Tank News International - Petrochemical Supplement 2018

Petrochemical Supplement 2018

How can a circular plastics economy grow the oil industry?

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Petrochemical Supplement 2018

How can a circular plastics economy grow the oil industry?

Read the insight: go.woodmac.com/tni

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Flying the flag 5 strategically located countries in Northern Europe 16 terminals 4.3 million cubic metres of storage 85+ years of experience 1st choice in bulk liquid and gas storage Inter Terminals Ltd +44 (0)1737 778108 Info@InterTerminals.com | www.InterTerminals.com Inter Terminals is owned by Inter Pipeline Ltd. www.interpipeline.com

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PETROCHEMICAL SUPPLEMENT 2018 WORD FROM THE EDITOR

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ear Reader

Welcome to the first edition of the Tank News International Petrochemical Supplement, our new annual supplement designed especially for the petrochemical industry and focused entirely on the global petrochemical sector.

This first edition delves into the past, present and future of the industry and explores trends, shifts and curves in the market and its surrounding industries.

The supplement has been divided by region into Global, EMEA, Asia, Americas and Australia.

Meanwhile, U.S. refineries were operating just shy of record highs, running close to 100% utilisation rates, due to high summer demand and low crude oil pricing. All of these topics are explored in features specific to each region.

We explore how surging demand for petrochemicals in Asia-Pacific is augmenting market growth, while burgeoning environmental consciousness is contributing to fundamental change in European plastics.

All of that said, it gives me great pleasure to welcome you to the first edition of this supplement and I would like to thank all our submitting analysts and contributors, who have worked hard in the production of their work.

So, join us on this new endeavour as a reader, or future contributor of the TNI Petrochemical Supplement.

Until next year,

enis mm E g Gre Publisher

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Greg Emmenis Publisher | Head of Sales +44 (0) 7877 003195 greg@tanknewsinternational.com

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PETROCHEMICAL SUPPLEMENT 2018 CONTENTS

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Contents GLOBAL 11-15 Popular petrochems

ASIA 62-63 China’s mega crude-to-chemicals projects

17-20 A digital future

65 ICIS: China petchems players calm on new tariffs

23 Enerkem makes a major breakthrough

67 Hengyuan Refining approves / SONGWON in China

24 Plastics too efficient to be easily replaced

69 TechnipFMC awarded contract for hydrogen in india

26-28 Leading from the top in process safety

70-71 S-OIL to invest in phase II petrochemical project

EMEA 30-31 EMEA – New global supply

AUSTR ALIA 73-74 Australia and IMO 2020: Making great progress

33 Olefins – Investments, Technologies, Trade

towards the future

34 Normec celebrates 55 years of activity 35 INEOS invests €2.7bn in new chemical complex 36 Vitol to partner with Quantafuel 37 The Port of Seville expands 39 Brenntag acquires Alphamin / Petrofac EPC win

PRODUCTS & TECHNOLOGIES 75 Elaflex

40 TWS Rent-a-tainer on the rise 41-42 Navigator Terminals: location profiles 43 CLH Group has invested more than €22m 45 ADNOC holds talks in Tokyo 46 Feel the chemistry in Antwerp 47 Jizzakh Petroleum to build new refinery 48 Yamal LNG 2nd train / Enterprise begins construction 49 RPE Zarya joins EPCA / Yamal LNG begins exports 50-51 Flax Field – Tank container solutions 52 Shell secures exploration acreage offshore Mauritania

EVENT PREVIEWS 76 EPCA returns to Vienna 77 Tanks and Terminals Storage 78 Petrochemical Supply Chain & Logistics

AMERICAS 53-55 Falling into refinery turnaround season 56 LyondellBasell completes acquisition 59 Contanda to build new large-capacity storage terminal 61 Jacobs selected by Keyera / Brenntag acquires CCC TA N K N E WS I N T ER N AT I O N A L .C O M

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WORLD NEWS

POPULAR PETROCHEMS

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etrochemicals play an important role in the 21st century lifestyle and are utilised in various end use industries. The oil & gas industry provides the feedstock in the form of crude oil, natural gas and their derivatives. Different kinds of processes employed on crude oil, and natural gas yield different products. The top 15 petrochemicals are analysed in a new report by Coherent Market

