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Released March 23, 2020 | SUGAR LAND
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Industrial Info's daily COVID-19 Impact Report gives you the latest related supply and production data relevant to the Energy Industry.
Petroleum Refining
Monroe Energy has reduced production rates by 20% at its 200,000-barrel-per-day (BBL/d) refinery in Trainer, Pennsylvania, and will be evaluating that rate as demand for petroleum products drops due to COVID-19 concerns.
United Refining Company reduced refining rates by an estimated 20% on Sunday at its 70,000-BBL/d Warren, Pennsylvania, refinery due to outbreak concerns.
ExxonMobil reduced production rates by 20% today at its 500,000-BBL/d refinery in Baton Rouge, Louisiana, due to a drop in demand.
Repsol reports that its refineries in Spain remain in normal operation. The company has removed administrative and all non-essential personnel from its 220,000-BBL/d Bilbao (Petronor), 166,000-BBL/d Puertollano, 174,000-BBL/d Tarragona, 220,000-BBL/d Cartagena and 119,500-BBL/d La Coruna refineries due to the outbreak.
Power
Demand for power by industrial sectors has dropped in some parts of the U.S. due to COVID-19 restrictions.
In general, nuclear power plants in the U.S. are moving forward with their refueling. Only one refueling schedule push-back has been reported, and that was only for a couple of weeks.
Among coal-fired power plants, longer-duration and more pressing planned outages are more likely to move forward, while outages with shorter durations (14 days or less) and that are seasonal in nature are more at risk of being postponed.
Petrochemical
More than 137 chemical projects have been delayed or impacted by COVID-19 so far, as confirmed by Industrial Info's research team. While most are delayed, few have been cancelled entirely, with project managers saying they have been instructed to postpone procurement and design decisions until further notice.
Arkema will repurpose and dedicate a pilot production line located in its Rhône Alpes Research Center (CRRA), near Lyon, France, for the manufacture of an alcohol-based solution in order to help out healthcare professionals now under considerable strain. The product of this unit will be available specifically to the French health industry and authorities.
Many chemical plant owners across the Americas and Europe have entered a level 2 advisory, which initiates planning to determine the impact of the current crisis on planned or ongoing capital and maintenance projects. Industrial Info has confirmed several large turnarounds and capital expenditure projects will begin as scheduled in the coming weeks, although with the understanding that the length of these projects will be longer than originally planned due to the limitation of contractors allowed into plants. The next advisory level would be to have essential staff remain onsite 24/7. While no cases of this have been confirmed in chemical plants as of today, contingency plans are being reviewed and evaluated.
Turmoil in the financial market is certain to impact planned mergers and acquisitions. Technip FMC has announced plans to temporarily stop its planned separation into two different entities -- Technip FMC and Technip Energies -- until financial and commodity markets have recovered.
Dena Petrochemical Company has delayed the commercial start-up of a new methanol plant in Iran -- which recently reached mechanical completion -- until later this year due to the COVID-19 pandemic.
BASF has postponed a 21-day planned maintenance turnaround of its 793.66 million-pound-per-year ethylene oxide unit in Ludwigshafen, Germany, due to outbreak concerns. The turnaround was previously planned to begin in April. September 2020 is considered the most likely month that BASF will plan for this turnaround.
Formosa says it is starting the Olefins 1 turnaround at its Point Comfort, Texas, plant as planned. Originally scheduled to take 90 days, the turnaround is now expected to take even longer due to the number of contractors the company is limiting in the plant in response to COVID-19.
Alternative Fuels
Ethanol producers will soon begin to feel the impacts of lower gasoline consumption in the U.S. market, ultimately leading to decreased use of ethanol in fuel blending. This will lead to production capacity cut backs and even the discontinuation of stockpiling of corn feedstock.
Oil & Gas Production
North American gas production was already in turmoil due to associated gas production growth from the oil plays. Now, depressed demand and weak prices will likely cause natural gas-directed drilling activity to fall below maintenance levels this year.
The Canadian crude oil sector continues to take a beating as crude oil storage in the country is approaching its maximum capacity of about 40 million barrels. Western Canadian Select (WCS) reached an all-time low of $5.43/BBL but has rebounded to $7.23/BBL. This will ultimately lead to a reduction in production, either through mandatory government policy curtailments, company decisions or coronavirus-related staffing issues.
Globally, major and independent oil producers have recently dropped capital expenditure budgets by 30-50% for this year, amounting to more than $11 billion in spending reductions. Independents in the U.S. will not be able to reach out to debt and equity markets as they did in the previous oil price collapse. Only swift and deep cuts to investment will likely keep producers afloat.
LNG
LNG Canada has reduced labor by 50% on its project. U.S. liquefied natural gas facility construction appears to remain intact: Freeport LNG's Train 3 is in the final commissioning stage. The real concern is that additional project final investment decisions (FIDs) for 2020 could be impacted by market conditions. Low LNG spot prices and the drop in oil prices will make LNG projects based on Henry Hub less competitive.
