19th December: refining and petrochemicals news

It’s been an interesting few weeks leading up to the end of 2013 for the petrochemical industry.  This article examines the key factors affecting decision making across the globe.

Brazil

Following a fire that broke out at the REPAR refinery earlier this month, there has been an announcement that the facility should be back online in the next few days. The plant is owned by Petrobras and is responsible for providing approximately 10% of the country’s refining capacity.

Canada

Between 2014 and 2018, NOVA Chemicals is planning to increase ethylene production at is Corunna, Ontario cracker. The company wants to increase output by 20%, following the completion of revamp works next year to convert to cracker to process NGL feedstock.

The Transportation Departments in Idaho and Montana are working with Mammoet USA South on transporting refinery equipment to the Great Falls refinery in Canada. The 1.6 million lbs of equipment is part of a US$ 400 million expansion at the Calumet Montana Refining owned facility.

Europe

It has been reported that petrochemical companies in Northwest Europe are continuing to use naphtha feedstocks over propane. This is mainly due to a price disparity between the two products. Propane is now too expensive to crack when compared to naphtha.

GCC

The Gulf Cooperation Council’s (GCC) petrochemicals industry has taken positive steps over the last two years towards environmental sustainability. The above is according to the Gulf Petrochemicals and Chemicals Association (GPCA). The GCC has this year not only added processing capacity to its petrochemical industry but reduced greenhouse gas emissions.

Thailand

The Federation of Thai Industries’ Refinery Club have announced the country’s refining figures for 2013. Thai refineries averaged at 849 000 bpd this year with a total value of Bt 1.4 trillion. Refineries in the country utilised on average 86% capacity.

Turkmenistan

A large scale product for the expansion and modernisation of the commodity and raw materials base of the Turkmenbashi oil refinery complex (TCOR) is currently underway. The plans include the construction f 12 storage tanks with a capacity of 90 000 m3. Six tanks will be located at the Turkmenbashi refinery, five at the Kenar tank storage farm and one at the Seidi refinery.

USA

BP has started up a new coker at the Whiting Refinery. This marks the final milestone in the US$ 4.2 billion upgrade project that has been carried out at the plant. The new coker has a processing capacity of 102 000 bpd and will allow the plant to process a higher volume of Canadian heavy crude oil.

By Claira Lloyd of Energy Global

The full article is visible via the link below – Pankaj Oswal

http://www.energyglobal.com/news/processing/articles/19th_Dec_refining_petrochemicals_news939.aspx#.UrONl_QW3X4

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Petrochemicals in NWE continue to shun propane as feedstock

Platts has reported that Northwest European petrochemical companies have abandoned propane for naphtha as a feedstock.  Prices weigh heavily in this consideration, as naphtha producers are now in a purple patch in the region.

Petrochemical companies in Northwest Europe are continuing to shun propane as a feedstock, according to industry sources.

Propane can be used as an alternative feedstock to naphtha by a number of petchem companies, but the delivered price of propane usually has to be below the delivered price of naphtha.

In the first half of November CIF propane prices were below CIF naphtha and propane was being widely used as a petchems feedstock.

But in the second half of November and first decade of December CIF propane prices moved above naphtha, driven by tight supply and demand to cover trader short positions.

This resulted in propane becoming too expensive to crack and according to sources most petchems either stopped or considerably reduced their usage of propane.

With weak demand from the traditional heating market in Northwest Europe, CIF propane prices have weakened recently, reaching a last published value Tuesday of $12.25/mt below CIF naphtha, based on Platts data.

But industry sources said the propane/naphtha price spread would probably have to widen even further before petchems started to crack significant quantities of propane again.

Austria-based petrochemicals company Borealis was actually a seller of propane Tuesday, concluding a deal for a 20,600 mt CIF cargo with Totsa at $950/mt and flat to balance December quotes, which based on Platts data equated to a price level just below parity with naphtha.

By Derek Hardy and Jonathan Fox of Platts

The full article is visible via the link below – Pankaj Oswal

http://www.platts.com/latest-news/petrochemicals/london/petrochemicals-in-nwe-continue-to-shun-propane-26559332

Crisis-hit Haldia Petrochemicals plans temporary shutdown

The problems for Haldia Petrochemicals continue to mount, this time due to a working capital shortfall.  According to industry sources, Haldia could complete a temporary shutdown for a week later in the month to save on other business costs.  The crisis has negatively impacted naphtha production and has resulted in a low plant load in the recent months.

KOLKATA: Haldia Petrochemicals is likely to opt for a temporary shutdown from the fourth week of this month following severe working capital crisis that is resulting in a shortage of naphtha and low plant load for the last few months.

