Ronnie Lim Business Times 18 Oct 11;
ALMOST three weeks after the Bukom fire, Shell has yet to restart all the production units it shut down for safety reasons.
Force majeure also remains on the oil giant's product supplies to some customers, BT understands.
Shell had shut its hydrocracker and thermal gas unit, as well as three crude distillation units (CDUs) which form the backbone of its 500,000 barrels per day Bukom refinery, due to their proximity to a 32-hour fire which started on Sept 28.
It is unclear if Shell had also shut its new petrochemicals cracker there or just reduced its output.
And just last week, it began restarting some of the units, but did not specify which.
Reuters cited sources saying that Shell has restarted a second CDU at reduced rates, a week after partially restarting the first.
When asked yesterday whether all the units have since been restarted, a Shell spokesperson said: 'We can confirm that some operations have continued, and some operations will resume at the site, but we are unable to comment on operational specifics.'
As for whether force majeure had been lifted yet, the spokesperson said: 'We confirm that force majeure has been declared on some of our customers. We continue to be in discussions with our customers to address their supply of product needs and to minimise any potential impact to them.'
Force majeure (FM) is a common clause in contracts that essentially frees both parties from liability or obligation when an extraordinary event or circumstances beyond the control of the parties occur.
Shell had declared FM on feedstock supplies including to Petrochemical Corporation of Singapore (in which it has a 25 per cent stake) as well as Ellba Eastern (where Shell has a 50 per cent stake), with supply disruptions also reported at Shell Eastern Petrochemical Corporation's new monoethylene glycol plant on Jurong Island.
PCS was not available for comment. But an Ellba spokesperson told BT yesterday that Shell's FM remains on supplies of feedstocks like ethylene.
Ellba has, however, managed to secure other sources of feedstock to keep its styrene monomer and propylene oxide (SMPO) plant running on Jurong Island.
Reflecting the production disruptions at Bukom, even as Shell starts to bring back its plants onstream, an oil trading source said: 'Shell last week was still looking around to buy products like diesel and jet fuel, but may pull back (from doing so) this week.'
Explaining why Bukom is taking a while to resume normal operations, he said: 'They probably want to be more careful in their restarting process, so that they don't cause another fire.'
Another trader said he understood that there has not been much cargo, if at all, loaded from Bukom so far this month, with most Shell cargo 'novated' or designated to other parties. The term novated means to replace an old obligation with a new one.
Asked whether Shell had started to estimate the damage caused by the fire, the Shell spokesperson said: 'It is too early to assess this, but the damage was limited to pump house 43 and the network of pipes. The process units are not damaged.'
Shell restarts 2nd crude unit at fire-hit Singapore plant
* 2nd CDU of 110,000-bpd capacity operating at 75 pct
* 35,000-bpd hydrocracker to restart in next 2-3 days
* Alternative delivery for clean products key to restart
Yaw Yan Chong Reuters 17 Oct 11;
SINGAPORE, Oct 17 (Reuters) - Royal Dutch Shell Plc has restarted a second crude distillation unit (CDU) at reduced rates at its fire-hit Singapore refinery, a week after the first was partially restarted, three industry sources with direct knowledge of the matter said on Monday.
It is also expected to restart its distillate-making hydrocracker at the 500,000 barrel-per-day plant, Shell's largest, within the next 2-3 days, they added.
"We can confirm that some operations have continued and some operations will resume at the site, but we are unable to comment on operational specifics," said a Shell spokesman in response to queries on the restart.
The sources said the 110,000-bpd CDU, which began restart operations last Sunday and will reach stable operating levels in 2-3 days, is expected to run at a reduced rate of around 75 percent.
The CDU operations will facilitate the restart of the 35,000-bpd hydrocracker, which was shut due to its proximity to the fire but was undamaged, as well as provide more feedstocks, mainly heavy kerosene, for Shell's ethylene cracker.
With the second CDU partially operating, the refinery is currently running at about 40 percent capacity as its largest 210,000-bpd capacity CDU has been functioning at about 50 percent capacity for around a week.
A third CDU, of 110,000-bpd capacity, and some other smaller secondary units are still shut in the aftermath of the more than 30-hour blaze that largely crippled the plants capability to deliver clean oil products, such as gas oil, jet fuel, gasoline and naphtha.
ALTERNATIVE DELIVERY SYSTEM
"Shell is slowly trying to get the CDUs and the main secondary units back up at reduced rates, primarily to yield products that are high margin, such as base oils and lubricants, as well as petrochemicals," one of the sources said.
"The key to this is to create an alternative, but stable, delivery system, that bypasses the damaged area, of transporting the products into storage or onto tankers. This is possible because the major units are largely undamaged."
