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Petrochemicals12-Sep-2024
MUMBAI (ICIS)–India has approved a two-year
scheme with an outlay of rupees (Rs) 109
billion ($1.3 billion) to provide incentives
for increased adoption of electric vehicles
(EVs) as the south Asian nation works to reduce
transportation’s environmental impact and
improve its air quality.
Two-wheelers account for 56% of 3 million
registered EVs in India
EV sales jump 45% in fiscal year ending
March 2024
Annual sales could hit 10 million units by
2030
The new scheme called PM Electric Drive
Revolution in Innovative Vehicle Enhancement
(PM E-DRIVE) was given the “go” signal at the
Union Cabinet meeting chaired by Prime Minister
Narendra Modi on 11 September.
“Subsidies worth Rs36 billion have been
provided to incentivize e
[electric]-two-wheelers, e-three-wheelers,
e-ambulances, e-trucks and other emerging EVs,”
India’s Union Cabinet said in a statement.
The scheme is expected to support about 2.48
million electric two-wheelers; 316,000 e-three
wheelers; and 14,028 e-buses.
Electric cars and hybrid vehicles have been
excluded from the scheme. Penetration of four-
wheeler EVs in the Indian market is very low,
with over 95% of the sales coming from two- to
three-wheelers.
In the fiscal year ending March 2024, passenger
vehicles accounted for about 18% of total
domestic vehicle sales, according to the
Society of Indian Automobile Manufacturers
(SIAM).
EVs provide growth opportunity for the chemical
industry, with chemical producers separately
developing specialty polymers and adhesives for
the environment-friendly vehicles.
Under the PM E-DRIVE scheme, the government has
allocated Rs43.91 billion for the procurement
of e-buses by state-owned agencies. These buses
will be deployed in nine cities across the
country.
To curb air pollution, the government has set
aside Rs5 billion for replacement of
traditional trucks with e-trucks. Additional
incentives will be given for scrapping old
trucks.
As a new initiative, the government will also
provide Rs5 billion for the adoption of
e-ambulances.
The scheme will promote installation of public
charging stations in cities with high EV
penetration and on selected highways.
A Rs20 billion budget was allocated to install
22,100 chargers for electric four-wheelers;
1,800 for electric buses; and 48,400 chargers
for two and three-wheelers.
Meanwhile, Rs7.8 billion was earmarked to help
modernise government operated testing agencies
to deal with new and emerging green mobility
technologies,
The new scheme replaces two earlier initiatives
called Faster Adoption and Manufacturing of
(Hybrid and) Electric Vehicle (FAME) scheme and
the Electric Mobility Promotion scheme.
While EV penetration in the country is
currently less than 7%, demand for
environment-friendly vehicleas has been rising
over the past few years, according to the
Federation of Automobile Dealers Associations
(FADA).
Affordability and limited charging
infrastructure are major hurdles in the faster
adoption of electric vehicles.
The primary objective of the new scheme is to
“expedite the adoption of EVs by providing
upfront incentives for their purchase, as well
as by facilitating the establishment of
essential charging infrastructure for EVs”, the
Union Cabinet stated.
The government expects to see annual EV sales
of 10 million units by 2030, said Nitin
Gadkari, India’s minister of road, transport
and highways said on 10 September.
Focus article by Priya Jestin
($1 = Rs83.97)
Crude Oil12-Sep-2024
SINGAPORE (ICIS)–Energy giant Saudi Aramco has
signed new agreements to advance separate
expansion plans with Chinese petrochemical
producers Rongsheng and Hengli.
Signing conducted during China Premier Li’s
state visit to Saudi Arabia
Deals with the Chinese firms part of
Aramco’s downstream expansion
Aramco moves closer to acquire 10% of
Hengli Petrochemical
Chinese Premier Li Qiang and Saudi Crown Prince
Mohammed Bin Salman on 11 September discussed
cooperation in energy, investment, and trade,
according to state news agency Saudi Press
Agency (SPA).
In a separate meeting with GCC secretary
general Jasem Mohamed Albudaiwi in Riyadh, Li
called on China and Gulf Cooperation Countries
(GCC) countries to align their development
strategies and “speed up free trade agreement
negotiations”, according to Chinese state media
Xinhua.
Li is in the Middle East on 10-13 September for
state visits to Saudi Arabia and the UAE, both
members of GCC.
The four other members of GCC are Bahrain,
Kuwait, Oman and Qatar.
PLANS WITH RONGSHENG
The new agreements follow a previously signed
framework agreement with Rongsheng
Petrochemical for a potential joint-venture
expansion of Saudi Aramco Jubail Refinery
Company (SASREF) facilities.
