Sinopec plans to build Canadian refinery; US chem investment exceeds $200 bn; US - China trade war escalates
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China’s Sinopec plans to build Canadian refinery
China's Sinopec Corp has joined a group planning to build a bitumen upgrading and petrochemical refining facility in Alberta.
In addition to Sinopec, the group includes an Alberta indigenous group, China State Construction Engineering Corp, and Alberta management company Teedrum.
Using approximately 167,000 barrels of diluted bitumen per day, the facility will produce a broad range of products for domestic and exporting consumption.
Gasoline, jet fuel, diesel fuel and basic chemicals will be shipped across Canada and to markets in the U.S. Northwest via existing clean product pipelines, rail, and to deep water for export, the project's consulting firm Stantec said in a statement.
The SinoCan Global refinery would cost C$8.5 billion, with a financing plan still to be worked out, according to Teedrum.
The Alberta First Nations Energy Development fund will hold equity ownership in the facility generating revenue to support social and economic initiatives in Indigenous communities.
Sinopec and China Construction will provide the expertise and investment needed to develop the facility.
Teedrum, an Edmonton based company, working in partnership with the Alberta First Nations Energy Centre (AFNEC) will lead the development.
The group hopes to receive regulatory approval from the Alberta and Canadian governments within two years.
US chemical investment from shale gas now exceeds $200 bn
U.S. chemical and plastics industry investment linked to natural gas has now surpassed $200 billion, the American Chemistry Council (ACC) announced in September.
Since 2010, 333 chemical industry projects cumulatively valued at $202.4 billion have been announced, with 53% of the investment completed or under construction and 41% in the planning phase.
Fully 68% of the total is foreign direct investment or includes a foreign partner. Project types include new facilities and capacity expansions.
“This is an exciting milestone for American chemistry and further evidence that shale gas is a powerful engine of manufacturing growth,” said ACC President and CEO Cal Dooley. “The U.S. remains the most attractive place in the world to invest in chemical manufacturing. We look forward to continuing to transform energy into a stronger economy and new jobs.”
ACC analysis shows that $202.4 billion in capital spending could lead to $292 billion per year in new chemical and plastics industry output and support 786,000 jobs across the economy by 2025.
A note of caution is in order however, the ACC warns.
U.S. manufacturers often rely on inputs that are not available or made in the U.S. to create products that cost less yet perform at the high level downstream customers expect.
“Protectionist trade policies such as tariffs and quotas unnecessarily raise the costs of those inputs, deter innovation and economic growth, and could ultimately weaken our country’s competitive advantage,” the ACC said.
US-China trade war escalates
Hours after President Trump announced the third round of U.S. tariffs on $200 bn in Chinese imports, China responded with its own levies of up to 10% on $60 bn worth of U.S. products.
The U.S. tariffs start at a rate of 10%, before rising to 25% at the end of the year. They come into effect on September 24 and will apply to thousands of Chinese products.
China will also impose its tariffs on more than 5,000 items on September 24.
The third U.S. list includes a total of 1,363 chemicals and plastics products, of which the U.S. imported $12.9 bn worth from China in 2017, according to the American Chemistry Council (ACC) and International Trade Commerce (ITC) data.
The latest list from the U.S. excludes some key chemicals after trade groups rallied to remove them.
The U.S. did not include rare earth elements. China is the world’s largest producer of rare earths and the biggest supplier to the U.S., according the U.S. Geological Survey.
Rare earth elements and minor metals have broad applications in U.S. industry, ranging from jet engines to mobile phones to oil and gas drilling.
These materials are critical raw-materials that are used to make catalysts for fluid-catalytic-cracking (FCC) units, which are used in refineries to produce gasoline and refinery-grade propylene (RGP).