Samsung Engineering, Lotte Chemical, and Malaysian companies to develop green hydrogen & ammonia project in Sarawak

MOSCOW (MRC) -- Samsung Engineering, one of the world’s leading engineering, procurement, construction and project management companies, has announced that it signed a Memorandum of Understanding (MoU) to develop a green hydrogen & ammonia project with Lotte Chemical, POSCO and SEDC Energy SDN. BHD., a Sarawak Economic Development Corporation (SEDC) subsidiary, according to Hydrocarbonprocessing.

The Sarawak H2biscus Green Hydrogen/Ammonia Project (H2biscus Project) will be located in Bintulu, Sarawak State, Malaysia. The signing ceremony, which was held in a non-face-to-face virtual format, was attended by senior executives from each company, including Park Cheonhong, Head of Samsung Engineering's Solution Business Division, Kim Yeon-seop, ESG Management Head of Lotte Chemical, Jo Joo-ik, head of POSCO’s Hydrogen Business Office, and SEDC Chairman YBhg. Tan Sri Datuk Amar (Dr.) Haji Abdul Aziz Bin Dato Haji Husain.

The H2biscus Project is aimed to converting hydropower and natural gas to green hydrogen/methanol and blue hydrogen and for the conversion of hydrogen to ammonia, aiming to supply hydrogen and ammonia to Korea and Sarawak. Based on the results of the pre-feasibility study conducted in 2021, the project is expected to produce 7,000 ton/year of green hydrogen for Sarawak’s local use, 600,000 ton/year of blue ammonia, 630,000 ton/year of green ammonia and 460,000 ton/year of green methanol.

Samsung Engineering, Lotte Chemical, POSCO and SEDC Energy will be taking an active role in developing the entire cycle of the project including direct investment, construction, transportation and utilization. The feasibility study is planned to be verified by this month through an in-depth technology, legal, financial, tax, and market analysis. After the Feasibility Study, Pre-FEED and FEED are completed, the EPC work will be implemented for the H2biscus Project.

Samsung Engineering is also currently executing the Sarawak Petchem methanol plant project in Bintulu, Sarawak Malaysia, which is expected to produce 5,000 tons/day of methanol.

Samsung Engineering is channeling its efforts to be a “Beyond EPC Green Solution Provider,” providing green infrastructure and energy optimization services through process analysis based on digital optimization. By developing new hydrogen-related technologies and CCUS technology, we will aim to transform the energy industry.

As MRC informed earlier, Lotte Chemical, South Korean petrochemical major, plans to take off-stream its naphtha cracker in Yeosu for a scheduled maintenance this year. The company is expected to put its Yeosu naphtha cracker under scheduled maintenance around May or June, 2022. Lotte's Yeosu naphtha cracker can produce 1.2 million tonnes per year (tpy) of ethylene.

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 2,265,290 tonnes in the first eleven months of 2021, up by 14% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,363,850 tonnes in January-November, 2021, up by 25% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding PP random copolymers decreased significantly.

Lotte Chemical runs two naphtha crackers in South Korea. One cracker is located in Daesan county in Seosan which can produce 1.1 million tonnes per year of ethylene with the other 1.2 million tonnes per year cracker in the southwestern city of Yeosu.
MRC

MOSCOW (MRC) -- US crude oil and gasoline inventories rose last week, alleviating a bit of the market's concerns about supply, though fuel demand surged close to record highs, reported Reuters with reference to the Energy Information Administration said on Wednesday.

Crude inventories rose by 2.4 million barrels in the week to Jan. 21 to 416.2 million barrels, compared with analysts' expectations in a Reuters poll for a 728,000-barrel drop.

Gasoline stocks rose by 1.3 million barrels last week to 247.9 million barrels, the EIA said, the most since February of 2021. Analysts were expecting a 2.5 million-barrel rise in stocks. Gasoline stocks generally build during the winter, a less busy season for driving.

Overall product supplied - a measure of demand - surged again, putting the four-week moving average at 21.2 million barrels per day, ahead of pre-pandemic trends. The increases have been led by consumption of distillates like diesel, as gasoline use has fallen off modestly in recent weeks.

Distillate stockpiles, which include diesel and heating oil, fell by 2.8 million barrels in the week versus expectations for a 1.3 million-barrel drop.

Refinery crude runs rose by 44,000 bpd last week, and utilization rates fell by 0.4 percentage point in the week.

Crude stocks at the Cushing, Oklahoma, delivery hub for US crude futures fell by 1.8 million barrels in the last week, the EIA said.

As MRC wrote previously, oil supply will soon overtake demand as some producers are set to pump at or above all-time highs, the International Energy Agency (IEA) said last Wednesday, while demand holds up despite the spread of the Omicron coronavirus variant.

We remind that lobal oil refining capacity fell for the first time in 30 years last year, as new capacity was outweighed by closures, said the International Energy Agency's (IEA) in its monthly oil market report on Wednesday. Refining capacity was down by 730,000 bpd in 2021, the IEA said, but net additions were expected to amount to 1.2 MMbpd in 2022.
MRC

MOSCOW (MRC) -- Technip Energies and Iowa Corn announced that the Iowa Corn Promotion Board (ICPB) and Technip Energies have signed an Asset Purchase Agreement under which Technip Energies acquires ICPB’s patents, technology, and rights for the process technology to produce monoethylene glycol (MEG) from surplus corn plant-based feedstocks, said Hydrocarbonprocessing.

Since 2013, ICPB has invested checkoff funds to develop the technology and to create new demand for corn-based products. Corn-based MEG is used to produce renewable plastics. Technip Energies will advance the technology development, construct and operate a pilot plant to commercialize the technology and make it available for licensing.

