July 8, 2012:

Mangalore Refinery & Petrochemicals Ltd. (MRPL), a unit of India’s largest explorer, offered to sell cargoes of diesel, jet fuel, naphtha, gasoline and fuel oil for loading in August from New Mangalore, on the west coast of India, according to tender documents obtained by Bloomberg News. Bids on each of the five cargoes are due by 9:30 a.m. India time on July 12 and are valid until 6:30 p.m. the next day.

Details of the tenders are as follows:

-----------------------------------------------------------

Product:    Diesel, 0.5 percent sulfur

Quantity:   40,000 metric tons

Loading:    Aug. 1 to Aug. 3

-----------------------------------------------------------

Product:    Jet fuel

Quantity:   36,000 tons

Loading:    Aug. 3 to Aug. 5

-----------------------------------------------------------

Product:    Gasoline, 92 RON

Quantity:   25,000 tons

Loading:    Aug. 5 to Aug. 7

-----------------------------------------------------------

Product:    Naphtha

Quantity:   35,000 tons

Loading:    Aug. 8 to Aug. 10

-----------------------------------------------------------

Product:    Fuel oil, high-sulfur, 380-centistoke

Quantity:   80,000 metric tons

Loading:    Aug. 12-14

-----------------------------------------------------------

Port:       New Mangalore, west coast of India

Close:      July 12, 9:30 a.m. India time

Validity:   July 13, 6:30 p.m.

-----------------------------------------------------------

By Bloomberg

July 7, 2012:

Bangchak oil refinery's second fire in less than two years has jolted the nerves of nearby residents who live in sometimes densely packed communities.  In this bird’s eye view photo, WatKlong Toey Nai community is seen located adjacent to oil tanks at Shell oil depot in Bangkok’s KlongToey district. The fire at Bangchak oil refinery on Wednesday has raised fears about the safety of the community situated near the oil depot, but manyresidents say they do not want to relocate. KOSOL NAKACHOL. Many are ready to leave the area, some have no choice but to stay, while others feel happy to live in the high-risk zone if the refinery can guarantee its safety measures. But it is the "if" that has many worried.

The blast and fire at the refinery in Bangkok's Phra Khanong district on Wednesday caused extensive damage to the facility. It also raised very serious questions about the company's safety measures. Those residents who want to move away insist a second fire in less than two years is too much to take. The refinery went up in flames in January last year. That incident and Wednesday's fire were thought to have been caused by a hydrogen leak. The residents said although no one was injured in either blaze, they no longer felt safe. "Where is it safe?" said Somyos Banju, 41, whose house is in Sukhumvit Soi 62. He and about 10 family members have lived there for more than 10 years.

"I heard a very loud bang and I rushed outside to see what was happening. I saw a plume of thick black smoke," he said. Mr Somyos said his trust in the company's safety measures has ebbed after the two fires. However, the refinery is almost 50 years old and urban expansion has put it smack in the middle of the city. "No one wants to live near the refinery if they can help it. But some people have no choice," he said. Mr Somyos believes industry and communities can live side-by-side if safety measures are well maintained. "Yes, I want to move to a safer place, but to where is the problem," he said. Tenants at Aue Amorn Suk Condominium at Sukhumvit Soi 62 were also wondering whether to stay.

Thanikarn Khechanlai, 38, who has run a barber shop at the condo for 15 years, said her shop was shaken during the blast which preceded the fire. She ran out and saw people screaming and running amok. She said the explosion was less of a concern than the potentially toxic air pollution the fire created. She thinks she should move rather than wait for the plant to relocate. Sawan Rak-kwarm-jing, 45, another condo tenant, felt it is the residents who should leave. "If there is anyone who has to go, it might be us because we came [after the refinery was built]," she said. Meanwhile, another group of residents near the oil depot owned by Shell Co in Klong Toey said they did not understand what all the fuss was about. They said they had full confidence in Shell's safety measures. Three communities - Wat Klong Toey Nai 1, Wat Klong Toey Nai 2 and Wat Klong Toey Nai 3 - sit adjacent to the Shell oil depot on Na Ranong Road. There are about 800 houses and more than 2,000 residents in total.

