ExxonMobil announces USD2B Baytown Chemical expansion

MOSCOW (MRC) -- ExxonMobil said that it will proceed with a USD2 billion investment to expand its Baytown, Texas chemical plant, which will create approximately 2,000 jobs during construction and contribute to the approximate 15 percent return the company expects from its chemical investments, said Hydrocarbonprocessing.

The Baytown expansion is in addition to the company’s 2017 Growing the Gulf initiative, which outlined plans to build and expand manufacturing facilities along the U.S. Gulf Coast, creating more than 45,000 high-paying jobs across the region.

"Our substantial investments in the United States support ExxonMobil’s long-term growth plans and will result in thousands more high-paying jobs,” said Darren W. Woods, ExxonMobil chairman and chief executive officer. “Through the billions of dollars that we’re investing in the Permian Basin to increase oil production and the expansion at our operations along the Gulf Coast, our company is making significant, lasting contributions to the U.S. economy and the many communities where we operate."

ExxonMobil commissioned Ernst & Young to examine the contributions the company made to the U.S. economy in 2017 – the year the Growing the Gulf initiative was launched. The research concluded that during 2017, ExxonMobil contributed more than USD43 billion to the U.S. gross domestic product and direct, indirect and induced economic activity supported nearly 177,000 jobs across the country.

“This research, focused on a single year, is a powerful snapshot of how our business in the United States directly benefits the American economy,” said Woods. “It underscores the many ways that the company and our employees are contributing to prosperity across the country."

Woods said the company’s recent investments, such as a major expansion of oil and gas production in the Permian Basin and the planned expansion at Baytown, will continue to boost the U.S. economy. "Our Baytown chemical expansion will put us in a solid position to maximize the value of increased Permian Basin production and will deliver higher-demand, higher-value products produced at our Gulf Coast refining and chemical facilities,” said Woods.

“Global demand for chemicals is expected to be greater than energy demand growth and GDP growth over the next 20 years,” Woods said. The expansion, expected to start up in 2022, includes a new Vistamaxx™ performance polymer unit, which produces products that offer higher levels of elasticity, softness and flexibility, attributes that contribute to a reduction in materials used and increased performance in everyday products. The new unit will produce about 400,000 tons of Vistamaxx™ polymers a year.

The project will also enable ExxonMobil to enter the linear alpha olefins market. Linear alpha olefins are used in numerous applications, including high-performing engine and industrial oils, waxes and building blocks for surfactants, polyethylene plastic for packaging, and other specialty chemicals. The new unit will produce about 350,000 tons of linear alpha olefins a year.

ExxonMobil’s Baytown facility is the largest integrated petrochemical complex in the U.S. and is one of the most technologically advanced refining and petrochemical complexes in the world. Founded in 1919, the complex is located on approximately 3,400 acres along the Houston Ship Channel, about 25 miles east of Houston. The facility includes a refinery, chemical plant, olefins plant, plastics plant and global technology center.
MRC

Clean oil arrives in Belarus as Russia tackles tainted fuel flows

MOSCOW (MRC) -- Belarus said that clean oil had reached it via the Druzhba pipeline from Russia, after several countries suspended such imports due to a contamination scandal that shocked the oil market and forced some states to open up strategic reserves, said Hydrocarbonprocessing.

Poland, Germany, Ukraine, Slovakia and other countries halted Russian oil imports via the pipeline last week after finding contaminants that could damage refinery equipment. Russian President Vladimir Putin called the incident damaging for Russia's image as a safe energy supplier, while pipeline monopoly Transneft said the oil had been contaminated deliberately.

A spokesman for Belarusian state oil firm Belneftekhim confirmed clean oil had arrived but reiterated that the company expected it to reach the Mozyr refinery, one of the country's two oil plants, no earlier than May 4.

The Russian energy ministry confirmed that clean oil reached Belarus on Thursday, saying the quality of oil was also expected to improve by May 7 at the Baltic Sea port of Ust-Luga. Druzhba can pump up to 1 million barrels per day (bpd), amounting to 1 percent of global crude demand. In total, Russia is exporting around 4 million bpd and other destinations in the south, northwest and east are unaffected, traders have said.

A long outage could force refineries in Eastern Europe and Germany to cut operations and prompt Moscow to reduce oil production. It could also trigger claims by Western oil buyers against Russian producers and pipeline monopoly Transneft for lost profits as they struggle to sell contaminated oil.

Poland's energy ministry has decided to release mandatory oil reserves to secure output at domestic refineries. The released reserves are to ensure continuity of refinery processing at normal levels, a ministry spokeswoman said.

