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 | Petro-Canada Sees La Ceiba Synergies with Montreal
Refinery & Coker? November, 2005 more>> |
| Reliance gives refinery shutdown details, Coker down 16 days November,2005 more>> |
| Marathon to increase capacity to 425 MBD and
add new Coker November, 2005 more>> |
| BP Whiting Coker considered for expansion October 2005 more>> |
| Coke Calcination Unit Commissioned At Volgograd Refinery October, 2005 more>> |
| Suncor Upgrader Coker Projects Update October 2005 more>> |
| New Delayed Coking Plant planned for BP in Spain October 2005 more>> |
|
ConocoPhillips Announces Delayed Coking License
Agreement with Petrleo Brasileiro S.A. September 2005 more >> |
| Flowserve Introduces AutoShift
Combination Cutting Tool, The Next Step in Decoking Automation August 2005 more>> |
| CHS to upgrade Montana refinery July 2005 more>> |
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Reliance to double Jamnagar
capacity July 2005 more>> |
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Foster Wheeler Wins New Delayed Coker
Complex for ENERCON in Chile |
| Tesoro Plans Coker at Washington Refinery May 2005 more >> |
| Maintenance worker found dead at BP Blaine Refinery in Washington May 2005 more >> |
| Syncrude's $7.9B Stg 3 expansion paid out by next year - despite 100%
cost increase April 2005 more >> |
| Valero Energy plans to acquire Premcor April 2005 more >> |
| ChevronTexaco wins battle for Unocal April 2005 more >> |
| Lyondell refinery attracts interest from Petrobras, PDVSA April 2005 more >> |
| ChevronTexaco plans heavy crude project March 2005 more>> |
| ExxonMobil Plans 15 Days Work At Baytown February 2005 more>> |
| Pipeline leak could leave Premcor without crude February 2005 more>> |
| Suncor Energy Inc Fire January 2005 more>> |
| Worldwide Refining (and coking) capacity December 2004 more >> |
| New coking unit at ConocoPhillip's Borger Refinery & Coker Expansion
Woodriver December 2004 more >> |
| Taiwan's Formosa Keeps 2005 Gasoil Term Sales Unchanged November 2004 more>> |
| EnCana considering joint
venture
to convert refinery to process heavy oil November 2004 more>> |
| United Warren Refiner Coker Project Update November 2004 more>> |
| Two Killed in Fire at Northeastern China Coker
October 2004 more>> |
| Downtime
Report on 3 Coking Refineries Shell Deer Park , ExxonMobil Baytown, BP Texas City October 2004 more>> |
| News | Commentary | |||||||
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Petro-Canada Sees La Ceiba Synergies with Montreal Refinery & Coker? |
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October 31, 2005 BNAmerica Canadian oil company Petro-Canada (NYSE: PCZ) could process oil produced from its La Ceiba development in Venezuela at its Montreal refinery, which will be upgraded to process heavy crude, president and CEO Ron Brenneman said during a conference call to discuss Q3 results. Petro-Canada is planning to upgrade its Montreal refinery by installing a coking unit to process more heavy crude, which "could have synergies" with the La Ceiba development, Brenneman said. "There could be some synergies there because this is a field that would produce conventional heavy oil, about 20 degrees API. In fact that is what we're talking about converting our Montreal refinery to run more of," he said. However, "it's also a crude we could readily sell in the open market so I wouldn't attribute any value to the fact we might be producing heavy crude in Venezuela and at the same time upgrading our refinery in Montreal," he said, adding they are "independent decisions." Petro-Canada and its 50:50 partner, US oil company Exxon Mobil, plan to start production at La Ceiba by 2008 "at the earliest," Brenneman said. Petro-Canada and Exxon Mobil filed a declaration of commercial viability with the Venezuelan authorities on September 30, 2005. "We're in the process of sorting that out with the authorities," he added. Petro-Canada and Exxon Mobil anticipate filing a provisional development plan by the end of the year, Petro-Canada said in its Q3 earnings statement. "We've completed the long-term production test, which was quite important from a reservoir point of view, so we have demonstrated the economics of this development from our perspective," Brenneman said. "It's a fairly conventional development and because we have some of the infrastructure in place, it's not a particularly long lead investment," he added. |
I think this makes a nice lead but not much sense - I agree with the Brenneman point that producing heavy crude in Venezuela & upgrading the refinery to run more heavy oil are likely independent decisions and actions. I also cannot imagine linking a new refinery expansion & coker too heavily to a crude supplied from a country that has gone overboard on tax, royalty fees & taking an 80% control of previous foreign investments in Venezuela by rewriting the contracts and conditions that made them initially invest there. ExxonMobil is already feeling those kind of economic robbing moves on its upgraders in Venezuela and since they are major partners with Petro-Canada it makes the connection more an alignment of synergy wording than project linkage. <Here was AP Oct 13, 2005 News item on S.America & Venezuela going nationalistic as background view & put this in perspective: Venezuela supplies 13 percent of U.S. crude oil imports, and Chavez's government has passed laws in the last four years that require state-owned Petroleos de Venezuela S.A. (PDVSA) to obtain a majority stake in all oil production projects, raised royalties on heavy crude production from 1 percent to as high as 30 percent, and required firms pumping oil to pay income taxes at a top rate of 50 percent, up from the previous 34 percent. All firms with oil-pumping contracts now face a Dec. 31 deadline to sign new joint-venture agreements giving PDVSA up to an 80 percent stake or have their oil fields reclaimed by the state. Before the joint ventures can be completed, the firms must also pay $3 billion in back tax claims. Besides BP and Exxon Mobil, the changes affect international majors such as Chevron Corp. and Royal Dutch Shell PLC. Regards Charlie Randall |
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Reliance gives refinery shutdown details, Coker down 16 days |
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| Reuters - Mumbai, October 28,
2005 Reliance Industries Ltd, which partially shut its 660,000 barrels-per-day refinery in early October, said one of two crude distillation units would be down for 31 days and its gasoline unit would be shut for 49 days. Reliance, India's largest private sector refiner, said in a post-results presentation to analysts posted on its website late on Thursday that the aromatics unit would be shut for 32 days while its coker unit will be closed for 16 days. Reliance had said previously that the gasoline, or fluidised catalytic cracking (FCC), unit had shut on October 4, but it has not given the dates that the other shutdowns started. Reliance said in a statement last month it would shut major units of its Jamnagar refinery and petrochemicals complex in the western state of Gujarat. Reliance said the shutdowns, taking place over eight weeks starting October, were for planned maintenance. |
Reliance just gave more of its October
shutdown details which have some units down for 31-49 days, but its
coking unit is only scheduled for 16 days on its Thursday posting. This
shutdown scheduled over 8 weeks is part of a planned maintenance program
& not part of the coking refinery's announced expansion / doubling in
capacity announced earlier. Regards Charlie Randall |
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by: OilOnline Thursday, October 27, 2005 Marathon Oil Corporation plans to pursue an expansion of its 245,000 barrel per day (bpd) Garyville, La., refinery. The project, currently estimated to cost approximately $2.2 billion, is expected to increase the refinery's crude throughput capacity by 180,000 bpd to 425,000 bpd, with completion possibly as early as the fourth quarter 2009. The initial phase of the expansion will include front-end engineering and design (FEED) work that could lead to the start of construction in 2007. The final investment decision is subject to completion of the FEED and the receipt of applicable permits. "The expansion of our Garyville refinery would provide an outstanding strategic fit to our existing refining network, including accessibility to numerous product transportation systems that serve key markets throughout the U.S.," said Clarence P. Cazalot, Jr., Marathon president and CEO. "This project also represents a continuation of the substantial capital investments we have been making in both our upstream and downstream operations, which are helping us meet the growing energy needs of consumers in the markets we serve, while providing significant value growth for our shareholders." Anticipated project investments include the installation of a new crude distillation unit, hydrocracker, reformer, kerosene hydrotreater, delayed coker, additional sulfur recovery capacity and other infrastructure investments. The new facilities will incorporate the latest safety and environmental control technologies. The proposed refinery configuration also will be designed to provide maximum feedstock flexibility, enabling Marathon to process more heavy sour crude oils. |
Just off the press - the newest / last
(1976) grassroots refinery in US, MAP Garyville, is going to add 180 MBD
capacity to become a 425 MBD refinery and add a new coker along with
several other new units. Garyville's existing coker brought online in
4Q01 / 1Q02, and it has the worlds largest diameter drums (30 ft) and
its 34.5 MBD coker capacity has a lot of upside processing capability
compared to the refineries 245 MBD crude process capabilities today,
even though it was designed to run Maya crude that makes up a majority
of its crude slate. Construction is targeted to start in 2007 & completion ~ 4Q 2009. Regards Charlie Randall |
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Associated Press Posted Oct. 16, 2005 Sunday
WHITING, Ind. - BP's Whiting refinery could be in line for a more than $1 billion expansion as the oil company looks at increasing capacity after damage wreaked by the Gulf Coast hurricanes, a union official said. Charlie Vesolowski, craft foreman for the Local 150 Operating Engineers, said managers told him they were considering adding a new unit at the Lake Michigan refinery that would take oil from Canada and turn it into gasoline. The expansion could cost between $1 billion and $2 billion, Vesolowski said. "They just tell us that over the next couple of years, they'll be spending a billion or two. That's what they're talking about," he said. Tom Keilman, a spokesman for BP Products North America, declined comment. "There are a couple of different things we've looked at from time to time," he said. "We continue to study options." The Whiting refinery, which employs about 1,275 workers, has the capacity to process more than 400,000 barrel of crude oil daily. Energy prices jumped after widespread shutdowns of refineries and oil and natural gas production along the Gulf Coast following Hurricanes Katrina and Rita. Lanny Pendill, an energy analyst with Edward Jones based in St. Louis, said many oil companies are considering expansions. "BP also stated that it is interested in expanding some of the refineries, particularly so they can handle the lower-quality oil," Pendill said. Whiting Mayor Joe Stahura, who worked at BP for 23 years, said he has discussed the possible expansion with the company. "We've been told that we'll be informed when the official word is announced," Stahura said. "I've learned when you deal with companies like BP, there's always something in the works, but getting to the final approval stage is a hurdle." BP Whiting also is in the midst of a $130 million expansion that will produce ultra low sulfur-diesel fuel to meet or exceed on-road diesel regulations. The new unit will have the capacity to produce about 36,000 barrels per day. |
If BP's Whiting coking refinery
is looking at a $1-2 billion expansion it is likely that it will
have to include some expansion on the coker as well.
This 400 MBD refinery only has a 31.5 MBD coker which makes
the crude to coker ratio only 8, compared to average US
crude to coker ratio of ~22, so its already overtaxed on the
existing crude slate & rate.
The craft foreman probably has right scope in that Canadian
syncrude or a blend bitumen mix will become part of the
expanded refineries crude slate (along with lot of other US
coking refineries in 2006 time frame) and will require some
expanding to handle the heavier crude. The Canadian Oil
sands projects have targeted a lot of US Midwest coking
refineries for end consumers, and Whitings proximity puts it
high on the list.
The Whiting refinery was the site of Standard Oil's first
"modern" coker in 1929 & was instrumental in the development
of hydraulic decoking, so this coking refinery has deep
roots in the petcoke history books.
Regards
Charlie Randall
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First Stage Of Coke Calcination Unit Commissioned At Volgograd Refinery |
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| First stage of the coke calcination unit was
commissioned today at LUKOIL-Volgogradneftepererabotka in Volgograd.
The commissioning ceremony was attended by Vagit Alekperov, President of
OAO "LUKOIL", Nikolay Maksyuta, Governor of the Volgograd Oblast, and
Evgeny Ishchenko, Mayor of Volgograd. The facility was built under the general framework of refinery development until the year 2014. The first stage of the facility required 18 mln. USD of capital investments. The units annual capacity of 100 thous. tons of raw coke will be employed for production of output directly used by the aluminum industry. Previously, oil coke produced by the refinery was sent as raw material to slate processing plants for calcination. Introduction of the calcination process at OOO LUKOIL-Volgogradneftepererabotka will improve the quality of coke, reduce calcined coke against raw coke transportation costs by 20%, and decrease thermal power consumption through steam generation at the facility. The start of the second stage of the facility is planned for the year 2009, to raise overall capacity to 280 thous. tons per year and provide calcination for all produced coke. The commissioning of the new facility marks the launch of the Coke Production Upgrade Program at OOO LUKOIL-Volgogradneftepererabotka which will be followed by reconstruction of the existing delayed coking facility and installation of a new unit. The purpose of reconstruction and upgrading of the Volgograd refinery is to raise refining volumes and increase conversion ratio, improve environmental safety of the production process and reach international product quality standards, said V.Yu. Alekperov, President of OAO "LUKOIL", at the commissioning ceremony. On the same day, V. Alekperov, N. Maksyuta and E. Ishchenko participated in the opening ceremony of a LUKOIL-Nizhnevolzhsknefteprodukt service station. This is one of LUKOILs first multifuel service stations in Volgograd which offers not only liquid motor fuels but also LPG filling options. The service station features the state-of-the art Assol-M automatic management system for record keeping of oil products and related merchandise which provides precise on-line collection and processing of data for flexible sales analysis. For customer convenience, the service station accepts non-cash payments, fuel and bonus cards. The service station is equipped in compliance with all fire and environmental safety requirements and has a modern video surveillance system. LUKOIL now has 126 service stations in the Volgograd Oblast including the newly commissioned station. |
Lukoil
Volgograd commissioned its first stage new 100 kMT calciner Aug. 24,
2005, which will be followed by the second stage raising calcined
capacity to 280 kMT for all Volgograd's raw coke production by 2009. The commissioning also signaled the launch of its new Coke Production upgrade program to reconstruct existing delayed coking unit and add a new coking unit Note: In 2002 at its Perm delayed coking facilities, Lukoil performed a reconstruction and expansion project adding 2 new furnaces, hydraulic unheading & increased capacity from 600 tpd to 1000 tpd (coke drums not replaced & upgrading of petcoke rail loading not completed). Regards Charlie Randall |
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Recap version of Suncor Energy Project updates (see full details
: http://www.suncor.com)
Suncor Energy (SU) upgrader repairs from fire completed, rates 200 MBD returning 225 MBD (Sep 19, 2005)
Suncor Energy (SU) announced its Board of Directors has approved funding for the next phase in the company's oil sands growth strategy and its 2005 capital spending plan. (Nov 17, 2004) o There are various elements in Suncor's multi-phase plan to increase oil sands production capacity to 500,000 to 550,000 barrels per day, from its current rate of about 225,000 barrels per day: Step One Production capacity is expected to increase to 260,000 barrels per day in late 2005, as a result of a $1 billion investment in both upgrading improvements and development of in-situ technology. This project is proceeding on budget and on schedule. Step Two Expand the existing upgrader to increase production capacity to 350,000 barrels per day in 2008. Expansion includes a new pair of coke drums, a sulphur recovery plant and other crude oil processing equipment. Bitumen supply for the expanded upgrader is expected to increase through further development of in-situ operations and mining/extraction. Bitumen from third parties is also expected to supply the expanded upgrader. The combined total cost of the project has been estimated at $3.6 billion and construction is currently under way. Step Three The construction of a third oil sands upgrader and the expansion of oil sands mining and in-situ development is the final phase of Suncor's plan to increase production capacity to 500,000 to 550,000 barrels of oil per day. Suncor is in the very early stages of planning for this phase of growth; details will be released as they are confirmed.
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There are several news items around Suncors expansion projects on the upgrader coking units and a recap of highlights is attached for full details visit the Suncor website indicated.
