The downstream rundown: In case you missed it 3/4
In case you missed any downstream news, this piece will give you a summary of some of the top stories from last week.
bp selects Honeywell technology for new diesel, SAF project
Honeywell announced that bp and Honeywell have signed a licensing agreement for Honeywell UOP’s Ecofining technology. bp is undergoing pre-feed engineering for its proposed diesel and sustainable aviation fuel (SAF) project in Western Australia. bp plans to convert hydroprocessing equipment at its former refinery site in Kwinana, Australia, to produce approximately 10kbd diesel and SAF from renewable feeds, integrating with its existing terminal operations.
Revamping to Honeywell UOP’s Ecofining process is expected to provide a fast-to-market, capital efficient solution, ideal for repurposing underutilized hydroprocessing units to produce diesel and SAF from renewable feeds, which have substantially similar molecules to petroleum-based diesel and jet fuel and can be used as a drop-in replacement without engine modifications, in the case of SAF in blends of up to 50% with the remainder as conventional jet fuel.
Chevron to buy Renewable Energy Group for $3 B
Chevron is buying biodiesel maker Renewable Energy Group Inc for $3.15 B, in its biggest bet so far on alternative fuels. The second-biggest U.S. oil and gas producer said it would pay $61.5 for each share of Renewable Energy, a premium of over 40%. Renewable Energy shares rose more than 37% in premarket trading.
Chevron has set a target to cut operational emissions to net zero by 2050 and in September pledged to invest $10 B to reduce its carbon emissions through 2028, with about $3 B earmarked for renewable fuels.
Neste, Marathon Petroleum to establish JV for production of renewable fuels
Neste Corporation has signed definitive agreements for the establishment of a 50/50 JV with U.S.-based Marathon Petroleum. The JV will produce renewable diesel following a conversion project of Marathon's refinery in Martinez, California (the Martinez Renewable Fuels project). The closing of the JV is subject to customary closing conditions and regulatory approvals, including obtaining the necessary permits, which depend upon certification of a final Environmental Impact Report.
Neste’s total investment will amount to approximately €900 MM ($1 B), inclusive of half of the total project development costs projected through the completion of the project. The project is expected to increase Neste’s renewable products capacity by slightly over 1 MMtpy. Production of renewable diesel is expected to come online in the second half of 2022. The facility is planned to reach its full annual nameplate capacity of 2.1 MMt by the end of 2023.
U.S. hits Russian oil refining sector, slaps export curbs on Belarus
The U.S. took aim at Russia's oil refining sector with new export curbs and targeted Belarus with sweeping new export restrictions, as the Biden administration amps up its crackdown on Moscow and Minsk over the invasion of Ukraine.
The new round of sanctions announced by the White House ban the export of specific refining technologies, making it harder for Russia to modernize its oil refineries.
The White House also applied a sweeping set of export restrictions levied against Russia last month to Belarus, arguing the controls would help prevent the diversion of items, including technology and software, in the defense, aerospace and maritime sectors to Russia through Belarus.
Neste swaps Russian crude for North Sea oil
Finland's Neste has replaced most of its Russian crude oil purchases with other crudes such as North Sea oil due to the crisis in Ukraine. Previously the Finnish refiner purchased from Russia some two-thirds of the crude oil it uses.
Burckhardt Compression, PTC collaborate to develop remote service solutions
Burckhardt Compression announced that it is working with PTC to develop remote service solutions for their customers worldwide. The two companies are also working together to further develop a type of metaverse augmented reality solution for service on reciprocating compressors.
Under the name UP! Solutions, Burckhardt Compression offers digital solutions that allow compressors to be monitored in real time and serviced remotely in cooperation with the customer onsite. For this purpose, the units are equipped with sensors that constantly collect data such as vibrations or temperature. This data is then analyzed and used, for example, to detect anomalies or schedule service work.
