Refinery UPDATE
June 2009
McIlvaine Company
TABLE OF CONTENTS
$3.4 Bln Garyville Expansion to Create U.S. Fourth Largest Refinery
Tesoro Begins 166,000 bpd Martinez Refinery Unit Overhauls
Lyondell Starts up Houston Refinery Unit-filing
Chevron may Halt Production at Hawaii Refinery
Wyoming to Investigate Costly Sinclair Refinery Spill
ConocoPhillips to Begin Restart of Several Borger Units
Exxon Says Baton Rouge Back to Normal Operations
Sunoco to Pay State $762,150 for Air Quality Violations Penalties at Marcus Hook Refinery
House Energy Dems to Give Most CO2 Credits Away
Flying J Expects Sale of Bakersfield Big West Refinery this Summer
Bingaman Introduces Bill for Refined Products Stockpile
House Panel Passes Limit on Greenhouse-Gas Emissions
U.S. Refiners Unhappy over Proposed Allocation of CO2 Credits
Sunoco Says Marcus Hook Refinery FCC Down
Dow Jones Table of Asia Refinery Maintenance/Shutdown Schedules for Late-2008/2009
China Plans to Eliminate Small Refining Units By 2011
Sinopec's Fujian JV Refinery at Final Stage before Operations
PetroChina Views Low Oil Price as Overseas Opportunity to Expand
Kuwait, China Agree to Terms for $9 Bln Guangdong Refinery
New PetroChina Refineries to Run Venezuelan Crude
Sinopec Refineries Showing China Gearing Up for Recovery
Indian Oil Ties up $3 Bln Debt for Refinery
Pipeline Blast in India’s IOC Digboi Refinery
Japan’s Fuji Oil to Boost Asphalt-Cracking Unit Capacity
Philippine’s Petron to Raise $528 Mln to Fund Refinery Expansion
Italy's ERG to Boost Diesel Share in Output by 2012 and Invest in its Coastal Refining Unit
Poland’s PKN Orlen Reports Loss as Oil Falls and Zloty Weakens
Samsung Engineering Wins $1.2 Bln Algeria Refinery Modernizing Deal
Uganda Steps Up Efforts for Funds and Investment Partners for Petroleum Refinery
TNK-BP Completes Russia’s Ryazan Refinery Overhaul
Ukraine Invites Libya to Build Oil Refinery, Petrol Stations
Cat Cracker Complex under Construction at Iranian Refinery
Saudi Aramco’s Riyadh Refinery Gets Makeover
Saudi Aramco, Total may Delay Jubail JV Deals Award
Marathon Oil Corp.'s $3.4 billion effort is to make its Garyville, LA oil refinery among the biggest in the nation.
Expected to be completed later this year, the project will expand the 256,000-barrel-per-day refinery, now the country's 18th largest, to a facility with a crude oil processing capacity of 436,000 barrels per day, the fourth biggest.
With it, output will jump from 12 million gallons per day of gasoline, diesel and other fuels to 19.5 million gallons per day.
The expansion is moving forward despite an economic crisis that has prompted rivals including Motiva, Valero Energy, ConocoPhillips and even Marathon itself to delay or cancel refinery upgrades or additions.
But it will come onstream at a time when declining demand for petroleum fuels, rising biofuel requirements and pending greenhouse gas legislation are creating uncertainty for the industry.
Analysts have even begun to suggest that U.S. gasoline consumption has reached its peak and that smaller refineries may be forced to close.
Yet, despite the headwinds, Marathon appears to have a sound strategy in Garyville, said Alan Gelder, a refining analyst with Wood Mackenzie, a British-based consultancy.
By maximizing output of diesel and other so-called distillates that are expected to be in higher demand than gasoline in coming years, it is aligning the facility well to market trends, he said.
"If it was going to be a gasoline machine, it would be entering a tough market making the wrong stuff," he said.
In 2008, U.S. gasoline demand fell 3.3 percent, its first annual decline since 1991, and the nation's refinery utilization slipped to its lowest point since 1988, according to the American Petroleum Institute.
The drop came after $4-a-gallon prices last summer shocked Americans into pumping less gasoline, more ethanol replaced gasoline in the nation's fuel supply and the recession shrank consumer spending. And both fuel demand and refinery utilization have remained weak this year.
But Marathon officials stressed that the company's Garyville project has been nearly six years in the making and is not based on current economic conditions.
"We're investing for the next 30 years," Rich Bedell, Marathon's refining division manager, said.
As such, the Houston-based oil company has configured the expansion to produce the maximum amount of higher-profit diesel and other distillates, or about half of the new plant's output. Though all of the refinery's fuels stay in the U.S. today, the new plant will also be set up to export fuel to Europe, South America or elsewhere.
"If the demand isn't here in the U.S., we can put it on ships and send it out to where it is," Bedell said.
The idea of U.S. refineries exporting fuel overseas may seem contradictory for an industry that in recent years blamed higher gasoline prices in part on a shortage of domestic refining capacity. But the Marathon expansion is another sign of the shift toward a more global trade for fuels.
However the economics shake out in coming years, Marathon is focused on the more immediate task of completing the Garyville project on budget and on time.
The company, which in 2006 approved a $3.2 billion budget for the project, raised it to $3.4 billion last year amid rising labor and material costs. But it has not deviated from its fourth quarter 2009 target date for opening.
In some cases, that has meant almost the equivalent of moving mountains. At one point, Marathon had to spend $1.5 million to build a bridge to deliver a massive vacuum tower, arriving from Belgium through the Port of New Orleans, to the plant, which is situated by the Mississippi River. Resembling a space shuttle booster, the tower was 750 tons, 172 feet long and 42 feet in diameter. Another crude unit was so big it had to be delivered in sections by one hundred thirty-five 18-wheelers.
To date, the project is 80 percent done, and more than 8,000 workers are rushing to finish by year-end.
Tesoro Corp began overhauls of a hydrocracking unit and reformer at its 166,000 barrel-per-day (bpd) San Francisco Bay area refinery in Martinez, California, a company spokesman said on May 11.
The work is expected to finish in late June, Tesoro spokesman Lynn Westfall said in a statement.
LyondellBasell ACCEIN.UL started up a depropanizer tower in the gasoline-producing fluidic catalytic cracking unit at its 270,600-barrel-per-day (bpd) Houston refinery, according to a notice filed with state pollution regulators.
A Lyondell spokesman declined to discuss operations at the refinery.
Lyondell began starting up the depropanizer tower on May 8, according to the notice filed with the Texas Commission on Environmental Quality.
Chevron, the owner of one of two oil refineries in Hawaii is conducting a study to determine whether to cease refining operations at Campbell Industrial Park.
Chevron Corp. will decide if the oil refinery should be converted into a terminal for distribution of products shipped to Oahu.
Chevron says it's simply reviewing how best to use its facilities in a changing market. Company spokesman Al Chee says just like any other business, Chevron must constantly be aware of the market and shape its actions accordingly.
