Citgo Lake Charles refinery sustains damage after major storm

MOSCOW (MRC) -- Citgo Lake Charles announced the refinery sustained damage as a result of Hurricane Laura, according to Hydrocarbonprocessing with reference to the company's statement.

The company released the following update.

"We are pleased to confirm that all of our employees are safe," said President and CEO Carlos Jorda, "and thanks to the advance preparation and hard work of our refinery employees, there wasn't any flaring or release of hydrocarbons resulting from this ferocious storm. Our refinery employees showed tremendous professionalism during this time. We commend them for their dedication."

The refinery sustained damage as a result of high winds. A detailed assessment, which will take a number of days to complete, is currently underway as are plans to repair the damage. CITGO cannot issue a restart schedule until the assessment is complete, but the company does not expect an immediate restart.

Jorda added, "Our thoughts are with everyone impacted by the storm. We are working with local authorities to support efforts to restore the region."

As MRC wrote earlier, in the first week of July, 2020, Citgo Petroleum Corp restarted the large gasoline-producing fluid catalytic cracker at its 167,500-barrel-per-day (bpd) Corpus Christi, Texas, refinery.

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

According to MRC's DataScope report, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.
MRC

MOSCOW (MRC) -- ExxonMobil Corp has begun restarting the small crude distillation unit (CDU) and gasoline-producing fluid catalytic cracker (FCC) at its 369,024 barrel-per-day (bpd) Beaumont, Texas, refinery, reported Reuters with reference to sources familiar with plant operations.

The 110,000-bpd Crude A CDU and 120,000-bpd FCC were shut on Tuesday ahead of the approach of Hurricane Laura to the US Gulf Coast.

Exxon is also restarting the 75,000-bpd PTR 3 catalytic reformer and 40,000-bpd diesel hydrotreater, sources said.

As MRC informed earlier, ExxonMobil has put off for a year work on its refinery expansion in Beaumont, Texas. The expansion project is now slated to be online sometime in 2023, versus the original 2022 proposal. Bloomberg first reported the delay. ExxonMobil declined to confirm the story, noting that it does not comment on the status of individual projects. The company "is evaluating all appropriate steps to significantly reduce capital and operating expenses in the near term as a result of market conditions caused by the COVID-19 pandemic and commodity price decreases," the company said in a statement.

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

According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.

ExxonMobil is the largest non-government owned company in the energy industry and produces about 3% of the world's oil and about 2% of the world's energy.
MRC

MOSCOW (MRC) -- Japan’s biggest oil refiner Eneos Holdings Inc will hasten its transformation into a supplier of low-carbon energy and materials as domestic oil demand drops more than expected due to the COVID-19 pandemic, reported Reuters with reference to new President Katsuyuki Ota's statement.

A quicker timeline comes amid a wider consolidation in Japan’s refining sector, which has been cutting capacity as it struggles to get business from a shrinking, ageing population that consumes less fuel because of more efficient vehicles.

Eneos, formerly JXTG, unveiled last year its long-term plan to transform with an assumption that domestic oil demand would halve by 2040, or fall 2% annually. It said in May 2020 it would spend 1.5 trillion yen (USD14 billion) in three years to March 2023 to drive the change.

But “Japan’s oil demand may not return to the levels we had anticipated before the pandemic”, said Ota, who became president in June. “We need to tackle various reforms faster” to develop growth businesses such as renewable energy and streamline the refinery structure, he added.

“It would not only mean shutting refineries down, but also turning them into chemical refineries or energy platforms for electric power, hydrogen and others.”

To this end, Eneos’ refineries in a petrochemical complex in Kashima, east of Tokyo, and Mizushima, western Japan, among others have potential, Ota said.

Eneos operates 11 refineries with 1.93 million barrels per day (bpd) capacity. Their run rate in April-June plunged to 68%, lowest since 2010, as the pandemic slammed demand.

It has already decided to stop refining at its 115,000 bpd Osaka refinery, and teamed up with Mitsubishi Chemical to strengthen petrochemical refining at their plants in Kashima.

The end of refining at Eneos’ Osaka plant will cut Japan’s overall capacity to just over 3.4 million bpd, from 5.94 million bpd in the 1980s.

To cope with sliding demand, four of Japan’s biggest oil companies have merged into two, Eneos and Idemitsu Kosan, in recent years.

Ota said further alliances would likely be with players in other industries such as electricity, gas and chemicals.

Eneos is still in talks with Vietnam National Petroleum Group (Petrolimex) to collaborate on refinery projects, and it eyes renewable energy projects in Australia to make CO2-free hydrogen, he said.

As MRC reported previously, Eneos Corporation restarted its fluid catalytic cracker (FCC) unit in Japan on 14 August, 2020. The company halted operations at this unit on July 28, 2020. Located at Sendai, Japan, the FCC unit has a propylene capacity of 100,000 mt/year.

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

According to MRC's DataScope report, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.

Japan's largest refiner JXTG Nippon Oil & Energy was renamed ENEOS Corporation on 25 June, 2020, as part of a wider re-organization of the parent company JXTG Holdings. The move, which also involved renaming the parent company to ENEOS Holdings upon approval at its annual shareholders meeting in June 2020, comes as it strives to be a more comprehensive energy and materials company under its 2040 vision announced in May, 2019. JXTG Holdings was formed as a result of a merger between JX Holdings and TonenGeneral in April 2017. This followed the establishment of JX Holdings as a result of the merger between Nippon Oil and Nippon Mining Holdings in April 2010.
MRC

MOSCOW (MRC) -- Energy companies last Friday continued efforts to restore operations at US Gulf Coast offshore platforms and refineries shut by Hurricane Laura as oil markets largely shrugged off the storm's impact, reported Reuters.

