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 | SINOPEC To Privatize Zhenhai Refinery November 2005 more >> |
| Gulf Coking Refinery Restarts: Lyondell-Citgo Houston, Chevron
Pascagoula, Valero & Total Pt Arthur, ExxonMobil Beaumont. October. 2005 more>> |
| The Great Pumpkin Returns to ConocoPhillips' Wilmington
Refinery October, 2005 more>> |
| Gulf Refinery situation, Norco, MAP showing promise September, 2005 more>> |
|
Katrina Targeting US Oil Companies |
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Frontier Oil Announces Increase in Permitted
Crude Capacity at Its Cheyenne, Wyoming Refinery |
|
Argentina - Chavez: |
| Tesoro: Golden Eagle Boiler Upset Cuts Jan Runs February 2005 more>> |
| China starts petchem,
refinery works for Kazakh oil January 2005 more>> |
| Shell says to sell Bakersfield Refinery January 2005 more>> |
| Worldwide Refining capacity December 2004 more >> |
| EPA cannot control Washington state's SO2 top polluter - Mt St.
Helens! December 2004 more>> |
| Kuwait Plans Big Oil Project Spending 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>> |
|
Premcor gets tax break on Crude Expansion
October 2004 more>> |
| Premcor bid to
be good neighbor slips October 2004 more>> |
| Indias_Reliance_to_export_240,000T a month Q4 gasoline October 1 more>> |
| Russian Oil Reserves September 30 more>> |
| Oil & Hurricanes - Where will your coker feedstock come from September 16 more>> |
|
News |
Commentary | |
| SINOPEC To Privatize Zhenhai Refinery | ||
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BEIJING, Nov 15 Asia Pulse - China's largest oil refinery Sinopec Monday
announced it will privatize Sinopec Zhenhai Refining and Chemical
Company Limited (ZRCC) through its wholly-owned Ningbo Yonglian. |
China's largest refinery will undergo a privatization of Zhenhai Refinery & Chemical Co. LTD (ZRCC) through Nigbo Yonglian (also a Sinopec subsidary). Zhenhai imports ~80% of its crude from the Mid East (Nigbo also part owner in the Pipeline for delivering the imported crude) and ZRCC also has ~550 TPD petcoke production, and has its own coking technology.
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| Gulf Coking Refinery Restarts | ||
| Explosion Rocks Houston Refinery Sunday, Oct. 16, 2005 HOUSTON - An explosion set fire to a Houston refinery Sunday as workers tried to restart gasoline-producing equipment that had been shut down since Hurricane Rita. One contract worker suffered minor burns to his hands and arms, according to a spokesman for the plant, a joint venture of Lyondell Chemical Co. and Citgo Petroleum Corp. The fire was extinguished within an hour, but it likely would be a few days before workers can get in to that part of the plant to assess the damage and determine what went wrong, said Jack Williams, a district chief with the Houston Fire Department. The blaze started as workers were trying to restart a fluid catalytic cracking unit, which converts a diesel-like product into gasoline, said Lyondell-Citgo spokesman David Harpole. The unit had been shut off last month when Hurricane Rita threatened the Houston-area and was kept off for maintenance, Harpole said. "When we started it up after the hurricane, we found some mechanical issues," he said. "We had been conducting maintenance. Noon was the scheduled restart time." Other units at the refinery have been restarted since the hurricane and the facility remains at 50 percent capacity. At full strength, the refinery produces 268,000 barrels a day of crude oil. The refinery covers around 700 acres along the Houston Ship Channel and has about 875 employees. It manufactures such petroleum products as gasoline, diesel, heating oil, jet fuel and lubricants. No detectable concentration of anything harmful was found in the air from the blaze, Harpole said. ---------------- Chevron restarts Coast refinery Thursday October 14, 2005 Mississippi Business Journal PASCAGOULA - Chevron Global has successfully and safely restarted its Pascagoula Refinery, which was shut down prior to Hurricane Katrina. The refinery produces 325,000 barrels per day of refined products. As Katrina approached, Chevron took steps to protect staff and the environment by shutting down operations and securing the facility. The hurricane damaged the refinery's marine terminal, cooling towers and other equipment. It did not suffer significant flooding because of a perimeter dike installed after Hurricane Georges in 1998. "Safely restarting the Pascagoula Refinery is another terrific achievement of our employees in the Gulf Region, many of whom have had to overcome personal adversity to help us resume operations," said Jeet Bindra, president, Chevron Global Refining. "We continue to place a high priority on safety in all areas of our business following the hurricanes, as well as helping our employees and their communities recover from this catastrophe." ------------------------ Refineries in Beaumont, Port Arthur, Texas Restart By Rachel Stone, The Beaumont Enterprise, Texas Oct. 13--One Southeast Texas refinery already was cranking out gasoline Wednesday, and others are getting closer. The Valero Corp. refinery in Port Arthur was at about 50 percent capacity Wednesday and is likely