Shell plans to up petchems spend; India’s GAIL eyes US ethane
Petrochemicals news you need to know.
Shell PA cracker project spared from planned cuts
Royal Dutch Shell indicated during an earnings call on February 4 that its proposed ethane cracker project in Pennsylvania is still under consideration even as the company plans to cut capital investment in 2016 by $3 billion.
A Shell presentation listing 25 potential oil, gas and chemical projects shows that 10 have been scrapped since 2013.
In 2015, the company reached four major final investment decisions while many potential projects have been “purposely delayed, re-phased, or cancelled” to manage affordability and get better value from the supply chain in the market downturn.
Shell's CFO Simon Henry told analysts on the call that the company expects a step-up in spending on downstream projects, predominantly in petrochemicals.
In the methanol sector, Methanex Corporation is unlikely to greenlight any new major capital spending in 2016, including a $1 billion proposal to expand its production plant in Medicine Hat, Canada.
Methanex CEO John Floren told an investors conference call on January 28 that the company’s strategy for the next 12 months is to maintain investor dividends, be “prudent and manage cash.”
The company expects to spend $80 million on capital projects in 2016, with most of the work related to completing the installation at its Geismar II methanol plant, which was recently relocated from Chile to Louisiana.
Marathon to integrate Texas refineries; Flint Hills plans $750M refinery upgrade
Marathon Petroleum Corp. plans to invest $2 billion over the next five yeats to expand and integrate two Texas refineries, despite announcements it will slash capital spending in 2016 from $4.2 billion to no higher than $3.7 billion, the company said on February 3.
As part of the project, called the South Texas Asset Repositioning (STAR) program, Marathon will fully integrate its Galveston Bay and Texas City refineries, making it the second-largest refinery in the US.
The STAR program aims to increase production of higher-value products and improve the the Galveston Bay refinery's reliability, as well as increase processing capacity.
Meanwhile, Flint Hills Resources plans to spend $750 million at its Pine Bend refinery in Rosemount, Minnesota to replace or upgrade major equipment and add advanced emission controls, StarTribune reported, citing company sources.
Pending state permits, the planned work is expected to start in 2017 and take three years to complete, according to the report. It will be the largest construction project at the refinery in at least a decade and at its peak it will employ 2,500 workers, the company said.
India’s GAIL eyes US ethane
Indian state-owned gas utility GAIL plans to import ethane from the United States to feed a $5 billion petrochemical plant it is jointly setting up with Hindustan Petroleum Corp. Ltd in the state of Andhra Pradesh, local reports said in early February.
The two companies are seeking supplies of up to 1.3 million tons per year of ethane for 15 years starting in 2022 to feed a world-scale ethane cracker, the core of the planned complex.
If the plan goes ahead, GAIL will be the second company after Reliance Industries to import ethane into India to feed petrochemical plants. Reliance has long-term storage and capacity agreements with Enterprise Products Partners' Morgan’s Point export facility in Texas for the liquefaction and export of 1.5 mtpa of ethane as feedstock for its India crackers, starting in Q3 2016.
US Ethane Export Terminals
Source: US Ethane, EthyIene & PoIyethyIene: Exports & Markets Report.
US raises plastic resin output
US production of major plastic resins totalled 6.8 billion pounds (about 3.1 million metric tons) in December 2015, up 8% year on year, according to statistics released on February 8 by the American Chemistry Council (ACC). Year-to-date production was 78.2 billion pounds (about 35.5 million metric tons), a 2.9% increase compared to the same period in 2014.
Meanwhile, sales and captive (internal) use of major plastic resins totalled 6.8 billion pounds in December 2015, up 6.5% on year. Year-to-date sales and captive use was 78.4 billion pounds, a 3.8% rise from the same period in 2014.
API launches job tool for veterans
The American Petroleum Institute (API) has launched a new web-based tool to help connect members of the armed forces and military veterans to civilian employment opportunities in the oil and natural gas industry.
According to the API, the tool – called the Veterans Energy Pipeline – helps identify which career opportunities are best suited for the applicant based on a job task analysis that compares job duties and tasks of military occupations to the potential energy job’s responsibilities, expected duties and desired skill sets.
Kuwait to set up new company to run refinery complex
Kuwait's National Petroleum Co. (KNPC) said on January 31 it would set up a new company to run its planned 615,000 barrels/day Al-Zour refinery and petrochemical complex, which, when built, will be the biggest in the Middle East, Reuters reported.
The new company, KBRC, will also manage a planned permanent 3 billion cubic feet/day liquefied natural gas (LNG) import terminal. KNPC told Reuters in October 2015 that the commissioning of the refinery was expected to start in November 2019.