PBF Turns Focus to Louisiana, Delaware Refinery Projects

Researched by Industrial Info Resources (Sugar Land, Texas)--Having improved operations at its Torrance refinery in California, PBF Energy Incorporated (NYSE:PBF) (Parsippany, New Jersey) has turned its focus to optimizing some of its other refineries. Industrial Info is tracking more than $487 million in PBF project activity.

PBF owns and operates five refineries in the U.S., including those in Louisiana, California, Delaware, New Jersey and Ohio.

Click on image at right for a graph showing PBF project activity by state.

Chief Executive Officer Tom Nimbley told investment analysts during the company's second-quarter earnings conference call on August 2 that the 155,000-barrel-per-day (BBL/d) Torrance refinery has demanded "a high percentage of our optimization focus" since its acquisition from Exxon Mobil Corporation (ExxonMobil) (NYSE:XOM) (Irving, Texas) in 2015. Those optimization efforts included a "laundry list of items" ranging from producing asphalt at Torrance to pursuing new markets for its products, he said.

PBF also made considerable efforts to improve the operational reliability of the California facility. For more information, see February 21, 2017, article - PBF Energy Vows to Improve Refinery Reliability.

But Nimbley said that in the last three months, PBF has shifted its optimization focus to its 189,000-BBL/d Chalmette refinery in Louisiana, "because candidly, there is a lot of opportunity there...."

Among other things, he said, Chalmette "has a lower percentage of high-value products than I would like ... and we see opportunities to increase distillate yield particularly by modifying some of the operations inside the fence line ...."

The company announced a public offering of 6 million shares of its Class A common stock this month, with the goal of funding "strategic capital projects associated with optimizing its ability to process heavy sour feedstocks, increasing its clean product yield, and enhancing its system-wide operational reliability...."

Among these potential projects are the restart of "certain idle units" at the Chalmette refinery. Industrial Info is tracking the planned restart of a 23,000-BBL/d hydrocracker, which was mothballed in 2010 by the previous owner. Construction is expected to begin the first quarter 2019, with completion in 2020. For more information, see Industrial Info's project report.

Nimbley said the Chalmette refinery "continues to run reasonably well, and we continue to see significant weight and potential in this asset." He added that a 450,000-barrel crude oil tank project that was completed in 2017 at Chalmette "continued to deliver on expectations as we exported on average 48,000 barrels per day of clean products in the second quarter." The new storage helps solve a problem that occurred when oil from crude tanker ships filled up the limited storage capacity at the site, forcing the tankers to back off and wait for the refinery to pull down from the storage tanks so the ships could then complete their delivery.

Also at Chalmette, a restarted reformer is "performing as expected, and we should see full benefits going forward. We continue to uncover and evaluate other opportunities within the plant to increase our clean-product yield and enhance margins."

At PBF's 190,000-BBL/d Delaware City, Delaware, refinery, the company is reviewing plans for a 40-million-to-60-million-standard-cubic-foot-per-day hydrogen plant, which would be built and operated by a yet-to-be-identified third party. PBF would use the hydrogen to process heavy sour crude into low-sulfur diesel. The hydrogen plant would come online in fourth-quarter 2019, allowing the company to refine more fuel that complies with the International Maritime Organization's (IMO) 0.5% sulfur cap on marine fuels (down from the present 3.5% cap) beginning in 2020. For more information, see Industrial Info's project report .

Nimbley said PBF is well-positioned for the new IMO fuel standard, with "more coking capacity on a percentage of throughput basis than all but one independent refiner. That being said, PBF does have the opportunity to optimize its system even more."

PBF reported $287.7 million in net income for the just-ended quarter, a $392 million swing from a net loss of $104.2 million that was reported in second-quarter 2017.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.