COVID-19 - News digest as of 23.12.2021

1.Crude oil prices recover on large inventory draw as markets ignore gasoline build

MOSCOW (MRC) -- Crude oil prices recovered on Wednesday morning despite word from the Energy Information Administration of an inventory draw of 4.7 million barrels for the week to December 17, according to OilPrice. At 423.6 million barrels, crude oil inventories remain 8% below the five-year average - compared to 7% below the five-year average last week. Last week’s draw adds to last week’s huge draw of 4.6 million barrels from crude oil inventories. On Tuesday, the American Petroleum Institute estimated a crude oil inventory draw of 3.670 million barrels for the week to December 17.

MRC

MOSCOW (MRC) -- A fire erupted on Thursday morning at an Exxon Mobil Corp complex in Baytown, Texas, one of the largest refining and petrochemical facilities in the United States, reported Reuters.

Four people were injured. There were no fatalities and those injured were in a stable condition, while other personnel were accounted for, Exxon said.

Emergency response teams were working to extinguish the blaze more than five hours after it erupted at about 1 a.m. on Thursday, the company said.

The fire occurred in a hydrotreater unit at the oil refinery that had been shut on Wednesday due to a bypass line leak, people familiar with plant operations told Reuters. The injured were contractors who had been repairing the leak.

Harris County Sheriff Ed Gonzalez said initial reports had indicated there had been some type of explosion at the plant. Social media users said on Twitter that a blast shook buildings in the area.

An Exxon official told a news conference the blaze had affected a unit that produces gasoline.

The Baytown plant houses a chemical plant, an olefins plant and the country's fourth biggest oil refinery, with capacity to process 560,500 barrels per day of crude.

The olefins facility, which began operations in 1979, is one of the largest ethylene plants in the world, according to the company's website.

Production was reduced across the Baytown refining and petrochemical complex in August 2019 because of a fire in a propylene recovery unit at the olefins plant. And as many as 37 workers were injured in another fire at the olefins facility in July 2019.

As MRC wrote previously, ExxonMobil said in late August, 2021, a small debris fire near an out-of-service tank was quickly extinguished at its 369,024 barrel-per-day (bpd) Beaumont, Texas, refinery. There were no injuries.

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.

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

MOSCOW (MRC) -- Borealis (Vienna), a leading producer of polyolefins, has delayed the start-up of a new, world-scale propane dehydrogenation (PDH) plant at its existing production site at Kallo, Belgium, which is the company's biggest investment in Europe, until Q3 2023, citing Covid-19, according to Kemicalinfo with reference to the company's email.

The plant in Kallo in the port of Antwerp was previously targeted to begin operations by the end of next year.

Pandemic-driven restrictions have wreaked havoc on maintenance and construction schedules in the industry. A new nitrogen facility being built by Nederlandse Gasunie NV in Zuidbroek in the Netherlands is also behind plan.

Borealis announced spending of EUR1 billion (USD1.1 billion) for its Kallo plant in 2019. The PDH facility will turn propane into propylene, which is then used in plastics.

As MRC reported earlier, the constriction works of Borealis' new PDH unit in Kallo began in September, 2019. The new PDH plant would have a targeted production capacity of 750,000 metric tons/year of propylene, making it one of the largest such facilities in the world. Borealis chose Kallo due to its logistical position and its experience in propylene production and handling. Borealis has selected the Honeywell UOP Oleflex technology for the new plant. Borealis already owns a 480,000-metric tons/year PDH plant at Kallo, which will continue to operate.

Propylene is the main feedstock for the producition of polypropylene (PP).

According to MRC's ScanPlast report, 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.

Borealis is owned by OMV AG and Mubadala Investment Co., the Abu Dhabi state investment company. Borealis is a leading provider of innovative solutions in the fields of polyolefins, base chemicals and fertilizers. With headquarters in Vienna, Austria, Borealis currently employs around 6,500 and operates in over 120 countries.
MRC

MOSCOW (MRC) -- The Deer Park refinery sale to the Mexican state-owned company Petroleos Mexicanos (Pemex) has been approved by the US government, according to EnergyCapital with reference to president Andres Manuel Lopez Obrador' statement this Wednesday.

Firstly, as we have reported previously, the sale was a matter of dispute. Some US Congressman considered selling Shell’s Deer Park refinery to Pemex threatened US national security.

Moreover, the transaction had a value of $596 million, in a combination of debt and cash; plus, the value of hydrocarbon inventory. The transaction would allow Shell to focus its refining footprint further; while also maintaining integration optionality and retaining value through its Chemicals and Trading activities.