Somsri Sathansathit, 59, a deputy chair of Wat Klong Toey Nai 2 community, said she had moved from Nonthaburi province and settled in the community more than four decades ago. The flurry of calls for the relocation of large oil depots away from the city is the least of her concerns. Mrs Somsri is also a grocer and lives with her husband and their two children in the community. "I have lived here for a long time. I know my way around the place very well and I don't see the need to relocate. More importantly, staff of Shell Co have had safety measures in place for years," Mrs Somsri said. In 1993, the company installed water mains connected to fire-extinguishing valves throughout the community. The system provides assurance and peace of mind to the residents. The company staff hold fire drills in the communities and in its oil depot once a year.

Ampai Saisen, a 46-year-old housewife in Wat Klong Toey Nai 2, said she has no intention of vacating the neighbourhood. She believes Shell has to safeguard its own assets and, in the process, the residents are also protected. "There have been fires in our community. After a major fire in the community in 1992, Shell installed the water mains to fight fires in the future," Mrs Ampai said. Preecha Ruangruen, a 53-year-old motorcycle taxi driver, who also lives in one of the Klong Toey communities, said the company installed pipes and pumps that could draw water from the nearby Chao Phraya River to battle any blazes. Ms Somsri, Ms Ampai and Mr Preecha agreed that they do not want the oil depot to move away. They believe that if a fire breaks out, staff of the company will reach their community faster than fire fighters. They said local people have nothing to fear from the depot. On the contrary, the company has a reason to fear what might happen to the communities because its safety and enormous assets are at stake.

Yongyuth Romchatthong, director of the Bangkok Fire and Rescue Department, said oil refineries and depots usually employ their own highly experienced fire-fighting teams. They also have sufficient resources to protect their valuable assets while his department was on standby in case they sought assistance if a fire breaks out. His department and the petroleum installations store enough foam to fight fires. He conceded it would be difficult to relocate the refineries away from communities. He suggested parties concerned implement effective measures to let both petroleum facilities and nearby communities co-exist in a safe environment. Bangkok Governor MR Sukhumbhand Paribatra said the extent of the fire at the Bangchak refinery may have been underestimated and so there was a delay in sounding the alarm and people living around the facility panicked. He said the relevant parties had a responsibility to quickly inform people nearby of a fire and what they should do. The governor insisted that he would discuss the possibility of moving oil refineries and weapons arsenals away from heavily populated areas of Bangkok.

By Bangkok Post

July 7, 2012:

Vedanta Resources, which recently picked up a controlling stake of 58.86 per cent in Cairn India, now wants to participate in the proposed 9 million tonnes a year refinery in Rajasthan. The Vedanta Group’s Chairman, Mr Anil Agarwal, called on the Chief Minister of Rajasthan, Mr Ashok Gehlot, in New Delhi. The Vedanta Chairman told the Chief Minister that his company would support the refinery by picking up a ‘small stake’ in the project. “Mr Agarwal discussed the issue of the proposed refinery in Rajasthan. With a positive gesture, he expressed his interest in participation in this ambitious project,” said a statement issued by the Rajasthan Government on Saturday. Currently, Cairn India is pumping out 175,000 barrels of oil per day from Barmer fields in Rajasthan. The State is aggressively pushing for a refinery in the vicinity of Barmer. Public sector companies ONGC and HPCL have already evinced interest to join hands for project.

The Rajasthan Government said that HPCL, ONGC and other agencies are actively participating in discussion with the State and “we are hopeful for positive outcome of these efforts”. At the same time, Mr Agarwal also discussed the need for continuing exploration to achieve the target of three lakh barrels a day from Barmer. At this production level, Rajasthan will meet almost 50 per cent of country’s domestic crude oil production, the statement said. In August 2009, the Rajasthan Government constituted a committee, headed by former Petroleum Secretary, Mr S.C. Tripathi, to do a feasibility study for setting up a refinery to process crude oil mined from Barmer. The panel recommended that the State Government should have 26 per cent equity in the refinery and rest by oil companies. It may also offer a concession of $1 a barrel from Cairn India. The State accepted Mr Tripathi’s committee recommendations. At the same time, a proposal to offer interest-free loan for 15 years, starting 2016-17 to 2030-31, for repayment in equal annual instalments over 16 years — from 2031-32 have been mooted.