to be back to normal by the end of the week, Vice President and General Manager Jim Gillingham said. The facility normally refines about 255,000 barrels per day. The power generation systems and boilers were online, as well as one sulfur train, spokeswoman Mary Rose Brown said in an e-mail. Total Petrochemicals USA began startup at its Port Arthur refinery Wednesday, spokesman Rick Hagar said. It will take between a week and 10 days for the refinery to be fully operational, he said. Total had wind damage to a maintenance building roof and a cooling tower, he said. "Insulation was a big deal," refinery spokeswoman Pat Avery said. "Insulation blew off of all the major equipment." The Total facility normally refines about 240,000 barrels of crude per day. The region's largest refinery, ExxonMobil Corp.'s Beaumont facility, has been powered up since last week, spokeswoman Michelle Snyder said. "We're working to develop our startup sequence, which will take a couple of weeks to do," she said. She described damage at ExxonMobil as minor. "There was nothing really significant in the damages we incurred," she said. The facility normally refines about 365,000 barrels per day. The Motiva refinery in Port Arthur also had power, spokeswoman Sue Parsley said. "We're cleaning up, evaluating everything and tending to our employees who had damage to their homes," she said. The company, which normally refines about 280,000 barrels per day, has to replace carpeting, sheetrock and ceilings in some buildings, she said. "It's progressing well," she said. All the refineries had located their employees and were getting back to normal work schedules. Kevin Dwyer contributed to this report. ------------- Recap : Refineries Restarting By STAFF AND WIRE REPORTS Tulsa World Thursday Oct. 14, 2005 Fuel prices drop as plants begin to recover Citgo Petroleum Corp. said Monday it restarted operations over the weekend at its refinery in Lake Charles, La., after Hurricane Rita forced a shutdown of the plant last month. Several other refineries in the regions hit by Rita and Hurricane Katrina are in various stages of resuming operations. Coupled with lower oil prices, the added refining capacity has led to a substantial decrease in gasoline prices in both Tulsa and Oklahoma City. Most Tulsa retailers were charging $2.49 for a gallon of regular unleaded Monday, down from $2.74 on Friday. In Oklahoma City, where a price war has reportedly broken out between retailers, pump prices were averaging $2.44 on Monday, 9 cents lower than the day before, according to AAA-Oklahoma. Statewide, gasoline prices were averaging $2.61 a gallon, 5 cents lower than the day before. A month ago, pump prices in Oklahoma were averaging $2.92 a gallon. Nationally, the price of regular unleaded is averaging $2.88 a gallon, down from $3 a month ago, AAA said. Citgo's Lake Charles refinery -- fourth-largest in the nation -- has enough power to start some operations, Citgo spokesman David McCollum told Bloomberg News in a phone interview. "We're bringing everything back up," he said, although an exact timetable was unknown. A refinery restart typically involves powering up boilers, computer systems, wastewater treatment and other facilities that support primary production units. The Lake Charles plant and other six other refineries near the Texas-Louisiana border were closed as Rita came ashore Sept. 24, idling more than 10 percent of U.S. refining capacity. Entergy Corp., the utility that serves the seven refineries, began restoring limited amounts of power to the plants last week. About 18 percent of U.S. refining capacity was still out of service Monday because of damage and blackouts caused by the two hurricanes. The following refineries near the Louisiana-Texas border were affected: Citgo at Lake Charles, capacity of 425,000 barrels of oil a day. The Houston-based company last week implemented a force majeure clause on some products, including diesel and jet fuel, because of the shutdown. Its gasoline customers have been placed on daily allocations to distribute fuel "as evenly as possible," Citgo said. A force majeure contract clause allows producers to avoid penalties for failing to deliver supplies because of unforeseen events. About 50 Citgo employees temporarily relocated from Houston to offices in Tulsa as Rita pounded the Texas Gulf Coast last month. Many more Citgo employees returned to Tulsa, Citgo's former headquarters, to wait out the storm with family and friends. ConocoPhillips, Westlake, La., capacity of 239,000 barrels a day. The Houston-based company started operations at the plant last week after power was restored, the U.S. Department of Energy Department said. ConocoPhillips said previously that floodwaters didn't reach the refinery, and wind damage was not expected to significantly affect resumption of operations. Exxon Mobil Corp., Beaumont, Texas, capacity of 348,500 barrels a day. The restoration of power will help Exxon Mobil complete assessments and repairs needed before the plant can resume production. The company has not specified when the refinery will begin producing fuel again. Motiva Enterprises LLC, Port Arthur, Texas, capacity of 275,000 barrels a day. Some power was