COVID-19 - News digest as of 27.01.2022

1. US crude oil and gasoline stocks grow, even as fuel demand surges to record highs

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.

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Explosion and fire reported at Westlake Chemical EDC plant in Lake Charles

MOSCOW (MRC) - A plant near Lake Charles, Louisiana, of Westlake Chemical, US petrochemical major, experienced a fire and explosion on Wednesday morning, reported KPLC News.

An explosion was felt throughout the area and caused a plume of smoke that stretched across the sky.

Plant officials say an empty ethylene dichloride (EDC) tank exploded at about 10:45 local time. The cause is under investigation.

Six injuries have been reported at the plant, none of which appear to be life-threatening, Westlake Chemical spokesman Joe Andrepont said. One person was treated onsite and five people were transported to area hospitals.

Andrepont said at 11:30 a.m. that the fire had been extinguished, all shelters-in-place were lifted, and there were no vapors in the air.

The plant in Lake Charles has the production capacity of 2.22m tonnes/year of EDC. The plant provides EDC and vinyl chloride monomer (VCM) to polyvinyl chloride (PVC) manufacturing plants near Baton Rouge and New Orleans and in Mississippi.

As MRC informed earlier, Westlake Chemical has lifted its force majeure (FM) on US PVC and upstream VCM, the company announced in a customer letter dated May 17, 2021. The letter said the company was "formally lifting the systemwide force majeure condition for PVC and VCM manufactured and shipped from its North American operations that was originally declared on Feb. 19" as a result of mid-February's deep freeze that "resulted in a shutdown/curtailment of our plant operations."

According to MRC's ScanPlast report, Russia's estimated consumption of unmixed PVC totalled 911,400 tonnes in January-November 2021, up by 7% year on year. The emulsion and suspension PVC market showed an increase in demand. November estimated consumption of SPVC in Russia was 79,340 tonnes versus 76,720 tonnes in October. Russian producers reduced their exports, and production increased after the completion of scheduled maintenance works.

Westlake Chemical Corporation is an international manufacturer and supplier of petrochemicals, polymers and building products with headquarters in Houston, Texas. The company's range of products includes: ethylene, polyethylene, styrene, propylene, chlor-alkali and derivative products, PVC suspension and specialty resins, PVC Compounds, and PVC building products including siding, pipe, fittings and specialty components, windows, fence, deck and film.
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Maire Tecnimont awarded sizable EPC contract by Rosneft

Maire Tecnimont awarded sizable EPC contract by Rosneft

MOSCOW (MRC) -- Maire Tecnimont S.p.A. has announced that its subsidiaries Tecnimont S.p.A and MT Russia LLC have signed an EPC contract with Rosneft, Russia's largest oil producer, for the implementation of the VGO Hydrocracking Complex at the Ryazan Refining Company’s (RORC) production site, 200 km South-East of Moscow, as per Maire Tecnimont's press release.

This contract follows the agreement signed by Maire Tecnimont and Rosneft and announced on 28th October 2021.

The overall contract value is approximately EUR1.1 billion (USD1.2 B) (Russian VAT excluded).

The project is subject to financial closing as well as to the fulfilment of certain conditions, typical for this kind of transactions. Project total duration, expected to be typical for this kind of initiatives, will be defined and disclosed once such financial closing and the fulfilment of certain conditions are met.

VGO stands for Vacuum Gas Oil, which is produced by vacuum distillation unit in a refinery plant. Rosneft’s subsidiary RORC is one of the largest Russian refineries by volume of refining and production output.

The project’s scope of work entails a full range of works related to the design, supply of equipment and materials, construction, start-up and commissioning, and project finance services. Once completed, the VGO Hydrocracking Complex will have a capacity of 40,000 barrels per day serving the need of the local market according to the higher standard Class 5 regulation. The project will benefit from highly efficient technology and equipment with an automated control system to reduce the carbon footprint of the plant.

A significant portion of the scope of work will be performed by MT Russia in its Moscow engineering centre, where Maire Tecnimont Group employs about 200 specialists currently involved in several ongoing Russian projects. Thanks to its well-established reputation as a provider of added value services to the Russian market, MT Russia represents therefore a strategic asset within the Group.

As MRC reported before, earlier this month, Rosneft said that its board had approved new strategy through to 2030 with the aim of achieving net zero emissions by 2050.

We remind that in November 2021, Russian oil firm Rosneft agreed to acquire a 37.5% stake in German refinery PCK Schwedt from Shell. The firm has exercised an option to buy the stake, increasing its shareholding in the refinery to 91.67%. The remaining 8.33% interest in the refinery is held by Eni. The transaction is contingent on government and regulatory approvals.

Rosneft is the world's largest publicly traded oil company. The company accounts for about 5% of global oil production, and its proven reserves in the international category will exceed 5 billion tons of oil equivalent. The structure of Rosneft includes the Angarsk Plant of Polymers and Ufaorgsintez (part of the structure of Bashneft) after the closing of the transaction for the purchase of Bashneft. Rosneft and partners acquired the Indian company Essar Oil in 2017 for USD12.9 billion and later renamed the company to Nayara Energy.
MRC

PVC imports to Russia up by 44% in 2021, exports down by 5%

MOSCOW (MRC) -- Imports of suspension polyvinyl chloride (SPVC) into Russia totalled about 64,500 tonnes in 2021, up by 44% year on year. At the same time, exports decreased by 5%, according to MRC's DataScope report.

December SPVC imports to Russia increased to 4,400 tonnes from 4,300 tonnes in November. A slight increase in supplies accounted for producers from South Korea and Uzbekistan.

Total PVC imports in the country were 64,500 tonnes in January-December 2021, compared with 44,800 tonnes year on year, the share of producers from China amounted to 85%.
Since the end of the third quarter, some Russian producers have significantly increased their export sales. 9,100 tonnes were shipped to foreign markets in December (excluding deliveries to the countries of the Customs Union) versus 13,600 tonnes a month earlier.

Overall exports were 184,300 tonnes in January-December 2021 versus 195,000 tonnes a year earlier.


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BASF and Innospec partner to bring increased value to ethanol producers

MOSCOW (MRC) -- BASF Enzymes LLC and Innospec Fuel Specialities LLC have entered into a distribution agreement to increase the overall value to the customers and to show their commitment to the ethanol yield industry, according to Hydrocarbonprocessing.

As part of this collaboration, BASF will be the distributor of DCI-11 Plus ClearTrak - a concentrated corrosion inhibitor - to ethanol plants located within the United States.

“We are excited to partner with Innospec and to add an industry leading technology to our enzyme and chemistry portfolio. This partnership allows BASF to broaden our portfolio and offer DCI-11 Plus ClearTrak along with our industry leading Sales and Technical Support,” said Jeffrey Carver, Sales Manager, BASF Enzymes LLC.

As MRC reported earlier, Air Liquide and BASF plan to develop world largest cross-border CCS value chain. The goal is to significantly reduce CO2 emissions at the industrial cluster in the port of Antwerp. The joint project Kairos@C has been selected for funding by the European Commission through its Innovation Fund, as one of the seven large-scale projects out of more than 300 applications.

We remind that BASF aims is to electrify its production processes for basic chemicals, which are currently based on fossil fuels.

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 the first nine months of 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 PP random copolymers decreased significantly.

BASF is the leading chemical company. It produces a wide range of chemicals, for example solvents, amines, resins, glues, electronic-grade chemicals, industrial gases, basic petrochemicals and inorganic chemicals. The most important customers for this segment are the pharmaceutical, construction, textile and automotive industries.
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