Tesoro Corp. operates the only other refinery in Hawaii.
Aloha Petroleum, Mid Pac Petroleum and some other companies import refined products.
The Sinclair oil refinery east of Rawlins will submit a report to state regulators detailing the cause, containment effort and clean up plan following a May 3 spill of some 3 million gallons of "gasoline-grade" liquid, according to officials.
No one was hurt in the incident, according to Sinclair.
Wyoming Department of Environmental Quality officials said the agency will conduct an onsite investigation of the spill sometime after it receives the report.
"It will have the cause of the spill release, actions to contain the spill, clean up action to date, and steps to prevent this from happening again," said DEQ spokesman Keith Guille. "Obviously, we need to look into whether any corrective action is needed."
The fluid reportedly spilled from a storage tank and was contained within secondary dikes on the refinery property. In a media release, Sinclair said emergency response activities were promptly initiated. The company did not provide a cause for the spill.
The refinery was at half-capacity for much of April while crews made repairs related to a March 29 fire that forced the shutdown of one catalytic cracking unit and other related facilities.
Shortly after the spill, Sinclair officials were not available for comment, and it was unclear whether the refinery was still producing and at what capacity.
Carl Anderson, DEQ's hazardous waste program manager, said the refinery already had an updated spill response and remediation plan in place because it is participating in a "corrective action" with DEQ for historic spills dating back to the 1980s.
"So we had approved a spill remediation plan, and we've had that in place for some time now," Anderson said.
DEQ and Sinclair are now in the process of reaching decisions about individual areas of the refinery and how they will be cleaned up. DEQ will likely address this most recent spill in the ongoing corrective action plan.
ConocoPhillips said in an environmental filing on May 13 it plans to restart several units at its124,000 barrel-per-day Borger, TX refinery following maintenance, between May 13-23.
"Several units (50, 51, 9, 10, and 19) are scheduled for start-up on between 5/13/09 and 5/23/09. During the start-up there may be periods of high emissions," Conoco said in the filing with the Texas Commission on Environmental Quality.
It identified the units by their numbers only.
In a separate filing, Conoco said that Unit 34, a sulfur recovery unit at Borger, is scheduled for maintenance May 13 for equipment change of service.
Several units were shut at Borger around the beginning of May for maintenance work that the company said at the time would last up to a month on some units.
Company officials were not immediately available for comment.
Exxon Mobil Corp said May 14 its 503,000 barrel-per-day Baton Rouge, Louisiana refinery returned to normal operations after repairs to a gasoline-making fluid catalytic cracker.
"It is not Exxon Mobil's practice to discuss operational details such as the production rates of individual units. However, the refinery has returned to normal operations," spokesman Kevin Allexon said.
"Sunoco emitted nearly twice the permitted limit of particulate matter and an average of four times the permitted level of ammonia from a unit at this facility for more than one year," Feola said. "We take these violations very seriously, and are working with Sunoco to correct the problems."
Testing conducted by Sunoco in January 2006 revealed elevated particulate levels from a fluid catalytic cracking unit. Follow-up testing in June and October 2007 showed inconsistency in the unit's particulate emissions -- passing one day only to fail the next. The cracking unit also was found to be emitting ammonia at an average concentration four times the permitted level.
Although a 2006 federal consent decree requires Sunoco to install a wet gas scrubber unit by the end of June 2013 to help control particulate matter, the company is required to comply with the existing particulate standard in the meantime.
Other problems noted include the release of carbon monoxide and volatile organic compounds, reporting violations, failure to meet testing requirements, and storage tank and visible emission violations.
Under terms of the agreement, Sunoco must test the cracking unit for particulate matter emissions by July 30 of each year until the new scrubber is installed. The company also has agreed to a $500 per day stipulated penalty if it fails to meet ongoing testing deadlines or if it fails to pay the $762,150 civil penalty to the state's Clean Air Fund within 30 days.
Sunoco paid $123,730 in penalties and emission fees in October 2005, settling violations noted during a facility-wide compliance evaluation conducted by DEP beginning in May 2003. The company also paid an $825,236 penalty in May 2005 for violations noted earlier that year.
In June 2006, Sunoco entered into a federal consent decree with the U.S. Environmental Protection Agency, Pennsylvania DEP, and other city and state environmental agencies for violations at the Marcus Hook refinery as well as the company's refineries in Philadelphia; Tulsa, Oklahoma; and Toledo, Ohio.
House Democratic energy leadership is planning to initially give away 85% of the greenhouse gas emission credits - the right to emit - as part of an agreement to win moderate support for a major climate and energy bill.
By giving away most of the credits, instead of auctioning them, Reps. Henry Waxman, D-Calif., and Ed Markey, D-Mass., increase the likelihood of the legislation passing in the House by meeting lawmakers' concerns for emission-intense industries and protecting low-income households from energy price rises.
That's in contrast to U.S. President Barack Obama's push for a 100% auction of the credits, a trillion-dollar revenue raiser in the Administration's budget for the years ahead. Many in the industry are likely to applaud the deal, but some environmental organizations say it won't reduce emissions enough to prevent what many scientists say is a trend toward global warming.
The proposal, negotiated behind closed doors over the past several weeks, has won the backing of key moderate Democrats on the energy panel that Waxman needs to vote the controversial bill out of committee.
Democrats such as a coal-state Rep. Rick Boucher, D-Va. and Rep. G.K. Butterfield, D-N.C., had resisted supporting the package, but were won over after tough late-night horse trading in recent days.
The panel chairman is aiming to vote the bill out of his committee so that the full House can consider it before the August break. While winning allowances for industry will be seen by some as a victory for the energy and emission-intense industries - and forging an agreement a significant achievement for Waxman - the toughest political hurdle is expected in the Senate.
Few Capitol Hill watchers believe a climate bill can pass this year in the Senate, but if the deal passes through the committee, it could alter prospects in the other chamber. The Senate is seen has having a stronger moderate base than in the House, though with many of the same concerns.
A sign of the political middle-road charted for the bill, both the oil industry and some environmental groups oppose the bill.
While Greenpeace said it couldn't back the bill because it wouldn't meet climate cut targets, American Petroleum Institute President Jack Gerard have "a disproportionate adverse impact on consumers and producers" of gasoline, diesel, jet fuel and other products.
Saying allocations were distributed disproportionally, "Those who drive, fly or take the bus or train to work will shoulder a disproportionate burden and this must be rectified," Gerard said in a statement.
Still, success in the House would give the president bargaining leverage at a major international climate summit later this year.
According to a document posted on the Energy and Commerce Committee's web site, 35% of the credits will be allocated to the power industry. While most of that will be distributed through the local distribution companies to protect against windfall profits, 5% will go to merchant coal generators.
