Refineries UPDATE

 

September 2011

 

McIlvaine Company

www.mcilvainecompany.com

 

TABLE OF CONTENTS

 

 

INDUSTRY ANALYSIS

AMERICAS

U.S.

ND Oil Producers Using Rail for Refinery Shipping but Regulators Say It Won't  Replace Pipeline

Fire at Valero’s Memphis Refinery Causes Midwest Gasoline to Strengthen

Unplanned and Planned Production Outages at U.S. Refineries

Proposed North Dakota Refinery Gets Key Permit from EPA

CVR Energy Increasing Heavy Crude Runs at Kansas Refinery

New Study Says Upcoming EPA Rules could Close Seven U.S. Refineries

East Coast Refiners and Shippers Were Prepared for Hurricane Irene

Reinvention Gives Alon’s Bakersfield Refinery a Restart

BRAZIL

Petrobras Temporarily Shuts Vacuum Unit of Bahia Blanco Refinery

COLOMBIA

Foster Wheeler Announces Phase 2 of Colombia’s Ecopetrol PMRB

ASIA

INDIA

India‘s HPCL Seeks Land to Construct $4.5 Bln Ratnagiri Refinery

MALAYSIA

Philippines Conglomerate San Miguel to Invest $1 Bln to Upgrade Malaysia Port Dickson Refiner

MONGOLIA

Mongolia to Build Three New Refineries

EUROPE / AFRICA / MIDDLE EAST

EUROPE

Analysts Say European Refiners Should be Poised for Another Difficult Decade

GERMANY

Hestya Energy to Buy Wilhelmshaven Refinery

SOUTH AFRICA

South African MPs Appeal to Govt to Expedite Plans for $10 Bln Mthombo Refinery

Foster Wheeler Wins Engen Petroleum Contract for Durban Refinery

KAZAKSTAN

Foster Wheeler to Design Hydrogen Production Unit for Kazakhstan Atyrau Refinery

QATAR

Technip Gets FEED Contract for Qatar's Laffan Refinery Expansion

SAUDI ARABIA

Jacobs Wins Second Phase Ras Tanura FEED Project

Saudi Aramco, Total JV Selects Banks for Islamic Bond Financing of $10 Bln Jubail Refinery Complex

UNITED ARAB EMIRATES

UOP Selected to Provide Technology for UAE Takreer’s New Propane Dehydrogenation (PDH) Unit

WORLDWIDE

Emerson Process Signs Five Year Agreement with Shell as Automation Tech Supplier

 

INDUSTRY ANALYSIS

AMERICAS

   U.S.

ND Oil Producers Using Rail for Refinery Shipping but Regulators Say It Won't  Replace Pipeline

North Dakota oil producers are making greater use of rail tanker cars to send their crude to refineries.

 

At least 10 railroad oil loading terminals are either operating or planned for western North Dakota.

 

By the end of the year they'll be capable of shipping close to 400,000 barrels of oil each day.

 

Public Service Commissioner Kevin Cramer says he sees the rail service as a stopgap measure while construction of oil pipelines catches up.

 

Cramer says a pipeline is still the safest and most economical way to transport North Dakota oil. But he says rail cars give producers more flexibility when it comes to selling their oil.

Fire at Valero’s Memphis Refinery Causes Midwest Gasoline to Strengthen

Gasoline in the Midwest strengthened for the first time in four days after Valero Energy Corp. (VLO)’s Memphis refinery caught fire, forcing all the main production units to be closed.

 

The fire started in a heater associated with an 80,000- barrel-a-day crude unit at the refinery, said Bill Day, a spokesman at Valero’s headquarters in San Antonio. The plant’s capacity is 195,000 barrels a day, according to data compiled by Bloomberg.

 

PBF Energy Partners LP told environmental regulators that it will cut processing rates on a fluid catalytic cracker at the Toledo, Ohio, plant beginning August 15 for maintenance. Work at the 175,000-barrel-a-day refinery may last as long as four days, the Parsippany, New Jersey-based company said in a filing.

 

The discount for conventional, 87-octane gasoline in the Gulf Coast narrowed 0.65 cent to 9.6 cents a gallon over futures at 1:45 p.m. in New York on speculation that supplies will be moved to the Midwest.

 

Total Petrochemicals USA Inc. also reported emissions at its Port Arthur, Texas, refinery after a compressor associated with a coker unit shut August 4. The “compressor was put back in service as quickly as possible,” the company, a unit of French oil company Total SA, said in the filing with state regulators.

Unplanned and Planned Production Outages at U.S. Refineries

The following table lists unplanned and planned production outages at U.S. refineries as reported by Dow Jones Newswires. The information is compiled from both official and unofficial refining sources and doesn't purport to be a comprehensive list.

 

The hydrocracking unit at Motiva Enterprises' 233,500 barrel per day (bpd) Norco, Louisiana, refinery shut down on August 5, according to a notice filed with the U.S. National Response Center.

 

The cause of the shutdown was unknown and under investigation, according to the notice.

 

Motiva is a joint-venture between Shell Oil Co and Saudi Refining.

 

BP Plc shut one of three crude units at its 405,000 barrel-a-day refinery in Whiting, Ind., for unplanned repairs, a person familiar with operations said August 3.

 

Tesoro Corp.'s 93,500 barrel-a-day refinery in Kapolei, Hawaii, shut down after a power outage on August 2, a company spokesman said. The refinery was expected to restart the following day. Supply was not impacted, the spokesman said.

 

Valero Energy Corp. on August 1 said it restarted the third crude distillation unit at its Texas City, Texas, refinery. The CDU was expected to be at planned rates within a few days, a Valero spokesman said.

 

ExxonMobil Corp. on July 30 reported emissions at its Baytown, Texas, oil refinery during the planned shutdown. Hydrofining Unit 3 was in the process of shutting down as planned when an associated tower over pressured, releasing emissions to the flare system, the company said in a report to Texas state environmental regulators. The report did not state the reason for the unit's shutdown or how long it would be out of service.

 

A key gasoline-making FCCU at BP PLC's Texas City, Texas, oil refinery lost circulation on July 29, causing an upset that resulted in excess opacity and emissions at the refinery for about nine hours, the company said in a report to Texas state environmental regulators. FCCU was stabilized and resumed normal operations, the report said.

Valero Energy on July 29 said the restart of the third crude unit at its Texas City, Texas, refinery was on track for later in the week. The unit was taken out of service on July 18 to repair a leak while the two other crude distillation units remained in operation.

