Pemex eyeing later refinery start-up date, months after initial announcement

Mexican state-owned oil company Petroleos Mexicanos is working to nail down the start-up date at its newest refinery, months after the government said it had begun early output to ramp up to full capacity by December, said Hydrocarbonprocessing.

The Dos Bocas refinery, in the Gulf state of Tabasco, was set to be fully operational and close to producing commercial-grade diesel and gasoline this month, former Energy Minister Rocio Nahle said in September.

The refinery, which is to process 340,000 barrels per day (bpd) at full capacity, has said it had received its first load of crude and begun refining it.

Mexican President Andres Manuel Lopez Obrador had also said the refinery, with a price tag which has more than doubled the initial estimate of $8 billion, would be producing tens of thousands of barrels a day by the end of the year.

Both deadlines were met with skepticism from analysts and the top Pemex executives who spoke on the condition of anonymity, noting that a series of pipeline connections and tests are needed at the refining before it can ramp up production. Pemex said late Wednesday the refinery was still being inspected.

Pemex CEO Octavio Romero visited the site "with the objective of reviewing how the facilities will operate and planning start-up dates for the project," the oil firm said on its X social media account. Pemex did immediately not respond to a request for comment.

Romero was still in Tabaso on Thursday, a source told Reuters. He met with Lopez Obrador earlier this week at the refinery. Neither the government nor Pemex have given further insight into the refinery's status. Mexico has for years struggled with its expensive, obsolete refining system, and the president has heavily propped up the indebted oil company during his administration.

With its six active domestic refineries, Pemex is processing less than half of its combined capacity of 1.6 million bpd. Lopez Obrador had promised to achieve fuel self-sufficiency by 2024, when his term ends. In addition to Dos Bocas, Pemex purchased a refinery in Texas and is building two coker plants, though Pemex continues to import massive quantities of gasoline and diesel.

We remind, Maersk is about to launch the first of its 18 large methanol-enabled vessels currently on order. On 9 February 2024, it will enter service on the AE7 string connecting Asia and Europe, which includes port calls in Shanghai, Tanjung Pelepas, Colombo and Hamburg (see all port calls in the fact box below), with Ningbo, China, being its first destination.

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INEOS has announced an agreement with LyondellBasell to buy its Ethylene Oxide and Derivatives business including the Bayport Underwood site, Texas, said the company.

The deal includes the 420 kt Ethylene Oxide plant, the 375 kt Ethylene Glycols plant and the 165kt Glycol Ethers plant together with all associated third-party business on the site, for $700 million.

Ethylene Oxide plays an essential role in the day-to-day life of millions of people. It is a key raw material used in large-scale chemical production around the world. It is necessary for the production of pharmaceuticals, cosmetics, semiconductors, polyester, food packaging, construction materials, antifreeze, brake fluids, solvents, paints, soap and detergents.

The first site acquired by INEOS in 1998 was the Ethylene Oxide facility at Zwijndrecht Belgium. As a key raw material, this Ethylene Oxide facility became the foundation from which INEOS has grown its chemicals business.

Tobias Hannemann, CEO INEOS Oxide said, "We are pleased to announce this strategic acquisition. INEOS is a leading producer in Europe and this significant step expands its Ethylene Oxide & Derivatives business into the US, which is the world’s largest market. It also complements our existing Ethanolamines production facility in Plaquemine, Louisiana.

There is free land on the Bayport Underwood site for INEOS’ growth aspirations and it is an ideal location to develop our third-party business supporting customers to co-locate and integrate into an existing Ethylene Oxide & Derivatives platform. We look forward to welcoming the business, site and team of very professional and highly motivated people into the global INEOS group.”

The LyondellBasell Ethylene Oxide & Derivatives site in Bayport Underwood produces high-quality ethylene oxide and derivatives. The fully integrated platform has access to cost advantaged US energy, feedstocks and logistics networks, and has both an excellent performance record and reputation in the market.

“This transaction is evidence of our disciplined focus on value creation through the execution of a key pillar of our strategy – growing and upgrading our core,” said Peter Vanacker, LyondellBasell CEO. “We remain proud of the positive cash generation, access to advantaged feedstocks, reliability and highly skilled team that makes up the EO&D business and are excited to have reached an agreement with INEOS to enable the business to continue generating value under different ownership.”

All current employees on the LyondellBasell Bayport Underwood Site and some who work offsite, will transfer over to INEOS on completion of the transaction.

Target completion is the second quarter of 2024, subject to regulatory and other third-party approvals, at which point INEOS will acquire a site with world class assets, leading production facilities and a successful and experienced team.

We remind, INEOS has announced it has completed the acquisition of the Eastman Texas City site, the 600kt Acetic Acid plant and all associated third party activities, from Eastman Chemical Company. As previously announced, Eastman and INEOS have also entered into a Memorandum of Understanding to explore options for a long-term supply agreement for vinyl acetate monomer.

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Easing global oil prices would help India boost imports from Russia, a senior government official said on Friday, as a lower than USD60 a barrel price of Russian oil will enable buyers to use Western services such as insurance and ships, said Hydrocarbonprocessing.

