CME Launches NGL Swaps and Plastics Futures Contracts on Clearport
Five new natural gas liquids swaps futures and two new plastics futures contracts began trading on the CME Group's ClearPort trading system, last night. The swaps were originally announced on Oct. 28.

The natural gas liquids swaps contracts will be cash-settled and based on OPIS index prices for Conway propane, Mont Belvieu natural gasoline, Mont Belvieu ethane, Mont Belvieu isobutene, and Mont Belvieu normal butane. The contracts will be cash-settled using OPIS assessments. They will be listed for 36 consecutive months, beginning with the November 2008 contract, and will be 42,000 gallons in size.

The plastics futures contracts are for polypropylene and polyethylene. The contracts will be listed for 24 consecutive months, beginning with the January 2009 contract, and will be 47,000 pounds in size. They will feature physical delivery in Houston.

Preliminary volumes for the first day of trading were not yet available by presstime.

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October 3, 2008
Pilot to Add Urea to 100 Truckstops Next Year

Truck-stop giant Pilot will begin offering urea to truckers at 100 of its locations around the U.S. starting mid-year 2009, the company said this week.

Urea, or Diesel Exhaust Fluid (DEF), will be required by 2010 model year trucks in order to replenish their Selective Catalytic Reduction (SCR) exhaust systems.

Fleets see SCR as the best of several competing clean air technologies proposed for meeting EPA's goal of near-zero emission of particulate matter, a smog-producing pollutant from diesel exhaust. It not only results in cleaner exhaust it also improves fuel mileage, sources say.

"Pilot's decision to offer [DEF] 'at the pump' will maximize affordability and convenience for truckers and is one of the final infrastructure elements to be in place for truck fleets and owner-operator customers planning to use SCR
emissions control technology to meet 2010 emissions standards," Pilot said.

The Knoxville, Tenn.-based chain will also offer pre-packaged, top-off quantities for SCR-equipped trucks. Because 2010 trucks will also carry EPA- mandated on-board diagnostic systems, trucks will slow to a crawl if they run
out of DEF on the road, according to Oliver Dixon, an analyst with Automotive World, who recently spoke at OPIS' Fleet Fueling Conference & Exhibition in Atlanta.

Fleets may also choose to buy their own DEF and store it at their bulk terminals, sources say.

DEF poses risks, however, if it is mishandled. Because it is an aqueous product, it may cross-contaminate diesel fuel and plug filters. Driver training will be needed. There are freezing point issues, as well, requiring special handling in cold climates.

Beginning next year, fleets will have to start buying Urea/Diesel Exhaust Fluid (DEF) to feed their new model trucks’ catalytic systems both at their terminals and as they fuel at truckstops. Find out how to turn this new requirement into a profit center for truckstops and a mileage saver for fleets by downloading the OPIS Understanding & Benefiting from Urea/Diesel Exhaust Fluid Requirements webinar rebroadcast! Learn the ins-and-outs of this new technology from three of the industry’s leading experts. Go here to download the rebroadcast now!

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August 5 , 2008
OPIS Introduces New Calendar-Day Rack Average

OPIS has just introduced a new rack benchmark pricing average that enables fuel buyers and sellers to capture in a single number a complete snapshot of the entire day's rack price changes - 12:00 a.m. (midnight) - 11:59 p.m.

Called the "OPIS Calendar-Day Average" the new pricing data point provides a comprehensive pricing summary of same-day rack price averages for the nearly 400 wholesale cities where gasoline and diesel fuel prices are reported by OPIS.

The OPIS Calendar-Day Average made its debut August 1, 2008.

The critical point that OPIS makes in unveiling the new price is that it includes price changes made after 6:00 p.m., which helps customers more efficiently balance the cost of their product with sales prices quoted for new or existing downstream business.

The new Calendar-Day Average benchmark is in addition to the already existing OPIS Contract Average and the OPIS Closing Average, key pricing snapshots that many OPIS customers already use as market standards for buying and selling fuel.

Market volatility continues to reshape the way wholesale business is being transacted and the manner in which product is being priced. The new OPIS Calendar-Day Average meets the critical need of customers who want to be able to capture 6:00 p.m. prices in the same day, and not have to wait until the contract average of the next day to price out product.