On the other hand, the acquisition has a political value for Mexico. President Andres Manuel Lopez Obrador pledged to drive the country to energy self-sufficiency by 2023. Indeed, Mexico has a deep dependence on foreign fuel imports. It buys around 70% of its fuel consumption from abroad.

Furthermore, back in late November, the Committee on Foreign Investment in the United States (CFIUS) denied the final approval for the sale. However, on Wednesday morning, the Mexican government said the CFIUS had finally approved the transaction.

In addition, Pemex Chief Executive Officer Octavio Romero, speaking alongside president Obrador, said that it was excellent news. He also remarked. “The idea is to finalize the purchase during the first weeks of 2022.”

As MRC informed previously, Royal Dutch Shell plc. said in November that its petrochemical complex of several billion dollars in Western Pennsylvania is about 70% complete and in the process to enter service in the early 2020s. The plant's costs are estimated to be USD6-USD10 billion, where ethane will be transformed into plastic feedstock. The facility is equipped to produce 1.5 million metric tons per year (mmty) of ethylene and 1.6 mmty of polyethylene (PE), two important constituents of plastics.

Ethylene and propylene are feedstocks for producing PE and polypropylene (PP).

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.

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.
MRC

MOSCOW (MRC) -- Cummins Enze, headquartered in Foshan, Guangdong Province, China, would initially invest USD47 mln (RMB 300 mln) in the establishment of a production facility for proton exchange membrane (PEM) electrolyzers, said the company.

After completion in 2023, the plant’s initial manufacturing capacity of 500 megawatts of electrolyzers per year will be gradually increased to one gigawatt per year over the next five years.

Cummins Enze will also offer a range of hydrogen generating system options to fulfill the needs of a diverse range of applications. This will comprise electrolyzers for both small-scale hydrogen production, such as a hydrogen fueling system for on-site hydrogen generation, and large-scale hydrogen generation facilities capable of 100 megawatts or more.

Sinopec is one of China’s leading hydrogen energy suppliers, with yearly hydrogen output reaching 3.5 million tons, accounting for 14% of the country’s total. Sinopec established the ambition of becoming the world’s leading chemical company focused on clean energy last year and designated the entire hydrogen industry chain as the primary business for its new power strategy. Sinopec has stepped up its efforts to convert gray hydrogen to decarbonized hydrogen, with the goal of becoming “China’s largest hydrogen energy firm.” Commercializing renewable hydrogen in China is expected to benefit not only green sectors, but also reduce hydrogen supply bottlenecks, hence accelerating fuel cell car adoption.

Sinopec has a solid industrial foundation and an integrated value chain as a significant industrial resource for hydrogen energy. Sinopec develops the complete service capability of oil, gas, hydrogen, and electricity and seeks consumer-oriented breakthroughs to accelerate the energy revolution of the industry chain. As Sinopec’s inaugural fund, the Enze Fund will also use Sinopec’s supply chain optimization, sales and marketing network to expedite the joint venture’s future commercial growth.

The joint venture’s new factory will be built in Foshan, China, which is a national ecological basis for the hydrogen energy industry. It boasts a mature hydrogen energy industry chain as a pioneer of the hydrogen economy. Additionally, it is one of the first regions identified by China’s central government for support in order to test and build the hydrogen sector.

As per MRC, Sinopec has set up a separate company to work on alternative energy projects. The authorized capital of the company, named Zhongshihua Xiongan Xinnenyuan (Zhongshihua Xiongan Xinnenyuan), amounted to 100 million yuan (USD15.7 mln). The scope of the company's activities will include work on projects in such areas as technologies based on hydrogen energy, the sale of equipment related to the storage and use of hydrogen energy, the promotion and implementation of services in the field of new energy technologies, as well as the sale of chargers for electric vehicles.

Earlier it was reported that SIBUR, the largest petrochemical complex in Russia and Eastern Europe, and the Chinese petrochemical giant - Sinopec - raised project financing for the Amur Gas Chemical Complex (GCC) from a syndicate of international, Chinese and Russian banks totaling USD9.1 bn.

Sinopec Corp. is one of the world's largest integrated energy and chemical companies. Business Sinopec Corp. includes oil and gas exploration, production and transportation of oil and gas, oil refining, petrochemical production, production of mineral fertilizers and other chemical products. In terms of refining capacity, Sinopec Corp. ranks second in the world, fourth in terms of ethylene capacity.
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