restored and the company is working "as quickly as possible to be able to restart operations, which we expect to occur within the month," Shell Oil Co. said last week. The refinery is a joint venture of Royal Dutch Shell and Saudi Refining Inc. The plant had some flood damage, and wind damaged the refinery's hydrocracking unit, along with power lines, cooling- water towers and other facilities, Shell said. Total Petrochemicals USA Inc., Port Arthur, capacity of 240,000 barrels a day. Total said limited power was restored last week and it expects to restore normal production within two weeks provided no more problems are discovered. The refinery is owned by a unit of France's Total SA. Valero Energy Corp., Port Arthur, capacity of 250,000 barrels a day. Entergy "restored a small portion of power" at the refinery, Valero spokeswoman Mary Rose Brown said week. "Repairs are continuing and we still expect to restart within a month from shutdown." Valero said it found "extensive" damage to electrical power poles and insulation at the refinery and "significant" damage to two cooling towers and a flare stack. The refinery had some flooding in low areas, though not in operating units. Calcasieu Refining Co., Lake Charles, capacity of 32,000 barrels a day. The refinery is operating at full rate, the U.S. Energy Department says, after being shut down Sept. 22. The refineries in Port Arthur, Beaumont and Lake Charles have combined oil-processing capacity of almost 1.78 million barrels a day. Combined with shutdowns at BP Plc's Texas City refinery southeast of Houston and four others shut by Hurricane Katrina, about 3.13 million barrels a day of refining capacity has been idle. The nation's 144 refineries have processing capacity of about 17 million barrels of oil a day. Eight of nine refineries in the Houston area have resumed operations after being spared major damage by Rita, company and government reports showed. The exception is BP Plc's Texas City plant, which has yet to begin the process of starting its units. The following is a status report on the BP plant and other refineries: BP, Texas City, oil-processing capacity of 460,000 barrels a day. The company expects to start the plant's steam system near the end of this month and begin refining gasoline next month, BP spokesman Scott Dean said. ConocoPhillips, Old Ocean, Texas, capacity of 216,000 barrels a day. The plant was not damaged by Rita and has returned to normal operations. Exxon Mobil, Baytown, Texas, capacity of 557,000 barrels a day, largest in the nation. The refining and chemical complex has resumed normal operations, said Irving, Texas-based Exxon Mobil. Lyondell-Citgo Refining LP, Houston, capacity of 268,000 barrels a day. The refinery is operating at reduced rates, the Energy Department said. Marathon Oil Corp., Texas City, Texas, capacity of 72,000 barrels a day. The company is operating at normal capacity, Marathon said. Pasadena Refining System Inc., Pasadena, Texas, capacity of 100,000 barrels a day. Operations resumed two weeks ago at the plant, which had "minimal" damage from wind, the company said. Royal Dutch Shell, Deer Park, Texas, capacity of 340,000 barrels a day. The refinery and an adjacent chemical plant "continue to increase production gasoline, jet fuel, diesel and chemical products," Shell said. The refinery was operating at reduced rates, the Energy Department said. Valero, Houston, capacity of 90,000 barrels a day. The refinery is operating at reduced rates after the company shut a fluid catalytic cracking unit last week for repairs, Valero spokeswoman Brown said. Repairs of the unit will take 10 to 12 days, Brown said. Valero, Texas City, capacity of 210,000 barrels a day. The refinery is operating at full rates, the Energy Department said. Three other refineries in Louisiana and one in Mississippi that together account for about 5.2 percent of U.S. oil-refining capacity remain closed because of damage done by Katrina. The four plants have a combined processing capacity of about 887,000 barrels of oil a day. The following refineries were shut on or around Aug. 28: Chalmette Refining LLC, Chalmette, La., processing capacity of 190,000 barrels of oil a day. Electrical power "should be restored in October, which will allow the refinery to start operations in November," Exxon Mobil said two weeks ago. Exxon Mobil is joint owner of the plant with Petroleos de Venezuela SA. Chevron Corp., Pascagoula, Miss., capacity of 325,000 barrels a day. The refinery may return to normal operations by the end of the month, Chevron said. The company "successfully and safely initiated the start-up procedures" at the refinery, Chevron said. While Katrina damaged the refinery's marine terminal, cooling towers and other equipment, the plant didn't have "significant" flooding because of a perimeter dike installed after Hurricane Georges in 1998, Chevron said. ConocoPhillips, Belle Chasse, La., capacity of 247,000 barrels a day. The refinery should resume partial operations in December and reach full output next year, ConocoPhillips said. "Removal of water from the site is complete, the area has been secured and repairs have begun," the company said. "Initial access to the refinery was limited due to flooding and infrastructure damage to the surrounding areas." The plant had "major" damage, according to an Energy Department assessment. Murphy Oil Corp., Meraux, La., capacity of 125,000 barrels a day. The refinery, located along the Mississippi River east of New Orleans, probably will remain closed for "a couple months" as the company repairs damage from flooding, Murphy Treasurer Kevin Fitzgerald said. The Tulsa World Business staff contributed to this Bloomberg News report. Source: Tulsa World |
