Japan refiners need to cut more capacity as demand falls

MOSCOW (MRC) -- Japanese oil refiners need to cut more production capacities as domestic demand is expected to decline further, the head of the Japan Petroleum Association (PAJ) said after JXTG Holdings Inc's plan to close its Osaka refinery, reported Reuters.

"Japanese refiners with ageing facilities fall behind South Korean rivals with large export-targeted facilities in terms of cost competitiveness," PAJ President Takashi Tsukioka, who is also the chairman of refiner Idemitsu Kosan Co Ltd, told reporters on Wednesday.

"Japanese oil refiners will need to close more facilities to meet sliding demand, but we don't know how long that has to continue," he said. For Japanese refiners, oil loading and shipping from the Middle East remain as usual despite heightened tensions in the area after a US Navy ship took defensive action against a second Iranian drone in the Strait of Hormuz last week, Tsukioka said.

But Japanese refiners are studying measures to handle potential disruption to crude supply from the Middle East amid mounting tensions around the Straits of Hormuz, Tsukioka said, without giving any example of specific measures.
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MOSCOW (MRC) -- Vietnam’s Binh Son Refining and Petrochemical will import 2 million to 3 million barrels of US West Texas Intermediate (WTI) crude in the second half of this year for its Dung Quat refinery, reported Reuters with reference to a company executive's statement.

This will follow the import of the first ever batch of 1 million barrels of WTI crude oil in the first half of this year, Vice Chief Executive Officer Nguyen Van Hoi told Reuters.

Vietnam is seeking to import more goods from the United States to help narrow a favorable trade surplus following threats by US President Donald Trump to impose tariffs on products from the Southeast Asian nation amid a Sino-US trade war.

"Other than WTI crude, we will continue using Vietnam’s Bach Ho crude and imported crude oil from other sources in Asia for the refinery," Hoi said by telephone.

Vietnam has been relying more on imported crude due to a slowdown in domestic output as reserves decline at existing fields and China’s increasingly assertive stance in the region hampers offshore exploration.

Binh Son will shut down the refinery, which can process 130,000 barrels per day of crude oil, for 51 days starting from early June next year for a major maintenance, Hoi said.

This will be the fourth time the refinery in the central province of Quang Ngai has undergone major maintenance since it began commercial production 10 years ago.

The refinery operated at 106% of its design capacity in the first half of this year, producing 3.38 million tonnes of refined products, the company said.

Vietnam’s trade surplus with the United States widened to USD20.59 billion in the first half of this year from USD15.55 billion a year earlier, according to Vietnam’s official customs data.

Vietnam’s Ministry of Industry and Trade and the US Department of Energy will soon sign a memorandum of understanding on LNG imports, the government said in a statement late last month.

As MRC informed before, Vietnam's Dung Quat oil refinery planned to sell a 5%–6% stake in the company in the fourth quarter of 2017 via an initial public offering (IPO). The IPO was part of a government plan to sell state-owned enterprises including Binh Son Refining and Petrochemical Co, which runs USD3 B Dung Quat. At that time, it was the sole refinery operating in the country.
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MOSCOW (MRC) -- Jiangsu Lvan Qingfeng, has brought on-stream its polystyrene (PS) unit, following a maintenance turnaround, according to Apic-online.

A Polymerupdate source in China, informed that, the company has resumed operations at the unit, on July 24, 2019. The plant was shut for maintenance on July 7, 2019.

Located in Jiangsu, China, the plant has a production capacity of 150,000 mt/year.

We remind, as MRC informed before, Shanghai SECCO Petrochemical conducted maintenance at its PS plant in China from early-October to the fist week of December, 2018. Located in Shanghai, China, the PS plant has a production capacity of 300,000 mt/year.
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MOSCOW (MRC) -- BP does not expect supply from additional biofuel capacity in Brazil - where it is combining its unit with U.S. grain trader Bunge’s - to replace diesel and gasoline demand, BP’s head of Alternative Energy, Dev Sanyal, told Reuters.

Through the deal BP will increase its biofuel production to 22 million tons from 10 million tons a year, firmly focusing on Brazil as its biofuels production and consumption hub.

To grow, BP expects to squeeze more out of the existing assets of the combined entity, rather than buy more land to plant sugarcane, Sanyal said.

A BP spokesman said it was too early to talk about possible job cuts.

As MRC informed earlier, British oil and gas company BP will increase investment in the United States after the lowering of tax rates under President Donald Trump, Chief Executive Bob Dudley said in February 2018.
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MOSCOW (MRC0 -- A bank dropped its objection to Philadelphia Energy Solutions Inc’s initial bankruptcy requests after the two sides struck an agreement over the terms of new financing reported Reuters.

PES filed for Chapter 11 bankruptcy protection on Sunday after a fire last month prompted it to close the largest refinery on the US East Coast.

ICBC Standard Bank Plc, which finalized an intermediation agreement to buy PES’s crude and refined products last month, initially objected to the terms of the debtor-in-possession financing sought by PES because it did not give the bank priority over any insurance payouts stemming from the June fire that destroyed a section of the refinery.

ICBC Standard, a joint venture between a South African bank and Chinese bank, said PES owes it more than $300 million in early termination fees and other costs, according to filings with the U.S. Bankruptcy Court for the District of Delaware. But the two sides struck a deal on the terms of the financing during a hearing on Tuesday in federal bankruptcy court in Delaware, according to a spokesman for the bank.

The hearing, which largely dealt with less complicated requests, was the first since the refiner filed for bankruptcy protection.

The fire tore through an alkylation unit at the Girard Point section of the refinery, scattering debris across nearby highways. PES said days later that it would have to shut the complex and lay off about 1,000 workers.

Nobody died in the blaze, which is currently under investigation by at least three federal agencies.

At the time of the fire, ICBC Standard said it had USD1.6 billion worth of crude and products stored at the 335,000 barrel-per-day Philadelphia plant, and the bank has not been able to gain access to all of it.

PES in recent weeks attempted to tap in to USD1.25 billion in property damage and loss of business insurance coverage, but its request was denied, the company said in court filings.

The refinery said that refusal forced it to enter Chapter 11 bankruptcy over the weekend. With the infusion of funds, PES said it could have kept the facility open, but instead it is in the process of draining the 1,300-acre site of its inventory and idling the facility.

"These insurance proceeds are the very heart of these Chapter 11 cases: the sooner the debtors (PES) can recover, the sooner the business can complete its recovery," PES said in a filing, signed by its chief restructuring officer, Jeffrey Stein.

By the time PES filed for bankruptcy, the company had only USD45 million of cash in deposit accounts, which was ICBC collateral. The funds were not enough to pay for the extraction of inventory or wind down the facility, PES said.

Instead of receiving an advance on its insurance payout, PES is seeking USD100 million in debtor-in-possession financing from its current lenders to pay for the shutdown process, bankruptcy and other obligations.
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