Oman to inaugurate $7bn Liwa Plastics project next week
Oman's state-owned OQ today said it will inaugurate its 2.7bn Omani riyal ($7.05bn) Liwa Plastics Industrial Complex (LPIC) on 20 December, around one and a half years after announcing the start of commissioning in May 2020.
"The Liwa Plastic Industries Complex is the largest manufacturing project in the Sultanate of Oman," OQ's acting chief executive for Refining and Petrochemicals Kamil bin Bakheet al-Shanfari said today. "The polymer products will cover the local and international markets."
The project consists of four packages, three of which have already reached commercial operation. The integrated commercial operation of the fourth and final package — package 1 — is due to reach full production in the first quarter of 2022. LPIC was supposed to fully commence commercial operations by the third quarter of this year.
At full capacity the project will add 838,000t/yr of polyethylene (PE) and about 215,000t/yr of polypropylene (PP), raising total production of both products in the country to 1.4mn t/yr from around 1mn t/yr, al-Shanfari said.
The project, which had originally been scheduled to come on stream in 2018 represents a big part of the government's plans to diversify its economy away from oil and gas exports and boost its manufacturing sector through investment in petrochemical projects.
LPIC, located in Sohar port, comprises a 1.04mn t/yr NGL extraction plant in Fahud, a 300km pipeline from Fahud to Sohar, a steam cracking unit, and polymer plants. The steam cracker allowed for the production of PE for the first time in Oman after the 880,000 t/yr swing PE plant started up in May last year. It also includes a 300,000 t/yr PP unit.
The project's cost has been progressively growing since its inception almost ten years ago. Oman in 2013 initially expected the project cost to stand at around $3.6bn. But this soon rose to $5.2bn by September 2015 and later to $6.4bn in July 2017.Oman had put the project cost at $6.7bn as recently as May 2020.
LPIC will enable OQ to utilize products from its refineries and its aromatic plant as feedstock for more valuable, higher-margin products. The project will also produce by-products that will be fed-back into the company's refineries and aromatics complex.
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PRSE: Brighter notes, familiar chords
PRSE: Brighter notes, familiar chords
London, 28 June (Argus) — In our editorial following last year's PRSE trade fair, we discussed short-term concerns and long-term optimism for the industry. This year's show — held last week in Amsterdam — featured some brighter notes, but conversations also struck many familiar chords of pessimism about the near term. On the plus side, last year's main reason for long-term optimism — increasingly supportive legislation in Europe — remains on track. The EU Packaging and Packaging Waste Regulations (PPWR) mandating recycled content across almost all plastic packaging by the end of the decade appear set for confirmation in the near future — welcome news for polyolefin recyclers in particular. And the PE films market appears less nervous about PPWR's strict reuse quotas for industrial packaging than it was in spring, with much optimism that future delegated acts will address industry concerns. Importantly for chemical recyclers, the European Commission has continued to support fuel use-exempt mass balance accounting, with member states reportedly largely in line. For PET recyclers, mandatory recycled content requirements are even closer, with the 25pc minimum for PET beverage bottles kicking in from next year. The weather has not generally supported a strong season for on-the-go beverage consumption in much of Europe this year, limiting the emergence of a peak season for rPET pellet consumption. And there is a feeling that the supply chain is more adequately stocked ahead of next year than it otherwise would have been, even as a reduction in the competitiveness of imports from Asia — the result of higher freight costs — theoretically supports demand for European recyclates. But PET recyclers were quietly confident about future demand prospects because of the upcoming regulation. Demand for premium blow-moulding grade rHDPE was another bright spot discussed at the fair, with many recyclers operating in that market noting increasing buying interest. This is an encouraging sign, one said, that brand owners are still looking to make as much progress as possible towards their 2025 targets for recycled content in packaging, after a slowdown in new projects last year, despite recent data showing that many are not on track to fully meet them. But for all the upbeat sentiment, many of the same concerns were raised again at this year's gathering. Polyolefin recyclers complained of low or even negative margins on commodity cost-saving products, such as low-end rPP grades and rHDPE pipe, with virgin PE and PP prices having declined in recent months and underlying demand still slow. There was still a feeling that a challenging period lies ahead, and that this could lead to further consolidation in the industry. And progress towards EU legislation supporting demand for recyclates outside of the packaging industry has been comparatively slow since the previous PRSE — save for a proposal from the commission to mandate 25pc recycled content in automotive plastics. Aside from concerns about sales volumes and