Viewpoint: Midcon refiners readied for IMO rules
Refiners in the US midcontinent appear well-positioned to take advantage the arrival of new International Maritime Organization (IMO) sulphur regulations in 2020, having performed extensive maintenance on distillate-producing units during this fall's turnaround season.
The regulations, which will restrict the use of high-sulphur marine fuels, are expected to boost demand for middle distillates. This demand will drive investment into more complex facilities as refiners seek to minimize heavy product production in favor of these lower-sulphur fuels.
With the rules already pressuring the global distillates market before coming into force, midcontinent refiners are preparing their facilities to run full-out. These refiners, experienced in maximizing the production of valuable low-sulphur products out of otherwise heavy, sour crude grades like Western Canadian Select (WCS), are expecting to reap the benefits of their past investments in complex refining capacity as these changes come into effect.
With an eye toward minimizing the need for maintenance through 2020, refiners in the region cut crude distillation unit (CDU) utilization to its lowest in more than eight years during this fall's turnaround season, taking more than 1mn b/d of capacity off line for repairs. Regional crude inputs into refineries sank to a three-year low.
Refiners' emphasis on preparing their distillate-producing units for the upcoming changes is highlighted by persistently high gasoline production throughout the turnaround season. Gasoline and blendstock producing units, not captured in the EIA's utilization measure, continued to operate at full capacity, ballooning inventories and depressing prices.
While these moves will help position midcontinent refiners ahead of the IMO rule change in 2020, they are just one part of a broader strategy meant to expand the region's role supplying the rest of the country. Hoping to leverage the region's access to discounted crude, some refiners are seeking to push into markets traditionally served by increasingly export-focused US Gulf coast refineries. These attempts to access more profitable eastern markets have drawn the ire of some more established players in the region, and companies have faced regulatory hurdles trying to secure the infrastructure necessary to make this move possible.
Related news posts
ANP reduz mescla de etanol e biodiesel no RS
ANP reduz mescla de etanol e biodiesel no RS
Sao Paulo, 6 May (Argus) — A Agência Nacional do Petróleo, Gás Natural e Biocombustíveis (ANP) diminuiu, temporariamente, a mistura obrigatória de etanol e biodiesel no Rio Grande do Sul por 30 dias, a partir de 3 de maio, em meio a enchentes catastróficas no estado. O mix de etanol anidro na gasolina caiu dos atuais 27pc para 21pc, enquanto o do biodiesel no diesel S10 está agora em 2pc, queda em relação à porcentagem vigente de 14pc. Também de forma temporária, a agência suspendeu a necessidade de mistura para o diesel S500. A ANP informou que pode revisar os prazos da medida dependendo das condições de abastecimento no estado. As chuvas no Rio Grande do Sul bloquearam rodovias e ferrovias que transportam os biocombustíveis para centros de distribuição, como Esteio e Canoas. O fornecimento de combustíveis fósseis pela ligação dutoviária da refinaria Alberto Pasqualini (Refap) às outras bases de distribuição do entorno não foi comprometido, afirmou a ANP. As enchentes no estado já deixaram pelo menos 83 mortos e 111 desaparecidos, de acordo com o governo local. Mais de 23.000 pessoas tiveram que deixar suas casas e cerca de 330 cidades estão em situação de calamidade pública. Por Laura Guedes Envie comentários e solicite mais informações em feedback@argusmedia.com Copyright © 2024. Argus Media group . Todos os direitos reservados.