Energy-intense industries such as the cement, glass and paper manufacturing sectors will get 15%, 9% for the natural gas sector, 2% for refiners, and 1.5% for home heating oil. Most of those emission allocations will phase out between 2026 and 2030.
Another 15% will be auctioned to help low-income households with expected energy bill price rises, with the revenue redistributed to the sector.
Daniel Weiss, Director of Climate Strategy at the Center for American Progress Action Fund, said the allocations would smooth the clean energy transition for middle and low income families, heavy manufacturing, and auto companies.
"Meanwhile, the 2020 limit on greenhouse gas pollution would be comparable to taking 500 million cars off the road - half of all cars worldwide in 2020," Weiss said.
As part of the deal, Waxman relaxed the near-term target for greenhouse gas reductions, as well as the goal for renewable energy and efficiency mandates. The President and the Committee Chairman had originally pushed for a 25% requirement by 2025. In the face of strong bi-partisan opposition, the chairman cut the requirement to 20% by 2020, with governors able to reduce the renewable portion if they increase energy efficiency.
States will also initially receive 10% of the greenhouse gas allowances for investments in renewable energy and energy efficiency, with that percentage decreasing over time.
The remaining allocations will be divided between the carbon capture and storage industry, the auto sector, clean energy research and development, projects to prevent de-forestation and funding to help countries adapt to climate changes in the future.
The owner of Big West refinery in Bakersfield, Calif., expects to sell the plant this summer, according to an internal memo that some suggest may be overly optimistic.
The May 4 memo, said to have been issued by top management at Utah-based Flying J Inc., states that interest in the refinery "has been good, but there is much work to do," in part because of the company's cumbersome bankruptcy case.
Court papers filed by Flying J indicate the company hoped to sell the refinery within six months of the start of the marketing period, which began in early April, said attorney John W. Kim, who works for the Los Angeles law firm of Nossaman LLP and represents a number of creditors in Flying J's bankruptcy case. That would translate to a sale this fall.
But it looks unlikely that the sale will take place by the end of this year, Kim said in an interview late last month.
A spokesman for Flying J said the company has made no announcement about the timing of Big West's sale. He was unable to provide further information.
At the refinery meeting, Huhn said managers referred to a list of 113 groups that have expressed interest in the refinery. That list has been narrowed to about 30 "serious" investors, he said.
One outfit to make the short list, Huhn said, is Alon, a multibillion-dollar Israeli company whose U.S. subsidiary owns and operates refineries in Long Beach and Paramount, as well as Texas and Oregon. Alon also sells gasoline at stations across the South, Southwest and Western United States.
Alon representatives recently spent a day touring the plant with top managers, Huhn said.
Big West ceased refining operations in January after it was unable to secure a steady supply of crude from oil producers skittish about Flying J's Dec. 22 Chapter 11 bankruptcy filing. More than 175 plant workers have been laid off in the wake of the bankruptcy filing.
As part of the energy legislation that the Senate Energy Committee is developing, Sen. Jeff Bingaman, D-N.M., has introduced S. 967, the Strategic Petroleum Reserve Modernization Act of 2009 to create a refined petroleum product reserve that would contain at least 30 million barrels of transportation fuels like gasoline and diesel. The new reserve will be part of the nation's 1-billion-barrel Strategic Petroleum Reserve (SPR).
Bingaman, chairman of the Energy Committee, said: "Our domestic oil market has changed and we must have a more sophisticated strategy to react to disruptions in our oil supply. While we are more dependent on imported crude oil than ever before, we also import more refined petroleum products. When U.S. refinery operations are disrupted, imported products from other countries are required to fill the gap. This legislation would provide a needed cushion while damaged infrastructure is repaired."
In the 1970s, when SPR was set up, the U.S. was vulnerable to supply disruptions, as the nation was a significant and growing importer of crude oil. However, the country then had plentiful refining capacity and did not import large volumes of refined products such as gasoline and diesel. Therefore, SPR managers decided to stockpile only crude oil.
Since then, history has shown that severe weather, not geopolitical events, is the most frequent cause of supply interruptions. For example, Hurricanes Gustav and Ike last September halted much of our nation's refining operations, and that resulted in fuel shortages in parts of the U.S. (mainly in the Southeast). The SPR was of limited use in easing these outages because the refineries affected by the storms were not able to process the crude oil from the reserve into fuels.
A bill to create the first national limit on greenhouse-gas emissions was approved by a House committee May 21 after a week of late-night debates that cemented the shift of climate change from rhetorical jousting to a subject of serious, if messy, Washington policymaking.
The legislation would create a cap-and-trade system: Over the next decades, power plants, oil refineries and manufacturers would be required to obtain allowances for the pollution they emit. Those who need more or less could turn to a Wall-Street-like market in the allowances.
The 33 to 25 vote was a major victory for House Democrats, who had softened and jury-rigged the bill to reassure manufacturers and utilities and members of their own party from the South and Midwest that they would not suffer greatly.
"I don't think it's too much of an exaggeration to say that this is a turning point, in the history of the United States and [its] energy sources," said Rep. Edward J. Markey (D-Mass.), one of the bill's chief sponsors. "This is a day we've waited a long time on."
The vote gives this bill more momentum than any previous legislation to reduce greenhouse gases, but it faces hurdles. In the House, Rep. Collin C. Peterson (D-Minn.) has said he wants to take up the bill in his Agriculture Committee, seeking to change rules for those who raise corn for ethanol. The Senate has shot down previous cap-and-trade plans.
President Obama supports the bill, an aide said, though some provisions are weaker than what he advocated during the presidential campaign. In particular, Obama called for all pollution credits to be auctioned off by the government, but the House bill would give away about 85 percent of them.
After that shift and a weakening of the bill's demands for new renewable electricity, the environmental group Greenpeace withdrew its support. But many environmental activists have accepted the changes.
"None of the strength of the bill is affected by that," said Fred Krupp, president of the Environmental Defense Fund.
The bill, aiming to remake the way the United States uses energy, employs vast incentives and slow-growing punishments to shift from high-polluting fossil fuels to new sources such as wind, solar power and plant-based fuels. The bill calls for a 17 percent reduction in greenhouse-gas emissions by 2020 and an 83 percent reduction by 2050.
Only a small segment of businesses, including utilities, factories and refineries that produce gasoline and other fuels, would have to buy pollution allowances. But because the United States depends heavily on fossil fuels, the new costs would probably be spread through the economy.
The Environmental Protection Agency estimated that the overall impact would be too small to significantly dampen economic growth. But the conservative Heritage Foundation has said it might cost a family $4,300 per year in a few decades.
"The actual paperwork isn't done at the retail level," said David Kreutzer, a climate policy specialist at the Heritage Foundation. "But it's going to jack the cost up, and they will have to pass the costs on to consumers."
The debate in the House Energy and Commerce Committee was, in essence, over before the first gavel. Chairman Henry A. Waxman (D-Calif.) had won over a majority by offering Democrats from heavy-polluting states promises to distribute the credits free and lower the bill's target for cutting emissions by 2020.