Because these projects are multi-phased (Millennium I & II, Firebag,Voyageur) and often overlapping stages, it is often easy to lose track of coking additions. But several of these recent ones contain significant completion points & details.
ConocoPhillips recently announcement that Suncor's new coke drums for Voyageur stage of expansion will be using COP technology. ConocoPhillips mentions that this will be the 3rd cooker on the 3rd Upgrader at Ft McMurray - so is this a new coking unit for the 2010-2012 time frame that is in the planning / EPC stage.
This could easily be confused with the 3rd set of drums on Suncors 2nd Upgrader that have been fabricated and placed as part of the next phase of expansion for taking capacity to 350 MBD by 2008 (coker capacity will not be utilized until investments in mining & In-Situ bitumen production are completed). These details are at the bottom of another announcement about the commissioning of Suncors expansion that took capacity from 225 MBD to 260 MBD with its centerpiece addition a new vacuum unit on the 2nd Upgrader. <Note the capacity addition will be offset from lost production due to Suncors fire on upgrader & downtime earlier (September 2005).
Reviewing the Suncor coking additions has upgrader operations with: Original Upgrader 1 & Coking unit 1 (8 drums) operating, Upgrader 2 & Coking unit 2 sometimes called Millennium II coker (4 drums operating & 2 new drums placed), and a new Upgrader 3 & Coking unit 3 in the planning / EPC stage. The petcoke production capacity with the Suncors 2nd Coking unit's 6 drums operational (when production capacity reaches 350 MBD in 2007-2008), petcoke production would go to approximately 8200 tpd (3 MM tpy) and put it as challenge to Reliance as the worlds largest coking operation.
The addition of the 3rd upgrader and 3rd Coking unit as another 4 or 6 drum operation (likely added in sets of 2 coke drums like the first 7 sets were?) would have Suncor claim the title (unless the recent announcement for Reliance/Jamnagar to double crude capacity also adds significant coking expansion - which is very likely).
Reviewing Suncor production capacity status has its 2004 pre-fire capacity of 225 MBD going to 260 MBD in October 2005, 350 MBD by 2008, and 550 MBD by 2012 with completion of final Voyageur phase (and 3rd coking/ upgrader units).
(More than enough Suncor Syncrude to ship in the new Enbridge Energy pipelines capacity for Mid-continent and Gulf coast refinery coking operations already in discussions.) Regards Charlie Randall ------------- |
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Foster Wheeler Awarded Front-End Engineering / Design |
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| HAMILTON,
BERMUDA, August 25, 2005 Foster Wheeler Ltd. (Nasdaq: FWLT) announced
today that its subsidiary Foster Wheeler USA Corporation has been
awarded a contract to supply a process design package for a delayed
coking plant based on Foster Wheeler's Selective Yield Delayed Coking
Process (SYDECSM) by BP Oil Refineria de Castellon, S.A. The terms of
the award were not disclosed. The project was included in the company's
first-quarter bookings for 2005. The planned facility has a design capacity of 20,000 barrels per stream day. The scheduled completion of the delayed coker plant is second-quarter 2008 and is part of BP's planned reconfiguration of their refinery located in Castellon, Spain, to reduce residual fuel oil production. We are very pleased that BP has selected Foster Wheeler's SYDECSM delayed coking technology for their refinery in Castellon, said Troy Roder, executive vice president and general manager of Foster Wheeler USA Corporation. This award reflects our position as a market leader in delayed coking, where we have consistently demonstrated technical and project execution expertise. |
Looks like BP's
Castellon Refinery in Spain will be gaining a new 20 MBD coker
in 2Q 2008 which will put it on parity with Spains other two
coking refineries YPF-Repsol's La Coruna (19 MBD coker) &
Puertollano (24 MBD coker).
Regards
Charlie Randall
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ConocoPhillips Announces Delayed Coking License
Agreement |
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HOUSTON, September 15, 2005 --
ConocoPhillips [NYSE:COP] announced a license agreement with
Petrleo Brasileiro S.A. (Petrobras) for a
grassroots 31,450 barrel
per day (BPD) delayed coking unit at its Pres. Getlio Vargas
Refinery (REPAR) in Araucaria, Paran, Brazil. The terms of
the agreement were not disclosed.
Part of a large-scale expansion project, the new coking unit will utilize ConocoPhillips proprietary ThruPlus Delayed Coking Technology in order to increase the refinerys production of gasoline and diesel fuels as well as produce anode-grade, green petroleum coke. Projected start-up of the unit is slated for 2009. Significant technological advances in delayed coking pioneered by ConocoPhillips are making it possible for world-class refineries like REPAR to process even heavier feedstocks while increasing throughput, improving safety and reducing environmental emissions, said Brian Evans, manager, ConocoPhillips Technology Solutions. Our 50-plus years of experience in delayed coking give us every confidence in the reliability, flexibility, safety and overall economics of the technology. ConocoPhillips' ThruPlus Coking Process is an advanced thermal process for upgrading low-value, heavy hydrocarbon residues into high-value, light hydrocarbon liquids. The process has a proven track record of safety and environmental advancements, and achieves higher unit throughput, higher liquid yields and improved unit reliability for both grassroots facilities and existing coking units. REPAR, which has a total crude oil production capacity 196,000 BPD, is responsible for approximately 12 percent of the countrys national production of petroleum byproducts, selling 85 percent of its products to the states of Paran, Santa Catarina and Mato Grosso do Sul, in addition to the southern region of So Paulo. The remaining 15 percent is supplied to other regions of Brazil or is exported. Main products produced are LPG, gasoline, diesel fuel, fuel oils, jet fuel, asphalt and naphtha. ConocoPhillips is an integrated petroleum company with interests around the world. For more information, go to www.conocophillips.com. Headquartered in Rio de Janeiro, Petrobras is an integrated company operating in exploration, production, refining, trading, and transportation of petroleum and its byproducts, at home and abroad. For more information, visit www.petrobras.com.br. |
Petrobras new grass root coker at Repar will
produce anode coke, use COP technology & startup in 2009.
Regards
Charlie Randall
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Reliance
to double Jamnagar capacity Meghdoot Sharon in Ahmedabad | July 07, 2005 10:00 IST |
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Reliance Industries has chalked out
plans to double the capacity of its mega project, the Jamnagar
refinery. The company will invest between Rs 15,000 and Rs 20,000
crore (Rs 150 and 200 billion) in doubling the capacity of the
refinery from 30 million tonne per annum to 60 million tonne per
annum and the expansion project is likely to be completed by August
2006.
Sources close to RIL said with the expansion, the Jamnagar refinery will in most likelihood, become the world's largest single location refinery. "The company will invest between Rs 15,000 crore to Rs 20,000 crore as part of the expansion plan, which is likely to be completed in just over a year from now," a top official of the company said. The refinery project itself earned a revenue of about Rs 50,000 crore (Rs 500 billion) for the company in the past fiscal, of which Rs 30,000 crore (Rs 300 billion) was in the form of exports. "The company will shortly commence work on the expansion of the refinery. Adequate land has already been earmarked for the expansion project," the official said. The refinery margins for 2004-05 were encouraging as end-product price increases were much higher than the rise in crude oil prices. Reliance recorded a 100 per cent capacity utilisation at its Jamnagar Refinery. The refinery processed about 30 million tonnes of crude during the 2004-05 fiscal. Exports of refining products during the past fiscal year were 10.2 million tonne, translating into revenues of around Rs 30,000 crore. In comparison, exports for 2003-04 stood at 7.5 million tonne. Meanwhile, Reliance is also implementing its retail outlets project and has the necessary approvals for setting up 5,849 retail outlets in India. Company officials said that the response from these retail outlets is encouraging as the throughput per outlet is higher than the industry norms. "By the end of March 2006, Reliance will have significant presence in the retailing of transportation fuels," said the official. Following the division of the Reliance empire, Mukesh Ambani has got control over the flagship Reliance Industries, which will implement the Jamnagar refinery expansion project. Meanwhile, Mukesh Ambani stated recently in Vadodara that there are no immediate plans to merge Indian Petrochemicals Corporation Limited, another refining unit and a Reliance group company, into RIL. |
The Reliance coking Refinery at
Jamnagar currently holding title to worlds largest coker - has just
announced a doubling of capacity by August 2006. Although not
mentioned here, doubling capacity at the large
Refining/Petrochemical complex will likely require an expansion
on its FW 8 drum coking unit as well.
Regards
Charlie Randall
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| CHS to upgrade Montana refinery | ||||||||
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CHS Inc. will invest $325 million to install a coker and other process modifications aimed at increasing fuel production at a Montana refinery. A coker is one of the major conversion units within a refinery. It is used to process crude oil left over after initial processing. The Inver Grove Heights-based energy, grains and food cooperative said the coker unit will allow its Laurel, Mont., facility to produce more gasoline and diesel fuel without its crude oil processing capacity. The refinery currently processes about 55,000 barrels of crude oil per day. "As we prepare to meet the energy needs of agricultural producers and rural America, it's essential that we can efficiently maximize our production from this refinery," CHS President and CEO John Johnson said in a statement. "We believe this is an excellent investment on behalf of our customers and the producers and cooperatives who own us." CHS (Nasdaq: CHSCP) said construction is expected to begin in early 2006, with completion by Aug. 31, 2008. The company is seeking the required permits from regulatory agencies. -----------
$325 million refinery project planned
7/14/05 - Work on $325 million in improvements is expected to begin next year at the CHS Refinery in Laurel, manager Pat Kimmet said. Refinery officials hope construction will be complete by early 2008, Kimmet said, but the date has not been firmly established because they are still seeking the proper permits. Most of the money for the project will be spent on the construction of a coker, which breaks down heavier oils into lighter petroleum products. Petroleum coke is usually sold for power generation. The coker will allow the refinery to convert more crude oil faster, Kimmet said. "We determined that a coker will better meet our customers' needs," Kimmet said. "This will create additional jobs for Montanans and produce additional gasoline and diesel fuel without increasing crude processing capacity." CHS Inc. is owned by farmers, ranchers and cooperatives in the Midwest and Western United States, and they are funding the project, he said. The addition will be built on existing property and old trailers and buildings will be removed before construction begins, Kimmet said. The Exxon and ConocoPhillips refineries in Billings have a coker, and this will make the CHS refinery more compatible, he said. Refinery officials said this is the largest project in the history of the Laurel refinery. It follows a recently completed $87.5 million environmental upgrade that produces a federally required ultra-low-sulfur diesel, Kimmet said. "We have a longstanding history of involvement in both environmental upgrades and technological upgrades in our refinery," Kimmet said. The refinery has more than 250 employees, and Kimmet said he expects more positions to be added. "This is a good thing for the community," Kimmet said. "We are very excited about it." http://www.billingsgazette.com/index.php?id=1&display=rednews/2005/07/14/build/local/55-refinery-project.inc
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The CHS (aka Cenex Refinery at
Laurel) has become the 3rd Montana refinery with a coker that should
complete by 2008. CHS like COP Billings refinery was an Asphalt
refinery operation prior to coking project.
Regards
Charlie Randall
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Foster Wheeler Wins New Delayed Coker Complex for ENERCON in Chile Thursday July 14, 10:00 am ET |
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HAMILTON, Bermuda--(BUSINESS WIRE)--July 14, 2005--Foster
Wheeler Ltd. (Nasdaq:
FWLT -
News) announced today that its Madrid-based subsidiary
Foster Wheeler Iberia, S.A. has been awarded a contract for the
engineering, procurement and construction (EPC) of a new delayed
coker complex at Empresa Nacional de Petroleo's (ENAP) Aconcagua
refinery at Concon, Chile. The project, which will use Foster
Wheeler's SYDEC(SM) delayed coking technology, will be executed
by a consortium led by Foster Wheeler, with two other
international companies.
ENAP, Chile's state-owned oil company, and its refining unit ENAP Refinerias, will have a combined 49% stake in the special-purpose company ENERCON (Energia Concon), and Foster Wheeler and its two consortium partners will each hold 17%. The total investment of the complex is about US$430 million. The contract value was not disclosed. The project will be included in Foster Wheeler's third-quarter 2005 bookings. "This EPC award marks the successful conclusion of a long process, which started with an exhaustive feasibility study, followed by the execution of the basic design," commented Jesus Cadenas, managing director of Foster Wheeler Iberia S.A. "This is a strategic project for the refinery. Using our leading-edge delayed coking technology, ENAP will be able to process cheaper, heavier crudes and to upgrade the heavy fuels it produces into lighter, more valuable products, such as liquefied petroleum gas, naphtha and diesel." The new facility includes a new 20,000 barrels per stream day delayed coker, auxiliary units, including sulfur recovery, sour water stripper, amine regeneration, coke handling and wastewater treatment, as well expanded utilities. Foster Wheeler Iberia, in collaboration with its consortium partners, will execute the project on a lump-sum turnkey basis. The process design package has been prepared by Foster Wheeler's coking center of excellence in Houston. The new complex is expected to start up in the first half of 2008. ---------------New Cleco Power Unit to Stabilize Customer Costs, Provide Economic BenefitsPosted on: Tuesday, 12 July 2005 RedNova News Cleco Power has filed plans with the Louisiana Public Service Commission (LPSC) to build the estimated $1 billion unit. The company's first choice for location of the unit is its Rodemacher Power Station near Boyce. It will encompass two circulating fluidized-bed boilers and generate approximately 600 megawatts of electricity. The unit will require environmental permitting approvals in addition to LPSC approval. "We are at the beginning stages of a lengthy process," said Mike Madison, president and CEO of Cleco Corp. "We believe, however, this project will bring huge benefits to our customers and our entire state. If the project is approved, current projections of future natural gas prices show this proposed unit has the potential to save customers nearly $4 billion over 30 years." Gov. Kathleen Babineaux Blanco joined Cleco executives, state legislators and other officials at a news conference at the State Capitol to discuss plans for the new unit, which is the utility's largest permanent job creation project in more than 20 years. "This project will create up to 1,200 construction jobs and 80 permanent, good-paying jobs, a significant boost to the economy of Central Louisiana," said Blanco. "Just as important, this new plant will give consumers, homeowners and businesses a reliable source of energy. Businesses look for stable energy costs and this project will help us attract new industry to Louisiana." Building a new unit will reduce the company's use of natural gas, which has seen dramatic price increases over the past five years. In place of natural gas, the new unit will primarily use petroleum coke, a byproduct of Louisiana's oil refinery industry. "Energy costs are a top concern of our customers, and we are committed to bringing them under control by lowering the fuel cost portion of customers' bills," Madison said. If approved, the new unit will be among the cleanest plants of its type in the nation. The facility design includes environmental controls that will allow the proposed unit to meet or surpass all federal and state environmental laws and regulatory permit requirements. As part of its plan to meet customers' power needs, Cleco Power is also requesting approval of two power purchase agreements to meet capacity requirements starting in 2006. One agreement is with Williams Power Co., Inc. for four years, and one is with Calpine Energy Services, LP for a one-year term.
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A new FW coker for ENAP at Aconcagua
refinery Chile.
