Marathon's Detroit refinery workers aim to work out contract without strike, union says

Teamsters, one of America's biggest unions, said it wants to negotiate a new contract with Marathon Petroleum for its members at the Detroit refinery without having to go on a strike, said Hydrocarbonprocessing.

There are 270-280 Teamsters working at the refinery in a variety of roles, according to the union, of which 273 workers voted to authorize a strike at the Detroit refinery on Thursday, with their most recent contract having expired last month.

"We don't have a date set for a strike, nor do we have a timeline if it comes to that. Our goal is to settle the contract in bargaining without having to go on strike," the Teamsters spokesperson said.

The refinery has a crude oil refining capacity of 140,000 barrels per day and processes sweet and heavy sour crude oils into products such as gasoline and distillates.

We remind, Marathon Petroleum Corp (MPC) reported net income of $1.5 bn for 4Q 2023, compared with net income of $3.3 bn for 4Q 2022. The 4Q 2023 adjusted earnings before interest, taxes, depreciation, and amortization (adjusted EBITDA) was $3.5 bn, compared with $5.8 bn for 4Q 2022. The decrease in net income and adjusted EBITDA from a year ago was driven by lower refining margins. In 4Q 2023, the company returned approximately $2.8 bn of capital to shareholders through $2.5 bn of share repurchases and $311 M of dividends.

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In early February, Royal Dutch Shell, a prominent Anglo-Dutch oil and gas company, declared force majeure concerning the supply of butadiene to its facility in Norco, Louisiana, USA, said Chemanalyst.

Market reports have confirmed the shutdown of a line with a substantial capacity of 265,000 tonnes of butadiene annually. This operational halt is anticipated to persist at least until the conclusion of February, with the precise cause of the disruption remaining undisclosed.

The declaration of force majeure signifies a contractual clause invoked by Shell, releasing the company from its obligations due to unforeseen and uncontrollable circumstances. For clients dependent on the Norco site for butadiene supply, this triggers a series of limitations and disruptions in the expected deliveries.

This recent force majeure event echoes a similar occurrence in the Shell portfolio, as on March 25, 2022, the company had previously announced force majeure for the butadiene supply at its Moerdijk facility in the Netherlands. The rationale behind this prior declaration was a technical issue, specifically a steam leak, affecting a 115,000-tonne per year line. This incident led to the incapacitation of a cracking unit, prompting Shell to invoke force majeure for the butadiene supply.

The declaration of force majeure in Norco, Louisiana, raises questions about the operational resilience and supply chain dynamics within Shell's butadiene production network. The unavailability of precise details regarding the cause of the disruption adds an element of uncertainty, leaving industry stakeholders and clients keenly awaiting further insights from the company.

As the force majeure situation unfolds, the affected clients at the Norco site must navigate through the challenges posed by restricted butadiene supply. This disruption may have implications for downstream industries dependent on butadiene, a key ingredient in the production of various synthetic rubbers and plastics.

Shell's proactive response to unforeseen technical challenges underscores the complexities inherent in the operation of petrochemical facilities. The company's commitment to transparency and effective communication with its clients will be pivotal in managing the impact of the force majeure on butadiene supply.

The force majeure declaration by Royal Dutch Shell for butadiene supply to its Norco facility in Louisiana introduces a level of uncertainty and disruption in the downstream petrochemical supply chain. The ongoing challenges faced by Shell, coupled with a recent similar incident in the Netherlands, highlight the intricate nature of operating facilities that are crucial to the global energy and chemical sectors. As industry participants await more information on the causes and resolutions of these disruptions, the resilience and adaptability of companies like Shell will be critical in navigating the complexities of the evolving petrochemical landscape.

We remind, in early February, Royal Dutch Shell, a prominent Anglo-Dutch oil and gas company, declared force majeure concerning the supply of butadiene to its facility in Norco, Louisiana, USA. Market reports have confirmed the shutdown of a line with a substantial capacity of 265,000 tonnes of butadiene annually. This operational halt is anticipated to persist at least until the conclusion of February, with the precise cause of the disruption remaining undisclosed.

