Magellan Midstream to sell select marine terminals

MOSCOW (MRC) -- Magellan Midstream Partners, L.P. announced an agreement to sell three marine terminals to Buckeye Partners, L.P. for USD250 million, said Hydrocarbonprocessing.

The terminals are located in New Haven, Connecticut, Wilmington, Delaware and Marrero, Louisiana. "Magellan remains focused on capital discipline and managing our business for the long term," said Michael Mears, chief executive officer. “Optimization of our asset portfolio, including divestiture of facilities outside our strategic footprint, is an important element to maximize unitholder value and our strong financial position."

Mears continued, “I would also like to personally and on behalf of the organization express our gratitude for the contributions from all employees supporting these facilities through the years and during this time of transition."

The sale is expected to close by late first quarter or early second quarter 2020, subject to regulatory approvals. The partnership intends to provide 2020 financial guidance as part of its fourth-quarter 2019 earnings release on Jan. 30 but does not expect the terminals sale to have a material impact on its future financial results.

Jefferies served as financial advisor and GableGotwals served as legal counsel to Magellan in connection with the transaction.

The partnership also announced that its board of directors has authorized the repurchase of up to $750 million of common units through 2022. Magellan intends to purchase its common units from time-to-time through a variety of methods, including open market purchases and negotiated transactions, all in compliance with the rules of the Securities and Exchange Commission and other applicable legal requirements.

As MRC informed earlier, Magellan Midstream Partners LP has begun talks with companies developing crude transportation assets in Freeport, Texas, as it considers building a US crude export terminal there instead of its previously planned spot off Corpus Christi.
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MOSCOW (MRC) -- US crude oil and distillate inventories fell last week while gasoline stockpiles grew for an 11th consecutive week to an all-time high, reported Reuters with reference to the Energy Information Administration.

Crude inventories fell 405,000 barrels in the week to Jan. 17, government data showed, less than analysts’ expectations in a Reuters poll for a 1 million-barrel drop.

Crude stocks at the Cushing, Oklahoma, delivery hub for the benchmark US crude futures , fell 961,000 barrels to 34.9 million barrels, their lowest since November 2018, the EIA said.

US crude futures briefly pared losses after the data was released, but then traded down USD1.80, or 3.2%, to USD54.95 a barrel by 1 p.m. EST (1800 GMT).

"Crude inventories have ticked slightly lower in the last week, as a minor drop in imports has been offset by lower refining activity," Matthew Smith, director of commodity research at ClipperData.

Net US crude imports slipped last week by 53,000 barrels per day, while refinery crude runs fell by 116,000 bpd, the EIA said.

Refinery utilization rates fell for a third straight week, decreasing by 1.7 percentage points to 90.5% of total capacity.

US gasoline stocks rose by 1.7 million barrels in the week to a record 260 million barrels, the EIA said, compared with analyst expectations for a 3.1 million-barrel rise.

Total motor gasoline inventories were about 4% above the five-year average for this time of year, the EIA said.

Distillate stockpiles, which include diesel and heating oil, fell by 1.2 million barrels in the week to 146 million barrels, versus expectations for a 1 million-barrel rise, the data showed.

US Gulf Coast distillate inventories rose 71,000 barrels to 46.8 million barrels, their highest since September 2017.

Over the past four weeks, gasoline supplied was down by 1.4% from the same period last year, while distillate demand dropped 8.3% year-on-year.
MRC

MOSCOW (MRC) -- Locked-out workers at the Co-op Refinery in Regina, Saskatchewan blockaded the facility, halting the movement of workers and trucks, the union and owner said, said Hydrocarbonprocessing.

Federated Cooperatives Ltd (FCL), which owns and operates the refinery, locked out 800 workers on Dec. 5 in a dispute over pensions, but has kept western Canada’s third-largest oil refinery operating with replacement workers and managers.

Unifor, which represents the workers, said that hundreds of union activists had surrounded the refinery, effectively shutting it down.

The lockout comes as western Canadian oil producers in Saskatchewan and Alberta struggle to move crude to U.S. refiners, their main market, due to congested pipelines.

FCL confirmed that blockades at the refinery’s entrances prevented people or trucks from passing in or out and said they violated a court injunction.

Brad DeLorey, a spokesman for FCL, said the actions were causing delays but the refinery remained fully operational.

The Co-op Refinery, which can process 135,000 barrels of oil per day, makes gasoline, propane and asphalt, among other products.

