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HollyFrontier plans to double capex in 2021, boost renewables spending

December 16/2020

MOSCOW (MRC) -- U.S. refiner HollyFrontier Corp has outlined plans to nearly double its capital expenditure in 2021, boosting its renewables investment and counting on an expected recovery in fuel demand after the coronavirus pandemic tanked consumption, said Hydrocarbonprocessing.

The refiner said it plans to spend between USD1.05 billion and USD1.15 billion next year, up from the USD475 million to USD550 million slated for 2020. This year the coronavirus pandemic slashed driving and sent the global economy into a tailspin, leading refiners to decrease output and figure out how to stay profitable in a year of little demand.

U.S. refiners utilization rate is still down more than 10 percentage points from the same time last year, Energy Information Administration data showed. Including its unit Holly Energy Partners LP, the company expects to spend between USD1.09 billion and USD1.21 billion in 2021.

The Dallas, Texas-based refiner said it would spend around $500 million to USD530 million on its renewables business next year, compared with USD130 million to USD145 million in 2020.

The coronavirus pandemic has decreased demand for traditional fuels like gasoline and diesel and in some instances has accelerated refiners plans to increase investments in renewable fuels. HollyFrontier was one of a handful of refiners earlier this year to announce a move toward renewable diesel, made from feedstock such as used cooking oil from fast-food restaurants.

With renewable diesel, refiners can take advantage of incentive programs, in particular Californias Low Carbon Fuel Standard, in which refiners can generate tradable credits with production of lower carbon-intensive fuels. Refiners can sell the credits to other fuel producers for profit.

Meanwhile, Democratic President-elect Joe Biden has pledged to move the United States to a zero-carbon emissions scheme by 2050, and legislation supporting demand for products like renewable diesel could garner bipartisan support.

Earlier this year, HollyFrontier converted a 52,000-barrel-per-day refinery in Cheyenne into a renewable diesel plant and said it plans to spend about USD650 million to USD750 million over the next 18 months to expand its renewables portfolio.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,760,950 tonnes in the first ten months of 2020, up by 3% year on year. Only high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments increased. At the same time, PP shipments to the Russian market reached 978,870 tonnes in  January-October 2020 (calculated using the formula: production minus exports plus imports minus producers' inventories as of 1 January, 2020). Supply of exclusively of PP random copolymer increased.


mrcplast.com
Author:Anna Larionova
Tags:petroleum products, crude oil, PP, PE, petrochemistry, Crude oil.
Category:General News
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