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Sunoco Tulsa Cancels ULSD project (&coker Exp?) – still plans sell

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This topic contains 4 replies, has 2 voices, and was last updated by  Anonymous 12 years, 4 months ago.

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  • #3332

    Charles Randall
    Participant

    <The Refinery coker cancel/delay list is getting longer – but this one was expected since Sunoco is trying sell Tulsa refinery – let next owner take investment writedown.  But will be good news for low sulfur petcoke buyers in mean time. CER Comments>
     
    Sunoco w’ll not upgrade Tulsa refinery
     
    Houston, 6 November, 2008 (Argus)Sunoco will not upgrade its Tulsa, Oklahoma, refinery, a decision that will reduce spending amid a weakening economy, the company said in its third quarter earnings release on Wednesday.
    Supplies from Gulf coast refiners are largely back on line following Hurricanes Gustav and Ike in September, and the slowing economy will probably continue to suppress demand for refined products going into 2009, chief executive Lynn Elsenhans said.
     
    “More than ever, this market environment requires our continued focus to maintain fiscal discipline,” she said.
    Cancelling the upgrade will save Sunoco $375mn, Elsenhans said. The Philadelphia-based company will continue to pursue the potential sale of the 85,000 b/d Tulsa refinery, and will evaluate all of its assets with an eye toward changing global market conditions, she said.

  • #6408

    Anonymous

    Title of this thread is misleading as the below article indicates it was a distillate hydrotreater.

    Sunoco puts off refinery upgrade

    By ROD WALTON World Staff Writer
    Published: 11/6/2008 2:25 AM
    Last Modified: 11/6/2008 4:03 AM

    Sunoco Inc. announced Wednesday that it will not follow through on the planned $375 million upgrade to its west Tulsa refinery.

    The Philadelphia-based company revealed its decision in its third-quarter earnings report. Sunoco said it still hopes to sell the facility, which employs about 360 people.

    Falling gasoline prices apparently sealed the fate of the planned improvement to the refinery’s hydro treater.

    “It’s an investment that we can’t justify right now given market conditions and the economic outlook,” Sunoco spokesman Thomas Golembeski pointed out.

    The refinery can process more than 85,000 barrels of crude oil per day, according to reports. The upgrade, which was set to be completed by 2010, would have given the facility the ability to convert high-sulfur heating oils to low-sulfur diesel.

    Sunoco officials likely will discuss their decision in more detail during a conference call with analysts Thursday afternoon.

    The company’s third-quarter net income totaled $549 million, or $4.70 per diluted share, compared to $216 million for the same three months last year.

    The slowing economy likely will continue to suppress demand for gasoline into 2009, president and CEO Lynn Elsenhans said in the earnings statement.

    “This market environment requires our continued focus to maintain financial discipline,” he said.

    The Tulsa refinery was acquired by Sunray DX in 1968. Sunray later merged with Sun Oil Co., which became Sunoco.

  • #6405

    Charles Randall
    Participant

    RE -Commenbt that title of thread is misleading & article was about distillate hydrotreater.
     
    You are probably right that the title should have matched the news lead & project a little more. But the $400 MM project was more than just distillate hydrotreater – it was the Sunoco Diesel upgrade / ULSD project that added both equipment & infrastructure to shove the industrial distillate into the Ultra Low Sulfur Diesel pool.  Sweet Crude Refineries often have more problems shifting product sulfur levels than thier Heavy/Sour Crude counterparts.
     
    Also I often use an existing news lead to discuss company/refinery/coker background or upcoming coker project which is my main tracking focus……but I should have done that on followup comments or intro comments & will try edit/correct post if I can.
     
    FYI – since Sunoco has cancled the ULSD project it does mean any drum replacement or coker debottlenecking project to take advantage of any heavy crude opportunities. While Sunoco is likely save some lost equity investment (ie you never get value back on putting in swiming pool when your selling your house) it will loose big on eventual sales value which new buyer will derate refining asset much more than the project would have cost.
     
    Recent news also hints at Sunoco looking at being partner for one Canadian Bitumen crude producers along lines Husky & Encanada partners for BP & COP….. clearly Sunoco Tulsa Refinery is not going to be a canidate.

  • #6398

    Charles Randall
    Participant

    Here are several additional news items on Sunoco refinery news items many around outcome of Sunoco Tulsa coking refinery future options – many are just seeking alternate methods to sell / exchange portion of assets:
     
    ————
     
    Sunoco might revamp refinery into terminal  

  • Tulsa World – Dec 16, 2008  The company’s preferred goal is to sell the Tulsa outlet. Sunoco Inc., the largest refiner in the Northeast, said it might convert its Tulsa refinery into a terminal by the end of 2009 if it’s not sold. http://www.tulsaworld.com/business/article.aspx?subjectid=49&articleid=20081216_49_E1_Sunoco163218

     
     

    Sunoco says seeking sale of chemicals business  
    Reuters via Yahoo! Canada News – Dec 15 6:13 AM
    U.S. refiner Sunoco Inc is seeking to sell its chemical business and is looking for a partner in the Canadian oil sands, Chief Executive Officer Lynn Laverty Eisenhans said on Monday. http://ca.news.yahoo.com/s/reuters/081215/business/cbusiness_us_sunoco_chemicals_1

     
    Sunoco seeks oil sands partner  

  • The Globe and Mail – Dec 15 6:45 AM
    U.S. refiner also wants to sell its chemicals business  http://www.theglobeandmail.com/servlet/story/RTGAM.20081215.wsunoco1215/BNStory/energy/?page=rss&id=RTGAM.20081215.wsunoco1215

     
     

    Sunoco Refinery fined $305,000 by OSHA  
    Gloucester County Times – Dec 15 9:12 PM
    WEST DEPTFORD TWP. The Sunoco Eagle Point Refinery has been fined $305,000 for multiple citations from the federal Occupational Safety and Health Administration (OSHA). http://www.nj.com/gloucester/index.ssf?/base/news-11/1229404222172990.xml&coll=8
     

  • #6389

    Charles Randall
    Participant

    Here is nice recap of decline in Refining industry using Sunoco Tulsa & Oklahoma as the example & history. But the question is not “IF” more US refineries close but how many & what is capacity threshold now (-75k,-100k,-150k??).
    Regards
    Charlie Randall
    ————-
    Crude awakening: Refinery status part of trend

    The Oklahoman Editorial
    Published: December 21, 2008
    Sunoco has been shopping its Tulsa refinery since May, hoping to find a buyer to keep the place running. If no buyer is found, the refinery could close or be turned into an oil terminal. Either way, the state will lose jobs and revenue from a significant industrial operation.
    Two trends are seen in this development. One is a continuation of the historic decline in oil refineries in Oklahoma, a state whose crude oil production falls lower every year. The other trend is nationwide and involves refineries struggling to maintain profit margins in the face of declining oil prices.
    Just six months ago, improving the status of refiners was seen as a way to shore up supply problems and avoid some of the volatility of gasoline prices. Building more refineries and improving existing ones was promoted as a temporary cure, if not a panacea, for the kind of supply disruptions that spike gas prices in some areas while not affecting them in others.
    Sunoco has set a timetable of late next year for disposition of its Tulsa refinery. In the early 1980s, Oklahoma had 13 refineries. By 2005, the number was down to five.
    Oklahoma refineries made very little money between 1981 and 2000. Things then improved, but profits are again in peril. If more refineries are closed during the current downturn, the next global economic boom will create supply problems worse than what we’ve seen since 2001.
    And the state can do little but sit back and watch.

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