03/02/26
Crude Summit: US refiners adjust slates, eye pipelines
Crude Summit: US refiners adjust slates, eye pipelines
Houston, 3 February (Argus) — US refiners are using their flexibility to handle
varying crude slates more often while eyeing options such as new fuel pipelines
to adapt to the changing market, according to speakers at the Argus Americas
Crude Summit in Houston, Texas, today. Monroe Energy's 190,000 b/d refinery in
Trainer, Pennsylvania, can run up to about 20,000 b/d of Western Canadian Select
(WCS) crude if it has "the right stuff to blend it," said chief executive Jeff
Warmann. Monroe, which is owned by Delta Airlines, has been researching the
possibility of railing WCS to the Monroe refinery, he said on the sidelines of
the conference. Once you remove some heavier elements of the crude the rest is
"near a Bakken lookalike," he said, referring to oil produced in the Bakken
shale in North Dakota. The US market is expecting an increase in heavier crude
volumes, including more imports from Venezuela, which could push back WCS into
the midcontinent and pressure prices for all heavy grades. Some US Gulf coast
refiners have facilities originally designed to take the heavier crude, but
other US refineries take lighter crude, such as oil from the prolific Permian
basin in Texas and New Mexico. On the midstream front, Joseph Israel, executive
vice president for US refiner Delek, told the conference that proposed fuel
pipeline projects will be key in supplying areas where refineries are closing,
such as California, eventually relieving the need for foreign imports. He
pointed to several projects, including a joint proposal from Phillips 66 and
Kinder Morgan to build a refined products pipeline system from the midcontinent
to western US markets. The Western Gateway project includes a new 200,000 b/d
pipeline from Borger, Texas, to Phoenix, Arizona, combined with the reversal of
Kinder Morgan's existing SFPP pipeline from Colton, California, to Phoenix. In
addition, the Phillips 66-operated Gold pipeline, which currently flows from
Borger to St Louis, Missouri, would be reversed to allow refined products from
midcontinent refineries to flow south to Borger and supply the Western Gateway
system. Western Gateway will be "a huge pressure relief" from the midcontinent
as well as west Texas, Israel said. Another large US midstream company, Oneok,
is considering building a 200,000 b/d pipeline — the Sun Belt Connector — to
carry gasoline, diesel and jet fuel from El Paso, Texas, to Phoenix. Phillips 66
last year completed a planned shutdown of its 139,000 b/d Los Angeles refining
complex. That closure, along with the ongoing shutdown of Valero's 145,000 b/d
refinery in Benicia, California, has raised concerns about the state's tight and
often volatile oil products market and the impact on neighboring states. By
Eunice Bridges Send comments and request more information at
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