Oil & Gas Pipelines
While midstream natural gas liquid (NGL) pipelines projects have been largely completed or are on track to be completed this quarter, construction has been halted for some large NGL fractionation and liquefied petroleum gas (LPG) refrigeration export projects.
Metals & Minerals
Global Mining Industry Shutters Mines to Safeguard Against COVID-19: Mining firms are placing mines on care and maintenance (shuttering) and suspending activity at mining projects in response to the COVID-19 outbreak. The fallout is rising at a quick pace as companies rush to wind down operations and demobilize construction workforces. Currently, most of this activity is centered in countries that have issued national quarantines, such as Argentina and Peru, and other countries, such as Canada, which have restricted travel and implemented other safeguards. Newmont, for example, has shuttered two mines in Canada, one in Argentina and one in Peru.
Meanwhile, oil and gas pipeline manufacturer Tenaris has laid off 900 employees and plans to shutter mills in Ambridge and Koppel, Pennsylvania, on March 31, citing low oil prices and COVID-19.
Industrial Manufacturing
North American automotive sector:
Pulp, Paper & Wood
Manufacturers of corrugated cardboard boxes expect to maintain operational levels in order to keep transport packaging flowing to makers of essential products, including packaging for food and other consumer products, medical and pharmaceutical products, tissue and hygiene products. Demand for household bathroom tissue products due to the outbreak is driving towel and tissue manufacturers to run machines at full capacity.
Food & Beverage
Bimbo Bakeries, which has been deemed part of a critical industry, is churning out products from 67 facilities across the U.S. and Canada. Demand for bread and staple food items has spiked as a result of the COVID-19 outbreak.
Many of the food and beverage plants that are remaining open are limiting access to their facilities to outside contractors and vendors, while accelerating sanitation efforts with internal staff.
Pharmaceutical & Biotech
A number of big-ticket projects are being shut down. California has a stay-in-place order, and Bayer has shut down its $150 million cell culture tech center in Berkeley, as did Cytokinetics and its $200 million project in South San Francisco.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
Petroleum Refining
Monroe Energy has reduced production rates by 20% at its 200,000-barrel-per-day (BBL/d) refinery in Trainer, Pennsylvania, and will be evaluating that rate as demand for petroleum products drops due to COVID-19 concerns.
United Refining Company reduced refining rates by an estimated 20% on Sunday at its 70,000-BBL/d Warren, Pennsylvania, refinery due to outbreak concerns.
ExxonMobil reduced production rates by 20% today at its 500,000-BBL/d refinery in Baton Rouge, Louisiana, due to a drop in demand.
Repsol reports that its refineries in Spain remain in normal operation. The company has removed administrative and all non-essential personnel from its 220,000-BBL/d Bilbao (Petronor), 166,000-BBL/d Puertollano, 174,000-BBL/d Tarragona, 220,000-BBL/d Cartagena and 119,500-BBL/d La Coruna refineries due to the outbreak.
Power
Demand for power by industrial sectors has dropped in some parts of the U.S. due to COVID-19 restrictions.
In general, nuclear power plants in the U.S. are moving forward with their refueling. Only one refueling schedule push-back has been reported, and that was only for a couple of weeks.
Among coal-fired power plants, longer-duration and more pressing planned outages are more likely to move forward, while outages with shorter durations (14 days or less) and that are seasonal in nature are more at risk of being postponed.
Petrochemical
More than 137 chemical projects have been delayed or impacted by COVID-19 so far, as confirmed by Industrial Info's research team. While most are delayed, few have been cancelled entirely, with project managers saying they have been instructed to postpone procurement and design decisions until further notice.
Arkema will repurpose and dedicate a pilot production line located in its Rhône Alpes Research Center (CRRA), near Lyon, France, for the manufacture of an alcohol-based solution in order to help out healthcare professionals now under considerable strain. The product of this unit will be available specifically to the French health industry and authorities.
Many chemical plant owners across the Americas and Europe have entered a level 2 advisory, which initiates planning to determine the impact of the current crisis on planned or ongoing capital and maintenance projects. Industrial Info has confirmed several large turnarounds and capital expenditure projects will begin as scheduled in the coming weeks, although with the understanding that the length of these projects will be longer than originally planned due to the limitation of contractors allowed into plants. The next advisory level would be to have essential staff remain onsite 24/7. While no cases of this have been confirmed in chemical plants as of today, contingency plans are being reviewed and evaluated.
Turmoil in the financial market is certain to impact planned mergers and acquisitions. Technip FMC has announced plans to temporarily stop its planned separation into two different entities -- Technip FMC and Technip Energies -- until financial and commodity markets have recovered.
Dena Petrochemical Company has delayed the commercial start-up of a new methanol plant in Iran -- which recently reached mechanical completion -- until later this year due to the COVID-19 pandemic.
BASF has postponed a 21-day planned maintenance turnaround of its 793.66 million-pound-per-year ethylene oxide unit in Ludwigshafen, Germany, due to outbreak concerns. The turnaround was previously planned to begin in April. September 2020 is considered the most likely month that BASF will plan for this turnaround.
