17.04.2017, 21:44
PBF Logistics buys Toledo terminal
OREANDA-NEWS. PBF Energy has acquired a terminal next to its 170,000 b/d refinery in Toledo, Ohio, that could help reduce its exposure to federal biofuel mandates.
PBF Energy subsidiary PBF Logistics said today it bought a Sunoco Logistics terminal with a ten-bay truck rack and 110,000 bl of storage next to the refinery. Blended fuel sales through the truck rack and increased exports to Canada could help improve economic conditions that forced run cuts at the refinery in 2016.
The company confirmed it would be the refinery's first controlled truck rack. PBF last year said that it was looking for truck racks and similar opportunities to increase the company's output of finished gasoline blended with gasoline.
Refiners that blend finished fuel acquire renewable identification numbers (RINs) needed to prove to federal regulators that minimum annual volumes of US transportation fuel blended with renewable fuels have been met. Merchant refiners such as PBF have typically produced and sold far more blendstocks than finished gasoline or diesel, forcing the companies to purchase RINs from blenders. Costs for the credits have fallen - credits for ethanol blended into gasoline last week averaged 25pc lower than the same week last year. But merchant refiners have made reducing or eliminating the mandate a top priority as regulatory spending ballooned into the hundreds of millions of dollars last year. PBF incurred an estimated $347.5mn in RIN costs in 2016.
The refiner sought increased ethanol shipping and blending at its east coast refineries, worked to lift rack sales at its 155,000 b/d refinery in Torrance, California and plans to improve exports out of its 190,000 b/d refinery in Chalmette, Louisiana.
PBF already supplied the Toledo terminal with a third of its production, but would not have had any right to RINs from blending at the terminal without a contract agreement. A two-year extension of the contract for that offtake agreement was up for renewal in March. PBF describes pipeline connections but no blending operations in securities documents detailing the refinery.
PBF Energy subsidiary PBF Logistics said today it bought a Sunoco Logistics terminal with a ten-bay truck rack and 110,000 bl of storage next to the refinery. Blended fuel sales through the truck rack and increased exports to Canada could help improve economic conditions that forced run cuts at the refinery in 2016.
The company confirmed it would be the refinery's first controlled truck rack. PBF last year said that it was looking for truck racks and similar opportunities to increase the company's output of finished gasoline blended with gasoline.
Refiners that blend finished fuel acquire renewable identification numbers (RINs) needed to prove to federal regulators that minimum annual volumes of US transportation fuel blended with renewable fuels have been met. Merchant refiners such as PBF have typically produced and sold far more blendstocks than finished gasoline or diesel, forcing the companies to purchase RINs from blenders. Costs for the credits have fallen - credits for ethanol blended into gasoline last week averaged 25pc lower than the same week last year. But merchant refiners have made reducing or eliminating the mandate a top priority as regulatory spending ballooned into the hundreds of millions of dollars last year. PBF incurred an estimated $347.5mn in RIN costs in 2016.
The refiner sought increased ethanol shipping and blending at its east coast refineries, worked to lift rack sales at its 155,000 b/d refinery in Torrance, California and plans to improve exports out of its 190,000 b/d refinery in Chalmette, Louisiana.
PBF already supplied the Toledo terminal with a third of its production, but would not have had any right to RINs from blending at the terminal without a contract agreement. A two-year extension of the contract for that offtake agreement was up for renewal in March. PBF describes pipeline connections but no blending operations in securities documents detailing the refinery.
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