Marathon evaluating idled-P66 plant for renewable fuel production

Marathon evaluating idled-P66 plant for renewable fuel production

MOSCOW (MRC) -- Marathon Petroleum, the largest refiner in the United States, is evaluating a conversion of Phillips 66’s Alliance, Louisiana, refinery into a renewable fuel plant, said Reuters.

The two companies are scheduled to meet next week and tour the 255,600 barrel-per-day refinery, which has been idled since late August, a day before Hurricane Ida roared over the area and swamped the site. Phillips 66 spokesperson Bernardo Fallas declined to comment.

Marathon spokesperson Jamal Kheiry said the company does not comment on “rumor or market speculation." It was unclear if Marathon was interested in acquiring the refinery or operating it through a joint venture with Phillips 66, one of the people said.

Phillips 66 said in November it would convert the Alliance refinery into an oil and refined products terminal to take advantage of its location on the Mississippi River, 20 miles (26 km) south of New Orleans.

Hurricane Ida caused flooding that breached the flood wall around the refinery and inundated control systems causing millions of dollars of damage to the facility.

At least three companies were potential buyers of the refinery before the hurricane struck. They included Hilcorp, Valero Energy and Saudi Aramco’s Motiva Enterprises , people familiar with the matter had said.

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.

Marathon Petroleum Corporation (MPC) is a leading, integrated, downstream energy company headquartered in Findlay, Ohio. The company operates the nation's largest refining system. MPC's marketing system includes branded locations across the United States, including Marathon brand retail outlets.
MRC

Shenghong Petrochemical to receive commercial production at its new refinery in China in May

Shenghong Petrochemical to receive commercial production at its new refinery in China in May

MOSCOW (MRC) -- China's privately-owned Shenghong Petrochemical is expected to reach commercial operation at its newly commissioned 320,000-bpd plant in Lianyungang in May, 2022, reported Reuters with reference to two sources.

Shenghong declined comment.

As MRC informed previously, Shenghong Petrochemical started test runs at this crude unit in late, 2021. The new plant, based in the eastern port city of Lianyungang, will be the only greenfield oil refinery that came on stream in China last year, with its capacity equal to nearly 3% of the country's crude oil imports.

Initially, commercial operations at the plant were expected to begin in the first quarter of 2022, upon completion of its downstream petrochemical facilities.

Shenghong Petrochemical's complex includes an oil refinery, a paraxylene plant of 2.8 million mt/year and an ethylene plant of 1.1 million mt/year, as well as various other plants.

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.
MRC

North American chem rail traffic decreased for third week

MOSCOW (MRC) -- North American chemical railcar traffic fell for a third straight week, led by a 16.2% decline in Canada, according to the latest data from the Association of American Railroads (AAR).

For the first three weeks of 2022 ended 22 January, North American chemical rail traffic was down 3.6% year on year to 137,191 railcar loadings.

In the US, chemical railcar loadings represent about 20% of chemical transportation by tonnage, with trucks, barges and pipelines carrying the rest. In Canada, producers rely on rail to ship more than 70% of their products, with some exclusively using rail.

With the exception of coal, total North American freight railcar traffic for the week fell in all the major commodity categories AAR is tracking.

As per MRC, North American chemical railcar traffic fell by 3.3% year on year for the week ended 15 January, as a small increase in US shipments was more than offset by declines in Canada and Mexico. The decline followed a 6.7% decline in the previous week, ended 8 January. For the first two weeks of 2022, ended 15 January, North American chemical railcar loadings were down 5.0% year on year to 91,437.

We remind, 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. 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.
MRC

Zhejiang Petrochemical intends to operate its newly built crude units in China at full rates in 2022

Zhejiang Petrochemical intends to operate its newly built crude units in China at full rates in 2022

MOSCOW (MRC) -- East China-based Zhejiang Petrochemical, the country's single-largest refiner, aims to operate its newly built 800,000-bpd crude units at full rates this year, reported Reuters with reference to two company executives.