Some
recent recaps and updates of the Gulf Coast Area Coking Refinery
restarts, Highlights on Lyondell-Citgo Sunday Explosion restarting,
Chevron's successful restart of Pascagoula, Valero & Total's Pt. Arthur
partial restart, ExxonMobil Beaumont and several others operational for
week now. Even if you didn't catch the news the price dropping at the gas pumps from $3/gallon last month, to $2.79/gallon last week, $2.49/gallon last Monday and $2.29/gallon by Friday / this weekend. FYI US average gasoline consumption per capita is about 470 gallons, the highest per capita consuming state is Oklahoma at 626 gallons & the lowest is New York State at 292 gallons. The impacts from Dynamic Hurricane Duo on the refining industries 144 US Refineries dropped the 17 million BPD capacity by 18% and refinery utilization by over 17%. The US average refinery utilization last week rose by ~5% to total 75%. Regards Charlie Randall |
| The Great Pumpkin Returns to ConocoPhillips' Wilmington Refinery |
| WILMINGTON,
Calif. -- ConocoPhillips continues a 53-year tradition by transforming a
pumpkin-shaped 3 million gallon storage tank at its Wilmington,
Calif.-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's South Bay area. ConocoPhillips invites the community to see Smilin' Jack and enjoy some of his delicious caramel corn on the nights of October 30 and 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 almost 27 million pumpkin pies. |
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| Gulf Refinery situation, Norco, MAP showing promise, Sep 2005 | ||
| Steve Quinn, Associated Press JACKSON, Miss. - As half of the Gulf Coast refineries damaged by Hurricane Katrina begin to ramp up production this week, industry experts have this message: Be patient. "What you've got are a whole series of requirements and processes and that takes days, if not weeks," said John Felmy, chief economist for the American Petroleum Institute. The going is also slow for the restoration of offshore oil and gas production. Almost 70 percent of normal oil production and half of the natural-gas output remains shut down, according to the U.S. Minerals Management Service, which said activity is slowly recovering. Eight major refineries that produce gasoline, diesel and jet fuel and heating oil were knocked out of commission, and the output at two others was cut by last week's killer hurricane and the flooding that followed. That cut overall U.S. refining capacity by more than 10 percent and contributed to a surge in retail gasoline prices and spot shortages around the country. Motiva Enterprises LLC, Marathon Oil Corp. and Valero Energy Corp. said that they hope to restart, and in some cases make fully operational, four of those refineries this week. Motiva, a joint venture between Royal Dutch Shell PLC and Saudi Refining Inc., said its Convent, La., refinery restarted on Sunday and its refinery in Norco, La., is expected to get started by mid-week. Both are located west of New Orleans. Marathon said over the weekend that its Garyville, La., refinery west of New Orleans should be fully operational early this week. Valero said it's still hoping to restart this week its St. Charles refinery about 15 miles from New Orleans. When running at 100 percent capacity, these four represent slightly more than 1 million barrels of refined oil product a day. In contrast, Chevron Corp.'s 325,000-barrel-a-day refinery in Pascagoula, Miss., and ConocoPhillips' 247,000-barrel-a-day facility in Belle Chasse, La., south of New Orleans have suffered major damage and are unlikely to resume production for some time, according to the U.S. Department of Energy. The ConocoPhillips facility, along with Exxon Mobil Corp.'s Chalmette, La., refinery and Murphy Oil Corp.'s facility in Meraux, La., also have no power. They represent nearly 690,000 barrels a day of refined oil products. But industry experts say that even after power is restored, restarting an oil refinery is a tricky and time-consuming process. Crews must be meticulous with repeated inspections, checking and rechecking for leaks. They must also ensure that all saltwater has been cleared or risk igniting a fire. "What you have is an important set of steps in terms of these are high-temperature, high-pressure facilities," Felmy said. "And that's if you have not had any damage, and we know from preliminary reports that's not the case." There are also workforce issues. With communication lines either down or overloaded, many companies have not been able to locate displaced employees. Last week, Shell Oil and Valero spoke out about efforts to locate and assist employees. In some cases, it may require providing shelter near the refineries. Valero estimated