June 20, 2013:

The buyer of Tesoro Corp.’s Kapolei oil refinery estimates it will take about $27 million to carry out the maintenance necessary to restart the facility, which has been idle since late April. Par Petroleum Corp., which announced this week that it is buying the refinery, agreed to pay the first $15 million for “startup expenses,” the company said in a filing with the Securities and Exchange Commission. Tesoro will pay the next $5 million, with Par Petroleum picking up any expenses in excess of $20 million, according to the filing. Tesoro, which had been searching for buyer for the refinery since January 2012, shut down the facility on April 29 and mothballed, or preserved, the refining equipment in the event a buyer was eventually found.

After the closure Tesoro began shipping in refined products to fulfill its contracts with customers. A Tesoro official on Wednesday estimated that it will take until early September to complete the maintenance and restart the refinery. On Monday Tesoro announced that it had secured a deal to sell the refinery to Par Petroleum for $75 million in cash, plus up to $40 million more over three years based on the facility’s performance.

By Star Advertiser

June 19, 2013:

Uganda said on Wednesday it would build a 30,000 barrels per day refinery by 2016/17 and double this capacity two years later in a move towards commercial output of the country's oil. Explorers struck oil in east Africa's third largest economy in 2006 and Uganda estimates its crude reserves at 3.5 billion barrels but wrangling over taxes and the viability of a local refinery have since stalled production. "The first phase of 30,000 barrels of oil per day refinery is expected to be operational in 2016/17, with expansion to 60,000 barrels two years later," Fred Kabanda, principal geologist at Uganda's petroleum exploration and production department, told a regional oil and gas conference in Nairobi.

By Reuters

June 13, 2013:

Imperial Oil Ltd said earlier this week it was unable to find a buyer for its refinery in Dartmouth, Nova Scotia, and will instead convert the facility into a terminal operation. The refinery, which employs some 400 staff and contractors, is Imperial’s least-profitable operation, as it uses high-priced imported crude oil. The company’s other three refineries process cheaper Canadian crude. Imperial, controlled by Exxon Mobil Corp, put the refinery up for sale more than a year ago and has had interested parties but was not able to make a deal.

The refinery, the only one in Nova Scotia, is among several on both sides of the Atlantic that operators have put up for sale, shut down, or threatened to close due to poor economics.

Below is a list of these refineries.

SHUT REFINERIES:

DARTMOUTH, NOVA SCOTIA, CANADA

Owner: Imperial Oil Ltd

Capacity: 88,000 BPD

Imperial said in June 2013 it was unable to find a buyer for its Dartmouth, Nova Scotia, refinery after putting it up on sale more than a year ago, and will instead convert the facility into a terminal operation. The refinery is Imperial’s least-profitable operation as it uses high-priced imported crude oil. Imperial is controlled by Exxon Mobil Corp.

PORT READING, NEW JERSEY, USA

Owner: Hess Corp

Capacity: 70,000 BPD

Hess shut down its Port Reading refinery at the end of February, 2013, the second such facility the company was forced to shutter over the last year, marking the company’s exit from the refining and terminal business.

ARUBA REFINERY, ARUBA

Owner: Valero Energy Corp

Capacity: 235,000 BPD

Valero decided to convert the refinery into a crude oil and refined products terminal in September 2012 after failing to find a buyer for the plant. The refinery had been idled since March 2012 due to weak profit margins since it processes heavy sour crudes it bought at a higher cost. Chinese oil giant PetroChina was said to be among strong bidders for the refinery.

ST. CROIX, U.S. VIRGIN ISLANDS

Owner: Hovensa LLC, a joint-venture between Hess Corp and state oil company Petroleos de Venezuela

Capacity: 350,000 BPD

Hovensa first reduced rates from 500,000 bpd and then shut the refinery in February 2012. The government of the U.S. Virgin Island objected to the shutdown and in April 2013 said it had agreed to a 14-month sales process with Hovensa LLC, during which time the company could use the plant as a terminal. The refinery had been powered by fuel oil rather than cheap natural gas because its isolation in the Caribbean mean gas imports are not available. That fact contributed to Hovensa making a loss of $1.3 billion in the last three years of its operation and any future owner will have the same problem to contend with.

MARCUS HOOK, PENNSYLVANIA, USA

Owner: Sunoco Inc, part of Energy Transfer Partners LP, Sunoco Logistics Partners LP, which is part owned by Energy Transfer Partners.

Capacity: 178,000 BPD

Sunoco shut the refinery in Marcus Hook, Pennsylvania, in December 2011, due to excess capacity and poor margins. Sunoco Logistics then bought the refinery in April 2013 for $60 million and plans to turn it into a natural gas liquids hubs to take advantage of the nearby Marcellus and Utica shale plays. The company received no offers for the plant as a refinery. Sunoco is processing natural gas at the plant.