Some 300 offshore production facilities and half-dozen refineries halted ahead of a Category 4 storm that hit the coast of Louisiana early Thursday with winds of 150 mile per hour (240 kph). The destructive winds cut a narrow path through the area, sparing facilities not directly in its path.

However, repairs to Citgo Petroleum's s 418,000-barrel per day Lake Charles, Louisiana, plant that was on the storm's path could take four to six weeks, according to Mizuho Securities. The company did not immediately reply to a request for comment.

Motiva Enterprises, operator of the largest US refinery, and Valero Energy Corp on Friday began restarting their Port Arthur, Texas, refineries, said people familiar with plant operations.

US crude futures traded at USD43.10 per barrel early Friday, up six cents, and not far from its USD42.34 level a week ago. US gasoline futures were up two cents, but are up less than 2% from a week ago, before the storm.

ExxonMobil Corp said its 369,024 bpd Beaumont, Texas, refinery, about 50 miles (80 km) west of where the storm's landfall, required "minor repairs," a spokesman said, and the company was taking steps to restart once power and port operations were restored.

"Refiners may be reluctant to quickly return to production when the product they make is a money losing proposition," Robert Yawger, director of energy futures at Mizuho Securities, wrote on Friday.

The ports of Beaumont, Orange and Sabine, Texas, and Cameron and Lake Charles, Louisiana, remained closed on Friday, according to the US Coast Guard.

Houston, the United States' largest energy export port, restarted operations on Thursday and had nearly halved the list of 53 vessels waiting on Thursday to reenter the port.

One-way movement and other restrictions were in place on Friday at points along the Houston Ship Channel, according to the US Coast Guard.

As MRC informed before, Exxon Mobil Corp restored stable power to its 369,024-barrel-per-day (bpd) Beaumont, Texas, refinery as it prepares to begin restarting production units. Exxon’s Beaumont refinery and chemical plant were shut down last Tuesday as Hurricane Laura was menacing the southeast Texas coast. In Beaumont, the company also operates a cracker with a capacity of 830,000 mt of ethylene and 195,000 mt of proplyelen per year, low density polyethylene (LDPE) plant with a capacity of 236,000 mt per year and linear low density polyethylene (LLDPE) plant with a capacity of 727,000 tonnes per year.

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

According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.
MRC

MOSCOW (MRC) -- Demand for transportation fuels in the United States has fallen since mid-March because of the spread of coronavirus and efforts to mitigate it, according to Hydrocarbonprocessing.

Demand for motor gasoline and jet fuel in particular has fallen to its lowest levels in years. In response, U. refineries reduced their operations to adjust to changing levels of overall demand for petroleum products and made other changes that resulted in proportionately less production of motor gasoline and jet fuel and more production of distillate fuel oil.

Beginning in April, refiners responded to less demand for transportation fuels by decreasing overall refinery runs. Refinery runs were 22% lower in April 2020 compared with the full year 2019 average of 17.0 million barrels per day (b/d). In May, inputs to distillation units were similar, at 21% lower than the 2019 average. These reductions largely resembled the overall declines in demand for finished petroleum products in those months, as measured by product supplied.

Because demand for motor gasoline and jet fuel was disproportionately affected by travel restrictions and other measures that were in place throughout much of the United States starting in late March, refineries changed operations in ways that resulted in less production of motor gasoline and jet fuel and more production of distillate fuel oil.

These three products generally have the highest yield percentages from refineries. In 2019, refinery yields for motor gasoline averaged 46%; distillate fuel oil, 30%; and jet fuel, 10%. Refinery yields reflect the volumetric ratio of a finished product to refineries’ total inputs of crude oil and net inputs of unfinished oils.

In April, refinery yields for motor gasoline fell to 41%, and jet fuel yields fell to 5%. Both values were, at the time, the lowest in the US Energy Information Administration’s (EIA) monthly data series for refinery yields, which dates back to 1993. Refinery yields are zero-sum, meaning a decline in one product’s yield will mean an increase in another product’s or group of products’ yields.

In April, US distillate fuel oil yields increased to 38%, their highest value on record. In the US Gulf Coast region, distillate fuel oil yields surpassed those of gasoline for the first time, reaching 40% for distillate and 39% for gasoline. In May, as travel increased, motor gasoline demand increased, but jet fuel demand continued to fall.

Refineries can change their petroleum product output by running downstream units, or units that process the output from distillation units, differently. EIA surveys the amount of material (referred to as fresh feed) that runs through four types of downstream units (catalytic reformers, catalytic crackers, catalytic hydrocrackers and cokers). Of these four types, catalytic crackers tend to be associated with motor gasoline production, and these units were operated less than other downstream units in April.

The amount of fresh feed processed through catalytic crackers in April 2020 was 30% lower than its 2019 average of 4.7 million b/d. The amount of fresh feed processed through all other downstream units (reformers, hydrocrackers, and cokers) was 20% lower than the collective average of 6.9 million b/d in 2019.

Earlier this year, as MRC wrote previously, BP said the deadly coronavirus outbreak could cut global oil demand growth by 40 per cent in 2020, putting pressure on Opec producers and Russia to curb supplies to keep prices in check.

And in September 2019, six world's major petrochemical companies in Flanders, Belgium, North Rhine-Westphalia, Germany, and the Netherlands (Trilateral Region) announced the creation of a consortium to jointly investigate how naphtha or gas steam crackers could be operated using renewable electricity instead of fossil fuels. The Cracker of the Future consortium, which includes BASF, Borealis, BP, LyondellBasell, SABIC and Total, aims to produce base chemicals while also significantly reducing carbon emissions. The companies agreed to invest in R&D and knowledge sharing as they assess the possibility of transitioning their base chemical production to renewable electricity.

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

According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.
MRC