midstream, LLC (DCP Midstream) is expected to total USD1.1 B and to be self-funded.

CPChem’s growth capital will fund expansion of its normal alpha olefins production, optimization and debottleneck opportunities in the olefins and polyolefins chains, as well as continuing development of world-scale petrochemicals projects in the US Gulf Coast and Qatar.

As MRC informed earlier, US Refiner Phillips 66 said on 30 September it would cut greenhouse gas emissions by 30% from its operations by 2030, amid mounting pressure on the industry to join the fight against climate change and cut carbon emissions by mid-century.

We remind that US-based Phillips 66 remains open to developing another ethane cracker for its Chevron Phillips Chemical (CP Chem) joint venture, the refiner's CEO said in March 2018.

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 2,047,100 tonnes in the first ten months of 2021, up by 17% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,226,530 tonnes in January-October 2021, up by 26% year on year. Supply of propylene homopolymers (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding stat-copolymers of propylene (PP random copolymers) decreased significantly.

Phillips 66 is a diversified energy manufacturing and logistics company. With a portfolio of Midstream, Chemicals, Refining, and Marketing and Specialties businesses, the company processes, transports, stores and markets fuels and products globally. Headquartered in Houston, the company has 14,100 employees committed to safety and operating excellence. Phillips 66 had USD56 billion of assets as of Sept. 30, 2021.
MRC

Crude oil prices slump as Omicron rapid spread in Europe and the US dims fuel demand outlook

Crude oil prices slump as Omicron rapid spread in Europe and the US dims fuel demand outlook

MOSCOW (MRC) -- Oil prices slumped on Monday as surging cases of the Omicron coronavirus variant in Europe and the United States stoked investor worries that new restrictions to combat its spread could dent fuel demand, reported Reuters.

Brent crude futures fell USD2, or 2.7%, to settle at USD71.52 a barrel, while US West Texas Intermediate (WTI) crude futures fell USD2.63, or 3.7%, to settle at USD68.23 a barrel.

Brent fell to a session low of USD69.28 per barrel, while WTI sank to USD66.04 per barrel, both their lowest levels since early December.

"This is a knee-jerk reaction to the proliferation of the virus and the fear that lockdowns can rapidly spread," said Andrew Lipow of Lipow Oil Associates in Houston.

The Netherlands went into lockdown on Sunday and the possibility of more COVID-19 restrictions being imposed ahead of the Christmas and New Year holidays loomed over several European countries.

US health officials urged Americans on Sunday to get COVID-19 booster shots, wear masks and be careful if they travel over the winter holidays, with the Omicron variant raging across the world and set to take over as the dominant strain in the United States.

Oil prices fell despite Moderna Inc's announcement on Monday that a booster dose of its COVID-19 vaccine appeared to be protective against Omicron in laboratory testing.

Meanwhile, OPEC+ compliance with oil production cuts stood at 117% in November, up 1 percentage point from the previous month, two sources from the group told Reuters, as output continues to lag agreed targets.

In the United States, energy companies added oil and natural gas rigs for a second week in a row.

The oil and gas rig count, an early indicator of future output, rose by three to 579 in the week to Dec. 17, representing its highest number since April 2020, energy services business Baker Hughes Co said in its closely followed report on Friday.

As MRC informed before, US commercial crude stocks fell 3.48 million barrels to 413.96 million barrels in the week ended Sept. 17, to more than 8% below the five-year average, Energy Information Administration data showed. Stocks were last lower Oct. 5, 2018.

We remind that in late August, 2021, US crude stocks dropped sharply while petroleum products supplied by refiners hit an all-time record despite the rise in coronavirus cases nationwide, the Energy Information Administration said. Crude inventories fell by 7.2 million barrels in the week to Aug. 27 to 425.4 million barrels, compared with analysts' expectations in a Reuters poll for a 3.1 million-barrel drop. Product supplied by refineries, a measure of demand, rose to 22.8 million barrels per day in the most recent week. That's a one-week record, and signals strength in consumption for diesel, gasoline and other fuels by consumers and exporters.

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

Covestro and EnBW sign long-term purchase agreement for solar power

Covestro and EnBW sign long-term purchase agreement for solar power

MOSCOW (MRC) -- The materials manufacturer Covestro and the energy company EnBW have signed a long-term industrial customer supply agreement (Corporate Power Purchase Agreement, PPA) for solar power, said the company.