"This new data set was requested by our customers in response to increase wholesale price volatility," said OPIS President Brian Crotty. "We are delighted to be able to provide this information for their benefit."

In a letter to customers announcing the introduction of the new Calendar-Day Average, OPIS pointed out that the new price will be easily integrated into existing customer pricing formats. Customers will have the option of receiving
the new average. They may elect to change or customize their current rack pricing file to accommodate the latest OPIS benchmark number.

Get connected to the most reliable rack price discovery source available. OPIS tracks almost 400 wholesale rack locations every day. Go here or call 888-301-2645 to start your 5-day, no-obligation free trial to the most relied-upon U.S. fuel price benchmark.

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July 31, 2008
Fines Could be Hefty for Non-Compliance of Biodiesel Pump Labels

If retailers don't abide by the Federal Trade Commission's (FTC) recently announced biodiesel pump labeling requirements, they could be in for some hefty fines of up to $11,000/day.
  
As part of the 2007 energy bill, the FTC was required within six months of the bill's passage to formulate biodiesel pump labeling requirements. In its recently finalized requirements, the FTC established the required format and
language of the labels which must be on pumps by Dec. 16, 2008.
  
For pumps dispensing 6%-20% biodiesel or biomass-based diesel, retailers can either specify the exact blend being vended or can opt for more general language as set out by the rule. For blends above 20%, the FTC requires the
labels to list the exact blend ratio. The agency also requires labels for 100% biodiesel or biomass-based diesel.
  
For biodiesel, the label will be blue and appear as "BXX." For biomass-based diesel, the label will be orange (to contrast with the blue label).
  
The rule doesn't require labels for pumps with 5% or less of either biodiesel blends or biomass-based diesel, FTC says, even though the labels' congressionally mandated language seems to indicate 5% blends are included
under the rule.
  
If a marketer violates the label law, the FTC could recommend that the U.S. Department of Justice file a lawsuit against the marketer and impose civil penalties of up to $11,000/day. Additionally, the FTC could pursue its own
action if necessary to recover any losses suffered by consumers by the mislabeling, under a legal principle called "disgorgement."
  
For more information, visit www.ftc.gov.

Make sure you’re in compliance with the new FTC mandate requiring the labeling of all pumps dispensing biodiesel or biomass-based diesel. Failure to comply could result in civil penalties of up to $11,000/day! Order your pump decals now by calling toll-free 877-210-4287 or by visiting www.opisnet.com/market/decalbiodiesel.asp.

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January 28, 2008
Special Report: Turnaround Season Could See Price Pivots

Scheduled refinery maintenance in the next 120 days does not look to be especially heavy, but the success with which turnaround work is completed may be the key lever that tilts gasoline and diesel prices higher or lower.

Western and Midwestern unit work does not appear to be as extensive as the Spring 2007 turnaround season was, and neither does the Gulf Coast, noted Citigroup analyst Doug Leggate in a mid-December report. But products traders aren’t necessarily comfortable with the temperate forecasts – they note that this year’s Gulf Coast output will take place against the backdrop of some of the heaviest refining construction in several decades. There are projects that will see huge refinery complexes like Marathon-Garyville and Motiva-Pt. Arthur approximately double their respective capacities by 2010. That work could tax veteran staff that supervise or perform many of the routine projects in Texas and Louisiana.

And conducting a refinery turnaround these days is anything but “routine”.  Assets that could have been purchased for $100-million or $200-million six years ago, now fetch five to ten times that level. Accordingly, there is much at stake in conducting work that will ensure that billion-dollar assets function properly during peak demand months. The stakes for the traditionally profitable second and third calendar quarters are now higher than ever.

From 1990 through 2002, for example, refiners might have expected to see cracks widen by perhaps $2-$4/bbl during the preseason and actual driving season. Nowadays, gasoline and diesel cracks can move $5-$10/bbl in under a week.