YORKTOWN, VIRGINIA, USA

Owner: Western Refining

Capacity: 66,300 BPD

Western Refining shut the refinery in September 2010 because of poor refining margins. The site was subsequently sold to Plains All American in December 2011 and is currently in use as a terminal.

EAGLE POINT, NEW JERSEY

Owner: Sunoco Inc, part of Energy Transfer Partners LP.

Capacity:145,000 BPD

Sunoco shut the Eagle Point refinery in November 2009, the first of the casualties of weak demand and slim profit margins among Atlantic Basin refineries. The site, which is connected under the Delaware River to Sunoco’s other sites, Philadelphia and Marcus Hook (see above), is a terminal with capacity to receive barges of Bakken crude from Albany.

BERRE, FRANCE

Owner: LyondellBasell

Capacity: 105,000 BPD

In January 2012, LyondellBasell mothballed the refinery in southeastern France having been unable to find a buyer for the plant since it began a sales process in May 2011.

CORYTON, ESSEX, UNITED KINGDOM

Owner: Petroplus

Capacity: 175,000 bpd

A joint-venture of UK Ltd, Vopak and Greenergy bought the refinery from Petroplus and converted it into a terminal in June, 2012. The refinery had stopped processing crude in May last year after its estimated $1 billion price tag failed to attract buyers.

TEESSIDE, UNITED KINGDOM

Owner: Petroplus

Capacity: 117,000 bpd

Petroplus idled the plant in April 2009.

PETIT-COURONNE REFINERY, NORMANDY, FRANCE

Owner: PetroPlus

Capacity: 161,000 bpd

Petroplus announced in April 2013 that it will shut the refinery after bids to buy it were rejected as unfeasible by the plant’s administrator.

REICHSTETT, FRANCE

Owner: Petroplus

Capacity: 85,000 bpd

Petroplus closed the refinery in eastern France in the second quarter of 2011. The least profitable of the plants in the PetroPlus refinery stable, the refinery was converted to become a terminal.

DUNKIRK, FRANCE

Owner: Total SA

Capacity: 150,000 BPD

A French court authorized oil major Total to permanently close the refinery in late October 2010 and proceed with plans to develop non-refining activities on the site.

WILHELMSHAVEN, GERMANY

Owner: ConocoPhillips

Capacity: 260,000 bpd

ConocoPhillips put the simple, hydroskimming refinery up for sale in July 2010. It was bought a year later by private Dutch company Hestya. It is currently being used as a terminal.

CREMONA, ITALY

Owner: Tamoil

Capacity:  90,000 bpd

Libya’s Tamoil shut the Italian refinery at the end of March 2011 and said it would pursue plans to convert the plant to a storage site.

REFINERIES FOR SALE:

MILFORD HAVEN, UNITED KINGDOM

Owner: Murphy Oil

Capacity: 130,000 BPD

U.S. oil firm Murphy Oil Corp said it would sell the plant to focus on oil and gas exploration and its U.S. retail business. In its first quarter earnings, announced in May 2013, the company said it continues to look for a buyer.

REFINERIES SAVED:

PHILADELPHIA, PENNSYLVANIA, USA

Capacity: 330,000 BPD

Current Owner: Philadelphia Energy Solutions

Former Owner: Sunoco Inc. Philadelphia Energy Solutions is the largest refinery on the U.S. East Coast and is a joint venture of Carlyle Group LP and Energy Transfer Partners, which bought its former owner, Sunoco. Sunoco and Carlyle reached a deal in the summer of 2012 to keep the plant running with Carlyle overseeing daily operations while Sunoco retained a minority stake in return for its refinery assets. JPMorgan Chase & Co’s commodities division would supply the refinery with crude and non-crude feedstocks and purchase fuel produced by the plant for offtake. Regional legislators, refinery unions and industry operators lobbied against the plant’s shutdown arguing that fuel shortages in the East Coast after the plant’s potential shutdown could create fuel shortages and hurt U.S. national security.

TRAINER REFINERY, PENNSYLVANIA, USA

Capacity: 185,000 BPD

Current Owner: Monroe Energy LLC, a subsidiary of Delta Air Lines

Former Owner: ConocoPhillips, which later spun off its refining and downstream arm Phillips 66 Delta bought the refinery from Conoco Phillips in spring of 2012 in order to control its jet fuel costs, which had reached $12 billion in 2011. The refinery has not yet become profitable But Delta said it expects the plant to turn a profit of $75 million to $100 million in the second quarter. It expects to use 50,000 bpd of cheap shale oil from the Bakken formation in North Dakota by the end of 2013. Delta has a contract with BP Plc for crude supplies and former owner Phillips 66 to sell or swap products other than the jet fuel that the airline needs.