Brazil lowers biofuel mix in flooded state
Brazil lowers biofuel mix in flooded state
Sao Paulo, 6 May (Argus) — Brazil's oil regulator ANP temporarily decreased the mandatory mix of ethanol and biodiesel in fuels in Rio Grande do Sul state for 30 days, starting on 3 May, amid floods in the region. The anhydrous ethanol blend on gasoline was lowered to 21pc from the current 27pc, while the mandatory biodiesel mix for 10ppm (S10) diesel is now at 2pc, down from the usual 14pc. The agency also temporarily suspended the blending mandate for diesel with 500ppm of sulfur (S500). ANP said it can revise deadlines depending on supply conditions in the state. Rainfall in Rio Grande do Sul blocked railways and highways where biofuels are transported to retail hubs, such as Esteio and Canoas. Supply of fossil fuels via pipeline from the 201,000 b/d Alberto Pasqualini refinery (Refap), in Canoas, and other retail bases has not been compromised, ANP said. Floods in Rio Grande do Sul have left at least 83 dead and 111 missing, according to the state government. More than 23,000 people have been forced from of their homes amid widespread damage. Over 330 cities are in a situation of public calamity. By Laura Guedes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
North Germany sees May holiday gasoline surge
North Germany sees May holiday gasoline surge
Hamburg, 6 May (Argus) — Driving activity in Germany increased around the public holiday on 1 May, leading to a rise in regional demand for fuels, particularly gasoline, in the past week. Oversupply of diesel is also pressuring premiums in Europe. Daily volumes of diesel and E5 gasoline reported to Argus this week were higher than the average for the current year. Demand for gasoline in the North region notably increased, with reported volumes in the past week reaching the highest daily average in 2024. The filling station sector is almost entirely responsible for the increased demand, market participants said. Many end-users took Monday and Tuesday off as additional holidays, leading up to 1 May. This resulted in a temporary increase in travel activity. In anticipation of this, filling station operators stocked up on fuel. But compared with previous years, overall demand for diesel in Germany remains weak. Coupled with plenty supply of diesel on the international market, this has led to premiums of cif Hamburg in April reaching their lowest level since July 2023. In the face of oversupply the difference between cif Hamburg diesel and cif ARA assessment fell further as well over the past week. The volume of diesel imported to northern Germany increased by 18pc in April compared with March, reaching around 71,000 b/d, data from Vortexa show. The low premiums of the diesel cif assessments, along with the ICE Gasoil Future's contango — which has encouraged the storage of product in tanks since mid-April — have particularly boosted import demand. By Johannes Guhlke Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Panama's new president faces copper, canal issues
Panama's new president faces copper, canal issues
Kingston, 6 May (Argus) — Stand-in candidate Jose Raul Mulino will take office on 1 July as president of Panama with a challenge to decide on the future of one of the biggest copper mines in the Americas. The 64 year-old lawyer won yesterday's presidential election in the central American country, promising a "pro-investment and pro-business" policy. He won with 35pc of the vote and an about 10 percentage point lead over his next closest rival, Ricardo Lombana. But he has delivered no comment on the future on the shuttered Canadian-owned copper facility that is one pillar of the country's economy. His government will use public works projects and incentives for foreign investors to restore economic growth, Molino said, without giving details. Panama also faces a crippling drought that has lowered water levels and reduced transit through the economically important Panama Canal. First Quantum intends to meet the new government to discuss reopening the mine, the company's chairman Robert Harding said in March. "Whatever government is elected, we will work with it," Harding said. "We would like to see this mine reopen." Panama closed the $10bn Cobre Panama mine after a supreme court ruling in November that First Quantum's contract was unconstitutional. The mine accounted for 5pc of the country's economy and 1.5pc of global copper output, according to the government. The shutdown will limit the country's economic growth to 2.5pc this year against 7.5pc in 2023, the IMF has forecast. The supreme court's order to close the mine followed weeks of protests over the terms given to First Quantum in October. Protests wracked the country as opposition parties, trade unions, environmental lobbies and non-governmental organizations objected to the terms. "Although the mine's owners would be happy to negotiate a reopening with the new administration, this is a very hot and controversial matter for the new government," a senior official of the outgoing government of President Laurentino Cortizo told Argus today. "Any suggestion of negotiating a reopening would again bring people on the streets." Mulino ran with former president Ricardo Martinelli until the courts disqualified Martinelli because of a money laundering conviction. Martinelli had proposed that Panama renegotiate the contract with First Quantum to secure higher royalties and a stake. "Mulino is a mentee of Martinelli, but I doubt he would stoke public anger by seeking to reopen the mine," the official said. Cobre Panama produced 331,000 t in 2023, 5pc less than 2022 output, First Quantum said. By Canute James Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Business intelligence reports
Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.
Learn more