It has been learnt that most of the technical officers of HPL, as well as shortlisted bidder Indian Oil, are not averse to the idea of a shutdown for a few weeks to cut down continuous losses and maintenance of the plant. HPL board will meet on December 17 for discussing the future course of action following the Supreme Court verdict that has allowed the Chatterjee Group to move to International Court in Paris for arbitration regarding the disputed 15.5 crore shares. This block constitutes 9.22% equity stake of the company and holds the key for management control.

HPL chairman Partha Chatterjee could not be contacted for comment, but managing director U K Basu said that there is no plan for a shutdown as of now.

According to sources, the HPL plant is now operating in less than 50% capacity which could be dangerous for the plant in the long run. The capacity of the plant is 260 tonnes per hour, but it is operating at 110-120 tonnes on average. “IOC is giving 1,000 tonnes naphtha per week. Not much naphtha has been lined up for the next few weeks. Besides, there has been no maintenance of the plant for the last 18 months,” said sources.

Sources pointed out that HPL is losing Rs 2-2.5 crore every day due to low-capacity operation. They said detonating financial condition is also forcing HPL to sell its products at discounts to realize funds quickly as the company could not hold inventory for long. “It is selling product without almost any margin forcing other petrochem players also to undercut price. This is not good for HPL as well as for the industry as a whole. IOC, the new owner in waiting, is also not happy with this as it is also facing the heat of price undercutting. If it continues for long, then HPL’s financial health will be beyond redemption,” alerted sources.

The firm had an accumulated loss of Rs 2,500 crore till March 2013. From April to October, 2013, HPL has posted a loss of Rs 521 crore taking the accumulated losses to over Rs 3,000 crore. The net worth of HPL has already eroded by Rs 50 crore. If the losses continue, then the company will have to go to BIFR.

The full article is visible via the link below – Pankaj Oswal

http://articles.timesofindia.indiatimes.com/2013-12-15/kolkata/45215153_1_chatterjee-group-hpl-plant-naphtha

IEA: Russia Likely to Benefit from Shale Revolution

Alphaenergy Belgrade

The steep growth of shale gas production in the US and other countries known as the shale revolution means not only risks but new opportunities for Russia, IEA chief economist Fatih Birol has said. He said that the leading suppliers of natural gas have been losing their former role as a result of the shale revolution. 

Russia may face more competition due to the continuing diversification of supplies and the emergence of new exporters such as Australia and North America, as well as new suppliers of natural gas.

At the same time, said Birol, the continuing development of unconventional gas resources is likely to increase trust in gas as a reliable energy source so the role of gas in the global energy supply structure is set to grow. This is good news for such big suppliers as Russia, said Birol.

He also opined that as a result of the shale…

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RI’s growing petrochemical market lures foreign players

Mande Blog

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Raras Cahyafitri, The Jakarta Post, Jakarta | Business | Wed, December 11 2013, 11:58 AM

Thailand-based PTT Global Chemical Public Company Limited, the chemical flagship of the giant PTT Group, signed an agreement on Tuesday with state-owned PT Pertamina on a joint venture to develop a petrochemical complex in Plaju, South Sumatra.

Under the agreement, Pertamina will hold a 51 percent stake while PTT Global Chemical will have the remaining 49 percent.

“PTT Global Chemical may find another partner with the consent of Pertamina,” Pertamina director Chrisna Damayanto said after the signing of the agreement on Tuesday.

The companies will jointly develop the petrochemical complex on a 450-hectare-site in Plaju that will house, among other facilities, a naphtha cracker with a production capacity of 1 million tons per year, Chrisna said.

Meanwhile, according to Bowon Vongsinudom, PTT Global Chemical president and chief executive officer, the project is estimated to…

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Mining supercycle ‘still going strong’

Informa Insights

Australia’s mining boom is not over, new research has revealed, although the market will undergo changes in the near future.

The Economist Intelligence Unit (EIU) described the country’s resources performance over recent years as a “supercycle”, with incredible demand from China and other emerging markets driving iron ore, base metals and coal.

However, a report by the organisation said there have been concerns the boom is over and previously viable projects are being mothballed due to declining commodity prices after the 2011 peak.

While academic sources have claimed prices will continue to rise long term, some investors and analysts have been more pessimistic, the In the Pits? report said.

“The Economist Intelligence Unit believes continued growth in China (slower, but from a larger base), ongoing global urbanisation, and structural factors such as higher energy and extraction costs will continue to support prices in the medium term,” it read.

Counter-cyclical capital…

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