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HP Brief

09.01.2012  |  Thinnes, Billy,  Hydrocarbon Processing Staff, Houston, TX

Keywords: [Europe] [renewables] [BP] [Carson refinery] [Texas City refinery] [Celanese] [litigation] [KBR] [Shell Global]

European refiner affirms renewables project

Total has reaffirmed its partnership and financial backing to the technology of renewable products company Amyris, the companies said in a recent statement. Total dedicated an $82 million funding budget over the next three years exclusively for the deployment of Amyris’s renewable farnesene and for the production of renewable diesel and jet fuel. Upon completion of the research and development program, Total and Amyris intend to form a joint venture company that would produce and market renewable diesel and/or jet fuel, as well as nonexclusive rights to other specialty products, the companies said.


BP has agreed to sell its 266,000-bpd Carson refinery in California and related logistics and marketing assets in the region to Tesoro for $2.5 billion in cash. The deal value includes the estimated value of hydrocarbon inventories and is subject to post-closing adjustments. The company noted that the sale is part of a previously announced plan to reshape BP’s US fuels business. BP also plans to sell its Texas City refinery, in order to focus on its three northern US refineries, which the company says are “feedstock advantaged.” Subject to regulatory and other approvals, Tesoro will acquire the Los Angeles-area refinery as well as the associated logistics network of pipelines and storage terminals and the ARCO-branded retail marketing network in Southern California, Arizona and Nevada. The sale also includes BP’s interests in associated cogeneration and coke calcining operations. The sale is expected to close before mid-2013. BP will sell the ARCO retail brand rights and exclusively license those rights from Tesoro for Northern California, Oregon and Washington and continue to produce transportation fuels at its refinery in Cherry Point, Washington.

Chemicals company Celanese said that a jury ruled in its favor in litigation filed by Southern Chemical relating to the terms of a multi-year methanol supply contract. The jury said the contract, under which Celanese has paid Southern Chemical about $130 million/year, should continue until its expiration, adding that Celanese did not violate the terms of the agreement. The contract, which expires in 2015, is valid for Celanese operations in the US and Mexico. Celanese is the largest methanol consumer in the US, while Southern Chemical is the second-largest supplier (after Methanex). Under the contract, Celanese received about 800,000 tpy of methanol from Southern Chemical. Southern Chemical alleged that Celanese was not using the purchased methanol solely for internal use, and was instead shipping it to other chemical companies for more than the contract price. Celanese officials, however, said they were selling the material as methyl acetate and had been given clearance to do so by the Southern Chemical president. Celanese plans to build a 1.3-million tpy methanol plant in Clear Lake, Texas, which would presumably replace the Southern Chemical supply once the contract expires in 2015.

KBR and Shell Global Solutions plan to expand their hydroprocessing technology alliance. In addition to hydrocracking and hydrotreating, KBR will now market, sell and provide technology and design packages for Shell’s deep-flash, high-vacuum unit distillation and thermal conversion technologies. KBR said the new alliance terms will help refinery operators that want to improve their distillation performance to optimize assets, minimize expenditures and capital investment and debottleneck operations. To meet those goals, refiners can use deep-cut vacuum distillation to maximize the recovery of distillate from residue. The falling demand for residue fuel oil means that refiners can use thermal conversion technologies to convert the bottom of the barrel to higher value products.

The US Chemical Safety Board (CSB) will pursue a full investigation to determine the causes of the August 6 fire at the Chevron oil refinery in Richmond, California. A CSB team of seven investigators arrived at the refinery several days after the fire and conducted witness interviews while reviewing documents at the site. The fire occurred when gasoil leaked from an 8-in. pipe connected to a crude oil distillation tower in the refinery’s crude unit. Workers initially noted the leak and were in the process of attempting repairs on piping connected to the still-operating crude oil distillation tower when the leak suddenly intensified. The gasoil immediately formed a large flammable vapor cloud. Important issues to resolve in the investigation include understanding why the pipe that later failed was kept in service during a late-2011 maintenance turnaround and what procedures and industry practices exist for responding to a leak of combustible material from a running unit. The CSB anticipates executing a site preservation and evidence testing agreement with Chevron and other investigative groups and arranging for independent testing of the leaking section of pipe to determine the failure mechanism. Both Chevron and the United Steelworkers, which represents hourly workers at the plant, have been cooperating with the CSB team. Chevron has provided assurances that its personnel will freely share their knowledge and investigative information with the Board. Cal/OSHA, Contra Costa County and the US Environmental Protection Agency.

Kuwait’s Equate Petrochemical Co. has shut down one of its ethylene glycol units with a total capacity of
550,000 mtpy after a fire on July 31. The fire resulted from a leak in part of a manufacturing unit. Equate said the fire was contained and extinguished promptly, adding that production operations of other production units were not affected. The company anticipates that the shutdown of the damaged unit will last six weeks.

UOP has been selected by Lukoil to provide technology to produce blending components used to make high-octane gasoline and petrochemicals at its facility in Nizhny Novgorod, Russia. Lukoil will license an integrated suite of Honeywell’s UOP technologies to produce high-quality gasoline blending components, propylene and other petrochemicals, the company said. Russia is the third largest energy consumer in the world, and demand is growing due to increasing economic activity. The suite of UOP technology will be used in a new integrated fluid catalytic cracking complex. The new units, expected to start up in 2015, will produce more than 1 million tpy of gasoline blending components and more than 170,000 tpy of propylene. HP

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