Insights, a market research and consulting firm based in Seattle, WA. The most sought-after product is ethylene, which holds a 25% market share in the global petrochemicals market. It is used as a feedstock for manufacture of polyethylene, polystyrene, ethylene glycol and ethanol. Ethylene is followed by benzene, propylene, xylene, butadiene in terms of market share. Some petrochemicals are used widely around the world in various applications

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including dyes, detergents, paint, plastic, rubber, textiles and fertilisers. The major drivers are the high dependency and lack of large scale alternatives to petrochemical products. The major competitor to petrochemicals are bio-based chemicals and as environmental consciousness increases, investment in bio-based chemicals is likely to escalate. In addition oil price instability also affects growth.

Continued on page 12

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Ethylene and propylene are the most dominant chemicals in terms of market share Continued from page 11

Top 15 Petrochemicals Market Taxonomy On basis of type of Petrochemical • Ethylene • Propylene • Benzene • Butadiene • Xylenes • Toluene On basis of type of Intermediate Chemicals • Methanol • Ethylene Oxide • Propylene Oxide On basis of type of Polymer • Polyethylene (PE) • Polypropylene (PP) • Polystyrene (PS) • Polyester (PET) • Polyvinyl chloride (PVC) • Acrylonitrile butadiene styrene (ABS) On basis of End User Industry • Packaging • Automobile • Construction • Electrical & Electronics • Aviation • Consumer Goods • Others

electrical and consumer goods require petrochemicals for product manufacture, and the healthy growth of these industries directly affect petrochemical market growth.

Ethylene, propylene are the most Propylene belongs to the alkene dominant chemicals in terms of class with three double bonded market share, and are major feedstock carbon atoms. It is the second for the manufacture of polyethylene, highest used petrochemical after polypropylene and polypropylene ethylene. Propylene or Propene oxide. Xylene is projected to be is a byproduct of oil refining and the fastest growing petrochemical natural gas processing. During oil market due to demand for polyester refining, ethylene, propene, and other fibres. Furthermore, chemicals such compounds are produced as a result as methanol, ethylene oxide and of cracking larger hydrocarbons. propylene oxide are used as reaction A major source of propylene is intermediates for light olefins, ethylene naphtha cracking, which is intended glycol, and polyurethane plastics to produce ethylene and results from respectively. refinery cracking producing other Moreover, ethylene Oxide is also used products. Propane dehydrogenation as a fumigant and disinfectant. converts propane into propylene with All the end user industries byproduct hydrogen. are majorly dependent on Fluid Catalytic Cracking polymers with polystyrene splitters and On-Purpose DEPENDENT being the most widely Technology (OPT) used. PVC is commonly are most widely used ON used for pipes, furniture, propylene production POLYMERS and flooring application; technologies worldwide. and polyethylene for plastic Its end-uses include films, bottles to consume edible and fibers, containers, packaging, non-edible liquids. and caps and closures. Propylene is The packaging industry is the largest considered as an important building end use market of petrochemicals. block for various chemicals such As the disposable incomes in the as polypropylene, propylene oxide, developing world rise, consumer acrylonitrile, cumene, oxoalcohols, demand for packaged materials rises isopropylalcohol, acrylic acid, as they seek quality assurance. The acrylated, isobutyl benzene, and packaging industry is directly affected by EPDM rubbers. These derivatives of consumerism. Other end use industries propylene are used in various endsuch as automobile, construction, Continued on page 14

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Continued from page 12

use industries such as automotive, construction, textiles, and packaging.

Growth of the propylene market is fueled by increasing demand for its derivatives especially by polypropylene. Moreover, increasing demand from various industries such as automotive and packaging has further propelled the global propylene market growth. Propylene oxide is used for mattresses, insulators, carpets, car seats, and construction chemicals.

According to Coherent Market Insights analysis, the global propylene market was pegged at 100 million metric tons in 2016 and is expected to grow at a CAGR of 3.9% during the forecast period. Increasing demand for derivatives, especially polypropylene and propylene oxide is expected to drive market growth.

