Lower Oil Prices Benefit European Refiners

16 Nov 2017   Europe, Refining

European refiners have seen their energy costs drop alongside the fall in oil prices, which has boosted their competitive position compared to North and South America, but Europe is still lagging in lowering energy costs compared to refineries on the other side of the Atlantic. Before the oil price crash of 2014, refineries in Europe had much higher costs than those in the Americas, as high oil prices usually widen refinery costs differences between regions, Stephen Wright, vice president at Solomon Associates, said at the World Refining Association conference in Athens this week. “High crude price is a big disadvantage” for European refiners, Wright said at the conference, as carried by Platts . Nevertheless, energy costs are still a huge part of Europe’s refinery costs—at some 50 percent of refinery costs, compared to 28 percent in North American and South American refineries. Europe has been pushing utilization rates up […]

Oil Refining Could Become Much Less Lucrative

10 Nov 2017   Refining

If the world gets serious about cutting greenhouse gas emissions, the global refining industry will be forced to contract. That may seem like an obvious conclusion, but a new report from The Carbon Tracker Initiative (CTI) ran the numbers, predicting that the refining industry would contract by 25 percent if governments adhered to the 2-degree-Celsius warming target. Policies to cap emissions would weaken oil demand, which tends to depress refining margins. CTI estimated in its report that refining margins would shrink by $3.50 per barrel by 2035, forcing refiners to take less competitive refineries offline. The global refining industry would see EBITDA earnings shrink by 50 percent over that timeframe. Another staggering conclusion from the report is that if governments around the world try to stick to the 2-degree target, the total refining capacity that already exists today would be sufficient to meet global demand going forward. No new […]

Quarter of oil refineries risk closure under climate goals: report

2 Nov 2017   Climate, Refining

A quarter of the world’s oil refineries risk closure by 2035 if governments meet targets to limit fossil fuel burning in the fight against global warming, a report released on Thursday said. A surge in electric vehicle sales and higher efficiency in internal combustion and jet engines are expected to slow demand growth for fuels such as gasoline, diesel and aviation fuel in the coming decades, potentially putting pressure on refining profits. At the same time, governments around the world are set to introduce legislation in the coming years to limit emissions of heat-capturing carbon dioxide into the atmosphere in order to meet targets set at a U.N-backed Paris conference in 2015. As a result, companies such as Chevron, Royal Dutch Shell, France’ Total and China’s largest refiner Sinopec could see profits from refining drop by 70 percent or more over the period, according to the […]

Oil Refiners Shrug Off Harvey to Rake in Fat Post-Storm Profits

26 Oct 2017   Refining, USA

Higher margins boosted earnings for makers of gasoline, diesel Midwest refiners benefited when storm shut Texas facilities When Hurricane Harvey cleared and the floodwaters receded, oil refiners found themselves floating on a sea of cash. That’s the consensus of industry analysts who expect the five largest pure-play refiners to post double-digit profit increases starting on Thursday. Despite the temporary devastation Harvey wrought in the heart of the Western Hemisphere’s refining heartland, most plants escaped long-term damage and were back in action quickly enough to capture swelling margins created by fuel shortages. Refiners in Midwest locations such as Kansas and Illinois — far from the south Texas coast where Harvey roared ashore on Aug. 25 — probably scored even bigger boosts to their bottom lines as facilities closer to the storm shut, triggering price-lifting fuel shortages for hundreds of miles inland, said Ashley Petersen, senior oil market analyst at Stratas […]

Midwestern Refiners Seek Canadian Oil To Expand Output

24 Oct 2017   Refining

Figures from last year say the Midwest’s refining capacity at 3.9 million barrels per day – that’s the highest volume on record. The surge in production comes from new sources of crude from the north, data show. Marathon Petroleum Corp, Phillips 66, British Petroleum, and other refiners in the region have invested in special equipment to make Canada’s highly viscous crude suitable for current refineries. “Ten years ago, we were 1 million barrels per day short on products, with the Gulf Coast supplying the product. Today, the midcontinent is flush with products,” Marathon Petroleum Chief Executive Gary Heminger told Reuters at the company headquarters in Ohio. Despite the growth in output, declining gasoline demand could make it difficult for Midwestern suppliers to find customers as their capacity grows. But the refiners are confident they can tap into new markets to turn a profit. “The Midwest is well […]

U.S. Midwest oil refiners boost output, cut region’s dependence on Gulf Coast

23 Oct 2017   Refining, USA

U.S. refineries from Ohio to Minnesota are capitalizing on access to cheap crude from Western Canada and North Dakota oilfields, helping their region break a historic dependence on fuel from the Gulf Coast while redrawing oil trade maps. The Phillips 66 gas station in Superior, Colorado, U.S., July 27, 2017. REUTERS/Rick Wilking Since the early 2000s, crude and fuel flows from the Gulf Coast into the U.S. heartland have been cut in half, as crude coming from Canada and North Dakota has pushed U.S. Midwest refining activity to record levels. In 2016, Midwest refining capacity rose to 3.9 million barrels per day (bpd) of crude, the highest annual volume on record. Midwest refiners such as Marathon Petroleum Corp, Phillips 66, BP PLC and Husky Energy have invested billions of dollars on new units capable of turning sludgy crude from Canada into gasoline and diesel. Investments […]

