PERN, refiners discuss oil decontamination after pipe scandal

MOSCOW (MRC) -- Polish pipeline operator PERN said it was talking with refineries about how to decontaminate their oil after Poland stopped deliveries of tainted crude from Russia last month, said Reuters.

"PERN is in constant contact with refineries in terms of parameters of oil transferred," PERN said in a statement.

The operator said its refinery clients continued to refine crude as PERN was supplying them with oil accumulated in the system or delivered by sea.

Poland, Germany, Ukraine, Slovakia and other countries halted oil imports via the Druzhba pipeline in April after finding contaminants that can damage refinery equipment.

Pertamina says refinery high octane fuel output up 67%

MOSCOW (MRC) -- Indonesia's state-energy company PT Pertamina said its production of high octane gasoline at its Cilacap refinery will increase to 1.67 million barrels per month this year from a previous rate of 1 million barrels per month, reported Reuters with reference to company officials.

"Pertamina can significantly reduce imports of high octane motor gas components for gasoline products blending," Pertamina director Ignatius Tallulembang said.

The increase is expected as Pertamina completes the development of its Cilacap Blue Sky project in mid-2019.

As MRC informed before, in September 2018, Eni and PT Pertamina (Persero) signed in Porto Marghera, at Eni Green Refinery, a Memorandum of Understanding further expanding the relationship into green refinery.

Pertamina is an Indonesian state-owned oil and natural gas corporation based in Jakarta. It was created in August 1968 by the merger of Pertamin (established 1961) and Permina (established 1957). Pertamina is the world's largest producer and exporter of liquefied natural gas (LNG).

Hengli boosts Saudi oil buys as new refinery ramps up

MOSCOW (MRC) -- China’s privately owned Hengli Petrochemical has increased its Saudi Arabian crude imports for April and May as it prepares to bring a new refinery in northeastern China to full capacity, according to officials and ship tracking data, as per Hydrocarbonprocessing.

The purchases have kept Saudi crude exports to China elevated so far in the second quarter despite lower global demand during peak refinery maintenance season. Saudi oil exports to China averaged at 1.37 million barrels per day (bpd) in the first four months this year, up from 1.01 million bpd in the same period of 2018, Refinitiv trade flow data showed.

Hengli is expected to lift 6 million to 8 million barrels of Saudi crude in May (194,000 bpd to 258,000 bpd), after loading about 8 million barrels in April, the highest monthly intake since it started trial runs at its 400,000-bpd refinery in December, one of the sources said.

"The plant is now running at 85 to 90 percent capacity. It can reach full capacity very, very soon,” said a company executive with direct knowledge of the plant’s operation. A second company source said the plant is targeting May 20 for full operations.

A company spokesman confirmed that Hengli aims to bring the plant - located in the port city of Dalian - to full operation sometime later this month, without giving further details.

From June onwards, Hengli’s Saudi oil intake will average around 4 million to 6 million barrels per month, while the remaining supplies will be made up of Iraq’s Basra Light crude and Brazil’s Marlim grade, said the company executive.

"We like Saudi oil in general, as it yields fairly good margins for the plant," the executive said. Hengli has signed on to buy 130,000 bpd of crude from Saudi Aramco, a deal that started in the second-half of 2018.

Hengli loaded about 2 million barrels per month of Saudi oil in the first quarter, according to one of the sources and Refinitiv data, helping to keep the company’s total liftings so far this year within contractual volume. Hengli said in March its plant successfully produced oil products and paraxylene, a petrochemical used to make textiles and bottles.

Saudi Arabia was China’s top oil supplier for a second straight month in March, overtaking Russia, and thanks to supply agreements with Hengli and another new privately controlled refiner Rongsheng Petrochemical.

Hengli, new to the refined fuel market, has deployed more than 200 employees for domestic marketing, with plans to lease storage space in Tianjin in north China, Yangzhou and Jiangyin in the eastern province of Jiangsu, and Dongguan in the southern province of Guangdong, said the second company official.

Fire contained at Phillips 66 refinery

MOSCOW (MRC) -- The Los Angeles County firefighters contained a blaze at Phillips 66’s Los Angeles refining complex, KNBC-TV reported, said Hydrocarbonprocessing.

There were no reports of injuries from the fire which broke out in a pump containing residual crude oil in the Carson, California, section of the 139,000-bpd Los Angeles refining complex, according to KNBC.

A Phillips 66 spokesman said the company would have a statement on Thursday.

A shelter-in-place for residents in Carson was canceled.

The Phillips 66 Los Angeles complex includes two adjoining refineries in Carson and Wilmington, California, which are suburbs of Los Angeles.

Hungary to release oil from reserves after pipeline contamination issue

MOSCOW (MRC) -- Hungary’s government will release 400,000 tonnes of crude oil from its emergency reserves to make up for lost imports via a Russian pipeline, reported Reuters with reference to state secretary Peter Kaderjak.

The oil, which will supply a refinery owned by energy firm MOL, is equivalent of about 60 percent of Hungary’s crude reserves, he told reporters, adding it was not clear when chloride in oil in the Druzhba pipeline would return to levels they were before a problem of tainted crude arose last week.

The move will supply MOL with enough crude to run its Szazhalombatta refinery for up to two months, Kaderjak said, adding that the government would replenish its reserves by the end of 2019.

As MRC wrote previously, in late April 2019, Hungarian energy group MOL temporarily suspended accepting crude oil through the Druzhba pipeline, it said adding, however, that the move did not affect its refineries.