January 27, 2010
Volume: 14
Issue: 2
Top Stories
Boeing, Masdar, UOP Team-Up on Saltwater Bio-Jet-Fuel Scheme
GM Inks Deal to Sell Saab to Spyker
Headwaters, Axens Form Direct Coal Liquefaction Alliance
Fuel Diversification: Challenges to Profitability
U.S. Export-Import Bank OKs US$1 Billion for Ecopetrol Projects
Petrobras Configuring New Mega Refinery for Export Market
Cutting Back on Capital Budgets, Improving Unit Reliability
Niche Refining Opportunities in 2010
Refinery Staff Reductions May Affect Turnaround Schedules
Shale-Gas Cannot Replace Coal; US EPA Regulation Better than Cap-and-Trade
Hart Receives Funding on Indirect Land Use Change for Biofuels
PetroChina Becoming Significant Player in Caribbean Fuel Oil Market
Refining Outlook 2010: Contrasts and Opportunities
Sub Freezing Temperatures Shut Down Hydrocracker
Start-Up Wins US$900,000 Grant for Biomass Gasification Factory
Market Report
Market Snapshot
Market Snapshot
Ernst & Young Report: Better Outlook in 2010 for Oil and Gas Sectors
CO2 Capture at Supercritical Plants Adds More Than 4¢/kWh Extra Cost
Refinery Shutdowns Leading to Higher Imports
U.S. Refining Analysis: Majors to Exit Transport Fuels Market
News from Americas
US$400M Upgrade for BP-Husky Toledo Refinery
New Senior Leadership at Infineum International
Brazil Slashes Ethanol Blend to 20%; Sugar Growers Accept It
Valero Finalizes Purchase of Two Ethanol Plants
U.S. DOE Funds Nearly US$80M for Biofuels/Fueling Infrastructure
Chevron Interim Q4 Update: Downstream Results Sharply Lower
Ford to Invest US$450M in Electric Vehicles
News from Middle East / Asia
Reliance Reports Improved Net Profits
CNOOC Expands Diesel Supply in Guangdong
China’s HK Motors to Build Hybrids in Alabama
New Hydrocracker at Huizhou Refinery Produces Fuels and Petrochemical Feedstock
Sasol, Tata Push US$10 Billion CTL Project in India
China Car Sales to Hit 15 Million Units This Year
Indian Government Won’t Cover Losses Caused by Price Controls
India’s Essar Group Eyes Zambia’s Indeni Refinery
News from Europe / Africa
Saudi/Shell ULSD Exports Begin This Month
Eni Buys ExxonMobil Austria Downstream Businesses
SATORP’s Jubail Refinery includes 17 Compressor Trains
Italy to Build Oil Refinery in Uganda
Qatar Entities Further Biojet Fuel Production
SASREF Completes Major Instrumentation Overhaul
Davy Wins SNG Contract for China Project

News from Americas

US$400M Upgrade for BP-Husky Toledo Refinery

Officials at BP-Husky Refining LLC announced Jan. 14 a major equipment upgrade at the BP-Husky Toledo Refinery in Oregon, Ohio.

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New Senior Leadership at Infineum International

Infineum International Ltd. has made a number of changes to its senior leadership team that will become effective Feb.1.

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Brazil Slashes Ethanol Blend to 20%; Sugar Growers Accept It

Brazil’s government this week decided to slash the mandatory blending of anhydrous ethanol in gasoline from 25% to 20% starting Feb. 1, undercutting soaring sugar-cane prices.

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Valero Finalizes Purchase of Two Ethanol Plants

Valero Renewable Fuels Company, LLC, a wholly owned subsidiary of Valero Energy Corporation, announced Jan.14 that it has closed on its purchase of two ethanol plants from ASA Ethanol Holdings, LLC.

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U.S. DOE Funds Nearly US$80M for Biofuels/Fueling Infrastructure

U.S. Dept. of Energy Sec. Steven Chu announced Jan. 13 the investment of nearly US$80 million under the American Recovery and Reinvestment Act for advanced biofuels research and fueling infrastructure that will help support the development of a clean sustainable transportation sector.

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Chevron Interim Q4 Update: Downstream Results Sharply Lower

Chevron Corp. Jan. 11 reported in its interim update that earnings for the fourth quarter 2009 are expected to be lower than in the third quarter 2009.

Full Story >>

Ford to Invest US$450M in Electric Vehicles

Ford Motor Co. officials announced Jan. 11 that the company will invest an additional US$450 million in its aggressive electric vehicle plan, paving the way to build a next-generation hybrid and plug-in hybrid vehicle in Michigan beginning in 2012 and creating 1,000 new jobs.

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News from Middle East / Asia

Reliance Reports Improved Net Profits

Reliance net profits improved in the latest quarter, thanks to higher gas production and better refinery and petrochemical margins. Overall refinery utilization rates exceeded 100% capacity.