North Atlantic Refining on July 29 said its 115,000-barrel-a-day refinery in St. John's, Newfoundland, Canada, is in the process of restarting after a longer-than-expected period of planned maintenance. The plant-wide turnaround began in early May and was planned to end in mid July. However, on July 5, the company delayed the start-up until the end of the month.

 

BP PLC on July 29 began the process of restarting a residual hydrotreating unit, or RHU, train at its refinery in Texas City, Texas. The train was depressurized on July 18 to facilitate repairs to fix a leak at the unit's heat exchanger. Two other trains at the RHU continued to operate during the repairs.

 

Husky Energy on July 28 said turnaround maintenance on isocracking units at its Toledo and Lima, Ohio, oil refineries will take place in the third quarter of 2011. General maintenance will go on simultaneously at the Toledo refinery.

 

Western Refining Inc. on July 27 said its El Paso, Texas refinery was in the process of restarting following a widespread power outage and plant-wide shutdown the night before.

 

Total Petrochemicals USA on July 26 began the process of restarting several processing units at its Port Arthur, Texas, oil refinery after a lightning strike earlier on July 26 forced shutdowns, the company said in a report to Texas state environmental regulators.

 

Valero Energy on July 26 announced third-quarter turnaround maintenance plans for a crude unit and a coker unit in the east plant at its Corpus Christi, Texas, refinery for three weeks starting in October. Six weeks of planned maintenance will begin in October at a crude unit and FCCU at its Three Rivers, Texas, refinery.

 

Alon USA Energy Inc. recently began turnaround maintenance at a key gasoline-making unit at its oil refinery in Big Spring, Texas, a report to Texas state environmental regulators made public on July 25 said. The date of the unit's return to normal service wasn't provided.

 

Exxon Mobil Corp. on July 25 confirmed an equipment malfunction and the emissions associated with the event at its Joliet refinery in Channahon, Ill., but would not provide further details.

 

Valero Energy on July 25 said a coker unit at its refinery in Texas City, Texas, continues to operate following a power "blip" at an associated compressor. The event had no material impact on production.

 

   For more detailed information, search Dow Jones Newswires using

the code N/REF.

 

Operator   Refinery    Capacity   Description                   Restart

                       (in 000s

                       bbl/day)

UNPLANNED

 

CANADA

 

CARIBBEAN

 

EAST COAST

 

GULF COAST

 

BP       Texas City    437.0  FCCU#1 lost circulation on July    July 29

         TX                   29 causing an upset that re-

                              sulted in increased opacity and

                              emissions for about nine hours.

                              The unit was stabilized and re-

                              sumed normal service.

 

                              Residual hydrotreating unit        July 29

                              train in restart on July 29; it

                              was depressurized 7/18 to repair

                              heat exchanger leak. Two other trains

                              trains functioned throughout the repair.

 

                              Refinery should return to full

                              capacity in August after April

                              power outage reduced rates.

 

Exxon    Baytown, TX   560.6  Upsets at two FCCUs results in

Mobil                         flaring on July 16. Status

                              of units unclear.

 

Total   Port Arthur   232.0   Several unspecified process units

USA     TX                    restarted on July 26 after light-

                              ning strike earlier on 7/16 shut

                              them down.

 

Valero  Texas City    245.0   The plant's third crude unit

                              restarted on July 30 after

                              being shut down on July 18 to

                              repair a leak.

 

Western El Paso, TX   125.0   Refinery restarting following      July 27

Refining                      plant-wide shutdown on storm-

                              related power outages on July

                              26.

 

MIDWEST

 

Exxon   Channanhon,   238.6   July 24 equipment malfunction

Mobil   IL (Joliet)           and emissions confirmed by Co.

                              on 7/25. No further details

                              provided.

 

ROCKIES

 

Exxon    Billings,      60.0  Production at minimum rates due

         MT                   to ruptured Silvertip Pipeline.

                              Company looking for alternative

                              crude sources, to co. said on

                              July 5.

 

WEST COAST

 

 

 

PLANNED

 

CANADA

 

North    St. John's    115.0  Refinery in restart on July 29.    End of

Atlantic                      Plant-wide maintenance began in    July

                              early May and was extended on

                              July 5.

 

CARIBBEAN

 

EAST COAST

 

GULF COAST

 

Alon     Big Spring     67.0  FCCU turnaround maintenance under-

         TX                   way, a filing to environmental reg-

                              ulators made public on July 24 said

 

Conoco  Borger, TX     146.0  Planned maintenance of Unit 29     July 16

                              electrostatic precipitators start-

                              ing July 6.

 

Exxon   Baytown, TX    560.0  The planned shutdown of hydro-     N/A

Mobil                         finer unit 3 caused emissions on;

                              July 30 reason for unit shutdown

                              not clear; restart information not

                              available.

 

 

 

Motiva   Port Arthur   285.0  Expansion project to increase      1Q

         TX                   throughput capacity by 325,000     2012

                              b/d, to 610,000-b/d, slowed.

                              Completion now seen 1Q

                              2012, from 2010.

 

Valero   Corpus        315.0  Crude & coker unit turnaround      Oct.

                              to start in Oct. for three         2011

                              weeks.

 

Valero   McKee    TX    170.0 Crude Unit and FCCU to undergo     3Q 2011

                              turnaround maintenance for six

                              weeks starting in Oct. 2011, the

                              co. said on July 26.

 

                              Vacuum unit turnaround planned for

                              first half of 2012, co. said.

 

                              Expansion project announced

                              March 2011 to increase crude oil

                              throughput by 25,000 b/d to

                              195,000 b/d.

 

Valero   Norco, LA     185.0  Hydrocracker project will pro-     2013

                              ceed and be completed in late

                              2013, the co. said on 7/27/10.

 

                              Upgrade project to build           2012

                              a new diesel hydrotreater

                              unit moved from 2010 to

                              4Q 2012.

 

Valero   Port Arthur   325.0  Hydrocracker project will pro-     2012

         TX                   ceed and be completed in late

                              2012.

 

MIDWEST

 

BP       Whiting, IN   405.0  Turnaround at Pipestill 12 de-

                              layed by 3 months; it was sup-

                              posed to begin in November, a

                              source said on Mar 25.

 

Cenovus  Roxana, IL    306.0  Coker and refinery expansion       Q4 2011

(Conoco/WRB)                  project on track for comple-

                              tion 4thQ 2011, the co. said

                              on July 26, 2011.

 

CVR      Coffeyville   115.7  Periodic turnaround will take      2012

         KS                   place in two phases beginning in

                              Fall 2011 and completed in Spring

                              2012.