that almost 1,000 of its employees may have been affected by the storm, including 550 at its St. Charles refinery, scheduled to restart by week's end. On Monday afternoon, the company said it had heard from all but nine of its employees from the St. Charles workforce. The company has set up a large air-conditioned tent equipped with a catering operation, according to Valero spokeswoman Mary Rose Brown. Additionally, the company has also dispatched 50 mobile homes to St. Charles for workers who may need temporary housing. "It appears a lot of our employees probably lost their homes," Valero Chief Executive Bill Greehey told employees last week at the company's San Antonio headquarters. "Rest assured, we are going to take care of our employees. Whatever financial help they need, they will be taken care of by Valero." Cal Hodges, a Houston-based energy consultant, said companies may need to recruit retired workers for stopgap help. "We need to get the workers back, but we may need to be creative, too, in getting people to the refineries," Hodges said. "That's one way to do it." Refineries also will receive a boost from the Department of Energy, which agreed to lend oil from the Strategic Petroleum Reserve. Exxon Mobil, Valero, Placid Refining Co. LLC, BP PLC, Marathon and Total SA will collectively receive 12.6 millions barrels of oil. More is available. Energy Secretary Samuel Bodman offered 30 million to be provided beginning today. The reserve supply, however, must be replenished by the companies once conditions return to normal. The Gulf of Mexico normally produces 1.5 million barrels of crude oil a day, or about a quarter of the United States' domestic output, according to the U.S. Mineral Management Service. The agency on Monday afternoon reported that about 70 percent of oil production remains shut in. In another development critical to the Gulf's recovery, the Louisiana Offshore Oil Port, the nation's largest oil import terminal, has been unloading tankers, operating at about 75 percent capacity. It may hit full capacity this week.Associated Press reporter Alan Sayre in Baton Rouge, La., contributed to this article. -------- Norco, Louisiana refinery to restart soon NEW YORK (Reuters) Sept. 4, 2005 - Shell Oil Co (RDSa.L) said on Sunday the 227,000 barrels per day Motiva refinery at Norco Louisiana could restart by the middle of next week. Norco was one of the eight refineries shut by deadly Hurricane Katrina. "Repair work continues at the Motiva Norco refinery," Shell said in a statement. Shell said the Motiva convent refinery in Louisiana restarted and would be brought to full capacity over the several days. ---------- Marathon provides Hurricane Katrina impact update #2 by: OilOnline Tuesday, September 06, 2005 Marathon Oil Corporation has provided the following update concerning the Company's response to Hurricane Katrina. Efforts continue to resume refining operations at the Company's 245,000 barrel per day Garyville, La., refinery. Baring any unforeseen problems, expectations are that all seven Marathon refineries will be operating at capacity on Monday. Marathon's refining capacity is 948,000 barrels of oil per day. Marathon Pipe Line LLC operations are returning to normal, parallel with the refinery. Marathon has received approval for a loan of 1.5 million barrels of oil from the Strategic Petroleum Reserve. This oil will assist in providing crude oil supply to the Company's Midwest refineries. Assessment and repair teams have re-boarded all Marathon-operated production platforms in the Gulf of Mexico. These facilities are located on South Pass (100 miles south of New Orleans) and Ewing Bank (130 miles south of New Orleans). The Ewing Bank platform sustained minor damage to piping, catwalks, handrails and some electrical equipment. Repairs are expected to be completed by late this weekend or early next week. The Company's three South Pass platforms have major damage, including structural damage throughout two of the three facilities. Assessment teams are developing repair plans; however, operational readiness and start-up timing are uncertain at this time due to the condition of the platforms. While repairs are proceeding at both Ewing Bank and South Pass, shore- based receiving facilities at Venice, Louisiana, which are operated by others, have been more seriously affected by the storm. As such, the restart of oil and gas production will be dependent upon not only the completion of necessary repairs to the platforms, but also on the availability of shore-based facilities. Marathon continues to assist its more than 650 employees and their families in Louisiana, Mississippi and Alabama who were affected by the storm. Assistance includes food, water, generators and other household items, as well as providing temporary housing for those whose homes were seriously damaged or destroyed. The company also is providing employees in these three states with interest-free loans of up to $10,000 to assist in their recovery efforts. Marathon has also brought in employees from other parts of the country to assist in both humanitarian and operations support activities. |
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Katrina Targeting U.S.
