New crude options and more reliable equipment will help make PBF Energy's recently-acquired California refinery more profitable, the US independent refiner's executives said today during a quarterly earnings call.
Third-party problems have helped roil operations at the 155,000 b/d Torrance refinery in the first seven months of PBF's ownership of a facility chief executive Tom Nimbley said has little margin for error.
"It has been running very well the last couple of weeks but it does not take much before you get a cascading effect so you have to cut back some things," Nimbley said during a quarterly earnings call.
Torrance lacks tank capacity and quick access to a waterborne market to replace surprise outages in supply, Nimbley said.
PBF added a crude unloading rack at a pump station near Bakersfield to load barrels into the 16-inch M70 crude pipeline system connecting Torrance to Kern County, western region president Jeff Dill said. The company was exploring other, low-cost supply connections after an unidentified third-party disruption had forced PBF to cut rates late last year.
"The beauty of a lot of these, particularly connections we are exploring in the Los Angeles basin, involve zero capital because either the producers or the other pipeline systems can put the connections in and we all sort of recoup the benefits of that over time," Dill said.
The refinery had also pushed for extensive electrical equipment upgrades following a pair of outages triggered by SoCal Edison accidents last year. Transformers, cable and other equipment had been upgraded since outages in September and October abruptly and dangerously shut the refinery.
PBF continued to seek permitting and engineering for a direct connection to a higher-voltage industrial grid, Dill said.
"There are a number of things we have pushed and, really, sort of kept our boots to the throat of SoCal Edison to improve what were just, basically, extremely poor work practices on their part," Dill said. "They have really improved the current infrastructure that is feeding the refinery and their work practices have improved, again, with some urging, I would say, from my technical team at the refinery."
The utility said Dill's assessment was "not reflective" of the root causes of the outages and that it was working with PBF to ensure it had the supply that it needed.
PBF still sees promise inside the plant. Operational changes have allowed the company to increase distillate production by 12,000 b/d when there was sufficient demand for that fuel, Nimbley said. The company also sold refined products into the Las Vegas, Nevada, market, a traditional outlet for Los Angeles-area refiners. Wholesale marketing had grown to 90,000 b/d across the refinery's fuel rack.
An upcoming turnaround on the refinery's crude unit, planned for the second quarter, was badly needed, Nimbley said. And the refinery remained vulnerable to otherwise small issues that create large headaches, such as an on-site wastewater plant malfunction that had cut crude rates.
"These things will all be fixed," Nimbley said.
