Environmental groups to sue Shell; Peru LPG Society consultant, Talara refinery manager take top energy roles in new Peru government; Orbia gets lithium technology; Texas plant certified to process pyrolysis oil
Environmental groups plan to sue Shell’s new Pennsylvania plant over emissions
Two environmental groups announced on Feb. 2, 2023 that they plan to sue Shell Chemical Appalachia over air pollution, just about three months after the startup of operations of Shell’s 1.6-million tonnes per year facility with capacity of polyethylene production, and related ethane cracker in Pennsylvania.
The Environmental Integrity Project said in a press release that along with another environmental group named Clean Air Council it filed “a notice of intent to sue (…) for repeated violations of air pollution limits,” it said.
Shell started operations in its petrochemical complex in 2022 after a construction that lasted several years. Full rates are expected for later this year.
The plant, located near Pittsburgh, is the first resin complex of this size built in the Northeast of the U.S. with the intention to tap ethane from the Marcellus shale and take advantage of the concentrated presence of plastic converters within 700 miles from the plant.
Peru LPG Society consultant, Talara refinery manager take top energy roles in new Peru government; Talara claims restart of some fuel production
The new Peruvian Energy and Mines Minister, Oscar Vera Gargurevich, named on Dec. 10, 2022, only three days after the former Peruvian President Pedro Castillo was imprisoned and Vice President Dina Boluarte became the Peruvian President, said on Feb. 3, 2023 that the Talara plant had produced fuel again. The Talara plant had been shut since late 2019 for an upgrade and expansion.
According to a press release by Petroperu, in English, on Feb. 2, to mark the event, the President of the Board of Petroperu, Carlos Vives Suarez, “delivered the first sample of low sulfur diesel to the Head of State, which marks one of the milestones of this energy project, considered the most important in the country. Vives Suárez reported that the production of cleaner fuels has been carried out gradually, hoping to reach 100% between March and April of this year."
"In the following weeks, the start-up and warranty tests of the conversion and deep conversion units will continue, hoping to culminate with this secure boot process in the first quarter of this year, as planned," according to the release distributed by Petroperu along with a picture of Boluarte donning a safey helmet and holding two transparent containers, each with about 1 liter of liquid, in one case a water-colored liquid and the other a bit more yellow. The image is available in Petroperu's website along with the full press release, in English.
The restart of the Talara plant, by far the biggest refinery owned by Petroperu, has seen delays. On Nov. 4, 2022 Vera Gargurevich, at the time the “corporate manager of the Talara Refinery,” had said that a December 2022 startup of the plant was planned after completion of a 30,000 bpd expansion to 95,000 bpd (barrels per day) of capacity.
Before that, Petroperu’s failure to restart the plant timely and as projected resulted in the unforeseen, unplanned need for Peruvians to part from $1.5 billion. Funds were released through an urgent decree in late Oct. 2022.
In April 2022 there was a ceremony to mark the gradual restart of activities in Talara, with plans at the time to reach full rates by September 2022.
According to a copy of Vera Gargurevich’s CV posted on Petroperu’s website, he started to work in Petroperu, precisely in Talara, back in 1983, initially supervising maintenance work at the solvent plant, later in the supervision of other operations and also other much smaller plants like that of Iquitos. He held supervisory or higher roles in the Talara refinery in 2015-2017.
According to his CV posted in government sites, Vera Gargurevich received a chemical engineering degree from the state-run engineering university in Trujillo, Peru, in 1983. Vera, who was born in 1958, completed on June 22, 2011 a Master of Business Administration in the Haskayne School of Business at the University of Calgary, according to his CV, in addition to another master degree in global energy administration from a Peruvian university, on the same date.
“The Cabinet member underscored the benefits generated by the construction (…) allowing the creation of 10,000 direct jobs, 20,000 indirect jobs," and more than (over $1.8 billion) in tax revenue for the country, the Andina press report said in reference to Vera Gargurevich’s comments in early February 2023. Peruvians have borrowed nearly $5 billion to help pay for the Talara upgrade: a project to increase refining capacity by 30,000 bpd and add units to process residuals and reduce sulfur in finished products.
Job creation was precisely a key selling proposition that the government of former President Ollanta Humala (2011-2016) legislators used to get support from other political groups, leading to approval in the one-chamber, 130-member Congress of a law that led Peruvians into debt for Talara.
As a result Congress approved in 2014 the law to incur debt for the modernization of the Talara refinery, to pay for a project to expand 30,000 bpd of capacity and process residuals, and remove sulfur from products,at the time projected to cost about $3.5 billion. The initial project cost estimate for the same Talara upgrade, around the mid-2000s, was about $1.5 billion. Actual costs, when including fuel purchases and extended maintenance have yet to be estimated. One former Petroperu general manager said in mid-2022 they may exceed $8 billion when including maintenance of idled equipment for many years, not counting fuel purchases or depreciation. Petroperu's balance sheets from recent years show its by far biggest asset was the work-in-progress in Talara.
