Formosa Petrochemical offers 2018 jet fuel and diesel term

MOSCOW (MRC) -- Taiwan’s Formosa Petrochemical Corp has offered a total of 3.3 MMbbl of jet fuel and diesel for 2018 term contracts, reported Reuters with reference to tender documents.

It is the first North Asian refiner to kick off term negotiations, which could set the precedent for other term contracts in the region, traders said.

The company has offered four cargoes of jet fuel of 300,000 bbl each for loading over Jan. 1, 2018 to Dec. 31, 2018, the documents showed.

It has also offered three cargoes of 300,000 bbl each of 10 parts per million (ppm) sulfur diesel for loading in the second, third and fourth quarters of next year.

Formosa offered four cargoes of 300,000 bbl each of 500 ppm sulfur gasoil for next year.

The tenders close on Nov. 9, with bids to remain valid until Nov. 24.

Formosa has also changed the pricing basis for the diesel cargoes, which will be priced off Platts’ 10 ppm sulfur diesel prices instead of the current 500 ppm sulfur prices, according to the documents.

The jet fuel volumes being offered are similar to those in 2017, but the diesel volumes for both 10 ppm and 500 ppm have been reduced.

Formosa finalized its 10 ppm sulfur diesel term contract for January-December 2017 with Winson Oil at a premium of 55 cents a barrel to Singapore quotes, about 20% lower than the 2016 term premium of 70 cents.

It also finalized its jet fuel and 500 ppm sulfur gasoil term contracts, also with Winson Oil, at parity to Singapore quotes.

As MRC informed before, Taiwan's Formosa Petrochemical Corp. had planned maintenance at its 540 Mbpd Mailiao refinery in March, September and November 2017. Formosa is one of the largest oil products exporters in Asia, so any major supply cuts from the refiner would likely support margins. The refiner is planning to shut a 180 Mbpd crude distillation unit (CDU) and two residue desulfurizer units (RDS) with a capacity of 80 Mbpd each at some stage during the maintenance periods. It is also planning to close a delayed coker unit and a vacuum distillation unit during the maintenance

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).
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MOSCOW (MRC) — Chevron Corporation announced a seven-year partnership with Microsoft Corp. establishing the company as Chevron’s primary cloud provider, accelerating the application of advanced technologies including analytics and the Internet of Things (IoT) to drive performance and improve efficiencies, as per Hydrocarbonprocessing.

The Microsoft strategic partnership is part of Chevron’s overall digitization initiative, a multi-year effort to streamline information technology (IT) operations around a digital core connecting the company’s engineers and operations through nimble analytics and increased automation.

Adoption of Microsoft’s Azure platform will allow Chevron’s IT workforce to evolve from supporting infrastructure to one that enables more advanced technologies, as well as optimize exploration, reservoir management, production operations, midstream logistics and marketing operations.

The strategic partnership also extends to broader technical collaboration that will allow the two companies to focus on joint innovation from a technology and business process perspective. This will include identifying areas to influence Microsoft’s roadmap of future products and where Microsoft solutions can help solve Chevron’s business challenges.
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MOSCOW (MRC) — Canadian Natural Resources Ltd has increased its volume commitment on TransCanada Corp’s Keystone XL pipeline by about 46% to 175,000 bpd, as per Hydrocarbonprocessing.

The bigger commitment from one of Canada’s largest oil and gas producers will be a boon to TransCanada, at a time when Canadian pipeline companies are trying to push through new projects in the face of fierce environmental opposition and concerns about slowing oil sands growth.

TransCanada’s open season to gauge interest from producers wanting to ship on the 830,000-bpd pipeline ended last week. The company has not released the results or said what volumes it would need to push ahead with the project. Canada’s two other biggest energy producers Suncor Energy and Cenovus Energy have said they are committed shippers on Keystone XL, without disclosing contracted volumes.

Canadian Natural is growing its oil sands operations after completing an expansion at its Horizon project in northern Alberta, which will add 80,000 bpd of production. Keystone XL would transport crude from Alberta to the US Midwest but has been delayed for eight years by regulatory hurdles. US President Donald Trump this year granted a presidential permit for the pipeline, reversing a rejection by the Obama administration.

