NexLube Tampa LLC plans to begin construction of a used oil re-refinery and blending plant in Tampa, Florida, using Axens' and Viscolube Revivoil technology.

The facility is expected to process 24 million gallons (91,000 m3) of dehydrated used oil annually. The re-refinery unit will produce API Group II base oil and various grades of motor oil, hydraulic fluid, transmission fluid and other specialty products after on-site blending.

Re-refined products will be marketed in a closed-loop process, where NexLube will provide its branded products to a municipality or other customer that has its own fleet of vehicles. The fleet uses the branded product and then returns the used oil to the re-refining plant.

Axens' innovative Revivoil technology was jointly developed with Viscolube of Italy, one of the world's leading spent lube oil re-refiners. NexLube selected Revivoil based on commercial experience and superior yield of high quality lube oil from used oil. Twelve units have been licensed using all or part of the Revivoil technology.

In addition to the Revivoil technology, enabling to recycle used oil instead of burning or releasing it to the ground, Axens is actively contributing to a cleaner environment by providing clean fuels technologies, catalysts and green engineering solutions.

NexLube Tampa LLC is a privately held company specializing in the production and blending of motor oils and hydraulic fluids through recycling of used oil. NexLube will use leading-edge technology to produce high quality base oil and lubricant products.

Established in 1963 as a private enterprise, Viscolube, is today one of the few European companies specializing in waste oil re-refining which is able to produce lubricating base oils whose properties are equal or even better than virgin base oils currently on the market. Viscolube has two production plants in Italy and is treating annually about 140,000 tonnes of waste oil, producing about 97,000 tonnes of lubricating bases.

Bechtel Buys ConocoPhillips' ThruPlus Delayed Coking Technology

Bechtel Corp. announced July 11 that it has purchased ConocoPhillips' leading delayed coking technology, a move that uniquely positions Bechtel for growth in the refining industry. ThruPlus Delayed Coking Technology is a proprietary process for upgrading heavy oil into high value, light hydrocarbon liquids.

"The purchase of the ThruPlus technology is a natural progression of our work with ConocoPhillips, and it allows us to deliver to customers high-quality, technologically superior coking units more efficiently and cost effectively," said Jack Futcher, president of Bechtel's Oil, Gas & Chemicals unit. "The technology sets Bechtel apart by enhancing our capability to carry a project from concept to completion."

The ThruPlus technology was developed and improved by ConocoPhillips during its more than 50 years of owning and operating units. It achieves higher unit throughput, higher service factors, superior liquid yields, and improved unit reliability. Bechtel and ConocoPhillips formed an alliance in the 1990s that combined Bechtel's expertise in engineering, cost optimization, procurement, and construction with ConocoPhillips' operating experience and technology expertise in delayed coking.

A global leader in the design and construction for the refining industry, Bechtel's delayed coking experience spans more than 50 years and includes projects in Canada, India, Russia, and the United States.

Manager of Lake Charles Pelican Refinery Enters Plea to Pollution Charges

The Houston-based manager of a Louisiana refinery pleaded guilty July 6 to misdemeanor charges of failing to prevent toxic pollutants from leaking into the air in 2005 and 2006, according to the U.S. Department of Justice.

Byron Hamilton, 66, vice president and general manager of Pelican Refining's facility in Lake Charles, faces up to a year in prison and a $200,000 fine for each of the two counts of negligent endangerment under the federal Clean Air Act.

Houston oilman and philanthropist Oscar Wyatt's company, NuCoastal Refining and Marketing, operates the refinery, which it jointly owns with BayOil USA. The companies bought the plant, which primarily produces asphalt, in early 2005 for $9 million.

The investigation began after state and federal inspectors discovered unsafe practices at the facility in March 2006, including the use of plastic children's swimming pools to contain oil leaks. Regulators also found that mandatory pollution prevention equipment was not operating at the refinery, causing highly toxic hydrogen sulfide gas to escape.

There was "no procedure to record, track, report or mitigate" emissions of hydrogen sulfide at the Pelican refinery, the Louisiana Department of Environmental Quality said in a statement July 6.

Hamilton's attorney, Bill Rosch, would not disclose the terms of his client's plea deal with prosecutors. But he said Hamilton acknowledged his role in causing the escape of hazardous chemicals.

"He takes personal responsibility for that," Rosch said.

U.S. District Judge Richard Haik in Lafayette, La., who is hearing the case, has not set a sentencing date, Rosch said.

Wyatt had no comment on the matter, spokeswoman Dorothy Beeler said.

The ongoing investigation is being conducted by the federal Environmental Protection Agency's Criminal Investigation Division, the Louisiana Department of Environmental Quality's Criminal Investigation Division and the Louisiana State Police.

Marathon's Downstream Spin-off Becomes Official

Marathon Petroleum Corp. on July 1 reported the completion of its transformation into a new, independent, publicly traded energy company. MPC is a top-performing refining, marketing and transportation business that was previously a subsidiary of Marathon Oil Corp.

MPC is the fifth-largest crude oil refiner in the U.S. and the largest in the Midwest. Marathon brand gasoline is sold through 5,100 independently owned locations across 18 states. In addition, Speedway LLC, a MPC subsidiary company, features industry-leading retail operations as the nation's fourth largest owned and operated convenience store chain with approximately 1,350 locations in seven states. MPC's fully integrated strategy provides operational flexibility to move crude oil, feedstocks and petroleum-related products efficiently through the company's distribution system with approximately 4,500 miles of pipeline and 83 terminals.

The transaction that created Marathon Petroleum Corp. was first announced in January and approved by the Marathon Oil board of directors in May.

"The benefits of independence have become increasingly apparent and establishing Marathon Petroleum as a stand-alone energy company, with enhanced flexibility to pursue tailored strategies, will drive long-term value for our shareholders and customers alike," explained Gary R. Heminger, president and chief executive officer of MPC.

House Panel Votes to Delay EPA Air Pollution Rule

A House panel voted July 12 to delay a recently adopted Environmental Protection Agency rule on air pollution by more than a year, another effort by Republicans to slow down or stop the agency's wide-ranging regulatory agenda.

