June 6, 2012:

KazMunaiGaz National Co., Kazakhstan’s state-owned oil producer, agreed to borrow $1.13 billion from the Export-Import Bank of China to upgrade its Atyrau oil refinery. KazMunaiGaz signed an agreement in Beijing today for a loan that will have a duration of 13 1/2 years, the company said in an e-mailed statement. China Petroleum & Chemical Corp. (600028), Marubeni Corp. (8002) and JSC KazStroyService will complete work on the $1.7 billion project in 41 months, KazMunaiGaz said. The Atyrau refinery, located on the northern shore of the Caspian Sea, can process 120,000 barrels a day, according to data compiled by Bloomberg. The upgrade includes the construction of a unit capable of processing 2.4 million metric tons of fuel oil a year, according to the statement.

By Bloomberg

June 6, 2012:

Japanese oil refiner Cosmo Oil Co said on Wednesday it expected to resume full crude oil refining operations at its quake-hit 220,000-barrel-per-day (bpd) Chiba refinery, east of Tokyo, when the restoration of fire-damaged liquefied petroleum gas (LPG) tanks is completed in the spring of 2013. The Chiba refinery can process up to 80 percent of capacity after the fire affected 17 of the plant's 25 LPG tanks following the devastating earthquake of March 2011. The company moved forward to spring its schedule for new LPG tanks from the original summer date. The tank replacement should cost about 10 billion yen ($127 million), it has estimated. A spokesman said the company might not build 17 new LPG tanks to replace all the damaged ones, adding that it would take into account such factors as oil supply and demand and its production plans before deciding on the number of replacements.

The Chiba refinery's main units are the two crude distillation units (CDUs), which have restarted more than a year after the magnitude 9.0 March 2011 earthquake. The 120,000-bpd No.2 CDU restarted operations on March 30, while the other 100,000-bpd No.1 CDU was restarted late in April. The No.2 CDU has been undergoing a maintenance shutdown from May 3 to mid- to late July. The turnaround for the other No.1 CDU has been set for Sept. 22 to Nov. 16.

By Rueters

June 6, 2012:

PORT ARTHUR, Texas - With the turn of a ceremonial valve Thursday, dignitaries marked the start-up of an expanded Motiva refinery, underscoring Royal Dutch Shell’s commitment not to imitate rival oil giants that have spun off their refining operations. ''By combining our upstream and downstream capabilities, integrated companies can drive innovation and match resource with demand,'' said Shell CEO Peter Voser at the ceremony marking the completion of a 5-year, $10 billion expansion that doubles the capacity of the refinery, a joint venture of Shell and Saudi Aramco. ''Some of our competitors have simply walked away from the issue - spinning off their downstream operations into standalone companies. Shell won’t do that.'' In the past year, ConocoPhillips and Marathon Oil have become independent exploration and production companies and spun their refining and other downstream businesses into separate corporations.

Voser said Shell is confident it can continue to thrive as an integrated company through ventures such as the upgraded Motiva facility, which he said is now more efficient and flexible. ''Part of the problem is that some refineries are unsuitable for processing more difficult crude, on which supply increasingly depends. They are in the wrong places making the wrong products.'' When working at top capacity, the refinery will process 600,000 barrels of crude a day. Khalid Al-Falih, CEO of Saudi Aramco, said the project was the largest single expansion of US refining capacity in four decades. ''With the completion of this massive expansion, the Port Arthur Refinery alone would be capable of meeting the entire gasoline demand of France, Italy or all of Scandinavia,'' he told about 150 reporters and company officials who gathered to mark the milestone. The expanded refinery is designed to process a range of crude types into various products including gasoline, ultra low sulfur diesel, jet fuel, petroleum coke, sulfur and petrochemical feedstocks.

Al-Falih said that diversity will make the $10 billion investment pay off for the partners, since the refinery will be able to adjust its operations to meet market conditions. The opening of the expanded refinery came as many refineries, particularly on the East Coast, are struggling to stay profitable. They have older, outdated equipment that makes it difficult to process new sources of oil, such as the heavier crude coming from Canadian oil sands. Voser said the Port Arthur refinery’s flexibility will give it a competitive advantage. ''Finding new resources, extracting them from difficult locations, processing and distributing them is a global challenge that spans the entire value chain,'' Voser said. ''In this context, integrated oil companies such as Shell have a critical role to play, and a distinct advantage.''

Thursday’s commissioning event marked the beginning of the flow of crude through the new processing units after an expansion that involved more than 14,000 construction workers, 2,000 pieces of engineered equipment, 40,000 truckloads of cement and 700 miles of pipe.  In an interview with the Chronicle after the formal ceremony, Voser said that at first the refinery will use mostly heavier Saudi Arabian crude oil, but that it also can process lighter, lower-sulfur oil produced from shale formations that are contributing to an oil and gas production boom.

''We can easily shift between gasoline and diesel as demand changes,'' Voser said. ''We will start with Saudi crude and then look elsewhere. The refinery is well geared for it.'' A Shell project in the Persian Gulf nation of Qatar is developing ways to produce liquid transportation fuel from natural gas, which is in high supply and cheap. But Voser said he doesn’t see that undercutting the transportation fuel market for the Port Arthur refinery anytime soon.

By Dailycomet.com

June 6, 2012:

Royal Dutch Shell Plc (RDSA) will partially shut its 500,000 barrel-a-day Pulau Bukom refinery in Singapore for a month starting in early July for maintenance, Reuters reported, citing five unidentified traders. The company will idle a 110,000 barrel-a-day crude distillation unit, it said, citing two of the traders. Work will also be done on a 35,000 barrel-a-day hydrocracker, a reformer unit and another secondary unit, Reuters said, citing one person. Shell does not discuss maintenance schedules, the company said in an e-mailed statement seeking comment.

By Reuters

June 6, 2012:

Orlen Lietuva, the Lithuanian oil refining unit of Poland’s PKN Orlen SA, resumed production at full capacity today after a month of maintenance and upgrades. The upgrades, the biggest in the history of the refinery, will help to boost EBITDA to $20 million, the Juodeikiai-based company said in an e-mailed statement today. The repairs and upgrades cost $65 million, it said.

By Reuters