Quantcast

PBF Chalmette refinery mulls reviving idle coker, HCU


Shutterstock photo


HOUSTON, Aug 10 (Reuters) - PBF Energy Inc is considering restarting ahydrocracking unit (HCU) and a coker idled for near a decade at its 190,000-barrel-per-day (bpd) refinery in Chalmette, Louisiana, sources familiar with plant operations said on Friday.

PBF would use part of $291 million it hopes to raise from a public offering of new shares to restart the 23,000-bpd HCU and 10,000-bpd coker idled in 2010 by previous owner Exxon Mobil Corp in response to the 2007-2009 recession.

PBF discussed restarting the hydrocracker when it bought the refinery from Exxon and partner Petroleos de Venezuela SA in 2015. Exxon was the managing partner.

In announcing the public offering on Thursday, PBF said it would use the proceeds from 6 million shares of Class A stock to pursue capital projects that would enable the company to produce clean refined products from heavy sour crude.

Along with considering restarting units at the Chalmette refinery, PBF said it may build a hydrogen plant at its 182,200-bpd refinery in Delaware City, Delaware.

During a May 3 earnings conference call, PBF Chief Executive Thomas Nimbley said restarting the coker could be quickly paid off by the anticipated jump in marine fuel prices expected from the switch in 2020 to lower sulfur fuel mandated by the International Marine Organization.

"The clean-dirty spreads that are being projected for 2020 are $50 a barrel by some analysts, that project would pay out very quickly," Nimbley said.

The IMO has said that marine fuel must have a sulfur content of no more than 0.5 percent beginning on Jan. 1, 2020. Currently, the sulfur content in marine fuel is 3.5 percent.

Hydrocrackers use hydrogen and a catalyst under high pressure and heat to produce motor fuels, primarily diesel, from gas oil.

Cokers increase the yield of motor fuel feedstocks from a barrel of oil and convert residual crude to petroleum coke, which can be used as a coal substitute.




This article appears in: Stocks , World Markets , Oil
Referenced Symbols: PBF ,



More from Reuters

Subscribe






See Reuters News











Research Brokers before you trade

Want to trade FX?