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Irelands only Oil refining facility at risk?


Dohville

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US-based oil refiner Phillips 66 may sell Whitegate refinery - The Irish Times - Sat, Mar 09, 2013
UPDATE 1-Phillips 66 may shed some non-US refineries -executive | Reuters
Phillips 66 mulls selling refineries in Ireland, Germany, Malaysia - Energy Business Review
Department in talks with Philips 66 over refinery plans | Irish Examiner

Looks like after a very short ownership, Phillips 66 seem keen to offload what they consider an "unsophisticated" refinery.
I heard locally that the investment required to bring it up to speed is huge, as it is operating more or less on 1950s technology. Its jetty can only handle one supertanker at a time, and it is a long way from the refinery to the National road network. Worth noting that the majority of the road linking it to Midleton, 13km away was built by the original refinery operators, to allow the heavy plant be driven to the construction site.
It provides 40% of irelands refining needs.
Who will buy?

Regardless of the need to reduce our Oil dependence, it should still be mandatory for us to at least have our own refining capacity, and not rely on world market variables for our refined product requirements.
 

wombat

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Regardless of the need to reduce our Oil dependence, it should still be mandatory for us to at least have our own refining capacity, and not rely on world market variables for our refined product requirements.
There was an EU requirement for a national strategic store of oil which was kept at Whiddy. Not sure if it is still kept but there isn't really a need to have a small refinery on the island.
 

Pat Gill

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Dohville,

I'm actually surprised that it has lasted this long, the type of crude reaching the market these days is much different to the crude which this refinery was built to handle.

In addition refineries are closing down all over Europe because of tiny margins.

Take another look at the definition of peak oil ?

Hint it has nothing to do with running out of oil.
 

Pat Gill

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There was an EU requirement for a national strategic store of oil which was kept at Whiddy. Not sure if it is still kept but there isn't really a need to have a small refinery on the island.
wombat,

The majority of our strategic reserve actually resides in cyberspace, reserves made up of paper contracts for supply rather than actually black stuff.
 

Dohville

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There is a worldwide shortage of Gas oil (diesel, aviation fuel, Kerosene) refining capacity. Most older plants are set aside to produce Petrol. I believe Whitegate should have been upgraded to reflect the worldwide increase in demand for Gas Oil 20 years ago but this was not done. Tosco owned it then.
Oddly, onlyin 2011, before Phillips 66 took it over, it was boasting of $17m profits. Now its new owners want shot of it?

Whitegate Refinery enjoys
 

Pat Gill

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There is a worldwide shortage of Gas oil (diesel, aviation fuel, Kerosene) refining capacity. Most older plants are set aside to produce Petrol. I believe Whitegate should have been upgraded to reflect the worldwide increase in demand for Gas Oil 20 years ago but this was not done. Tosco owned it then.
Oddly, onlyin 2011, before Phillips 66 took it over, it was boasting of $17m profits. Now its new owners want shot of it?

Whitegate Refinery enjoys
Dohville,

The reason for that worldwide shortage of the fractions such as diesel and kerosene might have a lot to do with the fact that production of conventional crude has been flat since 2005 and all of the increase in world crude supply has come from unconventional sources such as natural gas liquids or heavy oils such as tar sands.

Its extremely difficult to distil diesel or kerosene from such oil as in many cases the required complex hydrocarbons are simply not there in a lot of these unconventional oils.

Perhaps the crude from Ballyroe might be a useful feedstock for Whitegate, although I'm not sure it could handle higher sulphur crude without an upgrade.
 

Eire1976

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There was an EU requirement for a national strategic store of oil which was kept at Whiddy. Not sure if it is still kept but there isn't really a need to have a small refinery on the island.
Where did you get that snippet of brilliance?

There is plenty of scope for Ireland to have more than one refinery.
 

wombat

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Where did you get that snippet of brilliance?

There is plenty of scope for Ireland to have more than one refinery.
It has to do with capitalism, the Irish market is not big enough to warrent building a new refinery or increasing capacity at Whitegate.
 

Dohville

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It has to do with capitalism, the Irish market is not big enough to warrent building a new refinery or increasing capacity at Whitegate.
It currently produces 40% of what we use. We import the rest, at a price. Surely if we produced enough for our self, we could also sell the surplus on the open market?

While Oil extraction may still be cartel controlled, is refining under the same control?
 

wombat

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wombat,

The majority of our strategic reserve actually resides in cyberspace, reserves made up of paper contracts for supply rather than actually black stuff.
There is at least one tank in Whiddy full of diesel which is owned by NORA
 

wombat

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While Oil extraction may still be cartel controlled, is refining under the same control?
Anything but, most of the refineries are not owned by the majors. Its a very expensive process.
 

Carlos Danger

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While Oil extraction may still be cartel controlled, is refining under the same control?
Very much a closed shop due to the costs involved, not to mention the environmental barriers to constructing a new refinery.
 

Dohville

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Anything but, most of the refineries are not owned by the majors. Its a very expensive process.
A lot of it is a bit cloak and dagger. I understand part of the process to produce certain grades of gas oil is to add that grade to the crude being processed...
 

wombat

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A lot of it is a bit cloak and dagger. I understand part of the process to produce certain grades of gas oil is to add that grade to the crude being processed...
A lot of the useful products can be extracted by distillation of the crude oil. However, most of the work in a refinery involves getting the last bit of use out of the residue and it gets progressively more difficult and expensive.
 

Pat Gill

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A lot of it is a bit cloak and dagger. I understand part of the process to produce certain grades of gas oil is to add that grade to the crude being processed...
Thats the dark secret of the US natural gas liquids business, a very high percentage of output is sold to Canada where it is added to the output of the tar sands mines as a diluent in order to enable that Canadian unconventional oil to flow by pipeline back to the US refineries.

What has that to with Whitegate, maybe nothing but there was that theory floating around that the reason Philips 66 bought Whitegate was to help supply their US customers with diesel. Now those ##$$$ Canadians are doing that.
 

Pat Gill

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Very much a closed shop due to the costs involved, not to mention the environmental barriers to constructing a new refinery.
Almost 100% KongMing, but you forgot the hefty credit requirements of the oil suppliers, them monsters have killed many a refinery..
 

Carlos Danger

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Almost 100% KongMing, but you forgot the hefty credit requirements of the oil suppliers, them monsters have killed many a refinery..
I wouldn't have used "killed", so much as brought to within an inch of their lives. Once a refinery is shuttered, the perceived, and actual costs involved with re-opening can be tremendous. Having spent several years living in a refinery town (370k bbl/d) I have seen how places can live and die on the whims of an oil exec.
 
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