Debates still ended up lasting until nearly midnight on May 19 and May 20. Republicans submitted amendments allowing the bill to be nullified if too many jobs are lost, if electricity prices go too high, or if China and India do not rein in their emissions. All failed.
An effort by U.S. lawmakers to lower the cost of curbing greenhouse-gas emissions by freely distributing allowances among several industries has left oil refiners feeling short-changed.
The House Energy and Commerce Committee is currently reviewing a bill sponsored by Reps. Henry Waxman, D-Calif., and Ed Markey, D-Mass., that would give refiners 2% of the total free emissions credits allotted with the institution of a decreasing cap on carbon-dioxide emissions.
That would force refiners, which along with the automobiles they fuel account for more than a third of total U.S. CO2 emissions, to shell out significant amounts of money in order to pay for the carbon dioxide that they release into the atmosphere. By comparison, the electricity sector, which accounts for about 40% of U.S. CO2 emissions, would receive 35% of the allowances, with other energy-intensive industries such as cement, glass and paper manufacturers getting 15% of the free permits.
"The distribution of these credits is out of line with the actual distribution of emissions," said Amy Myers Jaffe, associate director of the Rice University Energy Program.
Refiners, already under pressure from falling U.S. demand for gasoline amid the worst recession in decades, say the bill will hurt consumers, lead to refinery closures and increase foreign imports from countries that don't have to abide by stringent CO2-emissions regulations. Stricter fuel standards unveiled recently are expected to further depress long-term demand.
"We expect our exposure from foreign refiners to increase in the future in large part due to several very large refineries being constructed overseas that are targeting the U.S. market," said ConocoPhillips (COP), the third-largest U.S. oil company by market value, in a press release protesting the bill.
The U.S. already receives fuel imports from Europe and Asia with more expected to arrive as Reliance Petroleum Ltd. ramps up its $6 billion refinery in Jamnagar, India, said Charles Drevna, president of the National Petrochemical Refiners Association.
"I think it's tilting the playing field," said Mike Jennings, chief executive of Frontier Oil Corp. (FTO), which owns two refineries. "It's not fair, in my opinion, to single out one industry."
Under the proposed "cap-and-trade" system, an ever-decreasing number of CO2-emission permits would be available to companies. Polluters would be able to buy more permits from companies with extra allowances. Refiners will be responsible for buying credits based on the emissions from their smoke stacks and what is emitted by drivers who use the fuel they produce.
For a company like Frontier, it likely means having to buy about $450 million worth of credits a year, which would be a huge capital investment considering the company earned about $80 million last year, Jennings said.
In order to cover the cost, Frontier would first attempt to pass it onto consumers by charging more for fuel. The cost of a gallon of gasoline could increase by 20 to 30 cents, though reduced demand could make it difficult to charge more, Jennings said.
Reuters has reported that U.S. refiner Sunoco confirmed that crude rates at its 178,000 barrel-per-day refinery in Marcus Hook, Pennsylvania remained down May 21.
Sunoco shut down the gasoline-making fluid catalytic cracker at the Marcus Hook refinery after a fire in an ethylene plant late May 17 halted operations.
Sunoco planed to replace lost production by increasing its output at two refineries in Philadelphia and New Jersey with rates of 335,000 bpd and 145,000 bpd, respectively, Reuters said.
Thomas Golembeski, a Sunoco spokesman did not reveal when the refiner planned to restart production.
The following table lists maintenance schedules and outages for oil refineries in Asia.
Country Company Location Unit(B/D) Period/Duration
Australia Shell Clyde Whole Refinery Nov 2008-TBA
(86,000)
Australia Caltex Australia
Lytton Reformer Sep (30 days)
(N/A)
Australia Caltex Australia
Lytton No. 1 DHT Sep (30 days)
(N/A)
Australia Caltex Australia
Kurnell RFCC March-Early/Late April
(N/A)
India Essar Oil Vadinar Whole Refinery April 16; 15-17 days
(210,000)
India CPCL Chennai No. 3 CDU Sep; 60 days
(60,000)
India BPCL Mumbai CDU/VDU March 7; 30 days
(120,000)
India BPCL Kochi CDU March 30; 45 days
(60,000)
India MRPL Mangalore Hydrocracker May; 25-30 days
(24,000)
India IOC Panipat CDU September; 22 days
(120,000)
CDU
(120,000) March 2010;40-50 day Indonesia Pertamina Cilacap CDU March (whole month;
(230,000) delayed indefinitely)
Indonesia Pertamina Balikpapan CDU Oct (20-25 days)
(60,000)
Japan Idemitsu Tokuyama CDU March 4-10
(120,000)
Japan Nippon Oil Osaka CDU March 8-Apr 1
(115,000)
Japan Japan Energy Mizushima No.2 CDU March 12-May 9
(95,200)
Japan Idemitsu Chiba CDU April-May
(220,000)
Japan Showa Shell Mizue CDU Early April-Early May
(65,000)
Japan Cosmo Oil Chiba No.2 CDU April 25-Jun 20
(130,000)
Japan Fuji Oil Sodegaura CDU May 6-Jun 20
(140,000)
Japan Nansei Sekiyu Nishihara CDU Mid-May, 1-2
(100,000) Weeks
Japan Showa Shell Yokkaichi No. 3 CDU Late May-Late July
(135,000)
Japan Cosmo Oil Sakaide No. 1 CDU Jun 10-Aug 4
(140,000)
Japan Idemitsu Hokkaido CDU Jun-July
(140,000)
Japan Cosmo Oil Sakai No. 1 CDU Aug 22-Nov 15
(80,000)
Japan Cosmo Oil Chiba No. 1 CDU Sep 11-Nov 12
(110,000)
Japan Seibu Oil Yamaguchi Desulfurizer Sep
(51,500)
Japan Seibu Oil Yamaguchi Reformer Sep
(19,000)
Japan Cosmo Oil Yokkaichi No.6 CDU Oct 2-Nov 28
(85,000)
Japan Idemitsu Aichi CDU Oct-Nov
(160,000)
Singapore Exxon Mobil Jurong Several March 1, six weeks
units
S Korea GS Caltex Yeosu RFCC Feb 6-March 20
(90,000)
HDS Feb 6-March 20
(30,000)
S Korea GS Caltex Yeosu No. 4 CDU May 7-June 5-10
(300,000)
S Korea GS Caltex Yeosu hydrocracker May 7-June 5-10
(60,000)
S Korea S-Oil Onsan No. 1 CDU April 1-20
(90,000)
S Korea S-Oil Onsan No. 1 RHDS April 1-27
(53,000)
S Korea S-Oil Onsan No. 2 RHDS October, 26 days
(53,000)
S Korea SK Energy Ulsan No. 2 CDU Jun 3-30
(110,000)
S Korea SK Energy Ulsan Hydrocracker April 2-27
(30,000)
S Korea SK Energy Ulsan No. 1 CDU Early April-TBA
(60,000)
Taiwan CPC Dalin No. 5 Reformer March 5-June 8
(30,000)
Taiwan CPC Dalin ROC Mid June-Mid Aug
(25,000)
Taiwan CPC Dalin No. 6 Reformer Mid July, 2 to 3
(30,000) months
Taiwan CPC Taoyuan No. 1 RDS April 25-June 10
(30,000)
Taiwan CPC Taoyuan No. 2 RDS Late Jan-March 8
(15,000)
Taiwan CPC Taoyuan VDU April 19-May 17
(36,000)
Taiwan CPC Taoyuan VGH April 19-Aug 1
(20,000)
Taiwan CPC Kaohsiung CDU June 4-July 2
(100,000)
Taiwan Formosa Mailiao No. 1 RDS March 1-April 7-9
(80,000)
Taiwan Formosa Mailiao No. 2 RFCC April 11-April 18-
(84,000) 21
Taiwan Formosa Mailiao No. 2 RDS Early Sep, 35-40
(80,000) days
Key:
TBA - To be announced
CDU - Crude distillation unit
DHT - Diesel Hydrotreater
FCC - Fluid catalytic cracker
HDS - Hydrodesulfurizer
RFCC - Residual fluid catalytic cracker
RDS - Residual desulfurizer
RHDS - Residue hydro desulfurizer
ROC - Residue Oil Cracker
VDU - Vacuum distillation unit
VGH - Vacuum gasoil hydrotreater
VRDS - Vacuum residual desulfurizer
China aims to eliminate all small refining facilities with an annual crude processing capacity of or below 1 million metric tons a year by 2011, the National Development and Reform Commission said over the May 2 weekend.
