Petronas and Aramco to finalize RAPID deal after resolving technical issues

MOSCOW (MRC) -- Malaysian state energy company Petronas and Aramco are facing "technical issues" in finalizing the Saudi oil major's USD7 B investment in a refinery project, but the deal will be completed soon, reported Reuters with reference to state news agency Bernama.

The government "is giving room to Petronas and Saudi Aramco to resolve several technical issues related to the investment agreement," Bernama reported, citing Abdul Rahman Dahlan, a minister in the Malaysian prime minister's office.

Saudi Aramco agreed in February, during Saudi King Salman's visit to Malaysia, to buy a USD7 B stake in the Refinery and Petrochemical Integrated Development (RAPID) project in the southern state of Johor.

"At the moment, there are certain terms that must be fulfilled by both parties and it's an ongoing process. I expect it won't be long for (Aramco) to release the funds for the project," Abdul Rahman said in an interview with Bernama.

He said there were "no major problems" and that the investment will be made "soon."

Petronas declined to comment. Aramco was not immediately available for comment.

The minister did not say what the "technical issues" were, but recent moves by Petronas and Aramco seem to indicate the project is moving along.

Last month, Aramco agreed to take a USD900 MM stake in petrochemical projects in the RAPID complex, expanding the agreement signed in February.

The companies are also jointly seeking to raise USD8 B via a bridge loan for the RAPID project, Project Finance International, owned by Thomson Reuters, reported last week.

Petronas had said in February, when it signed the agreement with Aramco, that the deal could take up to a year to close.

RAPID is a USD27 B project located between the Malacca Strait and the South China Sea, conduits for Middle East oil and gas bound for China, Japan and South Korea.

It will contain a 300,000-bpd oil refinery and a petrochemical complex with a capacity of 7.7 MMmtpy. Refinery operations are set to begin in 2019, with petrochemical operations to follow 6-12 months afterwards.

As MRC informed before, Petronas plans to build a C6-based metallocene linear LDPE plant and a low density polyethylene (LDPE)/ethylene vinyl acetate (EVA) swing plant at its greenfield integrated refinery and petrochemical complex in southern Johor state by mid-2019. The proposed metallocene LLDPE will have a capacity of 350,000 tpa, while the LDPE/EVA will have a capacity of about 150,000 tpa. The two plants are part of Petronas' planned Refinery and Petrochemical Integrated Development project in Pengerang at Johor.

Petronas, short for Petroliam Nasional Berhad, is a Malaysian oil and gas company wholly owned by the Government of Malaysia. The Group is engaged in a wide spectrum of petroleum activities, including upstream exploration and production of oil and gas to downstream oil refining; marketing and distribution of petroleum products; trading; gas processing and liquefaction; gas transmission pipeline network operations; marketing of liquefied natural gas; petrochemical manufacturing and marketing; shipping; automotive engineering; and property investment.

Saudi Aramco is an integrated oil and chemicals company, a global leader in hydrocarbon production, refining processes and distribution, as well as one of the largest global oil exporters. It manages proven reserves of crude oil and condensate estimated at 261.1bn barrels, and produces 9.54 million bbl daily. Headquartered in Dhahran, Saudi Arabia, the company employs over 61,000 staff in 77 countries.
MRC

MOSCOW (MRC) — Royal Dutch Shell Plc has canceled a plan to permanently close the gasoline-producing unit at its 227,586 bpd Convent, Louisiana, oil refinery, said Hydrocarbonprocessing.

A spokesman for Shell's US operations was not immediately available for comment early on Thursday. Shell has decided to overhaul the 92,000-bpd gasoline-producing fluidic catalytic cracking unit (FCCU) in 2018, extending its production for at least four to five years, the sources said.

Shell had planned to permanently decommission the FCCU in early 2018 as part of a plan to integrate the Convent plant with the company's 225,800 bpd refinery in Norco, Louisiana.

The plan originated when the two refineries were owned by Motiva Enterprises, which until May 1 was a 50-50 partnership between Shell and Saudi Aramco. In the planned split of the partnership, Shell took ownership of the two Louisiana refineries.