Tesoro senior vice president and chief economist Lynn Westfall mentioned the much more substantial differences at an analysts’ conference last month. He noted that the cost of refinery downtime during high-margin months ran about $17/bbl nationwide in 2007 and is closer to $18/bbl on the West Coast. Hence, “falling down” in the second quarter can have a dramatic impact on a refiner’s annual profit. Most of the refinery maintenance this year is tilted toward the latter part of the first quarter, although there is some second quarter work that should impact April runs.

Many refiners now shroud turnaround work under a cloak of secrecy, but Westfall ventured that 2008 crude unit maintenance would be about double the historic rate, with downstream conversion unit downtime also much higher than normal. Not all market-watchers agree –- some believe that this year’s maintenance schedule is lighter than in recent years which were witness to a flurry of downtime tied to desulfurization efforts.

A true wildcard in the 2008 2Q/3Q season will be the restoration of production that was taken off the shelf between 2005 and 2007. Most critical will be the resumption of “normal” operations at BP’s 475,000 b/d Texas City, Texas refinery. Nothing close to normal has been witnessed at that complex since early March 2005.  Secondly, BP’s Whiting, Indiana refinery, which limped along since an end-March 2007 fire, is scheduled to return to full operations sometime before the first quarter ends.

Here’s a rundown of where OPIS sees maintenance planned over the first quarter of 2008. Material is gathered from the best possible sources, but because of the reticence of many companies to confirm schedules, it cannot be guaranteed.

PADD1:

•  ConPhil – plans a turnaround for three major units at its 250,000 b/d Bayway, N.J., refinery in March for three to four weeks. The refiner is expected to shut a crude distillation unit, a hydrotreater and a reformer.

•  Sunoco – the 140,000 b/d Point Breeze section on the company’s Philadelphia complex will see maintenance beginning in February on most units, lasting into late March, for a total of roughly 50 days. The Point Breeze facility has two crude units, one rated at 90,000 b/d and another at 50,000 b/d.

PADD2:

•  BP – the 420,000 b/d Whiting refinery will take a 95,000 b/d crude unit down for 6-8 weeks from Dec. 26. The refinery, which has limped along since an end-March 2007 fire, is scheduled to return to full operations sometime before the first quarter ends.

•  Frontier – the 112,000 b/d El Dorado, Kan., refinery will see a 40,000 b/d crude unit, 40,000 b/d FCC, and 45,000 b/d coker all down March 1 for 40 days. By the end of first quarter 2008, Frontier expects to see completion of the El Dorado crude unit and vacuum tower expansion that was first approved by Frontier’s board of directors in late 2005. The unit expansions will allow the refinery to process incremental heavy crude volumes.

•  Sunoco – plans to perform a catalyst change-out on the 180,000 b/d Toledo, Ohio, refinery’s hydrocracker around March-April 2008. A hydrocracker expansion already underway will be completed at the time of the catalyst change-out. It’s also possible that Sunoco at that time will address some fouling pluggage on one of Toledo’s two crude units. The pluggage is restricting the unit to a rate of 80,000 b/d rather than the designed 90,000 b/d. If the crude unit isn’t shut to reduce the pluggage in the March-April timeframe, then the work will coincide with Toledo’s FCC turnaround in the fall of 2008.

•  Valero – the 182,000 b/d Memphis, Tenn., refinery as of early January has maintenance underway on a sulfur recovery unit.

PADD3:

•  BP - announced in late December that its 475,000 b/d Texas City refinery should be operating near full capacity in four to six weeks, past its previously announced timeframe of the fourth quarter of 2007. The refinery has been running at about half capacity since the March 2005 explosion that killed 15 workers.

Three of four major processing units that were taken down have been returned to service, and the fourth unit, which processes sour crude, is expected to be brought online in January or February. A reformer will also restart in the same timeframe. This should put the refinery at an operating capacity of 470,000 b/d. But a mid-January accident and fatality near an ultraformer could push the eventual restart back even further.

BP also shut down the Texas City alkylation 3 unit on December 31st for 90 days of scheduled turnaround service.

•  Chalmette Refining - a joint venture between ExxonMobil and PDVSA, operated by ExxonMobil, will shut its 72,000 b/d FCC and an alkylation unit on January 4 for about five weeks, but details on the exact shutdown date were unclear. The unit was last shut for a brief turnaround in early September.