In addition, small refineries with 1 million-2 million tons of refining capacity will also be gradually closed down by then, it said in a statement.
The government will also prohibit new refining projects for bitumen production or heavy oil processing, it added.
Most of China's small refining facilities belong to independent refineries, known as teapots, which had a total crude processing capacity of around 88 million tons, or about 1.8 million barrels a day, by the end of last year, according to domestic energy information portal C1 Energy.
Only eight refineries with a total annual capacity of 26.7 million tons had individual refining capacities of more than 2 million tons a year, C1 said.
State-owned oil giants such as China Petroleum & Chemical Corp. (SNP) and PetroChina Co. (PTR) also have small refining facilities under 2 million tons, but the total refining capacity of such facilities isn't known.
China Petroleum & Chemical Corp.'s (SNP), or Sinopec Corp.'s, 240,000-barrel-per-day joint venture refinery in Fujian province is in the final stage of preparation before going into production, Sinopec Group said May 11.
Trial operations of the project's first main refining equipment is expected to start in two months, and the project is expected to enter full operations in the second half of this year, an official newspaper cited a local government official from Fujian as saying.
By the end of April, investment in this project was 95.5% complete at CNY32.6 billion ($4.8 billion).
Sinopec and the Fujian provincial government together own 50% of the refining joint venture, with Exxon Mobil Corp. (XOM) and the Saudi Arabian Oil Co., known as Saudi Aramco, holding 25% each.
PetroChina views current low oil prices as a rare opportunity to expand its overseas reach, especially in areas where it already has a foothold, a company executive said on May 11.
"Overseas merger and acquisition is a key strategic development target for PetroChina," President Zhou Jiping told reporters on the sidelines of the company's annual general meeting.
"At the time of the financial crisis when oil prices keep falling, there is a rare strategic opportunity for us," he said. "We are actively but cautiously selecting overseas strategic projects."
He said the company's focus is to strengthen cooperation with national oil companies in resource countries such as Kazakhstan, Venezuela and Qatar while joining hands with international oil majors including Exxon Mobil, Shell, Chevron and BP.
PetroChina plans to expand their presence in the five major regions where it already has business and will emphasize investment returns when making decisions, Zhou said.
He said the 100,000 barrel-per-day China-Kazakhstan crude oil pipeline will be fully operational by the end of third quarter and the China-Central Asia gas pipeline is proceeding smoothly as planned.
PetroChina would bring in some 40 million tonnes of oil resoures from Venezuela when bilateral projects come on line in the future, said Jiang Jiemin, PetroChina's chairman.
The two sides will build a joint refinery in the east part of Guangdong province in which PetroChina would own a 60 percent stake.
PetroChina will raise up to 100 billion yuan ($14.65 billion) via debt to finance key strategic projects this year, Zhou said.
The top Chinese oil firm has said it needs 150 billion yuan in financing for 2009.
Zhou said the fund would be used to finance upstream projects in the Erdos and Tarim basins, coastal refineries, oil and gas pipeline networks as well as overseas expansions.
PetroChina has completed talks on liquefied natural gas supplies from Exxon Mobil's Australia unit and will have no regulatory obstacle, Zhou said.
An industry source said in February that Exxon Mobil has agreed to sell 2 million tonnes of LNG per year for 20-25 years from its Gorgon project in Australia to PetroChina, though the deal still needs government approval.
Kuwait and China have signed an agreement to establish a $9 billion, 300,000 b/d refinery at Zhanjiang, a city on the coast of Guangdong province in southwestern China.
Under terms of the agreement the refinery will be built in Zhanjiang instead of in Guangzhou, as originally planned, due to environmental concerns.
Sinopec will hold a 50% stake in the venture, which is scheduled to start operations in 2013, while state-owned Kuwait Petroleum International will hold 30%. The remaining 20% will be divided equally between Dow Chemical Co. and Royal Dutch Shell PLC.
China Gengsheng Minerals, Inc., a materials technology company in China with products capable of withstanding high temperature, saving energy and boosting productivity in certain industries such as steel and oil, announced that it has won a supply contract for fracture proppants with PetroChina's Changqing Oilfield. The total value of the contract is $5.5 million (RMB 37.6 million). Gengsheng is scheduled to start shipping immediately.
Fracture proppants are light, bauxite-based, grain-like materials that have a round and smooth surface and a quality of resisting high pressure and acid corrosion. They are used by oil and gas drillers to extract pockets of oil and natural gas scattered underground.
According to PetroChina's English-language Website, in 2007, PetroChina's Changqing Oil and Gas Province ("Changqing"), located at the Ordos Basin in Northwest China, produced 12 million tons of crude oil and 11 billion cubic meters of natural gas, making Changqing China's third-largest onshore oil and gas field.