-Charlie
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| Tesoro plans coker at Washington refinery | ||||||||
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HOUSTON, May
11 (Reuters) - Independent Western U.S. refinery Tesoro Corp. (TSO.N:
Quote, Profile, Research) plans to add a 15,000 barrel per day (bpd)
coking unit at its 108,000 bpd refinery in Anacortes, Washington, said
Chuck Flagg, senior vice president of planning and optimization. The coker will cost $175 million and be operational by April 2007, Flagg said during a webcast presentation from San Francisco for Wall Street analysts.
|
Tesoro Anacortes 15 MBD coking unit is
prepping to taking in western Canada crude - the coker is estimated
online by April 2007. <You will remember this refinery added a Rose
DeAsphalt unit back in 2002 or 2003 - so the new coker unit would mean
it now has significant bottoms handling & flexibility for 108 MBD
refinery - that perhaps its new 13.8 Coker ratio may not fully indicate> Recent Tesoro 1Q05 earnings reported a 45% tumble (& loss of -$75MM of operating income) from 1Q04 was largely due to major repair at two of its six refineries: the 108MBD Anacortes (work on Naphtha reformer) and 168 MBD Golden Eagle (work on Boilers) in preparation of a strong gasoline season. No indications were made of any prework or tie-ins for the future Anacortes coking unit during the Anacortes 1Q shutdown. Although the majority of western Canada's crude is still sold to US Eastern & Midwest markets the Total aggregate Excess Capacity on the 3 major trunk P/L system's for exporting Western Canadian crude is about 300 MBD. The Canadian Enbridge Energy P/L system currently has about 150 MBD of unused capacity for exporting future western Canadian heavy crude into US - about 40 MBD on Terasen (Trans Mountain) system that runs from Edmonton into Vancouver & on to Washington state - both strategic markets for California & Asia (and of course Tesoro Anacortes coker....and maybe Shell Anacortes as well?). And the Terasen Express P/L has 170 MBD of capacity for Light, Medium & Heavy Western Canadian crude into PAD IV, but a new Platte P/L connection completes April 2005 to PADD II that will expand the Terasen Express by 110 MBD (wwwcapp.ca/raw.asp?x=1&dt=PDF&dn=83040) This may also mean the Shell Anacortes (currently mostly ANS with some Lt Canadian crude) coke supply could also join the long list of green anode production at risk from the increased placement of western Canada's heavy crude supplies and its growing network of P/L delivery capability. Currently anode producing refineries at Lima, Robinson, Alliance and Regina have all indicated similar plans to Tesoro's for adding/increasing Canada crude to their slates (hence coker feeds). It remains to be seen whether part of the coking operation will continue producing some anode/calcinable type coke in addition to fuel coke as was the case for Toledo, Hartford (prior to COP ownership & expansion that is), and Baton Rouge. Several past anode producers like XOM B.Rouge, Beaumont, COP L.Charles, and host of others have become essentially fuel coke - but may still have an option to batch process their sweet resid separately to make ~anode / calcinable quality green coke. Aluminum industry intercession will likely come too little and too late - much like their experience with Pitch where its $90/ton cost rocketed to +$300/ton to pay former byproduct plants / new stand alone plants to make the material (Pitch and Petcoke are used ~equal parts to make Anodes that are used to melt Aluminum). The much expected "Inert Anode" by Alcoa has yet to be used in any of Alcoa's new / expaned plants and has been more of a foil for coke price negotiations than market reality. But of course its doubtful any price of coke would justify switching from expensive light crude to cheap heavy crude because of the volume differentials and earnings. And at $50/BBL crude cost & $2.0/gal gasoline value - the petcoke would need to be worth nearly $400/ton to gain equal "product" value status and have stand alone operations (assuming they could sell other refineries the +80% of other intermediate products). Needle coke sells in the $500 - 1000/ton range and makes primarily only needle coke, Carbon Black oil & fuel gas and there are only FEW stand alone operations of this type. The "sky is falling" theme for anode green coke supplies & ultimate need smelters relax spec's has been around for nearly 10 years now, however it is becoming central issue. But - I believe - there is great Refinery & Aluminum industry (better?) option that lies locked inside the Refineries hidden coker. Regards Charlie Randall |
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Man Dies at BP Cherry
Point Refinery - May 4, 2005 |
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JOHN
STARK, THE BELLINGHAM HERALD A maintenance worker was found dead inside an idled refining tower at BP Cherry Point Refinery late Tuesday. Gary Goldfogel, medical examiner for Whatcom County, identified the dead man as Nick Karuza, 58, of Blaine. Goldfogel said he performed an autopsy Wednesday but was not yet prepared to state a cause of death. Karuza, a lifelong county resident, was a member of a well-known South Side commercial fishing family with roots in Yugoslavia. He had formerly operated a purse seine vessel, fishing for salmon before fishing restrictions forced him and many others out of the industry. "He was a dedicated family man, dedicated more than 10 men," his wife, Diedra, said. "He loved the community he lived in." His survivors include four children: Nathan, 22; Marie, 19; Darian, 13; and Averi, 9. Refinery spokesman Mike Abendhoff said Karuza was an employee of Cascade Refinery Services and had been inside the tower doing pressure washing as part of routine maintenance. A co-worker discovered his body shortly before midnight. Equipment failure did not appear to have been a factor, he added. Jeff Parks, chief criminal deputy with the Whatcom County Sheriff's Office, said a preliminary investigation found no evidence of foul play, and the case has been turned over to Goldfogel and the Washington Industrial Safety and Health Administration. Parks said deputies' investigation indicated that Karuza had been working alone atop scaffolding inside the tower. He had been dead only a short time when his body was discovered. "They checked on him periodically and the next thing they knew he was at the bottom of the scaffolding," Parks said, adding that some sort of medical problem has not been ruled out as a cause of death. Elaine Fischer, spokeswoman for the Washington Industrial Safety and Health Administration, said agency investigators were at the refinery Wednesday but probably would not issue a report for several months. Reach John Stark at 715-2274 or john.stark@bellinghamherald.com. |
The BP Cherry Point Refinery is known
for it's commitment to safety. It has a superior
safety record for a low number of OSHA recordable incidents.
They recently celebrated 3 million safe work hours without a single lost workday.
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Syncrude's $7.9B Stage 3 expansion paid out by next year - despite 100% cost increase |
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Syncrude's $7.9B expansion likely paid out by next
year, says chairman
JAMES STEVENSON April 25, 2005 CALGARY (CP) - Syncrude Canada will likely end up paying full royalties on its $7.9-billion Stage Three expansion next year - around the same time the project is completed - as sustained high oil prices have paid-off most of the costs far earlier than expected. Canadian Oil Sands Trust, which is the largest shareholder in the Syncrude joint venture, told shareholders Monday that royalty costs would rise as a result. In Alberta, major oilsands projects pay a minimum rate of one per cent of gross revenues until costs for the project have been earned back. After that, the royalty rates jump to 25 per cent minus operating costs. "At these prices, we're pretty much paying off the capital that we spend as we go," president and chief executive Marcel Coutu said following the trust's annual meeting in Calgary.Coutu said oil prices, which have been higher than the $50 US mark per barrel for most of 2005, have put an end to traditional timelines where projects would get several years of the lower rates before reaching pay-out. "I think it goes to the structure - if everybody makes out better sooner, so does the royalty collector, the province." Coutu, who is also Syncrude's chairman, refused to say exactly when the trust expected to be bumped to the higher royalty rates and the specific financial impact on his company. Canadian Oil Sands is the Canada's largest income trust with a stock market value of more than $7.9 billion. It's sole holding is its 35.5 per cent stake in Syncrude - the world's largest oilsands operation. Syncrude's Stage Three expansion, designed to boost production by about 50 per cent, is now about 80 per cent complete. But it has been fraught with cost overruns. Originally estimated to cost $4.1 billion, it is now nearly 100 per cent higher than the initial budget. On Monday, Coutu told Canadian Oil Sands investors that the pricetag of the expansion has crept up by a further one to two per cent, or more than $100 million, for a total cost to Syncrude of $7.9 billion. The trust also told shareholders that major maintenance at Syncrude's sprawling facility in northern Alberta dragged down first quarter earnings. Net quarterly profits at the Calgary-based trust dropped to $59 million, down 43 per cent from $103 million in the same 2004 quarter. On a per unit basis, net income fell to 64 cents from $1.18 last year. Syncrude, which operates a mine and refinery processor north of Fort McMurray, Alta., is also partly owned by Imperial Oil, Petro-Canada and Nexen. Coutu said the main turnaround is now complete, along with repairs to one of three hydrogen plants which exploded earlier this year. "We remain on track to achieve our annual production outlook, if the plant runs without any major unscheduled downtime for the balance of this year." Last year, Canadian Oil Sands (TSX:COS.UN) posted record net profits of $509 million - 60 per cent higher than the previous year, thanks to record oil prices, lower operating costs and record annual output of 87.2 million barrels. Canadian Oil Sands also said Monday it is maintaining its annual forecast of between 80 and 86 million barrels in 2005, despite the lower production in the first quarter. The lower end of the range includes the possibility of a second coker turnaround, currently scheduled for early next year. On the Toronto stock market Monday, the trust's units rose $1.21 or 1.4 per cent to close at $87.61. |
The Syncrude Stage 3 expansion will be
paid off next year about the same time the project completes
(~80% complete now) - even though the project cost &
over-runs have doubled to $7.9B and some production loss
from main turnaround with repairs to one hydrogen unit
explosion in 2005.
There is possibility second coker turnaround early in 2006
but production estimates are expected to meet original lower
end range of 80-85 MMBD due to 50% increase in capacity from
expansion.
<Perhaps Syncrude should take a little longer to pay off the
project & use some windfall earnings from $50+ crude to
purchase any refineries that FTC makes either
ChevronTexaco/Unocal or Valero/Premcor mergers sell off?
Could give them US refinery beachhead like Suncor has with
ex-COP Denver refinery....>
The Canadian Suncor & Syncrude heavy oil developments &
progress towards integrating new production into the US
stand in sharp contrast to the Venezuelan program. The large
Venezuelan royalty and tax increases unilaterally to US
invested companies, strong Anti-US rhetoric and proposed
disposal of some CItgo US refineries place PDVSA at huge
disadvantage for placement of future heavy & synthetic crude
oil volumes into the mid-continent / heartland US cokers
capable of processing this crude. So the fight will be over
before it even begins and its going to be Canada by a TKO.
Regards
Charlie Randall
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Business Week APR. 25 6:19 A.M. ET Valero Energy
Corp. plans to acquire Premcor Inc. for $6.9 billion in cash and
stock as part of a deal that would create the largest refiner of
crude oil in North America, company officials announced Monday.
In the merger agreement, Valero will issue $3.5 billion in stock and pay $3.4 billion in cash. Valero also will assume about $1.8 billion in Premcor debt and will add four refineries and 790,000 barrels per day to its system.
"This transaction is one of the largest and most strategic
acquisitions in Valero's history," said Bill Greehey, Valero
chairman and chief executive officer. "This acquisition is also good
news for consumers because we have a track record of investing in
and expanding our refineries."
With the proposed acquisition, Valero will have total assets of $25 billion and annual revenues of nearly $70 billion, which would rank it No. 15 on the current listing of the Fortune 500. Adding Premcor's refineries in Port Arthur, Texas; Memphis, Tenn.,; Delaware City, Del.; and Lima, Ohio; will give San Antonio-based Valero 19 refineries with a total throughput capacity of 3.3 million barrels per day. The boards of directors of both companies unanimously approved the acquisition, which is subject to the approval of Premcor's shareholders and customary regulatory approvals. The transaction is expected to close Dec. 31. "This transaction provides Premcor's shareholders with a meaningful increase in the value of their investment, as the terms of the agreement represent a 24.6 percent increase over the closing price of our stock on April 22," said Jefferson F. Allen, Premcor's chief executive officer. Premcor, of Old Greenwich, Conn., is one of the largest independent petroleum refiners and suppliers of unbranded transportation fuels, heating oil, petrochemical feedstocks, petroleum coke and other petroleum products in the United States. The company's refineries have a combined crude oil throughput capacity of approximately 790,000 barrels per day. In recent months, U.S. refiners have seen rising demand spur gains in fuel prices and higher profits. Gas prices were expected to dominate talks Monday between President Bush and Saudi Arabia's Crown Prince Abdullah in Texas. "This acquisition couldn't come at a better time," Greehey said. "2005 is off to a great start and we are right on track to have another record year. Our first quarter earnings were 111 percent higher than the same period last year, and of course, we had a record first quarter in 2004."
----------------
Valero, Premcor in $6.9B merger Cash-and-stock deal would create largest crude oil refiner in North America. SAN ANTONIO (Dow Jones) - Valero Energy Corp. (VLO) confirmed that it agreed to acquire refiner Premcor Inc. (PCO) for about $6.9 billion in cash and stock. In a press release Monday, Valero said it values the transaction at about $8 billion, including the assumption of about $1.8 billion of Premcor debt offset by about $800 million in cash. The deal was reported by The Wall Street Journal earlier Monday. Shareholders of Premcor, based in Old Greenwich, Conn., will have a choice of 0.99 of a Valero share or $72.76 in cash for each Premcor share. Based on Friday's Premcor closing price of $59, the cash price of $72.76 would provide a premium of 23%. Valero will issue about 46.7 million shares in the deal, valued at about $3.5 billion based on Friday's Valero closing price of $75.04 . The cash portion will total about $3.4 billion . Valero expects to complete the merger on Dec. 31 . Valero said 2005 "is shaping up to be another year of record earnings" and said "we believe that our trend of record-setting quarterly results will continue into 2006 and beyond," reiterating statements from last week. The company predicts the acquisition of Premcor will add about 14% to earnings per share in the first year after closing. In 2004, Valero's earnings excluding a charge for a joint venture were $1.84 billion, or $6.66 a share. Analysts polled by Thomson First Call, on average, predict earnings of $7.40 a share for 2005 and $6.95 for 2006. Valero said it will finance the cash part of the acquisition with a combination of cash on hand and bank debt. At March 31, the company had $686 million cash. By year-end, Valero expects the combined company to have $2 billion of available cash and it anticipates issuing about $1.4 billion in new debt. After buying Premcor, Valero will be the largest refiner of crude oil in North America, surpassing Exxon Mobil Corp. (XOM). Valero acquired Ultramar Diamond Shamrock Corp. for about $4 billion in cash and stock in 2001, becoming the largest independent refiner in the U.S. Valero's 15 refineries have a combined throughput capacity of about 2.5 million barrels of oil per day, about 12% of the total refining capacity in the U.S. Premcor's four refineries have a capacity of about 790,000 barrels a day. Valero predicts the merger will lead to $350 million in annual cost-savings in the second year after closing, including lower administrative and interest costs, lower crude oil costs due to purchasing leverage and operational improvements. The Wall Street Journal reported that Premcor's chairman, Thomas D. O'Malley, plans to step down when the deal closes, as does Jefferson F. Allen, its chief executive, and the report said Premcor would have no seats on the Valero board. Valero noted that "there will be no changes to Valero's senior management or board of directors." In the press release, O'Malley said "I intend to remain a long-term and large shareholder of the new Valero." Valero scheduled an analyst meeting and Webcast for 11:30 a.m. EDT Monday.
-Josh Beckerman; Dow Jones Newswires; 201-938-5400;
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Hot off the
wires this morning is the Valero & Premcor merger agreement for ~$7
B which would create a Fortune Five hundred ~15 rank sized company
for the Energy industry. The Business week & DJ news wire versions
follow the template from Valero & Premcor websites.