SASREF operates a 305,000 barrel/day refinery
complex in Al-Jubail, Saudi Arabia with
downstream aromatics units that can produce
260,000 tonnes/year of toluene and 275,000
tonnes/year of benzene, according to the ICIS
Supply and Demand Database.
Aramco now owns 10%
of Rongsheng Petrochemical, bought for $3.4
billion, with further plans between the two
companies to take stakes in each other’s
subsidiaries.
Rongsheng Petrochemical manufactures and
distributes a range of petrochemical and
chemical fiber products, including purified
terephthalic acid (PTA), polyester yarns,
polyester filaments, and polyethylene
terephthalate (PET).
The Saudi oil giant intends to acquire 50% of
Ningbo Zhongjin Petrochemical (ZJPC), which is
fully owned by Rongsheng, with plans to upgrade
existing assets and jointly develop a new
materials project in Zhoushan.
The proposed Chinese yuan (CNY) 67.5 billion
Zhoushan new materials project would produce
polyethylene (PE), propylene oxide (PO),
styrene, ethylene vinyl acetate (EVA),
polyolefin elastomer and bisphenol A (BPA).
Rongsheng, in turn, would acquire a 50% stake
in Aramco’s SASREF, which operates a refinery
in Jubail.
POTENTIAL DEALS WITH
HENGLI
With Hengli, talks have advanced relating to
Aramco’s potential acquisition of a 10% stake
in the Chinese group’s petrochemical arm,
subject to due diligence and required
regulatory clearances.’
The two companies had signed a
memorandum of understanding (MoU) on the
proposed transaction in in April 2024.
Hengli Group operates across the entire
production chain of oil refining,
petrochemicals, polyester film, and textiles.
It is one of the biggest PTA producers in
China.
“China is an important country in our global
downstream growth strategy,” Aramco downstream
president Mohammed Al Qahtani said.
“These agreements reflect our collective
intention to elevate our relationships in vital
sectors to advance our downstream objectives.”
Aramco is targeting a fourfold increase in its
crude oil-to-chemicals conversion capacity to
four million barrels/day by 2030.
Focus article by Nurluqman
Suratman
Thumbnail image: Chinese Premier Li Qiang
meets with Saudi Crown Prince and Prime
Minister Mohammed bin Salman Al Saud, and
co-chairs the Fourth Meeting of the High-Level
Chinese-Saudi Joint Committee with him at
Riyadh’s al-Yamamah Palace in Saudi Arabia on
11 September 2024.
Petrochemicals11-Sep-2024
HOUSTON (ICIS)–Several chemical companies are
shutting down plants in Louisiana, with others
taking other precautionary measures as the eye
of Francine – now a Category 2 hurricane –
approaches the coast for imminent landfall.
Roehm is taking its methyl methacrylate (MMA)
plant in Fortier, Louisiana offline.
BASF earlier on 10 September started procedures
to idle
operations in Geismar, North Geismar
and Vidalia, Louisiana.
Shell has shut
in oil and gas production in the Gulf
of Mexico at its Perdido, Auger and
Enchilada/Salsa assets, but its chemical
production sites in Geismar and Norco,
Louisiana, and Deer Park, Texas, were operating
normally as of Shell’s latest update on 10
September.
Operations were continuing at ExxonMobil’s
Baton Rouge, Louisiana plant as of 10
September.
Louisiana is home to just above 25% of the
total ethylene capacity in the US, according to
the ICIS Supply and Demand Database.
It also has close to 50% of the country’s
vinyls chain capacity – for polyvinyl chloride
(PVC), chlorine, ethylene dichloride (EDC),
vinyl chloride monomer (VCM) and caustic soda.
Other significant exposures close to 50% of
total US capacity include methanol,
ethylbenzene, styrene and low density
polyethylene (LDPE).
Upstream, an estimated 38.56% of current US oil
production and 48.77% of US natural gas
production in the Gulf of Mexico was shut in,
according to the
Bureau of Safety and Environmental
Enforcement (BSEE).
The Port of New Orleans has shut down, and
railroad companies
are warning customers of delays as traffic
will be diverted following the port’s
flood-gate closure.
Track the latest updates on Hurricane
Francine and its impact on chemicals on the
Topic Page: Storm Season 2024.
Thumbnail shows wind speed probabilities of
Hurricane Francine from the US National
Hurricane Center
Focus article by Joseph Chang
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Ammonia11-Sep-2024
HOUSTON (ICIS)–As Hurricane Francine charged
forward with its landfall in southern Louisiana
as a category two storm late on Wednesday,
pushing out high winds and heavy downpours, US
farmers and fertilizer industry participants
appear prepared for the impacts but are hopeful
for a short-lived event.