The House Energy and Commerce Committee voted 33-13 to delay a rule EPA adopted the first week in July governing smog- and soot-causing pollution that blows across state lines, a move that would push the rule back to early 2013 from its current effective date of January 2012. Another rule dealing with the technology that power plants use to trap emissions, still under development, would also be delayed until that time.

Five Democrats joined Republicans in voting in favor of the delay, including Texas Reps. Gene Green and Charles Gonzalez. The EPA stirred ire in Texas when it tightened emissions limits there as part of last week's final rule on interstate pollution.

The bill approved July 12 still needs approval from the full House, which could vote on it before Congress breaks for a recess in August. It may face an uphill battle in the Democrat-controlled Senate and the White House, where the EPA has more support.

Republicans said the delay was to allow for a study of the cumulative effects of EPA regulations. The approved bill would create an interagency panel to study that issue and come up with a report by August 2012, in the middle of the presidential campaign season.

The study would examine the effect of environmental rules on unemployment, gasoline prices, electricity prices, and other metrics and report the results to Congress. EPA would not be allowed to enforce the utility air pollution rules until six months after the study is issued.

"Why do we create more regulatory burdens at a time when we're trying to create jobs?" asked John Shimkus (R., Ill.), a member of the committee. "Why don't we just pause and allow the economy to catch up?"

Democrats, many of whom voted against the bill, said it was unnecessary because EPA already conducts an analysis about the impact of its rules. Rep. Henry Waxman (D., Calif.), also said an August 2012 deadline was too soon for such a complicated analysis. "This legislation is likely to produce a report that is full of guess work and could dramatically underestimate or overestimate the cost of the new programs," Waxman said.

Tesoro to Build Anacortes Rail Facility Project and Supply the Refinery with Bakken Crude

Tesoro Corp. on July 15 announced its intention to supply crude oil by rail from the prolific Bakken Shale/Williston Basin area in North Dakota to its refinery in Anacortes, WA.

The Company currently takes delivery of one to two thousand barrels per day of Bakken crude oil into the Washington refinery. Upon completion of the project, which includes loading and unloading facilities and dedicated rail cars called a unit train, the Company expects to deliver up to 30 thousand barrels per day of Bakken crude oil into the refinery. The high quality, cost advantaged crude oil will allow the Company to decrease dependence on foreign water born feedstocks and declining Alaska North Slope production.

The Company plans to build an unloading facility to accommodate the unit train at the Anacortes refinery continuing the Company's economic contribution to the local community and the state of Washington. This new, highly efficient facility will effectively allow the Company to supply crude oil to the refinery from this "pipeline on rails". Once necessary permits are received, construction of the facility is expected to take approximately nine to 12 months to complete. The Company currently expects to spend about $50 million on this project.

Tesoro also announced July 15 that the Company has executed a long-term agreement with Rangeland Energy, LLC for access to Rangeland's crude oil loading terminal and pipeline facility in Williams County, North Dakota. The facility, which will have a direct connection to Tesoro Logistics' High Plains crude oil gathering system, is expected to be in service by the first quarter of 2012.

"The use of a unit train to supply crude oil to the Anacortes refinery allows us to leverage our advantaged logistical position in the Bakken as well as provide a high quality, lower cost feedstock supply to the refinery," said Greg Goff, President and CEO of Tesoro. "Expanding system supply and trading activities in an effort to drive lower feedstock costs remains a strategic priority for the Company," said Goff.

Upon completion of the Anacortes Rail Facility Project Tesoro intends to offer the Facility to Tesoro Logistics LP.

No Decision on New ConocoPhillips Spinoff Home Base

The ConocoPhillips spinoff announced July 14 will create the nation's largest independent refiner by capacity, but management hasn't decided what assets it will acquire and where it will be based, company spokesmen said.

The independent refiner that will emerge next year could have a different makeup than ConocoPhillips' existing refining business.

Before the July 14 announcement, the oil giant had committed to shedding underperforming assets and expects to dispose of $10 billion to $12 billion companywide, spokesman John Roper said.

"There's still the feeling that there is room to reduce some of these assets that aren't really the right fit," Roper said. "We don't know exactly what we are going to push out there."

Adding to uncertainty, the company is a partner in two major joint ventures -- one in refining and one in petrochemicals -- whose futures will have a major effect on the spinoff company's value.

ConocoPhillips operates two refineries it owns jointly with Canadian company Cenovus Energy, one in the Texas Panhandle city of Borger and the other in Wood River, Ill. While a Cenovus spokeswoman said she expects the assets will become part of the new spinoff, ConocoPhillips has not publicly committed to that.

ConocoPhillips also has a partnership in a petrochemical company with Chevron. The spinoff would benefit from acquiring that partnership, said Philip Weiss, senior analyst covering the energy sector for Argus Research, but ConocoPhillips hasn't announced its future, either.

"The downstream business would be stronger if it maintained those assets," he said. But, he added, "ConocoPhillips has some pretty good refineries in its system. It should be positioned relatively well in that peer group."

The refineries are geographically diversified, making the spinoff less susceptible to local market dynamics, analysts said.

ConocoPhillips' coastal refineries, in particular, are well positioned to take advantage of growing overseas demand for gasoline and diesel fuel, refining industry consultant Andrew Lipow said.

"The refineries have a strong presence in the Midwest markets as well as the Gulf Coast," Lipow said. "They have a presence everywhere. So if one area is experiencing poor refining margins; that will be counterbalanced by another part of the country where margins are good."

The spinoff's total refining capacity will be slightly larger than that of San Antonio-based Valero Energy, the nation's largest independent refiner. ConocoPhillips has 1.8 million barrels of crude oil refining capacity a day, according to the Energy Information Administration, and Valero has 1.7 million.

Valero spokesman Bill Day said the company doesn't expect the new independent to affect its operations.

"We already compete with Conoco, even though they are an integrated company at this point," Day said. "It's a very competitive environment."