BASF builds new plant for alkylethanolamines
BASF builds a new production plant for alkylethanolamines at the Verbund site in Antwerp, Belgium. After the planned start-up in 2024, the company will increase the global annual production capacity of its alkylethanolamines portfolio containing, amongst others, dimethylethanolamines and methyldiethanolamines by nearly 30% to more than 140,000 metric tpy.
Honeywell joins Oriental Energy to build 1-MMtpy SAF production facility
Honeywell and Oriental Energy jointly announced that a sustainable aviation fuel (SAF) production facility with an output capacity of 1 MMtpy will be built in Maoming, Guangdong Province in China. The new facility will help meet a growing SAF demand, facilitate GHG emission reduction in aviation fuel production through the deployment of innovative technologies and support China’s goals to reduce CO2 emissions and achieve carbon neutrality by 2060.
The Oriental Energy SAF project, which is expected to be built in two phases, involves two production units that will process used cooking oils and animal fats as feedstocks. When completed, it is expected to be among the world’s largest SAF production facilities using used cooking oils and animal fats as feedstocks. Using such feedstocks helps reduce lifecycle GHG emissions by approximately 80% compared with traditional fuels or by 2.4 MMtpy for the completed project.
Ethanol producers, oil refiners challenge EPA U.S. vehicle rules
The American Fuel And Petrochemical Manufacturers, several corn and soybean growers associations and others are challenging the U.S. Environmental Protection Agency's (EPA) tougher vehicle emission rules. The corn growers, a Valero Energy subsidiary and other ethanol producers said the new EPA rules revising emission requirements through 2026 "effectively mandate the production and sale of electric cars rather than cars powered by internal combustion engines."
The state soybean groups and another Valero subsidiary said the final rule exceeds "EPA’s authority by favoring one technology, electric vehicles, over others, including" ethanol produced by the farmers. The EPA failed to "adequately consider the vast greenhouse gas reduction benefits provided by renewable fuels," they said. The Competitive Enterprise Institute and Domestic Energy Producers Alliance also filed a separate challenge saying the rule seeks "to establish stringent fleet-wide automobile emission standards with credit trading and enhanced credits for electric vehicles, but the agency lacks the legal authority to issue such a rule."
UN plastic treaty to tackle production, packaging design
United Nations (U.N.) negotiators have agreed on a roadmap for a global plastic treaty that would address plastic production and design, according to a draft resolution seen by Reuters, in what delegates said was a key step to agreeing an ambitious deal.
U.N. member states are meeting in Nairobi to agree plans for the first global agreement to tackle plastic pollution, a soaring environmental crisis that is destroying marine habitats and contaminating the food chain.
Going into the summit, the main sticking points were whether any agreement would be legally binding or voluntary, and if it would address plastic production and single-use packaging design or be confined to improving waste management and recycling.
INEOS Aromatics completes modernization of PTA facility
INEOS Aromatics has completed a $70 MM modernization of its purified terephthalic acid (PTA) plant in Merak, Indonesia, that significantly reduces emissions and increases capacity, supporting the competitiveness and growth of the Indonesian polyester industry.
The installation of a larger oxidation reactor, reconfiguration of the reactor’s heat recovery system and revamp of the process air compressor train will both reduce CO2 emissions by 15% and increase the site capacity by 15%, from 500,000 tpy — 575,000 tpy.
Plastic Energy, Axens to partner with Qenos for circular plastics manufacturing
Plastic Energy and Axens are partnering with Qenos in the planning of a major circular plastics manufacturing facility in Australia.
Plastic Energy and Axens will support the recently announced Qenos and Cleanaway joint feasibility study for the conversion of up to 100,000 t of household soft plastic waste and mixed plastics back into circular polyethylene.
Circular plastics manufacturing using advanced recycling takes soft plastics and other hard-to-recycle plastic waste, which currently goes to landfill, incineration or escapes into the environment and recycles this back into the same products. It is the next major phase in recycling and is forecast to attract $680 B of investment globally by 2050.
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