Oil Operations By JUSTIN BACHMAN, AP Business Writer (8/28/05 @10PM) |
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| With crude oil
prices near record levels, a hurricane targeted the heart of America's
oil and refinery operations Sunday, shutting down an estimated 1 million
barrels of refining capacity and sharply curbing offshore production
throughout the region. Katrina, a Category 5 storm expected to strike New Orleans early Monday, was churning through the Gulf of Mexico. The area is crucial to the nation's energy infrastructure offshore oil and gas production, import terminals, pipeline networks and numerous refining operations throughout southern Louisiana and Mississippi. The impact was immediate Sunday night when electronic trading resumed on the New York Mercantile Exchange, as crude oil futures spiked $4.50 per barrel, putting the cost above $70 for the first time since oil began trading there in 1983. The hurricane followed a path similar to the one taken last September by Ivan, which caused heavy damage and reduced the region's output for months. Katrina's wind was fiercer. Oil companies have evacuated workers and shut down more than 600,000 barrels of daily production in the Gulf. Refiners closed down more than 1 million barrels of refining output by Sunday, but that amount could be higher because not every producer reports data, said Peter Beutel, an oil analyst with Cameron Hanover. "We're shutting down all kinds of everything. This is the big one," he said. "This is unmitigated, bad news for consumers." Gasoline futures soared more than 20 cents per gallon, above $2.12 per gallon, and natural gas was up $2.20 per 1,000 cubic feet in the opening minutes of trade. The "out of control" buying is spurred by the prospect that the region's numerous refineries could be idled for weeks by flooding, power outages, or both, Beutel said. The U.S. has ample crude oil supplies, even if major hurricane destruction trims Gulf oil output and foreign imports, but refining capacity is extraordinarily tight. As a result, prices for gasoline, heating oil, jet fuel and other products have flirted with records and could go even higher this week. "If this thing knocks out significant quantities of refining capacity .. we're going to be in deep, dark trouble," said Ed Silliere, vice president of risk management at Energy Merchant LLC in New York. The market has been on edge for months, with traders and speculators buying on the slightest fear. With Katrina, all those fears could be realized, Beutel said. "Basically I could spill a can of oil at my local gas station and you'd see the price of crude go up by $1 per barrel," he said. Crude settled at $66.13 a barrel Friday on the New York Mercantile Exchange, down $1.36 after hitting $68 last week. In many ways, Katrina was expected to be inconsequential to the energy industry, with many traders selling on Friday as the storm moved across Florida and was seen as moving north and striking the Florida Panhandle as a tropical storm with little impact. That all changed Saturday, when the system gained power and charged west, directly into areas of offshore oil production. ChevronTexaco Corp. completed evacuations of all workers in the eastern and central Gulf of Mexico and nonessential workers in the western Gulf late Saturday, company spokesman Matt Carmichael said. Chevron has about 2,100 employees and contractors working in the Gulf, Carmichael said. Chevron will continue to produce 90 percent of its normal production by remote as long as weather cooperates, he said. The Louisiana Offshore Oil Port, which processes loads from tankers too large for mainland ports, evacuated all workers and stopped unloading ships on Saturday morning said Mark Bugg, the terminal's manager of scheduling. The LOOP, 20 miles offshore, is the nation's largest oil import terminal and handles 11 percent of U.S. oil imports. Royal Dutch-Shell Group evacuated more than 1,000 offshore workers by Saturday. Only those in the far west remained, the company said on its Web site. BP PLC and ExxonMobil Corp. also brought workers ashore Saturday. Shell estimated 420,000 barrels of oil and 1.35 million cubic feet of gas per day will be shut in at its central and eastern Gulf facilities. Exxon Mobil said it has ceased daily production of 3,000 barrels of oil and 50 million cubic feet of gas. Valero Energy Corp. evacuated all but a few workers at its 260,000-barrel-a-day St. Charles refinery on Saturday. Murphy Oil Corp. also shut down its 120,000-barrel-a-day Meraux, La., refinery, and Exxon Mobil Corp. planned to shut down its 183,000-barrel-a-day refinery in Chalmette, La. Motiva Enterprises, a joint venture of Royal Dutch Shell PLC and state-owned Saudi Arabian Oil Co., began implementing hurricane contingency plans at its 225,000-barrel-a-day Norco refinery on Saturday. Motiva also was exploring contingencies for its 235,000-barrel-a-day Convent refinery, about 45 miles west of New Orleans, Dow Jones Newswires reported. |
Quick summary of Refineries LA evacuations actions for Katrina & likely
reactions already underway by traders spiking prices.
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Frontier Oil Announces Increase in Permitted Crude Capacity at Its Cheyenne, Wyoming Refinery |
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HOUSTON, July 25, 2005 /PRNewswire-FirstCall via
COMTEX/ --
Frontier Oil Corporation (NYSE: FTO) announced today that it received a permit from the Wyoming Department of Environmental Quality allowing the Company to increase its crude capacity at its Cheyenne, Wyoming Refinery to 52,000 barrels per day (bpd) of crude oil, up from 46,000 bpd. The new permit was effective July 22, 2005. While Frontier expects to run as much of the new permitted capacity as possible, the Company does not expect to continuously run at 52,000 bpd due to existing crude oil pipeline constraints. The Company is working to resolve these pipeline constraints. The new permitted capacity will immediately provide Frontier with improved flexibility to respond to market opportunities when crude oil is available. Frontier operates a 110,000 barrel-per-day
refinery located in El Dorado, Kansas, and a 52,000 barrel-per-day
refinery located in Cheyenne, Wyoming, and markets its refined
products principally along the eastern slope of the Rocky Mountains
and in other neighboring plains states. Information about the
Company may be found on its web site
|
Frontier just got their
permit to expand Cheyenne Coking refinery by 6,000 bpd for total
crude capacity of 52,000 bpd. Details are in news item. Much
like the El Dorado capacity expansion Cheyenne is not expected
to run continuously at new capacity (due to P/L constraints) but
now has flexibility to respond when opportunity is available.