•  Chevron – the 330,000 b/d Pascagoula refinery should see fire repairs from an August 2007 fire completed in the first quarter of 2008. The fire damage was largely isolated to the refinery’s No.2 crude unit.

Another fire on January 3rd broke out in a Residual Desulfurization Unit (RDS). The RDS treats feed for the FCC unit, said Chevron. The fire was quickly extinguished and it’s believed the fire was weather related. Atypical freezing temperatures in the region may have affected instrumentation, Chevron spokesman Steve Renfroe told OPIS. Chevron is investigating, he said.

Meanwhile, Chevron plans to spend about $500 million to construct a Continuous Catalytic Regeneration unit that is expected to increase gasoline output by about 10%, or about 600,000 gal/day. Chevron expects to break ground on the project during the first quarter of 2008, a company spokesman told OPIS.

•  Citgo – the 340,000 b/d Lake Charles, La., refinery will see a 50,000 b/d FCC down in February for 45 days, with a crude unit and DHT down from November into January. Citgo is expected to delay the restart of a reformer at the plant to sometime in February instead of the original plan for mid-January. However, the 125,000-b/d crude unit will restart as planned around Jan. 13. The crude unit, together with the reformer, was taken down in early November for about two and half months to sort out nagging operational problems.

•  Citgo – the 165,000 b/d Corpus Christi plant experienced a tube leak in the flue gas waste heat boiler January 1st. The heat boiler is being bypassed during maintenance activity.

•  ConPhil - began planned maintenance on Unit 29 (electrostatic precipitators) at the 152,000 b/d Borger, Texas, refinery on December 18. ConPhil will switch valves on ducting upstream of equipment. The maintenance was scheduled to end Dec. 28.

•  Delek – the 60,000 b/d refiner launched a planned turnaround on January 4 on a diesel hydrotreater at its Tyler, Texas, refinery. The work will involve a catalyst change out and substantive repairs to the DHT cooling tower.

During the DHT maintenance, work will be done at an amine unit resulting in operational outages at the sulfur recovery plant, sour water stripper, and the NHT. Downtime is expected to last through January 10th.

•  ExxonMobil – the 590,000 b/d Baytown, Texas, refinery will see a 95,000 b/d crude unit and 40,000 b/d coker down January 12 for 40 days.

•  ExxonMobil – the 363,000 b/d Beaumont refinery will have a 117,000 b/d FCC and associated alkylation unit down beginning about March 1 for 60 days.

•  ExxonMobil – plans to take down a reformer and hydrofiner at the 525,000 b/d Baton Rouge refiner in January.

•  Koch (Flint Hills) – the 305,000 b/d Corpus Christi refinery will see a 90,000 b/d crude unit and coker down into early January as a result of a December 1 turnaround.

•  Lazarus Energy LLC - plans to begin operating the 18,000 b/d Nixon, Texas refinery in first quarter 2008. Lazarus acquired the Nixon Refinery in 2006 and is currently completing its refurbishment. The refinery currently has the capacity to process 15,000 b/d of crude and to store over 130,000 bbl of crude and 165,000 bbl of refined products. Lazarus has received all necessary permits to begin operations in first quarter 2008.

•  Marathon – the 275,000 b/d Garyville, La., refinery will take a 130,000 b/d crude unit and 35,000 b/d coker down in early January for 40 days.

•  Motiva - the 275,000-b/d Port Arthur, Texas, refinery will shut down a waste heat boiler for repairs due to previous leaks in mid-January. This maintenance usually causes a slight cut in rates. The maintenance is planned to last through Feb. 3.

•  Shell – the 340,000 b/d Deer Park, Texas, refinery will take down a 70,000 b/d FCC and 18,500 b/d alkylation unit on January 18 for 45 days.

•  Total - shut one crude unit at its 240,000-b/d Port Arthur, Texas, refinery for a planned turnaround about January 8th for two weeks.

•  Valero – the 340,000 b/d Corpus Christi complex, West Plant, was scheduled to have a 40,000 b/d crude unit and coker down beginning January 10 for 14 days. That work has been postponed until May.