 

Husky    Lima, OH      160.0  15-day isocracker maintenance to

Energy                        replace reactor catalyst will be-

                              gin in 3rd Q 2011. Refinery will

                              operate at 90% of capacity during

                              that time.

 

                              15-days of maintenance planned     Autumn

                              at aromatics unit in the fall      2012

                              of 2012.

 

Husky    Toledo, OH    140.0  Isocracker maintenance and gen-

Energy                        eral maintenance for 38 days will

                              commence in Q3 2011, the Co. said

                              on July 28.

 

                              Minor maintenance planned in 4Q

                              2011, the co. said on July 28;

                              no details provided.

 

Tesoro   Mandan, ND     58.0  Total crude-oil processing capa-   2nd Q

                              city to increase by 17% to 68,000   2012

                              b/d by 2nd quarter 2012.

 

WEST COAST

Proposed North Dakota Refinery Gets Key Permit from EPA

Sen. John Hoeven of North Dakota says the Environmental Protection Agency has approved a key permit for a proposed oil refinery on the Fort Berthold Indian Reservation.

 

Officials say the permit allows for the discharging of treated wastewater from the refining process.

 

The Three Affiliated Tribes has been planning the refinery for years. Hoeven's office says the tribe might still need other permits but that the wastewater permit is "a significant milestone."

 

If it is built, the refinery near Makoti would process tar sands oil from Canada into fuel, creating about 65 permanent jobs. Some tribal members have urged the tribe to delve into wind power instead.

CVR Energy Increasing Heavy Crude Runs at Kansas Refinery

CVR Energy Inc has increased the amount of heavy sour crude processed at its Kansas refinery in the second quarter this year to 21.2 percent of the total, nearly double that of a year ago, Chief Executive Jack Lipinski said on August 4.

 

"That's up from 17.2 percent in the first quarter and also up from about 12 percent a year ago," Lipinski told analysts on the company's second-quarter earnings conference call, adding that the current level is the maximum amount of heavy sour crude the refinery can run.

 

The CEO said the company set a record of processing 24,600 barrels per day of heavy sour Western Canadian Select crude at the 115,700 bpd refinery in Coffeyville, Kansas.

 

He said the WCS discount to West Texas Intermediate, the U.S benchmark, surpassed $17 during the quarter. And as a Midwest refiner, CVR already benefits from WTI's deep discount to ICE Brent CL-LCO1=R and other global crudes.

 

"While this is not a barn-burning discount, we continue to maximize our runs of heavy-sour crudes so long as these differentials continue," Lipinski said.

 

Brent's premium to WTI CL-LCO1=R has surged for months with increasing inventories at the landlocked U.S. crude contract delivery point in Cushing, Oklahoma and lack of pipeline infrastructure to bring that oil to the refinery-heavy U.S. Gulf Coast.

 

Several proposals to open that route with new or reversed pipelines are on tap, but Lipinski said the discount could be prolonged despite such efforts as U.S. onshore oil production keeps rising.

 

"I really believe that we can see prolonged or even higher spreads, just simply because (U.S.) crude is near $100 a barrel. There are new technologies. You're doing to see shale oils, you're going to see conventional drilling, you're going to see everything increase," he said.

 

Regarding operations, Lipinski said CVR was planning a bifurcated turnaround at the Coffeyville plant, with some work on tap for the fourth quarter this year with more to come in the first quarter next year.

 

He said the plant would continue to operate at reduced rates of 90,000 to 95,000 barrels per day in the fourth quarter while work was ongoing.

New Study Says Upcoming EPA Rules could Close Seven U.S. Refineries

A new study says that upcoming EPA requirements could raise the cost of manufacturing gasoline, lead to the closing of domestic refineries, and force the U.S. to double its gasoline imports — while causing increased carbon dioxide emissions.

 

"The new EPA requirements could be devastating to consumers and communities across the nation," said Bob Greco, API's group director of downstream operations. "Consumers would be hurt by the increased cost of fuel projected by the study, and the closing of refineries could put local economies at risk, meaning there would be fewer jobs. In addition, we would be forced to rely even more on foreign fuel supplies, and that can only weaken our nation's economy and national security."

 

The new study, which was conducted by energy consulting firm Baker & O'Brien for API, examines the potential costs of EPA's "Tier 3" fuel standard for gasoline blends which could be proposed at the end of the year.

 

The study determined that the new requirements could boost the cost of making gasoline by up to 25 cents per gallon and could shutter up to seven U.S. refineries but predicted that it could drive up carbon dioxide emissions by up to 7.4 million tons a year because of the increased energy needed to manufacture the new fuel blend.

 

"These regulations don't make sense environmentally or economically," said National Petrochemical & Refiners Association President Charles T. Drevna. "The proposal would increase greenhouse gas emissions, hurt American consumers by adding billions of dollars to the cost of manufacturing gasoline, hurt communities and workers by threatening to put some fuel manufacturing plants out of business, and weaken America's economic and national security."

 

EPA cites new ozone NAAQS requirements as one of the reasons for the new gasoline requirements, but Greco pointed out that new, out-of-cycle ozone requirements "would clearly harm job creation and economic growth, all at a time when air quality continues to improve under the existing standards."

 

API represents more than 470 oil and natural gas companies, leaders of a technology-driven industry that supplies most of America's energy, supports more than 9.2 million U.S. jobs and 7.7 percent of the U.S. economy, delivers $86 million in revenue to our government every day, and, since 2000, has invested nearly $2 trillion in U.S. capital projects to advance all forms of energy, including alternatives.

East Coast Refiners and Shippers Were Prepared for Hurricane Irene

Some refiners along the U.S. East Coast braced for the arrival of Hurricane Irene, downgraded to a Category 2 storm that was forecast to blow into the region during the weekend of August 27 and 28, but operations continued normally.

 

Six refineries with a combined capacity of 1.3 million barrels a day were in the path of the storm that was east of Florida with wind speeds of up to 110 miles an hour. Irene was expected to hit the North Carolina coast Saturday, August 27 and sweep north along the Atlantic seaboard, potentially affecting refineries owned by ConocoPhillips (COP), PBF Holdings and Sunoco Inc. (SUN) in New Jersey, Delaware and Pennsylvania.

 

Although Irene sparked alarm in some regions in its path, the storm didn't look strong enough to cause damage to refinery equipment, but could impede the flow of materials in and out of their gates, said Dominick Chirichella, analyst at Energy Management Institute.

 

"You could get some short-term shutdowns, but it will be a potential logistics exercise, if anything," Chirichella said.