The Czech oil refinery at Litvinov has also started receiving oil from state emergency reserves due to a halt in Russian supplies.

Shareholders of two German refineries are arranging crude tanker shipments via the Baltic Sea in response to the Druzhba suspension, a spokesman for industry group MWV said.
MRC

Citgo Petroleum in talks with Aruba on refinery contract

MOSCOW (MRC) -- Citgo Petroleum Corp said it is holding talks with the government of Aruba on its oil refinery operating contract, a day after Aruba disclosed it would form a committee to decide the fate of the plant, reported Reuters.

The US subsidiary of state-owned Petroleos de Venezuela (PDVSA) said it is holding "active conversations with our counterparts in Aruba and hopeful that we will reach a solution for future work together."

Aruba’s prime minister, Evelyn Wever-Croes, on Monday said the Caribbean nation expects to overhaul or terminate the contract. US sanctions against Venezuela have hampered production.

An advisory committee will evaluate options including continuing to work with Citgo, terminating its contract and finding another operator, or seek another activity for the facility.

Citgo and Aruba in 2016 agreed to a 25-year contract to refurbish and reopen the 209,000-barrel-per-day refinery, which has been idled since 2012, when its former operator, US-based Valero Energy Corp, abandoned it over low profits.

The USD685 million overhaul, which had received initial funding from Citgo and PDVSA, had shown little progress since Washington in August 2017 issued a first round of sanctions on the Venezuelan state-run oil company. In late January, a second round of sanctions left the refinery without access to credit.

As MRC informed before, in late February 2019, Houston-based Citgo Petroleum slowed work on an overhaul of its 235 Mbpd Aruba refinery due to a lack of financing stemming from US sanctions on Venezuela's state-run PDVSA.
MRC

Crude stockpiles fall less than expected

MOSCOW (MRC) -- US crude oil stockpiles fell less than expected last week, while gasoline stocks posted a hefty surprise build ahead of the Memorial Day long weekend as refiners boosted their rates to the highest in five months, reported Reuters with reference to the Energy Information Administration.

Crude inventories fell 282,000 barrels in the week to May 24, compared with analysts’ expectations for a decrease of 857,000 barrels and the industry group the American Petroleum Institute report of a 5.3 million-barrel draw.

Stocks edged down from the previous levels which were the highest since July 2017. However, at 476.5 million barrels, they were about 5% above the five year average for this time of year.

Net US crude imports fell last week by 476,000 barrels per day (bpd) and crude production rose 100,000 bpd, back to its record high at 12.3 million bpd.

Crude stocks at the Cushing, Oklahoma, delivery hub fell by 16,000 barrels, EIA said.

Crude prices extended losses after the data was released. U.S. crude dropped USD1 a barrel to USD57.81 by 11:29 a.m. EDT (1529 GMT), while Brent crude was down USD1.91 a barrel at USD67.56.

Refinery crude runs rose by 189,000 bpd and utilization rates jumped 1.3 percentage points to 91.2 percent of total capacity, their highest since January, EIA data showed.

“This increase in refinery utilization has resulted in another significant increase in gasoline inventories, which is pressuring gasoline prices,” said Andrew Lipow, president of Lipow Oil Associates in Houston.

Gasoline stocks rose by 2.2 million barrels, compared with analysts’ expectations in a Reuters poll for a 528,000-barrel drop, and were about 1% above the five year average for this time of year, the EIA said.

US Gulf Coast gasoline inventories climbed to the highest levels for May on record, according to the data.

The Memorial Day holiday weekend is considered the start of the summer driving season and the peak demand season for gasoline.

Distillate stockpiles, which include diesel and heating oil, fell by 1.6 million barrels, versus expectations for a 564,000-barrel increase, the EIA data showed.
MRC

Czech Litvinov refinery started receiving state reserves crude

MOSCOW (MRC) -- The Czech oil refinery at Litvinov, owned by PKN Orlen unit Unipetrol, in the early May started receiving oil from state emergency reserves due to halt in Russian supplies via the Druzhba pipeline, news agency CTK reported, citing the head of state reserves Pavel Svarc, said Reuters.

Svarc said a loan from the state reserves would be enough to cover 15-20 days of operation at the refinery, one of two oil processors in the country.

Poland, Germany, Ukraine, Slovakia and other countries halted Russian oil imports via the Druzhba pipeline last week after finding contaminants that could damage refinery equipment.

Belarus said that clean oil had reached its territory after corrective measures were taken but would not reach its Mozyr refinery before May 4.

Svarc said clean oil from Druzhba could reach the Czech Republic around May 15. The country has another pipeline bringing oil from the Italian port of Trieste.
MRC