Sinopec Qilu Petrochemical Complex in Zibo Faces Fire Emergency

Last weekend, a significant fire engulfed the olefin plant of Sinopec Qilu Petrochemical Corp, situated within its expansive manufacturing complex in Zibo, Shandong province, said Chemanalyst.

The incident unfolded at 09:25 local time on December 23, prompting an immediate response from emergency services. Fortunately, the fire was swiftly brought under control, and no casualties were reported, as stated by the company through the Chinese social media platform Weibo. Despite the quick containment, the cause of the fire remains undetermined, leaving investigators to delve into the circumstances surrounding this unexpected event.

The olefins plant, at the center of the incident, boasts an annual production capacity of 900,480 tonnes of ethylene and 280,750 tonnes of propylene. This sizable capacity underscores the critical role the facility plays in the production of key petrochemical components.

In the aftermath of the fire, there were repercussions on the production front, extending beyond the olefins plant. The market reported a suspension in the production of polyethylene (PE), polypropylene (PP), styrene, and benzene at the Qilu Petrochemical complex. This suspension is a precautionary measure to assess and mitigate any potential impact on product quality and safety protocols, underscoring the complex interdependence of various processes within the facility.

Furthermore, the incident prompted Qilu to implement a reduction in the utilization of its refinery, which has a daily capacity of 70,202 barrels per day. The reduction, spanning from 2% to 38%, is indicative of the strategic adjustments made to ensure operational stability and safety in the aftermath of the fire. The decision reflects the company's commitment to meticulous risk management and adherence to stringent safety measures.

In addition to the impact on production and refinery utilization, there were broader implications for the region's handling of hazardous chemicals. Reports from market sources indicate the suspension of loading and unloading activities involving hazardous chemicals due to the aftermath of the explosion. This precautionary measure is a testament to the diligence exercised by regulatory bodies and industry stakeholders to avert potential risks associated with the handling of volatile substances in the aftermath of a major industrial incident.

The recent fire incident at the Qilu Petrochemical complex sheds light on the inherent challenges and risks associated with large-scale petrochemical operations. While the prompt containment and absence of casualties are commendable, the incident serves as a reminder of the need for continuous vigilance, robust safety protocols, and thorough investigations to ascertain the root causes of such events. Industry stakeholders, regulatory bodies, and the company itself will likely engage in comprehensive reviews and collaborative efforts to enhance safety standards, mitigate risks, and ensure the resilient and sustainable operation of petrochemical facilities in the future.

We remind, Sinopec Corp has applied to the government to swap some of its marine fuel export quotas for allowances to export light products such as diesel, jet fuel or gasoline, four China-based industry sources said this week. Asia's largest refiner has asked to swap a quota to export 800,000 metric tons of low-sulfur fuel oil, part of the 3 million tons of marine fuel quota recently issued by Beijing, for a similar amount of allowances for light product exports, the sources said. Approval could come by the end of October, one of the sources said.

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In the previous month, the United States imposed sanctions on Arctic LNG 2, a liquefied natural gas (LNG) initiative spearheaded by the Russian company Novatek, said Chemanalyst.

In response to the potential repercussions of these sanctions, foreign stakeholders opted to suspend their involvement in the project. This involved relinquishing their obligations for financing and the execution of offtake contracts for the LNG plant, as reported by the Kommersant daily on Monday.

The impact of the sanctions was further evidenced by Novatek's declaration of force majeure concerning LNG supplies originating from the project. This move by Novatek was a direct consequence of the sanctions imposed on the Arctic LNG 2 project.

Despite these challenges, Russia's Minister of Energy, Alexander Novak, remains optimistic about the project's progress. Novak asserted that the first train of the Arctic LNG 2 project has effectively commenced LNG production, with initial deliveries anticipated in the first quarter of 2024.

Insiders within the industry corroborated this information, indicating that the initial production from the train has generated the "first drops" of LNG. However, achieving the project's designated capacity of 6.6 million metric tons per year is expected to take some time.

The sanctions imposed on Arctic LNG 2 reflect the complex geopolitical landscape surrounding energy projects and the involvement of international stakeholders. The decision by foreign shareholders to suspend participation underscores the apprehension and potential economic implications of such punitive measures.

Novatek's invocation of force majeure adds another layer of complexity, emphasizing the challenges faced by the project in meeting its contractual obligations, particularly with regard to LNG supplies.

Despite these setbacks, the initiation of LNG production from the first train marks a notable milestone for the Arctic LNG 2 project. The first quarter of 2024 is anticipated to witness the commencement of deliveries, contributing to Russia's LNG export capabilities.

As developments unfold, the industry will keenly observe how the project navigates the challenges posed by sanctions and other external factors. The successful realization of Arctic LNG 2 holds significance not only for Novatek but also for Russia's position in the global LNG market. The resilience of the project in the face of geopolitical pressures will likely shape perceptions of Russia's energy capabilities and its ability to navigate complex international energy dynamics.