The combined company would add 790 MBD processing & 4 refineries to Valero's total for 3.3 million BPD and 19 refinery total. The combined $25 billion worth of assets is projected to pump out $70 billion revenue. <Note Petcoke is mentioned prominently along with the other refinery products.The merged 23 refinery system would sport over 13 Refineries with cokers> Both Premcor & Valero had also been mentioned (along with Sunoco) as interested bid candidates for the two Citgo refineries that have been mentioned for sale - although they remain unnamed, rhetoric suggest they would be the Lemont refinery (167 MBD & processes little PDVSA crude) and Lyondell-Citgo (LCR) refinery (268 MBD, 49% Citgo, LT crude contract whose price PDVSA is unhappy with & requires shortfalls to be replaced from market during outages like Venezuelan oil strike). Citgo & Petrobras released a news item about their (~$1.9B) interest in Lyondell's 51% portion but Lyondell showed little interest at the time.
Both Citgo
coking refineries would also fit well with a newly merged Valero-Premcor's
stable of other coking refineries.
Regards Charlie Randall |
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| 4/4/05 NEW YORK (AP) -
ChevronTexaco Corp., the nation's second biggest oil concern, is buying
rival Unocal Corp., the ninth biggest U.S. oil and gas exploration and
production company, for about $16.4 billion in cash and stock. Under the deal announced Monday, ChevronTexaco would also assume $1.6 billion of debt in the deal. Unocal has been evaluating a possible sale and reportedly had also drawn interest from the Italian oil company Eni SpA and China National Offshore Oil Corp., a large Chinese state-owned company. The deal would be the largest takeover in the oil sector in years, and comes as crude oil futures prices have been hitting record levels albeit they are still lower than the peaks reached in the 1980s in inflation-adjusted terms. With energy companies struggling to boost their reserves, Unocal, based in El Segundo, Calif., has represented an attractive takeover target. Many of its assets are in Southeast Asia and they could help meet growing demand from China and India. ChevronTexaco will issue about 210 million shares and pay about $4.4 billion in cash in the acquisition, which provides an overall value of about $62 per share based on the closing price of ChevronTexaco stock on Friday. Unocal shareholders may elect to receive either 1.03 shares of ChevronTexaco stock or $65 in cash for each Unocal share. Unocal currently has about 270.6 million shares outstanding. Unocal shares were down $3.85, or 6 percent, at $60.50 in recent premarket activity. ChevronTexaco, based in San Ramon, Calif., expects disposition of assets following the close of the transaction to result in proceeds of more than $2 billion. Annual savings are anticipated to be more than $325 million before taxes. The acquisition, which is subject to approvals by Unocal shareholders and certain regulatory agencies, is expected to be completed in six months. ChevronTexaco expects oil-equivalent production from the combined portfolios during 2006 to average about 3 million barrels per day. Unocal's 1.75 billion barrels of oil-equivalent proved reserves would increase ChevronTexaco's reserve base as of the end of 2004 by about 15 percent. ChevronTexaco expects the transaction will boost its prospective production growth rate. UPDATE 1-ChevronTexaco vies with Eni |
It
appears that ChevronTexaco (CVX) was successful in its bid for Unocal in
this latest update. Unocal has been considered ripe for takeover for
years (first fought off T Boone Pickens in 1985) and recently
foreign oil companies China's CNOOC along with Italy's ENI joined in
bids initiated by CVX in early March 2005. CVX is 19 times larger than the 9th ranked Unocal but this & previous mergers that enable oil companies to drill in competitors assets still seem to be the best place for the industry to increase its O&G reserves. This purchase won't be as cheap as the 2001 Chevron & Texaco merger or BP & Arco purchase in 2000 or Exxon & Mobil merger in 1999 - where on $/share vs added reserve Barrel Oil Equivalent (BOE) basis several recent mega-mergers/consolidations have added reserves on average cost of only $6-8 /BOE range: Canada @ $5.63 - 6.41/BOE & US @ $6.49-7.86/BFOE. But all of CVX strategic plan paths especially in Asia, seemed to either find Unocal on same road or at critical crossroads/junctions - so some of the synergy was obvious (along with the much needed benefit to CVX from Unocal reserve additions) Doing the math using preliminary article values which has Unocal at purchase price @ $16.4 billion on 210 million shares @ $62/share + 4.4B cash for debt. And Unocal reserves of 1.75 billion will bring a +15% increase CVX total production, which increases to 3.0 Billion BOE /Day. ChevronTexaco reserves had dropped 6% from 11.96 Billion BOE in 2003 to 11.75 Billion BOE for 2004. Unocal's exploration and production cost of $11/BOE on 1.75 Billion BOE reserves divided by its outstanding 263 million shares would yield a stock price of ~ $74/share. So its intrinsic value is much more than its stock price (or purchase price) and it is still a "relative" bargain. The equation is not quite that simple (or Unocal would have been gone long ago) and risk on reserve evaluations (aka Shell's rueful awakening to that fact) and the associated dollar value of those risks (ie Unocal's Yadana-Yetagun gas pipeline opposition in Myanmar), seem to find balance for CVX in todays $50/BBL oil market looking ahead to chances for $80/BBL in next two years. Regards Charlie Randall |
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| Lyondell refinery attracts interest from Petrobras, PDVSA | ||||||||
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Wed 3/30/05
Reuters reported Wednesday that
Petroleo Brasileiro and
Petroleos de Venezuela have offered to buy or rent
Lyondell Chemical Corp.'s stake in a Houston oil refinery.
Petrobras, Brazil's state-run oil company, and PDVSA, Venezuela's state-run oil company, want to use the facility to refine heavy crude extracted from Petrobras' Marlim field in the Campos basin off Brazil's southeast coast and sell it in the U.S. market. PDVSA's U.S. subsidiary, Citgo Petroleum, already owns a 41 percent stake in the facility through a joint venture with Lyondell (NYSE: LYO). Reuters added that the refinery can process 268,000 barrels per day of oil and is one of the few facilities in the United States capable of working with Brazil's heavy oil, meaning it would not need additional investment. If the bid is successful, the facility would represent Petrobras's first effort at refining on U.S. soil. ----------RPT Lyondell stake in refinery eyed by Petrobras worth 1.9 bln usd - analyst Wed 3/30/05 (Repeating for technical
reasons) LONDON (AFX) - Lyondell's stake in the Texas-based heavy
oil refinery eyed by Petroleo Brasileiro SA is worth some 1.9 bln usd,
making the deal costly, Bearn Stearns analysts said.
|
Couple articles on Lyondell refinery (LCR) developments with Pdvsa -
this time involving Petrobras as candidate for Lyondell's 49% and Pdvsa/Citgo
keeping its 41%. You should remember the last Chavez moves in February for increasing US upgrader JV partners tax royalty fees from 1% to 16% unilaterally AND Ramirez announcing that he intended to sell Citgo assets (that Citgo later discounted), with Lyondell singled out for a contract re-negotiation on its Venezuelan long term heavy oil price discounts to that JV operation, claiming Pdvsa was disadvantaged. (You should also remember the Venezuela/Pdvsa country wide strike the heavy cost afterwards to reimburse Lyondell for having to purchase its replacement crude in the market (per contract) - as a likely / major reason for LCR's target status.) Although Pdvsa/Citgo has finally managed to sell its German Ruhr Oel refinery recently (was on the market for over a year) - market values at $0.10-40 per invested $1.0 values probably contributed to some of the Citgo sales considerations. Petrobras establishing a $1.9B refinery investment in the US is probably overdue but given its aggressive development program for heavy oil refineries & cokers in Brazil doing it at same time in the US is probably over kill during a market peak cycle (as one articles also points out), even if one of the later refinery / coker expansions in Brazil slides off the list (ie 6 new cokers planned, with 3 in construction / operating & other 3 announced / planning cycle). ALSO Petrobras should read the fine print to see that replacing Lyondell does not necessarily mean that it becomes the supplier in current JV crude contract that is good until 2017 (per Bear Stearns analysts in 2nd article) - and provides the opener / out that PDVSA/Citgo is really looking for so ..... buyer beware on perhaps a good idea that seems to be happening at wrong time for some of the wrong reasons. Regards Charlie Randall |
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| CARACAS, Venezuela - ChevronTexaco Corp. is
planning a new project with Spain's Repsol YPF to pump heavy crude in
Venezuela's Orinoco tar belt, marking the latest interest by major oil
firms in Venezuela's vast reserves. The multi-billion-dollar project will refine the extra heavy Orinoco oil into synthetic crude and transport it through a new regional pipeline, according to a letter of intent the two oil firms signed with Venezuela. "The signing of the letter of intent with Repsol YPF provides us with an opportunity to further enhance our existing portfolio in Venezuela and sets the stage for what I believe will lead to an even longer and lasting partnership," ChevronTexaco Chief Executive Dave O'Reilly said Wednesday in a statement. Major oil firms are lining up to develop Venezuela's Orinoco area. Norway's Statoil and France's Total plan to launch a second upgrading project in the area this year. Joint investment of $5 billion to $6 billion is planned in the project, said Margarita Arango, a ChevronTexaco spokeswoman for Latin America. The four heavy crude projects in the Orinoco area - Petrozuata, Sincor, Hamaca and Cerro Negro - produce a heavy tar oil that is refined into around 500,000 barrels a day of synthetic oil. ChevronTexaco, based in San Ramon, Calif., currently has a 30 percent stake in the Hamaca project. The new project will be Repsol's first heavy oil venture in Venezuela. Venezuela is the world's fifth largest oil exporter, and the Orinoco area is estimated to have over 200 billion barrels in extra-heavy oil reserves. ChevronTexaco shares rose 5 cents to close at $58.31 Thursday on the New York Stock Exchange. The stock has traded in a 52-week range of $42.59 to $63.15. |
Announcement on
Spain's Repsol & ChevronTexaco LOI with Venezuela to develop new $6B
Orinoco syncrude project & regional pipeline. This follows another
recent announcement by Total & Statoil to launch 2nd upgrading project
this year. It is Repsol's first heavy oil venture in Venezuela and one of its motivations might be as offset to this years alarm to Repsol investors from reporting an oil reserve replacement ratio of just 32.5% for 2004 (understandably since its WAY down from Repsol's 142% oil replacement ratio in 2003 after it bought BP's Trinidad reserves). This project and plus recent project announcement for Venezuelan JV (49% Repsol) gas liquefaction plant with 80 MW generating plant will double size of its reserves in Venezuela. Nothing has been mentioned about issues around new Venezuelan royalty levels of 16% vs previous project rates of 1% <which 2003 had Venezuelan, in one Comparison world Fiscal terms for Governments take on oil, 2nd only to Iran and considerably above even UAE> RE: Another LA update news item about this weeks Petrobras & Venezuelan offer for Lyondell's part of LCR refinery - Lyondell's David Harpole said (Thursday 3/31) to Reuters that it was NOT negotiating the sale of its controlling part in the Houston refinery JV. Lyondell did not confirm the Petrobras offer or if it would negotiate any other type deal regarding the refinery. Petrobras Nestor Cervero stated the talks were at an initial stage, they had made initial contact and it was up to Lyondell to decide if they want to open talks. So the Venezuelan stormy relationship with US investors continues to cover the spectrum and alignments with Brazil's Petrobras, & Spain's Repsol increasing. Regards Charlie Randall |
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ExxonMobil Plans 15 Days Work At Baytown, Texas Refinery |
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| Feb. 6, 2005 HOUSTON -(Dow Jones)-
ExxonMobil (XOM) scheduled 15 days of maintenance at its largest U.S. refinery, in Baytown, Texas, according to filings with a state environmental agency. The work will involve valve repair on a hydroformer, and will begin Feb. 16, the report said. The repair will result in decreased flexicoker gas consumption,
according to the report filed with the Texas Commission for
Environmental Quality. 713-547-9208, jessica.resnick- ault@dowjones.com |
Some of the recent
updates around coking refineries shutdown or startup plans Feb 2005, as
US refineries get ready for 1Q05 head start on Gasoline season with
expectations of stronger demand. Market analysts are already saying that for the first time since 2002 Gasoline inventories are in position to avoid the springtime crunch in supply/prices. US gasoline supplies (World's largest consumer) have grown to 4% above last year's level making it one top averages for this time of year and with capacity utilization at 91.6% (again 4 points above last year) with few downtimes (and those that were have been "light" schedules - like ones mentioned here) and European import shipments for Jan (2.5 MM MT) & Feb (also expected to big volume) have been/will be records ...... all of this indicates a bearish outlook for Gulf Coast region baring any major OPEC slash / Major supply problem - Venezuela etc This may be end to refining celebrations around Margins/Crack spreads that continue 5th Month record highs at prices little changed from last years $2/gal prices at most US pumps ....... but by May there just might be a different story. I still do not see a lot of attention being paid to the other refinery fuel product short demand potential ..... diesel prices. As US refineries shift into higher gasoline production modes that have ~ 60% gasoline yield levels vs lower winter yields that favor higher diesel production levels, it bears some attention that the reason EU is shipping the US so much Gasoline (besides prices / having shifted to higher dieselization in cars / etc) is that there is a lot of Refinery downtime scheduled in EU for completing Low Sulfur projects during the 1Q05 and they have been building inventories to minimize the amount of supply & pricing impact to their diesel markets (hence need ship large amounts gasoline to stay at capacity). The US at stocked (or relative so for season - based on limited Just-in-Time inventory levels- gasoline position) with large number of EU refineries down should put BIG dump on world Crude oil prices by Mar/Apr at about the time that the EU stocked (or relative so given the amount of refining shutdowns) diesel positions should be running out for their "Just-in-Time" available inventories .... and put spike on world diesel prices that may be high already given strong demand increase in both Europe and China as more drivers take to streets in increasing number of diesel driven cars. World production levels are also going to be compromised because most of the rest of the world's economy is diesel driven one that HAS to export gasoline to stay at capacity ..... did I mention that the US is stocked (consumes 60% worlds gasoline). One last item is that a lot of Oil companies are bringing out trials of the 2006 Low Sulfur diesel in several areas for some of the new diesel cars spawned in Europe's dieselization (33% increase some areas like Germany) over last couple years, that will likely test market in US (ie Mercedes new E Series diesel engine, Daimler Chrysler's diesel driven sedan/coupe models). A lot of Refineries have folks working on making sure the LS fuel made at refinery can actually get to the pump at LS levels - remember the snafu in Europe on LS Fuel oil (reduced 1% max.) where it was tested & sold in tank but couldn't get to ships fuel hold on spec (line contamination etc pushed it back above spec) .... think given US pipeline & tankage systems have a lot of "transmix" downgrades or high sulfur diesel discounts waiting on some US early LS diesel products ...... also a build on demand for spec diesel product during a normal "off season" for production schedules. SO........ it's a great time if you have cheap crude and some diesel inventory for short world market, and aren't trying to make more gasoline go into a long supply market but...this opportunity may come and go before analysts wake up and smell the diesel! Regards Charlie Randall |
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Pipeline leak
could leave Premcor without crude |
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| LIMA A leaking pipeline in Kentucky could
leave Premcor Lima Refinery without crude oil to refine. The pipeline, which delivers 195,000 barrels of crude a day from Texas to Midwest refineries, failed shortly after midnight Wednesday. The repair date has been moved back to Sunday at the earliest and Tuesday at the latest, Premcor Plant Manager Tim Murphy said. Were in hour-by-hour communications with the company, Murphy said. If its Sunday, well hold on. If its Tuesday, were in dire straits. Sunoco Logistics Partners L.P. operates the Mid-Valley Pipeline. The leak caused a spill of 63,000 gallons of crude oil into a segment of the Kentucky River between Cincinnati and Lou-isville, Ky., according to Business Wire. Crews from Sunoco Logistics, U.S. Environmental Protection Agency and Kentucky Division of Emergency Management worked to contain the spill this week. Premcor scaled down production this week to save what crude the plant had, Murphy said. If the pipeline isnt shipping oil by Tuesday, the plant will not be producing, but will continue work shifts as normal. Well literally run out of crude, Murphy said. |
Premcor's Lima Coking
Refinery could be without crude due to a leak in Mid Valley crude oil
pipeline. The refinery is operating normally hoping repairs will be