Frontier started a crude supply agreement in 2003 (runs till
2007) with Baytex Energy for 20 MBD of Canadian Llyodminster
heavy crude oil blend that made up nearly 50% of 46 MBD refinery
crude oil charge rate and ~2/3 of the total heavy oil charge
rate to the refinery.
Since Suncor has purchased both of the Denver Refineries in Colorado, you can expect P/L deliveries of syncrude from its Canadian operations to find their way into the region and projects with Enbridge Energy to relieve some of the constraints on P/L crude deliveries in the future ......so maybe Frontier borrowed a line from "Field of Dreams" and "if you build it they will come" will put the new capacity to work continuously.
The Cheyenne refinery coker
has taken resid from Denver asphalt refinery that Suncor picked
up from COP, so some basis for linkage might already exist. More
aggressive capacity in both Wyoming & Denver might put some
pressure on the Montana niche product markets that the 3 Montana
coking (counting CHS new coker announcement) refineries have not
faced in the past with COP ~ operating Denver & Billings
refineries as a combined Business unit.
You will remember that the Cheyenne refinery had a coking unit furnace fire in Jan. 2004, but there were no injuries. And that the Frontier El Dorado coking refinery also mentioned here just completed a heavy oil, coker & gasoline expansion in 2003 on El dorado coking refinery. Crude expanded (~$10MM) on average by 18,000 bpd to118,000 but has seasonal variations, the coker expanded (~$16MM) by 2,200 bpd and phenol/cumene units were shutdown increasing gasoline volumes by 5,000 bpd. Regards Charlie Randall |
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Argentina -
Chavez: PDVSA looking at buying Royal Dutch/Shell operations in Argentina By AP Feb 2, 2005, 16:01 |
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| Venezuela's state-run oil
company is in talks to buy the Argentine operations of Royal
Dutch/Shell, Venezuelan President Hugo Chavez said Tuesday. Chavez, speaking with reporters during a visit to Buenos Aires, described the negotiations between Petroleos de Venezuela S.A., or PDVSA, and Shell as ``advanced,'' calling them part of PDVSA's interest in expanding its Latin American operations. Shell officials in Argentina refused to comment. Royal Dutch/Shell currently operates about 600 gas stations in Argentina. Any potential deal would include those assets, along with the company's refining, lubricant and transportation operations, Chavez said. Facing slagging profits in the region, Shell has recently sold off some of its Latin American operations, including its fuels marketing businesses in Peru and Venezuela. Analysts have said heavy taxes on oil and fuel have cut into the company's profit margins in Argentina. However, government price controls could complicate any potential sale. Shell and other refiners have racked up large debts with oil producers operating in Argentina because of a pact aimed at keeping domestic fuel prices low. LatinPetroleum.Com, ARGENTINA news, Source: AP |
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Tesoro:
Golden Eagle Boiler Upset Cuts Jan Runs |
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Tesoro Petroleum Corp. (TSO)
announced Thursday that scheduled and unscheduled maintenance had slowed
crude throughput levels during the fourth quarter of 2004. Continued
work on refining units during the first quarter of 2005 may also reduce
run rates, executives said in the quarterly conference call.