That will represent an increase of 280,000 bpd versus 2021.

Zhejiang Petrochemical didn't immediately respond to requests for comment.

As MRC informed earlier, Zhejiang Petrochemical Co Ltd (ZPC) has started up its No. 2 cracker in Zhoushan, China, which is part of the company's phase 2 petrochemical project in the county. Thus, the cracker with an annual capacity of 1.4 million tons/year of ethylene and 700,000 tons/year of propylene began trial runs in the first week of April, 2021.

Earlier, in the first half of November 2019, ZPC started operations at its No. 1 cracker, and the commercial production at this cracker was received in late December 2019.

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.
MRC

China 2022 crude imports may rise by 6-7% on new refineries, inventory refill

China 2022 crude imports may rise by 6-7% on new refineries, inventory refill

MOSCOW (MRC) -- China's crude oil imports could rebound by 6-7% this year, reversing 2021's rare decline as buyers step up purchases for new refining units and to replenish low inventories, reported Reuters with reference to analysts and oil company officials' statement.

Robust demand from China, which accounts for a tenth of the global crude trade, would help underpin global oil prices, keeping supplies tight amid forecasts for a jump in crude prices.

Demand recovery, however, is not expected until the second half of the year as China continues to combat COVID-19 outbreaks and limit production by smaller refiners.

For 2022, crude oil imports into China look set to grow by 600,000-700,000 barrels per day (bpd), offsetting last year's 590,000 bpd fall to match or beat 2020's record volume of 10.85 million bpd, analysts at FGE, Rystad Energy and Energy Aspects told Reuters.

Brent and West Texas Intermediate futures are already at 7-year highs near USD90 a barrel as investors look beyond the demand hit from the Omicron variant.

"We expect China's refinery runs to grow by 500,000 bpd, mainly driven by new refinery capacity coming online in 2022 and the recovery in transport and aviation fuels picking up the pace in the second half of the year," said Julie Torgersrud of Rystad Energy.

Imports are likely to make a slow start initially as Beijing's zero-tolerance virus control measures keep a lid on fuel demand, while reduced import quotas and narrowing refining margins will limit production by independent refiners.

Refinitiv data showed January arrivals totaled 41.13 million tons (9.69 million bpd), below 44.6 million tons in January 2021 and 46.1 million tons two years ago.

A possible release of state petroleum reserves (SPR) in coming weeks will also dampen national oil companies' purchases, analysts said.

Demand is set to recover later in the year, driven by new refining capacity at integrated petrochemical producers, in particular Zhejiang Petrochemical Corp and Jiangsu Shenghong Petrochemical.

"We expect crude imports to grow by 600,000 bpd year-on-year, driven by new capacities and a return of stockpiling," said Mia Geng, analyst with FGE.

The restocking of oil reserves is also expected to boost buying in the second half, led by state refiners Sinopec and PetroChina after an estimated steep inventory drawdown last year.

Total onshore crude oil stocks, excluding underground storage which is hard for satellites to detect, fell by 140 million barrels last year, Vortexa Analytics estimated, which a market source said was likely the largest drawdown since 2015.

China began refilling tanks in recent weeks, putting 4 million barrels of Iranian oil nL1N2U105C into reserve tanks in south China, Reuters reported.

Unipec, Sinopec's trading arm, has also been sweeping up millions of barrels of crude from the United States, Russia and the Middle East this month in an unusual buying spree, traders said. The extra supply could be used to ramp up refining output after the Lunar New Year and to refill stockpiles, they said.

As MRC wrote before, in December 2021, Amur Gas Chemical Complex LLC agreed and signed loan documents to finance the completion of Amur GCC’s construction. Amur GCC will act as the borrower; SIBUR and Sinopec will be sponsors proportional to their stakes (60/40, respectively) in the joint venture (JV). Upon completion of standard conditions precedent, AGCC will begin to draw on the loan which will total USD USD9.1bn and has a final maturity of 2035. Project costs in excess of USD 9.1bn will be covered by the JV parties pro rata.

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.
MRC