18 March 2013 23:06 [Source: ICIS news]
SAN ANTONIO, Texas (ICIS)--Advances in US production of crude oil from tight shale has led to increased supply and evolving infrastructure, giving US refiners the opportunity to co-process crudes with existing assets, a refinery technology expert said on Monday.
“It is clear that shale processing will continue for some time,” Chad Huovie, a product line manager at technology licensor Honeywell UOP.
“This is likely to require new operations and investment strategies to position a refinery to capture this opportunity,” he said during the American Fuel & Petrochemical Manufacturer (AFPM) annual meeting.
According to a technical paper prepared by Honeywell UOP and refiner Marathon Petroleum, “the resulting increase in natural gas supplies led to significant declines in the price of this raw material, employed by refiners both as a fuel source as well as a feedstock for hydrogen production”.
“Access to this lower-priced natural gas improved the position of refiners by reducing fuel and hydrogen costs significantly compared to other regions in the world,” the document said.
In response, many US refiners have chosen to make investments in logistics to gain access to these opportunity crudes.
“Shareholders and investment community presentations by Marathon, Tesoro, Valero and Phillips 66 refer to investments in rail unloading facilities, tank cars and refinery fractionation improvements aimed at enabling increased throughput of these crudes,” the document said.
“PBF recently completed the first phase of their rail unloading facility in Delaware City, while BP has made similar statements regarding transport of tight shale oil to their Cherry Point, [Washington] refinery,” it added.
The AFPM annual meeting runs through Tuesday.
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