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MEGlobal announced that its Asian Contract Price (ACP) for monoethylene glycol (MEG) will be US$850/MT CFR Asian main ports for arrival March 2024, said the company.

The March 2024 ACP reflects the short-term supply/demand situation in the Asian market.

We remind, MEGlobal has nominated its February 2024 monoethylene glycol (MEG) Asian Contract Price (ACP) at $850/tonne, USD10/tonne higher than its January ACP, said the company. The price is on a CFR (cost & freight) Asia basis.
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Eni’s chemical business reported an adjusted operating loss of €237m in the fourth quarter of last year on lower demand across all business segments, the Italian producer said.

The poor demand was driven by poor macroeconomic conditions and higher production costs, "which reduced the competitiveness of Versalis productions with respect to US and Asian players in an oversupplied market," the company said in a statement.

Sales of chemical products fell 3% year on year to 800,000 tonnes in the fourth quarter of last year.

The average plant utilization rate for the chemicals business stood at 48% in the fourth quarter, up from the 44% in the same period of 2022.

Eni's group net group profit fell by 76% year on year to €149m in the fourth quarter. For the full year, group net profit fell by 66% year on year to €4.75bn.

We remind, Eni, the renowned oil giant based in Italy, has officially announced its strategic initiative to convert the longstanding Livorno refinery into a bio-refinery, marking a pivotal shift in its operational focus towards sustainable energy solutions.

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Eneos, a prominent player in the Japanese petrochemical industry and a significant entity within Eneos Holding, is gearing up for a planned maintenance shutdown of butadiene production at the Kawasaki Line in March, said Chemanalyst.

This particular production facility, equipped with a substantial capacity of 105 thousand tons of butadiene, is slated for a temporary cessation until May to facilitate essential maintenance and extensive repairs.

Previous reports shed light on Eneos, formerly identified as JXTG Nippon Oil & Energy, and its affiliation with Eneos Holding. The company resumed butadiene production in Yokkaichi, Japan, on November 7, 2023, after facing an unexpected interruption in October due to an unscheduled repair. The affected production line, capable of yielding 105 thousand tons of butadiene, experienced downtime owing to a breakdown at the on-site cracking unit.

Operations resumed only after the successful restoration of the cracker. During this period, the butadiene production line at the same facility, boasting a capacity of 60,000 tonnes per year, continued its routine operations.

Eneos Holding, previously recognized as JXTG, holds the distinction of being Japan's largest oil company, engaging in a spectrum of activities encompassing the exploration, import, and refining of crude oil. The company plays a significant role in the production and distribution of diverse petroleum products, including butadiene, ethylene, propylene, styrene, paraxylene, orthoxylene, as well as fuels and lubricants. Eneos Holding has been expanding its production capacity globally in recent years, establishing its presence in various countries. The products manufactured by the company bear the distinctive ENEOS brand.

The corporate trajectory of Eneos Holding involves the merger of two Japanese entities, JX Holding and Tonen General, culminating in the formation of JXTG in April 2017. Subsequently, on June 25, 2020, JXTG underwent a transformative name change to Eneos Holdings, with its subsidiary, JXTG Nippon Oil & Energy, following suit and adopting the name Eneos.

The planned maintenance shutdown of butadiene production at the Kawasaki Line underscores Eneos' commitment to ensuring the efficient and reliable operation of its facilities. This strategic approach to maintenance aligns with industry standards, providing an avenue for optimizing production processes and enhancing overall operational efficiency. As a pivotal participant in the petrochemical landscape, Eneos continues to navigate the challenges and demands of the industry, steadfast in its commitment to upholding the highest standards of safety, reliability, and sustainability. The company's proactive measures in maintenance reflect its dedication to delivering quality products while prioritizing the well-being of its operations and the broader environment.

We remind, in early February, Royal Dutch Shell, a prominent Anglo-Dutch oil and gas company, declared force majeure concerning the supply of butadiene to its facility in Norco, Louisiana, USA. Market reports have confirmed the shutdown of a line with a substantial capacity of 265,000 tonnes of butadiene annually. This operational halt is anticipated to persist at least until the conclusion of February, with the precise cause of the disruption remaining undisclosed.

mrchub.com