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ExxonMobil-SABIC set contracts for mega project, EPA to halt surprise plant visits, EIA lowers oil demand forecast, BP to expand biofuels into Brazil
Our pick of the downstream industry news you need to know.
EIA revises oil demand forecast
The International Energy Agency (IEA) is reducing its 2019 oil demand forecast due to a slowing global economy amid a U.S.-China trade spat.
The IEA is revising its 2019 global oil demand growth forecast to 1.1 million barrels per day (bpd) and may cut it again if the global economy and especially China shows further weakness.
Last year, the IEA predicted that 2019 oil demand would grow by 1.5 million bpd but had cut the growth forecast to 1.2 million bpd in June this year.
Oil demand has been hit by the trade war between the U.S. and China at a time when markets are awash with oil, due to rising U.S. shale production.
Air Liquide to build $140-million ASU to supply ExxonMobil-SABIC cracker
Air Liquide has signed a long-term agreement with Gulf Coast Growth Ventures (GCGV), a 50/50 joint venture between ExxonMobil and SABIC, to supply oxygen and nitrogen from its industrial gas pipeline network to GCGV’s planned ethane cracker facility located near Corpus Christi, in Texas.
To support the new agreement and additional volumes, Air Liquide plans to invest nearly $140 million to build a new world-scale Air Separation Unit (ASU) in Bay City, Texas, and related infrastructure investments.
Air Liquide will supply 2,000 tons/day oxygen and 900 tons/day of nitrogen to GCGV’s planned 1.8 million tonne/year ethane cracker. Air Liquide will also add nearly eight miles of pipeline to connect GCGV to its Gulf Coast Pipeline System, strengthening Air Liquide’s extensive capabilities throughout the Gulf Coast region of the U.S., and its position in the growing industrial basin of Corpus Christi, where it has been present since the mid-1930’s.
In addition to delivering full requirements for oxygen and nitrogen to GCGV’s new petrochemical plant, the production capacity from the Bay City ASU, and its connection to Air Liquide’s expansive pipeline network along the Gulf Coast, will enable Air Liquide to retire older, less efficient assets. By modernizing its asset fleet, Air Liquide provides enhanced competitiveness to its customers over the long term and reduces the carbon intensity of its operations, hence contributing to achieving its 2025 Climate Objectives.
With Air Liquide’s ability to provide large volumes of oxygen and nitrogen via its integrated production and supply network, customers can benefit from a safe, flexible and reliable supply to meet their growing demands.
Savage to build rail terminal for ExxonMobil -SABIC cracker
Exxon Mobil and SABIC have selected Utah rail terminal operator Savage to build and operate a rail terminal to service its $10 billion petrochemical plant near Corpus Christi.
Savage will design, build and operate a 152-acre rail facility adjacent to the Gulf Coast Growth Ventures (GCGV) project to processes polyethylene pellets.
The rail facility is expected to be completed in 2021.
EPA to stop surprise plant visits
The Environmental Protection Agency (EPA) is getting rid of a policy that let pollution enforcement officials drop in at power and chemical plants for unannounced inspections without first alerting states.
Environmentalists are criticizing the policy change for limiting the tools EPA enforcement officials can use to make sure power plants, chemical facilities and other emitters are not illegally polluting across states.
An EPA spokesperson said the new rule will still allow for surprise inspections at facilities, once state
BP to expand biofuels in Americas
BP plans to expand its biofuels business by more than 50% after forming a joint venture in Brazil with U.S. agribusiness company Bunge.
The joint venture, to be called BP Bunge Bioenergia, will operate on a stand-alone basis, with a total of 11 mills located across the Southeast, North and Midwest regions of Brazil.
With 32 million tonnes of combined crushing capacity per year, the joint venture will have the flexibility to produce a mix of ethanol and sugar.
It will also generate renewable electricity - fueled by waste biomass from the sugar cane - through its cogeneration facilities to power all its sites and sell surplus electricity to the Brazilian power grid.
BP and Bunge's assets are largely complementary, with sites in five Brazilian states including three in the key region of São Paulo. The combined business will be ranked the second largest player in the industry in Brazil by effective crushing capacity.
The new headquarters is also set to be established in Sao Paolo.
Brazil is the world’s second largest and most integrated market for ethanol as a transportation fuel, with around 70% of the country’s vehicles already able to run on ethanol. This is anticipated to increase by around 70% by 2030.
The Brazilian government is encouraging growth in this market by introducing the first regulated carbon credits market in the country, known as RennovaBio.
This announcement follows the settlement of a free trade agreement between the EU and Latin America's Mercosur, which will allow a 450,000-tonne/year quota of ethanol to enter the EU duty free.