Peru to shutter refinery for a year

MOSCOW (MRC) -- Peru’s state-owned energy company will halt operations at its flagship oil refinery Talara for about a year starting in November, reported Reuters.

Talara will halt operations to complete a USD5 billion expansion project, the company said.

Petroperu said it plans to import fuel in that period to ensure demand is met in the Andean country of about 30 million people. It did not specify what kind of fuel it would import.

Petroperu would continue to buy oil from companies that operate in Peru and would process the oil at its Conchan refinery, the company said in a statement.

Talara, on Peru’s northern Pacific coast, is the second largest oil refinery in Peru after Repsol’s Pampilla.

The USD5 billion project to upgrade Talara, expanding its processing capacity to 95,000 barrels of oil per day from 65,000, started in 2014 and is about 73 percent complete.

Peru is a net oil importer. Petroperu said Peru’s fuel imports will fall significantly once the expansion is complete, which it estimated would happen at the end of 2020.

As MRC informed before, Mexico will delay the construction of the Dos Bocas refinery and instead funnel the USD2.5 billion earmarked in 2019 for the project into state oil firm Pemex, Arturo Herrera, Mexico’s deputy finance minister, told the financial Times in an interview in March 2019.

US crude stockpiles slump unexpectedly on strong export, refining demand

MOSCOW (MRC) -- US crude oil stockpiles last week fell by nearly 10 million barrels, the most since July, boosted by strong export and refining demand, reported Reuters with reference to the Energy Information Administration.

Crude inventories fell by 9.6 million barrels in the week to March 15, surprising analysts who had expected an increase of 309,000 barrels, according to a Reuters poll.

That brought overall crude inventories, not including the U.S. Strategic Petroleum Reserve, down to 439.5 million barrels, the lowest since January.

Crude stocks at the Cushing, Oklahoma, delivery hub were also down by 468,000 barrels, EIA said.

Net US crude imports fell last week by 660,000 barrels per day as exports alone rose over 800,000 bpd to 3.4 MMbpd, near an all-time record.

The four-week moving average of exports last week was 3 MMbpd, double where it was at this time a year ago, as the four-week average of imports fell to 6.6 MMbpd, the lowest since March 1996.

US crude prices rose after the data was released, hitting levels not seen since Nov. 12. West Texas Intermediate crude futures were up 22 cents, or 0.4 percent, at USD59.25 per barrel as of 10:55 a.m. EDT (1455 GMT), after touching a high of USD59.60 a barrel. Brent crude rose 27 cents to USD67.86 a barrel.

"I think we’re starting to see the impact of the OPEC production cuts. We’re seeing the impact of the Venezuelan cuts, they’re starting to show up in the numbers. Refiners are responding to strong demand, so they’re keeping those numbers relatively high," said Phil Flynn, analyst at Price Futures Group in Chicago.

The Organization of the Petroleum Exporting Countries and its allies have curbed supplies since the beginning of the year, while US sanctions on Venezuela and Iran have cut exports.

US crude production has, however, been surging to record highs since last year, with output last week rising 100,000 bpd, back to its 12.1 million-bpd peak.

"Domestic production held steady, but even at 12 million barrels per day, the export wave is keeping supplies from growing. Demand for gasoline rose sharply, as well, rivaling peak demand levels," said John Kilduff, a partner at Again Capital in New York.

Refinery crude runs rose by 178,000 bpd as utilization rates rose by 1.3 percentage points to 88.9 percent of total refining capacity, the highest in nearly two months, EIA data showed.

Gasoline stocks fell by 4.6 million barrels, compared with analysts’ expectations in a Reuters poll for a 2.4 million-barrel drop.

Distillate stockpiles, which include diesel and heating oil, fell by 4.1 million barrels, versus expectations for a 1.1 million-barrel drop, the EIA data showed.

Residents told to shelter in place after Texas petrochemical plant fire

MOSCOW (MRC) -- Residents of a Houston-area community were told to remain indoors and schools in six communities were closed, after a petrochemical plant fire that burned for days released high levels of a cancer-causing chemical into the air, said Hydrocarbonprocessing.

The three-day blaze at Mitsui unit Intercontinental Terminals Co (ITC) in Deer Park, Texas, was extinguished early on Wednesday after it destroyed 11 giant tanks containing fuels. No injuries were reported. The City of Deer Park, 20 miles (32 km) east of Houston, issued a shelter-in-place advisory to its 34,000 residents after reports of “action levels” of benzene or other volatile organic compounds (VOCs) within city limits, the municipality said on its website.

Inhaling benzene, a carcinogenic chemical, can cause minor irritation to skin, eyes and the respiratory system, while severe exposure can harm the nervous system or lead to unconsciousness, according to the Canadian Center for Occupational Health and Safety.