The chief of the cabinet of ministers appointed after the change of government in Dec. 7, 2022 is Alberto Otarola Penaranda, who is the brother of Fredy Otarola Penaranda, who was President of the Peruvian Congress between July 2013 and July 2014, precisely the period in which Congress approved the law to borrow to pay for Talara. That work by the so-called Nationalist Party legislators allowed former President Ollanta Humala (2011-2016) to sign contracts for the multi-billion project near the end of his government. Peruvians will pay debt until 2047 over Talara.
Alberto Otarola Penaranda was Defence minister in the government of former President Humala in 2011-2012. Humala, who selected him for the position, was a lieutenant colonel of the Peruvian army. The military are also present in Congress in Peru. The current President of Congress (since September 2022) is Jose Daniel Williams Zapata, a retired army general.
“The Peruvian LPG Society”
Oscar Vera Gargurevich, the Energy and Mines minister of the government of Dina Boluarte who was appointed on Dec. 10, 2022, announced in his first two weeks in office the naming of Carlo Renato De los Santos La Serna for the key position of General Director of Hydrocarbons of Peru.
Before that, De los Santos had represented before media the position of the Peruvian LPG Society, according to diverse Peruvian media reports from 2022.
Peru Proactivo (proactivo.com.pe) published a report on Aug. 7, 2018 to announce the creation of “The Sociedad Peruana de Gas Licuado (SPGL)” or “LPG Peruvian society,” a guild to represent LPG distributors, importers and producers in Peru. The founding of the guild coincided with increased citizen concern in Peru over prices of cooking fuel canisters, in part resulting from sharp price increases in recent years (as production from Camisea declined) and in part as the price of a 10-kilogram cooking fuel canister in Peru gained much political visibility in recent years, and Peruvians have grown aware of price differences with neighboring countries.
Back in the mid-2000s, when large volumes of LPG imports were not necessary because production of propane butane from Camisea was at levels sufficient enough that companies in Peru related to the consortium not only would meet all domestic demand but actively also exported LPG, former president Ollanta Humala (2011-2016), at the time an apparent aspiring candidate from the left with a military background, had mentioned the price of a cooking canister in just about every single political meeting during his two bids for the Peruvian presidency, including the one where he lost the runoff in 2006. Humala won the presidency in 2011 largely with offers to bring LPG cooking fuel costs lower, similar to Bolivian levels, but didn't deliver. He only raised awareness and discontent while projects to transport natural gas from Camisea to Peruvian cities he had long publicized were in reality lost in the mist or resulted in costly legal cases against Peru.
Humala and his wife Nadine Heredia, who according to Peruvian press at the time had decision making capacity including in minister namings and was actively involved in all large infrastructure projects, particularly Talara, are retired from politics and face corruption trials in Peru. Unlike Pedro Castillo, legal winner of the 2021 presidential elections for a five-year term, they are not in prison. Keiko Fujimori, Pedro-Pablo Kuczynski, Alejandro Toledo, and other Peruvians that had influential, or decisive roles in contracts or other actions that resulted in how Peruvian hydrocarbons are managed in Peru, and the country energy institutions and organizations current ability to delivery affordable fuel to the nation, also face legal processes but are not in prison. Castillo told a Spanish media in an interview (not possible to confirm veracity of report independently) in early February that he is kept in a small windowless room, alone, unable to communicate with his family. Five Peruvian judges in a process that was online and lasted hours, did manage to jail him preventively, with charges involving 18 years of prison, accusing him of committing four crimes (rebellion, conspiracy to commit rebellion, abuse of authority, and disturbing public peace), in flagrante delicto, by just reading a message to the nation that lasted about four minutes. Castillo is a former rural elementary teacher, not a constitutional lawyer, and the text was about calling for the election of a new Congress with also powers to work on a new constitution. The current government blames Castillo for leading protests in the nation even as he is isolated in a strict prison regime. It is true many protesters call for the restitution of his presidency and what they describe as the democratic order in Peru.
Going back to the LPG guild, the companies making up the society created in 2018 included Costagas, Llamagas, Limagas, Primax/Pecsa and Solgas. Primax is the fuel company of the powerful Peruvian Romero group, initially created in a partnership with a Chilean company.
As recently as on Dec. 18, 2022 Carlo De los Santos was identified and quoted by Peruvian newspaper La Republica as “consultant for the Peruvian Society of LPG (SPGL)” as he was asked to discuss the impact of road blockades on LPG distribution nationwide.