Oil prices have been in a deep slump since 2014, prompting Canadian producers to scale back plans for growth and fueling speculation that TransCanada could struggle to get enough shippers to support Keystone XL. TransCanada Chief Executive Officer Russ Girling said in May that lower oil prices and alternative export routes were complicating shipper negotiations.

Bloomberg, citing sources, reported on Thursday that TransCanada had asked the Alberta government to buy capacity on the pipeline. TransCanada spokesman Terry Cunha declined to comment on the Bloomberg report, adding that it “will spend the fourth quarter reviewing the commercial support of the project."

Alberta government spokesman Mike McKinnon did not comment on the Bloomberg report but said the government supported all pipeline projects and had not ruled out any options. "We make decisions on a project-by-project basis, weighing all economic considerations," McKinnon added.

Last month TransCanada scrapped its proposed 1.1 MMbpd Energy East pipeline from Alberta to Canada’s east coast amid mounting regulatory hurdles. The Alberta government receives royalties in the form of barrels of bitumen from some producers and had been signed up to ship 100,000 bpd on Energy East.
MRC

October production of unmixed PVC in Russia rose to 82,900 tonnes from 75,110 tonnes a month earlier, two producers increased their output: SayanskKhimplast and RusVinyl. Overall PVC production reached 735,400 tonnes in January-October 2017, compared to 627,000 tonnes a year earlier. Only two plants out of four increased their output, and this year's high level of production growth was caused by the long forced outage at SayanskKhimPlast in February-July 2016.

The structure of PVC production by plants looked the following way over the stated period.

RusVinyl (JV of SIBUR and Solvin) raised its capacity utilisation last month, the plant produced 29,800 tonnes of PVC in the second month of autumn, 2,700 tonnes out of which was emulsion PVC (EPVC), compared to 20,700 tonnes in September (the plant shut its production capacities for a short turnaround). Thus, RusVinyl's overall production of resin reached 254,400 tonnes in the first ten months of 2017, up by 4% year on year.

SayanskKhimPlast produced over 27,800 tonnes of suspension PVC (SPVC) in October versus 25,300 tonnes a month earlier. SayanskKhimPlast managed to manufacture 212,500 tonnes of resin in January-October 2017, compared to 104,300 tonnes a year earlier (last year's low production was caused by a forced long outage from mid-February to July 2016).

Bashkir Soda Company produced 21,700 tonnes of SPVC last month versus 22,700 tonnes in September. The Bashkir plant's PVC production totalled 197,300 tonnes in the first ten months of 2017, compared to 204,400 tonnes a year earlier. The plant's lower output was largely caused by the forced shutdown in August because of problems with the supply of ethylene.

Kaustik (Volgograd) resumed its PVC production on 18 October after a scheduled maintenance (the outage started on 25 September), the plant managed to produce 3,500 tonnes of PVC over the incomplete month of operations, compared to 6,400 tonnes a month earlier. The plant's overall production of resin reached 71,200 tonnes over the stated period versus 72,800 tonnes a year earlier.

MRC

MOSCOW (MRC) -- Saudi Aramco is expected to shut down its condensate splitter at its Ras Tanura refinery by the end of November for a month for planned maintenance work, two industry sources said, later than originally planned, according to Hydrocarbonprocessing.

The splitter was due to be shut for maintenance in October for 30 days, sources had told Reuters.

"The shutdown has been pushed back to the very end of November until the end of December," said one of the sources; without providing further details on the delay.

A second source said the unit would be taken offline from Nov. 26 until Jan. 8.

Ras Tanura is Saudi Arabia’s largest oil refinery with a capacity of 550,000 bpd.

Aramco did not respond to an emailed request for comment by Reuters.

As MRC reported earlier, in June 2016, Saudi Arabian Oil Co. and Saudi Basic Industries Corp. (Sabic) became one step closer to building their first plant to process crude directly into chemicals, cutting out a link in the production chain from hydrocarbons to the finished products that go into plastics and other consumer goods. The state-owned companies signed an agreement to study such a project to be located in Saudi Arabia. A joint venture is possible if the companies decide to move ahead after the study is completed. Oil companies normally refine crude into transportation fuels including gasoline and diesel and leave byproducts such as naphtha to be processed separately into chemicals.

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.
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