 

Short-term refinery shutdowns, if combined with closures at fuel import terminals and pipelines, could stretch gasoline and diesel supplies in the northeast. Investors buying fuel futures on the New York Mercantile Exchange in preparation for problems sent gasoline prices to $2.7924 a gallon, up 1.3%, the biggest gain on the fuels board.

 

PBF Energy, a unit of PBF Holdings, said it has comprehensive emergency preparedness plans in place for its 182,000 barrel-a-day refinery in Delaware City, Del., and 160,000 barrel-a-day refinery in Paulsboro, N.J. In the meantime, the company was watching the day-to-day circumstances surrounding the storm.

 

"You pray that things are not going to be more severe than they're predicting," PBF Energy President Michael Gayda said. Employees were making sure the refineries' drain systems were clear, tying down anything that might blow away and stocking up on food, fuel, cots and anything else needed by staff on the premises when Irene lashes out, Gayda added.

 

ConocoPhillips continued normal operations at its 238,000 barrel-a-day refinery in Linden, N.J., and 185,000 barrel-a-day refinery in Trainer, Pa., company spokeswoman Janet Grothe said.

 

Sunoco, which has one 178,000 barrel-a-day refinery in Marcus Hook, Pa., and a 335,000 barrel-a-day facility in Philadelphia, said it was "monitoring the storm closely" and began taking steps to get ready for its arrival.

 

Colonial Pipeline Co., which operates a 5,519-mile pipeline delivering fuel from the Gulf Coast to the New York Harbor area, said it is monitoring the situation. The company briefly on August 23 shut down the pipeline north of Greensboro, N.C., as it checked for damage after an earthquake rocked central Virginia.

 

Kinder Morgan said it was monitoring conditions at its East Coast fuel terminals in the path of the hurricane. Depending on how bad the storm hit, employees at the terminals could board up the buildings, throw down sandbags and ensure that drainage ditches were clear, Kinder Morgan spokesman Joe Hollier said.

 

"All of our terminals are following their emergency plan," Hollier said.

Reinvention Gives Alon’s Bakersfield Refinery a Restart

Since the Alon Bakersfield Refinery June restart under the Israeli-owned Alon, the plant has not processed any oil whatsoever. It was originally designed to refine only crude oil, which it did until its closure about 30 months ago, at an output of 65,000 barrels a day.

 

Now it deals only with gas oil brought in by truck and rail from another refinery complex the company owns and operates about 140 miles away in southeast Los Angeles County.

 

The transportation process far from ideal, is questionable as to how long it can be sustained. For about a year Alon has been frustrated in its attempts to negotiate rights to use the only petroleum pipeline between here and L.A. so that it doesn't have to rely on trucks and rail cars.

 

Among those skeptical of such a long haul is Henry Medina, president of Bakersfield-based Fleet Card Fuels, one of the refinery's wholesale fuel customers. He said the current model seems to require a lot of handling and transportation expense.

 

"Is that viable? I hope it is, but I'm not so sure," Medina said August 24.

 

But on another level, refining gas oil left over from Alon's Paramount-Long Beach complex achieves new efficiencies that the plant's former owner, Utah-based Flying J Inc., tried but failed to achieve.

 

In refining, gas oil is one step above asphalt. It's a heavy byproduct that Flying J produced in Bakersfield but had to sell to bigger refineries down south because it lacked the capacity to process it.

 

Flying J applied for a permit to reconfigure the plant so it could refine gas oil, but eventually it gave up under community opposition. The company's December 2008 bankruptcy indirectly led to the refinery's closure in early 2009.

 

Alon paid about $40 million for the plant in spring of last year, then spent months redesigning the refinery. After a false start in late May, the plant sold its first batch of diesel on July 5, followed by its first gasoline sales in the middle of last month.

 

The refinery processes about 11,000 barrels of gas oil a day, turning it into about 300,000 gallons of diesel and 140,000 gallons of gasoline daily. It also makes smaller amounts of propane, butane and other petroleum products.

 

Leaman, the general manager, said plans call for ramping up to process 14,000 barrels a day, an increase of about 27 percent.

 

Fleet Card's Medina said much of that fuel ends up in tractors, commercial fleets and trains around Kern County. He said having a local supplier doesn't necessarily mean lower prices, because of the global nature of the commodity, but it does make supplies more dependable. For example, he said, customers won't have to wait for trucks bringing diesel from Los Angeles.

 

But to him, the biggest local effect of reopening the refinery is job creation.  Some 175 jobs were lost when Flying J closed the refinery, leaving a skeleton crew of a few dozen workers to look after the property. Refinery spokesman Chad Druten said the plant currently employs 103 people, most worked at the plant under Flying J but is planning to hire a few more.

 

Alon also contracts more than 50 people to perform duties such as maintenance and security, not including the many truckers who bring in gas oil from Long Beach.

 

In another change under Alon, the United Steelworkers Local 219 no longer represents workers at the refinery.

 

Huhn said United Steelworkers has a complaint pending in Washington that seeks to reinstate the union's place at the refinery. Without a union there, he said he fears that management will cut back employees' wages and health benefits.

 

Even so, he has remained positive about the plant's reopening.

 

The refinery's success is essential to Alon's publicly traded U.S. subsidiary, Dallas-based Alon USA Energy Inc.

 

The Bakersfield reopening was the first topic mentioned in the company's second quarter earnings news release August 4, when it announced net income, excluding special items, of $16.7 million as compared with a $29.5 million loss a year before.

 

Although the Bakersfield restart came about too late in the year to figure heavily into the company's second quarter profits, President and CEO Paul Eisman lauded the "hard work" accomplished.

 

"It's very early in the operation, and we are working to maximize the unit performance, but what we see thus far is promising," he told analysts in a conference call.

 

"The refinery greatly increases the competitiveness of our West Coast operations," Eisman went on to say. He added that priorities now include controlling costs and maximizing fuel production at the plant.

 

Alon's vice president of West Coast refining, Ed Juno, said that another important task is phasing in higher wholesale prices that better reflect the refinery's costs. He said the refinery initially offered low prices as it reentered the local market.

 

Most of these pricing adjustments have taken place already, he said.

 

"We're just concentrating on getting our operations smoothed out and our logistics with the truck and rail are beginning to click," he said. "So, I think everything's just coming together."

BRAZIL

Petrobras Temporarily Shuts Vacuum Unit of Bahia Blanco Refinery

Brazil-based Petrobras has temporarily shut operations at its Bahia Blanco refinery in Argentina due to a fire and explosion.

 

The company suspended the vacuum unit of the refinery, which has a capacity to process 31,000 barrel-per-day after the fire interrupted the operations.