With crops like cotton and sugarcane in the
fields and fertilizer plants scattered across
the landscape, there are concerns over how hard
Louisiana will be hit with the state already
seeing deteriorating conditions since late on
10 September.
Part of the concern anytime there are tropical
threats in this area is flooding from
significant rainfall especially within the New
Orleans area (Nola), whose port is crucial to
the fertilizer industry and heavily relied on
by agricultural interest as well.
With the last few days having been spent
getting ready for this storm that quickly
developed, the pace of fertilizers has now
taken a step back with a source saying “Eyes
are just on Francine at the moment. Nola is at
a standstill so hoping the impacts are not
long-lived.”
No production impacts have been reported with
producers having been quiet on their activities
outside of Canadian major Nutrien, who has both
production and other interests in the projected
path of the storm.
The company said in a statement on 11 September
there were no further updates, and it was
actively monitoring the storm and did have an
active comprehensive emergency response plan.
While the most recent US Department of
Agriculture (USDA) crop progress report on 9
September did not indicate any numbers for the
Louisiana corn crop, recent field reports have
indicated a good portion has been completed
with rice and soybean harvest underway in many
locations.
Cotton harvest has not begun for most of the
state with defoliating applications having
recently underway to prepare for machine
harvesting which potentially leaves the crop
more vulnerable.
Updates on the Louisiana soybean harvest have
not yet been released but it is likely some
acreage was underway or on the verge of being
fully mature with the USDA report showing there
was 68% of the acreage that have reached the
dropping leaves stage.
Like cotton this puts the crop far into
maturity and at risk for intense winds and
excessive rain.
By late on 11 September the storm was having
significant impacts on Mississippi as well,
which is home to not only considerable crop
acreage but fertilizer production and storage
but also distribution logistics and retail
operations.
Like Louisiana, there is considerable soybean
acreage in Mississippi, and it is possible that
some of this crop was also being harvested or
about to commence with it also seeing 68% of
their acreage now dropping leaves.
The state also has considerable cotton acreage
as well that could be severely damaged by
Francine.
The biggest impact from this hurricane for
fertilizers will probably not be seen in terms
of infrastructure damage to plants or wrecking
of logistic operations but it will be based on
how hard this hurt farmers and how long they
will be drying out.
Once it passes out of Louisiana and through
Mississippi the watch will be on for their
northern neighbors as the current forecasted
path has the storm moving upwards almost
parallel with the Mississippi River, bringing
further wind and considerable rainfall.
Depending on harvest progress some areas could
benefit from the added moisture ahead of making
fall applications.
Others will find the sudden shift in conditions
to be extremely limiting to further field work
over the rest of September, especially for any
acreage flooded in the coming days.
Crude Oil11-Sep-2024
SAO PAULO (ICIS)–Petrobras has begun start-up
procedures for Brazil’s largest natural gas
processing unit (UPGN) in Itaborai, near Rio de
Janeiro, the state-owned energy major said on
Wednesday.
The company received authorization from
regulator the National Agency of Petroleum,
Natural Gas and Biofuels (ANP) for industrial
operations on 9 September.
The facility will process gas from the pre-salt
layer of the Santos Basin, transported via the
new Route 3 gas pipeline; the project is
strategic for Petrobras, which has said it
wants to increase natural gas supply to the
Brazilian market profitably.
The move comes just days after the government
passed new regulations for the natural gas
market which are aiming to increase domestic
supply; the move was praised by chemicals
companies, although analysts concurred that
the key players to make the regulation a
success will be the oil and gas majors.
Currently in its final preparation phase, the
UPGN is undergoing process and equipment
calibration, and commercial operations are
expected to commence in early October.
The project will enable the flow of up to 18
million cubic meters per day (cbm)/day) and
processing of up to 21 million cbm/day of gas,
reducing Brazil’s dependence on imports.
Petrobras has renamed the complex housing the
UPGN to Boaventura Energy Complex, referencing
the preserved ruins of Sao Boaventura Convent
within the site.
Future plans for the complex include two
gas-fired thermoelectric plants and additional
refining units for fuels and lubricants.
Once completed, the facility will have
production capacities of 12,000 barrels/day for
Group II lubricating oils, 75,000 barrels/day
for S-10 diesel, and 20,000 barrels/day for
aviation kerosene, operating in synergy with
the Duque de Caxias Refinery.
Duque de Caxias is also where Brazil’s polymers
major Braskem operates some facilities, and the
company has repeatedly said it would expand
that site if more and cheaper natural gas was
available.
