Dow locks union workers out of Houston-area plant

MOSCOW (MRC) -- Dow Inc locked 226 employees out of its Houston-area chemical plant in Deer Park, Texas, after United Steelworkers union (USW) workers rejected the latest labor contract proposal, said Reuters.

"Our Deer Park site will continue to operate in the safe and reliable manner our neighbors, employees and customers have come to expect of us; but it will be without the United Steelworkers after 2 p.m. on April 22nd," Dow spokeswoman Ashley Mendoza said.

Dow has twice made contract proposals it called “last, best and final.” The first was rejected by 96 percent of the membership and the second by 98 percent, said Lee Medley, president of Local 13-1, which represents the Dow workers.

USW District 13 Director Ruben Garza said overtime distribution, as well as fatigue and safety due to understaffing, were at the heart of the dispute.

"The USW is committed to making sure that we have consistent and safe staffing levels,” Garza said in a statement. “These negotiations are about more than just money. We also must consider the safety and well-being of the workers and the entire community."

Mendoza said Dow and the USW had reached an impasse.

"Although we have made progress on many elements, we have come to an impasse on others," she said. “Harmonization of collective bargaining agreements within Dow across North America is critical."

As MRC wrote before, in 2012, three major chemical companies: Dow Chemical, Formosa Plastics, and Chevron Phillips Chemical had unveiled their expansion plans in North America basing on deposits in the Marcellus Shale Formation in New York, Pennsylvania, and Ohio. One of the upcoming projects of Dow Chemical basing on attractive price of shale gas is propylene project in Freeport, Texas.

The Dow Chemical Company is an American multinational chemical corporation. Dow is a large producer of plastics, including polystyrene, polyurethane, polyethylene, polypropylene, and synthetic rubber.
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Weak first quarter seen for US refiners, brighter summer expected

MOSCOW (MRC) -- US independent refiners are expected to roll out lower than expected first-quarter profits after a spate of outages, weak gasoline margins and a surge in the price of Canadian oil, said Hydrocarbonprocessing.

Major independent refiners cut production dramatically during the quarter, with some electing to undergo maintenance rather than produce barrels at a time when gasoline margins slumped.

Several major U.S. refiners, including Valero Energy Corp , HollyFrontier Corp, and Marathon Petroleum Corp, are all expected to fall short of consensus estimates when they report results, according to Refinitiv Eikon’s SmartEstimate model, which values more recent revisions from higher-ranked analysts.

However, reduced refining output in the early part of the year sets up the industry for a potential rebound as the critical summer months approach. With gasoline stockpiles at a four-year low on a seasonal basis, margins have rebounded in anticipation of driving season.

U.S. refinery utilization dropped to 87.5 percent in early April, the lowest seasonally since 2014. Refiners had been running full-tilt for much of 2018, encouraged by strong demand for distillates. But in the process, they overproduced gasoline, tanking margins for the fuel along the way.

Those margins fell to USD3.64 a barrel in January, the lowest since 2009. They have since recovered, and were at about USD23.00 a barrel on Monday, as inventories have fallen to about 228 million barrels from almost 260 million barrels in mid-January.

Refiner earnings kick off this week with Valero on Friday. Since the beginning of April, analysts, on average, have revised projections for refiners lower by more than 5 percent, according to Refinitiv data. Analysts have sharply lowered estimates for Valero, Marathon and HollyFrontier, along with PBF Energy and Phillips 66 , in the past month, putting them in the bottom quartile among U.S. companies in terms of revisions, according to Refinitiv data.

On top of heavy maintenance, fires broke out at facilities over the last few months, including at Valero’s Port Arthur, Texas, refinery, Exxon Mobil Corp’s Baytown, Texas, refinery and HollyFrontier’s El Dorado, Kansas, refinery.

HollyFrontier lowered the amount of crude it expected to process in the first quarter by 5,000 bpd. Analysts at Goldman Sachs downgraded the company’s outlook last week on concerns that profits would take a hit after Canadian crude differentials collapsed.

Sandy Fielden, director of commodities and energy research at Morningstar, said PBF also lost out because of “the Canadian crude discount just disappearing."

Canadian crude oil had been heavily discounted due to oversupply and lack of pipelines, but that discount eroded after the province of Alberta instituted production cuts. Western Canada Select (WCS) recently has traded around USD9.25 a barrel under U.S. crude, compared with USD15.65 at the beginning of the quarter.
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Saudi Aramco to buy Shell stake in Saudi refining JV for $631M

MOSCOW (MRC) -- Saudi Aramco will acquire Royal Dutch Shell’s 50 percent stake in the Saudi refining joint venture SASREF for USD631 million, reported Reuters with reference to the two companies.

