Limetree Bay Refining’s plans to restart the former Hovensa plant in St. Croix, U.S. Virgin Islands, at the end of 2019 will add significant refining capacity to the North American stack, helping to offset the loss this year of the 335-Mb/d Philadelphia Energy Solutions plant in Pennsylvania. Limetree Bay is also poised to fill a void in Caribbean refining that’s been left by Venezuela’s economic collapse as well as the International Maritime Organization’s 2020 changes to the bunker fuel market. But the facility is not without its challenges, from high fuel costs and stiff competition from Gulf Coast refineries to tropical storms. Today, we conclude an analysis of the operation and potential markets for the refinery.
Latin America
Wednesday, 9/11/2019
Limetree Bay Refining plans to restart a former Hovensa plant in St. Croix, U.S. Virgin Islands, at the end of 2019. The refinery’s initial processing capacity of 200 Mb/d represents a significant addition to the North American stack, helping to replace the loss this year of the 335-Mb/d Philadelphia Energy Solutions plant in Pennsylvania. If it opens on time before the year’s end, Limetree will be well-positioned to fill a void in Caribbean refining that’s been left by Venezuela’s collapse as well as the International Maritime Organization’s (IMO) 2020 changes to the bunker fuel market. The plant’s location in the middle of world trade routes conveys some advantage, but it must compete with U.S. Gulf Coast refineries to supply regional markets. While higher input costs compared to U.S. rivals will dampen margins, a tolling agreement with BP could insulate Limetree from market exposure. Today, in the first of a two-part blog series, we review the operations and potential product market for the refinery.
Thursday, 1/07/2016
The race to load the first freely exported U.S. crude cargo was won by NuStar’s Corpus Christi terminal, edging out Enterprise’s Houston terminal, as the Theo T set sail for Italy on New Year’s Eve with Eagle Ford crude and condensate on board. Midstream companies are now set to fiercely compete, not just for bragging rights but for terminal fees, as more U.S. crude heads overseas. But where exactly will that crude go? With oil prices tracking below $40/Bbl and narrow differentials prevailing between U.S. and overseas crudes, breaking into new markets will be tough. Today we outline which markets are most likely to absorb U.S. crude supply.
Monday, 10/12/2015
Depending on whom you believe, the international liquefied natural gas (LNG) market is either struggling through a period of oversupply and rock-bottom prices or poised for a new round of demand growth based on that low-cost supply abundance. (Hint: The answer may well be both of the above.) For electric and natural gas utilities that want to become LNG importers as quickly—and as cheaply--as possible, an increasingly popular option is buying or (more likely) chartering a floating storage and regasification unit, or FSRU. Today, we look at the growing use of FSRUs and how they may boost the LNG market.
Thursday, 4/03/2014
Increased refined product exports from US Gulf refineries are being driven by diesel refining margins but a lot of by-product gasoline is being produced as a result. Domestic demand for diesel and gasoline has declined over the past 5 years. Fortunately for refiners there is strong demand for diesel and gasoline in Latin America as well as for diesel in Europe. Important cost advantages stemming from the shale revolution are helping Gulf Coast refiners secure these markets against international competitors. Today we conclude our analysis of booming Gulf Coast exports.
Monday, 8/05/2013
Over the past six weeks, the price of Mont Belvieu propane has strengthened by more than 20%. That’s not supposed to happen in the middle of the summer doldrums when the only growth market for propane is backyard BBQ grills. Could supply be falling? Not hardly. The most recent Energy Information Administration (EIA) numbers show propane production from natural gas processing plants hitting another record, up 42% in the past four years. You might think that kind of supply growth would crush prices. But there is an escape valve for excess propane supplies: Exports – and lots of them. Fortunately international markets have been there to soak up the barrels. Today we will examine how this is all shaking out in the U.S. propane market.
Wednesday, 2/06/2013
U.S. gas plant production of propane is up 25% since early 2011, far above growing volumes of ethane, held to only an 8% rise by rejection economics. As propane supplies have surged, prices have come down hard…. But not nearly as hard as would have been the case if it were not for rapidly increasing exports. And where are all these barrels going? That’s right. In a conga line of ships headed to Latin America where the growth in imports from the U.S. into some countries has been off the scale. Which countries are taking all this propane? How long can this go on? How much dock capacity does the U.S. need? What could derail this development? Today we begin a blog series to explore these questions.