Those blockades that La Republica mentioned were parts of protests against Dina Boluarte and her cabinet as some of the Peruvians that voted for Castillo for president (he received over 8.8 million votes, 44,000 more than his opponent Keiko Fujimori), in a nation of over 30 million inhabitants, do not recognize the legitimacy of Boluarte and consider the abrupt government change a coup. Fighting has resulted in 60 deaths with hundreds of injured, many by firearm. Protests started on Dec. 7, 2022 and as of early February continued with equal or more intensity.
Peruvian energy media revistaenergiaynegocios.com published on Sept. 23, 2022 a report discussing the supply chain and prices of LPG in Peru where it identified Carlo De los Santos not as mere consultant with the LPG society but as “the representative of the Peruvian Society of LPG.”
Solgas, another member of the Peruvian LPG Society, was once a state owned LPG company but was sold in the 1990s to Spain-based hydrocarbons producer and refiner Repsol by former Peruvian President Alberto Fujimori (1990-2000), jailed since the mid-2000s. Chile-based Copec then bought Solgas in 2016.
Limagas, an LPG distributor, was bought in 2013 by Chile-based Lipigas, according to Peruvian media.
LPG pricing is very controversial in Peru in part because prices in the Andean country, home to the huge Camisea gas deposit, are about five times or more higher than those in neighboring Bolivia. Peruvians living in areas near Ecuador are also exposed to lower fuel prices that citizens outside Peru’s borders enjoy.
In the case of Bolivia, a country that in the 1990s had similar gas reserves compared with Peru, the state-owned downstream industry manages to produce not just more affordable fuels like LPG but also fertilizers, for domestic use and for export. Peru faced much difficulty in 2021-2022 just in trying to import fertilizers. Castillo's government was trying to make the purchases directly during his government, through direct tendering from government without intermediaries, but without success, in part due to government's controlling entities observing parts of the process. He had also asked Petroperu former President Humberto Campodonico, in public, specifically in the April 2022 ceremony to inaugurate the then just completed Talara refinery in the presence of diverse project stakeholders such as the engineering company behind Talara's work, Spain's Tecnicas Reunidas. Castillo had asked Campodonico to do what he did in his first term in Petroperu to get the Talara spending going and approved to help him build a fertilizer plant, to in turn help Peruvian farmers. But Campodonico abruptly resigned in Oct.2022 after informing about the need for $1.5 billion or else Peru would not have fuel, that led to the need for an urgent decree to make the spending possible without transparency instruments normally used in such cases. It was not disclosed what volume of fuel was purchased and over what period with the $1.5 billion, or any details as to the process, sellers, or tendering details, due to the use of an urgent decree. To help visualize the magnitude of the loss for the Peruvian coffers just in one day in late October, the entire Peruvian budget for 2023 proposed at the time was $56 billion with that spending subject to strict control.
LPG is a fuel needed daily in Peru for cooking and also used as vehicle fuel by some gasoline-powered autos converted to run on LPG. Nearly all homes in Peru buy LPG (propane and butane) in canisters, that are refillable and are connected to stoves through hoses.
Part of the discontent being focused in the south of Peru is because residents there can see how the same LPG canister can cost about $3 in Bolivia and over $15 in Peru, leading to smuggling and other issues. South Peruvians are also upset because the Camisea gas reserves are in the south of the country yet they must pay LPG prices that are higher than those in the coast, the end point of the Camisea pipeline that originates in the southern edge of the Ucayali basin, located in the department of Cusco.
As for Petroperu, even if a full restart of Talara were to occur within three months, the state owned oil company still faces critical challenges, many of those related to servicing its relatively new long-term dollar-denominated Talara debt extending to 2047. Other challenges include maintenance needs for its 50-year old pipeline that crosses the Peruvian Amazon rainforest.
Mexico’s Orbia gets technology to produce lihium hexafluorophosphate in North America
Orbia’s Fluorinated Solutions, a unit of Mexico-based Orbia (previously Mexichem) announced on Feb. 2, 2023 in a press release from Boston a technology licensing agreement with Kanto Denka Kogyo that will help produce lithium hexafluorophoshate (LiPF6), a critical lithium-ion battery material.
“Currently, there is no large-scale production of LiPF6 in North America. With significant growth of the U.S. electric vehicles market, demand for lithium-ion batteries and materials is increasing,” Orbia said, according to the release.
Orbia, based in Mexico City, recently announced the first U.S. manufacturing plant for LiPF6 in St. Gabriel, Louisiana, partially funded by a $100 million award from the U.S. Department of Energy, it said.
There are other initiatives in Mexico related to accessing lithium to feed the needs of an automotive industry through exploring programs with Bolivian companies and officials.
Sweeny Refinery in Texas certified to process pyrolysis oil from waste plastic
Phillips 66 said on Jan. 25, 2023 that it has received certification for its Sweeny Refinery in Texas to process oil made from waste plastics into feedstocks for new plastics.
The products will be used to support polymer producers, including Chevron Phillips Chemical Company LLC, Phillips 66’s 50-50 joint venture.
By Renzo Pipoli