Motiva told customers this week that it will postpone a maintenance turnaround that had been scheduled for June at its giant Port Arthur, Texas, base oil plant. Observers said Group II buyers will probably welcome the decision.
Motiva, a 50-50 joint venture between Shell Oil Co. and Saudi Refining Inc., normally does not discuss operation schedules, but according to sources had planned to temporarily shut down one of two production trains at the Port Arthur plant in June for catalyst work. The base oil plant completed a turnaroundon the other train in March.
Several sources confirmed the companys statements about postponing the June turnaround, although it was not clear whether a new date has been set. One source said the shutdown has been rescheduled for the summer of 2006, while another knew of no new date.
One source said Motiva attributed its decision to the fact that its supply is tight and that it did not want to risk hampering its ability to meet deliveries. Observers said buyers are likely to appreciate this concern since Group II supplies in general – like much of the U.S. market – are relatively tight now.
The market is already pretty tight, so I think [lubricant] blenders will be glad to hear this, one buyer said.
Winter is typically the most popular season for maintenance turnarounds, since lubricant production and base oil demand ebb at that time. But Motiva could well be in a more flexible position to handle a shutdown in the summer of 2006. The Port Arthur plant is in the midst of an expansion designed to increase capacity by 15,000 barrels per day beginning in January. The plant is already one of the worlds two largest base oil facilities, with capacity of 25,000 b/d.
Posted prices for paraffinic base oil prices in the United States were unchanged this week. The price of crude oil on the New York Mercantile Exchange closed yesterday at $49.46 per barrel, $4.82 lower than a week earlier.
Historic U.S. posted base oil prices and WTI and Brent crude spot prices are available for purchase in Excel format.