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CVR postponed startup at Wynnewood refinery until the end of the third quarter

May 07/2021

MOSCOW (MRC) -- A renewable diesel unit at CVR Energys Wynnewood, Oklahoma, refinery will not be in service until the end of the third quarter due to severe weather in February and delays in equipment deliveries, the company said, said Hydrocarbonprocessing.

The unit was expected to start processing renewable diesel this July. The U.S. refiner said it recently signed agreements for feedstock supply and terminalling and is in negotiations on product marketing for the project. It expects the project to cost between USD135 million and USD140 million, up from earlier estimates of USD110 million.

The company is selecting the technology to add pretreatment capabilities at Wynnewood to process lower carbon-intensity feedstocks like inedible corn oil, animal fats and used cooking oil, Chief Executive David Lamp said Tuesday on the companys first-quarter earnings call.

That will give us the flexibility to run just about anything, including corn oil, tallow, unused cooking oil, although there may not be much availability of that, Lamp said. He said CVR will largely be using soybean oil, which has increased 30% in price since early April, due to its widespread availability over other feedstocks like used cooking oil.

A number of other refiners have plans to start or expand renewable diesel production in the next several years, but feedstock supply constraints remain an industry-wide issue. CVR is also exploring renewable diesel production at its 132,000 barrel-per-day Coffeyville, Oklahoma, refinery and the possibility of using biomass as a feedstock for its renewable projects.

Lamp said he sees a geographic advantage for the refiner to use biomass, which includes wood chips, grass cuttings and corn stalks but added that nobody really knows how to use it yet."

As MRC informed earlier, COVID-19 outbreak has led to an unprecedented decline in demand affecting all sections of the Russian economy, which has impacted the demand for petrochemicals in the short-term. However, the pandemic triggered an increase in the demand for polymers in food packaging, and cleaning and hygiene products, according to GlobalData, a leading data and analytics company. With Russian petrochemical companies having the advantage of access to low-cost feedstock, and proximity to demand-rich Asian (primarily China) and European markets for the supply of petrochemical products, these companies appear to be well-positioned to derive full benefits from an improving market environment and global economy post-COVID-19, says GlobalData.

We remind that in December 2020, Sibur, Gazprom Neft, and Uzbekneftegaz agreed to cooperate on potential investments in Uzbekistan including a major expansion of Uzbekneftegazs existing Shurtan Gas Chemical Complex (SGCC) and the proposed construction of a new gas chemicals facility. The signed cooperation agreement for the projects includes the creation of a gas chemical complex using methanol-to-olefins (MTO) technology, and the expansion of the production capacity of the Shurtan Gas Chemical Complex.

Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 576,270 tonnes in the first three month of 2021, up by 4% year on year. Low density polyethylene (LDPE) and high density polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market totalled 410,890 tonnes in January-March 2021, up by 56% year on year. Supply of homopolymer PP and PP block copolymers increased.
Author:Anna Larionova
Tags:petroleum products, crude oil, PVC, PP, PS, PE, neftegaz, petrochemistry.
Category:General News
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