completed by Tuesday - otherwise the plant will have to shutdown. Both the Premcor Lima refinery and COP's Alliance refinery (recent FCC fire) are coking refineries that produce green anode petcoke that is in limited supply. While both seem to be short term in nature - limited storage volumes could cause shipment issues. Regards Charlie Randall |
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| FORT MCMURRAY, Alta. (CP) Suncor Energy Inc. began an investigation Wednesday into the cause of a fire at its oilsands plant and said it has started repairs to return to full production. The fire, which began Tuesday morning at one of Canadas largest oilsands plants, was extinguished late in the day, the company said in a release. Located in one of the companys two oilsands upgraders, the fire affected a coker fractionator, which separates crude oil products. The response of our emergency services and operations teams throughout this incident has been excellent, said Steve Williams, Suncor (TSX:SU) executive vice-president. Apart from some first-aids related to the cold weather, there were no injuries. We are now focused on safely returning to full production. Oil production at the facility was operating at about 110,000 barrels per day, the company said. It did not know when full production rates of about 225,000 (barrels) would resume. Suncor said it will provide information on damage estimates and production impact once the investigation is complete. During the fire, about 250 employees who work in the immediate area were assigned to other portions of the facility. A construction site close to the operating area that employs about 1,200 workers was closed until Thursday. One witness said two explosions several minutes apart rocked the companys Millennium upgrader and sent a fireball six stories high into the air. Suncor shares were up 30 cents to $40.40 in early trading Wednesday after falling more than five per cent Tuesday in heavy trading on the Toronto stock market. | Suncor uses Delayed Coking and Hydrotreating to upgrade Athabasca Bitumen to finished products and refinery feedstocks. They operate 12 coke drums. | |||||||
| Worldwide Refining (and coking) capacity | ||||||||
| The Oil &
Gas Journal (OGJ) site link is working again although the new look
resembles more of an auto-parts website than an
Oil & Gas industry site! The Refining capacity summary for 2004 just
came out in the Dec 20th report & continues to show WW capacity creeping
upward despite large numbers of refineries closing. The number of refineries dropped from 717 in 2003 down to 674 in 2004, a net loss of 37 refineries, despite one new addition. A total of 47 were closed - China closed 38 refineries, 4 Russian refineries operating only as condensate & other plants were removed & 5 other refineries were shutdown. (Math seems to be ok OGJ numbers 717-47+1= 674). Sinopec closed all 38 refineries in China (it had 27 of its 56 refineries last year at under 10 MBD capacity) but still managed to post +120 MBD increase in capacity overall - there is 40 MBD loss shown in coking capacity but its all in "other" / not coking units. But the 4Q04 has had a number of Chinese "1 mm tpa charge on new coking units" missing that were announced, however several appear to be just expansion / debottlenecking improvements and not additional 1 mm tpa increased capacities. Sudan coker wasn't shown - but it may still end up being a 1Q05 instead 2H04 startup > That is all on first pass check but trends 2003 continue and China /Sinopec has firmly slipped into similar path as US refining - closing down all small refineries, expanding large / key coastal refineries using heavy imported oils & maintaining capacity at slight capacity creep upward (but still substantially below growing demand levels). Although there were no US refineries closed in 2004, at least 20 small refineries (less 90 MBD) are still expected to close by Jan 1, 2006 or before LS fuels extensions have ended. Regards Charlie Randall |
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| ConocoPhillips new cokers at Borger and Woodriver | ||||||||
| Confidential: Industry sources confirm ConocoPhillips is looking at a 2 drum coking unit for its Borger Refinery but COP declined to comment upon it. Supposedly the coker manufacturer bids closed on Wednesday, but none of the participants (like CB&I) would confirm or deny the coker / bids either. The Borger Refinery had also just recently completed a 20 MBD (from 130 to 150 MBD) expansion & debottlenecking project by the end 2002 / first 2003 and added a 6 MBD S Zorb SRT unit for gasoline streams in April 2001 to meet/exceed the 2004 LS fuels 30 ppm sulfur specification in gasoline and to demonstrate the Phillips S Zorb Sulfur Removal Technology & process for COP licensees. COP's Ferndale Refinery added a unit end 2002 for diesel application (at the time it was 2nd diesel & 6th gasoline S Zorb license counting both Ferndale & Borger). Regards Charlie Randall |
No longer confidential: The Nov 2004 COP
Analysts report in the Refining & Marketing presentation show both the
COP Borger coker addition (target 2Q07) and mention an additional coker
expansion at Woodriver (target 4Q08) after the Hartford coker is
integrated. The COP R&M 2004 May presentation on Woodriver also had slides showing both Hartford coker integration and a new coker expansion planned (but I had overlooked it in 42 slide presentation). Charlie Randall |
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Mount St. Helens Top Washington Polluter |
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| Washington state's top polluter isn't a
pulp mill, a power plant or refinery. It's the newly awakened Mount St.
Helens. Since the volcano began erupting in early October, it has been
pumping out 50 to 250 tons a day of sulfur dioxide, the lung-stinging
gas that causes acid rain and contributes to haze. Those emissions are so high that if the volcano were a new factory, it probably couldn't get a permit, Clint Bowman, an atmospheric physicist for the Washington Department of Ecology, told The Seattle Times. All of the state's industries combined produce about 120 tons a day of the noxious gas. Normally, the state's No. 1 polluter is a coal-fired power plant near Centralia owned by the Canadian firm TransAlta. The plant churned out 200 tons a day of sulfur dioxide until regulators demanded $250 million worth of renovations, bringing the level down to 27 tons a day. Tough to get those kind of results from a volcano. "You can't put a cork in it," said Greg Nothstein of the Washington Energy Policy Office. Because the area around St. Helens is so sparsely populated, officials say they haven't heard complaints about respiratory problems linked to the emissions. But persons with sensitive breathing ailments probably would feel the effects if they lived close to it, said Bob Elliott, executive director of the Southwest Clean Air Agency in Vancouver. "We are very fortunate, in terms of the impact on human health, that Mount St. Helens is pretty remote," Elliott said. Italy's Mount Etna can produce 100 times more sulfur dioxide than Mount St. Helens, and it sits in the middle of a heavily populated area. The volcano spawns acid rain and a type of bluish smog that volcanologists call vog, which can affect large swaths of Europe, said Terry Gerlach, a U.S. Geological Survey scientist. Kilauea Volcano on Hawaii's Big Island churns out 2,000 tons a day of sulfur dioxide when it's erupting, creating an acid fog that damages local crops. The impact from St. Helens hasn't been as noticeable, but, Gerlach said, "If you were to go and collect rainwater just downwind of the volcano, I suspect you would see some acid rain." Worldwide, sulfur dioxide emissions from volcanoes add up to about 15 million tons a year, compared to the 200 million tons produced by power plants and other human activities. Volcanic gases bubble out of magma as it rises to the surface, and the amount and type of emissions depend on the chemical makeup of the molten rock. In addition to sulfur dioxide, volcanoes also release smaller amounts of other noxious gases, including hydrogen sulfide and hydrogen chloride. They also release carbon dioxide, the greenhouse gas that's primarily blamed for global warming. Mount St. Helens produces between 500 and 1,000 tons a day of carbon dioxide, Gerlach estimates. Worldwide, people and their activities pump 26 billion tons of carbon dioxide a year into the atmosphere, he said. The total from volcanoes is about 200 million tons a year or less than 1 percent of the man-made emissions. (http://news.yahoo.com/newstmpl=story&u=/ap/20041202/ap_on_sc/top_polluter_1 ) |
EPA cannot control
Washington state's SO2 top polluter - Mt St. Helens! Another reminder that global forces are on scale far larger than man's and well beyond his control. Would have been better comparison if article hadn't switched from comparing Mt St Helens @ 250 TPD SO2 vs all the states Industry @ 120 TPD SO2 (after intervention regulators), to all Volcanoes vs all Human activities. The 15 million TPY SO2 from all volcanoes vs all industries, instead of all human activity (@ 200 million TPY), would have been interesting factoid; likewise on the 200 million TYP CO2 from volcanoes vs all industries instead of all human activity (@ 26 billion TPY). The Britain experience with Mad Cow's disease where reducing both cow population & grains crops that fed them (switching back to grasslands) resulted in dramatic reduction in CO2 levels, indicates the level of impact those type "human activities" can have on emissions. <FYI - Great humorous / tongue-in-cheek science article on the details entitled: "Mad Cows don't belch or fart" . > Also might mention that this is relative dormant period for Earth volcanic activity - Mt St. Helens is only one of series US PNW volcanoes (entire PNW mountain range are really volcanoes) that make up part of Pacific's "Ring of Fire" activity. Mt St. Helens is on ~500 year cycle that leads activity from the others that are on ~800-1000 year cycles. Recent information / discovery of "Super Volcanoes" like entire Yellowstone park area that already has subsurface magma chamber back at alert status - really diminish our inflated view of man's impact on long term global weather patterns I believe. Regards Charlie Randall |
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Kuwait Plans Big Oil
Project Spending ($30-40B) & |
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| Kuwait Plans Big Oil Project Spending Dec. 5, 2004 KUWAIT (Reuters) Kuwait plans to spend some $30 billion
to $40 billion to upgrade its energy sector, and to increase oil
production capacity 60 percent to four million barrels per day by 2020,
top oil officials said in remarks published in local newspapers on
Sunday. |
Kuwait expansion will
be good news for the calcining industry where more & more of this staple
green anode blending component has been disappearing into the new
regional calciners at Alba & Kuwait. And most of today's petcoke
production levels would be consumed once the Alba & Dubal smelter
expansions are completed - unless cokers are also expanded. It has been
expected for some time that Kuwait refineries would be expanding and
produce more petcoke - but not on the scale recently announced. It
remains to be seen, however if Kuwait would also add a resid
desulfurizer (or expand) with new cokers that keeps its petcoke in the
anode blending spectrum @ 3.0-3.5 % Sulfur instead of +4.5% sulfur.
<Note KNPC has done some recent research into more effective ARDS use>
Some previous announcements indicate coking units might be installed at
Kuwaits other 2 refineries, this announcement includes a 4th refinery
(also in earlier news item July 04) with capacity (~400 MBD) equal to
nearly half of Kuwait's current 3 refinery's total capacity (~911 MBD).
Today's Kuwait export crude (31 API/ 2.5 % Sulfur) is actually a blend (as are most of today's marker crudes) of heavy & light crudes but their own refineries (nearly 50% Kuwait crude production is refined domestically & equity owned refineries - 250MBD in EU) processing predominately the heavier type of crude, since nearly 80% of the crude is actually a low to medium API crude with higher Sulfur than the export blend. New JV projects in China / Asia are expected to add secure outlets for the additional crude production which requires higher desulfurization capabilities. The regional expansion of Aluminum & Steel plants are also dependent upon Kuwait's crude production expansion as I understand it, because of the associated increase in natural gas production for feedstock & power plants. The 10% increase in OPEC quotas of 1998 "fueled" earlier smelter expanison in the region. Should the crude expansion and NG availability not keep pace with power demands, then higher priced fuel oil as feedstock could add economic limitations to size of expansions planned. Regards Charlie Randall |
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| Taiwan's Formosa Keeps 2005 Gasoil Term Sales Unchanged | ||||||||
Nov. 4, 2004 SINGAPORE -(Dow Jones)- Taiwanese refiner Formosa Petrochemical Corp. (6505.TW) has renewed its gasoil term contracts with buyers for the term year starting January. Next year's term sales of 2.4 million-2.7 million metric tons of 0.5%, 0.2% and 0.05% sulfur gasoil sold to more than 10 buyers are unchanged from the current year's volumes. This is equivalent to 80 cargoes, each 30,000 tons in size, with buyers having the option to load another 10 cargoes from Formosa's 450,000-barrel-a-day refinery in western Taiwan's Mailiao. Term prices couldn't be confirmed. Existing premiums are 10-20 cents/bbl over the Singapore mean price, free on board. -By Irene Tang, Dow Jones Newswires; +65-6415-4067; irene.tang@dowjones.com |
Taiwan's Formosa
Petrochemical & refining complex has extended its current Gasoil term
contracts for next year and left the sales terms unchanged for 80-90
cargo's of gasoil in 2005 . Formosa's Mailiao Petrochemical complex has
a delayed coker. I believe this may be leaving a lot of upside money on the Asian table for next year. Any European exports into the Asian gasoil market will be sharply curtailed in the 4Q 2004 and first half of 2005 as Europe takes a large number of its refineries down for maintenance and installation of equipment to meet EU's 2005 LS diesel specifications (much like the rotation that occurred in the US refineries to meet LS fuels / Gasoline specifications this year.) Additionally EU is building higher level inventories (limited by available capacity of course) to lower the impact but, I believe, will be completely offset by the increased diesel demand in Europe resulting from a 33% increase in dieselization that occurred at the end of 2003 and first of 2004 - especially in Germany. A lot of the oil industry forward speculation calls for a lowering of crude and product prices due to normal production levels & lower risk levels in some of the top 10 suppliers in 2005 compared to the high volatile 2004. Last years gasoline shortage in the US due to refinery downtime is likely to be repeated - but on a stealth basis because most US forecast have not plugged the EU gasoline import shortfall resulting from all the European refinery downtime during the US peak gasoline demand period. Also the normal 4 - 5 year El Nino, drought inducing cycle for the US seems to be on schedule and a fairly developed pattern off the US Atlantic coast seems to point to a repeat of the US 2000, California issues. If the current forecast are accurate it may already produce a more severe East coast winter and milder West coast winter. This type weather pattern would reduce US distillate inventories in the east and keep refineries occupied producing high demand / value diesel and not building advance gasoline inventories. Additionally it would not yield enough snowfall / spring runoff in the West coast to recharge the Northwest Hydro Power systems and place California needing makeup gas & power from thermal units, plus a re-emergence of the inadequate transmission lines that have not been upgraded. These weather related issues will of course have an impact on the US export production of gasoil into the Asian markets as well. As added benefit of the El Nino effect - I think US refineries can of course expect the Environmentalist & EPA to do the "Aha factor" and use this reoccurring drought cycle as evidence of "Global Warming" specter and push for joining the "Kyoto Team" .... just like they have in 2000 and every drought cycle before it. Might be good time to remind them that none of the EU Kyoto team will make any 2004 & 5 targets, or have a prayer of meeting 2010 goals, or have a clue to what happens after 2012 to make the 2025 expectations. I would also like to point out that China is not bound by Kyoto and during the Globalization of industries from 2000 - 2004 has risen to #2 spot on total emissions behind the US - a fact I see being disguised by the Environmentalist converting emissions levels to a "per person or per GDP" index ..... think we need a sanity flag on the whole Kyoto play! Regards Charlie Randall |
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EnCana considering joint
venture to convert refinery to process heavy oil JAMES STEVENSON Nov. 29, 2004 |
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| CALGARY (CP) - Canadian energy giant EnCana
Corp. is examining a potential joint-ownership of a retrofited refinery
in Ohio to provide capacity for the company's quickly increasing