Polypropylene and its alloys are

extensively used in the automotive industry. Another derivative acrylonitrile is used in a variety of elastomeric fibers and polymers. It is used for acrylic fibers in clothes such as sweaters, socks, beddings, carpets, sportswear, cushions, and blankets.

To meet the global demand there are some planned and upcoming capacity additions with major capacity expansions planned in China during the forecast period. China has also been the largest importer of propylene and its derivatives and a need to reduce its reliance on imports. Many investments are being proposed by 2025. This includes Fujian Meide Petrochemical Fuzhou Propylene Plant, Oriental Energy Ningbo Propylene Plant, and Oriental Energy Ningbo Propylene Plant. In 2016, global polypropylene production capacity was around 120 million metric tons grown from 107 million metric tons in 2014.

Asia Pacific dominated the propylene market in 2017, and is expected to

continue its dominance over the forecast period. This is attributed to growth of automotive and construction industries in the region.

According to International Trade Administration (ITA), China is the world’s largest construction market and it was valued at US$ 717.71 billion in 2016, and is estimated to reach US$ 1,042.17 billion in 2021. The major regions in propylene market are China, US, and Western Europe, which account for over 70% of the total market demand.

Polypropylene was the largest market segment for propylene with a market share of around 64% in 2017.

It is expected to retain dominant position in market, which in turn is propelling demand for propylene from end use industries. There are certain upcoming polypropylene projects to serve the demand from various end-use applications. For instance, a 700 kilo tons polypropylene plant,

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based on propylene recovered from cracked Liquefied Natural Gas (LPG) generated from INDMAX Plant, is under implementation is scheduled for completion by the end of 2018.

The major players operating in the global propylene market include China Petroleum & Chemical Corporation, BASF SE, ExxonMobil Corporation, The DOW Chemical Company, LyondellBasell Industries N.V., SABIC, BP Plc., and IRPC Plc. The Top 15 petrochemicals report details that surging demand in AsiaPacific is augmenting market growth.

The region is a major processing hub for petrochemicals with India, China, and South Korea being major drivers.

Six of the world’s ten largest refineries are in Asia Pacific with the largest being Reliance owned Jamnagar Refinery. This region has recently observed an upturn in consumption due to increased population. China has also claimed to have the world’s largest shale reserves but is

unable to develop them due to water shortages. Technological advancement in shale gas extraction is expected to complement growth.

North America is a major processing hub. Feedstock is obtained from shale gas produced in the various US shale plays (Marcellus, Eagle-Ford, Permian, Barnett, Bakken and Niobrara). In addition, it is also one of the largest consumer of petrochemicals. Also, The Middle East and North Africa are major sources of crude oil. There is also a significant presence of petrochemical industry in this region due to close proximity to crude oil source.

Europe is a consumer market for petrochemicals with heavy dependency on North American and Asian markets. A west to east shift has been observed in the petrochemical market. Maturation in Europe has led to shifting of existing petrochemical infrastructure to countries such as India where labour is cheap.

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The growth focus is shifting to low cost feedstock availability such as CTO (Coal to Olefin), MTO (Methanol to Olefin), Shale Gas, Coal Bed Methane and bio feedstock to produce ethylene and propylene. These are considered as alternative processes for ethylene and propylene production. China has announced six CTO projects having total ethylene capacity of 1.62 million tonnes/year.

The major players in the Petrochemical Industry are BASF SE, ExxonMobil, The Dow Chemical Company, Shell Chemical Company, SABIC, Sinopec Limited, Lyondell Basell Industries, Total S.A., Sumitomo Chemical Co. Ltd., Chevron Phillips Chemical Company LLC and E. I. du Pont de Nemours and Company.

For more information visit www.coherentmarketinsights.com

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A DIGITAL FUTURE The petrochemical industry has ridden high on emerging market demand growth and location has been the key to success.

A

s the industry gains momentum, companies look to build on their core capabilities and strategy in order to tap into markets that are on the up.

TNI talks to Hans-Jörg Bertschi, Executive Chairman of Bertschi Group to learn more.

“As a result of the strong economic developments and positive business cycle over the last six years, we are seeing a significant growth in the global movement of petrochemicals,” says Hans-Jörg.

