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Refinery closures a benefit to Magellan refined product systems

September 14/2020

MOSCOW (MRC) -- The closure of some U.S. oil refineries will have a net benefit to Magellan Midstream Partners LPs refined products pipeline systems, the companys chief executive officer said, said Hydrocarbonprocessing.

It creates the opportunity for more volume movement to replace what the refinery was putting into the market directly and it will create a longer-haul movement for existing volumes because they need to be transported from farther away, said CEO Mike Mears, speaking at the Barclays CEO Energy-Power conference.

Multiple North American oil refiners have announced closures, or plans to repurpose their plants, as global fuel demand remains lower after plummeting from stay-at-home orders caused by the coronavirus health crisis.

Crude oil benchmarks are trading near three-month lows as the pandemic continues, with coronavirus cases rising in parts of Europe, India and in areas of the United States.

HollyFrontiers Cheyenne, Wyoming refinery, which is being converted into a renewable diesel plant, and Marathon Petroleums shuttering Gallup, New Mexico, refinery are among the recently announced closures that would benefit Magellans system, Mears said. He said expects the trend to continue as the country moves away from traditional fuel sources in the coming decades.

"Its very hard to predict when and who, but it will happen over the course of time," Mears said. The Tulsa, Oklahoma-based midstream company, which also transports crude oil, said it has seen demand for gasoline linger at lower levels than predicted. Metropolitan areas have lagged behind rural communities, where fuel demand has come close to fully recovering, Mears said.

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.
Author:Anna Larionova
Tags:petroleum products, PP, PE, petrochemistry.
Category:General News
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