Crude Oil11-Sep-2024
LONDON (ICIS)–UK GDP remained flat in July as
a rise in services output was offset by
declines in production and construction,
official data showed on Wednesday.
The country’s economic output was also flat in
June, according to the Office for National
Statistics (ONS).
Services output grew by 0.1% in July,
production output decreased by 0.8% while
construction fell by 0.4%.
In the first two quarters of the year, GDP in
the
UK rose by 0.7% and
0.6% respectively as it rebounded from
recession through the second half of 2023.
The Bank of England
cut interest rates by 25 basis points in
August as the country’s economic outlook
improved.
Liquefied Petroleum Gas11-Sep-2024
SINGAPORE (ICIS)–ICIS has revised down its
forecast for China’s combined imports of
propane and butane for 2024 because of
weaker-than-expected demand in fuel
applications. Wang Yen, Senior Analyst speaks
with Lillian Ren, analyst on the China propane,
butane and LPG markets.
Full-year LPG imports projected at 36.7
million tonnes
Fuel LPG demand falls on increased natural
gas usage amid weak economy
Strong feedstock LPG demand partly offset
decline in fuel consumption
Crude Oil11-Sep-2024
SINGAPORE (ICIS)–Francine has strengthened
into a hurricane and is moving northeastward
across the Gulf of Mexico, with landfall
expected in Louisiana, US, on Wednesday
afternoon or evening.
It turned into a hurricane as of 19:00 US
central daylight time (CDT) on 10 September
(00:00 GMT), the US National Hurricane Center
(NHC) said in its latest update.
At 19:00 CDT, Francine was located about 150
miles (240 kilometers) east of the mouth of the
Rio Grande and about 350 miles southwest of
Morgan, Louisiana, packing maximum sustained
winds of 75 miles/hour, according to the NHC.
Chemical companies are implementing
precautionary measures.
with some shutting down operations ahead of
Francine’s landfall.
Francine is expected to accelerate its
northeastward path tonight and into Wednesday.
Following landfall, Francine’s center is
expected to move northward into Mississippi
Wednesday night and continue through Thursday.
A storm surge warning is in effect for Sabine
Pass, Texas to the Mississippi/Alabama border,
Vermilion Bay, Lake Maurepas, and Lake
Pontchartrain.
A hurricane warning is in effect for the
Louisiana coast from Cameron eastward to Grand
Isle.
Ammonia10-Sep-2024
HOUSTON (ICIS)–Having lashed out across
northern Mexico and south Texas with rain and
winds over the past 24 hours, Tropical Storm
Francine has started to track further with an
expected landfall in Louisianna as a moderate
hurricane on 11 September.
With numerous manufacturer plants, storage and
shipping operations, especially within New
Orleans, the state of Louisianna is an
important segment for the US fertilizer
industry, which has quickly turned more
concerned over the possible hurricane.
Especially as the tropical threat has increased
in the last 36 hours and possibly bringing even
more destructive impacts than initial thought
over the coming days.
High winds, heavy rainfall and subsequent
flooding is a part of the immediate forecast
with the acreage in the path of Francine maybe
being subject to crop damage and significant
inundation.
This could decrease yields, halt harvesting and
will hold back any additional field work for
several weeks, including any fall fertilizing.
For now, the focus is on preparing as much as
possible for what might develop within the next
24 hours with producer Nutrien said it was
keeping watch and was getting ready.
“We are actively monitoring the situation
surrounding Tropical Storm Francine and have
comprehensive emergency response plans in place
to ensure the safety of our people and
operational integrity of our facilities,” said
Nutrien spokesperson.
CF Industries, with considerable operations in
the storm’s project path, has not responded to
inquiries over plans for storm preparation or
maintaining operations.
Also, without comment has been producer Mosaic,
but ammonia sources said it was expecting the
storm would have little bearing on current
activity as it is still a quiet period for the
nutrient.
A phosphate source said some imports volumes
which were scheduled to arrive soon have been
delayed a bit because of these renewed weather
concerns.
Overall the cautious but not overly concerned
sentiment is prevalent with it likely due to
the less severity of this potential hurricane,
but also because the fertilizer industry has
weathered some challenges in recent years like
the pandemic and international conflict.
Given the past events experienced, an industry
source said “I think the market has shrugged it
off so far because that’s how we’re doing most
shocks so far this year and it’s worked”.
Late on Tuesday afternoon Tropical Francine was
at a wind speed 65mph and moving northeast at
10mph with their predictions that it will
strengthen further as it moves closer to
landfall estimated now to be sometime during
Wednesday.
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