Shell Convent refinery restarts all but one unit: sources

3 Oct 2017   Refining, USA

Royal Dutch Shell Plc restarted all but one unit over the weekend at its 227,586 barrel per day (bpd) Convent, Louisiana, refinery, sources familiar with plant operations said on Monday. The refinery’s 45,000 bpd heavy-oil hydrocracker remained shut on Monday but is scheduled to start half production by the end of the this week, the sources said. The other half of the unit will undergo a planned, month-long overhaul. The refinery was shut by a fire on the night of Sept. 26 that destroyed the transformer through which all external electrical power is supplied. Shell had been expected to restore production by early this week at the Convent refinery. Shell began restarting the refinery on Saturday, according to energy industry intelligence service Genscape.

Hurricane Maria Hits US Refineries Without Touching Land

27 Sep 2017   Refining

Hurricanes sometimes don’t need to make landfall to cause problems for U.S. refineries. At least two East Coast refineries are making less gasoline and diesel as rough Atlantic seas hamper the transfer of crude oil from ships to barges for delivery to the facilities, people familiar with operations say. Philadelphia Energy Solutions Inc., which operates the largest oil-refining complex serving the New York Harbor market, was said to cut rates about 20 percent. Delta Air Lines Inc.’s Monroe Trainer in Pennsylvania ran out of crude and had to put its crude units into circulation limbo, heated but not processing. Unless supply is replenished within a few days, Trainer will run vacuum gasoil through the crude units […]

Total Expects Port Arthur Refinery Production Return Soon

27 Sep 2017   Refining

Total SA expects production soon from its 225,500-barrel-per-day (bpd) Port Arthur, Texas, refinery, which has been shut since an Aug. 30 power outage during Tropical Storm Harvey, a company spokeswoman said on Tuesday. Gulf Coast market sources said the restart continued to be delayed by a plugged pipeline that supplies oil to the crude distillation units (CDUs). Total was also forced to shut a 30,000-bpd diesel hydrotreater for repairs following a fire on the unit, the sources said. Total spokeswoman Tricia Fuller called what the sources said “not correct.” “The comment on the blocked crude line and a fire are not correct,” Fuller said. “The Total Port Arthur Refinery is restarting the plant and anticipates first production soon. We are preparing for the previously planned turnaround on some process units.” The Gulf Coast market sources were not immediately available to discuss Total’s statement. The […]

Stormy Weather Exposes Shortcomings Of World’s Oil Refineries

22 Sep 2017   Refining

Hurricane Harvey’s crippling impact on U.S. oil refinery operations this month and the challenge buyers faced in filling the gap in gasoline supplies has exposed a shortage of spare refining capacity around the globe. Nearly a quarter of U.S. refining capacity was knocked out by the storm this month, driving U.S. gasoline prices to two-year highs above $2 a gallon. Many plants are still struggling to resume normal operations, prompting other refineries around the world to crank up output to fill the gap. Global refining is considered to be running at its maximum when capacity utilisation is 85.5 percent, the highest level reached in the modern era, BP’s head of refining economics Richard […]

Far From the Texas Coast, Hurricane Harvey Hits Oil Refiners

20 Sep 2017   Refining

Three weeks after Hurricane Harvey ravaged the massive fuel-making industry along the Texas coast, the region’s recovery from storm damage is starting to disrupt plans for crucial maintenance at refineries thousands of miles away from the flood zones. Harvey knocked out almost one-quarter of U.S. refining capacity in late August, sending gasoline and diesel prices soaring. The storm hit a few weeks before most of the nation’s fuel makers were set to begin seasonal shutdowns. Demand usually slows at this time of year, so it’s a good time to make repairs and install new equipment at plants that typically run all day every day. But at least 13 refineries from Louisiana to Montana with a combined 3.27 million barrels a day have delayed […]

Exxon Beaumont refinery may restart most units this week – sources

18 Sep 2017   Refining, USA

ExxonMobil Corp may restart most of the production units at its 362,300 barrel per day (bpd) Beaumont refinery in Texas, by the end of this week, said sources familiar with plant operations on Sunday. Exxon spokeswoman Charlotte Huffaker said restart activities were progressing at the Beaumont refinery, which was shut down on Aug. 30 after Hurricane Harvey slammed Texas. The refinery’s two crude distillation units restarted on Friday, sources told Reuters. The refinery has also restarted its 40,000 bpd diesel hydrotreater. Exxon restarted the 65,000 bpd hydrocracking unit on Sunday, said energy industry intelligence service Genscape. The refinery’s 45,000 bpd coking unit is expected to achieve full-production level by the last week of September. Crude distillation units refine crude oil as it comes into the refinery and provide hydrocarbon feedstock for all other production units. Hydrotreaters remove sulfur from motor fuels in compliance with U.S. environmental […]