 

Petrobras carryied out a revision of all of the refinery's operational procedures, reports Reuters.

 

Bahia Blanca deputy environmental secretary Eduardo Conghos said they would do an evaluation of the plant as the repeated incidents were raising concerns over its general functioning.

 

The output produced by the Bahia Blanca plant accounts for about 5% of Argentina's total refining capacity of 627,000 bpd.

COLOMBIA

Foster Wheeler Announces Phase 2 of Colombia’s Ecopetrol PMRB

Foster Wheeler on August 9 announced that its Global Engineering and Construction Group has been released to perform the second phase scope for an existing contract with Ecopetrol S.A. for the Project for the Modernization of the Refinery in Barrancabermeja (PMRB) in Colombia. This release includes additional project management consultancy (PMC) and front end engineering design (FEED), detailed engineering for the crude unit revamps, assisting Ecopetrol in the selection process for engineering, procurement and construction (EPC) contracts, and control and supervision of the EPC and construction contractors.

 

Ecopetrol is proceeding with the second phase of the PMRB, recently approved by its Board of Directors. The PRMB will add heavy crude processing capability to take advantage of the available domestic heavy sour crudes, and provide a processing configuration to meet the Colombian clean fuels product specifications. This upgrade to the refinery will eliminate fuel oil production and increase overall profitability.

 

"Ecopetrol continues to demonstrate confidence in our team," stated Umberto della Sala, Interim Chief Executive Officer, Foster Wheeler AG. "We are extremely pleased to continue working with Ecopetrol on this project, and on the Cartagena Refinery Expansion project in Colombia where we are also PMC. This confirms our leading technical expertise and international execution capabilities in large and complex projects."

 

The contract value of this work, which was not disclosed, was included in Foster Wheeler's second-quarter 2011 bookings. Foster Wheeler booked the FEED in the fourth-quarter of 2008, and has made subsequent bookings since, as further work releases were made by Ecopetrol. The second-quarter 2011 booking was the largest single booking made against this contract, which was first announced by Foster Wheeler in November 2008.

ASIA

   INDIA

India‘s HPCL Seeks Land to Construct $4.5 Bln Ratnagiri Refinery

India-based Hindustan Petroleum (HPCL) is seeking more land from the state government of Maharashtra to develop a new $4.5bn refinery at Chausal in the Ratnagiri district.

 

The company is requesting for about 4,000ha of land for the proposed facility which will have a capacity of 9-15 million tonnes per annum (mtpa).

 

HPCL is expected to buy the land from the government for an estimated $6.5bn (INR 300bn).

 

The company is expected to fund the new refinery through internal resources of $2.4bn (INR110bn) and $2.18bn (INR100bn) of loans.

 

State owned Engineers India has prepared the detailed feasibility report for the new refinery and the state government has already held preliminary discussions with the company.

 

Construction of the refinery is expected to be completed within four years, subject to the receipt of environment clearance, reports Business Standard.

 

HPCL has recently been granted about 2,800ha of land by the state government in the same district to set up the Lote Parshuram refinery.

   MALAYSIA

Philippines Conglomerate San Miguel to Invest $1 Bln to Upgrade Malaysia Port Dickson Refiner

Beer brewer turned largest Philippines conglomerate, San Miguel Corp (SMC) already has huge plans for its soon-to-be acquired Port Dickson refinery which is included in the acquisition of a 65% stake in Esso Malaysia Bhd from ExxonMobil Corp.

 

In a teleconference via Manila August 28, San Miguel director and Petron Corp president Eric Recto said the group was planning to invest between US$700 million and US$1 billion to upgrade the aging Port Dickson refinery, increasing the complexity of the refinery in a bid to produce higher value petroleum and petrochemical-based products.

 

"I think the refinery has a lot of potential, but this will only be achieved with a fair level of investments to replace old machinery and bring in new equipments," he told reporters, adding that the acquisition was in line with San Miguel's objective to diverse itself from a food and beverage based group. The group derives more than 70% of its revenue from its non-food and beverages segment and is an extremely diversified conglomerate, with businesses ranging from food and beverages to petroleum, power, energy and infrastructure.

 

"The financing would be in a 70/30 ratio, where 70% would be derived from financial institutions, with the remaining from internal funding. Esso Malaysia operations on its own today can actually generate cash flow and the cash flow is able to support the internal funding," he said.

 

He said the investments would be made over a period of three to five years with new equipment slated to be introduced into the 48-year-old refinery. "If more capital is necessary to augment or supplement the funding, we will be very tentative on where the money comes from," he said when responding to queries on the syariah compliancy of Esso, as the holding company has its business in producing alcoholic beverages.

 

He said San Miguel would give local banks priority to provide financing, adding that he was confident they would be very competitive.

 

Last year, the Port Dickson refinery produced a much lower range of 45,000 barrels per day on average compared to its rated capacity due to process inefficiencies and aging equipment.

 

San Miguel is expected to rope in its 68%-owned subsidiary Petron Corp to carry out the upgrades and return the refinery to its optimal capacity of producing 88,000 barrels per day.

 

Petron had earlier this year announced a massive US$1.8 billion refinery upgrade plan in the Philippines.

 

"What we are doing in the Philippines is to improve the complexity of our refinery with the addition of new equipment like fuel catalytic converter and delayed coker which would eventually allow us to produce 180,000 barrels per day. Currently, we are unable to achieve that due to lower economies of scale," he said.

 

He believes the Port Dickson upgrades will be moving on similar benchmarks as its Philippine refinery with improved complexity giving them more conversion capability to produce higher value products like petrochemicals.

 

With the acquisition, San Miguel is expanding its regional footprint and the deal marks SMC's first non-food and beverage deal of such scale outside the Philippines.

 

The 65% stake in Esso Malaysia is valued at 614.25 million ringgit (US$206 million) or 3.50 ringgit a share, and San Miguel will also buy unlisted ExxonMobil Malaysia Sdn Bhd (EMMSB) and ExxonMobil Borneo Sdn Bhd (EMBSB) for a combined 1.21 billion ringgit, and also their business of marketing petroleum products, making a combined offer of 1.82 billion ringgit for the total package.

 

The listed Esso Malaysia owns 280 service stations and five terminals, along with the Port Dickson Refinery, while its non-listed assets cover 250 service stations and six terminals.

 

"We have already signed the sale and purchase agreement, and some time is needed for the transition stage. But we hope to complete it as soon as possible," he said.