He notes there has been typically double-digit growth over the last six to seven years in the global business in which Bertschi is active.

areas,” states Hans-Jörg.

“In Europe, growth rates are more The company also made its modest at two to three percent, which move in South America, which has corresponds to market growth. seen some growth as well, with the “The petrochemical industry has opening of its subsidiary, growth at a higher rate than GDP Bertschi Santos. over the last few years. It is usually one to two percent Digitalisation above GDP growth, which is EXPANDING There are a wide range of quite healthy,” he says.

OFFERINGS different tank containers This growth has made ACROSS ASIA for specific products. an impact on Bertschi’s There are a certain number decisions on where to focus of standardised containers its efforts. The company is for large-volume chemicals focussing efforts on expanding and a mix of specialised tanks and its offerings across Asia, in particular standard tanks.

China and Southeast Asia. It has also In its global business, Bertschi had significant growth in the U.S. based focuses primarily on standardised tank off the shale gas investments of the services than in its European business, petrochemical and chemical industries where the portfolio for speciality in the Gulf. “These are our major growth Continued on page 20

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We are working on developing the ‘smart tank container’ concept which will allow better supply chain visibility

Continued from page 17

shipments that require specific tanks is larger.

“We are working a lot on developing the ‘smart tank container’ concept which will allow better supply chain visibility, allow the control of temperatures within the tank, and allow the control of tank pressure whilst the tank is in transit,” explains Hans-Jörg. “It is essentially a global communication network and digitalisation of our global and European offering is a major investment area for Bertschi.”

Looking ahead The company is relatively optimistic about the economic development from the U.S. as it is very strong with positive growth. “The business areas we operate in continue to grow in Europe and in Asia. There is positive momentum in the world economy which we will expect to see continue in 2019,” says HansJörg. As a result, the company is continuing to invest “significantly” in its capacity for 2019 in order to support its core customers.

Hans-Jörg notes there have been several shifts regarding the use of tank containers. One being the shift of customers away from drums

and IBCs to tank containers. This is primarily due to tank containers being a safer method of transporting products in terms of sustainability and potential damage to the environments.

“The second shift we are able to see is from parcel tanks to tank containers.

Many small to medium sized lots are still transported in product tankers, but now, as container vessels have capacities of more than 20,000 containers, it can be more cost-effective to send product door-to-door by tank containers,” notes Hans-Jörg. This shift is not seen for large volume flows.

Furthermore, the company doesn’t see the current trade disputes between the U.S. and China and the subsequent chemical duties having too much of a negative impact on global volume flows of petrochemicals. “It will only redirect certain flows around the globe, but overall demand will not suffer as a result of the disputes,” he says.

Expansion plans The company is planning to expand its business unit solutions capacity in terms of drumming and warehousing in Southeast Asia and in approximately one year, also in China.

It also plans to “significantly” expand its global ISO tank fleet for 2019 by a currently undisclosed amount. Bertschi will also open two more sites in China

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during 2019, however, the locations have not been disclosed at present.

Bertschi is a global player in the petrochemical logistics sector, with in total over 70 subsidiaries in 38 countries, covering all continents.

Bertschi has a fleet of 33,000 tank and silo containers, 1,100 trucks and 30 container terminals. The company is market leader in Europe for the intermodal transportation of chemicals by rail, road and shipping, and one of the global leading providers of tank container transportation and supplementary value-added logistic services for the chemical industry. Major Bertschi subsidiaries outside Europe are located in Shanghai, Singapore, Houston, Moscow, Sao Paulo, Dubai, Al-Jubail and Istanbul.

The company has four different business units: Two European units that focus on European chemicals, petrochemicals, plastics and distribution; two global units that focus on worldwide coverage of its ISO tanks and a business unit solution focusing on valueadded services such as drumming, packing and warehousing.

For more information visit www.bertschi.com

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Enerkem makes a major breakthrough with new high-octane biofuel

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nerkem Inc., a worldleading waste-to-biofuels and chemicals producer has succeeded in producing a new highperformance biofuel that could improve the octane rating of fuels sold on the market and reduce their carbon footprint.

