June 21, 2013:

Chicagoans are seeing some relief at the pump, and it just might last. The average per-gallon price in Chicago is $4.43, down 3 cents overnight and 16 cents lower than a week ago. In the greater metro area, the average for a gallon of regular is $4.19, down 3 cents overnight and down 18 cents from last week.

By Chicago Tribune

June 21, 2013:

The crude distillation unit of the Malacca refinery on Malaysia's west coast, jointly owned by state energy firm Petronas and US oil company Phillips 66, has been shut after a fire about two days ago, industry sources said on Friday. The cause of the fire is not clear but the crude unit, which processes 100,000 barrels per day (bpd) is expected to be shut for about 14 days, one of the sources close to the matter said. The refinery has deferred oil product exports for late-June loading and crude oil imports for July nomination, the source added. It might have to import oil products to cover the shortfall, the source said. Petronas could not immediately comment on the matter while P66 could not be reached for comment. Besides a base oil plant, there are two CDUs in the Malacca refinery that run as standalone operations.

The first is a 100,000-bpd CDU solely owned by Petronas, processing mainly sweet crude. The other, which has shut, is the CDU jointly owned by Petronas and P66, designed to process sour crude with higher sulphur content. The shutdown is expected to boost Asian gasoil margins, now at a three-month high supported by spot purchases by Indonesia ahead of the Muslim fasting month of Ramadan in July and by Saudi Arabia, to meet peak summer demand. - Reuters, June 21, 2013.

By The Malaysian Isider

June 21, 2013:

Costa Rica’s government halted a $1.3 billion refinery modernization largely funded by the Chinese government due to a contractual violation, paralyzing the Central American country’s biggest investment project. A feasibility study on the refinery modernization was conducted by Chinese company HQCEC, which has ties to China National Petroleum Corp., or CNPC, the comptroller general’s office said yesterday in a statement on its website. The terms of the contract specified that the study couldn’t be carried out by a company associated with CNPC, which is partnering with the Costa Rican state oil company, or Recope, on the project, the comptroller general’s office said. Calls and e-mails to CNPC spokesmen in Beijing weren’t immediately returned. “Due to an investigation, the comptroller general’s office determined the breach of a clause 5.02, signed by Recope and CNPCI International Ltd,” according to the statement. “The company that conducted the feasibility study has a relationship with the Chinese state oil company, which is prohibited and a breach of contract.” The project, in the city of Limon on the Caribbean coast, was the subject of talks between Chinese President Xi Jinping and President Laura Chinchilla during a visit by Xi to the country earlier this month. The modernization was to be primarily funded by a $900 million loan from China Development Bank Corp.

Recope President Jorge Villalobos Clare resigned following the decision, newspaper La Nacion reported. A revised plan for the refinery’s modernization, which targeted an increase in fuel production to 65,000 barrels per day from the current rate of 18,000, will be prepared within six months, Recope said in a statement.

By Bloomberg

June 20, 2013:

Did talk of creating a west-east pipeline come too late to save a Dartmouth oil refinery?

Some observers, including the premier, have wondered whether the 95-year-old operation could have hung on until a plan to ship lower-cost Alberta crude across the country materialized. Premier Darrell Dexter said he asked Rich Kruger, Imperial Oil’s chairman and chief executive officer, that very question Tuesday. “I did ask, and the indication I had was it made no difference one way or another,” Dexter said Thursday. “They don’t process Canadian crude so it really made essentially no difference in their decision.” Imperial Oil announced Wednesday that the facility will be turned into an import storage plant by the end of the year. The refinery will be dismantled over a number of years, while the converted terminal will store and distribute petroleum products refined elsewhere.  The downsizing of the Dartmouth operation will have an impact on many of Imperial’s 200 local employees, as well as some 200 contract workers. The terminal operation will employ 40 to 45 Imperial workers, as well as some contractors. Imperial officials said TransCanada Corp.’s potential project wouldn’t have been enough to make the small, aging refinery more competitive. “The minute that crude hits tidewater, it finds the international market price,” Gilles Courtemanche, the company’s vice-president and general manager of refining and supply, told reporters Wednesday.

“If you look at the current disconnect, if you will, or spread that we see in the marketplace, that is not a sustainable scenario.” But an Oshawa analyst said access to a cheaper western feedstock might have worked in the refinery’s favour, although Imperial — which is majority owned by ExxonMobil — probably couldn’t wait that long. “They just said, ‘We cannot continue using a Brent crude, which is priced much higher than our competitors in the Midwest. Our other refineries in the ExxonMobil family are doing much better. Therefore, we’re going to cut out the weak ones.’” said Roger McKnight, senior petroleum adviser for En-Pro International. TransCanada has yet to decide whether to convert an existing 3,000-kilometre natural gas pipeline to carry crude to Quebec. The so-called Energy East Pipeline plan includes the possibility of a 1,400-kilometre extension to Saint John. That’s where Canada’s largest refinery, Irving Oil’s 350,000-barrel-per-day facility, is located. Halifax energy executive Phil Knoll agreed it’s unlikely the Dartmouth refinery could have hung on for potential lower-priced western oil instead of relying on tanker shipments.