oilsands production. EnCana said Monday it has signed a memorandum of understanding with Connecticut-based Premcor Inc. to examine the possibility of upgrading a refinery in Ohio to process the heavy oil. The two companies said they will conduct a preliminary design and engineering study over the next six to nine months examining the possibility of upgrading Premcor's refinery at Lima, Ohio, to process an estimated 200,000 barrels per day of blended heavy oil supplied under a long-term sales contract. "This initiative with Premcor is an exceptional opportunity to achieve an efficient and cost-effective market integration for our growing oilsands production," Gwyn Morgan, EnCana's president and chief executive, said in a release. If the project goes ahead, the companies said a 50-50 joint venture, which would own and operate the upgraded refinery, would be established. Premcor said the Lima refinery is currently worth more than $1 billion US, and EnCana would contribute an equivalent amount of money to upgrade the refinery to handle oilsands crude. If additional funds were needed, both companies would contribute 50 per cent. Premcor said a similar, but larger upgrade of its refinery in Port Arthur, Texas, completed in 2001 cost $1 billion US. "EnCana is the logical partner for Premcor in this effort, bringing a reliable, long-term, North American heavy crude oil supply and a strong balance sheet and cash flow for the upgrade project," Premcor's chief executive officer-elect, Jefferson Allen, said in a release. "EnCana would be able to grow its oilsands production, and the upgraded Lima refinery would be able to process these incremental heavy, high-sulfur crude oil barrels. If the project went ahead, the converted refinery would be on stream in 2008. EnCana recently announced plans to sell all of its international production to focus on North American gas and its oilsands operations in northeastern Alberta. The company is currently producing about 35,000 barrels of day of bitumen from its two operations that use steam technology to access bitumen reserves located too far underground for conventional open-pit mining. EnCana has several expansion plans underway that will boost that production up to 60,000 barrels per day by 2006 and its reserves could enable the company to raise production substantially from there. EnCana has been looking for a longer-term upgrading solution for several years now. And having an ownership stake in a U.S. refinery would "connect us directly to the market as opposed to having to sell our barrels at a discount in Canada," said spokesman Alan Boras. Other Canadian oilsands producers have been facing the same issue of what to deal with their ever-expanding production. Oilsands leader Suncor Energy bought a Denver-based refinery last year for $220 million and plans to spend $300 million US over the next three years upgrading it to handle oilsands crude. While news of the deal came out after the close of markets, EnCana shares closed up 72 cents at $67.50 on the Toronto stock market Monday. Premcor shares rose 17 cents to $44 US on the New York Stock Exchange . |
Looks like Premcor
has already landed a partner for upgrading the Lima Refinery to process
Canadian heavy crude and MOU has been signed. The 50/50 JV would spend
$1 billion to upgrade the sweet domestic refinery (potential coker
expansion mentioned earlier emails) that would be on stream 2008. EnCana
is bringing the expansion money and Long term crude contract Premcor was
searching for in earlier news release. So it looks like yet another Anode coker will become fuel or minimized in its green anode coke production in the near future. Regards Charlie Randall |
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United Warren Refinery Coker Project Update - URC SEC - 10K 11/24/04 |
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| (http://www.sec.gov/Archives/edgar/data/101462/000119312504203075/d10k.htm) Various Nov 04 SEC 10K sections: Introduction: ....... We intend to commence our delayed Coker and related infrastructure project in the first quarter of 2005, at which time we plan to raise the necessary financing and commence construction. We expect an approximate three-year construction and start-up period, with commercial operations commencing in the first quarter of 2008. A delayed Coker converts the heaviest portion of crude oil that would otherwise produce asphalt or residual fuel oil into lighter material which can be blended into higher priced gasoline and distillate. This will allow us to take advantage of significant discounts for heavy grades of crude oil versus lighter grades by purchasing a higher percentage of these discounted heavy grades without uneconomically increasing our asphalt production or decreasing our gasoline and distillate production. We anticipate that this project will be financed through a newly formed project company by way of a combination of senior tax-exempt debt, subordinated debt, and/or equity totaling approximately $400 million to $450 million. This project company will own the delayed Coker and related infrastructure and lease them to us on a fully net basis. The availability of future borrowings and access to the capital markets for equity financing for this project depends on prevailing market conditions and the acceptability of financing terms offered to us. There can be no assurance that future borrowings or equity financing will be available to us, or available on acceptable terms, in amounts sufficient to fund the needs of the delayed Coker and related infrastructure project. In connection with this project, we are currently negotiating with Canadian crude oil suppliers to provide a long-term crude oil supply agreement, contribute equity or subordinated debt, and provide a floor on the differential between light and heavy crude oil. We expect this project to position us to be able to process a heavier sour crude slate and thereby maximize the benefit of a favorable light/heavy crude differential. On October 8, 2003, the Pennsylvania Department of Environmental Protection (DEP) issued air and water permits to us at our Warren, Pennsylvania Refinery authorizing the construction and operation of a delayed coker unit among other refinery upgrades. The Coker and other improvements, if financed and constructed, will allow the refinery to process a 100% heavy, sour crude slate, increase crude oil throughput to 70,000 bpd and will allow it to meet new low sulfur fuel requirements. Refining Operations Our refinery is located on a 92-acre site in Warren, Pennsylvania. The refinery has a nominal capacity of 65,000 bpd of crude oil processing and averaged saleable production of approximately 65,200 bpd during fiscal 2004. The West End of the refinery consisting of the FCC Unit, polymerization unit, alkylation unit and sulfur recovery unit-2 was shut down April 4, 2004 for a scheduled 26-day turnaround. The FCC had been on-stream for 41 months between turnarounds. The major activity in addition to normal shutdown maintenance was the replacement of FCC regenerator cyclones and expansion joints which were original equipment having functioned for 23 years. Metallurgical testing during prior turnarounds enabled us to extend the useful life of this equipment beyond a normal life expectancy of 15 years. For more on the scheduled maintenance turnaround, see Refining OperationsRefinery Turnarounds We believe our geographic location in the product short PADD I is a significant marketing advantage. Our refinery is located in northwestern Pennsylvania and is geographically distant from the majority of PADD I refining capacity. The nearest fuels refinery is over 160 miles from Warren, Pennsylvania and we believe that no significant production from such refinery is currently shipped into our primary market area (see Note 16 to Consolidated Financial Statements, Item 8). Recent Developments The annual shut down of the refinerys reformer unit was completed in November 2004 to regenerate the reformer catalyst. The reformer unit was shut down for 9 days from November 2 to November 11. We also decided to shut down the crude unit for minor maintenance during the period of the reformer unit shutdown, at which time crude oil throughput would have been otherwise restricted. The crude unit was shut down for 5 days from November 3 to November 8. The crude unit maintenance enables us to defer the crude units major turnaround from October 2005 to October 2006. .............. Supply of Crude Oil Even though our crude supply is currently nearly all Canadian, it is not dependent on this source alone. Within 90 days, we could shift up to 80% of our crude oil requirements to some combination of domestic and offshore crude. With additional time, 100% of our crude requirements could be obtained from non-Canadian sources. 86% of our contracts with our crude suppliers are on a month-to-month evergreen basis, with 60-to-90 day cancellation provisions; 14% of our crude contracts are on an annual basis (with month to month pricing provisions). As of August 31, 2004, we had supply contracts with approximately 30 different suppliers for an aggregate of 58,000 bpd of crude oil. We have contracts with four vendors amounting to 69% of daily crude oil supply (none more than 16,000 barrels per day). None of the remaining suppliers accounted for more than 10% of our crude oil supply. We access crude through the Kiantone Pipeline, which connects with the Enbridge pipeline system in West Seneca, New York, which is near Buffalo. The Enbridge pipeline system provides access to most North American and foreign crude oils through three primary routes: (i) Canadian crude oils are transported eastward from Alberta and other points in Canada; (ii) various mid-continent crude oils from Texas, Oklahoma and Kansas are transported northeast along the Ozark, Woodpat and Chicap Pipelines (foreign crude oils shipped on the Seaway system can also access this route), which connects to the Enbridge pipeline system at Mokena, Illinois; and (iii) foreign crude oils unloaded at the Louisiana Offshore Oil Port are transported north via the Capline and Chicap pipelines which connect to the Enbridge pipeline system at Mokena, Illinois. The Kiantone Pipeline, a 78-mile Company-owned and operated pipeline, connects our West Seneca, New York terminal at the pipelines northern terminus to the refinerys tank farm at its southern terminus. We completed construction of the Kiantone Pipeline in 1971 and have operated it continuously since then. We are the sole shipper on the Kiantone Pipeline, and can currently transport up to 70,000 bpd along the pipeline. Our right to maintain the pipeline is derived from approximately 265 separate easements, right-of-way agreements, licenses, permits, leases and similar agreements. The pipeline operation is monitored by a computer at the refinery. Shipments of crude arriving at the West Seneca terminal are separated and stored in one of the terminals three storage tanks, which have an aggregate storage capacity of 485,000 barrels. The refinery tank farm has two additional crude storage tanks with a total capacity of 200,000 barrels. An additional 35,000 barrels of crude can be stored at the refinery. Refinery Turnarounds Turnaround cycles vary for different refinery units. A planned turnaround of each of the two major refinery units (the crude unit and the fluid catalytic cracking unit) is conducted approximately every three to five years, during which time such units are shut down for internal inspection and repair. The most recent turnarounds occurred in October and November 2002 at our crude unit and its related processing equipment and in April 2004, at our FCC unit and its related processing equipment. A turnaround, which generally takes two to four weeks to complete in the case of the two major refinery units, consists of a series of moderate to extensive maintenance exercises. Turnarounds are planned and accomplished in a manner that allows for reduced production during maintenance instead of a complete plant shutdown. We defer the cost of turnarounds when incurred and amortized on a straight-line basis over the period of benefit, which ranges from 3 to 10 years. Thus, we charge costs to production over the period most clearly benefited by the turnarounds. The scheduled maintenance turnarounds during late October and early November 2002 and during April 2004 resulted in an inventory build-up (starting in August 2002 and February 2004, respectively) of petroleum products to meet minimum sales demand during the maintenance shutdown periods. |
The URC 10K SEC
filing in November contained an update on their Coker project which
should commence 1Q05, take 3-4 years in construction and startup 1Q08.
BUT.... the project is still subject to URC actually obtaining financing
by way of Newly formed project company for the $450 million and will own
coker & infrastructure and lease it back to URC. Also URC is negotiating with its Canadian Crude suppliers for a long term contract and equity participation in connection with the project. <The URC SEC document also points out that although most current crude comes from Canada, 86% of the crude is on month to month evergreen contracts that could have 80% switched in 90 days to mix of domestic & offshore crudes.> Regards Charlie Randall |
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Two Killed in
Fire at Northeastern China Coker Oct. 28, 2004 |
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| Up
to seven workers were killed in a fire at northeastern China's Daqing
oil refinery, an official said Thursday, the latest misfortune to befall
Mao Zedong's former communist model of industry. The blaze was ignited around 9:44 a.m. (0144 GMT) on Wednesday by a stray spark caused by a worker performing maintenance on a water tank at the refinery's sulfur recovery workshop, said Zou Ling, an official at the provincial Work Safety Bureau said. Zou said the blaze was extinguished in about an hour, but only two bodies were recovered. Rescuers believe the other five may have been overcome by fumes and fallen into a massive tank of highly toxic sulfurated hydrogen, she said. Workers are draining the tank, but the process is expected to take until Friday. "We think they're in the tank but have to be very careful in dealing with the solution so that no rescuers are hurt," Zou said. Daqing, located on the frozen plaints of Heilongjiang province in the far northeast, was long known as China's premier oil production base. Mao, communist China's founder, praised the town and its oil fields as a model to emulate, inventing the slogan "in industry, learn from Daqing." But its known reserves have been largely pumped dry and output last year slid to a 27-year low. Tens of thousands of workers have been laid off by the oil wells and refinery, prompting a spate of large street protests. China has been lobbying Russia to build an oil pipeline to Daqing in hopes of keeping its processing facilities running and reviving the town's fortunes. Russia has yet to commit, though, and is also mulling a competing Japanese proposal to build a pipeline to the Russian Far East on the Sea of Japan. |
 The
CNPC Daqing Coking Refinery fire in sulfur recovery area may have killed
up to 7 workers. The refinery has had a series of misfortune, and last
year the last of the area's known crude reserves were pumped dry. China
& Japan are both lobbying Russia hard for a new crude Pipeline into the
Asia regions.The Daqing Refinery was once a model for Mao's China & started the slogan "In Industry, learn from Daqing". The Refinery has 2 coking units with a combined charge capacity of 26 MBD and coke production capacity of 200-220 tpd (or 80, 000 MT/year), but has been operating at reduced rates in 2003 & 2004. The petcoke has been a very low sulfur that went into the aluminum / smelting industry. Regards Charlie Randall |
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Premcor gets tax
break on Crude Expansion |
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| Beaumont - A Port Arthur refinery will be
getting a tax break from the county for a major expansion that could
provide hundreds of construction jobs for local workers. Jefferson County Commissioners approved a tax abatement to Premcor Refining Group Inc. for three expansion projects totaling more than $440 million. Commissioners and County Judge Carl Griffith voted 4-1 to approve the abatement that will save Premcor millions of dollars over the next 10 years if the refinery utilizes the local workforce. Commissioner Mark Domingue voted against the abatement. "I am not against the project and congratulate Premcor on the expansion, but I think the terms of the abatement should be for a shorter period of time," Domingue said. The plans involve increasing the refinery's crude oil production from 250,000 to 325,000 barrels per day, expansion of the Port Arthur Coker Unit capacity and a project to produce ultra-low sulfur diesel fuel. The project is expected to employ 800 to 1,300 workers during the construction phase and bring 35 permanent jobs to the refinery. Don Kuenzli, plant manager, said the tax incentive is a factor in the company's decision to expand the Port Arthur refinery. "We think our CEO will look favorably on our Port Arthur project," Kuenzli said. "We are in a competition because they are also considering an expansion at the Lima, Ohio, refinery. I want to see the money come here, and you show that you support economic development." Port Arthur Mayor Oscar Ortiz said he was "100 percent" in favor of the abatement and the project because of the jobs and economic impact it will bring. "Port Arthur has a population that is 60 percent minority. Of that 44 percent is African American and about half of that African American population is out of work," Ortiz said. "If new projects can reduce that unemployment by even 1 percent then that would be a blessing." Commissioner Bo Alfred voted in favor of the abatement, but said he wanted safeguards in the contract to ensure that local workers were utilized. "How are we going to monitor whether local workers are being hired? I want to help business, but I also want to see Port Arthur's unemployment reduced," Alfred said. Kuenzli said the company will review all construction bids and make sure that jobs are awarded to competitive local companies. He said Premcor has had training sessions for local companies to help them understand the company's bidding process and is a part of the Minority Business Council. The terms of the abatement require review by an Abatement Committee at the end of the construction period before the full tax breaks are given. Commissioners discussed having the Committee review throughout the project. Premcor pays $22 million annually in property taxes to local entities even with the abatements it currently receives for its last expansion project in 1997. |
This is an update on Premcor Pt Arthur
Refinery 75 MBD crude unit expansion to 325 MBD, which was announced in
May 2003. The coker expansion was to be expanded by 25 MBD at cost of
$210-220 MM and was slated to be online by 4Q 2005. Regards Charlie Randall |
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Downtime Report on 3
Coking Refineries Shell Deer Park , ExxonMobil Baytown, BP Texas City |
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| Shell Deer Park Refinery Plans Crude