margins, challenges with feedstock sourcing have come tgo the fore again in 2024, particularly in the flexible PE market. Flexible PE bale prices have risen through the second quarter because of reduced production of waste from commercial sites and, more recently, strong demand for exports to southeast Asia. Recyclers have struggled to pass on increases to their pellet customers, resulting in a squeeze on their margins. Since the last PRSE, the confirmation of EU waste shipment regulations (WSR), which will ban plastic waste exports to non-OECD countries from November 2026, will reassure recyclers concerned about feedstock supply. WSR might turn out to have a similar or even greater impact on the flexible PE recycling market than the more-publicised PPWR. The 27 EU countries exported 33,000 t/month of flexible PE waste to non-OECD countries — mainly in southeast Asia — in the first four months of this year, according to data from Global Trade Tracker. This is equivalent to 15-20pc of the volume of post-consumer PE film waste that is recycled in Europe, according to the latest Plastic Recyclers Europe data. Keeping this material in the European market would naturally be expected to increase feedstock availability for European recyclers. But it would be an oversimplification to say that cheaper input costs for recyclers will be the only result. European capacity will also need to adapt to accepting more export-quality bales, which are typically seen as lower-specification 98/2 or less transparent fractions. And demand for feedstock in Europe is also likely to increase, including through companies currently involved in exporting bales — many of which are already recyclers or affiliates of recyclers — that are building or expanding European recycling capacity. It was clear at the last PRSE that the myriad challenges facing the European recycling industry were not going to have evaporated by the time this year's show came around. The mood overall felt more positive than last year, but the hatches remain battened for many recyclers, with a challenging few months or even years still expected ahead. EU-27 LDPE waste exports Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US Supreme Court ends 'deference' to regulators
US Supreme Court ends 'deference' to regulators
Washington, 28 June (Argus) — The US Supreme Court's conservative majority, in one of its most significant rulings in years, has thrown out a landmark, 40-year-old precedent under which courts have offered federal agencies significant leeway in deciding how to regulate the energy sector and other industries. In a 6-3 ruling that marks a major blow to President Joe Biden's administration, the court's conservatives overturned its 1984 ruling Chevron v. NRDC that for decades has served as a cornerstone for how judges should review the legality of federal regulations when a statute is not clear. But chief justice John Roberts, writing for the majority, said experience has shown the precedent is "unworkable" and became an "impediment, rather than an aid" for courts to analyze what a specific law requires. "All that remains of Chevron is a decaying husk with bold pretensions," the opinion said. For decades, under what is now known as Chevron deference, courts were first required to review if a law was clear and if not, to defer to an agency's interpretation so long as the government's reading was reasonable. But the court's majority said the landmark precedent has become a source of unpredictability, allowing any ambiguity in a law to be a "license authorizing an agency to change positions as much as it likes." Roberts wrote that the federal courts can no longer defer to an agency's interpretation "simply because" a law is ambiguous. "Chevron is overruled," Roberts writes. "Courts must exercise their independent judgment in deciding whether an agency has acted within its statutory authority." The court's ruling, named Loper Bright Enterprises v. Gina Raimando, focuses on lawsuits from herring fishers who opposed a rule that could require them to pay about $710 per day for an at-sea observer to verify compliance with regional catch limits. The US Commerce Department said it believes it interpreted the law correctly, but the fishers said the "best interpretation" of the statute was that it did not apply to herring fishers. The court's three liberal justices dissented from the ruling, which they said will likely result in "large-scale disruptions" by putting federal judges in the position of having to rule on the merits of a variety of scientific and technical judgments, without the benefit of expertise that regulators have developed over the course of decades. Overturning Chevron will put courts "at the apex" of policy decisions on every conceivable topic, including climate change, health care, finance, transportation, artificial intelligence and other issues where courts lack specific expertise, judge Elena Kagan wrote. "In every sphere of current or future federal regulations, expect courts from now on to play a commanding role," Kagan wrote. The Supreme Court for years has been chipping away at the importance of Chevron deference, such as a 2022 ruling where it created the "major questions doctrine" to invalidate a greenhouse gas emission rule limits for power plants. That doctrine attempts to prohibit agencies from resolving issues that have "vast economic and political significance" without clear direction from the US Congress. That has led regulators to be hesitant in relying on Chevron to defend their regulations in court. The Supreme Court last cited the precedent in 2016. The ruling comes a day after the Supreme Court's conservatives, in another 6-3 ruling , dramatically curtailed the ability of the US Securities and Exchange Commission — and likely many other federal agencies — to use in-house tribunals to impose civil penalties. The court ruled those enforcement cases instead need to be filed as jury trials. That change is expected to curtail enforcement of securities fraud, since court cases are more resource-intensive. By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Canaries' bio-marine fuel demand hit by ETS exemptions
