Crude oil processing in China hit a record high in 2023

Crude oil processing, or refinery runs, in China averaged 14.8 MM bpd in 2023, an all-time high. The record processing came as the economy and refinery capacity grew in China following the country’s COVID-19 pandemic responses in 2022, said Hydrocarbonprocessing.

China has increased refinery capacity more than any other country in recent years, partially to meet the country’s transportation fuel needs but also to produce feedstocks for its petrochemical industry. Petrochemicals are the essential building blocks to produce plastics, resins, and fibers widely used in consumer goods, packaging, and textiles. In recent years, capacity additions in China have been integrated with petrochemical facilities, increasing production of petrochemical feedstocks such as naphtha and liquefied petroleum gases (LPG), which include propane and butane.

Naphtha is a light hydrocarbon that is further processed to blend into motor gasoline in essentially all U.S. refineries. Much of the petrochemical feedstock for U.S. petrochemical producers comes from ethane and LPG, which can be separated and sold from natural gas processing plants.

In contrast, many petrochemical producers in Europe and Asia use mostly naphtha (rather than ethane) and LPG as petrochemical feedstocks. Naphtha, LPG, and ethane are used to produce industrial chemicals such as ethylene, propylene, and paraxylene, which are ultimately converted into intermediate or end-use products. Developing integrated refining and petrochemical complexes provides flexibility for these facilities to shift production toward either transportation fuels or petrochemical feedstocks, depending on market conditions.

China’s growing petrochemical sector has made the country one of the world’s largest petrochemical producers. As a result, China’s petrochemical manufacturers need the increased naphtha and LPG produced from China’s refineries, even as China continues to import the two feedstocks.

We remind, Lotte Chemical Corp. announced that it has established artificial intelligence (AI) organizations tailored to the characteristics of its basic materials and advanced materials businesses to strengthen data-based research.

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South Korea’s top chemicals maker LG Chem Ltd. and food and biotechnology firm CJ CheilJedang Corp. have agreed to launch an eco-friendly bio-nylon joint venture to create a new revenue source and cut carbon emissions, said Kedglobal.

The two companies said on Thursday that LG Chem Chief Executive Shin Hak-cheol and CJ CheilJedang CEO Choi Eun-seok have signed a head of agreement (HOA) to build a JV plant to produce eco-friendly nylon based on bio-materials, called PMDA, which are produced by fermenting corn, sugarcane and other crops.

Once up and running, the JV will be Korea’s first bio-nylon project to produce both raw materials and finished products, according to LG.

Under the agreement, CJ will produce PMDA with its microbial precision fermentation technology while LG will polymerize or combine raw materials to produce bio-nylon, also known as bio-polyamide, and sell products.

LG said bio-nylon produced from bio-based materials has the same heat resistance and durability as petroleum-based nylon, making it ideal for use in a wide range of products, including textiles, automobiles and electronic devices, while also significantly reducing carbon emissions.

We remind, LG Chem Ltd. striving to become a leading global battery materials player broke ground on its first-ever cathode plant in the US, expected to be the biggest of its kind in the world’s third-largest EV market.

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South Korea’s CJ CheilJedang Corp. announced on Tuesday that it has developed a packaging material using biodegradable material polyhydroxyalkanoates (PHAs), said Kedglobal.

PHA is a polymer that accumulates in microorganisms and decomposes in most environments, including soil and oceans.

CJ CheilJedang created the packaging material using only biodegradable materials like PHA, eliminating the use of polyvinyl chloride (PVC) commonly used in traditional plastic packaging.

The new packaging material exhibits similar properties to regular plastic and is durable and suitable for shipping packages, even for heavy or sharp-edged items.

Additionally, it has been recognized for its opacity, ensuring the contents are not visible, and its adhesive property, preventing shipping labels from coming off.

CJ Olive Young has introduced this packaging for its same-day delivery service “Dream Delivery Today.”

Currently, it's being used in two logistics centers in Gyeonggi Province for nearby Onul Drim deliveries, with plans for potential expansion being considered.