The purchase, which is part of Aramco’s strategy to expand its downstream operations, will be completed later this year, they said in a joint statement.

Saudi Aramco Shell Refinery Co (SASREF), based in Jubail Industrial City in Saudi Arabia, has a crude oil refining capacity of 305,000 barrels per day (bpd).

"Saudi Aramco will take full ownership and integrate the refinery into its growing downstream portfolio. SASREF will continue to be a critical facility in our refining and chemicals business," Abdulaziz al-Judaimi, Aramco’s senior vice president of downstream, said in the statement.

Aramco aims to become a global leader in chemicals and the world’s largest integrated energy firm, with plans to expand its refining operations and petrochemical output.

For Shell, "the sale is part of an ongoing effort to focus its refining portfolio, integrating with Shell trading hubs and chemicals," the company said.

Shell has sold over USD30 billion of assets in recent years as it shifts its focus to lower carbon businesses such as natural gas and petrochemicals.

As MRC wrote before, in October 2018, state oil giant Saudi Aramco signed an agreement to invest in a refinery-petrochemical project in eastern China, part of its strategy to expand in downstream operations globally. Zhejiang Petrochemical, 51 percent owned by textile giant Zhejiang Rongsheng Holding Group, is building a 400,000-barrels-per-day refinery and associated petrochemical facilities that was expected to start operations by the end of last year.

Saudi Aramco, officially the Saudi Arabian Oil Company, is a Saudi Arabian national oil and natural gas company based in Dhahran, Saudi Arabia. Saudi Aramco"s value has been estimated at up to USD10 trillion in the Financial Times, making it the world"s most valuable company. Saudi Aramco has both the largest proven crude oil reserves, at more than 260 billion barrels, and largest daily oil production.
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McDermott awarded petrochemicals contract in Kuwait

MOSCOW (MRC) - Kuwait Integrated Petroleum Industries Co. (KIPIC) has awarded McDermott International, Inc. a technology contract tied to a major project in Al Zour, Kuwait, McDermott said.

KIPIC, a Kuwait Petroleum Corp. (KPC) subsidiary, has selected McDermott to provide the basic engineering, technology license and catalyst for an integrated low pressure recovery (LPR) and olefins conversion technology (OCT) unit at its Petrochemical Refinery Integration Project (PRIZe) in Al Zour, according to a written statement McDermott emailed to Rigzone. The contract recipient added that the completed unit will produce 330,000 metric tons per annum of polymer grade propylene using refinery by-product streams.

“This award marks the 50th OCT unit that Lummus Technology has licensed, and we are honored to celebrate this milestone with KIPIC,” stated Leon de Bruyn, senior vice president of McDermott’s Lummus Technology business. “This is a significant achievement that highlights the trust that our customers have in our industry-leading technologies."

The grassroots Al Zour Refinery will boast 615,000 barrels per day of capacity and will be designed to process heavy crudes, KIPIC’s project website states. McDermott noted that the PRIZe project will add a gasoline block, aromatics block, OCT unit, polypropylene units, associated utility and offsites facilities to the KIPIC site, which will include world-scale petrochemicals and gasoline manufacturing as well as liquefied natural gas import facilities.

McDermott's Lummus Technology is a leading licensor of proprietary petrochemicals, refining, gasification and gas processing technologies, and a supplier of proprietary catalysts and related engineering. With a heritage spanning more than 100 years, encompassing approximately 3,100 patents and patent applications, Lummus Technology provides one of the industry's most diversified technology portfolios to the hydrocarbon processing sector.
MRC

Iran says in touch partners on waivers

MOSCOW (MRC) -- Iran said a US decision not to renew sanctions waivers has "no value" but that Tehran was in touch with European partners and neighbors and would “act accordingly”, reported Reuters with reference to Iranian news agencies, citing the Foreign Ministry.

US President Donald Trump has decided not to reissue waivers in May allowing importers to buy Iranian oil without facing US sanctions, the White House said.

"The waivers ... have no value but because of the practical negative effects of the sanctions, the Foreign Ministry has been ... in touch with foreign partners, including European, international and neighbors and will ... act accordingly," the agencies quoted the ministry as saying.

As MRC informed before, in early April 2019, Indian refiners were holding back from ordering Iranian oil for loading in May pending clarity on whether Washington will extend a waiver from US sanctions against the OPEC-member. In November 2018, US President Donald Trump withdrew from the 2015 Iran nuclear deal and re-imposed broad economic sanctions.
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