Stan Nelson, Chair of the Iowa Corn Research and Business Development Committee, commented: “Iowa Corn has been dedicated to finding new uses and markets for corn to meet our mission for long-term Iowa corn farmer profitability. By investing in research to expand the market for corn as an ingredient to replace oil, products like MEG will allow more renewable materials to be created and improve our environmental footprint. With the sale of MEG technology to Technip Energies, work will continue to explore other uses for corn such as propylene glycol."

Stan Knez, Chief Technology Officer, Technip Energies stated, “We are excited to add this MEG technology to our portfolio, as we work with clients looking for more sustainable ways to produce plastics and basic chemicals. As we continue to pursue technologies that contribute to the circular economy, this acquisition is in line with our ambition to accelerate the energy transition for a better tomorrow."

Corn-based MEG is a drop-in replacement for current fossil fuel-based MEG and a base chemical for products like antifreeze, pop and water bottles, and polyester clothing. Over 70 B pounds of MEG is used in the world every year with the yearly growth in the market equal to nearly 100 MM bushels of corn.

Earlier it was reported that SIBUR, the largest petrochemical complex in Russia and Eastern Europe, and the international engineering company Technip Energies entered into an agreement on cooperation in the field of technology for the production of Hexen-1 comonomer used in the production of linear polyethylene (LDPE) and low-pressure polyethylene (HDPE). The HEXSIB technology is a proprietary development of NIOST specialists, one of the main research centers of SIBUR.

MEG along with terephthalic acid (PTA) is one of the main components for the production of polyethylene terephthalate (PET).

According to MRC's ScanPlast, the estimated consumption of PET in Russia increased by 14% in January-November last year compared to the same period a year earlier and amounted to 737,590 tonnes. Compared to November 2020, the total estimated consumption increased by 25% and amounted to 75,760 tonnes against 60,520 tonnes in 2020.
MRC

MOSCOW (MRC) -- The Ecopet Kaliningrad petrochemical plant may launch production of recycled PET in two years, Devon news agency reported, citing Alexander Anikeev, CEO of Ecopet.

“This year we have a new shareholder — Tatneft, a profile player in the petrochemical market,” he said. “Together with our colleagues from Tatneft, we have conceived the expansion, namely the construction of a new unit. We are working on this issue with European licensors. Changes take place no sooner than two years from now.

At the same time, Ecopet's sales strategy will not change in 2022, A. Anikeev assured. “Our strategy provides for 95% shipments under contracts and 5% for spot,” he explained. we will already begin to develop products, and in February we will have volumes for the spot market."

Ecopet is the largest producer of polyethylene terephthalate in the Russian Federation. The share of the company's products in the Russian market is 37%. The design capacity of the plant for the production of PET is 220,000 tonnes per year. However, Ecopet has been operating at 110% capacity utilization for the past two years.
At the end of 2021, the company produced 234,000 tonnes. In 2022, 242,000 tonnes are expected to be produced.

Ecopet intends to switch to the industrial production of high quality fiber PET. The volume of production will depend on the demand of the market, Anikeev explained. "The demand of the Russian market for such grades is low: Titan-Polymer - about 70,000 tonnes per year, Flex Films Rus - about 30,000 tonnes per year. We will rebuild the technology upon request," he said.

Prior to this, the Kaliningrad enterprise had already produced small test batches of fiber polyethylene terephthalate. They were tested by Texkor, Flex Films Rus, Mogilevkhimvolokno and Retal.

Tatneft bought Ecopet in June 2021. The deal amounted to 6.4 bn rubles. The company is engaged in the production and sale of polyethylene terephthalate in Russia and Eastern Europe.

Tatneft also plans to launch the production of terephthalic acid (PTA) in order to provide its Ecopet plant in the Kaliningrad region with raw materials.

Ecopet is Europe's largest producer of polyethylene terephthalate. Ecopet JSC is a resident of the SEZ in the Kaliningrad region. The Ecopet group includes OOO TD "Ecopolymers" - a distributor that supplies PET both to the Russian market and to the markets of the European Union and the CIS. Another asset, BaltTechProm LLC, is an industrial park with an area of ??132 hectares with a prospective development site for another 103 hectares.
MRC

MOSCOW (MRC) -- Taiwan’s Formosa Petrochemical Corp has shut its 36,000 barrel-per-day hydrocracker at its Mailiao refinery following a fire last week, reported Reuters with reference to the company spokesman's statement on Tuesday.

The refiner has cancelled gasoil exports and offered a rare cargo of 180-centistoke (cst) fuel oil for February following the accident, spokesman KY Lin told Reuters.

The company is currently carrying out investigations into the accident.

The unit is expected to come back online by mid-March.

As MRC informed earlier, an explosion occurred at a polypropylene (PP) storage tank belong to Formosa Plastics (FPC, part of Formosa Petrochemical) in Linyuan, Taiwan in the early hours of 7 July 2021 and caused a flare-up, which was distinguished within an hour. Formosa Plastics Corp (FPC) runs a 230,000 tons/year PP plant in the Linyuan complex.

According to MRC's ScanPlast report, PP shipments to the Russian market were 1,363,850 tonnes in January-November, 2021, up by 25% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding PP random copolymers decreased significantly.

Formosa Petrochemical is involved primarily in the business of refining crude oil, selling refined petroleum products and producing and selling olefins (including ethylene, propylene, butadiene and BTX) from its naphtha cracking operations. Formosa Petrochemical is also the largest olefins producer in Taiwan and its olefins products are mostly sold to companies within the Formosa Group. Among the company's chemical products are paraxylene (PX), phenyl ethylene, acetone and pure terephthalic acid (PTA). The company"s plastic products include acrylonitrile butadiene styrene (ABS) resins, polystyrene (PS), polypropylene (PP) and panlite (PC).
MRC