Mid August downstream news update: UK and USA

UK

Centrica could reject plans to convert an empty gas field into a storage facility if the government decides not to help finance the project.

Initial comments from the Government suggest that it doesn’t believe that more storage facilities are necessary, despite the fact that the UK only has approximately 15 days’ worth of storage, notably less than other European countries.

Two years ago MPs warned that the UK has dangerously low gas storage capacity and it was important that storage was increased. Earlier this year, gas reserves fell to just 5% and there were concerns that Britain would run out of gas. As the country becomes increasingly dependent on gas imports, many think that more gas storage facilities are the way forward.

Centrica currently owns the UK’s existing long term gas storage facility at Rough, off the Yorkshire coast. The energy supplier now wants to convert an empty gas field at Baird, off the Norfolk coast, to create another storage facility of the same size.

Centrica wants the Government to guarantee a minimum return for their stored gas, but energy supplier SSE says ministers should be ‘extremely cautious about designing a mechanism to incentivise gas storage’; SSE is worried that existing storage facilities could suffer as a result.

USA

California

Residents of Benicia have withdrawn initial approval for the construction of a Valero Energy Corp. refinery in the city.

Valero will now be required to provide an environmental impact report (EIR). City officials announced on Thursday that a full EIR would be require to ‘ensure full consideration of all environmental issues’.

A Valero spokeswoman has outlined that the company is committed to satisfying residents’ health and safety concerns.

The city plans to hold a public meeting on the Valero proposal on 12^th September.

Illinois

Chicago gasoline strengthened after Marathon Petroleum Corp. (MPC’s) Catlettsburg, Kentucky, refinery had a power failure that shut down multiple units.

Conventional 85 octane gasoline, or CBOB, in Chicago gained 2.5 cents/gal - 12 cents/gal under New York Mercantile Exchange gasoline futures at 12.40pm, according to data compiled by Bloomberg.

Marathon is today restarting units at the 240 000 bpd refinery.

Indiana

Work on the US$ 3.8 billion modernisation of BP’s Whiting refinery is to wind down this year. However, a big maintenance project on a gasoline producing unit is scheduled for early next year.

BP plans to overhaul one of the refinery’s fluid catalytic cracking units.

Spokesman Tom Keilman confirmed that the work would take place next year and indicated that the unit for upgrade is one of two at the refinery that vaporizes crude oil to convert it to high octane gasoline.

Montana

The owner of the Great Falls petroleum refinery says that it plans a US$ 275 million expansion that will double production and add 30 jobs over the next two years.

Calumet Specialty Products Partners LLC spokesman Noel Ryan on Thursday confirmed the expansion plans at Calumet Montana Refining. Work is expected to be completed by September 2015.

Edited from various sources by Emma McAleavey.

Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/12082013/downstream_news_update_uk_usa546/