 

San Miguel started as a brewer in 1890, eight years before the Philippines' independence from Spain, and has been expanding into other industries. It is the country's biggest food and beverage producer currently.

 

It owns a majority stake in Manila-listed Petron Corp, which accounts for about a third of the Philippines' oil market.

   MONGOLIA

Mongolia to Build Three New Refineries

Mongolia, which is forced to import virtually all of its refined oil products and frequently faces chronic fuel shortages, is to begin building an oil refinery early next year in an effort to meet domestic demand and reduce dependence on neighboring Russia for energy supplies.

 

Two months ago Mongolian President Tsakhia Elbegdorj proposed to build an oil refinery, emphasizing its importance for Mongolia, infomongolia.com reported.

 

Construction on the refinery began on August 11 in the southeastern city of Saishand in Dornogobi province in cooperation with Mon L Gas LLC. The Saishand refinery will process 5,000 tons of crude oil per year. The Mongolian government granted SODMONGOL a license to construct the facility in 2008. Mongolia’s domestic oil consumption is currently less than one million tons per year.

 

At present Mongolia receives its fuel supplies from Russia, but since April imports have been curtailed because of Russia's soaring domestic demand. Accordingly, the Mongolian government eventually intends to construct a total of three refineries.

 

The second will be located in Darkhan-Uul. Built with the cooperation of Mongol Seku LLC, the Darkhan-Uul refinery will have an annual processing capacity of 200,000 tons per year. The third, to be built in Zuunbayan in Dornogobi province, is slated to have an annual production capacity of 300,000 tons.

EUROPE / AFRICA / MIDDLE EAST

   EUROPE

Analysts Say European Refiners Should be Poised for Another Difficult Decade

European refiners are poised for another decade of pain from low profits and run rates as a string of plant sales to emerging market investors only postpone inevitable closures .

 

Chevron Corp has completed the sale of its UK Pembroke plant to U.S. refiner Valero while Shell has sold the UK Stanlow complex to India's Essar as part of a pattern among major oil firms to spin off downstream assets and instead spend revenues from $100 oil on upstream projects.

 

Total has also sold a near 50 percent stake in Spanish refiner Cepsa to an Abu Dhabi government fund.

 

But these transactions are no guarantee of future deals, analysts and traders said, with cash-rich investors likely to cherry-pick only the most sophisticated coastal refineries in what is seen as a buyers' market.

 

For those inland refineries with limited complexity, the all-too familiar problems of slow demand growth due to competition from cheaper gas and tough new environmental restrictions are unlikely to make them attractive buys.

 

Strong Brent prices near record premiums of $22 a barrel to U.S. crude have only made matters worse by crushing margins, making Europe the least attractive region to process oil. Gross margins for converting Brent crude into gasoline were regularly negative in the first six months of 2011 and the worst on record, according to energy consultant Wood Mackenzie.

 

This year has been particularly painful for plants that rely on light, sweet grades since the loss of Libyan volumes has pushed up the Brent spread to heavier Dubai grades to an unusually high $6 a barrel this summer.

 

Many refiners will try to delay closure for as long as possible in the hope that competitors will fall victim first and this procrastination process could stall an eventual recovery in margins.

 

"It's like running away from a bear. You just have to be better or faster than the next guy. European utilization rates are low and margins are poor but if one refiner shuts down they bear all the costs, which provides a "windfall" to their neighbor," said Alan Gelder, Principal Analyst for downstream research at energy consultant Wood Mackenzie.

 

And ready buyers for refining assets are scarce, said Robert Beaman, oil and gas analyst at Business Monitor International.

 

"Once you have discounted Valero and Essar, you have to wonder who else would want to take them up. There's a limited number of buyers and most seem to have got what they wanted now," said Beaman

 

"Unless we have more closures, the sector looks to stagnate," he said.

 

Some assets such as those that have recently changed hands do have their appeal. Essar's purchase of the UK's second largest refinery Stanlow makes sense as it is seen as a way of getting a foothold in the retail market -- a potential market for high-quality fuels from its Indian Vadinar refinery now undergoing a major upgrade.

 

Fuel demand in Europe is thought to have peaked, but it is still a net importer of distillates like diesel and jet fuel.

 

Valero's decision to buy the 220,000 barrel-per-day Pembroke plant on the Welsh coast is also seen as a natural fit with its U.S. retail business since nearly half of its daily output is gasoline.

 

But other talks have stalled or broken down. Total has missed several of its own deadlines to announce a buyer for its UK refinery which has been on the market for 18 months. Talks between Essar and Shell over the purchase of its Harburg refinery broke down last year, prompting it to instead convert it to a storage site.

 

The tough environment since mid-2008 has already led to closures amounting to around 900,000 bpd of capacity, according to consultancy FACTS Global Energy (FGE). They estimate another 1.4 million bpd -- or about seven medium-sized refineries -- needs to be shut by 2015 to make the sector competitive again.

 

Shell has been one of the most active European refiners in divesting assets and the Stanlow deal means it has now exceeded its goal to divest or close 15 percent or 600,000 bpd of its global refining assets, the bulk of which is in Europe.

 

"Even this will not totally solve it because of all the new capacity coming on east of Suez and in South America. There will be closures through to 2020," said Gemma Gouldby, research associate at FGE, as emerging countries increasingly opt to process oil where the demand growth is.

 

But many are not ready to face the reality that margins, described at the beginning of August by the chief executive of Europe's largest independent refiner Petroplus as "miserable" could endure and that the only way to boost them is to shut capacity permanently.

 

For now, many are simply opting for economic run cuts and industry body Euroilstocks estimates that around one-fifth of European capacity or nearly 3 million bpd is currently offline.

 

Wood Mackenzie's Gelder said that he expects margins to recover briefly in 2012 but the planned inclusion of European refineries in the EU Emissions Trading Scheme in 2013 will again increase costs.

 

"We don't expect another golden age but we do think that 2012 will look better than 2010-2011."

 

Governments are also increasingly reluctant to let more refineries close because of the political fall-out. A nationwide strike in France over a plant shutdown last year prompted President Sarkozy to seek a pledge from Total not to sell or shut refineries in the coming years.

 

Spending cuts in countries like Italy aimed at cutting debt will also make decisions about closures more sensitive.

 

"No-one wants to close, especially not in the Mediterranean because of the unemployment," said Gouldby. "Elsewhere, they want to try to keep going and hope the others close first."

   GERMANY

Hestya Energy to Buy Wilhelmshaven Refinery

Hestya Energy B.V. on August 10 announced it has signed an agreement to purchase the Wilhelmshaven oil refinery, tank farm and marine terminal from an affiliate of ConocoPhillips. Hestya Energy B.V. is a private Amsterdam-based company established to acquire and operate businesses within the European midstream energy sector, including the oil refining and storage sectors.

