French CIM oil storage tanks brimming as coronavirus quashes demand

MOSCOW (MRC) -- Oil tanks at France’s storage and dispatch services company CIM are completely full due to the glut in global oil supply and the sharp drop in products demand, the director general of the company said, as per Reuters.

CIM, which handles around 40% of France’s crude imports, has 3 million cubic metres of crude storage capacity and 1.7 million cubic metres of refined products storage capacity, mostly at the Le Havre oil port hub. The firm also operates the 4,700 km Trapil pipeline network. “There is no demand, our tanks are full to the brim,” CIM’s Olivier Peyrin told Reuters.

Measures put in place by governments to stop the spread of the novel coronavirus outbreak have led to a sharp drop in fuel demand globally.

“Petrol demand has fallen by around 80% (in France), while jet fuel demand has tumbled by around 95%,” Peyrin said, with air traffic at France’s two major airports Orly and Charles De Gaulle, close to a standstill.

“I’ve never witnessed a crisis like this,” said Peyrin, who worked for oil major Shell before joining CIM in 2010.

“Before the crisis, we generally used to receive around 2 million tonnes of crude per month. Today we are at about 1 million tonnes,” he said. “For refined products, we use to handle 500,000 tonnes per month, now we are falling towards zero."

Peyrin said only one of three oil refineries supplied by CIM from Le Havre, Exxon Mobil Port-Jerome Gravenchon, was still operational. Total’s Gonfreville Normandy refinery has been halted following a fire, while the restart of its Grandpuits has delayed.

"We have reduced the team at Le Havre to a minimum just to receive the few deliveries we get, and expedite some refined products,” Peyrin said, adding that other storages facilities in France were in a similar situation.

As MRC reported earlier, South Africa’s largest refinery SAPREF will “minimize” maintenance to critical activities, a spokeswoman said, as a national lockdown looms to contain the spread of coronavirus. SAPREF, situated near Durban along the east coast, is a 50/50 joint venture between BP and Shell with a refining capacity of around 8.5 million tons a year. It accounts for 35% of the refining capacity in Africa’s most advanced economy, which is a net importer of petroleum products.

We also remind that the COVID-19 outbreak has led Shell Chemical to temporarily suspend construction on the massive plastics and petrochemicals site it's building in Monaca, Pa, USA.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 383,760 tonnes in the first two month of 2020, up by 14% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments increased due to the increased capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market were 192,760 tonnes in January-February 2020, down by 6% year on year. Homopolymer PP accounted for the main decrease in imports.
MRC

1. Refinery employees worried about response to virus cases

MOSCOW (MRC) -- Employees at Valero Energy Corp’s Port Arthur, Texas, refinery expressed worries about the company’s slow response to keep the coronavirus from spreading there after two workers tested positive, reported Reuters with reference to four people familiar with the matter. Valero, the nation’s second-largest refiner, started to cut non-essential work and related contractors only this week after starting temperature checks last week - much later than other major U.S. refiners, according to the people.



MRC

MOSCOW (MRC) -- One worker was injured in a fire at Valero Energy Corp’s 125,000 barrel-per-day Meraux, Louisiana, refinery early Friday morning, reported Reuters with reference to a company spokeswoman.

Valero spokeswoman Lillian Riojas said the injured worker was taken to a local hospital. The extent of the person’s injuries was unknown. All other workers at the refinery were accounted for.

Energy industry intelligence service Genscape said the refinery was shut at about the time the fire broke out, shortly before 1 a.m. CDT (0600 GMT).

The fire broke out in the refinery’s hydrocracker, said sources familiar with plant operations. The hydrocracker converts gas oil into motor fuels, primarily diesel.

Riojas said the fire was contained to the area where it broke out.

WWL-TV in New Orleans reported that the fire began with an explosion that was felt up to 7 miles (11 km) away.

Valero is the second-largest refiner in the United States, operating 13 refineries with a combined crude oil processing capacity of 2.2 million bpd, 11.6% of the national total.

Valero has reduced production at at least seven of its US refineries. The company also operates a refinery in Quebec and one in Wales.

As MRC wrote previously, in late March 2020, an employee at Valero Energy Corp’s Meraux, Louisiana, refinery tested positive for the coronavirus.

We also remind that Valero Energy Corp restarted the small CDU at its Port Arthur refinery after repairing a valve on 25 September 2019. And in late October 2019, Valero Energy Corp shut the small crude distillation unit (CDU) at its Port Arthur refinery. The 75,000-bpd AVU 147 CDU was shut to repair a heat exchanger.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 383,760 tonnes in the first two month of 2020, up by 14% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments increased due to the increased capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market were 192,760 tonnes in January-February 2020, down by 6% year on year. Homopolymer PP accounted for the main decrease in imports.
MRC

MOSCOW (MRC) -- Marathon Petroleum has cut rates at its 26,000 b/d Gallup, New Mexico, plant to about 70%, reported S&P Global with reference to sources.