Unit Work For Oct 25 Oct. 17, 2004 NEW YORK -(Dow Jones)- Deer Park Refining, Ltd. plans to shut the third stage reactor of the crude IPA unit at its Deer Park, Texas, refinery for routine maintenance on Oct. 25, according to a report filed with a state environmental agency. The reactor will be de-inventoried to the HIPA flare before decontamination and cleaning, said the report filed to the Texas Commission for Environmental Quality. The shutdown is expected to cause emissions, necessitating the report. The report didn't indicate the duration of the maintenance. The 334,000 barrel-a-day refinery operates as Deer Park Refining Ltd. Partnership, a 50-50 joint venture formed between Shell Oil Company (RD SC) and Mexican state oil company Petroleos Mexicanos (PEM.YY). -By Beth Heinsohn, Dow Jones Newswires; 201-938-4435; beth.heinsohn@ dowjones.com ------------- BP Texas City Cat Cracking Unit Shut Sat For Repairs Oct.17, 2004 NEW YORK -(Dow Jones)- BP Plc (BP) shut down a gasoline producing unit at its Texas City, Texas, refinery Saturday, according to a report filed to a state environmental agency. The fluid catalytic cracking unit was shut early on Oct. 16 to allow for repairs to the regenerator, causing excess opacity, which necessitated the report to the Texas Commission on Environmental Quality. The report didn't indicate duration of the repairs. The Texas City refinery has crude throughput capacity of 435,000 barrels a day. -By Beth Heinsohn, Dow Jones Newswires; 201-938-4435; beth.heinsohn@ dowjones.com@dowjones.com ------------ ExxonMobil Baytown Sulfur Unit Seen Restarting Oct 22 Oct. 17, 2004 NEW YORK -(Dow Jones)- ExxonMobil Corp. (XOM) plans to restart a sulfur conversion unit at its Baytown, Texas, refinery after repairs originally planned to begin Oct 18, according to a report filed to a state environmental agency. The sulfur conversion unit, Claus C, was shut down to allow the diverter valve to the incinerators to be replaced, an earlier report to the Texas Commission on Environmental Quality said. Neither the beginning date nor the duration of the maintenance was indicated in the most recent report. The refinery's crude throughput is rated at 557,000 barrels a day by the Energy Information Administration. -By Beth Heinsohn; Dow Jones Newswires; 201-938-4435; beth.heinsohn@ dowjones.com |
There were October
downtime reports on 3 coking refineries - Shell Deer Park with CRU unit
down, BP TX City with FCC repairs & ExxonMobil coming back up from
sulfur unit work. The Oct. 14 Refinery fire at Tesoro Golden Eagle was reported as not having impacted production or operating units. The coking units at these refineries may not have been impacted. Regards Charlie Randall |
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Premcor bid to be good
neighbor slips Incident blemishes efforts by new owner of Motiva site By JEFF MONTGOMERY The News Journal 10/18/2004 |
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| After a relatively quiet six months under
new ownership, the Delaware City refinery is once again in the spotlight
because of pollution releases and disputes over state permits the
company needs to upgrade its pollution control systems. Connecticut-based Premcor purchased the 185,000-barrel-a-day Delaware City plant and its pollution control obligations from Motiva Enterprises for $800 million on May 1. Since then, state officials and some community leaders have given the new owners good marks for working to improve plant safety and environmental performance. "It's been like a breath of fresh air. The new guys seem to want to do the right thing, and they've done a lot to demonstrate that so far," said John Czerwinski, business manager for Plumbers & Pipefitters Local 74, a trade union that has provided contractors to the refinery for decades. The changeover followed years of accidents, environmental offenses and mounting penalties at the refinery. Incidents ranged from local nuisance odors to regionwide clouds of smog and soot. A fatal explosion in 2001 - traced to neglected maintenance - spilled more than a million gallons of gasoline-laced acid, triggering unprecedented federal and state oversight. "We made a commitment when we purchased this facility to run it as safely as possible, to run it reliably and to be involved with communities around us," refinery manager Michael Pollauf said during a public hearing last week on one of the permits needed for the pollution reductions. "I believe we've made real progress." Refinery labor leaders and some neighbors said last week that Premcor appears to want a better reputation. "I see a much better safety focus and a desire to get the plant operating correctly without incidents," said Richard F. Davis, an industrial scientist, former state lawmaker and resident of Mariners Watch, a neighborhood just south of the refinery. "I would have said that they were doing very well in moving in that direction, if it hadn't been for the problems they had a couple of weeks ago. I think that has helped make everybody realize that it's going to take some time to correct some of the issues that are there," Davis said. Not without problems Davis referred to equipment failures and other problems that in late September allowed the release of an estimated 21,000 pounds of hazardous hydrogen sulfide, a smelly and potentially deadly compound, along with other pollutants. Experts described the hydrogen sulfide release as "exceptionally high" even by national standards. State officials say they still are investigating the incident. Pollauf said Premcor was disappointed by the accident. The company published an apology to the community, and Chief Executive Officer Robert O'Malley called Gov. Ruth Ann Minner while he was traveling on business in Europe to offer his own apology and reassurances. The Department of Natural Resources and Environmental Control has reported receiving a few dozen complaints about the refinery since Premcor's arrival, although exact numbers were unavailable. Last year, the agency logged 210 complaints against Motiva. "Overall, I think they definitely have a different way of managing the facility. In the short term, in some areas, I think we are seeing some improvements," said John B. Blevins, DNREC's air and waste management director. Some residents, however, said the new owners aren't much different than Motiva's. "We had one newsletter that's come out and that's about it," said Marvin C. Olson, a New Jersey nuclear-plant worker who lives in Emerald Ridge, northwest of the refinery. "I work in an industry where we would be shut down if anything close to what's happened there happened to us." "The people in south Jersey feel the effects of the Delaware City plant all the time. Their houses are filled with the acrid smells that come out of this toxic-waste dump that they used to call Motiva," Olson said. "In recent years, but not recently, you could see huge flames coming out of the stack, and you could smell it." Emission control The refinery also is involved in a dispute with the state over a proposal to tighten emission limits and cap refinery production that could delay approval for the first phase of the $200 million pollution control upgrade at the refinery. The deadline for state approval is Nov. 30. The upgrade includes the installation of modern emission "scrubbers" on two major refining units that now rank among the dirtiest of any found nationwide. Previous owner Motiva agreed to the projects to settle federal and state pollution lawsuits in 2001 and 2003. The plant, built to process heavy, high-sulfur crude oil, has for years ranked as one of the nation's top refinery sources of pollution from sulfur dioxide and related compounds. Sulfur dioxide is a respiratory irritant and major ingredient in smog and acid rain, and is believed to contribute to the formation of toxic soot. Premcor has estimated that total emissions will decrease by nearly 31,000 tons per year after the upgrades, with sulfur dioxide accounting for most of the decrease. Estimated costs for the upgrade have ballooned from $70 million to $200 million, partly as a result of public objections to Motiva's proposal to use a cheaper scrubbing method that would have dramatically increased the plant's pollution discharges into the Delaware River. The state refused to allow the cheaper scrubbers, forcing the plant to redesign the project and putting off the deadline for the new scrubbers by two years. The second of the two large units now is required to begin operating by Dec. 31, 2006. More recently, DNREC has proposed even tighter limits on emissions than those proposed by Motiva and Premcor. State regulators have tentatively recommended an absolute limit on the number of barrels of oil a day that Premcor can process through its first-stage refining system, or crude unit. Company officials said they have no plans to increase their total output, and DNREC should target pollution output rather than crude oil input. "We're being asked in the permit to do some things that weren't contemplated in this project," Pollauf said. "While I certainly understand that no one wants pollution that doesn't have to exist, we're concerned about being ask to control things that we have no method of attacking at the moment." Federal regulations require pollution upgrades for older power plants and industrial sites if they increase their original output beyond a set point. Motiva wound up in federal court in part because state officials found the company had expanded one poorly controlled pollution source without being reviewed for a mandatory upgrade. DNREC managers say they are concerned production and pollution could continue to creep upward, since the refinery's main crude refining unit can handle up to 220,000 barrels per day. |
Premcor's new
ownership of Delaware Fluid coking refinery took a major PR hit with the
large release of 21,000 lb of Hydrogen Sulfide - the LT. goal of
environmental investments by Premcor was to reduce emissions (mostly
Hydrogen Sulfide) by 31,000 lb/year. The release & timing are both bad
for Premcor's bid to be a good neighbor and get its permits in place
without drastic limitations on operations from state regulators. The local refinery watch group also has some big teeth because of an Industrial Scientist (R. Davis), also a former state lawmaker, is resident of Mariner's Watch a neighborhood on the refineries southside. During 2003 Motiva received over 210 complaints so the few Premcor has received is a major improvement (although part could also be attributed to a 6 month semi grace period for Premcor). The company also has couple disputes going with its state permits on pollution control systems. Premcor is still carrying some of Motiva's problems as state regulators nixed the $70 million cheaper scrubbers Motiva proposed & Premcor will have to install $200 million as result of public objections to Motiva & its plans. The Deadline for Premcor's permit approval is set for Nov. 30 if disputes can be resolved, and the second of 2 larger scrubbers must be operating by 2006. Recently the DNREC has proposed tighter limits than those Motiva & Premcor recommended. State Legislators have suggested putting a limit on the amount of crude barrels that the Delaware Refinery can process as means of controlling emissions. DNREC thinks the creep from toady's 185MBD to 220 MBD capacity might offset gains in emissions reductions. Regards Charlie Randall |
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The
Great Pumpkin Returns to ConocoPhillips' Wilmington Refinery |
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| WILMINGTON, CA,--(MARKET WIRE)--Oct 13,
2004 -- ConocoPhillips (NYSE:COP - News) continues a 52-year tradition
by transforming a pumpkin-shaped 3 million gallon storage tank at its
Wilmington, California-based Los Angeles refinery into Smilin' Jack, the
world's largest jack-o-lantern. The refinery pumpkin patch expects at
least 30,000 visitors who want a close-up look at Smilin' Jack. Since 1952, visiting the great pumpkin has remained a popular Halloween event in Los Angeles' South Bay area. ConocoPhillips extends an invitation to the community to see Smilin' Jack and enjoy some of his delicious caramel corn on the nights of October 29 through October 31, from 6 to 9 p.m. The ConocoPhillips refinery is located at 1660 West Anaheim Street, Wilmington, CA 90744, between the Harbor Freeway and Gaffey Street. Preparing Smilin' Jack for his annual appearance requires more than 100 gallons of orange, black and white paint. According to refinery engineers, if the giant jack-o-lantern were filled with pumpkin meat, there would be enough to make 26,800,000 pumpkin pies! ConocoPhillips is an integrated petroleum company with interests around the world. For more information, go to www.conocophillips.com. |
ConocoPhillips Expects More Than 30,000
Visitors to Swarm the World's Largest Jack-O-Lantern
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India's Reliance to export 240,000T a month Q4 gasoline By Neil Chatterjee October 1, 2004 SINGAPORE (Reuters) |
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| India's Reliance Industries Ltd. is
expected to export at least 240,000 tonnes of gasoline a month in the
fourth quarter, on term contracts to Iran and in spot market sales,
trading sources said on Friday. "It has four or five cargoes to Iran, or half its volume, and around four left mostly on a spot basis," said a gasoline trader. Gasoline cargoes are usually around 30,000 tonnes each. Traders say Reliance is expected to remain a key supplier of the motor fuel to Iran, which has become the Middle East's largest gasoline importer on rising car use. However, one dealer said the Indian refiner was losing money shipping the material to Iran. "Reliance doesn't have a retail business and other (Indian) retail outlets are already covered, so it has to offload it," a Middle East-based trader said. The term deal's differential to benchmark Middle East price quotes could not be confirmed. Out of the remaining fourth-quarter spot volumes, traders said Swiss-based Vitol had picked up 60,000 tonnes a month for loading from the west coast port of Jamnagar on a free-on-board basis between the 10th and the 15th of each month. The 95-octane material, awarded at small discounts to Singapore 95-octane quotes, is expected to head to the United States. "It depends on how the arb looks and needs 60,000-tonne freight (rates)," a trader said. "Otherwise, the spot material sometimes find its way to the AG or the east." Traders said Reliance was likely to win Ceypetco's tenders to ship 120,000 barrels, or around 14,000 tonnes, a month to Sri Lanka, while the remaining volumes were likely to be sold on a private-and-confidential basis. Reliance is India's largest oil and petrochemicals company, operating the world's third-biggest refinery at 660,000 barrels per day at Jamnagar. Its gasoline exports are expected to fall longer-term as it is working on moving into the domestic retail market, dominated by state-run firms. It has already commissioned at least 100 petrol stations and has permission to set up nearly 6,000. |
India's largest refinery, the world's third
largest (and current worlds largest coke producer ) Reliance is
increasing its gasoline exports to Iran which has become the middle east
largest gasoline importer. (Both Iran and Iraq have one largest growth
in both car ownership and use in the Middle East, and a great deal of
older cars from Iran are in high demand by newly allowed owners in
Iraq.) Discounted 95 Octane gasoline shipments from Reliance is also expected to head to the US from Swiss based Vitol. Regards Charlie Randall |
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Russian Oil Reserves. Yuko's (Russian Oil Company) |
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| Yukos Didn't End Russia's Energy Boom Washington DC (UPI) Sep. 27, 2004 After so much bad news in recent months, last week Russian President Vladimir Putin succeeded in netting $4 billion in investments from South Korea, with the prospect of $12 billion more from China to follow. Leaders from both countries were in Moscow, eager to court the Russian president for access to the vast oil and gas wealth of Siberia to feed their energy-ravenous industrial economies. Their willingness to do business on the Kremlin's terms strongly suggested that Putin has won his massive gamble to alienate billionaire oligarchs like Boris Berezovsky and Mikhail Khodorkovsky and their cheering sections in the United States. Western business analysts have repeatedly warned that Putin's drive to cripple and now dismember the biggest oil corporation in Russia, Yukos- which was created and run by Khodorkovsky- might wreck Russia's economic recovery and cause international investment to flee the country. Khodorkovsky is on trial in Moscow on charges of massive fraud and tax evasion. It has certainly had a dampening effect. There is no doubt that in Western business terms, Yukos was the most efficiently run oil corporation in Russia. By contrast, Western analysts believe that Gazprom, Russia's natural gas producing and exporting giant, may lose more than $2 billion in revenue every year because of incompetent business and administrative practices. But with global oil prices soaring and looking set to breach the not-so-long-ago unthinkable $50 a barrel price, Putin and his siloviki - his senior officials and advisers largely recruited from the old Soviet security services -- are having the last laugh. With global energy prices so high and still soaring and global supplies dangerously inelastic, the world is flocking to Russia, eager for its oil and gas, on the Kremlin's terms. China is so eager to keep purchasing Yukos oil that it even agreed last week to pick up the huge costs of importing it after top Yukos executives, eager to try and embarrass Putin said their corporation could no longer pay them. However, Gennady Fadeyev, president of Russian Railroads, also known as RZD, said that Chinese officials agreed during the visit of Chinese Prime Minister Wen Jiabao last week to cover RZD's transport costs for exports of oil produced by Yukos. The Russian government has hit Yukos with $7 billion in back-tax demands for 2000 and 2001 and on Sept. 20 Yukos announced it would stop supplying the state-owned Chinese National Petroleum Corp. with the 400,000 tons of crude oil it sends every month unless CNPC came up with $160 in transport tariffs and export duties per ton - a total of $64 million per month. The move was widely seen as an attempt to embarrass Putin ahead of the Chinese prime minister's visit, but it didn't work. China is picking up the costs. The Russians, in return, have agreed to vastly expand their export capabilities to China. Russian Railways plans to spend $1 billion over the next six years upgrading its one land-rail route to China, Fadeyev