China Gengsheng Minerals, Inc. ("Gengsheng") develops, manufactures and markets a broad range of high-tech industrial material products, including monolithic refractories, industrial ceramics and fracture proppants. Gengsheng sells its products primarily to the iron-and-steel industry as heat-resistant components for steel-making furnaces, industrial kilns and other high-temperature vessels to guarantee and improve the productivity of those expensive pieces of equipment while reducing their consumption of energy. Founded in 1986 and based in China's Henan province, Gengsheng currently has over 200 customers in the iron, steel, oil, glass, cement, aluminum and chemical businesses located in China and in 11 other countries. Gengsheng conducts business through Gengsheng International Corporation, a British Virgin Islands company, and its Chinese subsidiaries, which are Henan Gengsheng Refractories Co., Ltd., Zhengzhou Duesail Fracture Proppant Co., Ltd. and Henan Gengsheng High Temperature Materials Co., Ltd.
Jiang Jiemin, board chairman of PetroChina, said at his company's shareholders' meeting that PetroChina plans to build two greenfield refineries feeding on Venezuelan crude oil.
PetroChina will hold a 60 percent stake in one of refineries, the refining capacity of which would be 20 million tons/year, with the remaining stakes to be held by Petroleos de Venezuela SA (PdVSA), said Jiang.
No details were revealed on the second refinery.
Jiang also confirmed that PetroChina would be annually supplied with two million tons of LNG from ExxonMobil's Australian Gorgon Project for 20-25 years.
PetroChina is building Dalian and Rudong LNG terminals with supplies, respectively, from Shell's Gorgon project and Qatar. It is seeking supplies for its Shenzhen and Caofeidian terminals.
Adding to some tentative signs of economic recovery in China, Sinopec Corp. said May 22 its refineries were running at a higher capacity.
But the rebound in international oil prices to $60 a barrel has pushed the company's refining business back into the red because of low state-set fuel prices, which make it hard to recoup refining costs.
Su Shulin, chairman of the state-owned company also known as China Petroleum & Chemical Corp., said that China's apparent consumption of fuel and other oil products rose 1.5% in April compared to a year earlier. Company senior vice president Zhang Jianhua said that the company's refineries were running at 90% capacity. Platts energy analysts said China's apparent oil demand rose 4% in April, the first year-on-year increase in six months.
To make up for losses on the domestic market where state controls on fuel prices weigh on profits, Asia's biggest refiner has been exporting 600,000 tons of refined fuels a month, about half of it in diesel, according to Mr. Zhang. The two Sinopec executives were speaking at the sidelines of the company's annual general meeting.
Chinese customs data on May 22 showed that diesel exports rose to a record in April while gasoline hit a near-two-year high as refiners sought to offload stockpiles and cash in on the higher profits to be earned selling outside of China.
Sinopec, which is primarily a refining business with a smaller presence in oil and natural gas production, has been struggling with low profit margins -- even after the government issued a new policy this year to keep domestic fuel prices more closely tracked to international prices.
Last year, Sinopec's net profit fell 47%, the company's first annual profit decline in seven years, though the company said it expected earnings in the first quarter to rise more than 50%.
The company, which has to pay global prices for the crude oil it refines, saw some relief when oil prices cratered, but the recent climb back toward $60 a barrel has erased its profit margins.
"The pressure is large," Mr Su said.
The fall of global commodity prices such as steel have reduced costs for oil companies, so "now is a good time to reassess our plans and optimize them," he said.
The company has announced ambitious plans to increase capital expenditures by 4.2% this year to about $17 billion (111.8 billion yuan), of which half will go to developing oil and gas fields and building gas pipelines in China.
Part of the money for financing expansion will come from bonds. Sinopec wants to capitalize on recovering bond markets to raise debt financing, as have other Chinese oil companies. Wang Xinhua, director of Sinopec's finance division, said the company is considering a mix of long- and short-term debt.
Separately, Mr. Su said Sinopec is actively assessing possible merger-and-acquisition targets in South America and Africa. He said the company is considering a mix of possible company acquisitions, asset purchases or exploration plays.
State-run Indian Oil Corp has tied up $3 billion (149 billion rupees) term loan for a new refinery in east India in the country's largest syndicated rupee loan for a single project, the arranger said on May 14.
A consortium of 21 lenders led by State Bank of India agreed to provide the loan for the 15 million tonnes a year refinery in Orissa state, SBI Capital Markets said in a statement.
The refinery, due to be commissioned in early 2012, is expected to cost 335.04 billion rupees funded through a mix of Indian and foreign debt and internals accruals, it said.
The refinery is part of Indian Oil's plan to raise its refining capacity to more than 1.6 million barrels a day by 2011/12 from the current 1.2 million barrels.
Two persons were killed May 13 in an oil pipeline blast in the Digboi refinery of Indian Oil Corporation, official sources said.
The early morning blast took place in the pipeline inside the oldest refinery in Asia.
The blast led to a fire in the pipeline. The cause is suspected to be due to poor maintenance of the pipeline and although officials have yet to confirm this they have ruled out the possibility of sabotage.
Japan's Fuji Oil Ltd plans to boost capacity of its Eureka thermal cracking unit by 6,000 barrels per day to 30,000 bpd by late June during planned maintenance, officials with parent AOC Holdings Inc said on May 14.
The unit processes asphalt to gasoline and middle distillate.
The move, which is aimed at lowering crude oil purchase cost, is expected to have a positive impact on refining margins as the company expects the differential of Saudi Arabia's Arab Light and Arab Heavy grades to widen to $4 a barrel on average in the business year ending next March from $1.70 now.
The refiner will also raise the capacity of its vacuum distillation unit by 5,000 barrels per day (bpd) to 60,000 bpd at the company's sole Sodegaura refinery, east of Tokyo, AOC President Fumio Sekiya said.
The refinery's first hydrogen-making facility with capacity to produce 15,000 cubic meters of hydrogen per hour is also being set up to avoid a hydrogen shortage during the refinery's maintenance that will last until around June 20.
Fuji Oil has planned to operate its 140,000 bpd crude distillation unit (CDU) at 97 percent of capacity on average in the business year that started in April, up from 93.9 percent a year earlier, a company spokesman said.
The refiner also plans to boost the jet fuel loading capacity for export to 1,500 kiloliters per hour from 800 kl/h during the fall, the spokesman added.
AOC, the holding company for oil producer Arabian Oil, also announced it would invest $581 million (55.5 billion yen) in the five years ending March 2014.
Dresser-Rand and Samsung Techwin have entered a strategic alliance to cooperate in packaging and selling engineered centrifugal compressors and gas turbines.
The alliance agreement calls for exclusive packaging of Dresser-Rand DATUM centrifugal compressors and VECTRA power turbines for mechanical and generator-drive applications to supply Korean-based shipyards and engineering companies for oil and gas market applications, as well as to supply the local Korean market.
The agreement is intended to better serve clients in the marketplace that includes floating production, storage, and offloading (FPSO) vessels and floating LNG (FLNG) vessels, and land-based gas compressor and generator sets in power, refining, petrochemical and other industries.
Both companies recognize that Korea is the leading country for shipbuilding and offshore industry, especially FPSOs and FLNG vessels, and that local production and technical support is important to better serve clients in the energy equipment market in Korea. In support of the alliance, Samsung Techwin plans to build a new facility in its Plant #3, located in Changwon, Korea.
