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[Jul. 14, 2014]  HOW does conventional wisdom – i.e. the opinion of the majority – become conventional wisdom? This is a subject that the blog pondered over the last few days as it wandered around Euro Disney. Unfortunately, Mickey, Donald and his pals weren’t able to give us an answer. The reason why we dwelled so much on this subject was because of our post last week on coal-to-olefins (CTO) in China. We feel, like many others perhaps should feel, that we might have have been suckered-in to believing that water was the Achilles Heel of the process. If water is not really a challenge, and much of the planned new US supply come on-stream towards the end of this decade, here is a scenario: ?US petrochemicals companies suffer severe oversupply distress, which will either be short term or long term, depending on your view of the global economy. ?This could enable China to buy-up distressed US petrochemicals assets. It has ample reserves to go on a buying spree, especially if it reduces its holdings of US Treasuries. Back to our main point about conventional wisdom. Perhaps some of those at the top are happy to continue to peddle the CTO water challenge fallacy because they have pinned their career success on huge ethane-based capacity additions. When things go wrong, they might have already retired or moved on to other positions and so there is nothing in it for them to rock the boat. Less senior people worry that if they, too, rock the boat by expressing their doubts, on either CTO supply or more importantly the macro-economic fundamentals, they will be committing career suicide. It is easier to follow the herd and say, “we didn’t see this coming” when things go wrong, rather than be an outlier. Here is a reminder, from this excellent article by my colleague Nigel Davis, on the scale of what’s being planned in the US: ?As many as 11 new crackers could be built in the US before the end of the decade. Add the capacity from eight expansions for existing facilities announced to date and the potential capacity increase is 51% or 13.9m tonnes. US polyethylene capacity could rise by 47%, or 7.1m tonnes. ?Even if we tinker with some of the announced US cracker on-stream dates (see the above estimate, from ICIS Consulting, of actual, as opposed to announced, start-up timings), the big slug of ethylene capacity – as much as 7m tonnes – would be available after 2017. Tellingly, the ‘build-out’ – between 2017 and 2020 – is far above that in past ethylene cycles.
[Jul. 14, 2014]  The US and China signed new agreements that are expected to increase co-operation on energy issues.
[Jul. 9, 2014]  More Chinese companies have made this year’s Fortune Global 500 list but their typical profitability is weak, according to the annual ranking released on Monday.
China Exploration
[Jul. 14, 2014]  China and the United States have signed a preliminary agreement to cooperate on strategic petroleum reserves (SPR), China’s National Energy Administration (NEA) said, marking the first such effort between the world’s top two oil consumers. Under the agreement, the U.S. Energy Department and NEA will share information on technical, management and policy issues related to oil stockpiles, the Energy Department said in a statement on Friday.
[Jul. 14, 2014]  According to BP, drivers whose vehicles rely on burning oil have a little more than a half-century to find alternate sources of energy.
[Jul. 14, 2014]   China, the world’s second largest oil consumer after the U.S., imported 137.88 million tons of crude oil in the first half of 2014, 10.2% more than in the same period of last year, according to figures from China’s General Administration of Customs.
China Refining
[Aug. 1, 2014]  If good fences make good neighbors, that may explain why much of Asia’s recent territorial tension has centered on the ocean.India took a step toward tighter ties with Bangladesh this month in surrendering its four-decade claim to a swathe of the
[Aug. 1, 2014]  * Run rates at teapot refiners drop to 34.5% over July 24-30* New tax system curbs interest for crude, asphalt as feedstock* Domestic 180 CST prices dip on weak shipping demandWeak demand and high inventory of refined oil products restrained teapot refi
[Jul. 14, 2014]  PetroChina Co is committed to completing its C$1.32 billion (S$1.53 billion) purchase of the stake it doesn’t own in the Dover oil-sands project in Canada soon, according to the Beijing-based company’s parent.
