Shell mulls German refinery upgrade to meet 2020 IMO sulfur rules

MOSCOW (MRC) — Royal Dutch Shell is considering expanding the capacity of one of its German refineries to make oil products that meet an upcoming cap on the sulfur content of fuels used in shipping, as per Reuters.

In the past few days, Rheinland refinery representatives met local officials and environmental groups to present preliminary plans for an investment at the plant's 140,000-bpd Wesseling site, Shell said on the refinery's website.

Shell is considering "a modernization of the residue processing unit at Rheinland refinery and to enhance the desulphurization plant there," Shell told Reuters in an emailed statement.

Shell declined to give further details on the project, saying it was in the "very early phase of the planning process."

The International Maritime Organization, the United Nations' shipping agency, set global regulations in late 2016 to cap sulfur content in shipping fuel at 0.5%, versus the current 3.5%, from 2020.

Although shippers in the United States and most of Europe already burn low-sulfur fuel oil, a global cap means refiners will need to find a way to eliminate some 3 MMbpd of high-sulfur fuel.

A survey by consultancy KBC last month showed that just 15% of the global refineries it surveyed know how they will manage the tighter sulfur regulations.
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MOSCOW (MRC) -- Braskem SA saw a large decrease in short interest during the month of July. As of July 14th, there was short interest totalling 831,237 shares, a decrease of 29.2% from the June 30th total of 1,174,193 shares. Based on an average daily volume of 384,525 shares, the short-interest ratio is presently 2.2 days, said Stocknewstimes.

Institutional investors have recently made changes to their positions in the company. Comerica Bank acquired a new position in shares of Braskem SA during the fourth quarter worth USD215,000. Dimensional Fund Advisors LP increased its position in shares of Braskem SA by 0.5% in the fourth quarter. Dimensional Fund Advisors LP now owns 1,003,902 shares of the energy company’s stock worth USD21,291,000 after buying an additional 5,118 shares during the period. Rubric Capital Management LP increased its position in shares of Braskem SA by 1,311.4% in the first quarter.

Rubric Capital Management LP now owns 846,824 shares of the energy company’s stock worth USD17,233,000 after buying an additional 786,824 shares during the period. Eqis Capital Management Inc. increased its position in shares of Braskem SA by 15.4% in the first quarter. Eqis Capital Management Inc. now owns 13,652 shares of the energy company’s stock worth $278,000 after buying an additional 1,818 shares during the period. Finally, Advisors Asset Management Inc. increased its position in shares of Braskem SA by 14.5% in the first quarter. Advisors Asset Management Inc. now owns 80,301 shares of the energy company’s stock worth USD1,634,000 after buying an additional 10,179 shares during the period. 0.95% of the stock is currently owned by hedge funds and other institutional investors.

Shares of Braskem SA opened at 25.43 on Monday. Braskem SA has a 52 week low of USD11.05 and a 52 week high of USD25.66. The company’s 50-day moving average price is USD21.79 and its 200 day moving average price is USD21.09.
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MOSCOW (MRC) — South Korea's SK Engineering & Construction said on Sunday it had signed a deal with Iran's Tabriz Oil Refining Company worth USD1.6 B to renovate the Iranian company's refinery facility, as per Reuters.

SK E&C said in a statement that the project involves upgrading Tabriz Oil Refining Company's 110,000-bpd refinery, which opened in 1976 and is located in the northwest of Tehran.

Under the agreement, a consortium of SK Engineering & Construction and Iran’s Oil Design Construction Company would finance and implement the renovation project to increase the refinery's gasoline and diesel production capacity, according to the statement.

The project is scheduled to be completed within 36 months once the consortium breaks ground on construction.
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MOSCOW (MRC) -- Indian oil Corp Ltd (IOCL), India's largest refiner and oil marketing company, is likely to complete maintenance at its polypropylene (PP) plant in mid-August 2017, said Apic-online.

A Polymerupdate source in India informed that the plant is expected to resume operations following a maintenance turnaround. The company has undertaken a planned shutdown at its plant in mid-July 2017.

As per earlier plans, the plant was supposed to shut in early-July 2017.

Located at Panipat in the northern Indian state of Haryana, the PP plant comprising two units has a production capacity of 300,000 mt/year each.

As MRC wrote previously, IOCL took off-stream its HDPE unit at Panipat refinery in northern India on April 22, 2016. It remained shut for a brief maintenance turnaround until April 26, 2016. Located at Panipat in the northern Indian state of Haryana, the HDPE unit has a production capacity of 300,000 mt/year.

Indian Oil Corporation Limited, or IndianOil, is an Indian state-owned oil and gas corporation with its headquarters in New Delhi, India.
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MOSCOW (MRC) — US refiners could face a continued squeeze on profit margins in the months ahead as dwindling supplies of heavy crude from Venezuela and elsewhere are leading several to switch to higher-priced but easier-to-refine light, sweet crude, as per Hydrocarbonprocessing.

The shift also could mean higher prices for consumers in the last weeks of the summer driving season and into the fall if refiners are able to pass along those higher costs to drivers, analysts said.

PBF Energy Inc, Valero Energy Corp, Phillips 66 and Marathon Petroleum Corp said in earning calls over the past two weeks they are running more light crude as a result of narrower discounts for heavy crude. ExxonMobil Corp also is running a heavier slate of light crude at a Gulf Coast plant.

Refiners' "margins have already been heavily impacted," said John Auers, executive vice president at refining consultancy Turner, Mason & Co. "They will be impacted in the third quarter" as well, Auers said. The final period's outlook could depend on whether the US applies sanctions on Venezuelan imports, he added.

In part, the companies are reacting to high costs and anticipating weaker supplies of Venezuelan crude coming to the United States. Heavy crude prices also have been impacted by tax changes in Russia that have raised prices of its heavy crudes and by reduced production from Canada last quarter.

Through June, US imports of Venezuelan crude declined 7.1% compared with the same six-month period last year, to 654,078 bpd, according to Reuters data. Light, sweet crude costs more than heavier oils, narrowing the discount that US refiners, especially those along the Gulf Coast, have gained by configuring their plants to run heavy, sour crude over the past 20 yr.

Marathon's second-quarter income from its refining and marketing operations fell in part due to "unfavorable crude oil and feedstock acquisition costs, primarily due to lower sweet/sour crude oil price differentials," the company said on Thursday.

PBF also said narrower heavy crude discounts contributed to its second quarter loss of USD1.01 a share, compared to Wall Street expectations of a 2-cent a share gain.

Exxon is studying adding a light crude-processing unit at its Beaumont, Texas, refinery early in the next decade, spokeswoman Charlotte Huffaker said this week. It would be the second light-crude processing unit at the plant.

"These investments reflect the increased availability of abundant, affordable supplies of US light crude," Huffaker said in an email.

Valero and Phillips beat analysts' estimates, Valero by 13 cents at USD1.23 a share and Phillips by 5 cents at USD1.06 a share.

Other factors could balance the higher crude cost in the coming months, such as strong global demand for US refined products, said Andrew Lipow, president of Lipow Oil Associates in Houston. "Prices are going up because we're seeing the impact of the cuts by OPEC and non-OPEC countries," Lipow said.

Neil Earnest, president of Dallas energy consultancy Muse, Stancil & Co, said changes in the price of crude could also affects refiners' margins ahead.

"They don't move in lockstep," Earnest said. "It may, however, impact a refiner who has customized a process to run heavy crude. That refiner may see narrower margins."
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