Shell restarting Deer Park, Texas, joint-venture refinery: sources

18 Sep 2017   Refining, USA

Royal Dutch Shell Plc began restarting its 325,700-barrel-per-day (bpd) joint-venture Deer Park, Texas, refinery on Sunday for the first time since it was shut three weeks ago by Tropical Storm Harvey, said sources familiar with plant operations. The refinery’s largest crude distillation unit, the 270,000-bpd DU-2, restarted on Sunday morning and was on circulation by midday, the sources said. Other units are being brought up to operating temperature and readied to resume production following the restart of DU-2. Shell spokesman Ray Fisher said the Deer Park refinery was “still in startup. Nothing to add.” Shell began saying on Sept. 8 that the refinery was in startup mode. DU-2, along with the 70,000-bpd DU-1 CDU, does the initial refining of crude oil coming into the Deer Park refinery and provides hydrocarbon feed for all other production units. DU-2 is the workhorse of the refinery and has been […]

How US oil and gas passed test of ‘unprecedented’ weather

18 Sep 2017   Climate, Refining, USA

As Hurricane Harvey battered southern Texas on August 27, the National Weather Service described it as “unprecedented”. There had been stronger storms before, but the torrential rainfall brought by Harvey would have an impact that was “unknown” and “beyond anything experienced,” it warned. The severity of the damage to the oil and gas industry of Houston and along the coast was one of those unknown effects. Total refining capacity in Texas is 5.6m barrels a day, 31 per cent of total US refining capacity. It also produces 36 per cent of US crude. The flood waters lapping up around storage tanks at refineries owned by Valero Energy and Motiva, a subsidiary of Saudi Aramco, looked like a sign that there could be serious and lasting damage. Three weeks on, it is clear that the oil and gas companies have mostly been able to withstand the threat. Lessons learned from previous storms, in particular hurricanes Katrina and Rita in 2005, have made operations more resilient. “This storm was a test for how well the US can deal with these threats,” says Jamie Webster of the BCG Center for Energy Impact. “The industry, I would say, has passed with flying colours so far.” Harvey has been a human catastrophe. At least 82 people were killed, and the mounds of ruined carpets, panelling, furniture and other possessions piled up outside tens of thousands of houses bear witness to the scale of the damage to property. Leaks from sewers, refineries and chemical plants during and after the storm have raised fears about the lasting effect on human health. But for the energy industry, the impact seems set to be mostly transient.

U.S. Gulf Coast Refiners Are Bouncing Back

16 Sep 2017   Refining, USA

Nearly twenty days (or over 450 hours) after Hurricane Harvey made landfall between Port Aransas and Port O’Connor in Texas, there are a number of signs emerging in our ClipperData that the refinery hub of the U.S. is returning to some semblance of normalcy. Hark, here are but three such examples: Crude waiting offshore is gradually dropping after peaking at the beginning of the week at 31 million barrels – the highest since January. At the start of the week, we saw nearly 50 dirty tankers in the U.S. Gulf, as a backlog built up, ready to deliver to Texas ports as refineries restart. (Click to enlarge) Waterborne crude imports into the U.S. Gulf Coast have averaged 3 million barrels per day for 2017, until recent weeks. Arrivals dropped to close to 1mn bpd in the trading week immediately after Hurricane Harvey’s landfall, before rebounding back above 2mn bpd […]

Valero Houston Plant Underestimated Harvey Benzene Leak

15 Sep 2017   Refining

Valero Energy Partners’ Houston refinery suffered a hurricane-related spill Aug. 27 from a light crude storage tank, the Environmental Protection Agency said. The chemical plant that released a cloud of a carcinogenic chemical amid Hurricane Harvey and its aftermath in Houston’s Manchester neighborhood in August emitted far more of the chemical than it had previously disclosed, environmental regulators said Thursday. The plant, Valero Energy Partners ’ Houston refinery, suffered a hurricane-related spill Aug. 27 from the damaged roof of a light crude storage tank, the U.S. Environmental Protection Agency concluded in an investigation. Valero initially reported to the state that because of the spill, seven pounds of the carcinogenic chemical benzene were released into the air. Subsequently, Valero “has informed the EPA that it believes it significantly underestimated the amount of [volatile organic chemicals] and benzene released in its original report to the State of Texas Environmental Electronic Reporting […]

Largest U.S. refinery restarts production after Harvey: sources

12 Sep 2017   Refining, USA

The largest U.S. refinery was restarting production on Monday for the first time since being shut nearly two weeks ago by Hurricane Harvey, said sources familiar with plant operations. Motiva Enterprises [MOTIV.UL] restored the 325,000 barrel per day (bpd) VPS-5 crude distillation unit at its 603,000 bpd Port Arthur, Texas, refinery to minimum production levels early in the day, the sources said. After bringing the VPS-5 online, Motiva began restarting the 105,000-bpd Hydrocracking Unit 2, the sources said. The HCU-2 is a lucrative source of motor fuel exports for Motiva. Motiva did not immediately reply to requests for comment about operations at the refinery, which has been shut since Aug. 30 due to flooding from Harvey. Last Thursday, the VPS-5, HCU-2 […]