"We're very excited to have Samsung Techwin as our partner to serve these important and growing markets," said Vincent R. Volpe Jr., president and CEO of Dresser-Rand. "They possess unique combinations of market presence and technical expertise in packaging similar equipment that will position us to succeed quickly."
"Our DATUM and VECTRA products are recognized for their technical superiority and the value they bring to clients in the demanding markets we serve. We believe that together with Samsung Techwin as our partner in Korea, this value proposition will be further heightened."
"We believe that Korean shipyards and engineering companies will welcome this alliance wholeheartedly because they will benefit from Samsung Techwin's local project execution and technical expertise, supported by Dresser-Rand, a recognized rotating equipment technology leader," said C. S. Oh, president and CEO of Samsung Techwin.
"This is really a win-win alliance. Dresser-Rand will have opportunities to grow its core business by using Samsung's assets, and through the alliance Samsung can develop product lines to enter the energy equipment market," he concluded.
Leading Philippines oil refiner Petron Corp. plans to raise US$528 million (P25 billion) to finance its expansion and upgrade of its refinery in Bataan.
Petron chairman Ramon Ang told reporters during the company's annual stockholders meeting that the fund would finance the second phase of its Petro Fluidized Catalytic Cracker plant and the optimization of its 180,000 barrels per day refinery in Bataan.
Ang said the firm planned to raise P10 billion from a two-tranche bond issue and raise another P15 billion from the issuance of preferred shares.
"The bonds will be in two tranches, around P5 billion will be issued on May to June while the second tranche will be around June or July. After that, we will check if we can issue the P15 billion preferred shares to the market," he said.
The company tapped the Development Bank of the Philippines, HSBC, Bank of the Philippine Islands and ING in the bond issue. Last year the first phase of Petron's Petro FCC project had been commissioned, allowing it to crack up to 75 percent of every barrel of crude oil it refined into white products.
Petron hopes to convert the entire barrel into high value products with the building of the Petro FCC 2. In a separate interview, Petron president Eric Recto said the company expected to start construction of the phase 2 early 2011. He said the company's fund raising activities would finance the proposed refinery upgrades.
For the PetroFCC 2, Recto said that initial studies indicated that the second phase of cracker plant would cost over US$ 1 billion. But because of the current economic situation, he said, it would be lowered now.
The firm is conducting another study to determine the exact amount needed to build the project. He said Petron expected to complete the project in about four to five years.
Recto also said the company also planned to build 200 gas stations in the next 12 months on top of its existing 1,300 stations nationwide. Recto said the company would spend about P2 million for every station, or a total of P450 million for all the additional stations to be located in the provinces. "Our micro-filling stations will prevent them (other players) from gobbling into our market," he said. Recto also said that Petron would also put up a 20 megawatt self-generating power facility. "We're still studying that but we're looking at a greenfield plant, may be coal," he said.
Petron reported a net income of P874 million for the first quarter, higher by 33 percent from P658 million for the same period last year due to higher gross profit during the period of P3.659 billion. Revenues dropped to P34.65 billion for the period from P59.6 billion due to lower prices and lower demands.
Italy's No. 2 refiner, ERG aims to boost the share of high value middle distillates to 55 percent of total output in 2012 from 49 percent in 2009 under new business plan unveiled on May 14.
The share of middle distillates, such as diesel, at ERG's export-oriented coastal refining unit ISAB will rise to 52 percent in 2010 and to 54 percent in 2011, the company said in a slide presentation.
ERG, which owns 51 percent in ISAB refinery in Sicily with a capacity of 320,000 barrels per day, said it would invest 262 million euros in its coastal refining business in 2009-2012, part of its new 1 billion euro investment plan.
The remaining 49 percent of ISAB refinery is owned by Russia's oil company LUKOIL.
The main investment projects include reengineering of a vacuum unit, revamp of fluid catalytic cracking (FCC) unit, revamp of hydro-desulfurization (HDS) units at ISAB's Nord and Sud plants and conversion to ETBE ethanol fuel from MTBE blendstock, according to the slides.
ERG said it did not plan further maintenance shutdowns this year after a scheduled general turnaround of Nord and slowdown of Sud plants in the first quarter.
The Sud plant will have turnarounds lasting about 45 days in 2011 and in 2015 and a process shutdown for 15-20 days in 2013. The Nord plant would have shutdowns in 2011 and 2015 and a turnaround in 2013.
PKN Orlen SA, Poland's largest oil refiner and owner of the Lithuanian oil refinery Mazeikiu Nafta, posted a net loss in the first quarter of 2009, after a profit a year earlier, as falling oil prices cut the value of its inventory and the weakening zloty raised the cost of debt.
The net loss was $332.8 million (1.09 billion zloty), compared with net income of 626.3 million zloty a year earlier, Plock, Poland-based Orlen said in a regulatory statement on May 14.
That compares with the median estimate of a 1.18 billion-zloty loss in a Bloomberg News survey of 12 analysts. The loss before interest and taxes, or negative Ebit, was 320.5 million zloty, compared with positive Ebit of 565.1 million zloty. Sales fell to 14.7 billion zloty compared with 17.9 billion zloty and a median estimate of 15.7 billion zloty, informs ELTA.
The decline in the crude price in the quarter compared with the average for 2008, which lowers the value of the oil in Orlen's tanks, cut earnings by about 300 million zloty, the company said in April. Financial costs rose to 1.3 billion zloty from 285.9 million zloty after the Polish currency weakened 37% against the dollar and 24% against the euro from a year earlier.
South Korea's Samsung Engineering has won a contract worth $1.2 billion to modernize Algeria's biggest refinery, Algerian state energy group Sonatrach said.
The South Korean firm will complete rehabilitation and modernization works at the refinery in the Mediterranean port of Skikda within 36 months, Sonatrach said.
The contract was worth $1.2 billion (93.038 billion Algerian dinars), the Algerian company said.
The works will help increase the refinery's capacity by 10 percent to 16.6 million tonnes per year from its currrent level of 15 milion tonnes, Algeria's official news agency APS said.
It quoted Energy and Mines Minister Chakib Khelil as saying Algeria aimed to bring its refining capacity to 45 million tonnes by 2014 from 25 million tonnes now.
Other bidders for the Skikda's contract included South Korea's Hyundai Engineering and Construction, Italian oil services group Saipem SpA and Spanish engineering company Technicas Reunidas, Sonatrach said.
investment partners to establish a petroleum refinery aimed at refining oil once production starts next year, officials said May 25.
Ben Twado, the commissioner in charge of petroleum supplies, said government would go ahead with plans to set up a mini-refinery of about 4,000-5,000 barrels a day, with a designed capacity for expansion to enable the country to move closer to full-scale production in five to seven years.
An official at the energy and minerals ministry said government had also clashed with U.K.-based Tullow Oil PLC on the construction of a pipeline to transport unrefined crude oil to the Kenyan port of Mombasa for refining and export to East Africa and overseas markets.