By Business Line

July 6, 2012:

New York gasoline rose for a fifth day after PBF Energy Inc. (PBF) reported equipment upsets at refineries in New Jersey and Delaware.  The company had a malfunction yesterday at its Paulsboro plant, according to a filing with the New Jersey Department of Environmental Protection. The Delaware City refinery flared gases after a compressor failed, PBF said in a filing yesterday with state regulators. Conventional gasoline to be blended with ethanol, or CBOB, in New York gained 6.13 cents, rising to a premium of 1.88 cents a gallon versus futures traded on the New York Mercantile Exchange at 2:09 p.m., according to data compiled by Bloomberg. Prompt delivery rose 2.05 cents to $2.7428 a gallon.

East Coast gasoline inventories slipped for the third time in four weeks to the lowest level since Nov. 11, the Energy Department said yesterday. Gasoline stockpiles in independent storage in Amsterdam-Rotterdam-Antwerp, Europe’s oil-trading hub, dropped 5.6 percent to 588,000 metric tons in the week through yesterday, according to PJK International BV, a researcher in the Netherlands. That’s the lowest level since Nov. 10. The premium for conventional, 87-octane gasoline in the Midwest, or Group 3, rose 0.5 cent to 1.75 cents a gallon over futures. It’s the highest level since Jun. 22.

CVR Energy Inc. (CVI) is working to return a unit to service at its Wynnewood refinery in Oklahoma, according to a filing with the National Response Center. The refinery reported an ongoing release of hydrogen sulfide since July 3 because of unplanned maintenance, the filing showed.

By Bloomberg

July 6, 2012:

Investigators say they are making headway in establishing the cause of the second major fire to strike a Bangchak oil refinery distillation unit in 18 months. But their work will not be completed until sufficient safeguards are in place to prevent a third unfortunate accident. Given the intensity of Wednesday's blast and ensuing blaze, it was a near miracle that no one was hurt, but there was one major casualty, and that was trust. The thousands of residents, office workers and schoolchildren who live and study at schools in the vicinity of the Bangchak Petroleum plant are now aware of the dangers that exist. Bangkok Governor MR Sukhumbhand Paribatra says City Hall would like to relocate all refineries, arms depots and, presumably, oil storage tank farms out of the busy capital. Many people living in Bangkok would agree but it is not the first time they have heard a city governor or cabinet minister express such a view. It has led to nothing in the past and is most unlikely to lead to anything in the future. The expense of moving a refinery and all the infrastructure that goes with it would be colossal and disrupt both oil supplies and the national economy.

The seeds of the problem were sown decades ago when the capital was allowed to develop in a haphazard fashion without proper zoning or effective urban planning. Little thought was given to planning for the future. The operator of the refinery prior to Bangchak Petroleum Plc needed a site close enough to the city for ease of transport and yet far enough away so as not to be located in a highly populated area. That made Bangchak a satisfactory location when the refinery was opened in 1964 and it might have remained one had the capital not undergone a rapid expansion eastward during a subsequent building boom.

It is a safe assumption that people who moved to the Bangchak area did not consider the refinery to pose any danger in the same way that those who flocked to the new estates where Suvarnabhumi airport was being built a decade ago did not foresee just how noisy their environment would become once the airport opened for business. That led to years of protests about noise pollution and an eventual settlement by Airports of Thailand Plc. Now we can expect to hear concerns expressed by worried Bangchak residents.

The Pollution Control Department and Public Health Ministry acted correctly by monitoring the impact of the smoke billowing from the burning crude distillation unit and preparing evacuation plans in case sulphur dioxide levels rose too high. It is ironic that Bangchak Petroleum, which has done much to clean up Bangkok's air through the introduction of green "eco-friendly" fuels to reduce hydrocarbons, sulphur dioxide, PM10 and other irritants found in traffic fumes, found itself being blamed by air quality inspectors for emitting toxic substances such as toluene, benzene and xylene during the accident. The pollution control inspectors advised local residents to wear masks, keep doors and windows closed and switch off air-conditioning units as a precaution until levels subsided.

The unsung heroes of the refinery blaze were the firemen who acted quickly and professionally to bring it under control. And the most important thing now is to stop it from happening again. That means doing what major refineries in the United States, United Kingdom and Japan did after suffering disastrous explosions, fires and loss of life. They replaced old and corroded equipment, stepped up regular maintenance, overhauled their safety culture from top to bottom and introduced new operating procedures to minimise risk.

By Bangkok Post