Refiners Boost Output, But Irma Could Dent Demand

11 Sep 2017   Refining

Texas continues to recover from Hurricane Harvey, and many of the disrupted refineries are ramping up production once again. But the ripple effects from the outages are still being felt, and some Midwestern refineries are benefitting from surging margins stemming from the havoc. Bakken Midwest refining margins more than doubled between August 23 and September 1, according to S&P Global Platts , jumping from $9 per barrel to temporarily over $20 per barrel, although they have since fallen back a bit. The margins are inflated because of gasoline shortages in certain parts of the country, the unfortunate consequence of the massive refinery outages along the Gulf Coast after Hurricane Harvey. Refining margins were also helped along by the initial downward pressure that WTI exhibited as crude oil backed up without any place to go. That means that refineries outside of the Gulf Coast could temporarily enjoy super profits. September […]

U.S. refining rates drop to lowest levels since 2010: EIA

8 Sep 2017   Refining

U.S. oil refinery utilization rates slumped 16.9 percentage points to 79.7 percent last week, the lowest rate since 2010, according to data released by the U.S. Energy Information Administration on Thursday. U.S. Gulf Coast utilization rates dropped to 63.4 percent, the lowest rates since the EIA began collecting the data in 2010. U.S. refinery crude runs fell 3.3 million barrels per day to 14.5 million bpd in the week to Sept. 1, the lowest amount processed since 2013, EIA data showed. The data reflects the impact of Hurricane Harvey which hit the Gulf Coast on Aug. 25.

Largest U.S. refinery restarting after Harvey

6 Sep 2017   Refining

Motiva Enterprises [MOTIV.UL] said on Tuesday it was in the initial phase of restarting its Port Arthur, Texas, refinery, the nation’s largest crude oil refinery after it was shut by Tropical Storm Harvey last week. Motiva said the 603,000 barrel per day facility was in the final phase of equipment assessment and it expects to initially return to about 40 percent production by end of this weekend.

Exxon says making progress on reopening Baytown refinery

6 Sep 2017   Refining

Exxon Mobil Corp said on Tuesday it continues to work to reopen its 560,500-barrel-per-day Baytown, Texas, refinery and has made “significant progress” in restarting its chemical facilities after Hurricane Harvey pushed some operations offline. The company said its fuel terminals in the Houston region are open and supplying gasoline. Offshore U.S. of Gulf of Mexico operations are beginning to return to normal operations. Exxon’s 362,300 bpd Beaumont refinery is still offline due to flooding.

Valero Port Arthur refinery restarting multiple units: filing

5 Sep 2017   Refining

Valero Energy Corp was restarting multiple units at its 335,000 barrel per day (bpd) Port Arthur, Texas, refinery on Monday, according to a notice filed with the Texas Commission on Environmental Quality. The refinery was shut on Wednesday as Tropical Storm Harvey inundated the Port Arthur area.

Exxon Working Toward Restarting Baytown Refinery, the Second-Largest in the U.S.

4 Sep 2017   Refining

Large storage tanks situated in retention ponds are surrounded by rainwater left behind by Tropical Storm Harvey at Exxon Mobil’s refinery in Baytown, Texas, on Aug. 30, 2017. Corp. XOM 0.31% said it is working toward restarting its Houston-area Baytown refinery—the nation’s second-largest oil refinery—after a shutdown due to Tropical Storm Harvey, but said another of its coastal Texas refineries remains closed. Exxon’s two processing plants were among nearly a dozen refineries forced to halt operations due to Harvey, which wreaked havoc on three of the U.S.’s main refining hubs along the Texas coastline—Corpus Christi, Houston and the Port Arthur/Beaumont region. The closures have taken around 20% of U.S. refining capacity offline and have caused gasoline prices to soar, both at the wholesale and retail levels, amid concerns many of the refineries may be damaged and stay shut for weeks. ”Our initial assessment of Exxon Mobil’s Baytown complex revealed […]

Total plans to restart Port Arthur refinery ‘soon’: sources

4 Sep 2017   Refining

Total SA plans to restart the 225,500 barrel per day (bpd) Port Arthur, Texas, refinery “soon,” Gulf Coast market sources said on Sunday. No date has been set for the restart, but Total plans to carry out an overhaul of 76,000 bpd gasoline-producing fluidic catalytic cracking unit, scheduled to start in mid- to late-September, after restarting the refinery, the sources said. The company said on Sunday full power had been restored to the refinery. Initially, Total has been focusing on restoring control rooms and unit instrumentation at the refinery, the sources said. On Saturday, partial power was restored in the refinery. On Sunday full power was back on. A stable full power supply is necessary before the refinery can begin restarting. The refinery shut down when power went out on Wednesday as Tropical Storm Harvey inundated the Port Arthur area.

U.S. Phillips 66 requests Jones Act waiver after Harvey

4 Sep 2017   Refining

U.S. refiner Phillips 66 has requested a Jones Act waiver to allow it to use foreign vessels to move crude or products to and from its 260,000-barrel-per-day Alliance refinery in Louisiana after Hurricane Harvey, the company said on Sunday. The Jones Act requires all goods transported by water between U.S. ports be carried on U.S.-flag ships, constructed in the United States, owned by U.S. citizens, and crewed by U.S. citizens. Waivers can only be granted based on interest of national defense such as national emergencies. In the wake of Hurricane Katrina, waivers were issued to allow foreign vessels to transport oil and natural gas between domestic ports. Texas governor Greg Abbott has said the population size and number of homes affected by Harvey is bigger than for Katrina or Hurricane Sandy. “We can confirm the Jones Act waiver request to supply Alliance. The request is still […]

Exxon restarting second-largest U.S. refinery

4 Sep 2017   Refining

ExxonMobil Corp was restarting its Baytown, Texas refinery, the nation’s second largest, on Saturday six days after it was shut because of heavy rain from Tropical Storm Harvey. The company said it began initial restart of the 560,500 barrel per day (bpd) Baytown refinery on Friday night.

