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RE: Reliance Refinery Expansion Squeeze WW margins?- Doubt it

Home Forums Refining Community Refinery News Reliance Refinery Expansion Squeeze WW margins?- Doubt it RE: Reliance Refinery Expansion Squeeze WW margins?- Doubt it


Charles Randall

Here is update on Reliance Refinery Expansion & although many of the details are correct the conclusions may not be.  The Reliance expansion is just part of a huge petrochemical complex expansion & the demands for the ethylene feedstock on petrochemical side really put emphasis on the “may” (making it an economical choice) for gasoline & diesel exports …. rather than the “has to” implied by comments on supply capacity overshoot. Additionally it is not a given that refining margins will rise – a great deal of crude cost are driven by speculation not demand & peak demand like memorial day driving in US is ramping down gasoline price, demand and refining margins which are priced closer to fundamental demand price levels and not speculation level fuels prices compared to elsewhere.
The same thing is true for the “doubling” of petcoke production – the project is also adding a petcoke fired power plant that will eventually consume not only the 6-8,000 tpd from the expansion but some of the current petcoke production as well.
The $10,300/Bbl capacity addition for Reliance may be half as much for Mid East & other areas but does not put the new Reliance capacity at advantage against existing US refineries that are only expanding heavy residual capacity, have better complexities in the 14-24 range and not adding equivalent “new grassroots venture cost” capacity. 

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