Full Story >>

CNOOC Expands Diesel Supply in Guangdong

CNOOC – third behind Sinopec and PetroChina among oil producers and refiners – has boosted diesel supply to fast-growing eastern Guangdong province by 71% in the last month, according to a report from the official Xinhua news service.

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China’s HK Motors to Build Hybrids in Alabama

Representatives of Chinese-backed Hybrid Kinetic Motors Corp. (HK) inked a deal with Italdesign Giugiaro Jan. 18 on engineering and design plans for a line of hybrids that are slated to be produced in Alabama starting in 2013, according to The Birmingham News (Alabama).

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New Hydrocracker at Huizhou Refinery Produces Fuels and Petrochemical Feedstock

The new 80,000-bareel-per-day hydrocracker at China National Offshore Oil Corp.’s Huizhou refinery was successfully started up in late 2009. In addition to the production of transportation fuels, the unit will also produce feedstock for the ethylene cracker in the Nanhai petrochemical complex.

Full Story >>

Sasol, Tata Push US$10 Billion CTL Project in India

Sasol and Tata Steel officials announced Jan. 18 they want to build a 3.6-million-ton-year (80,000-barrel-day) coal-to-liquids plant in Orissa, India.

Full Story >>

China Car Sales to Hit 15 Million Units This Year

China Association of Automobile Manufacturers (CAAM) officials are citing predictions that domestic car sales will hit 15 million units this year, up 10% from the record-breaking 13.64 million unit sales in 2009, which were up 46.2% over 2008.

Full Story >>

Indian Government Won’t Cover Losses Caused by Price Controls

The Indian Finance Ministry is offering less than half of the compensation sought by the Oil Ministry to cover some US$6 billion in state-owned refiner losses on price-controlled LPG and kerosene sales, according to a Press Trust of India report.

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India’s Essar Group Eyes Zambia’s Indeni Refinery

India’s Essar Group and South Africa’s Sasol Ltd. are among foreign companies competing to acquire a majority stake in Zambia’s state-owned Indeni Petroleum Refinery, according to The Post (Zambia).

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News from Europe / Africa

Saudi/Shell ULSD Exports Begin This Month

The Shell/Saudi Aramco Sasref joint-venture refinery will commence exports of ultra-low sulfur diesel (ULSD) by end-January, according to a Reuters report quoting Sasref Executive Vice President Raja Ahmad Murad Bin Raja Bahrin.

Full Story >>

Eni Buys ExxonMobil Austria Downstream Businesses

Italy-based Eni officials announced Jan. 21 that they’ve signed a deal to buy the downstream assets of Mobil Oil Austria, including 135 retail fuel stations, ExxonMobil-Austria’s industrial and wholesale business (with 36 additional Esso branded retail service stations owned by resellers), and the aviation fuel business at the Vienna and Linz airports.

Full Story >>

SATORP’s Jubail Refinery includes 17 Compressor Trains

Compressor trains awarded to Elliott Company for SATORP’s Jubail refinery in Saudi Arabia will serve a variety of applications. Compressor loads will include sour service, hydrogen service and refrigeration.

Full Story >>

Italy to Build Oil Refinery in Uganda

Italy is set to build an oil refinery in Uganda, according to the Web site, New Vision (Uganda).

Full Story >>

Qatar Entities Further Biojet Fuel Production

Officials with Qatar Airways, Qatar Science & Technology Park (QSTP) and Qatar Petroleum (QP) announced Jan. 10 that they will jointly carry out engineering, economic analysis and move into the development of sustainable bio jet fuel that will also look into ways for production and supply, with the support of Airbus.

Full Story >>

SASREF Completes Major Instrumentation Overhaul

Saudi Aramco Shell Refinery Co. (SASREF) has recently completed a major upgrade of obsolete automation systems, involving distributed control system, field devices, central control rooms and integration of safeguarding systems with control systems. The export oriented SASREF refinery processes more than 300,000 barrels per day of Arabian Light crude.

Full Story >>

Davy Wins SNG Contract for China Project

London-based Davy Process Technology officials announced last week they’ve entered into contracts with China-based power producer Datang Energy Chemical Co. Ltd. for a plant to produce synthetic natural gas from coal gasification.

Full Story >>

Top Stories

Boeing, Masdar, UOP Team-Up on Saltwater Bio-Jet-Fuel Scheme

Boeing, the Masdar Institute of Science and Technology, Etihad Airways and UOP officials on Jan. 18 announced an agreement to establish the “Sustainable Bioenergy Research Project” (SBRP), aiming to develop “integrated saltwater agricultural systems to support the development and commercialization of biofuel sources for aviation and co-products.”

