US Midcon refiners approaches peak maintenance

OREANDA-NEWS. March 24, 2016. US refinery crude unit maintenance will peak next month in the midcontinent, according to the Energy Information Administration (EIA).

The energy statistics service expects planned work to take 551,000 b/d — or 14pc of regional capacity — offline for seasonal maintenance, according to a biannual report on planned work. The drop represents a near ten-year high for the region's crude unit maintenance levels.

Work on reformers, a downstream unit that produces higher-octane gasoline blendstocks, will also ramp up next month to 13pc of the region's capacity, potentially tightening octane supply, according to the EIA.

Midcontinent refiners last month moved through the largest expected drop in gasoline, jet and diesel fuel production, but the region would still likely need some supplies from the US Gulf coast or other markets to meet demand, according to the EIA.

Refiners confirmed cutting throughputs for both maintenance and poor margins last month in the midcontinent and on the Atlantic coast. Phillips 66 trimmed crude processing by as much as 400,000 b/d across its entire system earlier in the quarter, PBF Energy confirmed reduced rates at its 170,000 b/d refinery in Toledo, Ohio, and Delta Air Lines subsidiary Monroe Energy dropped throughputs at its 185,000 b/d refinery in Trainer, Pennsylvania.

But refiners ascribed much of the drop to a massive overhang in product inventories rather than planned work. And midcontinent refiner HollyFrontier was confident that upcoming work would successfully drain those stockpiles.

"We go through this every winter, to varying degrees," HollyFrontier chief executive George Damiris said in late February.

US Gulf coast refiners were generally wrapping up work on non-crude equipment, including hydrocracking, coking and fluid catalytic cracking (FCC) units, according to the EIA. Planned maintenance there should begin trailing off through the end of this month.

Crude unit work should pick up next month on the west coast. Combined with an ongoing, unplanned gasoline unit outage at ExxonMobil's 155,000 b/d refinery in Torrance, California, it will tighten gasoline production in the region. But planned maintenance on almost all units would be below the ten-year average for the season, according to the EIA.