Shell says restarting units at Pernis oil refinery

MOSCOW (MRC) — Royal Dutch Shell said on Tuesday it was restarting a number of units at Europe's largest oil refinery in the Netherlands following a 10-day outage, said Reuters.

The phased restart of the 404,000 bpd Pernis refinery is expected to weigh on refining margins in the region which rose sharply in the wake of the outage, caused by a fire at a power unit and a subsequent hydrogen fluoride leak.

Shell is currently restarting a number of units at the refinery near Rotterdam, a company spokesman said. Restarting a refinery of this size, which includes dozens of units, can be a complicated process and units often trip in the process.

It was unclear how long the restart process will take, but it comes slightly ahead of Shell's initial expectations of two weeks.

"Complete restart will take place in a structured and controlled way," the oil major said in an emailed statement, without identifying which units were resuming operations.

Refining margins were expected to weaken in the short term once the Pernis refinery resumes production and as large volumes of diesel imports reach the continent, said Robert Campbell, head of oil products markets analysis at Energy Aspects.

"This avoids some of the worst case scenario in the Amsterdam-Rotterdam-Antwerp refining hub but (maintenance) work is still significant in the autumn," Campbell said, which will support refining margins then.

The restart comes after Shell engineers were able to restore some of the power through alternative sources, according to industry sources.

No production units were damaged by the fire but some catalysts, used in upgrading units, will require replacing, according to the sources.
MRC

MOSCOW (MRC) -- KBR, Inc. has entered into a Memorandum of Understanding (MoU) with Saudi Aramco to expand and develop KBR's services for Saudi Aramco in line with the Kingdom of Saudi Arabia's (KSA) localization objectives, said Hydrocarbonprocessing.

The MoU and initiative is in line with Saudi Aramco's In-Kingdom Total Value Add (IKTVA) initiative that aims to double the percentage of locally produced energy-related goods and services to 70% of the total spent by 2021.

The MoU also seeks to encourage Saudi Aramco's in-Kingdom and worldwide partners across the supply chain to maintain their commitment to invest in the Kingdom and leverage the huge opportunities for growth of businesses, resources and utilize the available local skills.

KBR has partnered with clients around the world to create successful local training programs, while employing qualified local nationals on projects. KBR continues to expand upon these efforts in the Kingdom. For example, KBR provided engineering, design, project management, operations and maintenance services for the Sadara project in Jubail, the largest petrochemical complex ever built in a single phase. This project alone created thousands of jobs for both Saudi and US engineers, project managers, and other employees.
MRC

MOSCOW (MRC) — South Korea's top refiner SK Energy is buying its first-ever continental US crude oil shipment as producer club OPEC's output cuts raise MidEast prices, giving other suppliers a chance to compete for the world's juiciest oil market—Asia, said Reuters.

One of Asia's biggest fuel importers, SK Energy said it will import 1 MMbbl of US WTI Midland crude in mid-October. The oil will be processed at its 840,000-bpd refinery in Ulsan, about 250 mi southeast of Seoul, showcased in a recent media tour.

The order is dwarfed by SK Energy's overall oil needs of 270 MMbbl/yr, mostly supplied from the Middle East. But it comes as big players in Asian oil imports snap up more US crude since the Organization of the Petroleum Exporting Countries (OPEC) pledge to rein in output through March 2018 to drain a supply glut and prop up prices.

"Light crude oil has become more economically viable than before and by importing light crude from Kazakhstan, US and Mexico, it helps us boost profits and diversify sources," said Kim Woo-kyung, spokeswoman at the conglomerate SK Innovation Co which owns SK Energy.

Kim said the refiner is also buying more from Mexico and Kazakhstan. "We have decided to import as well 1 MMbbl of Mexico's Isthmus crude," also to arrive at Ulsan in October, she said.

SK Energy received a total of 2 MMbbl of Kazakhstan CPC crude for arrival in late July and early August, Kim said.

Continental US oil exports to South Korea have become more frequent since the United States in 2015 relaxed crude export rules, and have been spurred since the OPEC curbs were announced: GS Caltex, South Korea's No.2 refiner, said last month it bought a total of 3 MMbbl of US crude for August–October delivery.
MRC

MOSCOW (MRC) — Sinopec Corp said its oil storage facilities and petrol stations have not been affected by the earthquake that struck a remote and mountainous part of the province of Sichuan in southwestern China on Tuesday night, said Reuters.

Similarly, PetroChina's refinery, gas fields and pipelines have not been affected by the Sichuan earthquake, a spokesman said on Wednesday.

The quake measured 6.5 in magnitude in a sparsely populated area 120 mi west-northwest of the city of Guangyuan at a depth of 6 mi.

As MRC informed before, Sinopec group, parent of Sinopec Corp, will invest USD29.05 billion to upgrade four refining bases between 2016 and 2020 to produce higher-quality fuels. Sinopec's upgrades come as China, the world's second-biggest oil consumer, is embracing more stringent fuel standards in its battle against pollution and suffering an overall glut in refining capacity. After the upgrades, the total refining capacity of the four refining sites will reach 130 MMtpy, or 2.6 MMbpd, while ethylene capacity will reach 9 MMtpy.

China Petrochemical Corporation (Sinopec Group) is a super-large petroleum and petrochemical enterprise group established in July 1998 on the basis of the former China Petrochemical Corporation. Sinopec Group's key business activities include the exploration and production of oil and natural gas, petrochemicals and other chemical products, oil refining.
MRC

MOSCOW (MRC) — ExxonMobil Corp is considering expanding light crude processing capacity at its Beaumont, Texas, refinery with the addition of a third crude distillation unit, a company spokeswoman said, said Reuters.

If approved, construction could begin on Unit C in 2019 and be completed in 2022, said Exxon spokeswoman Charlotte Huffaker. She declined to disclose the contemplated capacity or possible cost of the Unit C expansion.

"These investments reflect the increased availability of abundant, affordable supplies of US light crude," Huffaker said. The expansion would be part of the USD20-B "Growing the Gulf" project announced in March by Exxon Chairman and Chief Executive Darren Woods.

While Exxon has mentioned potential expansion of light oil refining capacity at the Beaumont plant as part of that project, this is the first time the company has talked about Unit C and given a timeline for possible construction.

Since at least 2014, Exxon has been considering the addition of a large distillation unit that would boost Beaumont's crude oil refining capacity from 362,300 bpd to between 700,000 bpd and 850,000 bpd, sources told Reuters in 2014 and 2015.

The contemplated crude capacity expansion was put on hold in early 2016 due to cuts in capital spending, sources said at the time.

On Thursday night, sources familiar with Exxon's plans said the company was now looking at adding a large crude distillation unit at the refinery. The two crude units currently at the Beaumont refinery are Units A and B.

The last major expansion of a US refinery was the 5-yr, USD10-B addition of a crude distillation unit and other units at Motiva Enterprises Port Arthur, Texas, refinery which more than doubled its size to 603,000 bpd. The expansion was completed in 2012.

The Motiva expansion was originally budgeted at USD5 B, but went through a year-long review in 2009.

Last year, Exxon added 20,000 bpd in light crude refining capacity to Unit A at the Beaumont refinery, Huffaker said.
MRC