The imposition of sanctions on Arctic LNG 2 has prompted a series of challenges, including the suspension of foreign stakeholders' involvement and Novatek's declaration of force majeure. However, with the initiation of LNG production from the first train, the project remains on course, albeit with uncertainties regarding its timeline for reaching full capacity. The unfolding saga of Arctic LNG 2 reflects the intricate interplay between geopolitics and energy projects, showcasing the resilience and adaptability required in the contemporary global energy landscape.

We remind, Wednesday witnessed a notable downturn in oil prices, marked by a substantial 2% decrease that effectively erased the gains recorded in the preceding day's trading. This shift in market dynamics was predominantly instigated by investors closely monitoring unfolding events in the Red Sea. Despite the persisting attacks in the region on Tuesday, shipping companies exhibited a resumption of their operations, adding complexity to an already intricate geopolitical scenario.

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Companies across many sectors on Wednesday signed initial investment pacts totaling $18.75 B for projects they will build in India's western state of Gujarat, according to a government statement, said Hydrocarbonprocessing.

As part of the deals, an arm of Welspun Enterprises will invest $5.11 B, partly to build green hydrogen and green ammonia facilities, documents reviewed by Reuters showed.

The string of investment pacts come days ahead of India's Prime Minister Narendra Modi opening the state's biennial investment forum where he wants to boost his home state of Gujarat's manufacturing capabilities in key sectors.

Other heads of state and business leaders are expected to attend the forum. Deals inked on Wednesday also include agreements with state-backed Housing and Urban Development Corp to disburse loans worth 145 billion rupee ($1.74 billion) and with the National Bank of Agriculture and Rural Development to provide financing worth 260 billion rupees, documents showed.

Last week, Gujarat also inked a deal with steel manufacturer ArcelorMittal Nippon Steel India worth 125 billion rupees to upgrade an existing project in the state by 2026, as per the documents, along with another set of deals worth 450 billion rupees.

Welspun, ArcelorMittal, Housing and Urban Development and the National Bank were not immediately available to comment after normal business hours.

Separately, Indian conglomerate Essar also said last week it will invest nearly 550 billion rupees in energy transition, power and port sectors in the state, as it renews the firm's strategic investments after clearing a huge debt.

We remind, Finland's Industrial Union said on Thursday it planned two days of labor strike action at Neste's Porvoo oil refinery, likely shutting the plant's production unless the government agrees to change its proposed labor market reforms. Finnish unions have protested in recent months against the right-wing government's plan to favor local work agreements over centralized bargains, limit political strikes and make it easier to terminate work contracts.

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MAIRE announced that its subsidiary Tecnimont successfully achieved the mechanical completion of the rehabilitation works of the old plant (Area 5) for a subsidiary of the Nigerian National Petroleum Company (NNPC) in Nigeria, said Hyrocarbonprocessing.

The rehabilitation works, awarded in April 2021 for a total value of USD 1.5 billion, entail engineering, procurement and construction (EPC) activities aiming at fully restoring the Port Harcourt complex to a minimum of 90% of its nameplate capacity.

Alessandro Bernini, MAIRE Group Chief Executive Officer, commented: “We are proud to have reached this milestone fully satisfying the local content requirements, thanks to a 100% engagement of Nigerian subcontractors for the construction phase. Our technological expertise and engineering know-how enable Nigeria to revive its natural resources management. This landmark required over 9.5 million manhours, resulting in an excellent Health, Safety and Environment performance with no Lost Time Injuries. This project is a confirmation of the Group’s commitment towards the Sub-Saharan Region.”

We remind, Maire Tecnimont SpA’s (Milan) project development subsidiary MET Development (MetDev) has agreed to collaborate with Macquarie Capital to establish a new company aimed at developing, constructing and operating energy transition projects in Italy and Europe. The new entity is expected to focus on sectors ranging from the chemical recycling of waste and the production of sustainable fuels and hydrogen, to green and low-carbon hydrogen and CO2 capture projects, including fertilizers, it said.

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AkzoNobel has announced key organizational structure and leadership announcements for its decorative paints business in the region, effective January 1, 2024, said Sightsinplus.

India is now the regional headquarters of AkzoNobel’s decorative paints business in the newly formed South Asia region. Mr. Rajiv Rajgopal has been appointed as the new Business Unit (BU) Director – Decorative Paints, South Asia region.

He will continue his responsibilities as the Chairman and Managing Director, of Akzo Nobel India Limited. Mr. Rohit G Totla (Rohit Totla) has been appointed as the Sales and Marketing Director for AkzoNobel’s decorative paints business in India.

In this new role, he will be responsible for the growth of AkzoNobel’s decorative paints business in India. This is further to his recent appointment as an Wholetime Director in the Board of Directors of Akzo Nobel India Ltd.

We remind, AkzoNobel’s Coil and Extrusion Coatings business has signed a strategic agreement with the hi-tech specialists to develop a pioneering process that uses electron beams to cure coatings on metal substrates, said the company. E-beam technology is a fast-growing scientific field and could offer significant advantages over conventional thermal curing methods, such as lower energy consumption, increased productivity with higher quality and reduced environmental impact. The process itself cures coatings by using a directed stream of electrons to deliver the energy required to form the final film.

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