It was unclear when in 2018 the FCCU will be overhauled, the sources said. Shell has scheduled an overhaul of the unit's heavy oil hydrocracking unit in the summer of 2018.

Plans were laid as early as 2014 to idle the FCCU at the Convent refinery because it was seen as unprofitable compared with the 45,000 bpd heavy-oil hydrocracker, which is called the H-Oil Unit.
MRC

MOSCOW (MRC) — A refinery belonging Brazilian state-run oil company Petroleo Brasileiro SA was shut down for an emergency on Wednesday for the third time in less than 30 days, a labor union said in a press release, as per Hydrocarbonprocessing.

The Sao Paulo state oil workers’ union said a “highly explosive" mixture of gasoline, liquefied petroleum gas and diesel vapor escaped in a cloud from the Paulinia refinery, Brazil’s largest.

Petrobras, as the oil company is known, could not be reached for immediate comment.
MRC

MOSCOW (MRC) -- Metso has received four major valve orders for the oil and gas industry from Chinese petrochemical customers, as per Hydrocarbonprocessing.

All orders are for greenfield investments and have been booked in Metso's orders received starting from the first quarter of 2017, with subsequent quarterly bookings in 2017 and continuing to 2018. The total value of the orders and company names are not being disclosed. All the companies are in the top ten petrochemical companies in China.

The orders include approximately 2,500 Neles ball, segment and butterfly valves for on/off and control applications for various process phases, such as coal gasification, ethylene cracking and PSA processes. The control valves are equipped with Neles ND9000 series intelligent valve controllers, which have the capability for advanced performance follow-up.
MRC

MOSCOW (MRC) -- DuPont Industrial Biosciences, a unit of DowDuPont Inc, on Thursday said it halted operations at a 2-yr-old ethanol plant and will sell it, dealing another blow to efforts to create biofuels without using food crops, reported Reuters.

The decision to shut the Iowa plant comes as political winds are undercutting efforts to produce ethanol from plant waste and wood shavings. The US Environmental Protection Agency (EPA) this year has pushed to lower the amount of cellulosic biofuels that need to be blended into the nation’s fuels under a 2007 mandate, arguing the industry has not produced enough.

DuPont spent about USD225 MM to build the facility, which used corn stalks and stems to make ethanol, which is blended into gasoline. The plant was designed to produce 30 MMgal/yr.

The EPA predicted in 2007 that US cellulosic ethanol production could hit 1 Bgal by 2020, but output this year is expected to reach only 7 MMgal, according to Renewable Fuels Association (RFA), a trade group.

High production costs and still-maturing technology have undercut the rationale for cellulosic biofuel, part of the original goal to use biofuels to help reduce the nation’s dependence on foreign oil.

"Cellulosic biofuel innovators have been dealing with mixed policy signals and tremendous regulatory uncertainty for the past decade," RFA Chief Executive Bob Dinneen said in an interview.

Refiners such as PBF Energy, which must blend biofuels into the nation’s fuel pool or buy credits from those who do, have opposed the mandates.

"This is yet another example of why the nation’s biofuel mandate needs fundamental reform. More than a decade after the cellulosic portion of the mandate was passed, the fuel is still nonexistent," PBF Energy lobbyist Brendan Williams said.

A DuPont Industrial Biosciences spokeswoman said the EPA’s plan to decrease cellulosic biofuel volumes played no role in shutting the plant.

As MRC reported earlier, in late September 2017, DowDuPont Materials Science, the business division of newly formed DowDupont, commissioned ethylene and polyethylene (PE) units in Freeport, Tex., as part of Dow Chemical Co.'s previously announced USD6-billion US Gulf Coast (USGC) investment program in Texas and Louisiana on projects to utilize low-cost and advantaged US shale gas feedstock. The 1.5 million-tonne/year ethylene plant and 400,000-tpy PE plant - which is based on Dow’s proprietary Solution process technology for production of the company’s ELITE brand enhanced PE resins - were both in operation as of Sept. 21.
MRC