Shell to shut down German oil refinery

Shell will shut down its oil refinery in Wesseling, Germany by 2025 and convert the site to produce lubricant feedstock as part of its drive to reduce its carbon emissions, the company said on Friday, as per Hydrocarbonprocessing.

Shell said it will convert the site's hydrocracker unit into a production unit for Group III base oils, used mostly in engines, with capacity of about 300,000 metric tons a year, equivalent to about 9% of current EU demand and 40% of Germany’s demand for base oils.

The move is expected to reduce Shell's operational carbon emissions, known as Scope 1 and 2 emissions, by about 620,000 tons a year. Shell, which aims to cut overall greenhouse gas emissions - including those from fuels burnt by customers - to net zero by 2050, is also planning to sell its refining and petrochemicals site in Singapore.

Crude oil processing at the Wesseling site, which is part of Shell's Energy and Chemicals Park Rheinland near Cologne, will end in 2025 but will continue at its Godorf refinery, the company said. The new production facility in Wesseling is expected to start operations in the second half of this decade.

The Shell Energy and Chemicals Park Rheinland, which includes both the Wesseling and Godorf sites, currently has a capacity of more than 17 million tons of crude oil per year, of which Wesseling produces 7.5 million tons. Shell previously invested in a 10 megawatt electrolyzer used to produce zero-carbon hydrogen and a biomethane liquefaction plant at the Rheinland facility. Since 2020, Shell has divested five refineries, closed one and converted one into a terminal.

We remind, Shell Chemicals and Braskem will collaborate to increase the amount of circular content used in Braskem’s production of polypropylene as part of a wider value chain enhancement, said the company. The circular polypropylene will be produced using a ISCC PLUS-certified feedstock, based on a mass alance approach and will be used by Braskem’s customers in a variety of applications such as in the packaging and automotive sectors.

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PPG team delivered solid year-over-year sales growth, strong adjusted earnings growth and record operating cash flow, said the company.

The breadth and diversity of our business portfolio was a key driver to our record fourth quarter performance, as we benefited from solid volume growth in China, demand stabilization in Europe and continued growth in several key end-use markets such as aerospace, automotive original equipment manufacturer (OEM) and protective coatings.

We made strong progress on returning to our historic segment margin profile while delivering segment earnings growth of 30% and an aggregate segment margin improvement of 260 basis points, marking the fifth consecutive quarter of year-over-year margin improvement. Additionally, our earnings growth and working capital management resulted in strong cash generation in the quarter and record operating cash flow of over $2.4 billion for the year. We ended the year with a strong balance sheet that, coupled with our legacy of solid cash flow, provides us with shareholder value creation opportunities going forward.

Looking at the full year, in addition to our record financial performance, we successfully implemented various strategic initiatives to strengthen the company, including key actions to position PPG for higher organic growth. We also executed on our ongoing portfolio review leading to the divestitures of both our European and Australian Traffic Solutions businesses and the recently announced strategic alternatives review of the silicas products business. Finally, we have continued our heritage of rewarding our shareholders with our 124th consecutive year of dividend payments, including 52 consecutive years of dividend increases.

Looking ahead, while global industrial production remains at low absolute levels, we expect that demand for our businesses in China will continue to improve. In Europe, we believe that economic activity will stabilize in 2024 at current levels. In the U.S., we anticipate that economic conditions will remain subdued during the first half of 2024, and in Mexico, which is now our second largest country in terms of total net sales, we expect strong momentum to continue. From a PPG perspective, we plan to deliver volume growth in 2024 by executing on our key strategic growth initiatives and fully capitalizing on continued demand in several areas, including aerospace and Mexico, which will also benefit from cross-selling initiatives through our concessionaire network.

We remind, PPG announced that Hugh Grant, 65, PPG independent lead director, has informed the board of directors of his decision to end his tenure as independent lead director, effective Oct. 1, and retire from the board at the end of the year. Grant joined the board in 2005 and has served on the Nominating and Governance Committee and the Human Capital Management and Compensation Committee, serving the last nine years as independent lead director.

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Olin Corp. (Clayton, Missouri) reported fourth-quarter 2023 net income of $53 million, down 77% year over year, on sales of $1.615 billion, down 18%, said the company.

Adjusted earnings per share came to 27 cents, down from $1.49 in the year-ago quarter, but ahead of the analysts' consensus of 18 cents, as compiled by S&P Capital IQ. The company attributed the results in part to lower product pricing for caustic soda, lower pricing in the epoxy segment, and to the shutdown of cumene and bisphenol A capacities.

