2021 Atlantic hurricane season seen more intense than average; Alpek to build CO2 plant in Mexico in joint venture; KBR sells PDH technology license; Gulf of Mexico’s crude oil output to rise in 2021, 2022; U.S. rail transportation recovers
2021 Atlantic hurricane season seen producing above average activity
The 2021 Atlantic hurricane season will see above average activity compared with the 40-year average, according to a forecast published on April 14 by the Energy Information Administration (EIA).
The Colorado State University’s Seasonal Hurricane Forecasting projected eight hurricanes and 17 storms for the June 1 to Nov. 30 period.
The National Oceanic and Atmospheric Administration will release its own Atlantic Hurricane Season Outlook for 2021 in May.
Historically, most Gulf of Mexico shut-ins occur in October.
In 2020, hurricane-related disruptions started with Tropical Storm Marco and Hurricane Laura in August. Delta shut in 1.6 million barrels of oil production over two days in October,
The combined effects of Marco followed quickly by Laura led to 15 days of shut-ins. This more than doubled the total shut-in production from Hurricane Delta and overall resulted in the most shut-ins for the season since 2008, the EIA added.
Mexico’s Alpek to build CO2 plant in Mexico in joint venture with ContourGlobal
Alpek has formed an equal joint venture with ContourGlobal to build a carbon dioxide (CO2) capture and liquefaction facility that will be integrated into ContourGlobal’s cogeneration plant in Altamira, Mexico.
The plant will meet the rising need for food-grade CO2 for Mexico´s food and beverage industry, “currently undersupplied by around 80,000 tons per year. CO2 is used in the carbonation of soft drinks, beer, and mineral water,” among others, according to a press release issued on March 29.
“This project is very attractive from both an ESG (environmental, social and corporate governance) as well as a financial perspective,” said Jose de Jesus Valdez, Alpek’s CEO.
The facility will have capacity of about 70,000/tons per year and be completed by late 2022. A final investment decision could come by the end of the third quarter.
Alpek operates two business segments: polyester, which includes PTA, PET, rPET, and polyester fibers, and plastics and chemicals that includes polypropylene, expandable styrenics, caprolactam, and specialty chemicals.
Alpek, based in Mexico, produces PTA and PET worldwide. The company is one of the largest rPET producers in the Americas, the world’s third largest expandable polystyrene manufacturer, and Mexico’s only polypropylene and caprolactam producer.
Alpek reported for 2020 $5.3 billion in revenue. It operates 31 plants in Argentina, Brazil, Canada, Chile, Mexico, the U.S. and the U.K. As for ContourGlobal , it owns and operates 6,307 MW in 1179 power plants in 20 countries in four continents.
Altamira is located in Tamaulipas, which is the Mexican state bordering Texas at the mouth of the Rio Grande on the shores of the Gulf of Mexico.
KBR sells license for its PDH technology for project to be built in 2024
KBR, Inc. announced on April 13 in Houston that it signed a license agreement with JS Energy for its new K-PRO technology to turn propane into propylene for a planned propane dehydrogenator (PDH) project in Pakistan “to be commissioned in 2024.”
“K-PRO is based on an innovative catalyst that does not contain costly precious metals or environmentally-sensitive chromium and is a continuous process with efficient energy integration, heat recovery and high conversion,” the company said.
KBR introduced the technology in 2019 and claims it results in lower capital cost to build a plant as well as lower catalyst expenses during operations, with fewer pollutants.
Gulf of Mexico’s crude oil production to increase in 2021, 2022
The U.S. crude oil production in the Gulf of Mexico will increase in the next two years, according to the Short-Term Energy Outlook that the U.S. Energy Information Administration (EIA) published in mid-April.
The Gulf of Mexico’s production may reach 1.7 million barrels per day (b/d) in 2021 and 1.75 million b/d in 2022. Since 2000, the highest crude oil production year was 2019 at 1.9 million b/d.
By the end of 2022 thirteen new projects could account for nearly 12% of the total Gulf of Mexico’s crude oil production, or 200,000 b/d, it said.
The Gulf of Mexico represents 15% to 16% of the total U.S. crude oil production. In 2020, the Gulf of Mexico’s crude oil production averaged 1.65 million b/d.
Four of the new projects will likely begin production in 2021 and nine more will begin in 2022, according to Rystad Energy. Timelines may change based on market conditions, the EIA said.
Although eight new projects started production in 2020, annual production was lower than 2019 levels because of pandemic-related shut-ins. In addition, 2020 brought the most active Atlantic hurricane season on record, the EIA said.
U.S. rail transportation recovers from a year ago
The Association of American Railroads (AAR) reported in mid-April that U.S. rail traffic for the week ended April 10, including railcars as well as intermodal units, was 513,724 units, about 25% more than in the same week a year earlier.
Total carloads alone for the week ending April 10 were 233,300, up 17% compared with the same week in 2020, while U.S. weekly intermodal volume was 280,424 containers and trailers, up 31% over the same period.
Nine of ten carload commodity groups posted an increase compared with the same week in 2020. They included motor vehicles and parts, up 9,854 carloads to 12,044; and chemicals, up 4,984 carloads, to 33,988.
North American rail volume for the week ended April 10 on a dozen reporting U.S., Canadian and Mexican railroads reached 333,230 carloads, a 16% on-year increase, and 372,251 intermodal units, a 28% on-year increaseover the same week a year earlier.
Most petrochemical commodities, including plastic resins, move in railcars.
By Reuters Events Downstream