Chevron and Exxon seek small refinery waivers from US biofuels law

MOSCOW (MRC) -- Global energy giants Chevron Corp and Exxon Mobil have asked US regulators for exemptions to the nation’s biofuels policy that have historically been reserved for small companies in financial distress, reported Reuters with reference to sources familiar with the matter.

The requests will add fuel to a raging dispute between Big Oil and Big Corn over how the Trump administration should manage the US Renewable Fuel Standard - a 2005 law that requires oil refiners to mix biofuels such as corn-based ethanol into the nation’s fuel supply, or buy government-awarded credits from other energy firms who the blending.

The US Environmental Protection Agency (EPA) has already issued an unusually high 25 hardship waivers to small refineries in recent months, according to an agency source, driving blending credit prices down and helping the oil industry reduce compliance costs.

But the agency won't name the firms receiving the exemptions, citing a concern over disclosing private company information.

Both Chevron and Exxon, among the world’s most profitable energy companies, have asked EPA for waivers for their smallest facilities - Chevron’s 54,500 MBPD refinery in Utah and the Exxon’s 60 Mbpd refinery in Montana, two sources briefed on the matter told Reuters on condition of anonymity.

The exemptions would free the plants from their obligation to hand in blending credits earned or purchased for 2017, which came due this year, the sources said.

The disclosure of the Chevron and Exxon applications, which have not been previously reported, follow a Reuters report this month that the EPA has exempted three of ten refineries owned by Andeavor, one of the biggest U.S. refining companies.

The waivers could save Andeavor USD50 million or more in regulatory costs for the company’s 2016 obligations under the biofuels law.

Husky Energy - a Canadian oil giant backed by a Hong Kong billionaire - will also be seeking an exemption, this one covering the 2018 requirements for its small Superior, Wisconsin plant, spokesman Mel Duval told Reuters, disclosing the waiver for the first time.

Duval said Husky inherited a 2017 exemption when it bought the 50 Mbpd Superior refineries from Calumet Specialty Products Partners for USD435 million in November.

The waivers are intended for facilities producing less than 75 Mbpd that can also prove compliance with the policy would cause them “disproportionate economic hardship."

The exceptions and the EPA’s refusal to disclose them have infuriated the corn lobby, which argues the waivers hurt farmers by undermining demand for corn and should be used only sparingly for tiny facilities in dire straights.

A spokesman for Chevron, Braden Reddall, declined to confirm or deny the application but said waivers provide an edge.

"Several competitors have reportedly received exemptions from the RFS," he said in a written statement to Reuters. "If true, any refinery which has not been exempted from the RFS will be at a competitive disadvantage."

Exxon spokesman Dan Carter Dan Carter declined to comment.

ExxonMobil is the largest non-government owned company in the energy industry and produces about 3% of the world's oil and about 2% of the world's energy.

Chevron is the second-largest US oil group by production and market capitalisation, after ExxonMobil. Chevron Phillips Chemical (part of Chevron), headquartered in The Woodlands, Texas (north of Houston), US,l is one of the world’s top producers of olefins and polyolefins and a leading supplier of aromatics, alpha olefins, styrenics, specialty chemicals, piping, and proprietary plastics. Chevron and Phillips 66 each own 50% of Chevron Phillips Chemical.
MRC

MOSCOW (MRC) -- Orpic Logistics Company (OLC), a joint venture created by Compania Logistica de Hidrocarburos (CLH) and Oman Oil Refineries and Petroleum Industries (Orpic), has inaugurated the Muscat-Sohar pipeline and the Al Jefnain terminal in Oman, as per Hydrocarbonprocessing.

This pipeline, into which 336 million dollars have been invested, represents a key logistics infrastructure, allowing more than 50% of the country’s fuel to be transported and contributing to improved road safety and greater efficiency and sustainability by reducing the number of road tankers in and around the capital, Muscat.

The MSPP Project (Muscat Sohar Product Pipeline) is a multi-product, bi-directional pipeline that uses 290 kilometers of pipelines to connect the Mina Al Fahal and Sohar Orpic refineries to the Al Jefnain storage and distribution facility, as well as to Muscat International airport, which receives aviation fuel directly via pipeline.

In his speech, the CEO of CLH, Jorge Lanza, thanked ORPIC for the opportunity to participate in this project in Oman and stressed that "we have proven to ourselves, and to the industry, that we have cutting-edge experience and are able to develop successfully in new countries and environments such as Oman. The MSPP project is a significant milestone in the history of our company and we believe that it will open doors to new opportunities. CLH is committed to the development of the economy and talent of Oman, and we hope to continue to undertake more projects together, both in Oman and the surrounding area".

The Vice President of Orpic, H.E. Sultan bin Salim Al Habsi, said "We are proud to inaugurate such an important strategic project as the Muscat Sohar Product Pipeline (MSPP) and the Al Jefnain terminal. This project responds to the government’s strategic goals for the development of logistics systems for petroleum products in the Sultanate which will cover the growing demand for fuels."

The MSPP pipeline is divided into three sections: from the Mina Al Fahal refinery to the facility in Al Jefnain, measuring 45 km (10 inches); from the Sohar refinery to the Al Jefnain facility, measuring 220 km (18 inches), and a third branch that goes from the Al Jefnain facility to Muscat International Airport, measuring 25 km (10 inches). In addition, this new network has satellite control systems and advanced safety and environmental protection.

On the other hand, the Al Jefnain storage facility, located in the vicinity of Muscat, is a center for storage and distribution of petroleum products with a capacity of more than 170,000 cubic meters and 16 loading racks. At this facility, an average of 700 trucks are loaded every day, carrying fuel to service stations. This new infrastructure increases the country’s refined products storage capacity by 70%.

