December 22, 2012:

An oil tanker carrying Bakken crude to Irving Oil Corp.’s refinery in Canada from Albany, New York, ran aground yesterday in the Hudson River, delaying the first of what is expected to be many voyages on the route. The 600-foot (183-meter) vessel Stena Primorsk returned to the Port of Albany today from an anchorage point near Stuyvesant, New York, said Richard Hendrick, general manager of the port, in a phone interview. Hendrick said the cargo of about 11.7 million gallons (279,000 barrels) of oil would be offloaded to Buckeye Partners LP’s terminal and then be loaded on barges for shipment over the next few days. U.S. federal law requires companies to obtain licenses from the Commerce Department to export crude oil. The department’s policy is “to approve applications for exports of crude oil to Canada for consumption or use therein,” according to the department’s Export Administration Regulations. U.S. crude exports averaged 57,000 barrels a day in the first nine months of this year, the most since 2000, Energy Department data show. “Exports to Canada will probably pick up quite a bit in the next year,” Amrita Sen, chief oil market analyst for Energy Aspects Ltd., said yesterday in London. “The repercussions will have more to do with how much the U.S. continues to displace West Africa. That’s the one that really competes with Brent.”

Double-Hulled

The outer hull of the double-hulled tanker was breached, the U.S. Coast Guard said in a statement today. The accident occurred about 10 miles south of Albany at about 7 a.m., Coast Guard Petty Officer 2nd Class Erik Swanson said yesterday. Swanson said earlier today that divers were assessing the damage at Stuyvesant Anchorage, where the vessel stopped after the grounding. He said the assessment was the Coast Guard’s priority at the time, rather than determining the cause of the accident. “We’re still investigating whether it did run aground or hit something in the river,” Swanson said. Demand to ship crude abroad is increasing as domestic production surges. U.S. crude output rose last week to the highest level since January 1994, Energy Department data show. The gains have been primarily light, low-sulfur oil from Bakken and Eagle Ford shale formations in North Dakota and southern Texas. Refiners including Valero Energy Corp. (VLO) and Irving are seeking to use North American crude in eastern Canadian plants to replace cargoes from across the Atlantic Ocean.

Bakken Discount

Bakken oil in Clearbrook, Minnesota, was about $27 a barrel less expensive than North Sea Brent crude, the benchmark for overseas imports, according to data compiled by Bloomberg. A glut of oil in the upper Midwest, where North Dakota output has jumped 57 percent in the past year, has led producers to ship oil out of the region to the East and West Coasts by train. Rail shipments in the third quarter have jumped almost fourfold from a year earlier, according to the Association of American Railroads. The vessel was en route to Irving’s St. John refinery in New Brunswick, Canada, Hendrick said yesterday. Shipments from Albany were scheduled to take place every eight days, which would make the daily rate about 35,000 barrels.

“This is the first of a long string of planned shipments from the Port of Albany to Irving,” Hendrick said.

Valero Approval Valero has received approval from the Commerce Department to ship crude from the U.S. Gulf Coast to its Quebec City refinery, Bill Day, a company spokesman in San Antonio, said in an e-mail.  At 131 feet across, the Stena Primorsk is somewhat wider than other Hudson River-going vessels, Ian Corcoran, vice president of the Hudson River Pilots Association, said yesterday. “I haven’t spoken to the pilot yet, but if the ship loses the ability to steer, the width doesn’t really matter,” Corcoran said. He called it an unfortunate coincidence that the first tanker shipload of Bakken from Albany ran aground. Buckeye (BPL) said in October it reached a multi-year agreement with Irving to provide crude services at Albany. Buckeye has 1.8 million barrels of storage there, and is making modifications to increase its rail capacity to 135,000 barrels a day. Hendrick said Buckeye and another terminal run by Global Partners LP (GLP) receive more than one unit train a day of crude from North Dakota at the port.

Spokesmen from Irving and Buckeye didn’t respond to an e- mailed request for comment.

By Bloomberg

December 22, 2012:

Two persons have died following a fire incident at the Reliance Industries Ltd's (RIL) refinery in the Jamnagar district of Gujarat, the police said.  The incident took place in the crude distillation unit (CDU) of the refinery, they said, adding maintenance work was going on in the unit, and it was shut for the purpose. According to the police, when the fire broke out, one of the two persons doing maintenance work in the CDU fell from a height and died on the spot, while the other sustained burn injuries, and was admitted to hospital. He succumbed to injuries late Thursday night, police added.  The persons were employed by a contractor, the police said. The reason for the fire is not yet known. An RIL spokesperson said, "A small fire took place at the CDU of the refinery on Thursday, which was immediately contained. There was no production loss as the unit was under shutdown for maintenance." He added, "There was no damage to the machinery."

The police have registered a case of accident and are investigating the incident.

By Business Standard

December 21, 2012:

FERNDALE - Phillips 66 Ferndale Refinery has donated $25,000 to a project to build a new library in Ferndale. Combined with a match from an anonymous donor, the refinery's pledge actually will mean $50,000 for the library, the Whatcom Community Foundation announced Wednesday, Dec. 19.  Jeff Callender, a Phillips 66 spokesman, said the refinery and its employees "recognize the importance of a strong community library where everyone can access information, technology and life-enhancing programs," adding that a new library would benefit the community for generations. The $5.4 million project is a collaboration of the city of Ferndale, Whatcom County Library System and Whatcom Community Foundation. The donation edges the fundraising effort to within $500,000 of its goal.

The 15,000-square-foot library will be near City Hall on Main Street. In October, the Whatcom Community Foundation announced that an anonymous donor had pledged up to $1 million in matching funds.

By The News Tribune

December 21, 2012:

Karachi-based Byco Oil said it had completed Pakistan's largest oil refinery at Balouchistan with a capacity of 120,000 barrels per day, which is expected to reduce the country's imports of oil products. The new refinery, manufactured in the UK and assembled in Pakistan, is currently in the pre-commissioning stage, with tests being done on various equipment, the company said on its website. Byco Oil is the parent company of listed Byco Petroleum . "It will enhance overall crude oil refining capacity in the country from an existing 12.25 to 18 million tonnes per year and will significantly contribute in reducing a shortage of refined petroleum products in the country," the statement read. Byco officials could not be reached for comment.  The new plant will more than triple Byco's current capacity of 35,000 bpd at its existing refinery.

The refinery can be further expanded up to 180,000 bpd, the company said. An isomerisation plant to produce higher volumes and cleaner motor gasoline is also being commissioned with the refinery. Pakistan operates five other refineries, the largest of which is Pak-Arab Refinery's 100,000 bpd plant. Pakistan State Oil, a major oil importer in the country, imports about 250,000 tonnes of diesel every month through term volumes, they added.

By Reuters

December 21, 2012:

Flint Hills Resources LLC will conduct maintenance work on its West crude unit at the Corpus Christi refinery in Texas starting in February, according to a person with knowledge of the situation. The work will start Feb. 6 and is expected to last about 23 days, said the person, who asked not to be identified because the information isn’t public. Planned maintenance will be conducted on a delayed coker at the refinery complex from April 23 to May 19, said the person. A fluid catalytic cracker will undergo work in October at the East section, the person said. Katie Stavinoha, a Houston-based spokeswoman for the company, declined to comment in e-mails yesterday and today.

The Flint Hills Corpus Christi refinery has a capacity of 305,000 barrels a day, according to data compiled by Bloomberg.

By Bloomberg