Harvey Has Made the World’s Most Important Chemical a Rare Commodity

4 Sep 2017   Refining

Ethylene used to make cars, milk jugs, paint and mattresses More than half of U.S. production has been knocked out Few Americans care about ethylene. Many have probably never heard of it. As it turns out, this colorless, flammable gas is arguably the most important petrochemical on the planet — and much of it comes from the hurricane-stricken Gulf Coast. Ethylene is one of the big reasons the damage wrought by Hurricane Harvey in the chemical communities along the Gulf of Mexico is likely to ripple through U.S. manufacturing of essential items from milk jugs to mattresses. “Ethylene really is the major petrochemical that impacts the entire industry,” said Chirag Kothari, an analyst at consultant Nexant. Texas alone produces nearly three-quarters of the country’s supply of one of the most basic chemical building blocks. Ethylene is the foundation for making plastics essential to U.S. consumer and industrial goods, feeding […]

Largest U.S. refinery may be shut up to two weeks: sources

1 Sep 2017   Refining

Motiva Enterprises’ Port Arthur, Texas, refinery, the nation’s largest, may be shut as long as two weeks for assessment of the plant and repair of any damage, sources familiar with plant operations said on Thursday. The 603,000-barrel-per-day Port Arthur Refinery was shut on Wednesday because of flooding from Tropical Storm Harvey. Total SA has yet to estimate the time to repair its 225,500-bpd Port Arthur refinery because electrical power has not been restored, the company said. Gulf Coast market sources said a two-week outage at the Total plant was possible because electricity producer Entergy had to restore a substation that would supply the refinery with enough power to perform repairs, the sources said. Motiva said it was conducting an assessment of the refinery and could not provide a timetable for the plant’s restart. “Given the unprecedented flooding in the city of Port Arthur, it remains uncertain […]

How Long Can U.S. Refineries Remain Offline?

1 Sep 2017   Refining

When Hurricane Harvey blew into Texas last weekend, it dumped more than 30 inches of rain, flooding Houston and large areas of southeastern Texas, while leaving thousands homeless or without power. The worst storm to hit the U.S. since 2004 and by some estimates the largest rain-storm in U.S. history, Harvey has had a profound impact on the nation’s largest oil-producing and oil-refining region. Refinery shutdowns, pipeline closures and other consequences of Harvey has sent the Gulf oil industry into a tailspin while throwing oil markets into disarray . The question facing industry analysts, investors and consumes is how long this chaos will last. The storm forced several major Gulf refineries to shut their doors and limit operation. ExxonMobil and Total shut down facilities in the Port Arthur and Beaumont areas, while Valero , Marathon and Citgo were forced to reduce operations in refineries from Corpus Christi to Galveston […]

Flooding knocks out U.S. refineries, crude hit by supply disruptions

30 Aug 2017   Refining

Heavy rains from tropical storm Harvey caused large-scale U.S. refinery outages, pushing up gasoline prices, while crude prices rose in early Asian trade on Tuesday on the back of supply disruptions in Colombia and Libya. Refinery shutdowns from the storm helped push U.S. gasoline prices to 2015 highs of $1.7799 per gallon on Monday, although they receded slightly to $1.7325 per gallon by 0103 GMT on Tuesday. U.S. West Texas Intermediate (WTI) crude futures rose 23 cents, or 0.5 percent, to $46.80 a barrel, after falling more than 2 percent in the previous session. On international oil markets, Brent crude futures were up 17 cents or 0.3 percent, at $52.06 per barrel. Massive floods caused by Harvey forced several […]

ExxonMobil refineries are damaged in Hurricane Harvey, releasing hazardous pollutants

30 Aug 2017   Refining

The ExxonMobil refinery in Baytown, Tex., in 2008. (Jessica Rinaldi/Reuters) ExxonMobil acknowledged Tuesday that Hurricane Harvey damaged two of its refineries, causing the release of hazardous pollutants. The acknowledgment, in a regulatory filing with the Texas Commission on Environmental Quality, follows repeated complaints on Twitter of an “unbearable” chemical smell over parts of Houston. However, it was not immediately clear what caused the smell. ExxonMobil said in the filings that a floating roof covering a tank at the company’s Baytown oil refinery sank in heavy rains, dipping below the surface of oil or other material stored there and causing unusually high emissions, especially of volatile organic compounds, a category of regulated chemicals. The Baytown refinery is the second-largest in the country. The company said in its filing that it would need to empty the tank to make repairs, though it wasn’t clear when the weather would permit that. An […]