While ConocoPhillips won't commit to basing the new business in Houston, where the company has 4,000 employees, Lipow said that would make the most sense.

"This is really the center for the energy business in the United States," he said. "You'd want to be closest to where most of your business is."

House Passage of Keystone XL Legislation Gets Approval from NPRA

National Petrochemical & Refiners Association President Charles T. Drevna issued the following statement July 26 after House passage of the North American-Made Energy Security Act, which would require the Obama administration to decide by November 1 whether to approve construction of the Keystone XL pipeline from Canada to Texas:

"The construction of the Keystone XL pipeline would provide the American people with a dependable supply of energy from a close neighbor and ally, along with desperately needed jobs and a big boost to our economy. If America turns its back on Canadian oil, China will eagerly buy this precious resource, forcing our nation to turn to countries on the other side of the world for the energy needed to keep our economy running. The Senate should join the bipartisan majority in the House that voted today to approve this legislation to strengthen America's economic and national security."

Valero Updates Maintenance Turnaround Schedule

Valero has updated its maintenance turnaround schedule. This list includes only major projects that will have a material impact on production, and it is subject to change. While Valero provides general guidance on the start and duration of the maintenance, it does not disclose specific beginning and end dates.

Refinery Unit Month Approx. duration

Corpus Christi Crude/Coker Oct. 3 weeks
Three Rivers Crude/FCC Oct. 6 weeks

Murphy Oil to Sell Superior Refinery to Calumet for $214 Mln Plus

Murphy Oil Corp. announced July 25 that it has entered into an asset purchase agreement pursuant to which its wholly owned subsidiary, Murphy Oil USA, Inc., will sell its refinery in Superior, Wisconsin, and related assets.

The Superior Refinery is being acquired by Calumet Specialty Products Partners, L.P. for a sales price of $214 million plus the value of hydrocarbon inventory, and subject to certain other adjustments. The hydrocarbon inventory will be valued based on market prices at closing (the inventory was valued at approximately $260 million as of June 30, 2011). The sale is subject to customary regulatory approvals and conditions, and is expected to close later in the third quarter or fourth quarter of 2011.

David M. Wood, Murphy's President and Chief Executive Officer, commented, "We are pleased to announce the sale of our Superior Refinery as we execute on our strategy to exit the refining business." Wood added, "The price realization for Superior represents fair market value for the assets and we look to redeploy the proceeds and working capital from the sales process into our upstream growth business."

Davis Polk & Wardwell LLP is acting as legal counsel to Murphy. Goldman, Sachs & Co. is acting as financial advisor to Murphy.

Valero Finalizes $730 Mln Purchase of Chevron‘s UK Pembroke Refinery

Valero Energy Corp. the San Antonio-based refiner on August 1, paid $730 million for Chevron Corp.'s plant in Pembroke, Wales, United Kingdom, a sum that excludes working capital, Valero said in a statement.

The purchase was funded from available cash, the company said.

“We have been looking for several years at available downstream assets in Western Europe that would expand our geographic footprint,” said Joe Gorder, Valero's president for Europe, in a statement.

“We believe this acquisition fits perfectly, and that we are acquiring one of the finest refining, marketing and logistics operations in all Europe.”

In addition to the 210,000-barrel-a-day refinery, Valero also purchased an interest in related assets, including four pipelines, 11 fuel terminals, an aviation fuels business and more than 1,000 gas stations in the U.K. and Ireland.

Also, San Antonio-based Valero paid about $1.1 billion for working capital and inventories, including crude oil in storage.

In March, when Valero announced it planned to buy the Pembroke plant, Valero CEO Bill Klesse noted that the refinery was profitable “even during the depths of the economic downturn in 2009.” He said it immediately would add to Valero's earnings per share.

With the purchase of the Pembroke plant, Valero now has 15 petroleum refineries with a combined capacity of about 2.9 million barrels a day.

Klesse also said last spring that the Atlantic Basin is a “huge market,” and Europe is consistently short of diesel fuel.

Valero spokesman Bill Day added that the purchase “comes with built-in markets in Northern Europe, including the U.K. and Ireland.”

Also, Valero is “looking at the possibility of bringing gasoline from the Pembroke plant to the East Coast of the United States because we still serve those areas with branded stations,” Day said.

Valero stopped making fuel on the U.S. East Coast last year, when it sold its refineries in Paulsboro, N.J., and Delaware City, Del.

Falling U.S. Dependence on Petroleum Imports

In the recent past the United States was so dependent on foreign oil that by 2008 it imported two-thirds of what the country’s refineries needed to produce enough gasoline, diesel and the other petroleum products to meet its needs.

But recently the federal Energy Information Administration reported that in 2010 imports had fallen far more than many realized — to 49 percent of the country’s needs.

Part of the big drop resulted from the federal agency’s using a different measurement — net petroleum imports — widely viewed as a more accurate way to judge overall dependence on foreign petroleum. The figure counts imports of crude oil and of refined petroleum products such as gasoline and diesel, but it also subtracts exports of U.S. petroleum products, which have been growing.

The U.S. recently stopped being a net importer of petroleum products for the first time since at least 1973, as the country’s refiners sold more gasoline and other end products to other countries.

A second factor is simply lower demand for petroleum products, in large part a result of the sour economy, but also helped by more efficient cars.

And on the supply side, U.S. oil production, after languishing for years, is on the upswing.

One example is North Dakota. Perhaps within a year the state is expected to supply more oil for domestic use than the 1.1 million barrels a day that Saudi Arabia now exports to the United States.

In addition, biofuels, mainly ethanol, are meeting more fuel needs. And natural gas liquids, a byproduct of natural gas that can be used to replace some petroleum products, are surging.

Put them all together, and the United States has cut its dependence on imports substantially — with further declines possible if the trends continue.

“It’s a silent revolution,” said Lehi German, publisher of the newsletter Fundamental Petroleum Trends. “This is a big deal.”

The size of the shift has been somewhat hidden by the different numbers that have been used to describe the country’s dependence on foreign oil.

