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Regulators probe Phillips 66 refinery work

September 17/2021

MOSCOW (MRC) -- California Bay Area regulators are investigating whether Phillips 66 failed to obtain necessary permits to produce renewable fuels at its oil refinery in Rodeo, according to an email reviewed by Reuters.

The refiner is undergoing a multi-step conversion of the plant to turn it into the world's largest producer of renewable fuels using feedstocks such as soybean oil and animal fats. California is the biggest gasoline market in the United States, but some of the state's 14 refineries are not always profitable. Several are looking to survive long term by cashing in on state incentives for production of lower-carbon fuels.

Phillips 66 started to process small volumes of soybean oil at the Rodeo refinery in the first quarter of 2021, the company said this year. The Bay Area Air Quality Management District (BAAQMD), which regulates stationary sources of air pollution in the region, is investigating whether the company modified its refinery without getting required additional permits, according to an email last week seen by Reuters.

Phillips 66 wants the Rodeo project to produce more than 800 million gallons of renewable diesel, renewable gasoline and sustainable jet fuel annually. That effort requires increased use of hydrogen, which can cause flaring events and refineries to malfunction, environmental groups say.

At least 10 groups, including the Natural Resources Defense Council, have complained to regulators about the additional emissions produced by using more hydrogen to treat feedstocks like soybean oil and animal tallow. The NRDC, in a July letter, argued that Phillips 66 did not request proper approval from the air quality management district to start processing that oil this year.

The management district, in its email this month to NRDC, said it will conduct an on-site investigation and engineering review of the Rodeo facility, the email said. Phillips 66 told Reuters it obtained the necessary permits to produce renewable diesel from an existing hydrotreater as part of a standalone flexibility project. The management district declined to comment.

As per MRC, Phillips 66's 255,600-barrel-per-day (bpd) Alliance, Louisiana, refinery faces a monthslong shutdown for repairs following flooding from Hurricane Ida, sources familiar with plant operations said. Phillips 66 said it was still assessing the refinery and a timeline for operational restarts was not available. The sources said the company plans to complete its damage assessment next week when floodwaters fully recede. So far, the company still plans to restart the refinery, which in August it announced was up for sale.

We remind that US-based Phillips 66 remains open to developing another ethane cracker for its Chevron Phillips Chemical (CP Chem) joint venture, the refiner's CEO said in March 2018.

Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,176,860 tonnes in the first half of 2021, up by 5% year on year. Shipments of exclusively low density polyethylene (LDPE) decreased. At the same time, PP shipments to the Russian market were 727,160 tonnes in the first six months of 2021, up by 31% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased. Supply of statistical copolymers of propylene (PP random copolymers) subsided.

Phillips 66 is a diversified energy manufacturing and logistics company. With a portfolio of Midstream, Chemicals, Refining, and Marketing and Specialties businesses, the company processes, transports, stores and markets fuels and products globally. Phillips 66 Partners, the companys master limited partnership, is integral to the portfolio. Headquartered in Houston, the company has 14,300 employees committed to safety and operating excellence. Phillips 66 had USD55 billion of assets as of Dec. 31, 2020.
Author:Anna Larionova
Tags:petroleum products, PP, PE, propylene, ethylene, neftegaz, petrochemistry, Phillips 66, Russia, USA.
Category:General News
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