told reporters after meeting with visiting Chinese Railways Minister Liu Zhijun. Fadeyev said RZD would spend 14 billion rubles, or $480 million, modernizing a 220-mile stretch of track from near the city of Chita in Siberia to Zabaikalsk on the Chinese border by 2008. Another 16 billion rubles, or around $540 million, will be spent laying a second parallel track on the line, he said. The current volume of cargo shipped between Russia and China is 30 million tons a year. By 2010, we plan to double that number, Fadeyev said. Even bigger deals may be afoot. Hong Kong press reports have suggested that China may soon invest as much as $12 billion in energy development in Siberia. Only days before Wen's visit, Putin approved another national partner to develop the oil and gas riches of Siberia: South Korea. As Putin met President Roh Moo-hyun at the Kremlin Sept. 21 during the South Korean leader's four-day visit, South Korean and Russian companies were signing $4 billion worth of energy contracts, most of them focused on oil. And even more colossal deals to develop Siberia were agreed upon. The biggest single agreement was a $3 billion project to create an oil refinery and petrochemical plant in Tatarstan signed between the LG Group, South Korea's second-largest industrial cartel and Tatneft, the sixth-largest oil producer in Russia. The eagerness of South Korea and China's largest corporations to cut deals with Moscow over energy development confounded the predictions of U.S. business analysts that the drive to dismantle Yukos would cause both Russian and international investors to flee the Russian energy sector. It hasn't happened. Investment in the Russian energy industry did fall this year partially because of the Yukos controversy, according to official Russian figures reported Friday. The share of the fuel or energy industry dropped in the first half of 2004 to 19.6 percent of total investment compared with 23.5 percent of total investment during the first half of 2003, according to a report from the Russian Economic Development and Trade Ministry. Investment in the fuel sector fell not only in relative terms but also in absolute ones, decreased from 157.7 billion rubles in the first half of 2003 to 151.4 billion rubles in the first half of this year, the report said. However, the market appeared to have weathered the worst effects of the so-called Yukos factor, the report said. Players have separated Yukos from the market, it said. And on Monday, Alexei Ulyukayev, first deputy chairman of Russia's Central Bank announced at a Moscow conference that capital outflow from Russia, which reached an alarming $4 billion in the first quarter of this year, was decreasing. It dropped a little to $3 billion in the second quarter of this year and is expected to be down to $500 million to $1 billion in September, he said. Ulyukayev also told the conference that Russia's gold and foreign exchange reserves were expected to top $100 billion this year. Putin is not out of the woods yet. But all signs are that he has won his colossal gamble: In his showdown with Khodorkovsky and Yukos, he was right and the U.S. pundits were wrong. With all that oil and gas in its territories, it is Russia that is calling shots an dictating the term. ------------ Russian Oil Reserves 3 Times Higher |
This news article is important for its
implications of Russian crude supply into US refineries. The US cheering section for Yukos oil giant & its oil supplies seems to have suffered a major blow as natural alignment between Russia & neighbor China (some 30 million tons of mostly rail cargo flows today between the two countries) redirects & increases more crude in that direction. Timing appears to be everything as Putin's colossal gamble to dismember Yukos & imprison Mikhail Khodorkovsky despite doom predictions from US pundits & fleeing Western capital investments. The Yukos effect seems to have been weathered and bailed out by the $50/bbl price run on crude oil & the supply panic it has created in Asian sectors. The moves did not occur of course without some last minute shifts on the Putin & Khodorkovsky chess board however. The Yukos / Khodorkovsky moves were: - Raising the size of Yukos oil reserves from 11 billion to 13 billion Bbl, and increasing value to $43 billion. (This also helped verify some industry pundits long held claim that Russia has long undervalued the true size of its oil reserves and that total Russian BFOE reserve figure could be 3X and actually 50% larger than Saudi Arabia's 300 billion BFOE of proven reserves.) The announcement was enough to buy time against the $7 billion in back taxes & stock de-valuation putting Yukos in position where the Yukos market value fell below $3 billion and was subject to government dismantling, - Stopping oil flow to China's CNPC just before Putin's visit there to gain additional investments that would offset western decline and keep energy boom in full bloom. Yukos claimed the frozen assets and tax payments left it unable to pay the huge tariff, tax & rail cost on the 400,000 BBL's it sends each month to China. A dual move to highlight Yukos operational confinement and to embarrass Putin and throw a wrench in the Asian oil talks. Additional Yukos also stopped oil movements to domestic Refinery for similar reason which raised focus on its current constrained operations because of impact to fuel production. Putin's counter moves were as adroit. - The Russian government 7% shares in Lukoil were sold to longtime ally ConocoPhillips to show Putin is open to western investments. < Strange backdrop is that the Yukos CEO is Steve Theede an Ex ConocoPhillips executive, and new Yukos board member Edgar Oritz is ex-chief executive of Halliburton's biggest unit - so West seems to be straddling both sides on this play for big oil reserves! Russian banker Viktor Gerashchenko as chairman and the two westerners have replaced vacated Yukos board seats of Simon Kukes & Mikhail Khodorkovsky.
The claims at
reserve increases were neither disclaimed or verified but left as
enticing global backdrop for Putins fishing expedition into China.
Some Background = Russian Reserves Article |
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|
Oil Companies assess Ivan
Damage |
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| DALLAS (CBS.MW) -- Oil and gas field
operators in the Gulf of Mexico and onshore refiners said Thursday the
weather is now calm enough to begin the arduous task of damage
assessments after Hurricane Ivan steamrolled through the region. One damaged rig has already been located, torn from its moorings and floating 12 miles away. Packing sustained winds of more than 100 miles per hour, a giant storm surge and deadly tornadoes, Ivan lashed the Gulf Coast between Pensacola, Fla., and Mobile, Ala., as it came ashore early Thursday. . Though the storm has since moved inland, oil companies said they won't know whether their production platforms sustained serious damage until they've mobilized aircraft to fly over the area. Planes and helicopters grounded by the storm are just now being cleared for takeoff, and it's likely to take several hours to reach and survey the structures farthest out in Gulf waters. On the New York Mercantile Exchange, crude for October delivery fell 48 cents to $43.10 a barrel and the October natural gas contract sank 13.9 cents to $4.685 per million British thermal units, indicating traders' concerns about structural damage are easing. . About 25 percent of U.S. oil and gas output comes from the Gulf. On Thursday afternoon, Diamond Offshore said Ocean Star, one of its drilling rigs, tore free of its moorings during Ivan and was spotted drifting 12 miles from where its crew abandoned it ahead of the storm. Aircraft surveillance of the rig, operating in deep water, showed no apparent damage and efforts were underway to re-board it, Diamond Offshore said in a statement. Four other Diamond Offshore rigs in the storm's path were still on location and appeared to have weathered the storm, the company added. ExxonMobil, which had halted production of 55,000 barrels a day of crude and 740,000 million cubic feet a day of natural gas in the Gulf, said Thursday it had not yet begun its damage-assessment process. "Production remains shut in for all of our offshore central and eastern Gulf of Mexico platforms and our onshore and offshore Mobile Bay facilities," said Susan Reeves, spokesperson for the Dallas-based energy giant. "As soon as power is restored to the facilities and people are allowed back to the affected areas, then we'll begin our assessment process to determine the integrity of our equipment," she said. BP , which usually produces 350,000 barrels of oil equivalent a day in the Gulf, said it's organizing aircraft to fly over its structures. "Before we put people back onto facilities, we need to make sure it's safe," said BP spokesman Hugh Depland, adding flights should take place Thursday. "At that point, we'll be able to judge when we'll be able to put people back onto facilities." According to a statement on Shell's U.S. Web site, the company has scheduled some personnel to return to work Thursday and the rest on Friday. Shell Exploration & Production Co. "will now focus on damage assessment, recovery, and returning personnel to work," the parent company said. "The extent of offshore impact is unknown at this time. We have a fixed-wing aircraft conducting an over flight this morning to assess any damage/problems." Ivan had halted production of 444,800 barrels of oil a day and 1.44 billion cubic feet of gas daily. Also, Shell's Louisiana refineries, Norco and Convent, were undamaged by Ivan. There were no injuries at the facilities, and the refineries will begin restart procedures Thursday, the company said. Each refinery has a processing capacity of 225,000 barrels per day. At ChevronTexaco, workers were being sent back to the company's leases in the western Gulf Thursday morning, with its central leases to follow suit Thursday afternoon. The company expects to survey its eastern leases -- those generally closest to Ivan's path -- no later than Friday morning, spokesman Matt Carmichael said. As for its Pascagoula, Miss.-refinery, Chevron expects to complete aerial reconnaissance of the site by Thursday afternoon. The refinery processes 325,000 barrels of crude oil daily. "We won't be able to fully evaluate until conditions in the area are safe enough for people to return," Carmichael said. Jeff Callender, a spokesman for ConocoPhillips, said the company hopes to restart its Alliance refinery in Belle Chasse, La., on Thursday, something that depends on staffing levels. The refinery has a processing capacity of 250,000 barrels of crude a day, and the restart process can take as much as seven days, he said. There were no initial reports of damage. On Wednesday, the Minerals Management Service reported that workers on 575 platforms and 69 rigs had been evacuated from the Gulf of Mexico, representing 75.3 percent of 764 manned platforms and 59 percent of currently operating rigs. The reduction amounted to 77.6 percent of the 1.7 million barrels per day of oil produced out of the Gulf. Similarly for natural gas, about 49 percent of the 12.3 billion cubic feet of output is affected. |
The news is full of
impact to US oil industry after Hurricane Ivan lands. Good news is hard
to find as twenty reinsures are still struggling from $20 billion in
losses from previous Hurricane Charley. This article mentions that 77% of 1.7 MMBPD Oil production and 49% 12.3 BCFD Nat Gas production in US Gulf were reduced as 575 (out 754) platforms & 69 rigs evacuated workers. Nearly 800 MBD Refinery crude charge feeding coker installations was shutdown as mentioned in this article but the total gulf number will be much larger. Like the COP Alliance Refinery mentioned here - a refinery restart process can take up to 7 days to restore rates to capacity. Regards Charlie Randall ----------- |
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| Sept 9, 2004 NEW YORK
(Dow Jones) By David Bogoslaw, Dow Jones Newswires; --Premcor Inc. (PCO) said Thursday that upgrading its Lima, Ohio
refinery to be able to process heavy crude oils is too expensive to do
without first securing a contract with a heavy crude producer, most
likely in Canada. |
Lot
of things to read between the lines on this Premcor Lima news item - the
company releasing means just what they say here: " There is already a
deal & they are working hard to put it together." Most companies keep deals in the dark until they have all but minor points closed out - this reads like a solicitation for better offer on Canada Heavy Oil supply. Both Suncor & Syncrude have already actively campaigned to place more crudes into US Midwest & outside existing consumers - as they mention most Canadian capacity is already maxed out at 12-25% of crude slates (1 out of every 8 gallons gasoline going into Canadian car is made from syncrude or blended version of it). Since the Canadians have a reversed pipeline to get crude into most US Midwest, it should have cost advantage over other Heavy Oil shipments into Lima. Premcor bought Lima Refinery from BP to get market placement in Midwest, the reason BP sold it was that the refinery is locked into 90% sweet / 10% sour position (Great for Anode coke production bad for Refinery Margins with today's Swt/Sr spreads), and the expense to upgrade for LS fuels. Most Sweet crude refineries are often MORE expensive to upgrade than their sour or partially sour counterparts - they won't make new spec's LS with existing equipment & they often do not have sufficient HDS treatment expansion capacity (and if they did it would be for smaller vessels that have highest cost/$BBL throughput end of the spectrum). Usually it means the whole refinery must be reconfigured to run substantially more sour crude - Lima is already a nice size refinery (~2003 it was No 40 on list of largest 100 US refineries), it is 165 MBD crude rate, 22.5 coker rate with 240 kST/yr petcoke production - the nelson complexity is low 9.8 but its coker ratio is 13.6 which is fairly high ratio. BP converted Toledo Refinery to run more sour crude about the same time it announced the sale/shutdown for Lima Refinery and sent long term anode coke contract consumer, Venco calcining, searching for backup supply & alternate options (ie more TiO2 production) - so this event will not produce many new shock waves just establish closer timeline on probability of it switching to fuel coke production. Lima could mirror BP's Toledo conversion however, where new fuel coke drums were built and the anode drums became a backup operation that still makes some anode coke. Since Premcor pursued the purchase with active goal for gaining Midwest marketing presence ..... you know savy buyers like this company already had scope of sour crude expansion and debottlenecking worked into plans, plus the low purchase price at least makes it an option. Given the high price of crude oil and deep discounting for heavy crudes - it is likely the $1Billion investment and timeline of 3-4 years will be accelerated as much as possible to capture at least some of higher market volatility over the next 2-3 years in Oil industry. Regards Charlie Randall |
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Brazil - Develops reserves, New DCU's |
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| Brazil's state oil
company Petrobras said it has confirmed as viable a reserve of 76
million barrels of light oil, rare for Brazil, and will start developing
the field. A Petroleo Brasileiro (Petrobras) spokesman said the company planned to install a temporary production unit at the field to start pumping crude from the SEAL-100 block in the Sergipe-Alagoas basin in less than a year's time. The crude is 41-43 grade on the API scale, which is much lighter than the oil normally found in Brazil. A year ago, Petrobras reported several light oil finds with total estimated reserves of some 1 billion barrels. The Sergipe-Alagoas reserve was then estimated to contain 150 million barrels. The discoveries of light oil and natural gas reported by Petrobras last year cheered up foreign oil companies looking for hydrocarbons in Brazil, which have so far found little but small reserves of heavy oil at big depths. |
Looks like Brazil has grown light oil reserves in Sergipe-Alagoas basin
to 150 million barrels (counting the 76 million in this release) of
41-43 API crude that should help Petrobras next round of coker
expansions for 6 new Delayed Coking Units (DCU) by 2010, of which 3 have
concluded design & are in EPC phase. These are in addition to the
existing 4 DCU's at 3 of its refineries ( 3 of the existing DCU's use
Petrobras own coker technology & were designed internally). The sweet
resid and anode coke potentials represent one of the few "Oasis" with a
volume increases in green anode quality petcoke additions among a sea of
fuel coke producers. Regards Charlie Randall |
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Husky to enter oilsands |
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| Husky to enter oilsands with regulatory
approval for $500M Tucker project. James Stevenson CALGARY (CP) - Husky Energy Inc. plans to be the latest large oil producer to delve into the northern Alberta oilsands in a major way after receiving regulatory approval for its planned $500-million Tucker project. Calgary-based Husky announced Monday it has received Alberta Energy and Utilities Board approval for the project, about 30 kilometres northwest of Cold Lake, Alta. Construction on the $500 million oilsands development will begin next year and should be completed by 2006. Husky estimates the company will be able to recover about 350 million barrels of heavy oil over the project's 35-year lifespan. Peak production is expected at a rate of 30,000 to 35,000 barrels a day. |
The crude from this project is going to
feed into Husky Llyodminster upgrader & coker, and/or be blended with
diluent to feed into pipelines. Since the Llyodminster upgrader is
running about 22,000 BPD above design, I would think they will also need
to add more drums to 880 tpd upgrade coker there. I believe the Cogen at Llyodminster upgrader is at capacity also. This is another of the new SAGD process that has lower cost advantage over the mining process. The high cost of diluent into Canada (actually lot of syncrude product is used as diluent) may limit the blending option depending on economics on crude. Regards Charlie Randall |
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