As MRC informed earlier, Canada-based thermoplastic piping systems manufacturer Ipex has completed its stock purchase of Silver-Line Plastics. Silver-Line Plastics is a U.S. manufacturer of plastic pipe products with production facilities in North Carolina, Oklahoma, and Florida. The goal of the acquisition, which was first announced in August, is to allow Ipex to increase its market position in the U.S. with an expanded product portfolio serving a broader client base.

As MRC informed earlier, Russia's output of chemical products dropped by 3.2% in November 2019 month on month.
However, production of basic chemicals increased by 3.6% in the first eleven months of 2019, according to Rosstat's data. According to the Federal State Statistics Service of the Russian Federation, the largest increase in production volumes on an annualized basis accounted for mineral fertilizers and polymers in primary form. Last month, 255,000 tonnes of ethylene were produced versus 210,000 tonnes in October; by November, Russian producers had completed all their scheduled works. Thus, 2,721,000 tonnes of this olefin were produced in January-November 2019, up by 0.3% year on year.
MRC

MOSCOW (MRC) -- Belarus and Russia have agreed on an approach and method to compensation over tainted oil in the Druzhba pipeline, reported Reuters with reference to the RIA news agency, citing the Belarusian government.

Contamination in the pipeline was discovered in April 2019 and Belarusian President Alexander Lukashenko estimated the financial losses sustained amounted to hundreds of millions of dollars.

As MRC informed before, Belarus’ state oil company Belorusneft has suspended supplies of its own oil to Germany this month as Minsk needs to compensate for shortages of Russia-sourced oil amid a contract dispute with Moscow. Belorusneft supplies more than 100,000 tonnes per month of its crude oil to PCK Raffinerie GmbH in the north east of Germany. The refinery is majority owned by Rosneft (54.17%). Royal Dutch Shell has 37.5% in the plant, while Italian Eni owns 8.33%.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,904,410 tonnes in the first eleven months of 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments increased from both domestic producers and foreign suppliers. The PP consumption in the Russian market was 1,161,830 tonnes in January-November 2019, up by 7% year on year. Deliveries of all grades of propylene polymers increased, with the homopolymer PP segment accounting for the largest increase.
MRC

MOSCOW (MRC) -- Real estate developer Hilco Redevelopment Partners has entered into a USD240 million agreement to purchase the Philadelphia Energy Solutions oil refinery, which was the largest and oldest on the East Coast, according to court documents, said Hydrocarbonprocessing.

Chicago-based Hilco submitted the winning bid, which includes an escrow amount of USD30 million, in an auction last week for the Philadelphia site, documents filed with the U.S. Bankruptcy Court for the District of Delaware show. The sale still needs to be approved by the bankruptcy court, and Los Angeles-based developer Industrial Realty Group, LLC, was selected as the backup bidder, the documents show.

The plan is scheduled to be submitted to the court for approval on Feb. 6. PES filed for bankruptcy on July 21 and put its 335,000-barrel-per-day plant up for sale a month after a fire and explosions destroyed part of the refinery. With PES’s closure, more than 1,000 workers were laid off, including 640 local United Steelworkers members.

Hilco, which has acquired 5,000 acres (2,023 hectares) in North America, specializes in redeveloping obsolete industrial sites, dimming the prospect that the PES complex will be revived as an oil refinery.

Philadelphia Mayor Jim Kenney said in a statement that while the city expects challenges and years of work ahead, it is optimistic Hilco will develop the more than 1,300-acre site in a way that is more environmentally friendly and contributes to the regional economy.

"We welcome the selection of Hilco Redevelopment Partners as the winning bidder for the refinery site," Kenney said. City officials met with bidders during last week’s auction and were briefed on the track records of the various parties, but they were not given specific details of the proposals.

Hilco did not respond to requests for comment on its plans for the South Philadelphia site, which has been used to store and process hydrocarbons for about 150 years.

However, a stakeholder who was briefed by Hilco representatives in the days leading up to the auction said the company intended to use part of the site for light industrial purposes, including storage.

More than a dozen groups showed initial interest in buying PES, but only one publicly stated intentions to revive the site as an oil refinery at full capacity.

A sale to a real estate developer, either Hilco or IRG, does not preclude former bidders from leasing space on the site, according to two sources familiar with other proposals for PES.

As MRC informed earlier, Philadelphia Energy Solutions (PES) filed for Chapter 11 bankruptcy protection, the company said, its second such filing in less than two years, after a fire last month prompted it to close the largest refinery on the US East Coast.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,904,410 tonnes in the first eleven months of 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments increased from both domestic producers and foreign suppliers. The PP consumption in the Russian market was 1,161,830 tonnes in January-November 2019, up by 7% year on year. Deliveries of all grades of propylene polymers increased, with the homopolymer PP segment accounting for the largest increase.
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