We remind, Korean food giant CJ CheilJedang Corp. is seeing major success with its "K-Street Food" line, a selection of iconic Korean street snacks with global appeal. In May last year, the company’s brand Bibigo named six foods to its K-Street Food lineup: tteokbokki, South Korean-style corn dogs, gimbap (seaweed roll), gimmari, bungeobbang (fish-shaped snack filled with red bean paste) and hotteok (sweet pancakes).

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Malaysia's biodiesel production could rise to 1.8 MMt in 2024 if the government expands its 20% biodiesel mandatory program to more areas in the country, said Hydrocarbonprocessing.

Malaysia has rolled out a B20 program, where diesel for transportation must be blended with 20% palm-based biodiesel, in phases with most areas in the nation currently implementing 10% blending or a B10 program for the transportation sector.

"We can get (several blending) facilities up and running faster, then we obviously can go into B20 then," MBA president U.R. Unnithan told Reuters in an interview, adding that nationwide implementation would take more time and cost.

Unnithan said the group has submitted the recommendation to the government and hope expansion of the program could be done in the second half of this year, however further discussions with other stakeholders is needed before a decision is made.

Malaysia launched a nationwide mandatory 20% palm-based biodiesel blending for the transportation sector in 2020, however the program has only been implemented in some areas as the COVID-19 pandemic and multiple changes of government in recent years hampered progress.

The government has considered expanding its B10 biodiesel program, which requires the mandatory use of 10% palm oil, to the industrial sector and has a mandate to use biodiesel with 30% palm oil by 2025.

The Southeast Asian country exported nearly 300,000 tons of biodiesel last year, while around 1.1 million tons was consumed domestically.

Unnithan, however, cautioned that the government's intention to review price controls and fuel subsidies could hurt domestic demand for biodiesel.

We remind, Lotte Chemical Corp. announced on Monday its commencement of commercial production at the plant of Hydroxy Ethyl Cellulose (product name: Hecellose) in Yeosu, South Jeolla Province earlier this month. In December last year, Lotte Chemical constructed the Hecellose production facility on its Yeosu development site, specializing in Lotte Fine Chemical Co. 's key specialty product, Hecellose.

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The memorandum of understanding between CIP and LOTTE is intended to support collaboration on clean ammonia projects, said Hydrocarbonprocessing.

As part of the agreement, the two companies agree to discuss and finalize agreements for the supply, purchase, and sale of blue ammonia to LOTTE from CIP’s St. Charles Project in Louisiana, U.S., and green ammonia from CIP’s Murchison Project in Australia.

CIP and LOTTE also agree to initiate discussions regarding development of and investment in low carbon ammonia projects on a global basis. The two companies also intend to discuss potential collaboration on projects in infrastructure bunkering and other sectors in connection with low carbon ammonia.

CEO & Head of Hydrogen Business Group of LOTTE Chemical Corporation JinKoo Hwang said, “We are delighted to cooperate with CIP, a global leader in greenfield renewable energy investments. With the Korean government’s strong policy support on energy transition, Korea will be the fastest growing market for clean hydrogen and ammonia. We will take lead in providing sustainable clean ammonia by utilizing the strengths and expertise of both companies.”

CIP Partner Soren Toftgaard said, “We believe blue and green ammonia will co-exist for many years, as we gradually transition from fossil-based production. And we continue to see significant opportunities for both in the U.S., Europe, and Asia. We are proud of the new partnership with LOTTE on ammonia projects development and offtake to Korea and consider it an important step that could open further opportunities for our Energy Transition Fund.”

Blue ammonia is a low-carbon approach which combines traditional ammonia synthesis using natural gas with subsequent carbon capture and storage and could significantly accelerate the energy transition while green ammonia production at scale is becoming more mature.

We remind, Lotte Chemical Corp. announced that it has established artificial intelligence (AI) organizations tailored to the characteristics of its basic materials and advanced materials businesses to strengthen data-based research.

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