Covestro has thus secured 63 megawatts (MW) of power from the 187 MW EnBW solar park “Weesow-Willmersdorf” in Brandenburg. The system operated by EnBW is the largest solar park in Germany and was implemented without state EEG funding. The agreement with Covestro is the first PPA for the project. From the beginning of 2022, solar power will be used for 15 years at the Covestro sites in Dormagen and Krefeld-Uerdingen. The company will primarily use the renewable energy there to produce more sustainable, mass-balanced plastics, which are manufactured using the so-called drop-in process using alternative raw materials. These include mass balanced polycarbonates and mass balanced thermoplastic polyurethanes.

The conversion of the energy supply to renewable energies is a central pillar in Covestro’s strategy. The company is completely geared towards the circular economy and wants to make its production climate-neutral in the long term. “With the purchase of solar power from the EnBW park, we are underlining our claim to play a pioneering role on the way to a climate-neutral future and are once again sending out a signal for the expansion of renewable energies in Germany. Because for the climate-neutral transformation of industry, we need large amounts of renewable energies at internationally competitive prices,” said Dr. Klaus Schafer, Covestro’s Chief Technology Officer.

The EnBW solar park near Berlin with its 465,000 solar modules has been fully connected to the grid since March 2021. “We have been campaigning for a long time to ensure that renewable energies are marketable even without government support. PPAs are an important instrument for operating subsidy-free systems economically. At the same time, as a central instrument of the energy transition, they help the consumer to achieve climate targets quickly and efficiently. This makes PPAs particularly attractive for companies with energy-intensive production. We are pleased to be able to support Covestro’s production with our solar energy, ”explains Dr. Georg Stamatelopoulos, Chief Operating Officer Generation & Trading at EnBW.

A crucial prerequisite for the production of more sustainable plastics is the use of renewable energies. Covestro began converting its energy supply to renewable energies at an early stage and has been building a portfolio of various PPAs in Germany, Belgium and China since 2019. The agreement with EnBW is the first PPA for the purchase of solar power in Europe.

We remind that Covestro closed the sale of its European polycarbonates (PC) sheets business to the Munich-based Serafin Group effective January 2, 2020. This includes key management and sales functions throughout Europe as well as production sites in Belgium and Italy.

According to MRC's ScanPlast report, Russia's overall consumption of polycarbonate (PC) granules (excluding imports and exports to/from Belarus) decreased in January-October 2021 by 15% to 67,300 tonne from 79,500 tonnes a year earlier.

Covestro (formerly Bayer MaterialScience) is an independent subgroup within Bayer. It was created as part of the restructuring of Bayer AG from the former business group Bayer Polymers, with certain of its activities being spun off to Lanxess AG. Covestro manufactures and develops materials such as coatings, adhesives and sealants, polycarbonates (CDs, DVDs), polyurethanes (automotive seating, insulation for refrigerating appliances) etc. With 2020 sales of EUR 10.7 billion, Covestro has 33 production sites worldwide and employs approximately 16,500 people (calculated as full-time equivalents).
MRC

INEOS partner with Plastic Energy for recycling project at Grangemouth facility

INEOS partner with Plastic Energy for recycling project at Grangemouth facility

MOSCOW (MRC) -- INEOS Olefins & Polymers Europe and Plastic Energy have announced that they are working together on a trial to convert ‘hard to recycle plastic material’, such as flexible packaging, back into ‘food-grade’ quality plastic for use in food packaging, and other high hygiene standard applications, according to Hydrocarbonprocessing.

The companies have come together to launch a preliminary trial in Q1-2022 at the INEOS Grangemouth facility in Scotland. This preliminary trial and the evolution of the policy environment in the UK will inform the development of a large-scale advanced recycling plant, which aims to be the first of its kind in the UK.

Advanced Recycling creates a closed-loop system for plastics management, helps reduce landfill, prevents plastic from ending up in the environment, and reduces the use of fossil derived raw materials. The circular re-use of ‘end of life’ plastic is a further step to reduce total emissions.