Enerkem produces advanced biofuels and renewable chemicals from waste. Its disruptive proprietary technology converts non-recyclable, non-compostable municipal solid waste into methanol, ethanol and other widelyused chemicals.

The chemical engineering expertise at Enerkem’s Innovation Centre in Westbury, Quebec, allowed the company to successfully develop a process that uses its proprietary waste-to-biofuel

technology to produce a new biofuel with a Research Octane Number (RON) of up to 112. This is 20 points higher than the average octane rating found in regular motor gasoline.

By using bio-dimethyl ether (Bio-DME), a product derived from Enerkem’s biomethanol, combined with a DME-to-high-octane-gasoline catalyst developed by the National Renewable Energy Laboratory (NREL) in the United States, the Enerkem-NREL team were the first to demonstrate at pilot scale the production of an alternative fuel rich in paraffins.

“It’s a major breakthrough that could enable the development of a new nonoxygenated biofuel made from waste on a commercial scale,” explained Stéphane Marie-Rose, Director of Enerkem’s Innovation Centre. “Through the very selective catalytic reaction achieved using our waste-to-biofuels

“It’s a major breakthrough that could enable the development of a new non-oxygenated biofuel made from waste on a commercial scale,” Stéphane Marie-Rose, Director, Enerkem’s Innovation Centre

TA N K N E WS I N T ER N AT I O N A L .C O M

process, we have formed paraffinic molecules, such as triptane, whose properties already contain a highoctane rating, thereby increasing the volume of paraffins when used as an additive in a conventional fuel.”

In addition to the various environmental and economic upsides, there are many possible applications for a high-octane biofuel derived from Enerkem’s bio-DME. The non-oxygenated additive could serve the specialised fuels market, such as the aviation gasoline and professional motorsport sector. As with the biomethanol and advanced ethanol produced today at commercial scale

by Enerkem, this new biofuel allows better combustion, replaces fossil fuels and reduces greenhouse gas emissions.

Enerkem’s Innovation Centre intends to build on this technological advancement by further developing and optimising the process as well as evaluating the potential commercial applications in the coming months.

For more information visit www.enerkem.com

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PLASTICS TOO EFFICIENT TO BE EASILY REPLACED

T

he public, environmentalists, brand owners, institutions and now governments are responding to the rising tide of negative perception of plastics, which has been caused mainly by their improper disposal after use.

The reaction to their environmental impact has been to increase efforts to reduce, ban plastics and/or increase reuse and recycling.

However, understanding the implications for natural resources and the environmental consequences of shifting away from plastics must take into account the entire supply chain. If not plastic, then what? Metal? Wood?

Paper? Glass? Plastics are incredibly efficient and cost effective, therefore finding alternative solutions for their myriad applications and benefits is not easy or cheap. Few want to incur the burden of higher costs and eventually, due to a knock-on effect through the supply chain, this would eventually hit consumers’ pockets.

The efficiencies and performance of plastics products, in particular packaging, are extraordinary. Over the years, the material has found new applications and gained market share from paper and cardboard, metals and glass. According to Eurostat, plastics make up about half of all packaging in Western Europe, followed by wood and metals. It is worth adding that European estimates indicate around half of all goods are packaged in plastics, yet only account for less than 20% of packaging materials by weight.

The weight has seen significant reduction over the past 10 years with down-gauging and light-weighting, without affecting performance.

A major win would be to improve waste management and collection infrastructures across the globe.

Collection and reducing littering is a significant issue, primarily in developing countries with a sizable portion of the discarded waste eventually finding its way into the oceans through a small number of rivers.

A focus on recycling would be the

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preferred avenue to improve the disposal of plastics. Wood Mackenzie Chemicals forecasts that recycling around the world will only increase, led by rigid single-use packaging applications. The easiest plastics to recycle are those used in injection and blow-moulded applications, which represent around one-third of global PE, PP and PET consumption in 2018.

Film represents another third.

Despite all of these issues, chemical demand will persist due to increased median income, growing populations, improving living standards, urbanisation and other socioeconomic factors. While there will be lower growth rates, the sheer size of the market today generates considerable volume growth. Ethane and naphtha will remain the primary feedstocks for petrochemicals and plastics, with ethane capturing the majority of the growth.

