Azerbaijan's Aliyev says Baku supports green energy, but world needs fossil fuels for now

Azerbaijani President Ilham Aliyev, whose country is due to host the COP29 summit on climate change in October, said that his country is committed to the green energy transition, but that the world cannot abandon fossil fuels in the near future, said Hydrocarbonprocessing.

In a speech in Baku, Aliyev said: "Azerbaijan, as I said, is in the active phase of green transition, but at the same time, no one can ignore the fact that without fossil fuel, the world cannot develop, at least in the foreseeable future."

In his remarks, he described Azerbaijan's COP29 presidency as an "honor" that showed his country was serious about combating climate change.

He said that Azerbaijan was voluntarily choosing to transition towards renewable energy, even as its proven reserves of oil and gas were enough to last a century.

Azerbaijan is a major oil and gas producer that is key to the European Union's plans to reduce its dependency on Russian energy imports.

Baku's bid received approval in December from nearly 200 countries, including longtime adversary Armenia, with which it is currently engaged in peace talks to end a conflict which has lasted more than three decades.

The United Arab Emirates, the host of last year's COP28 summit, previously came under criticism for its own major oil and gas sector and high carbon emissions.

We remind, SOCAR is shipping Azeri BTC oil to Thailand via Africa's Cape of Good Hope to avoid the Red Sea, according to LSEG and Kpler data and traders. Attacks by Yemen-based Houthi forces on shipping in the Red Sea and Gulf of Aden are driving up freight costs and disrupting global trade. The Tilos I is carrying some one million barrels of Azeri BTC crude oil which was loaded at Turkey's Ceyhan port on January 22, according to LSEG and Kpler consultancy data.
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Chemplast Sanmar expects to commission its Paste PVC expansion project by the fourth quarter of the current financial year (FY). The 41-ktpa project is expected to start commercial production in Q4/FY24, said Projectstoday.

The company's custom-manufactured chemicals Phase-II expansion project is expected to be completed in Q1/ FY25. Moreover, its other chemicals business is also expected to witness improvement over the next three to four quarters as supply gets absorbed by the market. This would further cement its position as producer of Paste PVC in the country.

The company is assured of long-term potential of all its businesses and is strengthening capabilities to achieve sustainable growth.

We remind, Mexico's Orbia has decided to put a pause on the expansion plans for its polyvinyl chloride (PVC) production capacity due to a challenging market situation that adversely impacted its profits in 2023. The company's polymer division, which includes PVC, faced a substantial setback in the fourth quarter of the previous year, reporting a 54% year-on-year decline in earnings before interest, taxes, depreciation, and amortization (EBITDA), amounting to USD47 million. Additionally, sales within this division experienced a 21% year-on-year decrease, reaching USD577 million.

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U.S. production of major plastic resins totaled 8.0 billion pounds during January 2024, a decrease of 5.6 percent compared to the prior month, and a decrease of 0.9 percent compared to the same month in 2023, according to statistics released by the American Chemistry Council (ACC).

Sales and captive (internal) use of major plastic resins totaled 8.4 billion pounds during January 2024, an increase of 2.9 percent compared to the prior month, and an increase of 8.3 percent from the same month one year earlier.

We remind, the European Chemical Industry Council (Cefic) said it sees the European Commission’s Strategy on Advanced Materials for Industrial Leadership as a pivotal step toward addressing the challenges posed by the green and digital transition, adding that the chemical industry has an important role to play as the primary source of advanced materials’ value chains.

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Imports of fuel oil bound for the U.S. Gulf Coast fell to a five-year low last month as refiners ran more cheap, heavy Canadian crude and geopolitical tensions in the Middle East pressured fuel oil flows, said Hydrocarbonprocessing.

Fuel oil deliveries to the Gulf Coast dwindled in February to just 318,000 barrels per day (bpd), a 20% drop from the prior month and marking their lowest level since February 2019, data from tanker tracking firm, Kpler showed.

Heavy fuel oil feedstocks like high sulfur fuel oil and other heavy residues are used to make higher value products like gasoline and diesel.

Refiners can offset their need to import them by doubling the amount of fuel oil they produce themselves with a heavier crude slate rather than processing lighter blends, according to refining data provider Refinery Calculator.