CRESSIER REFINERY, SWITZERLAND

Capacity: 68,000 BPD

Current Owner: Varo Energy Holding, a joint venture between Vitol and Marcel Van Poecke, co-founder of PetroPlus, and founder of AtlasInvest. Former Owner: Petroplus Vitol, the world’s largest oil trader, formed the joint venture to buy the refinery in June 2012, six months after Swiss-based Petroplus filed for insolvency. The refinery was fully operational by July that year.

ANTWERP REFINERY, BELGIUM

Capacity: 107,500 bpd

Current Owner: Gunvor, Swiss-based trading house

Seller: PetroPlus Swiss-based trading firm Gunvor, co-owned by Russian tycoon Gennady Timchenko, bought the refinery in March 2012 from insolvent Petroplus to expand its infrastructure footprint in Europe’s largest oil trading hub. The purchase also provides Gunvor with “bricks and mortar” assets, giving it a reason to hedge exposure to physical markets ahead of stringent regulations on derivatives trading.

INGOLSTADT REFINERY, GERMANY

Capacity: 100,000 bpd

Current Owner: Gunvor

Former Owner: PetroPlus Gunvor bought the refinery from insolvent Petroplus in May 2012 and began operating the plant that August. The refinery had been in stand-by mode for seven months before the deal.

By Financial Post

January 28, 2012:

With environment clearances delaying Indian Oil Corporation (IOC)’s product pipeline, the state-run company plans to commission its Rs 30,000-crore refinery at Paradip in Odisha this September. The 15-million-tonne per annum (mtpa) project was scheduled to be commissioned last year but got delayed due to labour and land issues, beside slow progress on the power plant front. According to company executives, a little over 90 per cent of the refinery work is over. “The captive plant Bharat Heavy Electricals was building is in place and the refinery will be commissioned in September," said M M Vijaywargiya, executive director, IOC. The 1,108-km pipeline is yet to get final clearances from the ministry of environment and forests (MoEF). The pipeline will cover Odisha, Jharkhand and Chhattisgarh. "Clearances are in place as far as two other states are concerned and ground development work has already started. But for Odisha, we are yet to get some final forestry approvals from MoEF. This needs to be in place for the viability of the project, as it would carry the fuel produced to consumers,” he said.

The Paradip-Raipur-Ranchi pipeline is expected to cost around Rs 1,800 crore and would transport about five million tonnes of products. The project, conceptualised in 2009, took a little more than three years to get even stage-I forestry clearances from the Odisha government. The pipeline will have intermediate pumping stations at Jatni and New Sambalpur and delivery stations at Jatni, Jharsuguda, Ranchi, Raipur and Korba. The company will start the refinery with 50 per cent capacity in the first phase. “To start with, the plant would be working at a capacity of 7-7.5 mt. Within six to 12 months of commissioning, once the stabilisation period is over, it would be enhanced to full capacity,” Vijaywargiya added. Until the pipeline is in place, the company would have to depend on traditional transports to supply refined products. The Paradip project is expected to meet the deficit in products such as LPG, naphtha, jet/kerosene and diesel in the eastern parts. Apart from a crude and vacuum distillation unit, the refinery would host a hydrocracking unit, a delayed coker unit and other secondary processing facilities. IOC had acquired 3,344 acres for the project works, which started by the end of 2009.

By Business Standard

Jan 27, 2012:

Vietnam on Sunday inked a deal with firms from Japan and Kuwait to build an oil refinery complex worth nearly $9 billion as part of efforts to meet its growing energy needs. The Nghi Son refinery, which is due to start operating by 2017 in Thanh Hoa province, about 200 kilometres (125 miles) south of Hanoi, will turn Kuwaiti oil into petrol and other petroleum products. It will be able to process 10 million tonnes of crude oil a year, the government said. State-owned PetroVietnam will own a 25.1-percent stake in the joint venture while Japan's Idemitsu Kosan and Kuwait Petroleum International will each hold 35.1 percent. Mitsui Chemicals of Japan will own the remaining 4.7 percent. Speaking at the signing ceremony, Vietnamese Prime Minister Nguyen Tan Dung hailed the project as "very important" for the communist country's economic and social development, according to a government statement. Vietnam has offshore oil reserves but still spends several billion dollars each year to import petroleum products to feed its growing economy.

A ground-breaking ceremony for the Nghi Son refinery was held in May 2008 but the project has suffered a number of delays. It is still unclear when construction will start, an official from PetroVietnam told AFP, asking not to be named. The country's first refinery Dung Quat -- which cost around $2.5 billion and has a capacity of 6.5 million tonnes of crude a year -- opened in central Vietnam in 2009 after lengthy delays. PetroVietnam has said that it hopes the two refineries would satisfy 65 percent of the nation's oil and gas needs. It is also preparing for a third refinery project in southern Ba Ria-Vung Tau province.

By Business Insider