ITC, which reported that workers monitoring the scene of the fire had detected increased levels of benzene, said on its website the levels observed were “below those that represent an immediate risk.” A spokeswoman for ITC could not say what levels were detected. Residents were advised to remain indoors, turn off air conditioning and heating systems, and close doors and windows, making sure to plug any gaps, holes or cracks with wet towels or sheets to prevent the entry of potentially harmful vapors.

A state highway was closed in the city and the Deer Park Independent School District and five other nearby school systems canceled classes. The fire, which began on Sunday morning, destroyed 11 tanks holding up to 80,000 barrels of gasoline and other fuels. The site had as many as 242 tanks able to hold up to 13.1 million barrels of fuels before the fire.

The cause of the blaze has not been determined, officials said. The Texas Commission on Environmental Quality estimated that on the first day of the fire, 6.2 million pounds of carbon monoxide and thousands of pounds of nitrogen oxides, sulfur dioxide and toluene were released.

The environmental regulator said it was investigating the incident. It has cited Intercontinental Terminals for violations of state air-emissions rules 39 times over the past 16 years. A U.S. Environmental Protection Agency official said on Wednesday that air-monitoring systems near the site along the nation’s busiest petrochemical shipping port found no hazardous levels of volatile organic compounds or particulate matter.

The federal agency said it will test local waterways for possible contamination from the millions of gallons of water and foam that were dropped on the fire since Sunday. Some of the liquids leaked out of a containment dike and into a nearby drainage ditch that feeds into the Houston Ship Channel, the EPA official said.

The Harris County district attorney’s office has assigned an environmental prosecutor for any possible wrongdoing, a spokesman said.

No one on this side of the panel is aware of this investment in Sri Lanka

MOSCOW (MRC) -- Oman’s oil ministry denied being part of a USD3.85 billion plan to build an oil refinery in Sri Lanka, a day after the government in Colombo announced the country’s participation, as per Hydrocarbonprocessing.

Sri Lankan officials told a news conference on Tuesday that a joint venture between the Oman oil ministry and a Singapore investment vehicle owned by India’s Accord Group had agreed to build the 200,000 barrel per day refinery near Chinese-controlled Hambantota port on the island’s south coast.

The ministry was to take a 30 percent stake, the officials said, representing what would be Sri Lanka’s biggest single foreign direct investment. “No one on this side of the panel is aware of this investment in Sri Lanka,” Salim al-Aufi, undersecretary of Oman’s ministry of oil and gas, told a news conference on Wednesday.

“It came as news to me, I don’t know who is signing the check for USD3.8 billion.” Sri Lankan officials could not be reached for immediate comment on the Oman denial. It was a public holiday in Sri Lanka on Wednesday.

Any big deal in Sri Lanka involving Indian investment will pose a challenge to China, which had until recently been on track to be the dominant foreign investor on the island.

India has become concerned in recent few years about China muscling into Sri Lanka and other countries in a region where India is the traditional power.

China is the biggest buyer of Omani oil, importing about 80 percent of the Middle Eastern nation’s overall crude exports in January, according to an Oman government website.

Nan Ya to run 2-EH unit at full capacity by end of March

MOSCOW (MRC) -- Taiwan's Nan Ya Plastics (part of Formosa Petrochemical) aims to run its 2-ethyl hexanol unit at full capacity by the end of March after the plant restarted March 10, as per Apic-online.

The 2-EH unit is located at Mailiao and has a production capacity of 205,000 mt/year.

The unit was shut down unexpectedly February 12 due to a technical issue, with a total production loss of 12,000 mt."We are only running at 80% of our operating rate at the moment, but we will reach full output capacity by end-March," said a company source.

Nan Ya Plastics is the largest 2-EH producer in Taiwan.

As MRC informed before, on 19 March, 2018, Formosa Petrochemical Corp (FPCC) undertook an emergency shutdown at its No. 1 cracker in Mailiao owing to technical issues. The plant remained off-line for around one day. Located at Mailiao in Taiwan, the No. 1 cracker has an ethylene production capacity of 700,000 mt/year, propylene production capacity of 350,000 mt/year and butadiene production capacity of 109,000 mt/year.

Formosa Petrochemical is involved primarily in the business of refining crude oil, selling refined petroleum products and producing and selling olefins (including ethylene, propylene, butadiene and BTX) from its naphtha cracking operations. Formosa Petrochemical is also the largest olefins producer in Taiwan and its olefins products are mostly sold to companies within the Formosa Group. Among the company"s chemical products are paraxylene (PX), phenyl ethylene, acetone and pure terephthalic acid (PTA). The company"s plastic products include acrylonitrile butadiene styrene (ABS) resins, polystyrene (PS), polypropylene (PP) and panlite (PC).