Previously, the Ugandan government said it had reached an agreement with the Iranian government on the funding of an oil refinery.
Uganda's President Yoweri Museveni has blamed the export of unprocessed raw materials as the main reason behind the country's underdevelopment.
Analysts say Uganda's resolve to go ahead with a refinery poses a political risk to Tullow's investments in the country.
Tullow is in talks with the Congolese government to extend oil exploration activities on the Congolese side of the Albertine rift.
Tullow officials couldn't comment immediately.
Company officials estimate that there are more than 2 billion barrels of commercial oil reserves on the Ugandan side of the rift, with vast oil fields yet to be drilled.
TNK-BP completed the overhaul of processing facilities at CJSC "Ryazan Oil Refinery Company" (RORC, operator of the Ryazan Refinery), TNK-BP’s press service reported to the Petroleum Information Agency (ANI).
Implementation of the modernization project will help the Ryazan Oil Refinery Company increase the quantity and improve the quality of oil products produced by the Ryazan Refinery.
In particular, a considerable amount of diesel fuel for Russian consumers will have a higher quality. Apart from that, the negative environmental impact will be minimized owing to the equipment revision carried out during the overhaul. The total cost of the overhaul amounted to 870 million rubles.
The modernization and repair of 17 units at the Ryazan Refinery took 45 days, three days less than initially planned. Some 2,300 specialists of contractors were involved in the repair works.
Production processes did not stop at the refinery during the repair works. Suspension of processing facilities at the Ryazan Refinery did not affect the consumers, because a sufficient stock of raw materials and final products was accumulated at the refinery prior to the beginning of repair works. The next repair of facilities and units at the refinery will start in two years.
Dmitry Bedarev, is the General Director of CJSC "Ryazan Oil Refinery Company".
Ukraine, which is extremely interested in increasing its energy independence, has suggested that Libya build an oil refinery which will be able to process up to 10m tonnes of oil per year and a network of petrol stations in Ukraine, Prime Minister Yuliya Tymoshenko said.
"We completely depend on one supplier [Russia]. We have to demonopolize our domestic market," she said, when opening talks in Tripoli on May 25.
Ukraine suggested that Libyan partners build an oil refinery, Tymoshenko said.
Ukraine has already requested a feasibility study for the refinery's construction, she said. The study showed that the best place for the new oil refinery would be on the Black Sea near Odessa, she added.
"We are also ready to offer sites for building petrol stations in Ukraine. This is a serious diversification for us," Tymoshenko said.
She added that the refinery would allow Libya to enter not only the Ukrainian market but also the EU market.
A new catalytic cracker complex with the capacity of 45,000 barrels per day under construction at Abadan Oil Refinery in Khuzestan Province is 73 percent complete, Khuzestan TV reported May 12.
An Abadan Refinery official was interviewed by Khuzestan Province TV. He said: "This is a 36-month project aimed at modernizing the productivity of Abadan Oil Refinery. The project should enable us to increase valuable products such as petrol, gas oil, propylene and some gases used in petrochemical industries, God willing."
A correspondent reported that the project was under construction using a foreign currency allocation of 350m euros. He said: "With the new cat cracker project going on stream, some six million liters of petrol will added to the capacity of the country's refineries per day."
The Abadan Refinery official who was not named by the channel said: "In the first phase of the project, we are trying to make our petrol production plants more active at five refineries throughout the country. We are planning similar projects at four other refineries."
The correspondent added: "In line with the implementation of the project, today a reactor weighing 400 tonnes was lifted by a super-heavy crane capable of lifting 1,600 tonnes and installed at a height of 40 meters at the cat cracker complex of Abadan Oil Refinery."
A caption said the cost of the reactor was 8m euros.
Abadan's new cat cracker complex used the modern UOP technology, Khuzestan TV said, adding that the project was expected to become operational in the month beginning August, 23.
Thirty-nine days, 5,000 contractor employees, 1,000 regular employees, 800 pieces of equipment serviced and zero lost-time injuries; those are some of the statistics for Riyadh Refinery Department’s (RRD) recent mega-test and inspection (T&I).
“Safety was the main focus for the T&I planning team,” said RRD manager Ali A. Al-Hazmi. “As RRD employees, we must not only make sure that the contractors fulfill their responsibilities but also set an example by fulfilling ours.”
“We overcame some significant challenges to undertake this T&I,” said Abdulaziz Binnora, T&I planning coordinator. “First, we increased the scope of the task from the 500 pieces of equipment processed in the last T&I in 2003 to 800 this year. This included 170 pieces within the new diesel hydrotreating plant. We then had to find the qualified contractors to do the task in a market where labor and materials costs were continually rising, without compromising quality.”
Comprehensive planning was required to ensure that the necessary shutdowns could be done safely, cost-effectively, on time and with the highest quality standards.
That planning process began two years ago, when a multidiscipline team was assigned to facilitate the scope development, planning and preparation. “Ten Saudi Aramco departments were involved, and we made sure that some of the new engineers were assigned critical tasks to enrich their knowledge and be ready for future T&Is,” Binnora said.
A stringent pre-qualification evaluation ensured that only experienced contractors were awarded contracts six months in advance to allow them to participate in planning. Materials also were procured early to prevent problems of long lead times and busy manufacturing schedules.
Significant work was undertaken in the field to prepare for the T&I, including the construction of three prefabrication shops, a medical clinic, 17 portable offices, a materials yard, a central tool room, a temporary cafeteria and a new security gate to prevent delays in reporting to the work site, said T&I execution coordinator Saleh Al-Qahtani.
Training was also a key objective during the T&I. The project provided an opportunity for operation personnel to complete Job Task Standards, which can only be achieved when units are shut down. Refinery apprentices undertook a range of tours to familiarize themselves with T&I activities.
The project achieved major operational improvements, including:
The T&I was completed two days ahead of schedule with no lost-time injuries. “This crucial milestone was achieved through close vigilance and supervision at all levels of management and the active participation of Saudi Aramco organizations,” said Al-Hazmi.
Saudi Arabian Oil Co., (Saudi Aramco), and France's Total are expected to delay the award of deals of their joint-venture refinery project in Jubail to beyond the planned date of mid-June, Abha-based Al Watan daily reported May 25.
Bids have exceeded the $10 billion "red line" that the two partners have set as the project's cost, the paper reports citing a person in the oil sector.
About a $1 billion increase in expenses is "palatable" but the two partners were surprised to find that offers have exceeded this figure, said the person who is close to one of the companies competing for the project.
The initial estimate of the project's cost was $13 billion during the inflationary period, the daily said.
The fate of the Yanbu refinery project, an Aramco joint venture with ConocoPhillips, will depend on the fate of the Jubail refinery project, the person said, adding that the two companies have started to scrutinize the interests of potential bidders for the project.
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