The restart of the plant's operations is moving in line with the stage-by-stage construction of the delivery system, and the third CDU is also expected to be operational at partial levels in about a week, the sources said.
The plant is expected run at reduced rates over the next 2-3 months as the replacement delivery system is gradually put in place, while runs are slowly ramped up, amid repairs to the Pump House area where the fire occurred.
Full repairs to the damaged area are expected to take about a year, the sources said.
"So enough lines have to be built to allow the plant to operate at an efficient level of production, possibly even run at full, maybe in about a month or so from now," one source said.
Shell has also resumed loading for some of the affected products, mainly gas oil, which saw its first loading, post-fire, about a week ago.
It also sold 150,000 barrels of 0.5 percent sulphur gas oil, for loading over Oct. 27-31, over the end-of-day pricing window last Wednesday.
The sale was on the back of agreements that the oil major had with counterparties to buy back most of the 1.5 million barrels of distillate cargoes that it had declared force majeure upon.
Shell is a major supplier of distillates and gasoline to the region, with its refinery producing 6.5-7.0 million barrels per month, of which gas oil is about 4.5 million barrels, and another 4.0-4.5 million barrels of gasoline, with about 90 percent of the refinery's output exported.
Partial restart of Shell's Singapore plant hits snag
* Malfunctioning furnace delays base oil production by about 10 days
* CDU's partial restart unaffected, runs at below 50 pct
* Light distillate feed to ethylene cracker delayed by a few days
Yaw Yan Chong Reuters 11 Oct 11;
SINGAPORE, Oct 11 (Reuters) - Oil major Shell's partial restart of its 500,000 barrels-per-day (bpd) Singapore refinery has a hit a snag that will result in a delay of about 10 days before it could start producing high-margin base oils, industry sources said on Tuesday.
The problem is due to a malfunctioning furnace in its Lube Oil Complex (LOC), but the restart of the largest of its three Crude Distillation Units (CDUs), with 210,000-bpd capacity, is unaffected. The unit is running at a reduced operating rate of about 50 percent.
When asked to comment, a Shell spokesman said the company does not comment on operational matters.
"The restart was primarily driven by the very strong processing margins for lubricants. Base oil is used as the feed to produce lubes, but trading margins for base oil are too good for them to cannibalise the trading barrels," a refining source said.
About 360,000 tonnes of base oil is produced from a 30,000-bpd secondary unit per year, which cracks long-residue from the CDU, yielding distillates and base oil, which is then fed into the lubricants plant.
The sources said that both the unit and the plant, which collectively makes up the LOC, were also shut down in the aftermath of the fire that had crippled the plant's capability to deliver clean oil products, such as middle distillates, naphtha and gasoline, from its process units into storage and onto tankers.
During the restart, it was discovered that the furnace, which is part of the LOC, was damaged and required repairs that would take about 10 days, they added.
"Sometimes, units and equipment get damaged during a full shutdown process. In this case, it wasn't that critical because the CDU restart went ahead and there was no need to stop the unit," another source said.
"This is probably because the volumes of yield produced could be stored during that period before being fed into the unit."
LIGHT DISTILLATE PROBLEM
There was another technical problem of the light distillate yield meeting the feedstock specifications of the ethylene cracker that the product was to be fed into, and it will take a day or two to solve, the sources said.
The feedstock will then be supplied to the 800,000 tonnes-per-year (tpy) cracker, part of a larger chemical complex that also includes a 750,000-tpy monoethylene glycol (MEG) plant, to keep the complex running, at lower operating rates, instead of having to be shut.
The restart, nearly two weeks after the fire broke out and ahead of an anticipated 1-month timeframe, was made possible when a temporary line was built to deliver the clean oil products into storage without having to pass the area that had been damaged by the fire.
The CDU is expected to be kept steady at the reduced operating rate for an extended period of time, while investigations into the cause of the fire and repair work continue, the sources said.
Other major units, including the other two CDUs of 110,000-bpd each, a 35,000-bpd hydrocracker and the Fluid Catalytic Cracker (FCC) either remain shut or are operating at low levels, although all were undamaged by the fire.
Despite the earlier-than-expected restart, the sources said it would still take 3-6 months for the entire plant to resume normal operations.
Investigations, both by the oil major and Singapore's Manpower Ministry, are ongoing.
"We have commenced investigations and are working with the Ministry of Manpower as we establish the cause of the fire. We hope to apply any learnings from these findings to avoid such an occurrence in future," the Shell spokesman said.
Read more!
Posts
visitors since Nov 07