One measure looks solely at the percentage of imported oil used by refineries. T. Boone Pickens, who backs a plan to use more natural gas, likes to use that gauge, which topped 66 percent in 2008 and dropped below 62 percent in 2010.

Critics of that standard say it overstates U.S. dependence on imports because it ignores other fuels being produced in America, and it ignores how much of that oil is re-exported as refined products.

But the net imports standards reflect those extra supplies and growing exports. Taking everything into account, the country’s net petroleum imports peaked at 60.3 percent in 2005 and dropped to 49.3 percent in 2010.

“It’s a more comprehensive picture,” said James Williams, an analyst for WTRG Economics.

That picture has been changing dramatically for several reasons.

•Biofuels, which are now almost entirely corn-based ethanol, have already displaced about 5 percent of gasoline supplies and are being counted on to do more. A federal mandate would triple production from 2010 levels to 36 billion gallons a year in 2022. Most of the extra supply is to come from ethanol made with wood, grass and other cellulose.

Although meeting the 2022 target is unlikely, just shooting for it will mean more ethanol is available, and used.

•Estimates of natural gas reserves in shale formations continue to grow, and more of it could be used as a transportation fuel if more vehicles are built or equipped to run on propane or liquefied natural gas.

Such a transition could take years to make much difference, but other natural gas liquids are already a factor. Those liquids are a byproduct of processing natural gas for use to heat homes, and they can be used for petrochemicals and for some transportation fuel. One of them, butane, can be added to gasoline. Another is propane, which is used for heating and for a small but growing amount of transportation fuel.

All of those uses reduce the amount of petroleum products needed, and together they really add up. The Energy Information Administration in a report released in June said the United States produced 5.5 million barrels per day of oil in 2010. But there was an additional 4.2 million daily barrels of nonpetroleum fuels produced, including ethanol and natural gas liquids.

•U.S. oil production is starting to grow. One new source is oil locked in shale formations, including in the Bakken field in North Dakota and Eagle Ford in Texas. The fields combined could eventually produce 2.5 million barrels a day, nearly half of total U.S. production in 2010.

Those new supplies also should go further, thanks to tighter fuel economy standards. For model years 2012 through 2016 they could save 1.8 billion barrels of oil over the life of the program. Also, some demographic changes are holding down the number of vehicles per household, also helping to reduce consumption.

The results of these shifts in supply and demand are already showing up in the need for less imported crude, and there has been an even bigger drop in imported petroleum products, including chemicals and transportation fuels, which in 2006 amounted to about 4 million barrels per day.

Those since have dropped by a million barrels per day while U.S. exports of petroleum products including diesel have grown. In April the United States exported more petroleum products than it received.

Joanne Shore, an analyst for the Energy Information Administration, said those exports have prevented some U.S. refineries from being idled. Gasoline is still being imported, including from Europe, but more diesel is being exported to those countries since they have a bigger demand for the fuel.

“We have a symbiotic relationship with Europe,” she said.

No one is saying that the United States will be able to avoid importing petroleum. But there is a chance to replay what Jay Hakes, author of “A Declaration of Energy Independence,” describes as a forgotten victory.

In 1977, the United States imported enough oil to meet 47 percent of demand. Five years later the country needed only enough to meet 28 percent of demand, in part because of better automotive fuel economy standards, rising Alaskan oil production and cuts in the amount of fuel oil used to generate electricity.

It remains to be seen whether such a steep reduction can happen again, but current trends provide a promising start.

Shore, of the Energy Information Administration, said each of the different ways to measure imports had a place, but they were all pointing down.

“They are all directionally saying the same thing,” she said.

CANADA

Jacobs Wins EPC Contract for Alberta Refinery

Jacobs Engineering Group Inc. announced that it has been awarded a contract by North West Redwater Partnership to provide detailed engineering, procurement and construction services for the development of a new oil refinery in Alberta, Canada.

Officials did not disclose the contract value.

The North West Redwater Refinery is expected to treat and sell bitumen, a portion of which is royalty in-kind bitumen supplied by the Alberta Petroleum Marketing Commission (APMC) on behalf of the Crown. This partnership with the Province of Alberta, known as the Bitumen Royalty in Kind (BRIK) policy, helps promote Alberta's oil sands development. The refinery expects to utilize carbon capture technology and won't rely on natural gas, a major step towards sustainable oil sands development.

Under the contract, Jacobs provides owner's engineer services to support the development of the refinery from the remaining critical phases of project development through to sustaining operations. The integrated team, comprised of individuals from both North West Redwater and Jacobs, is responsible for leading the project development and the coordination of overall project delivery organization.

Irving Commissions $100 Mln Dehexanizer Benzene-Reduction Unit at Its New Brunswick Refinery

Irving Oil on July 5 announced its Dehexanizer Unit at its Saint John, New Brunswick, refinery is now operational. The unit is expected to reduce benzene content in gasoline produced by the refinery by 30 percent. The $100 million Dehexanizer Unit will ensure compliance with new U.S. EPA regulation requiring lower benzene in gasoline.

The Dehexanizer Unit includes a 185' distillation column that isolates benzene in the upper stream of the column. The upper stream containing benzene will be sent to another existing unit for further reduction.

Construction of the unit began in 2009, with a peak labor force of 250 people. Total workforce hours exceeded 500,000 without a single lost time injury. The success of this project, which came in under-budget and on-schedule, is testament to the skilled workers who contributed to this project.

"It's a privilege to operate in our community and we take our environmental requirements very seriously," says Mark Sherman, General Manager of the Irving Oil Refinery. "We are always striving to improve the environment in which we live and work, and the Dehexanizer Unit strengthens that commitment."

Irving Oil is also constructing a $26 million Vapour Recovery Unit at Irving Oil's East Saint John terminal, which is anticipated to reduce VOC emissions by 90 percent when loading gasoline on to marine ships.

Other environmental initiatives at the refinery include capturing carbon dioxide through a partnership with Praxair and sulfur dioxide reduction technology that has reduced SO2 emissions at the refinery by more than 85 percent over the last eight years. Irving Oil also conducts annual fugitive emissions and tank seal replacement programs to prevent and reduce VOC emissions.

