Sunoco plans to exit the refining business and has begun a process to sell its refineries located in Philadelphia and Marcus Hook, Pennsylvania. Sunoco also announced that it is conducting a company-wide comprehensive strategic review. Suisse Securities (USA) LLC has been retained to assist in the review process. Sunoco will pursue all options to sell its refineries, but if a suitable transaction cannot be implemented, the company intends to idle the main processing units at the facilities in July 2012.
We have made progress in increasing the efficiency of our refineries over the last several years, but, given the unacceptable financial performance of these assets, it is clear that it is in the best interests of shareholders to exit this business and focus on our profitable retail and logistics businesses which have higher returns, growth potential and provide steady, ratable cash flow, said Lynn L. Elsenhans, Sunocos chairman.
Together with the separation of SunCoke Energy and the sale of the chemicals business, Sunocos decision to exit refining marks a fundamental shift away from manufacturing that will reposition the company.
BASF has formed a new startup business with Alberta, Canada-based manufacturing technology firm Quantiam Technologies, seeking to commercialize advanced catalytic surface coatings for steam-cracker furnace tubes. The business is named BASF Qtech. Quantiam had previously developed the coatings for use in the global petrochemical industry. Manufacturing, R&D and technical services support for the new business entity will be provided by the Quantiam team in Edmonton, while marketing and sales support will be led by BASFs catalysts division, headquartered in Iselin, New Jersey. The catalytic surface coatings developed by Quantiam are applied on the internal surfaces of steam-cracker furnace tubes and coils, enabling the catalytically-assisted manufacture of olefins. The coatings are designed to improve operational profitability of petrochemical furnaces by reducing carbon formation, increasing online production time and cutting maintenance times, energy expenditures and CO2 emissions.
Shell has agreed to sell its interests in natural gas transport infrastructure joint venture Gassled to Infragas Norge for about $730 million, based on current exchange rates. Gassled is Norways integrated gas transportation system and processing facility which transports most of the gas production on the Norwegian Continental Shelf to consumers on the European continent and in the United Kingdom. The agreement with Infragas Norge AS relates to Shells 5.0% interest in Gassled JV and associated interests of 3.3% in the Dunkerque terminal and 2.5% in the Zeepipe terminal. Gassled is a joint venture established in 2003. It provides transportation services on an open access basis to producers on the Norwegian Continental Shelf. The parties intention is to close in the fourth quarter of 2011.
Murphy Oil has agreed to sell its 125,000-bpd refinery and related assets in Meraux, Louisiana, to Valero for $325 million in cash plus the value of its hydrocarbon inventory, putting the overall sale value near $625 million. The hydrocarbon inventory will be valued based on market prices at closing. Currently, that inventory is valued at around $300 million. The sale is subject to customary regulatory approvals and conditions and is expected to close in the fourth quarter of 2011. Following the sale, Murphy plans to focus on completing the sale of its assets in the UK.
BP has completed its acquisition of a 30% stake in 21 oil and gas production sharing contracts (PSCs) that Reliance Industries operates in India. This significant step will commence the planned alliance which will operate across the gas value chain in India, from exploration and production to distribution and marketing, the companies said. This should accelerate the creation of infrastructure for receiving, transporting and marketing natural gas in India. BP will pay Reliance an aggregate consideration of $7.2 billion.
Process optimization to grow 9%
The real-time process optimization and training (RPO) market is expected to grow at a compound annual growth rate (CAGR) of over 9% a year over the next five years, according to a new study from ARC Advisory Group. The market was slightly more than $1 billion in 2008, but dropped during the global recession to slightly over $950 million in 2010, the study says. The market is expected to reach more than $1.5 billion in 2015. The RPO market has rebounded from the lows of 2009, and is expected to return to pre-2008 growth as the global process industries need for safer, more efficient operations continues.
The global economy has still not returned to its pre-2008 optimism, said Dick Hill, a co-author of the study. The economic slowdown adversely affected growth but the market will rebound as many of the issues facing manufacturers, like reducing costs, still require solutions such as those offered by RPO suppliers.
The RPO market consists of three unique types of applications: advanced process control, online optimization, and training simulation and control validation software. Advanced process control includes model-based software to direct and control process operations. Online optimization continually monitors the state of the process and through a reference model predicts an optimum operation path. Meanwhile, training simulation and control system validation are real-time dynamic simulators designed to train process operators and verify control system functionality.
The recession that began in 2008 affected all corners of the globe and is still the single biggest influencing factor on growth of the RPO market. Much of the industrial world was forced to curtail capital project expenditures and RPO investments in the short-term.
However, cautious optimism is now returning. Global growth in the industry is being driven by developing regions of the world. HP