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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
[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.
[Jul. 11, 2014]  Overseas sources are undoubtedly going to play a far bigger role in supplying China’s energy needs, with oil imports set to account for three quarters of the country’s overall use by 2025. But with the country already the world’s biggest energy consumer, using more than Russia, India, Japan and Germany combined, China’s unquenchable thirst for oil and gas also means it’s is looking to increase efficiencies in its domestic upstream industry.
[Jul. 10, 2014]  Nearly a year has passed since a natural gas pipeline formally went into operation last July linking Myanmar’s deep-water port of Kyaukphyu with Kunming, the capital city of southwestern China’s Yunnan Province. A parallel oil pipeline is expected to finish this year. As well as opening up a new energy corridor for China, the pipeline has benefited Myanmar immensely.
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
[Jul. 22, 2014]  Fitch Ratings has affirmed city piped gas distributor China Resources Gas Group Limited’s (CRG) Long-Term Issuer Default Rating (IDR) at ’BBB+’ with a Stable Outlook. Simultaneously, CRG’s senior unsecured rating is affirmed at ’BBB+’.CRG’s IDR incorpo
[Jul. 22, 2014]  Pakistan’s government said Monday it was getting China’s help with the construction of a liquefied natural gas terminal and associated pipeline infrastructure.The Ministry of Petroleum and Natural Resources said it consented to the construction of an L
[Jul. 22, 2014]  China began moving the controversial oil rig near the Xisha Islands on July 15, easing a two-month standoff with Vietnam over vast fisheries and oil and gas reserves.The rig deployed by Chinese State oil company China National Offshore Oil Corporation
China Pipelines
[Jul. 10, 2014]  Nearly a year has passed since a natural gas pipeline formally went into operation last July linking Myanmar’s deep-water port of Kyaukphyu with Kunming, the capital city of southwestern China’s Yunnan Province. A parallel oil pipeline is expected to finish this year. As well as opening up a new energy corridor for China, the pipeline has benefited Myanmar immensely.
[Jul. 8, 2014]  Correcting rated pump performance to working conditions in the field will increase efficiency, particularly when the pipeline is transporting heavy oil. This article presents a model for correcting pump performance guidelines for heavy oil pipelines
[Jun. 27, 2014]  The growing bloodshed in Iraq and Syria is being watched as keenly in China as anywhere else in the world. Indeed, the greater Middle East is becoming an ever greater focus of Chinese foreign policy.At the just-concluded sixth ministerial conference of th
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
[Jul. 18, 2014]  The United States on Thursday set steep import duties on Chinese chemicals used in sanitizing water and confirmed duties on high-tech steel from Germany, Japan and Poland after finding the products were being sold too cheaply in U.S. markets.In a preli
[Jul. 18, 2014]  The North American subsidiary of a top 25 Chinese petrochemical company will build a $1.85 billion methanol complex in St. James Parish, injecting 400 permanent jobs and 2,365 indirect jobs to the region’s economy over a nine-year period.Yuhuang
[Jul. 18, 2014]  A subsidiary of China-based Shandong Yuhuang Chemical Co. Ltd. plans to build a $1.85 billion methanol manufacturing complex on the Mississippi River in St. James Parish, joining a booming petrochemical industry along the riverfront in Louisiana, the c
China Commodities
[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
[Mar. 24, 2014]  President Xi Jinping is leading an effort to reform China’s energy sector, which has long been under the strict purview of state-owned enterprises. China is expected to raise retail natural gas prices and may also allow investment from private compa
China Finance & Acquisition
[Apr. 25, 2014]  Guanghui Energy Co Ltd has become the first Chinese listed firm to announce a plan to issue preferred shares, in a surprise to market watchers who expected banks would take the lead in testing out the new form of capital recently approved by regulators
[Apr. 25, 2014]  China’s government says it will open 80 projects in eight state-run industries to private and foreign investors, as part of efforts to make its slowing economy more productive.The announcement is the latest in a series of policy changes aimed at
[Apr. 25, 2014]  National Development and Reform Commission announced in the Notice on the Adjustment of Oil Product Prices issued on April 24, 2014, that the current prices of oil products will be adjusted.
China Govt & Regulatory
[Jul. 21, 2014]  China’s government is pursuing major changes in its energy sector as it presses officials with its sweeping anti-corruption campaign.On June 25, state-owned China National Petroleum Corp. (CNPC) announced it would open its oil and gas pipeline netwo
[Jul. 8, 2014]  China should establish emissions inventories for all major port cities as soon as possible to detail pollutants from ships and ports, experts have suggested.
[Apr. 17, 2014]  In case of showdown over Ukraine, Russia aims at replacing Europe with China to sell its huge reserves of oil and gas, but Beijing is open to energy collaboration with the Kremlin only on its own terms.Western powers and Russia keep on skirmishing over Uk
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