VENEZUELA

Foster Wheeler Wins Contract for New PDVSA Refinery

Foster Wheeler AG announced July 5 that a subsidiary of its Global Engineering and Construction Group has been awarded a process design and front-end engineering design (FEED) services contract by PDVSA for the new Batalla Santa Ines Refinery Phase I Hydroskimming section to be built in Barinas, Venezuela.

The terms of the contract were not disclosed. An initial release of work was included in the company's first-quarter 2011 bookings. The majority of the contract value will be included in the company's second-quarter 2011 bookings.

Foster Wheeler's scope of work includes the preparation of the basic engineering design package, FEED and early procurement assistance for the crude distillation unit, the naphtha hydrotreater, the continuous catalytic reformer and the utilities and offsite facilities. The FEED is scheduled to be completed in the third quarter of 2011.

"Foster Wheeler is very pleased to have been selected for this important project, which is another step in its successful working relationship with PDVSA and follows the award for the major expansion of the El Palito Refinery in Venezuela," said Umberto della Sala, Interim Chief Executive Officer of Foster Wheeler AG. "This award reflects our in-depth refinery expertise and our strong position in the important South American market."

ASIA

AUSTRALIA

Shell to Convert Australia’s Clyde Refinery to Fuel Import Terminal by 2013

Shell on July 27 announced its decision to stop refining operations at its 79,000 barrel-per-day Clyde Refinery in Sydney, Australia, and convert it and the Gore Bay Terminal into a fuel import facility before mid 2013.

The decision recognized the Clyde Refinery was no longer regionally competitive against Asian mega-refineries.

Shell's vice-president Australia downstream, Andrew Smith, said the company would continue to grow its New South Wales business through its strategic infrastructure assets at Clyde and Gore Bay.

He said Shell remains committed to servicing its customers through a reliable supply of fuel into the state.

"While this is a sad day for Shell's operations in New South Wales and many of our employees at the refinery, the decision to convert Clyde into a terminal is consistent with Shell's strategy to focus its refining portfolio on larger assets, and to build a profitable downstream business here in Australia," he said.

Mr Smith said this news would be very difficult for many employees and Shell was committed to supporting them through the transition.

"Everyone at Shell acknowledges the valuable contribution made by Clyde and Gore Bay employees in servicing New South Wales customers for around 100 years, and Shell will look to identify redeployment opportunities where possible," he said.

"The decision follows a proposal made in April and consultation with more than 94% of employees at Clyde and Gore Bay, along with their representatives. In making this decision, Shell took into account all of the views expressed and alternatives proposed during consultation."

Refining at Clyde will cease prior to mid 2013. The process to convert Clyde refinery and Gore Bay into terminal operations will cover four stages:

design of the new facilities;
transition from refining to terminal operations;
works to improve efficiency and operability of the terminal; and
preparation for future development of up to 40 hectares of refinery land

The decision about Clyde's future is not related to Shell's Geelong Refinery and was not reached as a result of any government policy — including any proposed price on carbon.

CHINA

China CNOOC Refinery Shuts Aromatics Unit after Fire

China National Offshore Oil Company's Huizhou refinery has shut its 800,000 tonne-per-year aromatics unit after a fire broke out July 11, two industry sources said.

One source said the refinery's crude refining unit was operating at normal rates later in the day. The plant, in southern Guangdong province, owned by the parent of CNOOC Ltd, has a crude refining capacity of 240,000 barrels per day.

"The fire has been brought under control," said a second source with direct knowledge of the plant's operations, adding that the fire was due to a leak at a pump.

An explosion occurred in a CNOOC refinery in Huizhou, near Daya Bay in China's Guangdong province. CNOOC said the fire had been put out by 9:00 am (GMT 0100) and there were no casualties.

"By 14:15 the smog was basically dissipated while other facilities continue to operate below capacity," the company said in the statement, without specifying the facilities.

An aromatics facility normally processes natural gas condensate or naphtha to make petrochemicals such as benzene and paraxylene.

It was not immediately clear how long the aromatics unit will remain closed. But traders said the refiner may need to market excess naphtha if the plant is to maintain normal operations.

INDIA

India’s New Greenfield Cuddalore Refinery to Get NOCL Coker Crane

Nagarjuna Oil Company Limited (NOCL) has selected Konecranes to provide the coker crane for a new greenfield petroleum refinery at Cuddalore, Tami Nadu approximately 180 km south of Chennal on the Bay of Bengal.

It is a state-of-the-art project that will refine 6 million metric tonnes of crude petroleum per year, primarily to supply the growing energy needs of southern India. The project site is spread over an area of 1600 acres, including 300 acres of greenbelt.

Nagarjuna group has partnered with the State Government of Tamil Nadu and Tata Petrodyne Ltd. to implement the refinery project. The company has also drawn up key alliances with technology and service providers for speedy project implementation. According to NOCL, forging mutually beneficial relationships with established market players has been one of the key strengths of the company.

Konecranes is the dominant supplier of coker cranes to India. The Nagarjuna coker will be the ninth coker crane Konecranes has sold to India since 2003. Konecranes was contacted through Technip India, part of the Technip Group in Paris, who had worked with Konecranes on previous projects.

The NOCL crane is a single-leg gantry design, with a capacity of 32 tonnes and a 15 cubic meter bucket, operating on a 23.8-meter span. It is semi-automated and includes the latest versions of Konecranes proprietary value-added load control technologies, which manage a number of critical functions to reduce structural stress, increase efficiency and prolong equipment life.

DynAGrab has been designed to control the two hoisting machineries that handle the mechanical bucket. A semi-automation feature allows the operator to program designated locations for the bucket: if the operator presses the button for the hopper, the crane automatically positions the bucket in the prescribed position. It also has been designed to allow for teachable destinations, which can be employed during any part of the production process, from clearing the coke pit to placing the finished product on the conveyor that transports it to a barge or rail car.