“The pipeline is, optimistically, five years away,” he said. “If you’re a refinery and you’re not economically efficient now, five years is a long time. Can they 100 per cent count on it being ready in five years? I don’t think so.” Calgary-based TransCanada has said the project, if it goes ahead, could begin shipping as much as 850,000 barrels of oil per day to eastern markets by late 2017. But in the meantime, Imperial will close the Dartmouth refinery, and convert it to tank farm instead, after being unable to find a buyer over the past year.  The 88,000-barrel-per-day operation has been up for review since May 2012.  The import terminal will include existing Imperial depots in Sydney, Corner Brook, N.L.; Sept-Iles, Que.; and Cap aux Meules in Iles-de-la-Madeleine. Imperial Oil officials were also asked about other measures seen as potential lifelines for the refinery, ranging from municipal tax breaks to shale oil imports from Texas. But Courtemanche said a combination of market factors resulted in the processing operation no longer being viable. “The result of the marketing efforts illustrate the challenges of operating a refinery of Dartmouth’s scale and configuration in the very competitive conditions of the Atlantic Basin market,” he said.  The company spent hundreds of millions in recent years to make the refinery more efficient, the vice-president added.

By Herald Business

June 20, 2013:

Did talk of creating a west-east pipeline come too late to save a Dartmouth oil refinery?

Some observers, including the premier, have wondered whether the 95-year-old operation could have hung on until a plan to ship lower-cost Alberta crude across the country materialized. Premier Darrell Dexter said he asked Rich Kruger, Imperial Oil’s chairman and chief executive officer, that very question Tuesday. “I did ask, and the indication I had was it made no difference one way or another,” Dexter said Thursday. “They don’t process Canadian crude so it really made essentially no difference in their decision.” Imperial Oil announced Wednesday that the facility will be turned into an import storage plant by the end of the year. The refinery will be dismantled over a number of years, while the converted terminal will store and distribute petroleum products refined elsewhere.  The downsizing of the Dartmouth operation will have an impact on many of Imperial’s 200 local employees, as well as some 200 contract workers. The terminal operation will employ 40 to 45 Imperial workers, as well as some contractors. Imperial officials said TransCanada Corp.’s potential project wouldn’t have been enough to make the small, aging refinery more competitive. “The minute that crude hits tidewater, it finds the international market price,” Gilles Courtemanche, the company’s vice-president and general manager of refining and supply, told reporters Wednesday.

“If you look at the current disconnect, if you will, or spread that we see in the marketplace, that is not a sustainable scenario.” But an Oshawa analyst said access to a cheaper western feedstock might have worked in the refinery’s favour, although Imperial — which is majority owned by ExxonMobil — probably couldn’t wait that long. “They just said, ‘We cannot continue using a Brent crude, which is priced much higher than our competitors in the Midwest. Our other refineries in the ExxonMobil family are doing much better. Therefore, we’re going to cut out the weak ones.’” said Roger McKnight, senior petroleum adviser for En-Pro International. TransCanada has yet to decide whether to convert an existing 3,000-kilometre natural gas pipeline to carry crude to Quebec. The so-called Energy East Pipeline plan includes the possibility of a 1,400-kilometre extension to Saint John. That’s where Canada’s largest refinery, Irving Oil’s 350,000-barrel-per-day facility, is located. Halifax energy executive Phil Knoll agreed it’s unlikely the Dartmouth refinery could have hung on for potential lower-priced western oil instead of relying on tanker shipments.

“The pipeline is, optimistically, five years away,” he said. “If you’re a refinery and you’re not economically efficient now, five years is a long time. Can they 100 per cent count on it being ready in five years? I don’t think so.” Calgary-based TransCanada has said the project, if it goes ahead, could begin shipping as much as 850,000 barrels of oil per day to eastern markets by late 2017. But in the meantime, Imperial will close the Dartmouth refinery, and convert it to tank farm instead, after being unable to find a buyer over the past year.  The 88,000-barrel-per-day operation has been up for review since May 2012.  The import terminal will include existing Imperial depots in Sydney, Corner Brook, N.L.; Sept-Iles, Que.; and Cap aux Meules in Iles-de-la-Madeleine. Imperial Oil officials were also asked about other measures seen as potential lifelines for the refinery, ranging from municipal tax breaks to shale oil imports from Texas. But Courtemanche said a combination of market factors resulted in the processing operation no longer being viable. “The result of the marketing efforts illustrate the challenges of operating a refinery of Dartmouth’s scale and configuration in the very competitive conditions of the Atlantic Basin market,” he said. The company spent hundreds of millions in recent years to make the refinery more efficient, the vice-president added.

By NBCbayarea.com