Canaries' bio-marine fuel demand hit by ETS exemptions
London, 28 June (Argus) — Spanish energy firm Cepsa has delayed plans to supply marine biodiesel blends in the Canary Islands as increased demand for conventional bunker fuels and EU regulatory exemptions weigh on market fundamentals for the blended products. Cepsa's international marine fuels sales manager, Francisco Diaz Castro, told attendees at the Maritime Week Las Palmas conference last week that the firm remains committed to supplying marine biodiesel in the Canary Islands but is delaying it in response to a sharp rise in conventional bunker fuel demand in recent months, underpinned by vessels re-routing around the southern tip of Africa to avoid the risk of Houthi attacks in in the Red Sea. Vessels have been stocking up on bunker fuels before and after sailing around Africa's Cape of Good Hope to avoid stopping along the way. Latest data from the Spanish transport ministry show sales of conventional bunker fuel out of the Canary Islands last month increased by 3pc compared with April and by 41pc on the may last year (see table) . This demand growth has pushed suppliers to retain barge availability for conventional bunker fuels, reducing capacity to supply marine biodiesel blends. Market participants told Argus that another reason marine biodiesel demand in the Canary Islands has not picked up is EU regulatory exemptions for vessels sailing between the islands and mainland Spain. According to article 12 (3b) of the EU's Emissions Trading System (ETS) directive, "an obligation to surrender allowances shall not arise in respect of emissions released until 31 December 2030 from voyages between a port located in an outermost region of a member state and a port located in the same member state, including voyages between ports within an outermost region and voyages between ports in the outermost regions of the same member state, and from the activities, within a port, of such ships in relation to such voyages." Argus understands that this exemption applies to all vessels covered under the scope of the EU ETS, but would not apply if the vessel is sailing from an outermost region, such as the Canary Islands, to a different EU member nation, for example the Netherlands. A similar exemption for FuelEU Maritime regulations may be applicable as well, subject to member states asking for the exemption of the specific ports and routes for the vessels. Such an exemption could apply until 2029. Argus understands that requests from member states for this exemption will be published in the coming months. An exemption from FuelEU Maritime regulations could also be applied to routes connecting islands with a population under 200,000 people. This specific exemption would therefore not apply to Tenerife and Gran Canaria but may apply to other parts of the Canary Islands with smaller populations. By Hussein Al-Khalisy and Dafydd ab Iago Canary Islands liquid bunker sales t Month Las Palmas Tenerife Total Sales % m-o-m % y-o-y May-24 282,447 49,749 332,196 3 41 Apr-24 255,262 68,782 324,044 27 38 Mar-24 189,868 64,654 254,522 0 3 Feb-24 207,564 47,344 254,908 -6 0 Jan-24 219,962 51,894 271,856 16 27 Dec-23 187,889 47,306 235,195 4 1 Nov-23 181,218 45,940 227,158 5 -2 Spanish Transport Ministry Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Strikes disrupt bitumen at France Port Jerome refinery
Strikes disrupt bitumen at France Port Jerome refinery
London, 28 June (Argus) — Bitumen truck flows from ExxonMobil's 236,000 b/d Port Jerome refinery in northern France have been disrupted since 19 June by strike action at the neighbouring Gravenchon petrochemicals plant, according to market participants. Protesters outside the refinery entrance have blocked trucks, with the strike action linked to the petrochemical plant that is threatened with closure. Bitumen traders said they had been informed by ExxonMobil that a meeting will be held on 2 July between the company and its workers, and that the strike action is unlikely to stop before then. There has been less of an effect on cargo flows from Port Jerome. Four bitumen cargoes have loaded for export since the refinery's restart in May after an early March fire. The latest shipments have been to Bristol, southwest England, on the 6,165dwt An Hai Wan that arrived there on 25 June and to Galway, Ireland, on the 6,384dwt Bithav due in on 30 June. Port Jerome accounts for around 20pc of France's refining capacity and produces in excess of 600,000 t/yr of bitumen. ExxonMobil has yet to comment on the latest developments at Port Jerome/Gravenchon. By Fenella Rhodes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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