Thus, the nation's largest refiner cut rates across the board, the level at which fellow refiner HollyFrontier said it was running its inland and Rockies refineries, including its 110,000 b/d Navajo plant in Artesia, New Mexico.

Marathon Petroleum is the latest US refiner to cut runs to balance weak product demand with strong supply, temporarily shutting its New Mexico plant on April 15 as coronavirus pandemic destroys demand.

As MRC informed before, a portion of Marathon Petroleum Corp’s 363,000 barrel-per-day Carson refinery in California was shut in late February 2020, following a fire.

We also remind that the gasoline-producing unit at Marathon Petroleum Corp’s 585,000-barrel-per-day (bpd) Galveston Bay Refinery in Texas City, Texas, remained shut for six weeks for repairs in late Juney-early August 2019. The 140,000-bpd gasoline-producing Fluidic Catalytic Cracking Unit 3 (FCCU 3) was shut on June 29 2019 to repair a leak. The refinery’s 65,000 bpd reformer, called Ultraformer 4, was also shut down.

Propylene is the main feedstock for the production of polypropylene (PP).

According to MRC's ScanPlast report, PP shipments to the Russian market were 192,760 tonnes in January-February 2020, down by 6% year on year. Homopolymer PP accounted for the main decrease in imports.
MRC

MOSCOW (MRC) -- A growing number of oil tankers across Europe have been unable to unload their cargo over the past month as refining demand crashes, turning them into de facto floating storage, reported Reuters with reference to shipping data and trading sources.

European refineries have had to cut runs after measures put in place to contain the coronavirus outbreak crushed fuel demand.

More than 25 tankers with roughly 18 million barrels onboard were anchored near European ports, with most them already there for over a week as of Thursday, Refinitiv Eikon shipping data showed.

Many oil cargoes scheduled for late March or early April arrival were bought by refineries before the coronavirus pandemic paralysed business and social activity in Europe, traders said. But now the volumes are not needed.

"The refinery tells us they can’t take a cargo now. And it’s not very clear when they’ll be able to. It could take a month," a source with a major oil company said.

Storage facilities in Europe are filling up fast, with traders saying nearly all tanks are already rented and leaving no option for the refineries other than to float the cargo until it can be offloaded.

Full tankers are floating all over Europe, but the Mediterranean region, where refining run cuts have been higher, is harder hit.

Italy’s Trieste port, a Mediterranean oil hub connected to refineries in Austria, Germany and the Czech Republic by the Transalpine pipeline (TAL), has six vessels waiting to discharge, traders said and the shipping data showed.

“Delays in Trieste are above two weeks now for some cargoes. Some vessels discharge, but many are floating. And we see more coming”, a Mediterranean trader told Reuters. He added that the slower oil intake by refineries connected to TAL was disturbing pipeline operations.

TAL pipeline did not respond to a Reuters request for comment.

A number of cargoes floating outside other Italian ports including Milazzo, Vado Ligure and Genoa have been waiting for several weeks, four cargoes are facing weeks-long discharge delays in France’s Fos and delayed cargoes are also anchored around Turkey and Greece, the data shows.

“We’ve been waiting for...nine days,” a trading source selling to Mediterranean refineries told Reuters.

In northwest Europe the situation is generally better, traders said, but several vessels have been delayed in the last two weeks in the Antwerp-Rotterdam-Amsterdam hub and traders fear the number could rise.

“OPEC+ can try to establish market balance in the future, but it can’t solve the issue of a currently oversupplied physical market in Europe, it will be tough this month,” a trader with a major oil company told Reuters, referring to the grouping of OPEC countries and allies including Russia.

As MRC informed earlier, Royal Dutch Shell will start large-scale maintenance of its Pernis refinery in the Netherlands in mid-April, more than two weeks earlier than previously planned. The maintenance would mean the 404,000 barrel per day refinery, Europe’s largest, would be shut temporarily. The previous maintenance plan involved starting on May 4 and was expected to last through May and June.

We also reminad that Shell Singapore restarted its naphtha cracker in Bukom Island in early December 2019, following a two months maintenance shutdown since the beginning of October 2019. Thus, this cracker was taken off-stream for the turnaround on 1 October 2019. The cracker is able to produce 960,000 tons/year of ethylene and 550,000 tons/year of propylene.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 383,760 tonnes in the first two month of 2020, up by 14% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments increased due to the increased capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market were 192,760 tonnes in January-February 2020, down by 6% year on year. Homopolymer PP accounted for the main decrease in imports.
MRC