INEOS Olefins & Polymers Europe and Plastic Energy have a shared goal to create a world class circular economy value chain in advanced recycling, driving circularity to create the next generation of food-grade recycled content packaging.

Plastic Energy uses its advanced recycling process to convert post-consumer plastic, otherwise destined for landfill or incineration, through a pyrolysis process, into a liquid raw material (called TACOIL) for re-use in the next generation of plastic production. TACOIL is used as a replacement for fossil derived materials, to make food-grade and/or medical grade plastics.

The trial will take place in partnership with Petroineos at Grangemouth. It will use the existing refinery operations to process the TACOIL supplied by Plastic Energy, which already operate two recycling plants in Spain.

Plastic Energy’s technology allows for the improvement in circularity of highly demanding labeling, and packaging applications, such as chocolate bars, snacks and biscuits, pet and dry food. The new project is complementary to the existing use of mechanically recycled plastic in INEOS Recycl-IN range of products. Petroineos will supply the recycled raw material to INEOS Olefins & Polymers Europe to be transformed into Certified Circular plastic with the identical properties expected of conventional plastics made from oil and gas.

The partners recognize the need for collaboration to make such innovations sustainable at scale - in the spirit of “SDG#17 Partnerships for the Goals”, each partner contributes complementary skills and expertise that together create the circular value chain.

As MRC informed previously, earlier this month, INEOS FPS announced plans to deploy innovative Artificial Intelligence (AI)-driven optimisation technology at its Kinneil Terminal in Grangemouth that will deliver further carbon emissions reductions from its operations.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,047,100 tonnes in the first ten months of 2021, up by 17% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,226,530 tonnes in January-October 2021, up by 26% year on year. Supply of propylene homopolymers (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding stat-copolymers of propylene (PP random copolymers) decreased significantly.

INEOS Group Limited is a privately owned multinational chemicals company consisting of 15 standalone business units, headquartered in Rolle, Switzerland and with its registered office in Lyndhurst, United Kingdom. It is the fourth largest chemicals company in the world measured by revenues (after BASF, Dow Chemical and LyondellBasell) and the largest privately owned company in the United Kingdom.
MRC

Gazprom approves the program for the reconstruction of gas processing facilities for 2022-2026

Gazprom approves the program for the reconstruction of gas processing facilities for 2022-2026

MOSCOW (MRC) -- The Gazprom Management Committee has approved a comprehensive program for the reconstruction and technical re-equipment of gas and liquid hydrocarbons processing facilities for 2022–2026, the holding said in a statement.

The document was adopted in the development of the current program for 2021-2025. The purpose of the document is to ensure continued growth in the efficiency of Gazprom's refining complex. Details of the program were not disclosed.

The Management Board also took note of the information on the operation of the technological lines of the Amur Gas Processing Plant (GPP) and the progress of the GPP construction.

It was noted that the overall status of the project is 82.2%. In particular, start-up and commissioning works are continuing on the third technological line, the installation of large-sized equipment has been completed on the fourth.

On the fifth line, large-sized equipment for gas separation has been installed, assembly of metal structures and welding of pipelines continues. On the sixth stage, the assembly of metal structures is underway, the foundation work is being completed.

Gazprom's main processing facilities are the Astrakhan Gas Processing Plant (GPP), the Orenburg Gas Processing and Helium Plant, the Sosnogorsk Gas Processing Plant, the Surgut Condensate Stabilization Plant and the Urengoi Plant for the preparation of condensate for transportation. The facilities under construction include the Amur Gas Processing Plant and the Ethane-Containing Gas Processing Complex in the Ust-Luga settlement.

We remind, that in December 2020, SIBUR Holding, Russia’s leading petrochemicals company and one of the most rapidly growing petrochemicals businesses globally, and China Petroleum & Chemical Corporation (Sinopec), China’s leading energy and chemical company, have closed the deal to set up a joint venture (JV) at the Amur Gas Chemical Complex after obtaining all the necessary approvals from the regulators of both countries. SIBUR and Sinopec will hold interest in the JV in the amount of 60% and 40%, respectively.

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 2,047,100 tonnes in the first ten months of 2021, up by 17% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,226,530 tonnes in January-October 2021, up by 26% year on year. Supply of propylene homopolymers (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding stat-copolymers of propylene (PP random copolymers) decreased significantly.
MRC