The Group of Seven large economies known as G7 and some other nations have imposed a ceiling of $60 per barrel for oil at Russian ports to cut Moscow's revenue seen as funding its war in Ukraine.

Russia's flagship grade Ural in Baltic ports has plunged since late November below that level, reflecting subdued global oil prices that are headed for a seventh straight weekly decline. India, the world's third biggest oil importer and consumer, emerged as the biggest buyer of Russian seaborne oil, shunned by the West over Moscow's invasion of Ukraine last year.

The United States last month imposed sanctions on maritime companies and vessels for shipping Russian oil sold above the G7's $60 price cap, in an attempt to close loopholes in the mechanism designed to punish Moscow for invading Ukraine.

The three sanctioned vessels - Kazan, Ligovsky Prospect and NS Century - regularly supplied oil to India. The Indian official, who spoke on condition of anonymity, said there would not be any impact on India's intake of Russian oil due to Western sanctions on ships as enough vessels were available in the market.

He also said India buys Russian oil on delivered basis and refused to comment on the likely destination of NS Century. NS Century was on its way to India when the sanctions were imposed. The vessel has since then floated near Colombo.

We remind, ABS issued an approval in principle to Lemissoler Navigation for its design of a 65K DWT methanol-fueled Ultramax bulk carrier, the first such methanol vessel for China’s shipbuilding industry.

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The Dangote oil refinery in Nigeria received its first cargo of 1 million barrels of crude oil from Shell International Trading and Shipping Co, bringing the start of operations closer after years of delays, said Hydrocarbonprocessing.

Once fully running, the 650,000 barrel-per-day refinery funded by Africa's richest man Aliko Dangote will turn oil powerhouse Nigeria into a net exporter of fuels, a long-sought goal for the OPEC member that almost totally relies on imports.

Dangote Group said in a statement seen by Reuters on Friday that the cargo of 1 million barrels of crude from Agbami - a deep water field run by Chevron - was the first of 6 million barrels that would enable an initial run of the refinery.

That will kick-start output of diesel, aviation fuel and Liquefied Petroleum Gas, before the refinery later starts producing Premium Motor Spirit. A Dangote Group spokesperson said the STASCO cargo arrived on a chartered vessel and was discharged into the refinery's crude oil tanks.

The next four cargoes will be supplied by state oil firm NNPC in two to three weeks and a final cargo will come from ExxonMobil, Dangote Group's statement said. Nigeria's state oil firm NNPC Ltd signed an agreement in November to supply the Dangote refinery with up to six cargoes of crude starting this month. NNPC has a 20% stake in the refinery.

Despite being Africa's biggest oil producer, Nigeria experiences repeated fuel shortages. It spent $23.3 billion last year on petroleum product imports and consumes around 33 million liters of petrol a day. "Our focus over the coming months is to ramp up the refinery to its full capacity," Dangote was quoted as saying in the statement.

Nigeria commissioned the refinery in May, after it ran years behind schedule. At a cost of $19 billion, the massive petrochemical complex is one of Nigeria's single largest investments.

We remind, Maersk is about to launch the first of its 18 large methanol-enabled vessels currently on order. On 9 February 2024, it will enter service on the AE7 string connecting Asia and Europe, which includes port calls in Shanghai, Tanjung Pelepas, Colombo and Hamburg (see all port calls in the fact box below), with Ningbo, China, being its first destination.

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Maersk is about to launch the first of its 18 large methanol-enabled vessels currently on order. On 9 February 2024, it will enter service on the AE7 string connecting Asia and Europe, which includes port calls in Shanghai, Tanjung Pelepas, Colombo and Hamburg (see all port calls in the fact box below), with Ningbo, China, being its first destination, said Hydrocarbonprocessing.

The container vessel built by Hyundai Heavy Industries (HHI) in South Korea has a nominal capacity of 16,000 containers (TEU) and is equipped with a dual-fuel engine enabling operations on methanol as well as biodiesel and conventional bunker fuel.

Maersk has set a Net-Zero greenhouse gas emissions target for 2040 across the entire business and has also set tangible and ambitious near-term targets for 2030 to ensure significant progress. Maersk has secured sufficient green1 methanol to cover the vessel’s maiden voyage and continues to work diligently on 2024-25 sourcing solutions for its methanol-enabled vessel fleet.

“Deploying the first of our large methanol-enabled vessels on one of the world’s largest trade lanes, Asia - Europe, is a landmark in our journey towards our Net-Zero target. With the vessel’s capacity of 16,000 containers, this will make a significant impact in our customers’ efforts to decarbonize their supply chains, and we are looking forward to introducing more methanol-enabled vessels on this and other trades during 2024.”

We remind, Lummus Technology and Toshiba Energy Systems & Solutions Corporation announced a master collaboration agreement to jointly pursue carbon capture projects. Lummus will provide its post-combustion carbon capture technology and Toshiba will provide its advanced amine-based solvents specifically tailored for post-combustion carbon capture and its system design guidelines optimized for Toshiba's solvents.

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