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Pressure Spheres

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Storage Terminals

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rawing on his 30 as a loss of containment, has the years of experience potential to cause significant harm in the tank storage to people and the environment. In sector and senior addition, the company concerned roles within related will be faced with the economic industry associations and consequences of potentially huge industry/regulator forums, Martyn injury claims, clean up costs and Lyons, Chief Executive of Inter possible prosecution – not to Terminals, explains why mention loss of reputation. leading from the top There is, therefore, a clear PROCESS in process safety is ethical and business SAFETY essential to good case for investing in an MANAGEMENT business performance. effective Process Safety SYSTEM Management (PSM) system Control and and to be successful and management sustainable that system It goes without saying that requires the commitment of the a bulk liquid storage business entire workforce, starting at the top. depends on the careful and responsible handling and storage Catalyst for change of customers’ products. Good The catastrophic incident at the and effective governance, control Buncefield oil storage depot in and management of process December 2005 acted as a catalyst safety, alongside ensuring that for change in process safety and major (and minor) incidents are lessons learned from that incident prevented wherever possible, are have helped to make the bulk liquid wholly consistent with commercial storage industry safer. Among its success. A hazardous event, such many recommendations back in

LEADING FROM THE TOP IN PROCESS SAFETY

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2008, the Buncefield Major Incident Investigation Board identified the need for a working knowledge and competence of process safety at board level and a clear policy on PSM that is driven from the top and is understood by everyone throughout the entire organisation. Good safety does not happen by chance and requires constant active engagement at all levels and should involve both direct and contract staff.

Having represented the tank storage sector on a number of senior industry & regulator safety forums and been involved in delivering on the recommendations arising from Buncefield at Inter Terminals, I recognise the vital role of senior management in providing process safety leadership and cultivating a positive safety culture throughout the organisation in conjunction with our Safety, Health and Environmental (SHE) team. Whilst they are inextricably linked it is important not to confuse occupational safety and process safety. They are two different disciplines and effective management and success in one doesn’t necessarily lead to success in the other.

Key principles So what do we mean by process safety? Whereas occupational

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Tank storage operators need to invest in the necessary systems and procedures to retain corporate knowledge relating to PSM. safety focuses primarily on creating and maintaining a safe working environment that is free from hazards such as contact with oils and chemicals, slippery surfaces, moving vehicles and unguarded machinery, process safety is about managing the integrity of hazardous processes and storage systems as well as the optimisation of human performance and reductions in human failure and requires a combination of engineering and management skills. Just like financial risks to the business, process safety risks should be assessed and reviewed regularly at board level using appropriate risk analysis methodology. Also, at least one board member should be fully conversant in PSM in order to advise the board on managing risk and the process safety implications of board decisions. At Inter Terminals that responsibility lies with me.

prevent a recurrence. Having effective management systems in place, setting and regularly reviewing relevant KPIs, and categorising events appropriately all have a part to play in good PSM. To assist the latter Inter Terminals has introduced a system based on Process Safety Performance Indicators for the Refining and Petrochemical Industries (ANSI/API Recommended Practice 754) and is aligning its long established suite of leading and lagging KPI’s to this system. Equally applicable to bulk liquid storage operations where loss of containment has the potential to cause harm, this system classifies safety events into four tiers of leading and lagging indicators, from indicators of management system performance and minor incidents representing challenges to the management system and / or learning events through to events of greater consequence where loss of containment has occurred. The system enables us to measure activity and status of events and identify accident precursors and tackle emerging issues.

Corporate knowledge Tank storage operators need to invest in the necessary systems and procedures to retain corporate knowledge relating to PSM. This can include information on the safety design concept of plant and processes, together with any learning from past incidents that may have impacted on process safety integrity, and any improvements implemented to

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Learning and participation In addition to monitoring safety performance, information should be published on a regular basis to provide assurance about the identification and management of risks. Benefits also come from sharing best practice with others in the sector and elsewhere. To assist this, mechanisms should be in place to incorporate learning from relevant incidents in other organisations. In addition, active participation with industry and regulatory bodies helps to ensure Continued on page 28

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