•  Valero - the 166,000-b/d McKee refinery, which has been operating at reduced rates since a fire in a propane de-asphalting unit in February 2007, is expected to return to full rates by the end of January.

•  Valero – the 265,000 b/d Port Arthur refinery will carry out maintenance on a coker in late January or early February to reduce cracks in the coker drums.

The coker at Port Arthur has six drums, and two will be worked on at a time and the other four will remain operational, minimizing impact on production.

The maintenance work on each two-drum module is expected to take a total of 25 days.

•  Valero – the 186,000 b/d St. Charles (Norco) refinery will take a 100,000 b/d FCC and associated alkylation unit down February 1 for 20 days.

PADD4/5:

•  BP – the 263,000 b/d Carson, CA., (Los Angeles) refinery will take down a 102,000 b/d FCC and associated alkylation unit in January for 60 days. 

•  CHS – the 60,000 b/d Laurel refinery’s new $325 million coker unit is scheduled to begin start up on Jan. 30 and be fully operational within the first quarter of 2008. The coker will increase annual production of gasoline by 80 million gallons.

•  Frontier – a delayed coker unit at the 52,000 b/d Cheyenne, Wyoming, refinery damaged in a fire in mid-December will be offline until at least mid-January. During repairs, the company expects to continue running the crude unit at reduced rates of about 25,000 b/d.

•  Shell - has shut a 73,000-b/d catalytic cracker at its 158,000-b/d Martinez refinery in northern California for a two-week turnaround.

•  Tesoro - plans to take a crude unit down at the 170,000 b/d Golden Eagle refinery in Martinez, Calif., in February for 30 days and start up a coker at its Golden Eagle refinery during the second quarter of 2008. Work to modify the unit began during the fourth quarter of 2005. Tesoro also plans the start-up of a selective hydrogenation unit at the Anacortes, Wash. refinery, which will reduce the cost of goods sold at that plant by allowing Tesoro to purchase less expensive sour feedstock. Construction on the project began last year, and the unit is slated to start during the third quarter of 2008.

•  Valero – the 153,000 b/d Benicia refinery will see a 37,500 b/d hydrocracker down Feb. 10 for 12 days. The turnaround in an FCC and alky unit at Valero’s 77,000 b/d Wilmington refinery was completed later than planned, but units had restarted by mid-January.

OFFSHORE:

•  Valero – the 215,000 b/d Quebec refinery will take down the 50,000 b/d #2 crude unit on March 10 for 42 days.

The 270,000 b/d Aruba refinery was downed January 8 by a power outage. Downtime was expected to last about two weeks, said traders.

•  Harvest Energy – the 115,000 b/d Come-by-Chance refinery has completed maintenance previously planned for Spring 2008 in December of 2007. The plant’s crude unit was shut in late October for 30 days of maintenance.

•  PDVSA - the 600,000-b/d Amuay refinery and the 300,000-b/d Cardon refinery – both in the Paraguana refining complex – have been operating at reduced rates, and now there’s word that the 135,000-b/d El Palito refinery had its catalytic cracker taken offline Saturday because of a mechanical malfunction.

A mid-January power outage completely downed the 600,000 b/d Amuay complex. At presstime, two of five crude units were back online, but the refinery had no ability to upgrade due to a lack of steam, sources told OPIS. Steam generation will depend on when power can be restored to the steam generators, said sources.

The Cardon refinery at mid-January was said to be in the process of restart following a power outage that hit the plant in December that has hobbled the refinery since then. The restart reportedly began January 12, and most units were said to be operating at about 50% capacity by January 16. An alkylation unit was among those that had not yet resumed operations. Sources indicate that an acid leak damaged the alkylation unit and thus complicated its restart.

The El Palito refinery lost a 55,000 b/d FCC in mid-January for 2-3 weeks of unplanned maintenance. An initial investigation showed the FCC unit to have suffered minor damage from the incident.

•  Petroplus – the 170,000 b/d Coryton, U.K. refinery should resume normal operations in early 2008 following repairs to a dehexanizer column of the pentane isomerization unit following a fire on October 31, 2007.

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