Harvey’s rains shut in more U.S. refineries, sending fuel prices higher

29 Aug 2017   Refining, USA

 U.S. fuel prices surged on Monday as two more Gulf Coast refiners cut output and a third considered reductions, leaving more than 13 percent of the country’s refining capacity offline after Tropical Storm Harvey flooded plants and shut seaports. The storm swung back over the Gulf of Mexico on Monday and was expected to bring another 10 to 15 inches (25 to 38 cm) of rain to the Houston area and up to 8 inches as far east as New Orleans, the National Weather Service said. Marathon Petroleum Corp’s Galveston Bay refinery in Texas City, Texas, cut production by half, sources familiar with plant operations said. Lyondell Basell Industries’ Houston refinery early on Monday also cut output by half to conserve crude supply, other sources said. Meanwhile the nation’s largest plant, Motiva Enterprises’ [MOTIV.UL] 603,000-barrel-per-day (bpd) Port Arthur, Texas, refinery was considering shutting due to high […]

Flooding knocks out U.S. refineries, crude hit by supply disruptions

29 Aug 2017   Refining, USA

Heavy rains from tropical storm Harvey caused large-scale U.S. refinery outages, pushing up gasoline prices, while crude prices rose in early Asian trade on Tuesday on the back of supply disruptions in Colombia and Libya. Refinery shutdowns from the storm helped push U.S. gasoline prices to 2015 highs of $1.7799 per gallon on Monday, although they receded slightly to $1.7325 per gallon by 0103 GMT on Tuesday. U.S. West Texas Intermediate (WTI) crude futures rose 23 cents, or 0.5 percent, to $46.80 a barrel, after falling more than 2 percent in the previous session. On international oil markets, Brent crude futures were up 17 cents or 0.3 percent, at $52.06 per barrel. Massive floods caused by Harvey forced several […]

Refineries Shut Down as Harvey Dumps More Rain

28 Aug 2017   Refining

Several Houston-area refineries were shut down Sunday as Tropical Storm Harvey continued to drench the area, taking roughly 12% of U.S. fuel-making capacity out of commission and compounding concerns about fuel shortages in coming days. Exxon Mobil Corp. closed its massive Baytown refinery in a Houston suburb—the second largest in the U.S.—as torrential floodwaters from the storm paralyzed large portions of the area even after it was downgraded from a hurricane. The plant, located on the Houston Ship Channel, can process up to 560,000 barrels of oil a day and feeds fuel into pipelines and barges that move it from Texas to states across the southeast and up the East Coast. Royal Dutch Shell PLC confirmed it stopped making fuel at its 325,000-barrel-a-day plant in Deer Park, Texas, and Brazil’s state-controlled oil company, Petróleo Brasileiro SA, shut down its Pasadena […]

Higher-cost crude could squeeze margins at U.S. refiners

7 Aug 2017   Refining

U.S. refiners could face a continued squeeze on profit margins in the months ahead as dwindling supplies of heavy crude from Venezuela and elsewhere are leading several to switch to higher-priced but easier-to-refine light, sweet crude. The shift also could mean higher prices for consumers in the last weeks of the summer driving season and into the fall if refiners are able to pass along those higher costs to drivers, analysts said. PBF Energy Inc , Valero Energy Corp, Phillips 66 and Marathon Petroleum Corp said in earning calls over the past two weeks they are running more light crude as a result of narrower discounts for heavy crude. ExxonMobil Corp also is running a heavier slate of light crude at a Gulf Coast plant. Refiners’ “margins have already been heavily impacted,” said John Auers, executive vice president at refining consultancy Turner, Mason & Co. “They […]

Philadelphia oil refinery taps debt restructuring adviser

2 Aug 2017   Refining

Philadelphia Energy Solutions LLC, the owner of the largest U.S. East Coast oil refining complex, has hired an investment bank to help tackle its debt burden, as it struggles with low profit margins, people familiar with the matter said on Tuesday. The move underscores the challenges facing some East Coast refineries, which used to enjoy a competitive advantage when oil prices were high because they were able to secure supplies cheaply by rail. The crash in oil prices has changed that. Philadelphia Energy Solutions’ latest woes come five years after private equity firm Carlyle Group LP and Energy Transfer Partners LP’s Sunoco Inc rescued the refinery owner from bankruptcy, in a deal supported by tax breaks and grants that saved thousands of jobs. The refinery complex is still one of the region’s largest employers, and U.S. energy officials have warned that its closure could lead to price […]

Europe’s Largest Oil Refinery Shuttered For Weeks

A Royal Dutch Shell refinery in Rotterdam will remain closed until mid-August after a fire at the facility’s electricity stations caused it to shut down over the weekend, according to the owner company. The Pernis refinery will become functional again “at the earliest in the second half of August,” according to a recent statement. Pernis refines 400,000 barrels per day of oil, making it Europe’s largest refinery. The financial impact of the temporary closure is sure to be sizable, though Shell has not released any figures as of yet. “We are doing everything we can to minimize impact to our customers,” the company said . Earlier , a Shell spokesperson told AFP that all units of the refinery had to be shut down because they are all interconnected. The effects of the outage spread to other areas soon after the short circuit. European diesel prices surged following Shell’s announcement […]

