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)

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.

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

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.

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.

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.

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

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.

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.