MOSCOW (MRC) -- PBF Energy Inc said it was operating its refineries at minimum rates, with throughput about 30% lower than the refiner’s expectations, as coronavirus-driven travel curbs hit fuel demand, said Reuters.
The company also announced sweeping cost-cutting measures, including scrapping its dividend, to tackle the demand shock from the virus pandemic as travel restrictions have led to grounding of flights and fewer vehicles on roads.
The refiner announced pay cuts taken by company executives and employees, with Chief Executive Officer Thomas Nimbley taking a 67% cut, while the board and executive leadership have halved their compensation.
The refiner expects to lower 2020 operating expenses by about $125 million and will reduce capital expenditure for the year by $240 million or 35%, including spending on the newly acquired Martinez refinery.
The company also withdrew its throughput outlook for the first quarter and 2020, and said it was suspending its quarterly dividend of USD0.30 per share.PBF also agreed to sell five hydrogen plants to Air Products and Chemicals Inc for USD530 million in cash.
As MRC informed earlier, US refiner PBF Energy has completed its acquisition of Shell’s 157,000 bbl/day Martinez refinery near San Francisco, California. The USD1bn deal, agreed in June 2019, was completed effective 1 February 2020.
PBF Energy and Shell have agreed to jointly move forward with reviewing the feasibility of building a proposed renewable diesel project which would repurpose existing idled equipment at the Martinez refinery to create a renewable fuels production facility. The detailed feasibility review and planning for this project is expected to continue after deal closing.
As MRC informed earlier, in March 2019, Mammoet safely completed a critical lift at Shell’s Pennsylvania Chemicals Project in Potter Township, utilizing its MSG80 to hoist a 2,000 ton quench tower into position. The facility is the first major US project of its kind to be built outside of the Gulf Coast region in 20 years. Once operational, the facility will boast an ethane cracker and three polyethylene units, and is expected to employ up to 600 employees.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,093,260 tonnes in 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments rose from both domestic producers and foreign suppliers. The estimated PP consumption in the Russian market was 1,260,400 tonnes in January-December 2019, up by 4% year on year. Supply of almost all grades of propylene polymers increased, except for statistical copolymers of propylene (PP random copolymers).
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