Bosnian sole oil refinery halts operation for maintenance

MOSCOW (MRC) -- Bosnia’s sole oil refinery Brod said it had halted operations this month for an overhaul which may take a year, reported Reuters.

The refinery, which is majority owned by Russia’s Neftegazinkor, a unit of state-owned oil company Zarubezhneft, was shut on Jan. 9 to assess the works needed to restore the refinery to full capacity, a spokeswoman for Brod told Reuters.

Petar Djokic, energy minister for Bosnia’s autonomous Serb Republic, where the refinery is located, told local media on Thursday that production may resume next year.

In the meantime, demand would be covered through imports from Serbian oil company NIS, majority owned by Russia’s Gazprom Neft, he added.

The refinery was hit by a blast in October which killed one worker and injured nine. The results of the inquiry into the cause of the explosion have not been made public.

Auditors have warned that the refinery, which processes 1.2 million tonnes of crude a year, may face liquidity problems after it piled up losses and its liabilities exceeded assets.

Brod has dismissed those claims.

As MRC wrote before, in October 2017, Russian oil producer Gazprom Neft, through its subsidiary Naftna Industrija Srbije (NIS), started construction of a new deep conversion complex (DCC) at its Pancevo Refinery in Serbia with an investment of over EUR300m. The new complex will be equipped with delayed coking technology. It is anticipated to be ready in 2019 and will help NIS to start production of petroleum coke (pet coke) which is currently not done in the country.

The Gazprom subsidiary holds 56% in NIS, an oil and gas company in which the Serbian government is a major shareholder.

Mexican Pemex to oversee 'restricted auction' for new refinery

MOSCOW (MRC) - Mexican national oil company Pemex will oversee the process to pick the company that will build a new multibillion-dollar oil refinery in the southern Gulf Coast state of Tabasco, Energy Minister Rocio Nahle said, as per Reuters.

President Andres Manuel Lopez Obrador has pledged to fast-track the construction of the new refinery in Dos Bocas, Tabasco, to boost lagging domestic production of gasoline and diesel, and wean the country from a growing dependence on imported fuels.

"It will be a restricted auction because we’re going to invite serious, specialized companies," Nahle said at an energy conference in Mexico City.

The minister, who also serves as president of the Pemex board of directors, added that the invitation-only process will allow the government to prohibit the participation of international firms that have "histories of corruption."

Nahle did not say when the Pemex auction would be conducted, or which firms were being considered.

Pemex’s recently approved 2019 budget allocates almost USD2.5 billion for the refinery, which aims to be able to process 340,000 barrels per day (bpd) of heavy crude.

Lopez Obrador has said that the total price tag for the facility will be approximately $8 billion, and would mark Pemex’s seventh domestic oil refinery.

The company also has a 50 percent stake in the Deer Park refinery in Texas operated by partner Royal Dutch Shell.

PTT and BIG form JV to build first ASU from cold waste in Thailand

MOSCOW (MRC) -- Thailand's PTT Plc and Bangkok Industrial Gas Co. (BIG) have formed a joint venture to build the "first" air separation unit (ASU) that will use cold waste from the regasification of liquefied natural gas in Map Ta Phut, Thailand, as per Apic-online with reference to BIG's announcement.

The project, expected to require an investment of around USD47-million, will be capable of producing over 450,000 t/y of liquid oxygen, nitrogen and argon using advanced technology. Operations are scheduled to begin in 2021.

According to BIG, the new plant will bring "tremen-dous" environmental and energy efficiency benefits, such as reducing carbon dioxide emissions by 28,000 t/y and by reducing chilled water waste emissions from PTT's operations in the gulf.

The joint venture is owned 51% by PTT and 49% by BIG.

As MRC informed previously, PTT started commercial operations at its new 400,000 mt/year metallocene C6 linear low density polyethylene plant at Map Ta Phut, Thailand, in the first quarter of 2018.

PTT Global Chemical is a leading player in the petrochemical industry and owns several petrochemical facilities with a combined capacity of 8.45 million tonnes a year.

Mars crude falls from 5-year high ahead of Gulf refinery repairs

MOSCOW (MRC) -- Mars Sour, a US offshore crude grade, fell sharply as market participants focused on upcoming Gulf Coast refinery maintenance work expected to take crude units offline and reduce demand for the medium sour grade, reported Reuters with reference to traders.

Mars barrels for delivery in March traded at a USD5.20 premium to US crude futures, weakening after reaching a five-year high of USD7.35 last week amid rising demand for the medium sour crude, traders said.

Production cuts by the Organization of Petroleum Exporting Countries have made medium sour grades similar to Mars harder to find for refiners worldwide, increasing demand for "overseas buyers looking to replace Middle East barrels," Morningstar analyst Sandy Fielden wrote in a client note on Monday.

Demand for medium sour grades has risen in South Korea, India, Japan, Malaysia, Singapore and China, Fielden said, noting Chinese purchases of US crude have fallen sharply in recent months amid the US-China trade war.

But domestic demand for Mars began to normalize ahead of Gulf Coast refinery turnarounds scheduled for March and April, traders said. Mars on Monday traded near the same levels as West Texas Intermediate at East Houston, also called MEH, and at a USD1.50 to USD2 discount to Light Louisiana Sweet, a normal range, traders said.

Union says time running out for new refinery contract

MOSCOW (MRC) - The United Steelworkers union (USW) warned on Tuesday that time was running out to reach a new national agreement for U.S. refinery and chemical plant workers before the current pact expires on Friday, sources familiar with the talks said, as per Hydrocarbonprocessing.

The USW and Shell Oil Co, the U.S. arm of Royal Dutch Shell Plc, have been in talks since Jan. 16 for an accord on wages, benefits and safety covering 30,000 refinery, chemical plant and pipeline workers.

A message sent to union members noted that less than 60 hours remain to reach a new agreement. The current contract expires shortly after 12 a.m. on Friday, the sources said.

The message also said Shell needed to “get serious about economics and our other issues,” the sources said. Shell spokesman Ray Fisher said the company was working for an agreement with the union.

“We continue actively working through numerous topics to reach an agreement with the USW International Union that best ensures opportunity for our workers to continue to grow, develop and enjoy earnings that are among the most competitive in the manufacturing industry,” Fisher said.

The USW has said the talks will not be automatically extended past the contract’s expiration. These are first talks since a breakdown in negotiations in 2015 led to a series of rolling strikes in which more than 7,000 workers walked off their jobs at 12 refineries and three chemical plants. Most strikes ended within two months.

The sources said the chances for a national strike had increased slightly because of slow paced negotiations. Going into talks, both sides said they wanted to reach a mutually beneficial agreement.

This year’s negotiations made progress early on union proposals to increase health and safety representation at plants, according to the sources, but have bogged down over a USW proposal to begin replacing non-union workers who perform maintenance work with union members by 10 percent a year.

The union is seeking an 8-percent-a-year pay increase for hourly workers under a new three-year contract. U.S. refinery workers make about USD40 an hour after four years on the job.