China Biofuels, Green Energy
[Jul. 16, 2014]  China National Petroleum Corporation (CNPC) announced Tuesday that the petroleum drilling and exploration operation of Zhongjiannan Project in the South China Sea was smoothly completed on schedule July 15 with oil and gas shows found. In accordance
[May 22, 2014]  Although exact details are unclear, Russian and Chinese media outlets are reporting that ten years of negotiations surrounding the sale of natural gas from Siberia to China have finally concluded at the tail end of a state visit by President Vladimir Puti
[May 19, 2014]  Western efforts to punish Russia for its military adventures in eastern Ukraine look set to backfire in spectacular fashion.This coming week, Russian President Vladimir Putin is poised to unveil a very big prize: access to the world’s largest, fas
China Gas , LNG / LPG
[Aug. 1, 2014]   A private Chinese chemical firm plans to build a $1.85 billion plant by the Mississippi River to make methanol out of shale gas, becoming one of the latest foreign investors to capitalize on the U.S. shale boom.Over the next five to 10 years, as
[Aug. 1, 2014]  China National Offshore Oil Corporation (CNOOC) launched production at its Panyu 0-2/5/8 project in the South China Sea.Panyu 0-2/5/8 is located in the Pearl River Mouth Basin, off China’s southeastern coast.Panyu 0-2/5/8 includes three oil fields,
[Aug. 1, 2014]  Asia increased its imports of Iranian oil by 25 percent in the first six months of the year, largely thanks to sharp spikes in purchases from China and India.According to a Reuters investigation, which reviewed official customs data and tanker schedule
China Pipelines
[Aug. 1, 2014]  From changing the nature of global politics to being a force for human rights, the announcement of the new BRICS development bank has been met with feverish anticipation by the global economic community. Its supporters have written that it will free th
[Aug. 1, 2014]  Uzbekistan’s possible participation in constructing a gas pipeline from Turkmenistan through Afghanistan and Pakistan to India (TAPI) will be considered at a meeting of the Uzbek-Turkmen commission on trade-economic, scientific-technical and cultural c
[Jul. 29, 2014]  The offshore section of the Myanmar-China natural gas pipeline has successfully shipped 1.87 billion cubic metres of gas, according to the Chinese oil and gas giant CNPC.Sixty-million cubic metres of gas has remained in Myanmar for domestic use, whilst
China Terminals & Storage
[Mar. 28, 2014]  New loan issuance affects the oil tanker shipping industry One of the key indicators that grabs analysts’ attention is China’s new loans. Issuing new loans is an important way of stimulating economic growth, as it increases demand. However, ex
[Mar. 12, 2014]  State-owned China National Offshore Oil Corp, leader of the country’s liquefied natural gas import business, plans another receiving terminal in the southeastern province of Fujian, a company official said on Tuesday. China, the world’s t
[Jan. 30, 2014]  All 20 Indian crew members of an oil tanker - which exploded and caught fire at a shipyard in east China while undergoing repairs -  are safe, officials said a day after the incident killed seven Chinese workers. The captain and the crew members were
China Petrochemical
[Aug. 1, 2014]  If good fences make good neighbors, that may explain why much of Asia’s recent territorial tension has centered on the ocean.India took a step toward tighter ties with Bangladesh this month in surrendering its four-decade claim to a swathe of the
[Aug. 1, 2014]  * Run rates at teapot refiners drop to 34.5% over July 24-30* New tax system curbs interest for crude, asphalt as feedstock* Domestic 180 CST prices dip on weak shipping demandWeak demand and high inventory of refined oil products restrained teapot refi
[Aug. 1, 2014]   Petrochemical and fuel oil trader CEFC International has tied up with a subsidiary of Rizhao Port Group (RPG) to build and operate oil storage facilities in Rizhao port in China.The joint venture between CEFC’s wholly owned subsidiary, Hong Kong
China Commodities
[Jul. 25, 2014]  Australia and New Zealand Banking Group (ANZ) and the Export-Import Bank of China (China Exim) have teamed up to lead a $787m financing deal for four new LNG carriers in China.The cash will go to CNOOC, Teekay LNG Partners, China LNG Shipping (Holdings) a
[Apr. 25, 2014]  Today’s European trading session saw West Texas Intermediate and Brent both claw their way up from last session’s losses on the bearish US supplies report, with firm support coming from Ukraine. Meanwhile, natural gas kept earlier gains on rep
[Mar. 27, 2014]  Over the years, Oil & Gas and Chemical plants have become more complex due to the use of more integrated systems and the development of more complex process design. Therefore there is an apparent need to find a comprehensive way of ensuring the plant
China Finance & Acquisition
[Jul. 29, 2014]  Athabasca Oil Corp. (ATH) fell to its lowest price in seven months after saying it’s continuing efforts to collect a C$1.32 billion ($1.22 billion) payment from PetroChina Co. (857) for a Canadian oil-sands project.The shares fell 6.8 percent to
[Jul. 25, 2014]  Australia and New Zealand Banking Group (ANZ) and the Export-Import Bank of China (China Exim) have teamed up to lead a $787m financing deal for four new LNG carriers in China.The cash will go to CNOOC, Teekay LNG Partners, China LNG Shipping (Holdings) a
[Jul. 25, 2014]  Crude-oil futures fell Thursday, but losses were limited by a larger-than-expected drop in U.S. oil stocks and positive China manufacturing data.On the New York Mercantile Exchange light, sweet crude futures for delivery in September closed at $102.7,
China Govt & Regulatory
[Jul. 31, 2014]    The company at the center of China’s anti-corruption offensive may be set to reward  investors who stuck with it. Shares in PetroChina Co. (857) surged the most in five months in Shanghai trading today,  after a
[Jul. 28, 2014]  China National Petroleum Corporation (CNPC) is one of the world’s largest companies, with global operations and a 2013 revenue of US$432 billion (S$536 billion). Its publicly listed subsidiary, PetroChina, trades in Hong Kong, Shanghai and New Yo
[Jul. 25, 2014]  China Petroleum & Chemical Corp. (386), owner of more than 30,000 gas stations in the country, is seeking to raise 100 billion yuan ($16 billion) selling about a one-third stake in its retail unit, people familiar with the matter said.The sale woul
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