Japanese Economy Taking Hit

Japan, who has been prone to deficit for nearly 30 years is experiencing its first deficit indicating the economy trouble wave is rippling towards Japan. Japan posted a trade deficit of Y725.3bn in fiscal 2008. However, the government of Japan is confident that the economy is in its state for a rebound especially in the indsutrial production and exports. The petrochemical industry in the country is yet to see a clear signs of rebound and the industry is now in wait and see situation.

Petchem Overcapacities Expected

Petchem industry is feeling the pinch as industrial analysts are worrying on overcapacities including Bayer CEO in the recent interview. The financial crisis has turned the chemical and plastics industry into a huge overcapacities at least for 2009 and 2010 petrochemical outlook.

The mostly hit industry is plastics and polymers business used in the auto industry which is not building a huge industry overcapacities and inventories. Bayer CEO also predicted that growth in Bayer's pharmaceuticals and crop chemicals businesses to be much affected in 2009.

$9 Billion Refinery Investment Needed

As the economy is collapsing it is getting harder and harder for oil and gas projects to seek external funds to invest in their projects. PetroSA who is planning for a $9 billion refinery project is currently in the same situation as the state-owned oil and gas company starting negotiations with potential investors.

PetroSA is trying to get external fund for its new capacity 400,000 barrels a day refinery in Coega, answering South African Petroleum Retailers' Association call for security of oil supply via partnership between the government and the private sector. The country is currently facing poor sustainable oil supply due to low buffer in the country resulting from poor stock planning.

PetroSA vice-president of new ventures: midstream, Joern Falbe, said on Friday that PetroSA had "from the beginning" indicated that it was looking for a partner in the $9bn project. 

China & Myanmar Signing New Oil & Gas Pipeline Contract

A cross boarder oil and gas pipelines to enable oil and other oil-derivatives to China is already in plan as China and Myanmar signed a pipeline contract between China and Myanmar to slash the transfer time for crude oil imports.

The agreement reportedly consists of pipeline project as well as join-venture for hydropower projects. China and Myanmar plan to build 2,000-km gas and oil pipeline through Ruili and Kunming in Yunnan province which can tremendously cut out oil cargos long detour through the congested Malacca Strait.

The project is however under strict control due to Myanmar's history with human rights which means less injection of capital from external sources. As the project benefits China in great length, Beijing is offering incentives including cheap loans and tax breaks to attract foreign participation.

Brazil Discovers Huge Oil Deposit

Brazil may be striking a gold mine or more precisely a black gold mine as its' discovery on the Maranhao site may have oil deposits as huge as the Campos Basin, which produces 85 percent of the Brazil's oil.

The basin was discovered by Petroleo Brasileiro SA and Devon Energy Corporation 160 kilometers off the coast of Sao Luis which this year alone has produced an average of 1.65 million barrels per day this year.

Maranhao state in northeast Brazil is famous for luring oil refining, steelmaking and pulp for export due to its five days closer to Europe proximity. With the stable output from Maranhao basin, Brazil's state oil company, Petrobras is planning to build a $20 billion premium-products refinery 30 kilometers from Sao Luis, for Europe and North America export by 2013.

Pertamina Planning to Start Up New Polypropylene Plant in 2011

Pertamina, Indonesia's state-run refinery operator is planning to start up its new 250,000 tonne/year polypropylene (PP) plant at Balongan, Indonesia in early 2011. Pertamina is under huge expansion and and rumours of it planning to acquire local polypropylene producer, Polytama Propindo has also been rumoured.

The feedstock for the plant will be coming from Pertamina's new 250,000 tonnes/year of propylene capacity residual fluid catalytic cracker (RFCC) expansion unit in Balongan.

Malaysian Researchers Looking at New Biofuel Technology

Malaysia University of Science and Technology (MUST) is developing new ways of using oil palm-related products to produce renewable fuels, in what is seen as a response to European Union concerns in food and environment-related carbon balance. 

The MUST university is collaborating with a German research organization, Fraunhofer to work on directly processing oil palm biomass into biodiesel, instead of bidiesel being produced from crude palm oil. However, the MUST-Fraunhofer research is focusing on making the fuel from non-CPO biomass. This is to alleviate the mass requirement for oil palm plantations where only 10% of the biomass comprises CPO (Crude Palm Oil) and the rest includes fibers, empty fruit bunches, shells, fronds and tree trunks. 

Much of the reasearch will be to turn non-CPO biomass into gas and liquefied gas for usage as gasoline and biodiesel which will see bigger commerical gassification plant in Malaysia from palm oil. MUST is in the hope that the technology to be developed for commercial use in 2-3 years.