The energy-saving DynAReg feature has been designed to eliminate the issue of resistors wearing out and be environmentally responsible, as it recycles braking power back into the electrical grid. DynAPilot load sway control minimizes load sway due to bridge and trolley motion, reducing collisions between the bucket and the pit walls or hopper and dramatically reducing risk of damage. It also makes it easier to transfer a full bucket of material into the hopper without spillage. Sway control increases operator confidence, reduces training time and allows operation of the crane to its full potential.

According to Don Paulino, product manager for Konecranes, this project is a good example of the global nature of coker crane supply, as the original contact came through Technip Paris, in connection with a project in Germany. "There are relatively few companies equipped to supply and support coker cranes in India," says Paulino. "So far, we have a perfect track record of project execution there. One reason is that a Konecranes service branch is routinely established for each new coker crane sold in India, which helps us deliver the lowest lifecycle cost benefits that our customers have come to expect," he continued.

Konecranes India provides full operation and maintenance contracts, local installation support, and local project management, with engineering support from Houston, Texas and Finland.

The NOCL coker crane will be built in Houston, Texas and will ship in 2012.

Mangalore Refinery Order for 150 AUMA Electric Actuators

A major order for 150 AUMA electric actuators has been placed by Mangalore Refinery and Petrochemicals Ltd (MRPL). Increased capacity from 12 to 18.5 million metric tones per annum at the scheme is supported by the actuation technology, which aids valve operation at a new tank farm.

Located in Mangalore, the scheme is India's only facility with two hydrocrackers producing premium diesel. Hazardous location operation was a key requirement for field devices: AUMA SAExC multi-turn products were therefore supplied, which meet a range of international standards including ATEX, IECEx, CSA, FM and Indian:CCOE. ACExC actuator controls were also commissioned as part of a full service provided by AUMA India that included delivery, installation and support.

Highlighting the advantages of AUMA's modular products, MRPL reports that the interlocking actuation solution supports the site's highly automated procedures to process a variety of API crudes. Operation is enhanced with push button controls mounted at accessible angles and non-intrusive (NI) capability enables remote parameter programming using local control pushbuttons on the actuator.

JAPAN

Japan’s Cosmo Oil Plans to Restart Quake-hit Refinery in Late Fall and Replace All Fire-hit LPG Tanks for $130 Mln

Japan's Cosmo Oil Co said August 2 that it plans to restart a crude distillation unit (CDU) at its quake-hit Chiba refinery in late November.

Toshiaki Iwana, the head of the refinery, which comprises a 100,000 barrels per day No.1 CDU and a 120,000 bpd No.2 unit, made the comment to Reuters on the sidelines of a news conference.

The facility has been shut since LPG tanks caught fire there after a massive earthquake rocked the country on March 11.

The No.2 CDU would be restarted first, another company official said at the site in Ichihara city, Chiba prefecture.

Also on August 2, Cosmo said it would cost about $130 million (10 billion yen) and take two years to replace all 17 fire-hit LPG tanks at the refinery and that it would initially restart secondary units.

These would be a hydrogen producing unit, a sulfur recovery unit and a hydro-desulfurization unit, Iwana said.

Refineries in Japan shut after the March quake and tsunami have mostly recovered operations, but two remain shut.

At the end of July, the country's top oil refiner JX Nippon Oil & Energy Corp said it aims to resume refining operations at its quake-hit 145,000 bpd Sendai refinery at the end of March 2012.

VIETNAM

PetroVietnam Awards $441.57 Mln Gas Facility Construction to Local Consortium

State-owned PetroVietnam Gas Corp., or PV Gas, has awarded a contract valued at $441.57 million to a consortium comprising two domestic companies to build a gas processing plant and associated pipeline system in southern Vietnam, a PV Gas official said in July.

Under the deal signed July 16, PetroVietnam Construction Corp. and PetroVietnam Equipment Assembly and Metal Structure Co. will build the gas processing plant in Vung Tau Province, about 100 kilometers east from Ho Chi Minh City, said the official.

The plant will have an annual processing capacity of more than 7 billion cubic meters of gas, and will start operating from 2014, he said.

The new facility will use natural gas from Hai Thach-Moc Tinh and Thien Ung-Mang Cau gas fields in the Nam Con Son basin off southern Vietnam via the Nam Con Son 2 Gas Pipeline, he added.

According to state-run Vietnam New Agency, these fields are expected to produce 1.5 billion cubic meters of natural gas a year by 2013, 2.8 billion cubic meters by 2014 and 3.09 billion cubic meters by 2017.

VNA also said the contract involves construction of a pipeline system for transporting the plant's products, including liquefied petroleum gas and ethane, to neighboring industrial sites.

EUROPE / AFRICA / MIDDLE EAST

UNITED KINGDOM

Essar Energy Buys $350 Mln Stanlow Refinery and Stock for $916 Mln from Shell UK

Essar Energy Plc, an oil and gas company announced August 1 that it has completed the $350 million acquisition of the oil refinery at Stanlow from Shell UK Limited and also pays $916 million for the stock of crude oil, refined products and certain other inventory items on the refinery site.

This was determined by the market prices of these items on completion of the acquisition and was at cost.

The payment for this stock is being primarily funded from a working capital facility consisting of a three year secured revolving credit facility for $1.5 billion.

The Stanlow refinery, near to Ellesmere Port in the north west of England, has a nameplate capacity of 296,000 barrels of oil a day or bpd.

It supplies one sixth of the U.K.'s petrol, as well as being a key manufacturer of diesel and aircraft fuel.

The acquisition of the Stanlow refinery gives Essar Energy direct access to the UK market.

It is also aligned with Essar Energy's strategy to provide options for the export of high value fuel products from its refinery at Vadinar, in Gujarat state, India.

Vadinar currently has a capacity of 300,000 bpd and this will be increased to 375,000 bpd under a phase I expansion plan, due to be completed by the end of this year, and to 405,000 bpd by September 2012 under a further optimization project.

