Parkland cancels plans to build stand-alone renewable diesel complex at B.C. refinery

Parkland cancels plans to build stand-alone renewable diesel complex at B.C. refinery

MOSCOW (MRC) -- Parkland Corp. says it will not go ahead with its plan to build a stand-alone renewable diesel complex at its refinery in Burnaby, B.C., said Winnipegfreepress.

The company says it made the decision as it faced rising project costs, a lack of market certainty around emerging renewable fuels and legislation in the U.S. that advantages U.S. producers.

Parkland had announced a plan in May 2022 to build a stand-alone renewable diesel complex within its Burnaby refinery, capable of producing 6,500 barrels per day.

The company says it is still going ahead with its plan to expand co-processing of renewable fuel alongside traditional petroleum-based materials at the refinery to 5,500 barrels per day.

The announcement came as Parkland raised its quarterly dividend to 34 cents per share from 32.5 cents and reported a fourth-quarter profit of USD69 million or 39 cents per diluted share on USD8.72 billion in sales and operating revenue.

The result compared with a profit of USD22 million or 15 cents per diluted share on USD6.29 billion in sales and operating revenue in the fourth quarter of 2021. This report by The Canadian Press was first published March 3, 2023.

We remind, in 2021, Parkland Fuel plans to increase renewable fuel production by more than 6,500 b/d at its refinery in Burnaby, British Columbia, to offer more low carbon products. Roughly C$600mn ($460mn) will be needed to expand existing facilities and build a stand-along renewable diesel complex on the site of its 55,000 b/d refinery, located in greater Vancouver on the Pacific coast of Canada. The refinery co-processed about 1,500 b/d of renewable fuels across 2021.

Lukoil has begun ship-to-ship loadings of ULSD

Lukoil has begun ship-to-ship loadings of ULSD

MOSCOW (MRC) -- Russian oil producer Lukoil has started ship-to-ship (STS) loadings of ultra-low-sulfur diesel (ULSD) off its western exclave of Kaliningrad, according to traders and Refinitiv data, said Hydrocarbonprocessing.

About 33,000 tons of ULSD loaded by Lukoil in mid-February on to the M.T. Kalne tanker in the Baltic port of Primorsk has been taken to the port of Kaliningrad and is now being transferred on to the vessel Sea Runner, according to traders and Refinitiv data.

Lukoil has previously conducted STS loadings of Urals oil near Kaliningrad. Russia also plans to start STS loadings of light oil products and liquid petroleum gas (LPG) near its Baltic port of Ust-Luga, according to Federal State Unitary Enterprise (FSEU) Rosmorport.

A full EU embargo on Russian oil products went into effect on Feb. 5 and traders have since rerouted diesel exports to Africa and Asia, as well as used STS transfers.

We remind, Lukoil completes reconstruction of several units at Volgograd refinery. A large-scale reconstruction has been completed at the Volgograd refinery. The project included modernization of the CDU-VDU-5 crude distillation unit with production capacity of 3.5 MMtpy and the solvent extraction unit with production capacity of 300, 000 tpy. Over 230 core equipment items were installed and technologically outdated units were decommissioned. The share of Russia-made equipment installed during the reconstruction exceeded 70%. The construction site spanned the area of 34 thousand square metres; investments into the project exceeded 12 B roubles.

Chinese diesel and gasoline exports continue to rise

Chinese diesel and gasoline exports continue to rise

MOSCOW (MRC) -- China's diesel exports rose for a second month in December, while gasoline exports climbed for a third month, as the country's COVID outbreak limited domestic fuel demand, and refiners utilized their expanded yearly export quotas, said Hydrocarbonprocessing.

China exported 2.79 MMt of diesel in December, representing a 32.8% increase on November's 2.10 MMt, data from the General Administration of Customs showed on Wednesday. That is the highest since March 2021. Total diesel exports for the year amounted to 10.92 MMt vs. 17.21 MMt for 2021.

Gasoline exports were 1.91 MMt in December, the highest since October 2020, and up from 1.49 MMt the month before. Total gasoline exports for 2022 stood at 12.56 MMt vs. 14.54 MMt in 2021. Refiners continue to offload inventory abroad to make full use of their yearly export quotas after a year in which COVID-19 restrictions have choked domestic fuel demand. Though domestic travel initially picked up after restrictions were abruptly eased at the end of November, the subsequent nationwide surge in COVID cases in December dampened domestic consumer and industrial fuel demand as people stayed home to avoid infection.

