Home › Forums › Refining Community › Refinery News › Update Refinery sales: US Valero Delaware & Paulsboro & EU Chevron Pembroke joins Total Dunkirk & Sh › RE: Update Refinery sales: US Valero Delaware & Paulsboro & EU Chevron Pembroke joins Total Dunkirk & Sh
Here is update on US Refinery Valero Delaware Fluid Coking Refinery & mentions Valero’s Paulsboro Coking refinery sales status. Also includes recent update on Europe Refinery sales at Chevron Pembroke, Total Dunkirk & Shell’s Stanlow refineries – none of them are coking refineries however. Chevron claims to be looking at 2,000 redundancies World Wide but mostly in US, Africa & Asia.
I disagree one article comments that Asian Refineries will likely escape this round of cuts in Refining Industry capacity rationalization because their cost are lower. Asia and especially China has recently overbuilt on refining capacity with a large amount of capacity that is destined for gasoline & diesel exports to US & Europe. I think it will likely be a delayed action because the Chinese government owns and subsidizes most of its capacity and unlike the US will provide some support. The coming major increase in Mid East Refining capacity will be taking market share from the China refineries because they are also government subsidized with integrated crude from the countries supplying import crude into China (several are even JV partners on new world class export refineries).
Looking at US demand picture it is unlikely capacity there will ever return to pre-recession levels and especially so with mandated increasing substitution of Ethanol displacing Gasoline production. Since US is one of few Gasoline based Fuel regions in the world all of the remaining countries like China, India, Africa & Russia will have to readjust to domestic diesel production levels on crude (which is one reasons previous capacities were limited to 50-75% of their capacities) …….. having governments involved in subsidizing losses & offsetting freight fuel cost is going to make this round of rationalization especially brutal.
The only bright spot I can see is all the mutual fund traders and companies like Citigroup that have been speculation both crude & gasoline prices way above fundamental values (which is also part reason US margins are so bad) are likely take a bath if they float 22 supertankers like they did end 2008/start 2009 betting current price & demurrage cost will be below future crude & product values in peak consumption periods. Most of them barely broke even – this time maybe it will be blood bath, unfortunately they are going to take out all small, low complexity, independent refineries with them.