Essar Energy also owns a 50% stake in the Kenya Petroleum Refineries Ltd refinery in Mombasa, Kenya, which has a nameplate capacity of 80,000 bpd.

The consideration for the acquisition of Stanlow is payable to Shell in two installments.

The first, which was paid on completion, was for $175 million less an adjustment to reflect certain costs associated with the transferring of the Stanlow refinery to Essar Energy's subsidiary, Essar Oil UK Limited.

The second installment, of $175 million plus interest at the rate of LIBOR plus 4%, is payable on the date of the first anniversary of completion.

UNITED KINGDOM / FRANCE

PetroChina Paying Ineos $1.015 Bln to Form Oil Refining, Trading Joint Venture

PetroChina Co. (PTR), China's largest listed oil firm by capacity, said July 3 it finished forming two joint ventures with Ineos Group Holdings PLC that will conduct crude oil refining and trading, a deal in which PetroChina is paying Ineos $1.015 billion.

The joint ventures, Ineos Refining Ltd. and Ineos Refining II Ltd., will use assets at Scotland's Grangemouth refinery and France's Lavera refinery, PetroChina said in a statement.

The transaction was completed July 1 and PetroChina International (London) Co. acquired 50.1 percent of the outstanding shares of the first joint venture and 49.9% of the shares in the second, PetroChina said.

Ineos Investments (Jersey) Ltd. and Ineos Refining II will also receive a 50 percent stake each in Ineos Infrastructure (Grangemouth) Ltd., an England-based company that will provide infrastructure and services to Ineos Refining II.

NIGERIA

Nigeria to Raise Refineries Capacity from 60 to 95 Percent

To make petroleum products available Nigeria’s Federal Government is committed to raising the capacity of its four refineries to 95 per cent said Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke; who stood in for President Goodluck Jonathan at the opening ceremony of the Society of Petroleum Engineers (SPE) conference and exhibition in Abuja August 1.

Currently, the refining capacity of refineries (Port Harcourt (old), Port Harcourt (new), Kaduna and Warri) is 60 per cent.

She said: "The nation’s refining capacity would receive significant boost in the next three years, with the coming up of three new refineries and the TAM of the traditional refineries, which is now being handled by the companies that first built them to ensure that this time, the facilities will actually give us the result that we desire in this country and take us to 95 per cent capacity utilization in all our traditional refineries."

Alison-Madueke in the keynote address also said: "The overall thrust of our energy policy is in the optimal utilization of the nation’s energy resource mix for sustainable development. These policies include increasing the pace of oil and gas exploration, development and production to continually increase the nation’s reserve base and productivity, liberalize and deregulate the downstream sector and progressively privatize the oil and gas industry to bring in private sector efficiency that will engender sustainability.

"We will also monetize Nigeria’s gas resources for economic growth and development and encourage indigenous and foreign participation in upstream, midstream and downstream sectors of the oil and gas industry, on a level playing field."

The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Austen Oniwon, said the corporation has given itself 24 months to fix the old refineries.

He said a team of experts from the Nigerian National Petroleum Corporation (NNPC) will be going to United Kingdom next month to meet with the consultant on the three Greenfield refineries.

The team will review the detailed feasibility study of the refineries, which was completed in July. Thereafter, it will engage the financiers and the contractors – the Chinese to also examine the feasibility study to determine appropriately the size and configuration of the Greenfield refineries.

TAJIKISTAN

Tajikistan Begins Construction on First Oil Refinery Costing $100 - $150 Mln

Tajik President Emomali Rahmon launched the construction of the country's first oil refinery during a working trip to the town of Tursunzoda in the Shahrinav district.

Energy-poor Tajikistan has suffered from high hydrocarbon energy import bills since 1991. In 2009 and the CIA estimated that Tajikistan produces only 221 barrels per day of oil, as opposed to its consumption rate of 38,000 barrels per day.

Tajikistan began considering construction of an oil refinery after Russia introduced export duties on light oil products. According to official data, Tajikistan now spends annually $343 million on oil imports, out of a state budget of roughly $2 billion.

The oil refinery will be built in the Shahrinav district, 30 miles from the capital Dushanbe and will have an initial annual production capacity of 100,000 tons of oil per year. Rahmon suggested that if funding could be found to increase the refinery's capacity up to 500,000 tons per year then 90 percent of the country's fuel and lubricants would be met by the new installation, Moscow's Regnum news agency reported.

Energy analysts state that the kind of refinery envisaged for Tajikistan plants can be built in four-five months at a cost of $100 to $150 million and could pay for itself within eight months under local conditions.

IRAN

Iran's Offer to Expand Sri Lanka's Sapugaskanda Oil Refinery to 100,000 bpd Rejected

The Sri Lankan government has rejected Iran’s offer to assist in expanding the island’s Sapugaskanda oil refinery capacity from 50,000 to 100,000 barrels per day over a dispute on the project’s financing.

A government official with knowledge of the project speaking on condition of anonymity said that the deal breaker was Iran’s insistence that Sri Lanka commit $500 million of its share of the cost up front, but the Treasury baulked at immediately committing such a vast sum.

The source added that that the Treasury would have acceded to the Iranian request if it at least had been on a pro rata basis based on the progress of the project, but backers of the refinery expansion now need to find an alternate financing source, the Island Online reported.

In the interim the situation at Sapugaskanda is becoming more strained as the refinery is finding it increasingly difficult to produce gasoline and diesel under ever more stringent standards to meet environmental concerns, which has resulted in the refinery diminishing its output to 40,000 barrels per day.

According to environmentalists, a law imposing a standard of 500 parts per million sulfur content for auto diesel became law in January 2007, but it has not been fully implemented due to the inability of the Sapugaskanda refinery to produce fuel meeting the new standard.

IRAQ

Italian Consortium to Build $6 Bln Iraqi Refinery in Kerbala

An Italian consortium will build and operate a 200,000-barrels-a-day refinery in the middle of Iraq as part of a drive to boost fuel supply, the country's deputy oil minister said July 26.