 

The Wilhelmshaven refinery is located on the German North Sea coast. It has a deep water port and crude oil processing capacity of 260,000 barrels per day, making it one of Europe's leading refineries in terms of scale.

 

"The Wilhelmshaven refinery and terminal complex offer numerous geographical and logistical advantages, including a deepwater port, and are strategically positioned to capture increasing regional demand for terminal capacity and other downstream opportunities," said Christian B. Cleret, CEO of Hestya Energy B.V.

 

The transaction is expected to close later this year. Equity for the acquisition is being provided by the Riverstone/Carlyle Global Energy and Power Funds, a group of energy-focused private equity funds managed by Riverstone Holdings LLC, and AtlasInvest, a private investment company with investments spanning oil exploration and production and the midstream and downstream sectors.

   SOUTH AFRICA

South African MPs Appeal to Govt to Expedite Plans for $10 Bln Mthombo Refinery   

The National Council of Provinces select committee on economic development has urged the Treasury and the Cabinet to expedite planning for PetroSA's $10 billion Mthombo crude oil refinery, which it says will address the problem of aging refineries and create jobs in the Eastern Cape.

 

SA imports about 7 percent of its refined fuel and is likely to face a shortfall of about 180,000 barrels a day of petrol and diesel by 2020.

 

The committee undertook a visit to the province earlier this year to probe issues related to the Coega industrial development zone (where the refinery will be located), the motor industry and Eskom's [Electricity Supply Commission] proposed building of another nuclear power station at Thyspunt.

 

In its report tabled in Parliament in August, the committee wrote that the planned 360,000 barrels-a-day refinery "seems to hang in limbo. Costs for the scoping and the environmental impact assessment are enormous and there is no further progress".

 

"The National Treasury must table a funding program to this committee linked to immediate timelines. The proposal to Cabinet must also be considered on an urgent basis," the report read.

 

The committee believes the proposed refinery will act as an economic catalyst for the Eastern Cape and would secure SA's future fuel requirements.

 

An estimated 27,500 temporary jobs would be created in the three- to-four-year construction period, and 18,500 direct and indirect permanent jobs would be created once it was operational.

 

"It is estimated that by 2015, SA will have to import about 8.5 billion liters of fuel per year (equivalent to 150,000 barrels per day) if there is no significant new investment in local refining capacity. Importing this much refined fuel will have a negative effect on the country's foreign exchange reserves, render national supply more vulnerable to external factors, and will not contribute to the creation of new jobs in the industry," the report said.

 

It noted the government's concern about SA's "considerable dependence" on international oil companies to secure future liquid fuels energy needs "as their global strategies are focused mainly on upstream activities, not new refining investment".

 

PetroSA insisted in a statement that its management and board remained committed to the project. "However, following comments and concerns raised by various stakeholders regarding the size of the project, we are currently reviewing (it), taking those inputs on board and will return to the board with a revised proposal."

 

Earlier this year, a Department of Energy official said that a 20-year infrastructure plan for liquid fuels, which the department would complete by December, would determine the appropriate size for Project Mthombo.

Foster Wheeler Wins Engen Petroleum Contract for Durban Refinery

Foster Wheeler announced that a subsidiary of its Global Engineering and Construction Group has been awarded a contract by Engen Petroleum Limited (Engen) for engineering, procurement and construction management (EPCm) services for Engen's new multi-products pipeline feeder lines and infrastructure project at Engen's Durban refinery in South Africa.

 

The Foster Wheeler contract value for this project was not disclosed and was included in the company's second-quarter 2011 bookings.

 

The objective of this project is to develop the pipeline network from Engen's depots to tie in to the Transnet pipeline in order to enhance Engen's access to key refined product markets in the South African interior. Transnet is the principal operator of South Africa's fuel pipeline system.

 

"We are pleased that Engen has selected Foster Wheeler for this project, our largest win with Engen to date," said Umberto della Sala, Interim Chief Executive Officer, Foster Wheeler AG. "This win reflects Engen's confidence in our EPCm project execution capability and track record in South Africa, which is a market in which we plan to continue to grow, leveraging our strong execution center in the country."

   KAZAKSTAN

Foster Wheeler to Design Hydrogen Production Unit for Kazakhstan Atyrau Refinery

Foster Wheeler AG announced September 1 that a subsidiary of its Global Engineering and Construction Group has been awarded a contract for the basic engineering design of a new hydrogen production unit, based on Foster Wheeler Terrace-Wall steam reforming technology, to be built at the Atyrau Refinery (Atyrau, Kazakhstan Republic), a member of JS National Company "KazMunayGas" group that it is the leading national oil and gas company of Kazakhstan.

 

The contract was awarded to Foster Wheeler by OJSC Omskneftekhimproekt, the project engineering contractor for the Deep Oil Conversion Complex, a major revamp and modernization of the Atyrau refinery. The main purpose of this project is to increase the oil conversion rate and production of all types of motor fuels to meet Euro IV and Euro V standards. The refinery will, as a result of this modernization, require additional volumes of high purity hydrogen.

 

The Foster Wheeler contract value was not disclosed and was included in the company's first-quarter 2011 bookings.

 

The new hydrogen unit, which will use high olefinic LPG as the main feedstock and natural gas as the alternate feedstock, will be designed to produce 24,000 normal cubic meters per hour (Nm3 /h) of pure hydrogen. The basic design package is scheduled for completion during the third quarter of 2011.

QATAR

Technip Gets FEED Contract for Qatar's Laffan Refinery Expansion

Technip has been awarded an early engineering contract covering the expansion of Laffan refinery in Qatar, as the Gulf Arab state seeks to boost exports of refined products such as diesel to Asia and Europe, and meet rising domestic demand.

 

Qatargas, which operates Laffan refinery, said it awarded the front end engineering design, or FEED, contract for the facility's second-phase expansion to Technip for an undisclosed sum.

 

Expansion of the Ras Laffan-based condensate refinery in the northeast of Qatar, will double its current 146,000-barrel-a-day capacity to 292,000 barrels Qatargas said. The expansion will allow the tiny Persian Gulf country to export and meet domestic demand for naphtha, diesel, liquid petroleum gas, or LPG, and jet fuel, it added.

 

"The second phase of Laffan refinery supports the State of Qatar vision to improve product distribution domestically and fully complies with international customers' demands for cleaner fuel products, allowing Qatar to become a net exporter of diesel and other refined products, instead of an importer," Qatargas Chief Executive Officer Khalid bin Khalifa Al Thani said in the statement.

