05242018Thu
Last updateThu, 24 May 2018 2pm

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China’s Promises Allow U.S. Producers to Breathe Easier

Recently, Chinese President Xi Jinping gave reassuring words to help calm tariff tensions with the U.S. Xi’s commitment to cut tariffs and open the economy could be a first step in drawing more interest from foreign investment.

Rystad Energy estimates that U.S.-headquartered E&P companies have 75,000 barrels a day of crude oil production and 200 million cubic feet a day of gas coming from China. This is miniscule in comparison with the overall 3.7 million barrels a day of crude oil production and 13.5 billion cubic feet a day of gas that China is projected to produce in 2018. 


Global Chemicals Production Continues on Soft Note

Data collected and tabulated by the American Chemistry Council (ACC) show that growth in global chemical production continued on a soft note in February. The ACC’s Global Chemical Production Regional Index (Global CPRI) indicates that global chemicals production fell 0.8% in February, following a revised 0.7% drop in January and a 0.3% gain in December. During February, production gains were in North America, Europe, Africa and Middle East with weakness in Latin America and Asia-Pacific. The Global CPRI was up 2.0% year-over-year on a 3MMA basis and stood at 114.3% of its average 2012 levels in February. 

DowDuPont to Expand Manufacturing in Texas

DowDuPont plans to make a series of investments totaling approximately $100 million over the next two years to expand manufacturing capacity and to modernize facilities at the Sabine River Works (SRW) plant in Orange County, TX. The investments will incrementally expand production capacity to support global growth of specialty materials manufactured at the site. Additionally, the company is evaluating longer-term plans to invest in a new facility to further support market growth. The added capacity is expected to come online in several phases starting in 2020. 

U.S. Production Growth to Be Led by Light, Sweet Crude Oil

Recent growth in U.S. crude oil production has been primarily light, sweet crude oil, defined as having an API gravity of 35 or higher and sulfur content of 0.3% or less. These light, sweet crudes, which are produced from tight resource formations, accounted for up nearly 90% of the 3.1 million barrels per day (b/d) growth in production from 2010 to 2017. Light, sweet crude oil accounted for more than half (56%) of total domestic crude oil production in 2017, and in EIA’s Annual Energy Outlook 2018, this share grows to 60% by 2020 and to 70% by 2050.

U.S. supply of lighter crude oil from tight formations, such as the Bakken in North Dakota and the Wolfcamp and Eagle Ford in Texas, is projected to continue to outpace that of medium and heavier crudes. 

Saudi Aramco Integrating Petrochemicals Business into Largest U.S. Refinery

Motiva Enterprises LLC, a subsidiary of Saudi Aramco, signed MoUs worth between $8 billion to $10 billion with U.S. companies Honeywell UOP and TechnipFMC in a ceremony in Houston. The MOUs are a first step in Motiva’s expansion into petrochemicals. Final investment decisions on these projects are not expected to be made until 2019.

One of the MOUs paves the way to evaluate the use of TechnipFMC’s ethylene production technologies in the U.S. The second MOU enables Motiva to examine the use of UOP’s aromatics extraction and production technologies for benzene and paraxylene for development of a potential complex along the U.S. Gulf Coast.   

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