Ahmad al-Shammaa told Dow Jones Newswires the preliminary agreement is valid for six months, during which time the consortium should make progress on securing finance and equipment to build the project in Kerbala province, some 100 kilometers south of Baghdad.

The joint venture, named as Refinery of Kerbala Corporation Ltd., includes Italy's Saipem SpA (SPM.MI), a large financial institution, and ex-Eni SpA (E) executives, Shammaa said.

"After six months if they prove to be serious and they have made progress in securing financial, technical and equipment suppliers, we will sign with them a final contract to build the refinery," he said.

The project will be built on the basis of build, operate and own and is estimated to cost around $6 billion. Construction is expected to take around four years, Shammaa said.

Shell Global to Supply Technology for Iraq Basrah Refinery Upgrade

Shell Global Solutions has signed an agreement with the South Refineries Co. of Iraq for the provision of technology licenses to a refinery in Basrah, Southern Iraq. Shell will provide a license for a sulfur recovery unit and visbreaker unit as part of the agreement, it said.

Shell Global Solutions has signed an agreement with the South Refineries Co. of Iraq for the provision of technology licenses to a refinery in Basrah, Southern Iraq.

Shell will provide a license for a sulfur recovery unit and visbreaker unit as part of the agreement, it said.

Together with the refinery expansion, these technologies will contribute to optimized operations at the Basrah refinery, significantly boosting capacity.

The sulfur recovery unit is likely to enable the refinery to meet and exceed world standards for emissions, while the visbreaking unit will help increase overall upgrading, building a future proof solution for the long-term.

The upgrading of the refinery with Shell Global Solutions’ technologies will contribute to fulfilling Iraq’s expected future demand for oil products, the companies said.

“These license agreements demonstrate Shell Global Solutions’ commitment to the country and the development of this sector, as part of the Shell Group’s long-term strategy in Iraq,” said S. Ozmen, vice president of licensing for Shell Global Solutions.

“We are involved in oil production through our Majnoon field operations, we signed a heads of agreement (HOA) in 2008 to capture and monetize gas being flared in the Southern Iraq fields, and we are now entering the downstream sector in Iraq, a key growth market,” he added.

Axens Awarded South Refineries Contract in Iraq

South Refineries Company (SRC), a subsidiary of the Iraqi Ministry of Oil, awarded Axens the Basic Engineering Design and License contracts for the construction of the new refinery in Maissan, Southern Iraq. Axens will supply the following process technologies for the refinery:

- a Naphtha Hydrotreater - 35,100 BPSD (barrel per stream day)

- a CCR Reformer (OctanizingTM) for gasoline production - 24,500 BPSD

- a Vacuum Gas Oil (VGO) Hydrotreater - 56,300 BPSD - producing a moderate sulfur feedstock for the Fluid Catalytic Cracker (FCC),

- a Deasphalted Oil Hydrotreater based on HyvahlTM technology - 27,600 BPSD

- a saturated Liquefied Petroleum Gas (LPG) treatment unit (SulfrexTM) - 278,000 MTPA (metric ton per annum),

- an unsaturated LPG treatment (SulfrexTM) - 399,400 MTPA

The refinery will have a capacity of 150,000 BPSD and will deliver high quality products mainly for the domestic market.

OMAN

Oman Extends Bid Deadline for Sohar Refinery Expansion

The Omani company plans to expand crude processing capacity at the Sohar refinery to 187,000 barrels a day.

Oman is extending the bidding deadline to next month for engineering and construction companies seeking to work on the expansion of a refinery in the port of Sohar.

Engineering and building companies had until August 3 to collect tender packages related to the project and will have until September 6 to submit bids for the work, the state-run refinery company said in an announcement on its website.

Bids were initially to be due August 8.

Oman Oil Refineries and Petroleum Industries SAOC aims to expand capacity at the Sohar facility. The company owns one refinery and two chemical plants at Sohar and another fuel processing plant at Mina al Fahal near the capital Muscat.

The Omani company plans to expand crude processing capacity at the Sohar refinery to 187,000 barrels a day from 116,000 barrels, according to Chicago Bridge and Iron Co, known as CB&I, which won the contract for engineering and design work on the project.

Capacity will be expanded by adding units to make cleaner-burning fuels and making existing facilities run more efficiently, CB&I said in a statement March 2.

SAUDI ARABI

Foster Wheeler Announces Riyadh Refinery FEED Contract

Foster Wheeler AG announced July 5 that Foster Wheeler SOFCON, an unincorporated consortium between a subsidiary of Foster Wheeler's Engineering and Construction Group and A. Al-Saihati, A. Fattani & O. Al-Othman Consulting Engineering Co., (SOFCON), has been awarded a contract by Saudi Arabian Oil Company (Saudi Aramco) for the front-end engineering design (FEED) and project management services for the Clean Transportation Fuels Project at the Riyadh Refinery, Kingdom of Saudi Arabia.

The Foster Wheeler contract value for this project was not disclosed. The initial release of work was included in the company's first-quarter 2011 bookings. The company expects to receive the main release of work in the third quarter of 2011.

The objective of this project is to reduce the sulfur content of gasoline and diesel produced by the refinery to 10 parts per million, and to reduce the level of benzene in gasoline.

The company's FEED scope includes new isomerization, naphtha splitting and sulfur guard-bed units as well as the addition of new equipment, including a diesel hydrotreater reactor, in existing units. The FEED also includes the debottlenecking of the hydrocracker and gas concentration units, and replacement of crude and vacuum distillation tower internals. Other new facilities include two new tanks, a new pipe rack, instrument air compressor, condensate system, substation, process interface building and workshop. Main control and monitoring systems will also be upgraded, as will the laboratory facilities.

In a joint statement, Umberto della Sala, Interim Chief Executive Officer, Foster Wheeler AG, and Ala'a Fattani, President and Chief Executive Officer, SOFCON, said, "We have been involved in this project from its early stages and are delighted to receive this latest award from Saudi Aramco. Our intention is to execute the FEED in-Kingdom from our offices in Al-Khobar."

McIlvaine Company,

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