US firms keen to expand Portugal's Sines port for LNG trade

MOSCOW (MRC) -- American companies have a strong interest in expanding Portugal's deepwater port of Sines due to its strategic position for liquefied natural gas (LNG) exports to Europe, reported Reuters with reference to US Energy Secretary Dan Brouillette's statement Wednesday.

Portugal launched an international tender in October for a contract to build and operate a new container terminal in Sines, continental Europe's closest port to the Panama Canal. It expects to pick the winner in the last quarter of this year.

Simultaneously, Singapore's PSA, which operates the only existing container terminal in the port, is also in the process of increasing its capacity.

The planned overall expansion will be crucial to also increase the port's capacity to receive larger ships and more LNG cargoes from abroad for further shipments to Europe.

"It is a very unique and strategic point for us and a very good part of the economics of natural gas," Brouillette said during a visit to Sines. "We are excited to see the development here ... and we look forward to working with Portugal and the industry here for this upcoming tender offer.

"I think you'll see much US interest in this port. We’ll wait and see, as the tender closes, to see which companies may be on this. The fact they are here today looking at this, I think it indicates a very strong American interest in this port."

Portuguese Infrastructure Minister Pedro Nuno Santos said the U.S. interest and potential investment was "an opportunity we must seize".

In the tender, US companies may still face competition from Chinese rivals such as state-owned Cosco or Shanghai International Port Group, which have expressed interest in expanding the port, according to Portuguese newspaper Publico.

Brouillette made no reference to Chinese plans in Portugal, but in the past Washington has expressed concerns about heavy Chinese investment in Portugal's energy sector including large stakes in grid operator REN and power utility EDP-Energias de Portugal.

EDP has a significant wind power operation in the United States. REN, in its turn, owns the Sines LNG terminal.

Chinese firms have invested around 10 billion euros in Portugal, particularly during its economic and debt crisis in 2010-14.

In late 2018, Beijing and Lisbon signed a memorandum of understanding on cooperation on Beijing's belt and road initiative - which promotes expanding land and sea links between Asia, Africa and Europe.
MRC

MOSCOW (MRC)--US refiner PBF Energy has completed its acquisition of Shell’s 157,000 bbl/day Martinez refinery near San Francisco, California, said the company.

The USD1bn deal, agreed in June 2019, was completed effective 1 February 2020.

Equilon Enterprises LLC d/b/a Shell Oil Products US, a subsidiary of Royal Dutch Shell plc announced that it has formally closed on the sale of Shell’s Martinez Refinery in California to PBF Holding Company LLC, a subsidiary of PBF Energy Inc, in exchange for USD 1.2 billion which includes the refinery and inventory. The deal also includes crude oil supply and product offtake agreements, and other adjustments.

The transaction covered the sale of Shell’s Martinez Refinery and adjacent truck rack and terminal in California. Shell’s associated branded fuel businesses, Aviation terminal, and Catalysts business in the area were not part of this transaction.

All regulatory requirements were met prior to the closing of this divestment.

As part of the sale, Shell and PBF entered into crude supply and product offtake agreements to continue to supply Shell branded businesses ensuring that Shell customers will continue to have access to quality Shell branded fuels.

PBF Energy and Shell have agreed to jointly move forward with reviewing the feasibility of building a proposed renewable diesel project which would repurpose existing idled equipment at the Martinez refinery to create a renewable fuels production facility. The detailed feasibility review and planning for this project is expected to continue after deal closing.

As MRC informed earlier, in March 2019, Mammoet safely completed a critical lift at Shell’s Pennsylvania Chemicals Project in Potter Township, utilizing its MSG80 to hoist a 2,000 ton quench tower into position. The facility is the first major US project of its kind to be built outside of the Gulf Coast region in 20 years. Once operational, the facility will boast an ethane cracker and three polyethylene units, and is expected to employ up to 600 employees.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,093,260 tonnes in 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments rose from both domestic producers and foreign suppliers. The estimated PP consumption in the Russian market was 1,260,400 tonnes in January-December 2019, up by 4% year on year. Supply of almost all grades of propylene polymers increased, except for statistical copolymers of propylene (PP random copolymers).

Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.
MRC

MOSCOW (MRC) -- Royal Dutch Shell will support its half of the joint venture with Energy Transfer to build the Lake Charles LNG export terminal in Louisiana with volumes in its existing portfolio rather than with new long-term offtake contracts tied the facility, reproted S&P Global with reference to a person familiar with the plans.

The decision reflects the advantage the integrated energy major has over most other North American developers in adding liquefaction capacity, thanks to its own operations and relationships in all parts of the LNG value chain, through which it has its hands in one-fifth of the world's production of the super-chilled fuel.

ExxonMobil and Qatar Petroleum advanced Golden Pass LNG in Texas last year without announcing any long-term offtake contracts with external buyers tied to that facility, while the Shell-backed LNG Canada project in British Columbia did the same thing in 2018.

While Lake Charles LNG has yet to make a final investment decision, Shell is confident its about 75 million mt LNG portfolio is sufficient to cover its end of the venture, said the person, who spoke to S&P Global Platts on condition of anonymity to discuss sensitive arrangements. An Energy Transfer spokeswoman did not immediately respond to a request for comment on its plans.

"It's about whether or not you have the portfolio that can be resilient enough to deal with both the buyer side but also on the supplier said," the person said. "It's survival of the fittest."