Formosa says it is starting the Olefins 1 turnaround at its Point Comfort, Texas, plant as planned. Originally scheduled to take 90 days, the turnaround is now expected to take even longer due to the number of contractors the company is limiting in the plant in response to COVID-19.
Alternative Fuels
Ethanol producers will soon begin to feel the impacts of lower gasoline consumption in the U.S. market, ultimately leading to decreased use of ethanol in fuel blending. This will lead to production capacity cut backs and even the discontinuation of stockpiling of corn feedstock.
Oil & Gas Production
North American gas production was already in turmoil due to associated gas production growth from the oil plays. Now, depressed demand and weak prices will likely cause natural gas-directed drilling activity to fall below maintenance levels this year.
The Canadian crude oil sector continues to take a beating as crude oil storage in the country is approaching its maximum capacity of about 40 million barrels. Western Canadian Select (WCS) reached an all-time low of $5.43/BBL but has rebounded to $7.23/BBL. This will ultimately lead to a reduction in production, either through mandatory government policy curtailments, company decisions or coronavirus-related staffing issues.
Globally, major and independent oil producers have recently dropped capital expenditure budgets by 30-50% for this year, amounting to more than $11 billion in spending reductions. Independents in the U.S. will not be able to reach out to debt and equity markets as they did in the previous oil price collapse. Only swift and deep cuts to investment will likely keep producers afloat.
LNG
LNG Canada has reduced labor by 50% on its project. U.S. liquefied natural gas facility construction appears to remain intact: Freeport LNG's Train 3 is in the final commissioning stage. The real concern is that additional project final investment decisions (FIDs) for 2020 could be impacted by market conditions. Low LNG spot prices and the drop in oil prices will make LNG projects based on Henry Hub less competitive.
Oil & Gas Pipelines
While midstream natural gas liquid (NGL) pipelines projects have been largely completed or are on track to be completed this quarter, construction has been halted for some large NGL fractionation and liquefied petroleum gas (LPG) refrigeration export projects.
Metals & Minerals
Global Mining Industry Shutters Mines to Safeguard Against COVID-19: Mining firms are placing mines on care and maintenance (shuttering) and suspending activity at mining projects in response to the COVID-19 outbreak. The fallout is rising at a quick pace as companies rush to wind down operations and demobilize construction workforces. Currently, most of this activity is centered in countries that have issued national quarantines, such as Argentina and Peru, and other countries, such as Canada, which have restricted travel and implemented other safeguards. Newmont, for example, has shuttered two mines in Canada, one in Argentina and one in Peru.
Meanwhile, oil and gas pipeline manufacturer Tenaris has laid off 900 employees and plans to shutter mills in Ambridge and Koppel, Pennsylvania, on March 31, citing low oil prices and COVID-19.
Industrial Manufacturing
North American automotive sector:
- Honda U.S. is shut down until March 31. Honda Canada currently is operating as usual.
- Ford is shut down, but is working with manufacturers to produce ventilators and other safety products.
- GM is shut down for at least two weeks, although it is working with manufacturers to produce ventilators and other safety products.
- Toyota plants are closed until April 6. It is working to sterilize its facilities to protect workers.
- Bridgestone has temporarily shuttered its plants in North America.
- Tesla has stated it will remain open, but that may change in the next day or so.
- Volkswagen has suspended production.
- BMW is remaining open for now.
- Michelin suspending some production.
- Hyundai has shut down production, but some component plants remain operational.
- The majority of the automotive and retail distribution centers have been shuttered.
- Grocery warehouses are remaining open. In fact, most major grocery retailers are hiring additional workers.
- Pharmacy warehouses are remaining open and in some cases adding workers.
- Amazon is hiring 100,000 workers for warehouse operations.
- Dollar Tree is hiring 25,000 workers.
- Lowe's is hiring warehouse workers.
- LVMH (perfume manufacturer) is converting its operations to produce hand sanitizer.
- Anheuser Busch is converting from beer manufacturing to making hand sanitizer.
- Aviator Nation is converting manufacturing to face masks.
- Citizens of Humanity is converting from apparel manufacturing to face masks.
- Christian Siriano is converting from apparel manufacturing to face masks.
Pulp, Paper & Wood
Manufacturers of corrugated cardboard boxes expect to maintain operational levels in order to keep transport packaging flowing to makers of essential products, including packaging for food and other consumer products, medical and pharmaceutical products, tissue and hygiene products. Demand for household bathroom tissue products due to the outbreak is driving towel and tissue manufacturers to run machines at full capacity.
Food & Beverage
Bimbo Bakeries, which has been deemed part of a critical industry, is churning out products from 67 facilities across the U.S. and Canada. Demand for bread and staple food items has spiked as a result of the COVID-19 outbreak.
Many of the food and beverage plants that are remaining open are limiting access to their facilities to outside contractors and vendors, while accelerating sanitation efforts with internal staff.
Pharmaceutical & Biotech
A number of big-ticket projects are being shut down. California has a stay-in-place order, and Bayer has shut down its $150 million cell culture tech center in Berkeley, as did Cytokinetics and its $200 million project in South San Francisco.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