U.S. refineries have been running more heavy Canadian crude because of its ample supply, with Gulf Coast refiners ramping up their intake by around 10% on the year, according to data from Refinery Calculator.

Western Canadian Select crude (WCS)traded at the Houston hub has carried a wide discount to the global Brent benchmark, hitting $11.92 per barrel in the fourth quarter of last year from $9.78 per barrel in the third quarter, according to a note from TPH&CO.

WCSbecame more readily available this month after BP's BP.L 435,000 bpd Whiting refinery, the largest plant in the Midwest and a key buyer of the Canadian grade, went offline after an unplanned outage on Feb. 1.

As a result, domestic residual fuel oil production climbed to a more than four-year high in the week to Feb. 16, at 462,000 bpd, up from 350,000 bpd from the previous week, according to weekly data from the Energy Information Agency (EIA).

U.S. Gulf Coast fuel oil imports have also been curtailed following attacks by Houthi rebels in the Red Sea, which have disrupted trade flows and driven up shipping costs by diverting vessels away from the Suez Canal.

This has weighed particularly on imports from the Middle East, including Iraqi and Fujairah high sulfur fuel oil loadings, Energy Aspects analyst Royston Huan said. And a European fuel oil supply squeeze has pushed more barrels to Europe, where prices are higher, according to Energy Aspects.

"It looks like all roads lead to Europe", said Steve Sinos, a managing partner at Blue Lacy Advisors. The arbitrage is closed for European and Asian high sulfur fuel oil deliveries to the Gulf Coast said Sinos, adding that moving this grade from Europe to the Gulf Coast could result in a $40 per ton loss due to current freight rates.

We remind, SIBUR began construction of a research and technology scaling center in Kazan, which will provide for a full cycle of creating new synthetic materials for key sectors of the Russian economy, the company's press service said in a statement. The key areas of operation for SIBUR's R&D center will be the development and scaling of new polyolefin and heterogeneous catalysts, synthesis and piloting of new products for the development of the company's existing chains and creation of fundamentally new materials, process modeling and engineering, development of new technologies, implementation of projects aimed at decarbonization, a closed cycle economy and digital initiatives.

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Russia has significantly increased its fuel exports to Senegal this year on rising bunker demand, as more companies are diverting cargoes around Africa instead of using Red Sea routes, traders said and LSEG data showed, said Hydrocarbonprocessing.

Russian fuel oil supplies to Senegal in the first two months of 2024 reached 550,000 metric tons compared with 1.08 million tons in the whole of 2023 and 0.37 million tons in 2022, replacing oil product supplies from Rotterdam, the data showed.

"Senegal has strong growth in bunkering," one trader said. "The bunker fuel suppliers are benefitting from the situation in Suez."

Since December last year, many shipping companies have instructed their vessels to sail around southern Africa instead of using the Red Sea due to attacks by Houthi militants, leading to bunker fuel demand growth.

Fuel oil is widely used for fueling ships, or bunkering. Senegal may also use it for power generation, market sources said. Senegalese oil minister Antoine Felix Abdoulaye Diome did not respond to requests for comment when contacted by Reuters.

The bulk of Russian fuel oil supplies to Senegal are shipped from the Russian Baltic port of Vysotsk, and also from the ports of Ust-Luga and St. Petersburg. Russia has also exported about 0.2 million metric tons of diesel to Senegal since the start of this year, versus 0.8 million tons in 2023.

Most of those volumes are of high-sulphur gasoil loaded at the Black Sea port of Novorossiisk, according to LSEG data. "You could also take bunker fuel to Nigeria, but there is more piracy risk, so it's better to take it north," the trader continued, adding that he would expect further bunker demand growth in African countries because of the Red Sea situation.

The European Union's full embargo on Russian oil products came into effect in February 2023, and the bulk of Russia's fuel oil and VGO was redirected to other regions, mostly Asia and African countries.

We remind, Russia ordered a six-month ban on gasoline exports from March 1 to keep prices stable amid rising demand from consumers and farmers and to allow for maintenance of refineries in the world's second largest oil exporter. The ban, first reported by Russia's RBC, was confirmed by a spokeswoman for Deputy Prime Minister Alexander Novak, President Vladimir Putin's point man for Russia's vast energy sector.

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