If FID is reached, Shell plans to use cash to fund its portion of the Lake Charles LNG venture, the person said. Completion of the 16.45 million mt/year capacity terminal is targeted for late 2025. The joint venture partners will have a better idea of exactly when an FID can be made after reviewing bids from construction contractors that are offering to build the terminal, the person said.

Details of Shell's plans come as LNG industry leaders gathered in Houston to discuss at a Platts LNG conference the outlook for additional liquefaction projects in the US, Canada and Mexico, as well as the impact weak prices and demand in Asia, Chinese tariffs and the coronavirus outbreak are having on developers. Most of the proposed US terminals are relying on traditional 20-year take-or-pay contracts tied to their facilities to secure financing for construction. And, virtually all of them are struggling.

"It's truly a year of reflection for all of us," Steve Woodward, a senior vice president at Appalachian Basin gas producer Antero Resources, which supplies feedgas for US liquefaction output, said at the conference. "When is the second wave actually going to kick off? It has all of us scratching our heads as to what the next steps are."

The coronavirus has exacerbated the situation by restricting travel to key Asian commercial markets, forcing some spot LNG cargoes to be diverted to other regions and raising the prospect of Chinese buyers declaring force majeure to try to avoid having to comply with contracts.

"It's all happening in real-time," George Nemeth, director of marketing and business development for Sempra Energy's LNG unit, said at the conference. "We don't know what's going to happen with cargoes that might not be able to find a home. Some will float. Maybe some maintenance gets moved up."

In an interview with Platts Wednesday, Freeport LNG CEO Michael Smith said he believes the substantially lower fees that developers of new US LNG export projects are being asked to accept for their supplies compared with what was agreed to for existing facilities, like his Texas terminal, will make it very difficult for most of them to build.

Officials from several of those developers, including Tellurian, Cheniere, and LNG Limited, spoke at the Platts conference Thursday. While none expressed worry of possibly having to abandon projects, they all acknowledged the challenges facing the market, especially for developers relying on new offtake contracts.

"Buyers are spoiled for choice," said Vivek Chandra, CEO of Texas LNG, which has proposed an export terminal in Brownsville. "We are a victim of our own kind of hubris."

As MRC wrote before, Shell Singapore restarted its naphtha cracker in Bukom Island in early December, 2019, following a two months maintenance shutdown since the beginning of October 2019. Thus, this cracker was taken off-stream for the turnaround on 1 October 2019. The cracker is able to produce 960,000 tons/year of ethylene and 550,000 tons/year of propylene.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,093,260 tonnes in 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments rose from both domestic producers and foreign suppliers. The estimated PP consumption in the Russian market was 1,260,400 tonnes in January-December 2019, up by 4% year on year. Supply of almost all grades of propylene polymers increased, except for statistical copolymers of propylene (PP random copolymers).

Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.
MRC

MOSCOW (MRC) -- Idemitsu Kosan expects its Keihin refinery in Tokyo Bay to remain shut at least until the end of March, having been shut since late December 2019 due to a fire, a company spokesman told S&P Global.

The fire started on December 24, 2019, near the 27,000 b/d coker at the refinery, which is operated by Toa Oil, part of the Idemitsu Kosan group. The coker and other related units were immediately shut and subsequently all other units, including the sole crude distillation unit, were closed over December 25-27, 2019.

As MRC wrote previously, Idemitsu Kosan shut its naphtha cracker for a maintenance turnaround in Chiba from 9 April 2019 to end-May 2019.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,093,260 tonnes in 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments rose from both domestic producers and foreign suppliers. The estimated PP consumption in the Russian market was 1,260,400 tonnes in January-December 2019, up by 4% year on year. Supply of almost all grades of propylene polymers increased, except for statistical copolymers of propylene (PP random copolymers).

Idemitsu Kosan is a Japanese petroleum company. It owns and operates oil platforms, refineries and produces and sells petroleum, oils and petrochemical products. The company runs two petrochemical plants in Chiba and Tokuyama. The two naphtha crackers can produce up to 997,000 tonnes of ethylene per year.
MRC

MOSCOW (MRC) -- China's Sinopec Anqing refinery in central Anhui province plans to shut three units in February and cut its run rate to 55% from a planned 94% due to manpower shortage and reduced demand after thee coronavirus outbreak, reported S&P Global with reference to a refinery source's statement.

"The current throughput for February is 350,000 mt in February, falls from original planned 600,000 mt," the source said.

The refinery has idled a 4 million mt/year crude distillation unit and a 1.4 million mt/year fluid catalytic cracking unit, the source said, adding it was also planning to shut a 1 million mt/year delayed coker in mid-February.

Anqing refinery has two CDUs and three FCCs. While the above units are shut, it's now operating a 5 million mt/year CDU and two FCC with a total processing capacity of 2.7 million mt/year, according to the source.

We remind that, as MRC wrote previously, Sinopec Guangzhou Petrochemical, part of China's petrochemical giant - Sinopec, resumed operations at its cracker in China on December 5, 2019, following a turnaround. The cracker was shut for maintenance on October 12, 2019. Located in the Guangzhou province of China, the cracker has an ethylene production capacity of 260,000 mt/year and propylene production capacity of 150,000 mt/year.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,093,260 tonnes in 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments rose from both domestic producers and foreign suppliers. The estimated PP consumption in the Russian market was 1,260,400 tonnes in January-December 2019, up by 4% year on year. Supply of almost all grades of propylene polymers increased, except for statistical copolymers of propylene (PP random copolymers).
MRC