Magellan Midstream, Valero form JV to expand Pasadena marine terminal

MOSCOW (MRC) — Magellan Midstream Partners, L.P. and Valero Energy Corporation announced the expansion and joint development of the marine storage facility currently under construction along the Houston Ship Channel in Pasadena, Texas, said Hydrocarbonprocessing.

The Pasadena facility, which will handle petroleum products, including multiple grades of gasoline, diesel and jet fuel, and renewable fuels, will be owned by a limited liability company that is owned 50/50 by Magellan and Valero and will initially include 5 MMbbl of storage, truck loading facilities and 2 proprietary ship docks.

As previously announced in July 2016, phase 1 of this facility is already under construction, which includes approximately 1 MMbbl of storage and a new marine dock capable of handling Panamax-sized ships or barges with up to a 40-ft draft. This first phase will now be owned by the jointly-owned company.

Further, this facility will be expanded by an incremental 4 MMbbl of storage, a 3-bay truck rack and a second marine dock capable of handling Aframax-sized vessels with up to a 45-ft draft (phase 2). After completion of this expansion, the Pasadena facility will be connected via pipeline to Valero's refineries in Houston and Texas City, Texas and the Colonial and Explorer pipelines in addition to the already planned connection to Magellan's Galena Park terminal facility.

Combined, phases 1 and 2 of the Pasadena marine terminal are currently estimated to cost approximately USD820 MM, which will be funded equally by capital contributions from Magellan and Valero. With the new arrangement, Magellan's incremental capital spending will be approximately USD75 MM more than its previous spending estimates of USD335 MM for phase 1 alone. Both phases are fully contracted with long-term customer commitments.

Magellan currently serves as construction manager and will serve as operator once construction is complete. Phase 1 of the new terminal is expected to be operational in early 2019, with phase 2 expected to come on-line in early 2020, subject to receipt of necessary permits and regulatory approvals.

If warranted by additional demand, the new Pasadena facility could be expanded to include an incremental 5 MMbbl of storage, another 3 docks and expanded truck loading capacity, for a maximum footprint of up to 10 MMbbl of total storage and up to 5 docks. All future expansions are expected to be owned by the jointly-owned company.
MRC

Solvay completes the sale of its joint venture stake in Brazilian PVC compounder Dacarto Benvic

MOSCOW (MRC) -- Solvay is a multi-specialty chemical company, committed to developing chemistry that addresses key societal challenges, said the company on its website.

Solvay innovates and partners with customers in diverse global end markets. Its products and solutions are used in planes, cars, smart and medical devices, batteries, in mineral and oil extraction, among many other applications promoting sustainability.

Its lightweighting materials enhance cleaner mobility, its formulations optimize the use of resources and its performance chemicals improve air and water quality.

Solvay is headquartered in Brussels with around 27,000 employees in 58 countries. Net sales were € 10.9 billion in 2016, with 90% from activities where Solvay ranks among the world’s top 3 leaders. Solvay SA (SOLB.BE) is listed on Euronext Brussels and Paris and in the United States its shares (SOLVY) are traded through a level-1 ADR program.
MRC

Phillips 66 to sell assets to MLP in USD2.4 billion deal

MOSCOW (MRC) -- Phillips 66 Partners LP , the master limited partnership (MLP) of Phillips 66 , said it would buy assets from the refiner in a deal valued at USD2.4 billion, including debt, in its biggest acquisition ever, said Wdsm.

The MLP said it would buy a 25 percent interest in two of the refiner's pipelines in the Bakken basin, and a 100 percent interest in the Merey Sweeny LP coke processing unit.

MLPs are formed by oil companies to buy and operate midstream assets. Such companies distribute excess cash to its investors in the form of tax-deferred dividends.

The Bakken pipeline assets - Dakota Access LLC and Energy Transfer Crude Oil Company LLC - include 1,926 combined pipeline miles and 520,000 barrels per day of crude oil capacity, Phillips 66 Partners said on Friday.

The deal is expected to close in early October.
MRC

S.Korean fuel oil exports to China rise, dent shipments from Singapore

MOSCOW (MRC) — Two South Korean refiners are exporting excess cargoes of residual fuel oil to nearby China, displacing some Singaporean sales of the commodity which can be used in ships and power stations, three trade sources said, said Hydrocarbonprocessing.

Scheduled maintenance work at S-Oil Corp's Onsan plant in September and a fire at GS Caltex's Yeosu refinery in August has curbed the facilities' capacity to refine residual fuel oil into other products, meaning they have been shipping excess cargoes to China, the sources said. They declined to be identified as they were not authorised to speak with media.

S-Oil did not respond to a request for comment, while a GS Caltex spokesman declined to comment. The sources estimate GS Caltex, the nation's No. 2 refiner, has exported between 100,000 t and 200,000 t of residual fuel oil as a result of the fire, mostly to China.

S-Oil, the country's third-biggest refiner, is estimated to have exported 120,000 t of 380-cantistoke fuel oil into China in September for use as a marine fuel through three 40,000-t cargoes. That has pushed out some exports from Singapore, the sources said.

"The drawing power from Singapore into the north seems less (after the secondary-unit closures at the two South Korean refineries)," said a Singapore-based fuel oil trader. GS Caltex is exporting most of its excess fuel oil cargoes since the unit shutdown to China at the expense of Singaporean exports to China, said a trade source in South Korea.

Fuel oil demand in China is being supported by increased run rates at independent refineries, said Nevyn Nah, oil products analyst at Energy Aspects. Those refiners use the product as a feedstock. He also noted that the lifting of China's annual fishing ban, starting from August through to September, depending on location, means more fishing boats will head out to sea, burning more fuel.

GS Caltex earlier in the month said it was unsure when it would be able to restart its 66,0000-bpd hydrocracker after the fire at the Yeosu plant. The company is equally owned by GS Energy Corp, a unit of GS Holdings and US oil major Chevron Corp.

S-Oil shut one of its hydrodesulphurization units for 25 days of planned maintenance in September. China is a net importer of fuel oil used as a refining feedstock or in refueling marine vessels.
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OPEC says winning battle to curb oil glut

MOSCOW (MRC) — Output cuts by OPEC and other oil producers are clearing a supply glut that has weighed on crude prices for 3 yr, ministers said at a meeting on Friday to review the pact that expires in March 2018, said Reiters.

The Organization of the Petroleum Exporting Countries, Russia and several other producers have cut production by about 1.8 MMbpd since January. The group is considering extending the deal beyond its March expiry, although two sources said Friday's gathering was unlikely to make a specific recommendation on an extension.

Ministers on a panel monitoring the pact, comprising Kuwait, Venezuela and Algeria, plus non-OPEC Russia and Oman, were meeting in Vienna after oil prices gained more than 15% in the past three months to trade above USD56/bbl. "Since our last meeting in July, the oil market has markedly improved," Kuwaiti Oil Minister Essam al-Marzouq said in an opening speech at the meeting he is chairing. "The market is now evidently well on its way towards rebalancing."

Russian Energy Minister Alexander Novak said OPEC and other producers now needed to work on strategy beyond March. "We need not only to keep up the pace but continue our coordinated joint actions in full, but also work out a strategy for the future, to which we will stick starting from April 2018,” he said, adding oil demand was rising at a "high pace."

Officials said before Friday's meeting that the Joint Ministerial Monitoring Committee would consider extending the supply cut pact. But two OPEC sources said the ministers were not likely to make a specific recommendation for an extension.

The committee can make policy recommendations for the wider group of OPEC and non-OPEC producers, which meets in November.
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