To stimulate the pandemic-battered economy, the government issued an additional 13.25 MMt of export quota for diesel, gasoline and jet fuel, taking the total 2022 quota to 37.25 MMt, even with 2021's quota.

The government recently announced its first refined product export quota for 2023 at around 19 million tonnes as it seeks to further help demand. However, road traffic volumes in some large cities are appearing to increase. Domestic consumption of refined products, such as petrol and kerosene, is expected to pick up through the Lunar New Year, which falls on Jan. 21, with millions of Chinese expected to travel for the week-long holiday.

China's liquefied natural gas (LNG) imports posted their first major annual decline since the country began importing it in 2006. Total LNG imports in 2022 amounted to 63.44 MMt, down 19.5% on 2021's figures. December imports came in at 6.6 MMt, up only marginally on November and down 13% on the year. The drop, predicted by industry analysts, comes after a year in which pandemic restrictions curtailed manufacturing demand for the fuel. Global LNG prices, though lower in recent months, were high through much of 2022 due to the war in Ukraine, leading to a further contraction in demand from Chinese industrial consumers.

We remind, Sinopec Corp announced that it has completed trial runs at a 1-MMtpy ethylene plant in the southern Chinese province of Hainan that will boost exports. The facility is part of a 28.6 B-yuan (USD4.15 B) complex built at the site and is the second major petrochemical plant starting this year after a similar-sized facility was announced last week by PetroChina in Guangdong province.

Shell completes withdrawal from its interest in Salym Petroleum Development in Russia

Shell completes withdrawal from its interest in Salym Petroleum Development in Russia

MOSCOW (MRC) -- Shell said it completed withdrawal from its interest in Salym Petroleum Development in Russia on 3 March, said the company.

Shell Salym Development BV - a subsidiary of Shell plc - completed the withdrawal from its 50% interest in the Salym project, which had been jointly developed with Gazprom Neft, a subsidiary of Gazprom. This follows the receipt of all necessary regulatory approvals.

Shell also intends to end its involvement in the Nord Stream 2 pipeline project. At the end of 2021, Shell had around USD3bn in non-current assets in Russian ventures.

Shell said it expects that the decision to start the process of exiting joint ventures with Gazprom and related entities will impact the book value of Shell’s Russia assets and lead to impairments.

We remind, Shell Chemical Appalachia LLC announced it has commenced operations of its Pennsylvania Chemical project, Shell Polymers Monaca (SPM). The Pennsylvania facility is the first major polyethylene manufacturing complex in the Northeastern United States and has a designed output of 1.6 MMt annually.

Cepsa to invest more than USD3.8 B in sustainable energy/mobility by 2027

Cepsa to invest more than USD3.8 B in sustainable energy/mobility by 2027

MOSCOW (MRC) -- Spanish oil and gas company Cepsa plans to nearly double its investments over the next three years to a total of 3.6 B euros (USD3.82 B), with more than half of that amount going to sustainable energy and mobility, said the company.

It also posted a full-year net profit at current cost of supplies (CCS) of 790 MM euros for 2022, up sharply from the 310 MM euros reported in 2021. The planned investment increase of 93% for 2023-25 is from the previous three years, Cepsa said.

Adjusted CCS earnings before interest, tax, depreciation and amortization (EBITDA), excluding one-offs, jumped 62% last year to 2.94 billion euros. Cepsa said the improved core earnings were driven by better market conditions, higher underlying commodity prices and increased refining margins.

In 2022, Cepsa paid a total of 6.65 billion euros in taxes, which it said was an all-time record. Over two-thirds were paid in Spain.

The company said it will pay about 325 million euros in Spain's temporary energy windfall tax based on 2022 revenues, though the charge was not reflected in last year's results. Chief Executive Maarten Wetselaar has vowed to challenge the tax in court.

We remind, Cepsa has signed a deal with the Dutch port of Rotterdam to ship green hydrogen from southern Spain to northern Europe. The hydrogen will be produced at Cepsa’s San Roque Energy Park near the Bay of Algeciras, and will be exported through hydrogen carriers such as ammonia or methanol to the Port of Rotterdam.