 

"Qatar's target is to supply markets across Southeast Asia and Europe, emphasizing on these commercially valuable products for their petrochemical industry," he added.

 

Laffan refinery is 51% owned by state-owned Qatar Petroleum, or QP, while ExxonMobil and Total each hold 10% stakes, according to the Qatargas website.

 

FEED works are scheduled for completion by the first quarter of 2012, while the engineering, procurement and construction, or EPC, contract is expected to be awarded by the third quarter next year, according to the statement.

 

Laffan refinery started production in September 2009 and uses field condensate supplied by Qatargas and Rasgas, the state-controlled LNG producers. The refinery produces a daily 62,000 barrels of naphtha, 52,000 barrels of kerojet, 24,000 barrels of gasoil and 8,000 barrels of LPG.

 

Tasweeq, the international marketing arm of Qatar Petroleum, in March said Qatar will export 200 million tons a year of condensate in 2014, up from 125 million tons a year in 2010. Qatar is the world's largest producer of LNG--natural gas cooled so it becomes liquid--and exports close to 77 million tons a year.

 

The wealthy Gulf state is developing its downstream industry to diversify its economy and generate revenues from the export of liquid fuels to fast-growing economies in Asia.

   SAUDI ARABIA

Jacobs Wins Second Phase Ras Tanura FEED Project

Jacobs Engineering Group Inc. announced August 30 that it has been awarded the second phase of the Ras Tanura Refinery Clean Fuels and Aromatics Project. This award is under the Saudi Aramco General Engineering and Project Management Services (GES+) Contract.

 

Jacobs is executing the project from its office in al-Khobar, Saudi Arabia.

 

The scope of services for the Clean Fuels and Aromatics Project includes front end engineering design (FEED) services for both inside battery limits (ISBL) and outside battery limits (OSBL). In addition, the project includes modifications to the refinery to comply with expected future environmental regulations. The Ras Tanura refinery is located in the Eastern Province of Saudi Arabia.

 

In making the announcement, Jacobs Group Vice President Mike Coyle stated, "We are proud to have successfully attained award of the FEED phase of this project in partnership with Saudi Aramco. We welcome the opportunity to support Saudi Aramco's production of higher-grade clean fuels."

Saudi Aramco, Total JV Selects Banks for Islamic Bond Financing of $10 Bln Jubail Refinery Complex

Saudi Aramco Total Refining and Petrochemical Co., or Satorp, has selected three banks to arrange a planned Islamic bond, or sukuk, issue that will help it finance a large refinery complex at Jubail on the Persian Gulf coast.

 

Deutsche Securities Saudi Arabia, Samba Capital and Saudi Fransi Capital were chosen as joint lead managers and joint bookrunners for the sukuk, Satorp said in a statement posted on its website.

 

The offering, which earlier this month secured regulatory approval will kick off Sept. 10 and last for 16 days. The total sukuk size will be determined by Satorp at a later stage, it said.

 

The Islamic bond is the first shariah-compliant project sukuk instrument in the Arab world's largest economy.

 

Satorp, a company that is 62.5% owned by Aramco and 37.5% owned by France's Total S.A. (TOT), plans to build a 400,000 barrel-a-day export refinery in Jubail.

 

The refinery complex, estimated to cost more than $10 billion to build, is part of a drive by the world's top oil exporter to boost refining capacity by more than 1.7 million barrels a day from installed capacity of 2.1 million barrels a day now.

   UNITED ARAB EMIRATES

UOP Selected to Provide Technology for UAE Takreer’s New Propane Dehydrogenation (PDH) Unit

Honeywell’s UOP LLC, announced that it has been selected by the Abu Dhabi Oil Refining Co. (Takreer) to provide key technology for a new petrochemical production unit in the United Arab Emirates.

 

The new propane dehydrogenation (PDH) unit will use UOP’s C3 Oleflex ™ technology to convert propane to propylene, a material used in the production of materials such as films and packaging. The unit is expected to produce 500,000 metric tons of propylene per year.

 

UOP will provide engineering design, technology licensing, catalysts, adsorbents and equipment for the project, which is expected to start up by the end of 2013.

“This is the world’s first PDH unit to be implemented within a refinery, a significant milestone that indicates refineries are moving toward production of higher-value petrochemical products to achieve the most value from their operations” said Pete Piotrowski, senior vice president and general manager for UOP’s process technology and equipment business unit. “UOP has a successful history with Takreer, and we are pleased to embark on this new venture together.”

 

Jasem Al-Sayegh, general manager for Takreer, said, “We look forward to continued collaboration with UOP, which will help meet the world’s growing demand for propylene and also help strengthen our business regionally.”

 

The UOP Oleflex process uses catalytic dehydrogenation to convert propane to propylene. Compared to competing PDH processes, Oleflex provides the lowest cash cost of production and the highest return on investment, enabled by low operating and capital costs, high propylene yield and reliability, and maximum operating flexibility. Since the technology was commercialized in 1990, UOP has commissioned nine C3 Oleflex units for on-purpose propylene production.

 

Honeywell’s UOP was recently selected by Takreer to provide process technology for its Ruwais facility, also located in the United Arab Emirates. The Carbon Black & Delayed Coker project will utilize the UOP Unionfining™ technology to upgrade distillate-range petroleum fractions to produce ultra-low-sulfur diesel.

   WORLDWIDE

Emerson Process Signs Five Year Agreement with Shell as Automation Tech Supplier

Emerson Process Management, a global business of Emerson, has signed a five-year Enterprise Framework Agreement with Shell to serve as a global strategic supplier for field instruments and on/off valve actuators, important technologies used in automating refineries and plants. The new agreement builds on an existing relationship where Emerson serves as a Main Automation Contractor for Shell capital projects.

 

Under the new Enterprise Framework Agreement, Emerson will be Shell's sole-source supplier of on/off valve actuators — including its Bettis and EIM product lines — and provide support for actuators in Shell facilities worldwide. Emerson will also be a global strategic supplier of field instruments that provide pressure, temperature and flow information to help Shell run its production and processing operations safely and efficiently. Emerson field-instrument brands include Rosemount and Micro Motion.

 

"We welcome this opportunity to strengthen our relationship with Shell," said Steve Sonnenberg, president of Emerson Process Management. "We look forward to applying both our Main Automation Contractor capabilities and this broader range of products to bring Shell even more of the benefits of our integrated PlantWeb automation technology."

 

 

McIlvaine Company,

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