A boiler problem at the company's Golden Eagle, California refinery in January, due to unknown causes, reduced the average daily throughput at the refinery to about 150,000 to 155,000 barrels a day. The refinery has a capacity of 166,000 barrels a day, according to the Energy Information Administration. "Operating costs may not come down as we had hoped," Tesoro Chairman Bruce A. Smith said. Additionally, he said the company has just started a thirty-day turnaround at its Anacortes, Washington refinery, which will reduce the plant's throughput rate. The plant can run 115,000 barrels per day, according to the E.I.A. For the near future, the company plans to stay focused on turnarounds and internal projects, Smith said. He said they are not looking toward acquisitions in the short term. "In the longer term we may be back where we want to do that," he said. -Jessica Resnick-Ault, Dow Jones Newswires; 713-547-9208; jessica.resnick- ault@dowjones.com |
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| China starts petchem, refinery works for Kazakh oil | ||
| Asia News - Tuesday January 18, 2005 China starts petchem, refinery works for Kazakh oil SINGAPORE, Jan 18 (Reuters) - China's top oil and gas firm, PetroChina, is building a petrochemical complex and upgrading its refinery near Kazakhstan for $3 billion to receive crude piped from its central Asian neighbour, company sources said on Tuesday. The oil giant started work this month on a 1 million-tonne-per-year (tpy) ethylene plant, the largest in China, and to more than double the refining capacity at Dushanzi, in the far-flung Xinjiang region, to 200,000 barrels per day (bpd) they said. Energy-thirsty China has long zeroed in on resource-rich Kazakhstan and the world's second-largest oil producer, Russia, to secure oil and gas via pipelines. PetroChina signed a contract last week with UOP LLC, a U.S. firm that provides technical expertise to the refining, gas processing and petrochemical industry, to help build a 2 million-tpy hydrocracker and a 3 million-tpy diesel hydrotreating unit to process high sulphur Kazakh crude, sources said. The $2.4 billion petrochemical complex is due for startup by 2008, two years ahead of an industry forecast, while the $660 million refinery expansion is expected to be completed by 2007, company sources said. "The whole expansion plan is on schedule, as the pipeline will be completed late this year," said a PetroChina official from Beijing. China has clinched a string of pacts with land-locked Kazakhstan, including a $700-million oil pipeline now being built, and has acquired hundreds of million of dollars worth of mostly oil assets. PIPELINE Construction of the 962-km (600-mile) crude pipeline began last September. The pipeline will run from Atasu in central Kazakhstan to the Chinese border town of Alashankou, with initial annual capacity of 10 million tpy and a peak rate of 20 million tpy. It is not immediately clear when that peak rate would be reached. China now buys Kazakh crude by rail, taking a total of 1.2 million tonnes in the first 11 months of 2004, Chinese customs data showed. Kazakhstan aims to triple its crude output to more than 3 million bpd by 2015. The world's second-largest oil consumer also buys 22,000 bpd of crude oil from Russia, but has yet to seal a major energy deal with its giant neighbour and long-time political foe. The $3 billion project is one of the largest investments that Chinese state oil firms have injected into the restive Xinjiang province, dominated by Turkish-speaking Uighurs. It is part of Beijing's long-term plans to boost the economies of the western hinterlands and narrow the wealth gap with the booming east. The ethylene complex would generate new business opportunities for the local firms to manufacture petrochemical products from plastics to textiles, the sources said. Once Kazakh crude is fed into the Dushanzi plant, PetroChina would divert nearly 5 million tpy of domestic crude to other plants in the region, they said. "The top target would be Lanzhou, where the refinery is under-utilised," said a second official, referring to the 200,000-bpd plant in Lanzhou city of Gansu province, the oil products supply hub in western China that feeds the southwest region via a major pipeline. PetroChina's domestic crude oil production is nearly stagnant, rising just 0.4 percent last year. |
PetroChina is
building a petrochem complex (online 2008) & doubling its Dushanzi
coking refinery (online 2007) near Kazakhstan to 200 MBD for $3B, and
will get get pipeline crude (comes by RAIL currently) from its Asian
neighbor. Another gain for PetroChina refining system will occur when 5
million tpy of domestic crudes can then be diverted to cascade into
other regional plants - top target is 200 MBD Lanzhou refinery that is
under utilized. (Earlier April 2004 Lanzhou news release reported it
would have a new 20 MBD coking unit operating by May 2005? The refinery
currently has 15 MBD Shell Gasifier (1997) that uses Vacuum resid & is
listed as Other coking.) Regards Charlie Randall |
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| Shell says to sell Bakersfield refinery | ||
| LONDON, Jan 10, 2004 Reuters - Royal Dutch
/ Shell Group said on Monday it has agreed to sell its Bakersfield, California Refinery to privately-held Flying J for an undisclosed consideration. Shell said the 70,000 BPD refinery was being sold because it was no longer deemed strategic. The company is in the middle of a multi-billion dollar disposal programme as it seeks to rebuild investor confidence after a damaging reserves overstatement scandal |
It appears that Shell
has an agreement on the sale of Bakersfield Refinery (& coker) to
independent refiner Flying J. The Shell multi-billion $ asset disposal
also mentioned here brings up interesting potential. The current drive for Shell to sell or shutdown a lot of refinery assets & reinvest in upstream (plus reintegration of Shell US into Royal Dutch mold) could eventually make it similar type target to recent China CNOOC bid for Unocal. RD Shell was never a strong fan of Downstream assets (unlike Shell USA) & correcting / getting back to reserve levels prior to the overestimated reserve scandal will give it good reason to dispose of them. Shell's Motiva & Equilon partnerships with large companies that were merging pushed a lot of downstream assets into Shell USA to satisfy FTC merger requirements. Shell ended with more downstream assets than a lot of the super mergers that were drilling for reserves in their competitors books! (Think most of the acquired oil reserves ended at cost less than $6/BBL based on acquisition price ($/share) even if all other assets were assigned a zero value). Regards Charlie Randall |
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| 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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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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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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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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