US refiners boost processing capacity to accommodate shale

MOSCOW (MRC) - As U.S. oil production rises - setting records in average daily output nearly every month this year - the companies that convert crude to diesel and gasoline are increasing their ability to consume more crude and generate higher profits, Reuters.

Using more efficient equipment and running bigger plants at peak speeds, the combined capacity of nation's 135 refineries was 18.6 million barrels per day (bpd) at the start of the year, up 16 percent over the 15.7 million bpd in 1985, when there were 223 refineries, according to Energy Information Administration data.

Demand for new products coming from these expansions "will lead to higher refinery utilization, higher distillate prices and higher refinery margins generally," Arvinder Saluja, a senior analyst at debt ratings firm Moody's Investors Service, wrote in a report on Thursday.

U.S. refinery utilization, or how much of the capacity is being used, hit a record 98 percent in early August, the EIA said. Utilization differs from capacity due to weather or maintenance disruptions, market demand and other factors.

This year, high production and ample supplies of shale and heavy Canadian oil have made U.S. refiners very profitable. Refining income this year through September at Phillips 66 was USD1.94 billion, up 87 percent from the year earlier. Valero Energy's refining business posted an operating profit of USD3.64 billion, up 21 percent.

Just as shale producers are exporting more, U.S. refiners which convert crude into low-sulfur fuels should be able to drive exports of marine fuel and profits higher next year. Earning from such sales can remain strong through "at least 2022," Moody's Saluja said.

Between 2012 and 2017, exports of finished U.S. refined products climbed by 772,000 bpd to 2.79 million bpd, accounting for a national increase of refined products exports of 735,000 bpd to 3.34 million bpd.

Consolidation is also lifting refiners' outlooks. Last month, second-largest refiner Marathon Petroleum Corp acquired fifth-largest Andeavor in part to gain Andeavor's ability to process shale and because of its retail gasoline network in Mexico.

Six of the 10 largest U.S. refineries are owned by oil producers, including Motiva, owned by Saudi Aramco, Exxon Mobil Corp and Chevron Corp .
MRC

MOSCOW (MRC) -- Fluor Corporation announced that its joint venture team, FDH JV, has successfully generated first steam into Kuwait National Petroleum Company’s (KNPC) Clean Fuels Project in Kuwait, as per Hydrocarbonproceesing.

"This significant milestone marks the completion and turnover of the first utility units by the Fluor-led joint venture and KNPC is advancing these units into operation with our ongoing support,” said Al Collins, president of Fluor’s Energy & Chemicals business in Europe, Africa and the Middle East. “The 12,000-plus craft workers at site have been backed by joint venture project team members across three continents, a global operation for a mega-sized project. Accomplishing this milestone shows we are set to deliver the remaining units in the project to support KNPC’s ambitious Clean Fuels Program."

This project is being executed on the three KNPC-owned and operated refineries in Kuwait. As part of the Clean Fuels Project, KNPC plans the retirement of existing processing facilities at Shuaiba and a major upgrade and expansion of the Mina Al Ahmadi and Mina Abdullah refineries to integrate the refining system into one complex with full conversion operation. The Fluor-led joint venture with Daewoo Engineering & Construction and Hyundai Heavy Industries is responsible for engineering, procurement and construction as well as associated pre-commissioning and testing support for the Mina Abdullah Package 2. After commissioning, both the Mina Abdullah and Mina Al Ahmadi refineries will have a capacity of 800,000 barrels-per-stream day to supply local and international demand for clean fuels meeting the most stringent environmental requirements.

The American Society of Safety Engineers recently recognized the project with its 2018 Gold Award in Health, Safety and Environmental Excellence. The strong safety culture at site was achieved by active engagement at all levels of the organization and a relentless focus on risk identification and mitigation. This engagement has enabled the workforce to achieve 60 million work hours without a lost-time incident.
MRC

MOSCOW (MRC) - Benchmark northwest European gasoline refining margins rose sharply on Thursday, buoyed by lower oil prices and inventory drawdowns on both sides of the Atlantic, said Reuters.

U.S. gasoline stocks fell 3.2 million barrels last week, according to the Energy Information Administration. This compared with analysts' expectations in a Reuters poll for a 2.1 million barrels drop.

Stocks independently held in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub declined slightly to 985,000 tonnes in the week to Thursday, according to data from Dutch consultancy PJK International.

Nigeria's state oil firm NNPC said on Thursday it had signed a crude-for-product deal with BP for the next six months to help meet the country's gasoline needs over the holidays and ahead of its general election early next year.
MRC

MOSCOW (MRC) -- Imports of polyethylene (PE) into Kazakhstan grew in January-September 2018 by 9% year on year, totalling 99,300 tonnes. Only shipments of high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) increased, reported MRC analysts.

September PE imports to Kazakhstan rose to about 11,300 tonnes from 10,000 tonnes a month earlier, local companies increased their purchasing of linear low density polyethylene (LLDPE) and high density polyethylene (HDPE) in Russia and Asia. Overall PE imports into the country were 99,300 tonnes in the first nine months of the year, compared to 91,400 tonnes a year earlier. HDPE and LLDPE shipments increased, whereas demand for LDPE subsided.

The structure of PE imports by grades looked the following way over the stated period.

September HDPE imports to Kazakhstan grew to 8,500 tonnes from 7,400 a month earlier. Local companies managed to raise their PE purchasing in Russia and Uzbekistan. Thus, overall HDPE imports exceeded 78,100 tonnes in the first nine months of 2018, up by 12% year on year.

September imports of LDPE by local companies decreased to 1,400 tonnes against 1,600 tonnes, on a limited supply from Russian producers. Total imports of LDPE into Kazakhstan were about 13,700 tonnes in January-September, down 17% year on year.

Purchasing of linear low density polyethylene (LLDPE) by local companies was 7,500 tonnes in the first nine months of 2018, compared to 5,200 tonnes a month earlier.


MRC

MOSCOW (MRC) - Imports of polypropylene (PP) into Kazakhstan exceeded 25,400 tonnes in first nine months of this year, up 2% compared to the same period of 2017. Export volumes remained unchanged, according to MRC analysts.

September PP imports into Kazakhstan decreased to 3,300 tonnes against 3,900 tonnes a month earlier, local converters reduced their purchases of PP in Russia. Overall PP imports into the country exceeded 25,400 tonnes in the first nine months of the year, compared to 24,800 tonnes a year earlier. Export sales of Kazakh polypropylene remained at the level of 2017.

The structure of PP imports by grades looked the following way over the stated period.
September imports of homopolymer PP into the country were about 2,000 tonnes compared with 2,700 tonnes in August. Local companies had faced with restrictions in the supply of homopolymer PP from Russian producers. Total PP imports into Kazakhstan exceeded 18,000 tonnes in the first nine months of 2018, up 19% year on year.

September imports of propylene copolymers remained at the level of 1,300 tonnes, which corresponds to the August figure. Total propylene copolymers imports into Kazakhstan were 7,400 tonnes in the first nine months of the year, down by 3% year on year.

Total PP exports from the country were about 18,400 tonnes in the first nine months of this year, the same figures as in 2017. Russian producers accounted for about 90% of the total imports.


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