As MRC informed before, in March 2017, Oman Refineries and Petroleum Industries Company (Orpic) announced plans to raise capacity of its polypropylene (PP) plant to 340,000 tpa of high quality PP from 200,000 tpa.

ORPIC (Oman Oil Refineries and Petroleum Industries Company) is one of the leading companies in Oman and has two refineries in that country, in Sohar and Muscat. ORPIC is owned by the Government of the Sultanate of Oman and Oman Oil Company SAOC, the trading company created by the Government of the Sultanate of Oman for managing investments in the energy sector.
MRC

MOSCOW (MRC) -- A trial pitting materials firm A. Schulman Inc. against Citadel Plastic Holdings LLC began April 16 in Delaware Chancery Court in Wilmington, Del., as per Plasticsnews.

A spokesperson for Fairlawn, Ohio-based Schulman confirmed that the trial is underway but had no further details. The firm is seeking damages related to its USD800 million acquisition of Citadel in early 2015. Issues related to the Citadel acquisition — including questions about material quality — led to financial problems at Schulman.

Schulman filed the suit in June 2016. The firm is seeking unspecified damages from former Citadel owners including Huntsman Gay Capital Partners and Charlesbank, as well as from several former Citadel executives, including Michael Huff and Matthew McDonald.

Most of Schulman's accusations center around Lucent Polymers, an Evansville, Ind.-based compounding firm that Citadel bought in late 2013. According to the original court filing, Schulman "never would have purchased, much less paid $800 million for Citadel had it know that [Lucent] was engaging in fraudulent business practices that … substantially reduced [Citadel's] profitability and growth prospects."

Schulman also has accused Citadel/Lucent of falsifying certificates of analysis given to customers that exaggerated flame retardant properties and other characteristics of the compounds that Lucent was making. "Knowledge of this pervasive fraudulent scheme … went all the way to the top," Schulman officials said in the filing. "Lucent and Citadel officers and directors knew of and condoned these wrongful practices."

Judge J. Travis Laster is hearing the case. Schulman is being represented by Wilmington lawyer Paul Lockwood. Legal information on Citadel was unavailable on the court's web site. In February, Schulman agreed to be acquired by LyondellBasell Industries for USD2.25 billion.

Separately, Schulman officials in January said that federal officials are undertaking a criminal investigation related to the lawsuit. In a Jan. 9 earnings call, Schulman President and CEO Joseph Gingo said the FBI has identified Schulman as a possible crime victim.

A November court ruling said that several former Citadel employees in October were served with subpoenas requiring them to produce documents as part of the FBI investigation. Those former employees included executives Huff, McDonald, Kevin Andrews, Jason Jimerson and Mario Sandoval.

Schulman posted sales of almost USD2.5 billion for fiscal 2017. The firm ranks as a leading compounder and concentrates maker in both North America and Europe and as one of Europe's leading resin distributors.
MRC

MOSCOW (MRC) - Russia's imports of polypropylene (PP) slightly exceeded 45,000 tonnes in first three months of this year, up 28% year on year, compared to the same period of 2017. Supply of all grades of PP increased, according to a MRC's DataScope report.

Russian companies increased volumes PP imports in March, which reached 16,400 tonnes against 14,200 tonnes in February; shipments of propylene homopolymers (homopolymer PP) and block copolymers of propylene (PP block copolymer) increased. In general, PP imports into Russia exceeded 45,000 tonnes in January-March 2018, compared with 35,100 tonnes year on year. The import for all grades of propylene polymers increased, the greatest increase in supplies accounted on homopolymer PP.

Overall, the structure of PP imports by grades looked the following way over the stated period.
March imports of homopolymer PP grew to 6,000 tonnes against 4,600 tonnes a month earlier, shipments of homopolymer PP raffia from Uzbekistan and Turkmenistan increased. Overall imports of homopolymer PP reached 15,500 tonnes in the first three months of 2018, compared to 10,700 a year earlier.

March imports of PP block copolymers in Russia decreased to about 4,300 tonnes against 3,200 tonnes in February. Local companies increased purchasing of PP block copolymers for extrusion pipes in Europe. Imports of PP block copolymers into Russia rose to 11,200 tonnes in January-March 2018, compared to 10,800 tonnes a year earlier.

March imports of PP random copolymers remained in the level of February at about 2,500 tonnes. Total imports of PP random copolymers in Russia were 7,700 tonnes in January - March 2018, compared with 6,500 tonnes year on year. The greatest increase in supply accounted for pipe propylene copolymers.

Imports of other propylene polymers for the reported period increased to about 10,600 tonnes compared with 7,100 tonnes in the same time a year earlier.


MRC

MOSCOW (MRC) - Poland's biggest oil refiner PKN Orlen said that a shipment of 130,000 tonnes of Iranian crude oil has arrived at the Baltic seaport of Gdansk, as per Reuters.

Most of the oil refined in Polish refineries comes via pipelines from Russia, but state-run PKN Orlen and Lotos are increasingly buying from other sources, including Iran and the United States.

"Delivery from Iran has become a fact. Oil from the Middle East gives us many opportunities. First of all, it enables diversification of delivery directions and increases the energy security of the state," PKN said in a statement.

The Iranian oil, which is lighter than the Russian crude and contains less sulphur, will be refined at PKN’s plant at Plock, northwest of Warsaw. PKN said that earlier tests of the Iranian oil “confirmed its significant potential".

It took a month for the Delta Kanaris tanker to transport the Iranian cargo from the Kharg island to Gdansk.
MRC