Refinery news: Shell Pernis fully halted, earliest restart H2 Aug

Europe’s biggest refinery, Pernis, is currently “out of order”, Shell said late Tuesday, adding that the power station where a fire started Saturday evening needs to be repaired before “the refinery can be rebooted step by step”. Refinery: Pernis, The Netherlands Owner: Shell Overall capacity: 404,000 b/d Unit affected: Unknown Duration: Since Saturday, July 29 Earlier a Shell spokesman said operations were expected to restart “at the earliest in the second half of August.” The company declined to comment about the status of loadings from the site, but said it regretted the impact “this may cause on our customers.” “We are doing everything we can to minimize impact to our customers,” it said. Shell also confirmed its Moerdijk steam cracker in the Netherlands is in operation, but declined to give further details. LPG traders said Shell had stopped LPG loadings Monday from the Pernis plant, while ULSD and jet […]

How To Successfully Privatize A National Oil Company

11 Jul 2017   Refining

Budgetary pressure, falling revenues, cost-cutting measures and general ambiguity – just a few of the characteristic traits that have marked the latest oil price recession period. State-owned companies, commonly executing the double task of carrying out energy-related activities and cross-subsidizing the government budget, find themselves increasingly vulnerable. Privatization represents an expedient variant of raising cash for state coffers and rendering oil companies more efficient by means of bringing in new ideas and adhering to free-market discipline – a multitude of national oil companies (NOCs) might be privatized in the coming years. Saudi Arabia has long been nourishing the idea of orchestrating its first-ever oil IPO, as does Kuwait, whilst Mexico and Russia have lately carried out privatizations with varying degrees of success. Since NOCs control more than 70 percent of global oil reserves, they have been historically reluctant to open up equity access. NOC privatization, in itself, is a […]

Oil to keep flowing in Dakota line while legal battle continues

22 Jun 2017   Refining

Oil will continue to flow through the Dakota Access Pipeline through the summer while authorities conduct additional review of the environmental impact, after a judge on Wednesday ordered more hearings in coming months. Last week, U.S. District Court Judge James Boasberg in Washington ruled in favor of Standing Rock Sioux and Cheyenne River Sioux tribes, who said more environmental analysis of the Dakota Access line should have been carried out. The tribes had said the 1,170-mile (1,880 km) line violates their hunting, fishing and environmental rights. On Wednesday, Boasberg set out a schedule of hearings that will decide what will happen to the line while additional review is completed. A lawyer for the U.S. Army Corps of Engineers, which is […]

U.S. refineries are running at record-high levels

21 Jun 2017   Refining, USA

Refinery gross inputs include crude oil and other oils processed through crude distillation units. Gross inputs to U.S. petroleum refineries, also referred to as refinery runs, averaged a record high 17.7 million barrels per day (b/d) for the week ending May 26, before dropping slightly to 17.5 million b/d for the week ending June 2 and 17.6 million b/d for the week ending June 9. Product supplied to the U.S. market as well as inventories and exports are also at relatively high levels. Weekly U.S. refinery runs have exceeded 17 million b/d only 24 times since EIA began publishing the data series in 1990, and all of those instances have occurred since July 2015. Despite record-high inputs, refinery utilization did not reach a new record, because refinery capacity has increased in recent years. Refinery utilization reached 95% for the […]

Inside The World’s Most Sophisticated Refining Industry

20 Jun 2017   Refining, USA

Over the past 5 years, focus on the U.S. oil & gas sector has centered around oil production from the U.S. shale revolution while neglecting, arguably, the most important part of the US oil & gas sector: U.S. refining. The shale revolution may have put the U.S. in the top 3 oil producers in the world, but the U.S. already has the top spot with the world’s largest and most sophisticated refining industry. (Click to enlarge) In terms of size, China’s refining industry comes closest to the U.S. with over 15 million barrels per day (bbl/d) of refining capacity, but the industry operates at less than 75 percent utilization. The low utilization of Chinese refineries is because 3.5-4.5 million bbl/d of refining is done by independent “teapot” refineries that operate at 30 percent-60 percent capacity. These teapot refineries are inefficient and propped up by government regulations. In terms of […]

More Refineries Must Be Part of U.S. Energy System

10 Apr 2017   Refining

Sadly, American policymakers are focused on the wrong thing when it comes to petroleum. For the benefit of American consumers and the nation as a whole, the emphasis should not be so much on petroleum production but rather on building new refineries across the nation that produce the variety of refined petroleum products the country consumes. It’s absurd to run the world’s largest economy on a petroleum refinery system that is so vulnerable that if a couple refineries stop producing for any reason, it…

Exclusive: Delta hires consultant to study refinery options

15 Mar 2017   Refining

Delta Air Lines has hired a consultant to assess the impact on jet fuel prices if the carrier sells or closes the Philadelphia-area refinery it purchased five years ago to keep fuel affordable, two sources familiar with the process said. They said the consultant will also study other scenarios involving jet fuel prices and the refinery sector, including the impact if other refineries close. The U.S. East Coast refining industry is fighting a battle to survive, with concerns about a second wave of plant closures after four refineries shuttered in the past decade due to the rising costs of acquiring crude. Dallas-based consultancy Baker & O’Brien Inc was asked to perform a financial valuation of the refinery’s assets and study other scenarios, such as other regional refineries closing and the financial impact […]