"In fourth quarter 2023, we executed a 'value accelerator initiative' designed to halt the decline in our electrochemical unit [ECU] values and accelerate a favorable inflection point for our chlor-alkali products and vinyls business," said Scott Sutton, Olin's chairman, president and CEO. "We are seeing success with our 'value accelerator initiative' but expect to continue to limit our market participation through February 2024, as we remain disciplined in our approach to ECU values."

Sutton said he expects the initiative to drive sequential improvement in results. "Considering the ongoing difficult global economic environment and our 'value accelerator initiative,' we expect first quarter 2024 results from our chemical businesses to be slightly higher than fourth quarter 2023 levels." The Winchester ammunition business will remain strong, he added. "Overall, we expect Olin's first quarter 2024 adjusted EBITDA to improve by approximately 10% from fourth quarter 2023 levels."

We remind, Olin shares rose more than 3% in afterhours trading on Thursday after its Q4 adjusted earnings beat its earlier guidance. Olin reported $210.1 million in adjusted earnings before interest, tax, depreciation and amortization (EBITDA). Earlier, it expected Q4 adjusted EBITDA to be in the $200 million range. Olin expects Q1 adjusted EBITDA to rise 10% over Q4 levels, reaching $231 million.

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Sasol Ltd. (Johannesburg) said it anticipates continued pricing and demand volatility in its chemicals business during the second half of its fiscal year, which ends on June 30, 2024, said the company.

In a stock exchange announcement on Jan. 25 detailing its first-half production and sales metrics for the period ended Dec. 31, 2023, Sasol said global market sentiment and petrochemical markets “remain uncertain with the persistent muted demand and margin outlook for chemicals.”

The company said its first-half performance “continued to be impacted by a volatile macro-economic environment, with weaker oil and petrochemical prices, unstable product demand and continued inflationary pressure.”

Sasol’s chemicals business was impacted by challenging market conditions, with macroeconomic weakness, especially in China and Europe, and customer destocking negatively impacting global demand, it said. Sasol’s average sales basket price for chemicals in the first half of the financial year was down 24% year over year, to $1,194 per metric ton, with the decrease driven by a combination of lower crude oil, feedstock and energy prices, as well as weak market demand, it said.

We remind, Sasol North America, a subsidiary of the renowned Sasol conglomerate, recently undertook an unexpected shutdown of its olefins production facility located in Lake Charles. The abrupt halt in operations was necessitated by the adverse impact of freezing temperatures in the region. Commencing on January 15, the company made the decision to suspend the production of key elements such as ethylene, ethylene oxide, propylene, and ethylene glycol, a hiatus expected to extend until the conclusion of the current week. The extreme weather conditions not only disrupted Sasol's industrial operations but also posed challenges to personnel and logistics across the affected region.

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MRC -- A fire at a Rosneft-owned export-oriented oil refinery in the southern Russian town of Tuapse overnight has been extinguished, local officials said.

The refinery is one of many energy infrastructure facilities hit by fire or drone attacks across Russia in the past week. "The vacuum unit was on fire. According to preliminary information, there were neither casualties nor injured," Sergei Boiko, the head of Tuapse district, said on the Telegram messaging app.

The plant's annual capacity is 12 MMt (240,000 bpd). It supplies fuel mainly to Turkey, China, Malaysia and Singapore. The plant produces naphtha, fuel oil, vacuum gasoil and high-sulphur diesel. The cause of the blaze and the scale of the damage were not immediately clear. A Rosneft representative was not immediately available for comment.

Unofficial Telegram channels showed pictures of the blaze and said drones had been responsible. Russian energy company Novatek on Sunday said it had been forced to suspend some operations at the huge Baltic Sea fuel export terminal and "technological processes" at its fuel-producing complex after a fire started by what Ukrainian media said was a drone attack.

Russian news agencies also quoted officials at the region's major airport in the seaside town of Sochi as saying it had suspended arrivals and departures. Crews and dispatchers were taking all precautions to ensure flight safety in the area.

We remind, the volume of jet fuel exports at risk of disruption after a suspected drone attack on a Baltic Sea terminal could be more than 20,000 bpd, much of it destined for Turkey, according to data from terminal owner Novatek. The company said on Sunday it had been forced to suspend some operations at the huge Baltic Sea fuel export terminal and "technological processes" at a nearby fuel-producing complex after a fire started by what Ukrainian media said was a drone attack.

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