Full Story >>

GM Inks Deal to Sell Saab to Spyker

General Motors officials announced Jan. 26 that they’ve finally agreed on terms to sell GM’s Saab car division to Sweden-based upstart, Spyker.

Full Story >>

Headwaters, Axens Form Direct Coal Liquefaction Alliance

Utah-based Headwaters officials announced Jan. 19 the signing of an alliance agreement with Axens to market direct coal liquefaction technology “alone or in combination with refinery residues or biomass.”

Full Story >>

Fuel Diversification: Challenges to Profitability

Some of the unexpected consequences to the current reduction in refined product demand are reduction in construction costs for new facilities that are planned for completion beyond 2011. However, fuel diversification will have a long term effect on refined product fuels.

Full Story >>

U.S. Export-Import Bank OKs US$1 Billion for Ecopetrol Projects

The U.S. Export-Import Bank (Ex-Im Bank) on Jan. 19 announced a US$1 billion “preliminary commitment” to help finance upstream and downstream projects for Ecopetrol, the mostly state-owned oil company of Colombia.

Full Story >>

Petrobras Configuring New Mega Refinery for Export Market

The 300,000-b/d Petrobras refinery to be completed in 2013 will be expanded to 600,000 b/d by 2015. With financial help from the Japanese government and Marubeni Corp., the US$20 billion project is purposed for export of refined product to Japan.

Full Story >>

Cutting Back on Capital Budgets, Improving Unit Reliability

Improving maintenance and reliability in refinery operations is an important priority in 2010. With many refiners indicating they will cut back on capital costs, a higher emphasis will be placed on reliably running existing units, such as the fluid catalytic cracking unit.

Full Story >>

Niche Refining Opportunities in 2010

Projected economics in 2010 seem to indicate a drastic cut in capital projects. Nonetheless, some mega refinery investments are in progress or in the planning stages, such as with the Petrobras US$20 billion refinery in the northeast region of Brazil.

Full Story >>

Refinery Staff Reductions May Affect Turnaround Schedules

Downstream staff reductions have been recently announced by several refining organizations. However, there is speculation as to how these reduced staffing levels will affect plant turnarounds.

Full Story >>

Shale-Gas Cannot Replace Coal; US EPA Regulation Better than Cap-and-Trade

At a Jan. 13 press conference in Washington, D.C., Fred Palmer, Peabody Energy senior vice president-government relations, announced that Peabody – the world’s largest publicly-traded coal company – would support new U.S. Environmental Protection Agency (EPA) “greenhouse” regulations on the energy and power industries, rather than carbon cap-and-trade legislation.

Full Story >>

Hart Receives Funding on Indirect Land Use Change for Biofuels

Hart Energy Consulting has received funding from the Lucille and David Packard Foundation and the Energy Foundation for the project Land Use Change: Science and Policy Review.

Full Story >>

PetroChina Becoming Significant Player in Caribbean Fuel Oil Market

The Caribbean is becoming a major hub for fuel oil traders. PetroChina is projected to become a major player in the Caribbean fuel oil market with its investment in storage facilities and its ties with PDVSA.

Full Story >>

Refining Outlook 2010: Contrasts and Opportunities

2010 will be a pivotal year for the energy industry. Refinery overexpansion from the previous upcycle will be felt, while the industry adjusts to shifts in market demand.

Full Story >>

Sub Freezing Temperatures Shut Down Hydrocracker

Hydrocrackers are designed to operate for at least two- to four-year run lengths. However, unplanned shutdowns due to sub freezing temperatures are a rare event.

Full Story >>

Start-Up Wins US$900,000 Grant for Biomass Gasification Factory

Millinocket, Maine-based RE-Gen LLC will get a US$903,000 grant from U.S. Dept. of Energy (DOE) for a biomass gasification furnace factory with capacity for 250 systems per year.

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Market Report

Market Snapshot

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Market Snapshot

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Ernst & Young Report: Better Outlook in 2010 for Oil and Gas Sectors

While the last 12 months have been a challenge for companies in the oil and gas sector, there have been substantial opportunities for those with strong balance sheets, according to the Ernst & Young Global Oil and Gas Transactions Review, released Jan. 18.

Full Story >>

CO2 Capture at Supercritical Plants Adds More Than 4¢/kWh Extra Cost

Adding carbon dioxide capture to a supercritical pulverized coal-fired power plant will impose more than 4¢ per kiloWatt hour extra cost, according to a new study by California-based SRI Consulting.

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Refinery Shutdowns Leading to Higher Imports

Rationalization of U.S. refining assets will eventually result in noticeable increases in refined product imports. Regional imbalances in transportation fuel prices are also apparent from recent plant closures.

Full Story >>

U.S. Refining Analysis: Majors to Exit Transport Fuels Market

With oil companies reporting low refining margins, consultancy Gerson Lehrman Group recently provided analysis on the causes of sagging performance in the downstream business.

Full Story >>