Exxon to invest $20 billion on U.S. Gulf refining projects

7 Mar 2017   Refining

Exxon Mobil Corp ( XOM.N ), the world’s largest publicly traded oil producer, said on Monday it would invest $20 billion through 2022 to expand chemical and refining plants on the U.S. Gulf Coast. The investments at 11 sites should create 35,000 temporary construction jobs and 12,000 permanent jobs, Chief Executive Darren Woods said in a speech at CERAWeek, the world’s largest gathering of energy executives in Houston. Exxon last month pledged to boost this year’s spending by 16 percent to expand operations, especially in shale production, after the company posted a better-than-expected quarterly profit, helped by rising oil prices and lower costs. The quarterly report was Exxon’s first under Woods, after former CEO Rex Tillerson was […]

Exxon Is Steering Its Construction Dollars Back to U.S.

7 Mar 2017   Refining

Exxon Mobil Corp. is spending $20 billion through 2022 to expand its chemicals and fuel-making capacity in Texas and Louisiana to transform U.S. shale oil and natural gas into products for growing consumer markets in Asia. After decades of siting new plants to make plastics, industrial chemicals and motor fuels close to feedstock sources and end markets in the Middle East and East Asia, the shale boom is spurring Exxon to steer construction dollars back to its home country, Chief Executive Officer Darren Woods said in remarks prepared for the CERAWeek energy conference in Houston on Monday. The plans answer a call by President Donald Trump for American companies to boost the number of U.S.-based jobs, and the White House immediately released a statement from Trump praising the announcement. The 11 new chemical, refining and LNG projects on the Gulf Coast will create 45,000 jobs, many of which will […]

U.S. Oil Industry Becomes Refiner to the World as Exports Boom

7 Mar 2017   Refining

When PBF Energy Inc . scooped up a refinery from Exxon Mobil Corp. on the Mississippi River in 2015, it wasted no time sprucing up the plant with an eye toward quickly resuming lucrative fuel exports. Within three months, PBF was ready to load its first tanker for shipment abroad. By late last year, the New Jersey-based company was exporting 22,000 barrels a day of fuel, or 16 percent of that refinery’s output. Now, it wants to boost that to almost 25 percent. PBF isn’t alone in this push. From major producers such as Chevron Corp . to specialized refiners including Valero Energy Corp ., the U.S. refining industry has shifted its game over the last five years, taking advantage of gaps left by struggling refiners in Latin America, Africa and Asia. Along the way, it’s transforming what had long been a largely domestic business into a new global […]

U.S. Oil Industry Becomes Refiner to the World as Exports Boom

6 Mar 2017   Refining

When PBF Energy Inc . scooped up a refinery from Exxon Mobil Corp. on the Mississippi River in 2015, it wasted no time sprucing up the plant with an eye toward quickly resuming lucrative fuel exports. Within three months, PBF was ready to load its first tanker for shipment abroad. By late last year, the New Jersey-based company was exporting 22,000 barrels a day of fuel, or 16 percent of that refinery’s output. Now, it wants to boost that to almost 25 percent. PBF isn’t alone in this push. From major producers such as Chevron Corp . to specialized refiners including Valero Energy Corp ., the U.S. refining industry has shifted its game over the last five years, taking advantage of gaps left by struggling refiners in Latin America, Africa and Asia. Along the way, it’s transforming what had long been a largely domestic business into a new global […]

Fires Spark a Double Bonanza for Oil Refiners

27 Jan 2017   Refining

Oil refiners from Japan to the U.S. are benefiting from being forced by fires to make less fuel. A slew of blazes at plants across the globe is shrinking supplies and boosting profits from turning crude into products such as gasoline and diesel. At least 13 refineries, including in Ruwais in Abu Dhabi, Deer Park in Texas and Tuapse in Russia with a combined capacity of about 1.8 million barrels a day, were struck by fire this month, according to data compiled by Bloomberg. That’s more than double the five plants affected last month. Bloomberg data The unexpected incidents are offering refiners a double windfall as it coincides with declining global fuel inventories amid solid demand. Total oil-product stockpiles in developed countries fell in November for a fourth month, with a “hefty” drop in middle distillates such as diesel in Europe, according to the International Energy Agency. If such […]

U.S. refiners face severe labor shortage for deferred maintenance

29 Dec 2016   Refining

After years of running flat out, U.S. Gulf Coast refiners are lining up repairs to plants in 2017 – but facing a severe labor shortage that could delay work, drive up costs and raise accident risks. Fuel producers such as Marathon Petroleum Corp ( MPC.N ) and Valero Energy Corp ( VLO.N ) have delayed routine work in the past 24 months amid high margins. Those margins collapsed this year in a global fuel supply glut, providing an incentive for refiners to undertake the shutdowns necessary for maintenance. But refiners are now competing for pipe fitters and ironworkers with a host of billion-dollar energy projects, including Cheniere Energy’s ( LNG.A ) liquefied natural gas export terminals and a new petrochemical unit for Dow Chemical ( DOW.N ). Without undertaking the work they […]