Page 7 - AsianOil Week 42

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which the company hopes to bring online before the end of the year. ZPC held a trial production phase at the unit in May.
Additional import allowances could help the company cement a recent agreement with super-major BP on a proposed 1mn tonne per year (tpy) acetic acid plant in Zhoushan. The two companies have signed a memorandum of understanding (MoU) on exploring the creation of a new 50:50 venture to build the proposed facility, using BP’s CATIVA XL production technology. The new plant, which would be in addition to ZPC’s existing 400,000 bpd integrated complex, would be BP’s largest acetic acid producing site.
The Chinese acetic acid market is the largest in the world, accounting for more than half of global production capacity. Acetic acid is a component chemical used to manufacture a variety of prod- ucts, including purified terephthalic acid (PTA).
ZPC’s chairman, Li Shuirong, said: “This co-operation will help ZPC to optimise its site structure and improve competitiveness, and together, we shall advance the high-quality development of China’s petrochemical industry.”
BP is not the only foreign player looking for new energy opportunities in Zhoushan, however.
Total
French major Total has signed a shareholders’ agreement with Chinese state-owned Zhejiang Energy Group (ZEG) on the creation of a joint venture to supply and deliver marine fuels to the Ningbo and Shanghai Ports in the Zhoushan region. The agreement was signed on the side- lines of the IPEC conference in Zhoushan City.
ZEG and Total had originally signed an MoU in April on exploring opportunities in energy supply and distribution within China. ZEG will own 51% of the new company, while Total will hold the remainder.
“This new partnership is fully aligned with our strategy to support and supply our ship- ping customers wherever they go,” Total’s sen- ior vice-president of lubricants and specialties, Philippe Charleux, said. “Providing them with low-sulphur fuels fully compliant with IMO
[International Maritime Organization] regula- tion in China will further contribute to the tran- sition towards a sustainable shipping industry.”
Zhousan has become a focal point for down- stream and midstream companies after Beijing picked the city to be a pilot zone for a marine fuel centre and physical oil and gas trading hub to rival Singapore.
Privately owned Zhejiang Wuchan Zhongda Petroleum became in March the country’s first private trader to win a crude import licence.
However, the short-term outlook for down- stream players across Asia has become some- what muddied, owing to rising regional capacity, slowing demand for oil products and soaring freight rates.
What next
Reuters quoted the head of Huatai Futures’ oil research, Xiang Pan, as saying some independ- ent refiners would not be able to use all of their quotas because of “credit problems or because they prefer domestic trades”. Pan said: “This year in the first-half margin was poor, especially for gasoline. Although margins recovered in the second half, it is still worse than previous years, as the market is competitive and refined oil prod- ucts are in oversupply.”
Margins are expected to be squeezed by soar- ing freight costs, which are rooted in the US’ decision to sanction five Chinese shipping com- panies over allegations that they were involved in the illegal transportation of Iranian crude.
The blacklisted companies included COSCO Shipping Tanker (Dalian) and COSCO Shipping Tanker (Dalian) Seaman & Ship Management – units of China’s largest shipping company, China COSCO Shipping – Kunlun Holding, Kun- lun Shipping, Pegasus 88 and China Concord Petroleum.
State-owned Sinopec, Asia’s biggest refiner, is reportedly planning to reduce its refinery runs from November in response to the price spike.
Compounding the problem is the fact that global traders ExxonMobil, Equinor, Unipec and Trafigura have decided to ban the use of vessels linked to Venezuelan oil flows, taking around 300 tankers offline in the process.™
Week 42 23•October•2019 w w w . N E W S B A S E . c o m P7